A data centre. Thanks to low price, HCM City is ranked among top markets in the land price category for data centre development. — Photo Courtesy Cushman & Wakefield

HCM CITY — HCM City is ranked among the top markets in the land price category for data centre development, experts said.

In an annual report by Cushman & Wakefield, the company said that with many of the largest markets in the APAC region boasting particularly high land costs, only HCM City ranks within the top 10 for the land price category.

The rest of the top ten markets in the category are: Columbus, Santiago, Johannesburg, Atlanta, Nashville, Phoenix, Austin, Denver, and Chicago.

The report ranks major data centre markets around the world according to 13 weighted categories, including market size, fiber connectivity, power cost and environmental risk, to determine the top overall markets as well as the top performing markets in each category.

According to the company’s latest forth quarter of 2022 HCM City marketbeat report, the average rental price reached US$159 per sq.m per lease cycle, up 3 per cent quarter-on-quarter and 10 per cent year-on-year. 

Việt Nam may be a frontier data centre market at this juncture but it has numerous fundamentals that would suggest great potential for development going forward. The country currently has 70 per cent internet penetration, with an estimated 29 million people yet to get online. 

Over 48 per cent of Việt Nam’s capacity is located in the centre of HCM City. Currently, only a small number of multinationals require high-level capacity.

The common approach for international operators is to partner with 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.

According to Cush & Walkfield, south of HCM City is preferred as a hub for data centres, especially for cloud services platform providers, due to latency issues and the securing of manpower. CMC Telecom opened its Tân Thuận Data Centre in August last year. The facility was designed by B-Barcelona of Singapore. The facility has a total area of 13,133sq.m and was 30 per cent pre-leased at launch according to CMC. 

Australian edge data centres firm Edge Centres has expanded into Asia with the deployment of their first data centre, EC51, in Việt Nam in HCM City in collaboration with the Việt Nam National University. They also have plans for an additional edge site in HCM City. 

GAW Capital acquired greenfield land in the Sài Gòn Hi-Tech Park in the city. The data centre is expected to be over 18,000sq.m and support 20MW in capacity.  

Viettel, a Vietnamese telecommunications company, announced plans to build a new data centre with $260 million in investment. While specifics on the facility have yet to be announced, this would be Viettel’s third project in the city.

Competition for sites between both data centre players and other asset classes has reached a fever pitch over the course of the past year. Fulfillment centres and large-scale single family rental developments have been evaluating similar sites as data centres. 

According to the company, one notable advantage that data centres have in competition for these sites is the limited impact on surrounding traffic and parking availability, a key area of concern for a number of local communities. However, data centres do require a higher power draw, and there have seen greater local community concerns about the potential effect on electrical grids. The growth of edge data centres has continued, optimising workload for latency. — VNS