Vietnam’s real estate sector is increasing its supply of green-certified projects as part of efforts to achieve the country’s net-zero target by 2050. However, experts emphasize the need for stronger policies and incentives to attract investors by showcasing the long-term economic benefits and resilience of sustainable real estate.
ESG implementation remains challenging
According to Avison Young Vietnam, green buildings have emerged in the country over the past 15-20 years, aligning with the introduction of green-certified projects in regional countries such as Thailand, Indonesia, and Malaysia. As of 2024, Vietnam had had 559 green buildings covering a total floor area of 13.6 million square meters, primarily consisting of warehouses, office buildings, retail spaces, and educational facilities.
Globally, several Environmental, Social, and Governance (ESG) standards—including GRESB, EDGE, LEED, BCA Green Mark, WELL, and BREEAM—are used to assess and promote sustainability in the built environment, each with its own distinct criteria and methodologies. In Vietnam, the most widely adopted certifications include LEED, EDGE, and LOTUS, the latter issued by the Vietnam Green Building Council (VGBC).
Singapore remains the regional leader in sustainability, with 95% of its Grade A office projects holding green certifications such as BCA Green Mark or LEED. Across the ASEAN region, Vietnam currently has 238 LEED-certified green buildings, compared to 290 in Thailand, 44 in Indonesia, and 158 in Malaysia.
David Jackson, CEO of Avison Young Vietnam, explained that in real estate, the term “green” primarily refers to a project’s environmental impact (E)—including low-emission materials, energy-efficient construction techniques, and nature conservation efforts. In contrast, ESG has a broader scope, incorporating social (S) and governance (G) factors. Beyond environmental concerns, ESG aims to create long-term sustainable value for businesses, project stakeholders, and the broader community. However, achieving this remains a significant challenge in Vietnam.
Recently, Dalat has begun work on an ESG-focused real estate complex, reflecting the growing trend of green real estate development. Meanwhile, in HCMC, many residential and retail projects are being designed with green standards from the outset, ensuring they meet higher sustainability certifications.
This shift indicates that green real estate is no longer just a trend but is gradually becoming an industry standard, driven by increasing awareness of user well-being, environmental responsibility, and social impact.
However, the development of ESG-compliant real estate in Vietnam still faces significant obstacles. Policies supporting green buildings, particularly those related to energy efficiency standards and technical regulations, remain unclear and inconsistent. Additionally, the approval process for projects that incorporate new construction technologies and techniques is often lengthy, potentially delaying investment.
For businesses, the initial cost of green buildings is higher due to eco-friendly construction techniques, sustainable materials, and additional expenses for consulting and certification assessments. Meanwhile, access to green financing remains limited, and alternative funding solutions such as green bonds have yet to gain widespread adoption in Vietnam.
As a result, the number of green-certified projects remains relatively small compared to the overall volume of new developments, highlighting the need for stronger policy support, financial incentives, and clearer regulatory frameworks to accelerate sustainable real estate growth in the country.
Customer demand accelerates green building transition
Nguyen Thanh Trung, senior technical operation manager at CBRE Vietnam, reported that green buildings in Vietnam surged by over 200% in 2024, compared to the previous year. This rapid increase underscores a growing commitment among investors to sustainable development.
Since late 2024, CBRE has observed rising interest in green real estate projects, particularly among Vietnamese corporations. While international corporations previously led this segment, domestic businesses are now making sustainability a key priority.
Regulatory measures aimed at reducing greenhouse gas emissions and achieving net-zero targets are further accelerating this transition. Global corporations, aiming for net-zero emissions by 2030, are pressuring property owners—who typically target 2050—to adopt sustainable solutions sooner. This discrepancy of time is driving a faster market shift toward green, energy-efficient spaces.
According to CBRE’s 2024 Asia Pacific Office Occupier Survey, technology and sustainability are shaping the future of workspaces. The survey found that around 75% of respondents plan to upgrade their offices to meet higher environmental and efficiency standards.
Although green-certified buildings typically have rental and purchase costs about 10% higher than conventional properties, they offer long-term benefits, including energy efficiency, reduced operational and maintenance costs, and enhanced living and working environments.
Lai Nhu Quynh, senior leasing manager for commercial leasing at Savills Vietnam, predicts that the green building trend will continue to expand and see wider adoption. This shift will not only impact real estate sectors such as industrial parks, factories, residential complexes, and office towers, but will also extend to facility management, manufacturing, and consumer goods.
In HCMC and Hanoi, older buildings that have been in use for years without green certifications are undergoing renovations and upgrades to remain competitive with newly developed, green-certified properties. Meanwhile, developers of new projects are integrating sustainability from the start, carefully researching, preparing documentation, assessing projects, and designing efficiently to optimize costs and timelines for green certification.
Despite the practical benefits of green buildings, such as reducing energy consumption by 20-30% in building operations and achieving higher rental prices for investors, developers remain cautious about the higher costs. Constructing green buildings can increase construction costs by 5-15% compared to conventional developments, with even higher costs for existing buildings that require upgrades.
Securing international green certifications demands strict compliance with rigorous standards, both during initial approval and throughout ongoing maintenance. For older buildings, this process can involve significant costs and extended research to implement suitable green upgrades.
Nevertheless, the long-term advantages of green office buildings justify the push for broader adoption, which should be actively supported by local authorities, developers, property managers, and office tenants. According to Savills Vietnam, green-certified office buildings in Hanoi and HCMC consistently perform well, maintaining high and stable occupancy rates. HCMC leads the market, with 17 green-certified buildings maintaining occupancy levels above 90%.
