Vietnam may attract Google, Amazon to open data centers (according to JLL)

Vietnam can attract Google, Amazon and Microsoft to develop its own data centers thanks to its strategic location and dynamic policies, according to JLL.

JLL, a real estate and investment management firm, operates in more than 80 countries in a recent report.

According to JLL, the data center market in Vietnam is dominated by domestic telecommunications companies such as Viettel IDC, FPT Telecom, VNPT, CMC Telecom … The demand for cloud storage and big data analytics services from these providers has grown strongly over the past time.

Currently, many international businesses are starting to enter the Vietnamese data center market. Some notable projects, such as Gaw Capital’s (Hong Kong) 20 MW capacity center in Ho Chi Minh City’s Hi-Tech Park. NTT (Japan) and QD Tek (Vietnam) jointly opened a data center worth $70 million.

Recently, Alibaba also announced plans to set up a data center in Vietnam. Speaking to Nikkei Asia, Dang Minh Tam, head of solution architect at Alibaba Cloud, said the group’s plan is to catch up with demand in one of Asia’s fastest-growing economies.

“Vietnam is becoming a hub for data center investment in Asia,” said Celina Chua, JLL’s Director of Data Center Customer Solutions (APAC).

Many cloud service providers from the US are expected by JLL to follow in the footsteps of the Chinese e-commerce company, making the market increasingly competitive and diversifying services. “It is only a matter of time before Google, Amazon, Microsoft, Tencent invest in their own data centers in Vietnam,” JLL said.

In a report on the Asia-Pacific market, research firm Savills also identified Vietnam’s data center industry as one of the fastest growing markets in the world.

Currently, Vietnam has 28 data centers in three regions with a total capacity of 45MW. Savills estimates that the supply of this sector in Vietnam, Thailand, Indonesia and Malaysia is still less than Hong Kong or Singapore, although the population is about 30 times larger.

According to research units, Vietnam dominates in attracting data center investors thanks to its strategic geographical location, dynamic economic policies, and young population. The Telecommunications Law 2023 takes effect from the beginning of 2025 with more flexible and open regulations that will facilitate the development of this market and attract more foreign investment.

Power Plan VIII and its implementation plan, which have just been approved, are also expected to ensure a stable energy supply to meet the growing demand of data centers.

Reasonable construction costs, according to JLL, are also advantages of Vietnam, ranging from 6 to 13 million USD per MW, depending on the agreement and each locality. Regionally, Japan, Singapore and South Korea are facing escalating costs. In contrast, countries with more economical investment costs become alternatives such as China and India.

However, the rapid rate of increase also comes with risks. Savills experts said that Vietnam needs to solve the challenges of ensuring data privacy, cybersecurity, sustainable resource consumption to attract investors in this field in the coming time.

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