Paul Tostevin, director of Savills World Research, said: "Vietnam has the opportunity to become one of the regional leaders in the field of sustainable development."
The reason is that global investors are paying more attention to ESG. Therefore, the formulation of a comprehensive development strategy that incorporates sustainable environmental measures is imperative.
In addition, social sustainability standards, policies safeguarding workers and assuring the implementation of safety measures during the project development process, immigration procedures, and site clearance are included.
He added: “This is and will continue as an investor-oriented global trend. For them to buy an asset or develop a project in a new market, that location must satisfy specific criteria. An investment cannot be made in a location that fails to satisfy the fundamental ESG criteria outlined in the company's development policy.”
This will also gain significance for real estate hire purchase companies, with a particular focus on multinational corporations seeking to incorporate it into their supply chains.
"Therefore, ESG factors will continue to spread and influence every aspect of the real estate industry. Countries must establish legal and policy frameworks that promote transparency for foreign investors," he said.
Health, safety and quality are the most essential considerations for all tenants, commercial buildings failing to satisfy these criteria for comfortable space or fresh air will bear the risk of competition with new buildings, the largest real estate agency Savills said in its recent annoucement.
Increasingly, businesses are implementing environmental sustainability targets and goals to reduce carbon emissions.
In Vietnam, according to Savills Real Estate Market Report in third quarter this year, more than 85 per cent of the fastest growing enterprises in the country have ESG commitments. This helps fuel demand for offices that meet green standards.
In Hanoi, the market will welcome approximately 68,400 square metres of green-certified offices until the end of 2025 from Grade A projects such as 27-29 Ly Thai To, Grand Terra or Tien Bo Plaza.
In Ho Chi Minh City, more than 80 per cent of the city's future Grade A and B supply is expected to have green certifications.
During a recent visit to Vietnam, Paul Tostevin shared: “Last year, real estate investment had significant changes globally. Total global investment fell by 50 per cent, especially in the office segment with a decrease of nearly 60 per cent.”
Most of these investment changes come from challenges in the US, which is undergoing a significant shift to hybrid working, causing increased office vacancy.
This is the consequence of a dramatic change in working trends and a decline in the scale of required spaces within the IT industry. Although this pertains to the US and some Western countries, it is an important market that has an indirect effect on Europe and Asia Pacific.
Office markets in the Asia Pacific are continuing to remain the most stable of the regional occupational markets.