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Green-certified buildings more alluring to office market players in Vietnam’s cities

Tenants in Vietnam’s major cities are shifting to high-quality office space, increasingly prioritising spaces with green certification and modern amenities.

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Green-certified buildings more alluring to office market players in Vietnam’s cities
Green-certified buildings more alluring to office market players in Vietnam’s cities, Source: freepik.com

Ho Chi Minh City’s office market boomed towards the end of last year as new buildings quickly achieved high occupancy rates, contributing to pushing the absorption rate of the entire market to a record level.

Bosch Global Software Technology Company in December opened a new office over ​​10,000 square metres at OfficeHaus, a working space meeting LEED Gold standards in the heart of the city.

The OfficeHaus building, located in Tan Phu district, has seen its occupancy rate skyrocket from 10 to 75 per cent in just one year thanks to its LEED Gold design and flexible office solutions.

ByteDance, TikTok’s parent company, at the end of 2024 also moved from a building in District 3 to The Nexus in District 1. The Nexus has also achieved LEED certification as well as EDGE green building recognition and WELL, a set of standards for evaluating architectural design that focuses on human health.

Marvell Group and Simpson also rented space at E.Town 6 building in Tan Binh district, a building put into operation in early 2024 with LEED Platinum, the highest rating for reducing a building’s carbon footprint and promoting a healthier work environment for customers.

Meanwhile, the Thu Thiem New Urban Area located over the Saigon River continues to strengthen its position as a high-end office destination. In particular, The METT Building is attracting high-quality tenants such as Shinhan Bank of Korea and Malaysian financial and banking group CIMB.

Prime location on the Thu Thiem peninsula with state-of-the-art infrastructure has helped METT to become a top choice for high-valued tenants.

According to a report from CBRE Vietnam released last week, in 2024, the office market in both Hanoi and Ho Chi Minh City witnessed an improvement in total net absorption and slightly higher than the average net absorption recorded in the last five years.

The Hanoi office market witnessed a higher net absorption in Grade B, reaching more than 44,600sq.m, compared to around a half net absorption recorded in Grade A. Such positive net absorption in Grade B is attributed to the favourable rental policies offered by landlords of office buildings in this segment.

Meanwhile, the opposite trend was recorded in Ho Chi Minh City with the leasing demand for Grade A outpacing Grade B, with 38,000sq.m leased, compared to only 14,600sq.m in Grade B.

According to CBRE, there are big deals planned for 2025 from major corporations moving to higher quality office buildings, which will help to improve the city’s occupancy.

Pham Thanh, head of Research and Consulting at CBRE, said that although the Hanoi office market is generally more cost-sensitive than the southern metropolis, it has followed Ho Chi Minh City’s trends.

“In response to the emerging flight-to-quality trend, newly completed buildings in Hanoi and also existing office buildings are adapting by undertaking renovations and pursuing green certifications in recent times,” said Thanh. “This proactive approach reflects a commitment to sustainability and the need to meet the evolving expectations of tenants in Hanoi office market.”

All Grade A buildings in Ho Chi Minh City completed since 2019 are green certified through Green Mark or LEED. Thanks to their high quality, they have successfully attracted reputable companies leasing areas of up to 2,000sq.m, or even 10,000sq.m on a few occasions.

Another notable trend is the growth of the IT sector, leading and contributing one-quarter of leasing areas in Hanoi and 30 per cent in Ho Chi Minh City, followed by the finance, banking, and insurance sectors.

“Vietnam has gradually evolved as a hub for tech innovation and agility thanks to its dynamic economies and young, educated workforce. Regarding their business nature, they are fast in expanding decisions. They don’t need to locate in the core central business district, but it is essential for office landlords to innovate their office spaces to fit the new working style of the young workforce,” Thanh added.

In the next three years, supply is expected to reach nearly 170,000sq.m in Hanoi and over 100,000sq.m in Ho Chi Minh City. By 2030, this number could total over 600,000sq.m in Hanoi and 300,000sq.m in Ho Chi Minh City, provided that project licensing can be obtained in due course.

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Industrial production on the mend: Deputy Minister

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Vietnam’s industrial production has continued its rosy signs since late 2023, promising a bright prospect for the country in the time ahead, Deputy Minister of Industry and Trade Phan Thi Thang said at the Government’s regular press conference in Hanoi on August 5.

According to the official, Vietnam’s Purchasing Managers’ Index (PMI) in July 2024 reached 54.7 points, the highest since November 2018, with output increasing sharply thanks to increasing new orders for four consecutive months.

The index industrial production (IIP) in July grew by 0.7% over the previous month and 11.2% year-on-year, Thang said, noting the index saw increases in 60 provinces and centrally-run cities in the first seven months of this year.

She attributed the result to improvements in the production capacity of domestic businesses that have also shown their readiness to optimise opportunities to access new markets in the time to come.

Additionally, the deputy minister said, support policies and the drastic instructions of the Government and the Prime Minister in public investment disbursement and the implementation of key industrial projects have helped consolidate the confidence of both domestic and foreign firms.

The official also pointed to a range of challenges such as intrinsic weaknesses, regional and global volatilities, the risk of global supply chain disruptions, and the reliance on some export-import markets, along with the pressure of trade remedy investigations.

Given this, the Ministry of Industry and Trade will speed up public investment disbursement, review obstacles to key projects in electricity, oil and gas, processing and manufacturing, and minerals in order to soon put them into operation, and continue its cooperation with FDI firms and big enterprises at home and abroad as well as international organisations to step up connectivity and improve capacity for domestic suppliers.

The ministry will also encourage the purchase of home-made goods, and seek new markets for key exports, Thang added.

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Petrovietnam to complete $1.5 bln Long Phu 1 thermal power plant in 2027

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State-owned energy giant Petrovietnam aims to restart the idling Long Phu 1 thermal power project, located in the Mekong Delta province of Soc Trang, and complete it in 2027, according to the draft amendments to the power development plan VIII (PDP VIII).

Petrovietnam was assigned as investor of the $1.5 billion coal-fired power project in 2010. In 2014, Petrovietnam signed deals to assign Russia’s Power Machine and its technical arm Petrovietnam Technical Service Corporation (PTSC) as engineering, procurement, and construction (EPC) contractors.

Long Phu 1 thermal power project in Soc Trang province, Mekong Delta. southern Vietnam. Photo courtesy of PetroTimes magazine.

Long Phu 1 thermal power project in Soc Trang province, Mekong Delta. southern Vietnam. Photo courtesy of PetroTimes magazine.

In January 2018, when the project reached 78% completion, the United States had deployed sanctions against Russia due to the Crimea issues, leading to challenges in project implementation. In March 2019, Power Machine stopped construction activities at the project site.

According to the ministry’s document, Petrovietnam is restarting the project and amending the project’s feasibility study.

Long Phu 1 is one of five under-construction coal-fired power plants in Vietnam, the ministry noted. The others are the 1,330 MW Vung Ang II, 110 MW Na Duong II, 1,403 MW Quang Trach I, and 650 MW An Khanh-Bac Giang.

Meanwhile, five projects are facing challenges, namely the 600 MW Cong Thanh, 1,200 MW Nam Dinh I, 1,320 MW Quang Tri, 1,980 MW Vinh Tan III, and 2,120 MW Song Hau II.

The Cong Thanh is waiting for approval to use LNG as feedstock, while Quang Tri, Vinh Tan III, and Song Hau II have stopped or do not have any investor yet. Nam Dinh I is progressing to begin construction later this year.

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Investing in human resources for cultural industries

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After more than seven years of implementing the Strategy for the Development of Cultural Industries in Vietnam to 2020, with a vision to 2030, Vietnam’s cultural industries have made new strides, making positive contributions to the country’s GDP growth.

The production value of Vietnam’s cultural industries in the 2018-2022 period reached about 1,059 trillion VND (USD 44 billion). In 2022, the contribution of cultural industries to GDP reached 4.04%. In large cities such as Hanoi and Ho Chi Minh City, cultural industries have contributed about 4% of the local GRDP. Many cities have officially joined the UNESCO Creative Cities Network such as Hanoi, Hoi An, and Da Lat.

However, according to Tran Thi Phuong Lan from the Department of Culture and Arts under the Party Central Committee’s Commission on Communication and Education, the cultural industry has not yet developed to be commensurate with the country’s distinct potential, outstanding opportunities, and competitive advantages.

Vietnam still lacks specific and appropriate mechanisms and policies to attract capital and resources for the comprehensive development of cultural industries. The connection and coordination between sectors in the development of cultural industries is still not tight, has not promoted the commercial element in cultural products; there are still few large literary and artistic products and works with high ideological and artistic value, etc.

On August 29, 2024, the prime minister signed and issued Directive No.30/CT-TTg on the development of Vietnam’s cultural industries, meeting the expectations of those working in this field.

The prime minister requested ministries, branches and localities to thoroughly grasp and further raise awareness of the position, role, importance and value of cultural industries for socio-economic development and promotion of Vietnamese culture; to promote the responsibility of leaders in directing the development of cultural industries; to proactively implement strategies in a focused and key direction; to issue necessary mechanisms and policies to support, encourage and promote the development of cultural industries in the coming period.

Many experts and managers believed that the most important thing that cultural industries need is human resources, because this is a vital and key factor. Localities need to issue mechanisms and policies to ensure and attract resources, contributing to the construction and development of culture and people in each region, closely linked to the strengths of cultural industries.

In Da Nang, since 2015, the city leaders at all levels have been striving to implement the Party and State’s policies and guidelines in placing culture on par with economics, politics, and society. The city has identified the development of cultural industries along with the construction and completion of the cultural market in 12 areas, focusing on: advertising, software and entertainment games, design, cinema, performing arts, and cultural tourism.

However, the development of cultural industries in Da Nang still has some limitations, with human resources being limited in both quantity and professional quality. The preferential treatment policy for people working in culture and arts has not been given due attention.

Nguyen Thi Hoi An, Deputy Director of the Department of Culture and Sports of Da Nang City, said: “Da Nang has proposed a roadmap to upgrade the Da Nang College of Culture and Arts. At the same time, we focus on training human resources for the cultural industry, improving the quality of training at specialised schools; building standard curricula; investing in teaching and learning equipment in a synchronous manner in the stages of art, technology, production management, distribution, preservation, and communication; and encouraging and sending qualified staff to study and gain experience in countries with developed cultural industries.”

Nguyen Thi Thanh Thuy, Deputy Director of the Department of Culture and Sports of Ho Chi Minh City, shared: The city has been focusing on training human resources for cultural industries through schools, linking with businesses, and cooperating with international partners.

In addition, the city has reviewed and supplemented land funds to the city planning to build cultural industrial parks and film studios; focused on building a network of creative, branded businesses that are competitive in areas where Vietnam has potential and strengths such as software, handicrafts, performing arts, etc., to create many high-quality products. At the same time, there should be reasonable policies and regimes for human resources in the cultural field.

Associate Professor, Dr Do Lenh Hung Tu, Chairman of the Vietnam Cinema Association, said: In the stage of training and developing the film human resources, especially high-quality human resources, the establishment of a specific mechanism to discover, nurture, use and reward talents is extremely important. At the national level, the State needs to have special treatment regimes so that talents can fully develop their capacity and contribute to society, while at the same time creating more favourable conditions for professional organisations to promote young creative activities, create playgrounds, and “talent nursery” competitions.

In the immediate future, it is necessary to promote specialised training in the film industry; especially training a team of film managers with sufficient qualifications and capacity to meet the requirements in the period when cinema is striving to become a key cultural industry.

Highly qualified human resources are a decisive factor for the development of cultural industries. Therefore, it is necessary to effectively implement policies to attract and promote talents, provide incentives and honour individuals with good works and positive influence in society; support the transfer of knowledge, skills, practical know-how, etc., related to the fields of cultural industries; train and foster a team of managers and enforcers of copyright, related rights, cultural and tourism human resources; and form a team of in-depth and interdisciplinary experts.

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