The explosion of the digital economy has changed the buying behavior of consumers drastically. The trend of online shopping has helped e-commerce thrive, especially after the pandemic. This has created opportunities for data center in Vietnam to become “fertile ground” for investors in the next few years.
Data center in Vietnam is gathering investors’ attention
Data center real estate has opened a new direction in the investment and business strategies of developers. Vietnam is rated by experts as one of the 10 emerging markets on the global data center map.
The data center warehouse market in Vietnam is concentrated in the two largest economic centers in the country, Hanoi and Ho Chi Minh City. Ho Chi Minh City, with a total of 20 centers and 60 service providers.
In a report by Savills, it is predicted that the growth rate of the data center market will increase at an average annual rate of 14.64% per year until 2026. This growth shows the growth potential of the field. This is also an inevitable trend that investors will be interested in in the coming time.
CMC etsablishes a data center with an investment of up to VND 1,500 billion in Tan Thuan, District 7
The city granted the Quang Dung Technology Distribution (QD TEK) and NTT Global Data Centers (GDC) consortium a license in March 2022 to build and operate the HCMC Data Center project, a high-tech Tier III+ facility with a floor area of 16,649 m2 and a total investment capital of 56 million USD.
In June 2022, Gaw Capital Partners will have developed a level 3 standard data center, in Ho Chi Minh City Hi-Tech Park, which is expected to come into operation in 2024.
With the attraction of investment capital combined with supportive policies and the potential of data center Vietnam real estate market, the government has set a future goal of trying to make Vietnam the Digital Hub of the Asia-Pacific region.
Explosion of Digital Data and Cloud Computing
The digital age has ushered in an era of unfathomable data creation. The proliferation of smartphones, the burgeoning Internet of Things (IoT), and the widespread adoption of social media have all contributed to an astronomical surge in digital data. This influx is further compounded by businesses digitizing their operations, generating vast streams of data in the process. The essence of this deluge of data is not only its sheer volume but also its velocity and variety.
At the core of this data-driven transformation lies cloud computing. Cloud services offer unparalleled flexibility, scalability, and accessibility. As enterprises and individuals increasingly rely on cloud-based applications, storage, and services, the demand for data centers capable of seamlessly accommodating these requirements has become imperative.
Need for Reliable and Efficient Data Storage and Processing
Data is the lifeblood of the digital economy, and its importance cannot be overstated. From mission-critical business operations to personal communication, data forms the backbone of virtually all online interactions. Consequently, the necessity for secure, reliable, and efficient data storage and processing solutions is paramount.
Data centers provide the infrastructure needed to ensure data is stored securely and can be accessed swiftly when required. They incorporate redundancy measures and backup systems to mitigate the risks of data loss. In an era where downtime can translate into significant financial losses and reputational damage, the reliability of data centers is a crucial asset for businesses and organizations.
Rise in Internet Usage, E-commerce, and Digital Services
The global population’s growing dependence on the internet has given rise to a myriad of online activities. Internet usage is no longer limited to information retrieval; it encompasses everything from entertainment and communication to business transactions and education.
E-commerce, in particular, has undergone a seismic transformation. The convenience of online shopping and the proliferation of digital payment systems have revolutionized retail. This paradigm shift has necessitated the establishment of robust e-commerce platforms, all of which rely on agile and efficient data centers to handle transactions, inventory management, and customer interactions.
Digital services, spanning streaming, social media, and online collaboration tools, further underscore the necessity for resilient data centers. The infrastructure that these centers provide is crucial for the seamless delivery of high-quality content and real-time interactions.
Vietnam’s Allure for Data Center Investments: A Multifaceted Advantage
Vietnam has emerged as a prime destination for global data center investments due to a myriad of factors that collectively create a conducive environment for data-centric ventures.
Strategic Geographic Location
– Proximity to Key Asian Markets: Vietnam’s strategic position within Southeast Asia grants it access to a multitude of rapidly growing markets. Its proximity to countries like China, India, Thailand, and Singapore positions it as an ideal gateway for data centers targeting a regional clientele.
– Connectivity Advantages in the Region: The country’s robust telecommunications infrastructure and extensive submarine cable networks ensure seamless connectivity. These links facilitate swift data transmission across the Asia-Pacific region, making Vietnam an attractive hub for data center operations.
Favorable Economic Environment
– Strong Economic Growth and Stability: Vietnam’s consistent economic growth rate has captured the attention of investors. The stability of its economic climate lends assurance to data center investors looking for secure and sustainable long-term investments.
– Government Support for Technology and Infrastructure: The Vietnamese government’s proactive approach to technological advancement and infrastructure development bolsters its appeal. Initiatives to enhance digital infrastructure align with the needs of data center investors and underscore the country’s commitment to fostering a thriving tech ecosystem.
Competitive Operating Costs
– Attractive Labor Costs Compared to Other Markets: In comparison to more established data center destinations, Vietnam offers a labor force with competitive rates. This cost advantage can significantly impact operational expenses, making data centers in Vietnam financially appealing.
– Lower Energy Costs Due to Renewable Energy Adoption: With a growing focus on sustainability, Vietnam’s increasing adoption of renewable energy sources translates to lower operational costs for data centers. This not only aligns with environmental responsibilities but also reduces the financial burden of energy-intensive operations.
Data Privacy and Security
– Strengthening Data Protection Regulations: Vietnam’s commitment to data protection is evident through the strengthening of its data privacy regulations. This framework ensures that data stored and processed within the country is subject to stringent safeguards, attracting data-driven businesses concerned about compliance and security.
– Increasing Importance of Secure Data Storage: The rising global emphasis on secure data storage elevates the significance of locations that prioritize data privacy. Vietnam’s proactive approach to enhancing data security complements the demand for trustworthy data center facilities.
Criteria For Choosing A Data Center For Rent in Vietnam
The data center real estate market in Vietnam is growing strongly to meet the increasing needs of businesses. However, in order to select a data center that will provide a good and stable service, businesses must consider the four criteria listed below:
– Clearly define needs when renting/buying data centers: each center will have a different format to serve each specific purpose, with a large center equipped with thousands of modern machines and systems. to meet the needs of storing and processing large amounts of data. Therefore, you need to clearly define your needs to avoid wasting space, infrastructure and rental costs.
– The size of the various data centers will also influence the operation strategy; the system requirements will differ, as will the scale and rental rates.
– Location of data centers: depending on the type of data for what purpose, each data center will be located in separate locations. There are centers that will be located in high-tech zones of key regions or provinces near the city center.
– Security is an extremely important element of a data center. You need to pay attention to the security of the operating system, connectivity, stability and high speed of the bandwidth and transmission line so that the data is always updated quickly, easily detect the errors. unauthorized access on the internet environment.
To meet information security requirements, rent data center space must adhere to strict guidelines.
In addition, the rental data center needs to achieve certifications of many different standards: Quality management system (ISO 9001), Information security management system (ISO 27001, ISO 27017), Certificate of Payment Security (PCI DSS), Energy Management System (ISO 50001),…
Read more: The factory market for sale in Vietnam is a bright spot for industrial real estate in 2022
Savills Vietnam, Specializes In Providing Rental, Buying and Selling Data Centers in Vietnam, Package Service, and Competitive Prices
With the strengthening and coordination of the regional network and the experience and understanding of the Vietnamese market, Savills Vietnam has provided full-service industrial real estate solutions for domestic and foreign enterprises. In particular, capturing the investment trend Savills provides solutions for leasing, buying/selling data centers in Vietnam at the most competitive prices in the market.
Savills Vietnam specializes in providing the leading data center rental, purchase/sale service in Vietnam
Vietnam’s data center services from Industrial Savills Vietnam always ensures good infrastructure and convenient locations, with offices in Ho Chi Minh City, Da Nang, Hai Phong, Hanoi, and other provinces to meet all data storage needs of small and medium-sized businesses.
With 3 offices in Hanoi, Ho Chi Minh and Da Nang, Savill Industrial’s team of consultants has leased more than 559,164 m2 and 494,111 m2 of industrial real estate to many domestic and foreign enterprises. Among them are: CocaCola, Shopee, HZO, Medtronic Vietnam.
Read more: Renting Good Quality Warehouse in Long An in the first half of 2023
Conclusion
Finding a suitable location to build a data center is an extremely complex process that requires a huge capital investment. This will relate to the trend of long-term land leases of 10 to 30 years to stabilize operations. Therefore, many businesses have chosen to rent data centers in high-tech zones in key economic regions to open new investment directions in the future.
If you are in need of advice on data center rental services in Vietnam at a preferential price, contact Mr John Campbell via hotline: 0986.718.337 for a consultation from our industrial expert at Savills Vietnam. We offer solutions for leasing or buying and selling data centers tailored to business needs in prime locations in each region.
In addition, you can refer to industrial real estate projects at Savills Industrial here.
