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Digitisation wave to boost data centres growth in Vietnam, according to Cushman & Wakefield

Xuan Pham • 19/09/2022

Explosive growth in data centre demand has also deepened the sector’s environmental impact., according to a recent report by Cushman & Wakefield

The Asia Pacific (APAC) data centre market is one of the fastest developing regions and is on track to become the world’s largest over the next decade.


This growth is primarily attributable to gigawatt markets Tokyo and Shanghai alongside Tier 1 markets Singapore, Hong Kong, Mumbai, Sydney and Seoul and emerging Southeast Asian markets Hanoi, Ho Chi Minh City, Bangkok, Kuala Lumpur and Jakarta. Explosive growth in data centre demand across APAC has also deepened the sector’s environmental impact.

Data Centers operate and manage servers for the entire system of an enterprise. This is the place to place computer equipment,with high density to process and store information, cooling and air ventilation, fire-fighting system,...

“With political stability, the absence of terrorism and low incidence of natural disasters, such as earthquakes, Vietnam has the necessary attributes to be a major data center market.“ Trang Bui, CEO of Cushman & Wakefield Vietnam.

According to Cushman & Wakefield, Vietnam currently has about 27 data centers (DCs) located in big cities with a variety of sizes and quality, meeting standards and certificates at many different levels. The overall market is estimated at around 45MW with some operators and new developers looking to add more supply to the market in the short to medium term.

About 80% of the Data centres in Vietnam are operated by local telecommunication companies. Major players include:

  • VNPT IDC (7 facilities, 2 of 10,000 sqm, others under 2,000 sqm in addition to joint-ventures in other projects of large scales from 5,000 – 6,000 sqm);
  • Viettel IDC (5 facilities, 1 of 10,000 sqm, 3 of 3,000 – 6,500 sqm, 1 of 500 sqm);
  • FPT Telecom (4 facilities, all under 5,000 sqm).
  • Some other names include CMC Telecom, KDDI Corporation, Hitachi Asia (Vietnam), Hewlett Packard Enterprise, SAP Vietnam, IBM Vietnam Company, Microsoft Vietnam and Amazon Web Services Vietnam.

Major end users include IT & Telecom, Government, BFSI, Healthcare and Others.

Data centres are energy and carbon-intensive type of property due to the constant operation of cooling systems, IT equipment, power generators and facility lighting. In fact, carbon emissions from data centres contribute up to 3.7% of total greenhouse gas emissions, placing it ahead of aviation (2.4%), shipping (2.3%) and rice cultivation (1.5%).

More efficient energy usage will be required to reduce its carbon footprint. But emissions, while vital to address, are only part of the sustainability picture. A new Cushman & Wakefield report, Energy, Water, Carbon: A New Trinity for Measuring Data Centre Sustainability, mentions:

  • Power usage efficiency (PUE) - the traditional measure of data centre sustainability: the facilities’ total power / the energy used by IT equipment. The ideal PUE level is 1.0.
  • Carbon usage effectiveness (CUE) - measures the carbon emissions from a data centre: CO2 emissions caused by total data centre energy / the energy used by IT equipment. The ideal CUE level is 0.0. 
  • Water usage efficiency (WUE) - tracks how much water is used for cooling and other operational needs: total water usage by data centre / the energy used by IT equipment. The ideal WUE level is 0.0.

The industry has made significant improvements to PUE over recent years; the industry average has dropped from around 2.5 in 2007 to 1.5 today. However, water consumption and carbon emissions need to also to be measured in addition to power usage to provide a more holistic picture of data centres’ true environmental impact.

Like green buildings, operational costs as well as environmental impact can be reduced when businesses take initiative right from the beginning of the design process, selection of materials and cooling system. CUE can be improved with the use of renewable energy such as wind power, solar power. WUE can decrease depending on the design of the cooling system, creative solution to reuse water or rainwater harvest.

Data centres built in cooler climates have a natural advantage and an opportunity to pump cold air into a facility. This removes excess heat in the system, reducing the need for traditional computer room air-based cooling systems, which are both energy and carbon-intensive. When data centres can’t use natural cold air, facilities can instead utilise heat recovery systems to provide excess heat to local businesses or municipalities. 

“For as long as we see increasing digitisation of everything from banking to manufacturing to communications and media the demand for data centres will only grow. The only way to future-proof the sector is to ensure regulatory standards keep pace. 

To support the development of data centers in Vietnam, there needs to be an improvement in telecommunication infrastructure and dependable power systems to prevent downtime as well as adhere to international standards.” Trang Bui continues.

In addition, aggressive incentive packages from the Government such as preferential tax rates or land use fees for data center development will encourage developers to participate in this market. The quality of human capital is also a critical factor in managing the operation of data centers and delivering high-quality services.

The report, Energy, Water, Carbon: A New Trinity for Measuring Data Centre Sustainability was created following the Cushman & Wakefield webinar Data Centres: Driving the Sustainability Agenda. A replay of the webinar is available here.

Recent Press Release

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Data centres: Headroom for growth in Asia Pacific

Data centres across Asia Pacific are growing in scale and new markets are being evaluated for expansion as operators anticipate increased demand from continued digitization and wider adoption of artificial intelligence.

Trang Bui • 08/09/2023

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Quynh Dang • 14/06/2023

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Cushman & Wakefield has marked International Women’s Day 2023 by announcing its Women’s Integrated Network (WIN) has surpassed 500 members across Asia Pacific.

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