Việt Nam enjoys competitive construction costs to develop data centres

Việt Nam enjoys competitive construction costs to develop data centres

Việt Nam boasts some of the lowest construction costs for a mid-specification standard data centre in the Asia-Pacific region, according to the latest Asia Pacific Data Centre Construction Cost Guide 2025 by global commercial real estate services company Cushman & Wakefield.

A chart of regional cost per megawatt in 2025, ranked by mid-range cost and based on mid-specification builds. — Photo Courtesy of Cushman & Wakefield

In the report, which covers 90 data centre clusters in 26 cities, Cushman & Wakefield stressed that Việt Nam continued to be recognised as an attractive destination for data centre investors.

The report reveals that the average construction cost for a mid-specification standard data centre in Việt Nam is US$6.9 million per megawatt, an increase of 3.5 per cent year-on-year. 

A significant portion of this cost is attributed to electrical systems, accounting for approximately 26 per cent, followed by mechanical systems and interior fit-out or finishes, each at 13 per cent.

Other expenses include cooling systems, fire suppression and life safety systems, security systems, furniture and fixtures, IT racks, equipment and cabling. Land costs make up only 5 per cent of the total, with mid-category suburban land costs with infrastructure averaging $209 per square metre in both HCM City and Hà Nội.

"Compared to mature markets, the data centre market in Việt Nam 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, Việt Nam 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 Bùi, country head of Cushman & Wakefield Vietnam.

In fact, many leading companies such as Apple, Intel, Canon, Samsung, LG, LEGO, Airbus, and other global organisations 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 digitalisation in the public sector. These efforts not only drive the growth of pioneering businesses but also expand the capacity of data centres in Việt Nam.

According to Cushman & Wakefield's 2024 data, Việt Nam currently has 51MW of operational data centre capacity, 11MW under construction, and an additional 28MW planned within the next five to seven years. 

HCM City currently accounts for 50 per cent of the operational capacity in Việt Nam, which is dominated by local telecom providers who have struggled to meet the demand of Việt Nam’s domestic market.

Cushman & Wakefield predicts that the landscape is poised to change since the Vietnamese Government announced the Law on Telecommunications, which eases processes around data localisation 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 Việt Nam will entice more international operators to enter the market.

STT Telemedia Global Data Centres have announced a joint venture with VNG Corporation, while Alibaba and South Korean industrial conglomerate Hyosung Corporation have both also recently announced plans or expressed interest in developing data centres in HCM City.

Viettel has announced that it has partnered with Singtel to develop a submarine cable connecting Việt Nam 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, prioritising shorter routes to other Asian digital hubs to support the Government in building and developing digital infrastructure in Việt Nam. 

As such advances take place, Việt Nam will become a more attractive market for data centre investment, Cushman & Wakefield added. 

Bizhub