As Covid-19 moved the world online, the amount of data generated surged. Scalability and growth have become crucial factors in the modern business realm. Amidst the rising competition, data centers have become integral to a business’s scheme of things. According to Mr. Troy Griffiths, Deputy managing director of Savills Vietnam, there are two key drivers behind the escalated increase in data center demand: computing power and digital infrastructure. These factors are driven by the large-scale shift to working from home for many businesses and organizations, plus the growth in video streaming, video conferencing, online gaming and social networking.
To accommodate this explosive rise in demand for storage capacity, the number of data centres is expanding rapidly across the globe and in all shapes and sizes (hyperscale, cloud, edge, micro and modular). Vietnam is among the key region driving global data centre growth. In this market, Vietnam stood at $858 million in 2020 and is forecast to grow at a compound annual growth rate of over 14.64% until 2026 (according to Researchandmarket.com). These significant figures also convincingly demonstrate for the fact that domestic and international investors are increasingly turning to alternatives in the Vietnamese market such as data centres and self-storage services to diversify their portfolios. The partnership between USDC Technology with Edge Centres recently on 29 September 2022 is also one of the expected events of the market for the development of edge data center facility in Vietnam.
Attractiveness for investment opportunities increasing
“While the land fund in the central area of cities is increasingly short, the suburbs offer plenty of land with good rents and are less affected by natural disasters, thus rendering ideal locations for this demand. The ability to connect to 4G and 5G networks also greatly affects investors’ decisions for choosing a location for their data centres,” said Trang Bui, senior director at JLL Vietnam.
With the global economy under pressure, “real estate investors are looking for defensive strategies that will keep them safe during the downturn. Thus, data centres are currently at the top of investors’ list of concerns,” she added.
Another attraction for investors is long-term rental contracts, as rental demand is less affected by the ups and downs of the traditional real estate market, helping investors enjoy more stable and sustainable benefits. Profits on data centres tend to be higher than in traditional real estate sectors. For example, while the overall real estate investment market has gone down by 12% in 2021, investments in data centres real estate have grown by 25% on average.
“Data centres are an alternative real estate segment for investors who are faced with record-low yields and eager to hunt for new opportunities in potentially growing segments,” Bui added.
Vietnam’s data center market is getting more and more attraction from domestic and foreign investors. This is a great chance but also a challenge to data center key players – like USDC Technology. Our critical mission is to leverage our service’s quality and continuous enhancement in technology so that we would be able to adapt to the great demand from the market.
