The remaining top 10 markets in the category are: Columbus, Santiago, Johannesburg, Atlanta, Nashville, Phoenix, Austin, Denver, and Chicago, according to a report released by Cushman & Wakefield Vietnam on February 2.
The annual report, now in its fourth year, ranks major data centre markets around the world according to 13 weighted categories including market size, connectivity, power cost and environmental risk to determine the top overall markets in each category.
According to the latest Q4 2022 Ho Chi Minh City marketbeat report, the average rental price reached $159 per sq.m per lease cycle, up 3 per cent on the quarter and 10 per cent on-year.
|Vietnam is a frontier data centre market|
Vietnam may be a frontier data centre market, but it has numerous fundamentals that would suggest great potential for development. The country currently has 70 per cent internet penetration, with an estimated 29 million people yet to get online. Over 48 per cent of Vietnam's capacity is located in the capital of Ho Chi Minh. Currently, only a few multinationals are locally requiring high-level capacity.
The common approach for international operators is to partner with the local telecommunication operators. There is a sizable lack of existing infrastructure relative to the population of the market and demand for internet services. This represents a major opportunity at both the content provision and infrastructure establishment level.
South of Ho Chi Minh is preferred as a hub for data centres, especially for cloud services platform providers, due to latency issues and securing of manpower. Increasing land prices, limited land availability (especially for hyperscale) and limited current or future power supply in Ho Chi Minh directly are pushing new data centre developments to Binh Duong or Dong Nai provinces.
“Vietnam’s digital and data infrastructure is currently fragmented and underdeveloped compared to the market’s population size and demand for internet services," said Bui Trang, country head of Cushman & Wakefield Vietnam.
"However, this limitation is also an opportunity for investors to participate and build data centers early. According to our records, the majority of foreign developers coming to Vietnam will desire through signing cooperation agreements with domestic developers."
Cushman & Wakefield's head of Data Centre Advisory Team, Asia Pacific, Vivek Dahiya, said interest and investment in the region would continue at pace as the sector evolved.
"We are seeing significant investment and interest in Bangkok, Ho Chi Minh, Hyderabad, Johor, and Manila, and we expect this to continue, along with interest in other primary and secondary markets in the region. Data centres are a rapidly evolving asset class, as evidenced by this report. Last year, Portland ranked 10th. This year it tied for first. We expect such strong movements to continue in the years to come as the sector evolves and matures," Dahiya said.
Significant ecosystem development in Vietnam:
CMC Telecom opened its Tan Thuan Data Centre inAugust 2022. The facility was designed by B-Barcelona of Singapore. The facility has a total area of 13,133 sq.m and was 30 per cent pre-leased at launch according to CMC.
Australian data centres firm, Edge Centres, has expanded into Asia with the deployment of their first data centre, EC51, in Vietnam in Ho Chi Minh with the Vietnam National University. They also have plans for an additional site in District 1 of in Ho Chi Minh.
GAW Capital acquired greenfield land in the Saigon High-Tech Park in Ho Chi Minh. The data centre is expected to be over 18,000 sq.m and support 20MW in capacity.
NTT GDC and local Vietnamese firm Quang Dung Technology will develop a new data centre located in the Saigon High-Tech Park that will support 6MW of IT capacity, with an estimated launch date of 2024.
Viettel, a Vietnamese telecommunications company, has announced plans to build a new data centre totalling $260M in investment. While specifics on the facility have yet to be fully clear, this would be Viettel's third project in Ho Chi Minh.
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