Yield-on-cost and per MW Development Cost Including Land, 2025. –— Photo courtesy of Cushman & Wakefield

HCM CITY — Việt Nam is an ideal destination for data centre investment and the country is expected to see further interest from international investors, experts said.

A key factor enhancing the country’s investment appeal is its liberalised regulatory environment.

“Việt Nam’s recently introduced policy change allowing foreign investors to acquire land, and to own and operate data centres without a local partner, has demonstrated the Government’s commitment to boosting digital infrastructure across the country,” said head of Insights and Analysis for Cushman & Wakefield’s Asia Pacific Data Centre Group, Pritesh Swamy.

“Data centres have been classified as “high-priority technology” for development and investment, and we expect to see further interest from international investors in the months to come,” he said.

Việt Nam is rapidly emerging as a strategic destination in the Asia-Pacific data centre investment landscape, with a yield-on-cost second only to Singapore.

The Cushman & Wakefield Asia Pacific Data Centre Investment Landscape report found the yield-on-cost for data centre investments in Việt Nam to be in the range of 17.5 per cent to 18.8 per cent, behind Singapore’s 21 per cent to 23 per cent.

This positions Việt Nam as one of the most attractive emerging markets, driven by surging demand, competitive development costs, and proactive government support, the company said.

The average development cost—including construction and land costs—per megawatt (MW) of data centre capacity in Việt Nam is approximately US$7.1 million. This is significantly below the regional average of $10.1 million/MW and nearly half the cost of development in Japan, which is the region’s most expensive market at $16.1 million/MW.

By 2030, the total capital expenditure requirement for planned data centre projects in the country is estimated at $755 million.

While this figure is modest compared to major markets such as Japan ($47 billion), Australia ($21 billion), or Malaysia and India ($20 billion each), it underscores the market’s early-stage growth and high return potential.

Việt Nam’s current capitalisation rate ranges from 7 per cent to 8 per cent, well above the regional average of 5.8 per cent, offering an attractive risk premium for forward-looking investors.

Furthermore, Việt Nam’s infrastructure shortfall is part of a broader regional trend, highlighting robust demand amid constrained supply. The Asia-Pacific region averages over 350,000 people per MW of colocation capacity, several times higher than the US.

In Việt Nam, this figure exceeds 1.77 million people per MW, among the highest in the region. Even if all under-construction and planned projects are completed by 2030, the country would still face a significant shortfall, with a projected density of 692,563 people per MW.

According to Cushman & Wakefield, Việt Nam’s macroeconomic fundamentals further support the sector’s growth. Although the country has yet to reach a $1 trillion GDP like some regional peers, it is among the fastest-growing economies, with strong breakout potential.

Cushman & Wakefield’s analysis shows that markets with GDPs under $1 trillion—including Việt Nam, the Philippines, Thailand, Taiwan (China), and New Zealand—account for 7 per cent of regional GDP but only 5 per cent of total data centre capacity, indicating substantial headroom for expansion. — VNS