The process of urbanization makes the construction density grow larger and the demand for land resources higher, which has created pressure on the formation and maintenance of public spaces in cities. Space for the public will be narrowed or completely lost if the investor is only interested in making the most of the land fund without paying attention to creating green spaces connecting built units.
In recent years, big cities such as Hanoi, Ho Chi Minh City have made significant progress in urbanization, and high-rise apartment buildings are growing on the increasingly narrow land fund. High construction density also increases population density, leading to infrastructure overload. The Department of Environment (Ministry of Natural Resources and Environment) reports, in 2020, the average green area per capita in Ho Chi Minh City is only 0.55 m2/person. It is estimated that each urban dweller needs an area of about 10m2 of trees. The current ratio is very low compared to this standard.
According to Cushman & Wakefield's Q1 2022 report, in the context of increasing land prices and limited land funds, apartment prices have continuously peaked in the past 10 years. Demand will continue to be stable in Q1 and by the end of this year, Cushman & Wakefield forecasts that apartment supply will reach 10,000 units, given the popularity of the large-scale complex township and luxury apartments. The more money spent on a house, the more buyers will focus on the availability of green spaces with good air quality and surrounding public facilities. Therefore, before commencing construction, investors need to carefully plan reduce construction density, and prioritize portions of the land fund for schools, parks, trees, and health care..., thereby reducing pressure on the surrounding infrastructure, avoiding the shortage of community spaces.
Similar to the housing market, industrial real estate also needs "green" standards. According to Cushman & Wakefield’s Q1 2022 report, the total supply of industrial land in Ho Chi Minh City and four key southern provinces including Dong Nai, Long An, Binh Duong and Ba Ria Vung Tau, remained stable at approximately 25,200 hectares. Demand for industrial assets such as land, factories and warehouses increased steadily, mainly coming from the manufacturing, e-commerce, 3PL and retail sectors. As a sector that can have great environmental impact, industrial developers and investors must pay more attention to reduce emissions, ensure a good working environment for experts and workers, preserve the living environment for the surrounding local residents.
Trang Bui, General manager, Cushman & Wakefield Vietnam commented: “Real estate can contribute significantly to the beauty of a city. Before granting the right to use public land, in addition to evaluating the financial capacity, we need to also evaluate the developer’s ability to contribute aesthetically. The potential of the real estate market in Ho Chi Minh City is major, and the right planning will be a good foundation for our country to rise in rankings within the region.”
Phu My Hung is a success story in urban planning. The Phu My Hung urban area is 409ha wide, well planned with diverse green patches stretching from inside residential areas to parks, pedestrian zones, canals and rivers. This area possesses a remarkable density of green space with an average green area per capita up to 8.9 m2. The close distance between green areas and public utilities such as bus stations, schools, supermarkets create a harmonious living space, that is fully connected with utilities, meeting the living needs of residents. Phu My Hung's success comes from effective space planning from the very beginning, as well as accepting to sacrifice maximum profits for sustainable development.
Another good example of effective planning is Singapore. The government of this country since 2008 has introduced a "green" scoring and goal setting system for all building projects, as well as providing financial support to investors who is willing to incorporate green space into their project. It is these policies that have brought about countless world-famous creative destinations such as the Garden by the Bay or a tropical garden with a majestic waterfall of over 6 hectares in the middle of Changi International Airport.
According to a report by Cushman & Wakefield Vietnam, urban areas not only need green space but also need to focus on creating destinations such as parks, pedestrian zones, squares or riverbanks. These destinations give the city its identity and help attract visitors, residents, investments and new business models. Vietnam has taken the first steps in implementing urban solutions such as the opening of the first pedestrian street Nguyen Hue in HCMC in April 2015 and the second pedestrian street wrapping around Hoan Kiem Lake area in Hanoi since September 2016. These destinations have attracted massive daily footfall from both locals and visitors, benefitting the retail shops in the area. Most recently in Ho Chi Minh City, we recorded the opening of Bach Dang Deck Park, which has also proved to be an attractive and much needed type of space for citizens.
Vietnam's real estate market is accelerating to recover from the pandemic, and both businesses and the government are working to change the urban landscape to improve the living environment. However, the creation of green areas and public entertainment spaces is just beginning, the city needs more participation from the people and efforts from the government to be able to achieve the set goals. For future real estate projects, the "sustainable" and "human" factors will not be a trend but will become an important "must have" factor in the project.