Data centers: trends of the future

Aug 16, 2021

1. Today I read a very good article by JLL Vietnam about real estate for data centers. Let me summarize some of the main points of this article:

Data centers are an essential part of any business, leasing a place for servers to store data, analyze data, process and transmit technical services and other services and more.

Covid-19 is seen as a catalyst driving the demand for digital infrastructure to increase.

In 2021, Cisco forecasts that global internet traffic will triple from 2016 and reach 3.3 zettabytes annually, of which, traffic to online video (including Nextflix and YouTube) accounts for 82 %; in which 43% are mobile connections.

Advantages of data center real estate:

  • Long-term lease, less affected by external factors like traditional real estate
  • Profit when offering data center is higher than traditional real estate.

Disadvantages of data center real estate:

  • The cost of building a data center is many times higher than that of a traditional warehouse or office building.
  • Differences in the regulations of the cities on the establishment of data centers
  • It is necessary to ensure that the power supply is sufficient and continuous without any interruption. Data centers use a lot of power, which requires 24/7/365 continuous operation, and then the power required to cool the equipment. In addition, data centers also regularly generate a large amount of CO2 emissions that affect the environment.

2. The question is where is the current land fund for data center investment in Vietnam?

According to my observations, existing data centers in Hanoi are usually concentrated in Hoa Lac Hi-Tech Park, in Ho Chi Minh City: Sai Gon high-tech parks in District 9.

4/5/2020: The largest Data Center project in Vietnam of FPT Telecom (FPT Telecom) with an area of ​​​​10,000 m2 has officially started construction in Sai Gon high-tech parks, HCM City

Viettel IDC has 4 data centers: Phap Van Data Center, Hoa Lac Data Center, Hoang Hoa Tham Data Center, Binh Duong Data Center.

According to the Vietnam Information and Communication Technology White Paper 2020, by the end of 2019, there are 4 centralized information technology parks in the country, including: Quang Trung Software Park (Ho Chi Minh City), Da Nang IT Park, Cau Giay Hanoi concentrated information technology park and Hanoi Software Technology Park. These concentrated information technology parks have a total of 887 businesses operating, with a total of 42,700 information technology workers.

Ho Chi Minh City and Hanoi are the places with the most demand for data centers, but the land for data centers from 3-5 hectares is almost no longer available, while the neighboring provinces of Ho Chi Minh City such as Binh Duong, Dong Nai and Long An do not have a clear plan for this type of investment attration. Often lease land depending on each specific case.

3. Danang IT Park (Da Nang IT Park)

However, there is a well-planned place for data centers in particular as well as industries related to information technology and high technology in general, which is Da Nang Centralized Information Technology Park (Da Nang IT Park) with the expectation of having the largest concentrated IT Industrial Park in the country.

Da Nang IT Park with a scale of 341 hectares in Hoa Lien commune, Hoa Vang district, has now been put into operation in phase 1 with an area of ​​131 hectares with an investment of 47 million USD, phase 1 has been put into operation. Phase 2 includes 210 hectares with an investment of 74 million USD.

Danang IT Park was signed by the Prime Minister Decision No. 27/QD/TTg dated January 6, 2020 on the Decision to establish Da Nang Centralized Information Technology Park

Danang IT Park is located in a prime location of the Northwest economic development belt of Da Nang, 20 minutes from the city center by car. From here, it is easy to reach the administrative - business district, airport, seaport, universities and local tourist attractions.

Danang IT Park is divided into different functional subdivisions:

Division A: Division of production and sales of information technology products and services

has the remaining land area for lease (updated in early 2021) is 35 ha, lease term is 2062

Division A also has ready-built factories for rent and buit to suit factories

Factory standard: 2-storey factory, floor area from 3,000 m2. Reinforced concrete structure, soundproof, heat-insulated wall, anti-static epoxy floor, central air conditioning system of the whole factory, automatic fire protection system, floor height 06 m, floor load 1 Ton/m2; rooftop solar system for the whole factory; The factory integrates auxiliary functions including: office, warehouse, canteen, elevator for employees and freight elevator, parking system, smart, modern and airy garage. The expected handover time of block A2 is Q4.2021

Division B: Division of Research - Development, consulting and training of information technology incubators

Division C: Office subdivision, working headquarters serving the management and administration combined with exhibitions, exhibitions, product introduction and communication

There is also other subdivisions providing services for the IT Park, including

Division D: housing for experts working in the IT Park (including apartment buildings and villas)

Division E: Ecological subdivision and civil services: trees, water surface, physical training and sports

For more details about some plans for data centers in Vietnam as well as to lease land and ready-built factories of Da Nang Information Technology Park, please contact (+84) 90806 9399