Vietnam continues to be recognized as an attractive destination for data centre investors. According to the Asia Pacific Data Centre Construction Cost Guide 2025 by Cushman & Wakefield, which covers 90 data centre clusters in 26 cities, Vietnam boasts some of the lowest construction costs in the Asia-Pacific region, second only to Taiwan.
The report reveals that the average construction cost for a mid specification standard data centre in Vietnam is USD 6,935,600 per megawatt, an increase of 3.5% y-o-y (equivalent to VND 175,470,680,000 per megawatt). Electrical systems account for the greatest share of this cost (26%), followed by mechanical systems and Interior Fit-Out / Finishes at 13% each. Other expenses include cooling systems; fire supression & life safety systems; security systems; furniture & fixtures; and IT racks, equipment & cabling. Land costs represent only 5% of the total, with the price for mid-category suburban land with available infrastructure averaging USD 209 per square meter across both Ho Chi Minh City and Hanoi.
Leading companies such as Apple, Intel, Canon, Samsung, LG, LEGO, Airbus, and other global organizations have begun working with Vietnamese partners to establish digital transformation strategies as part of a comprehensive approach to global business. The Vietnamese government has also announced the National Data Centre Project to securely store government data as it advances towards robust digitalization in the public sector. These efforts not only drive the growth of pioneering businesses but also expand the capacity of data centers in Vietnam.
According to Cushman & Wakefield's 2024 data, Vietnam currently has 51 MW of operational data centre capacity, 11 MW under construction, and an additional 28 MW planned within the next five to seven years. HCMC currently accounts for 50% of the operational capacity in Vietnam, which is dominated by local telecom providers who have struggled meet the demand in Vietnam’s domestic market. However, the landscape is poised to change since the Vietnamese government announced the Law on Telecommunications that eases processes around data localization and cancels foreign ownership caps for data and cloud providers to allow for foreign ownership in the country. These exemptions from the usual market entry constraints in Vietnam will entice more international operators to enter the market: STT Telemedia Global Data Centres have announced a JV with VNG Corporation; Alibaba and South Korean industrial conglomerate, Hyosung Corporation, have both also recently announced plans or expressed interest in developing data centres in HCMC.
Viettel have announced that they have partnered with Singtel to develop a submarine cable connecting Vietnam to Singapore and Southeast neighbours Cambodia, Thailand and Malaysia. The national telco is also planning for at least two Vietnamese-owned cables to be operational by 2030, prioritizing shorter routes to other Asia digital hubs to support the government in building and developing digital infrastructure in Vietnam. As such advances take place, Vietnam will become a more attractive market for data centre investment.
"Compared to mature markets, the data centre market in Vietnam is still in its infancy with a more 'modest' growth rate. However, with competitive construction costs and land prices, along with a prime geographical location, Vietnam has great potential to become a data centre market, as evidenced by the level of interest from international operators. Although current barriers have limited actual investment volumes, increasing transparency, openness to foreign investment, and national regulatory reforms will create more opportunities for international investors and drive industry growth," said Trang Bui, Country Head of Cushman & Wakefield Vietnam.
However, the data centre market in Vietnam still faces many challenges. One of the biggest challenges is the ability to provide stable and robust power, which is crucial for maintaining data centre operations. In Vietnam, frequent power outages occur as the national grid struggles to meet peak demand. The government is working to add about 6.6 GW of power capacity, but this could take years to complete.
Additionally, complex legal regulations and administrative procedures are also major barriers. Obtaining the necessary permits and navigating the broader legal landscape in Vietnam can be challenging. Finally, the skilled labor force in the construction and operation of data centres is still limited. This is especially true in emerging markets, where the workforce capable of building large-scale industrial projects requiring high reliability is still relatively small.
Please click here for a deeper analysis of the Data Centre Construction Guide 2025 report.
