Misconceptions, electricity costs, and the lack of sustainable energy are preventing Vietnam’s green building market from reaching its full potential. By Michael Tatarski. Photos by Lee Starnes.
As Ho Chi Minh City and Vietnam continue to develop, more efficient buildings are becoming increasingly important. But it doesn’t take a construction expert to recognise that many of the projects going on around the city aren’t particularly green. Fortunately, quiet progress is being made on the eco-friendly front.
Given how many stories have been published about industrial pollution, it may come as an ironic surprise that the manufacturing industry is leading the push for sustainable buildings in Vietnam. The country’s place in the global supply chain is a major reason for this, says Melissa Merryweather, the director of Green Consult-Asia and a leading national expert on green buildings.
“A lot of manufacturers are under much stricter pressure from their client base,” Merryweather says. “If you’re making shoes and your client is Nike, Nike now requires a lot of oversight.”
Compared to when they first opened shop in Vietnam, most multinational corporations now have stricter global regulations concerning their products. In many cases these manufacturers have had to play catch-up.
“They came here because it was cheap, and they didn’t do it with very high standards,” Merryweather says.
Over the past few years, though, numerous factories have improved worker comfort, including better ventilation and lighting. “The cost for doing this can be very low,” Merryweather says. “I worked with a plant employing 24,000 people and they started on a green plan very late. Still, after improvements to worker comfort they saved 18 percent on energy and 75 percent on water use, which over a 100,000-square-metre facility is a lot of water.”
But despite significant savings, cost remains the deciding factor of whether a company will go green. “Nobody is going to do it because the planet is heating up or because Ho Chi Minh City may be under water in 50 years,” Merryweather says.
A common, but incorrect, belief among architects and engineers in Vietnam is that a green building will cost 20 percent more than a normal structure. This is simply not the case and is hindering the development of a robust green building market.
“That is one of the main issues; there is rising awareness of green buildings, but that awareness is not always accurate,” says Michael Sieburg, a manager at Solidiance, a Singapore-based firm that recently released a white paper titled, ‘Is There a Future for Green Buildings in Vietnam?’
Merryweather agrees this misperception is a major problem. “People who say it will cost that much actually have no idea because they’ve never done it before,” she says. “Adding 20 percent to a building cost, that’s actually hard to do.”
Research conducted by Merryweather and the Vietnam Green Building Council over the last three years shows that green buildings cost just 0.5 to 5 percent more, on par with countries like Singapore and the United States. This extra cost most likely will be recuped quickly through energy savings once a building begins operating.
“We know energy prices are going up 15 percent a year,” Merryweather says, “and the projected savings only include electricity and water, not any of the knockoff benefits of improved health, productivity and things like that.”
This is why energy-intensive sectors like manufacturing are leading the way to improved efficiency in Vietnam. Of course, not only industrial plants are getting in on the action.
“Hotels have also been somewhat early adapters, as they also have big operating costs and there is a brand-name benefit of being labeled eco-
friendly,” Sieburg says.
Infrastructure and the lack of renewable energy is also a major issue. In fact, despite recent increases, Sieburg believes electricity prices are too low compared with the rest of the region. “Many companies don’t see the need to make the short-term investment for long-term savings because their energy costs aren’t that high,” he says.
But avoiding extra costs now could cause serious problems down the road. “The national supply of energy is not sufficient for the needs projected over the next few years,” Merryweather says. “If we don’t build better buildings and improve existing buildings there’s going to be a big energy supply problem and a big cost issue.”
For all its poorly designed buildings, Ho Chi Minh City does have one landmark structure that can illustrate for developers the financial sense of building green. President Place, located on the corner of Nam Ky Khoi Nghia and Nguyen Du streets, is Vietnam’s first LEED Gold-certified building.
In an email Alex Crane, a senior leasing manager at Savills Vietnam, says President Place has landed prominent tenants like Microsoft and Canon thanks to its green credentials. The ability to attract multinational corporations will appeal to any developer, as will the potential down the line to charge premium rent.