Data Centers in Vietnam: The inevitable investment trend in the real estate industry for the next 5 years
The explosion of the digital economy has completely changed consumer shopping behavior. The trend of online shopping has helped the e-commerce market grow strongly, especially after the pandemic. This creates opportunities for data centers in Vietnam to become “fertile land” for investors in the next few years. Clear evidence is that Ho Chi Minh City will have 2 data centers in Saigon Hi-Tech Park with Tier 3 standards going into operation by 2025. These will be the first Tier 3 standards data center projects in Saigon Hi-Tech Park in the East Saigon.
1. Data centers in Vietnam are attracting the attention of investors
The data center real estate sector has opened a new direction in the investment and business strategies of investors. Vietnam is evaluated by experts as one of the top 10 emerging markets on the global data center map. The data center market in Vietnam is mainly concentrated in the two largest economic centers, Hanoi and Ho Chi Minh City. In Ho Chi Minh City, there are about 20 data centers and 60 service providers. However, the number of high-standard data centers is still limited. By 2025, there will be 2 data centers in Saigon Hi-Tech Park coming into operation with Tier 3 standards.
The data center sector is considered an untapped goldmine in Vietnam
According to a report by Savills, the expected annual growth rate of the data center market is projected to be an average of 14.64% until 2026. This growth indicates the development potential of this industry. This is also an inevitable trend that investors will be interested in the near future.
Gaw NP Capital is investing in building a data center in Saigon Hi-Tech Park with Tier 3 scale, the project called 1Hub Data Center is expected to come into operation in 2025 with an estimated investment cost of up to 70 million VND. Another High-Tech Park data center project with Tier 3 scale and total investment capital of 56 million USD is HCMC1 data center.
These are the two most notable data center projects in Saigon Hi-Tech Park in the near future. With the attractiveness of investment capital combined with supportive policies and the potential of Vietnam’s data center real estate market, the Government has set a future goal of trying to turn Vietnam into a digital hub in the Asia-Pacific region.
2 data centers in Saigon Hi-Tech Park with Tier 3 scale will soon come into operation
1.1. The explosion of digital data and cloud computing
The digital age has marked the emergence of a period that generates enormous amounts of data every day. The popularity of smartphones, the boom of the Internet of Things (IoT) and the growth of social networks have fueled the sudden increase in digital data. These data need to be encrypted and stored by businesses, thereby constantly generating larger data streams every day. The current data challenge is not only about the volume of data to be stored but also about the speed of processing and the diversity in data classification.
The core of this transformation process relies on cloud computing technology. Cloud services provide flexibility, scalability in storage, and the ability to access data efficiently. As businesses and individuals increasingly depend on cloud applications, storage, and services, the demand for data centers capable of meeting these requirements has become urgent.
Digital data is continuously created in the activities of modern society
1.2. The demand of efficient data storage and processing
It is not an exaggeration to say that data is the lifeblood of the digital economy. From critical business operations to personal communication activities, data forms the backbone of nearly every online interaction. Therefore, the location of secure, reliable and efficient data storage and processing solutions is extremely important.
Data centers provide the necessary infrastructure to ensure data is stored securely and can be accessed quickly when needed. They integrate backup measures and protection systems to minimize the risk of data loss. In an era where a minor system failure can create huge financial losses and damage a business’s reputation, the reliability of data centers is extremely important to businesses and organizations.
1.3. Growth in Internet usage, e-commerce and digital services
The increasing global reliance on the internet has created many online activities and even new industries. The use of the internet is not just limited to retrieving or seeking information anymore but also includes everything from entertainment, and personal communication to business transactions or even education.
E-commerce has transformed in recent years. The convenience of online shopping and the spread of digital payment systems have revolutionized the retail sector. This transformation relies on the development of powerful e-commerce platforms, all dependent on data centers to process transactions, manage inventory and interact with customers flexibly and efficiently.
The internet boom has ushered in a new era where many services can be transacted and utilized online
Digital services, including streaming platforms, social networks, and online tools, require highly reliable data center infrastructure. The infrastructure provided by these centers is crucial to ensuring the delivery of high-quality content and real-time interaction.
See more: The Data Center Market – A Sweet Slice for Technology Businesses
2. Attractiveness of investing in Vietnam’s data centers
2.1. Strategic geographical location
Vietnam’s strategic location in the Southeast Asian region provides an advantage in accessing diverse rapidly developing markets. Proximity to countries such as China, India, Thailand, Singapore, etc., has made Vietnam an ideal destination for investors targeting the data center sector and aiming to serve customers in Southeast Asia or Asia in general.
Robust telecommunications infrastructure and an extensive undersea cable system, ensure seamless and stable connectivity. These links support rapid data transmission across the Asia-Pacific region, making Vietnam an attractive hub for data center activities.
2.2. Favorable economic environment
Vietnam’s stable economic growth has attracted the attention of investors. The economic stability ensures a secure environment for data center investors seeking long-term, safe, and sustainable investments.
The Vietnamese government is actively approaching and supporting technological advancements and infrastructure development to enhance the country’s attractiveness. Initiatives to improve digital infrastructure are in sync with the needs of data center investors and highlight Vietnam’s commitment to creating an ecosystem of a growing technology industry.
Vietnam is an economically advantageous location for various services and products from all over the world
2.3. Competitive Operating Costs
Compared to other prominent established data center locations in the world, Vietnam provides an abundant workforce at competitive costs. This advantage can significantly impact operating costs, making data centers in Vietnam financially more advantageous. With a focus on sustainability, Vietnam is increasingly using renewable energy sources, reducing operational costs related to energy. This not only demonstrates environmental responsibility but also helps reduce the financial burden for data centers.
2.4. Privacy and Data Security Rights
Vietnam’s commitment to data protection is evident through the enhancement of data protection and privacy regulations. Vietnam has been continuously updating documents and regulations on cyberspace and data security in recent years. This system ensures that data stored and processed within Vietnam adhere to strict security measures, attracting businesses interested in compliance and security.
The global increase in data storage security highlights the importance of locations that prioritize data privacy. Vietnam, through specific steps to enhance data security, meets the growing demand for reliable data centers.
Learn more: Challenges in Building Green-Certified Data Centers
3. Criteria for choosing to rent a data center in Vietnam
The data center real estate market in Vietnam is growing strongly to meet the increasing needs of businesses. However, to choose a data center that can provide stable and good service, businesses need to consider four criteria including usage needs and the scale of the data center, the location and security of the data center.
Each data center will have a different format to serve specific purposes. Therefore, it is crucial to clearly identify your needs to avoid wasting space, infrastructure, and rental costs. The scale of different data centers will also impact operational strategies; system requirements, scale, and rental costs will vary. Depending on the type of data and purpose of usage, each data center will be located in different areas, with some situated in premium regions of provinces or near city centers.
You should determine the purpose of use to rent a data center with the most appropriate scale and cost
Security is a crucial factor for a data center. Pay attention to the security of the system, connections, stability, and high-speed bandwidth transmission lines to ensure that data is always updated quickly and unauthorized access error is easily detected in the internet environment. The higher the Tier of a data center, the more stable its operation, and in the event of an unexpected incident (such as a power outage), higher-tier data centers also have better backup measures.
Taking the example of the 1Hub Data Center project in the Saigon Hi-Tech Park with Tier 3 standards, it has an operational capability of up to 99.82% of the time in a year and the ability to perform maintenance and repairs while operational. This ensures the safe and stable storage and processing of data. Even in the case of natural disasters or sudden power outages, a Tier 3 data center can maintain operations for up to 72 hours, a capability not present in Tier 1 and 2 data centers.
1Hub Data Center is the largest data center project in Saigon Hi-Tech Park with a total investment of 70 million USD. This promises to be the safest and most effective place to provide data services in Ho Chi Minh City as well as Vietnam when it comes into operation. Despite not being operational yet, 1Hub Data Center has already attracted significant interest from businesses inside and outside the Saigon Hi-Tech Park for long-term development cooperation.
This demonstrates the project’s attractiveness and the substantial demand for data center services in Vietnam. With an expected operational date of 2025, this data center in Saigon Hi-Tech Park will be the most advanced and largest data center in terms of scale and standards along with HCMC1 in Saigon Hi-Tech Park and East Saigon.
Saigon Hi-Tech Park data center – 1Hub Data Center is a part of the OneHub Saigon Business Park
In addition, rented data centers need to achieve various certificates, including Quality Management System (ISO 9001), Information Security Management System (ISO 27001, ISO 27017), Payment Security Certificate (PCI DSS), Energy management system (ISO 50001),…
Conclusion
Data centers promise to become an attractive investment field in Vietnam, as Vietnam holds many potential factors to be a new spotlight on the world technology map. In the future, after completing the 1Hub Data Center and HCMC1 projects, Ho Chi Minh City will have 2 data centers in Saigon Hi-Tech Park meeting Tier 3 standards, leading the way in providing high-quality, scalable, and modern data centers in Vietnam.
