Gaw Capital Acquires Saigon Site for 20MW Data Centre Project

Gaw Capital Partners has added a fifth country to its Asia data centre network with the announcement on Tuesday of a site acquisition in Ho Chi Minh City, Vietnam.

Through a fund under its management the Hong Kong private equity shop has completed the acquisition of a 6,056 square metre (65,186 square foot) greenfield plot within a data centre cluster at Saigon Hi-Tech Park with plans to develop a facility with an IT capacity of 20 MW, the company said.

Gaw Capital sees the new project in Vietnam as providing a foothold in a market which had just three facilities under development by October of last year, according to an independent study, and saw just $420 million in investment during 2020.

“Through the early entry into the market, it allows the firm to be well placed to serve the unmet demand in the market, with that demand being further accelerated by a young, tech-savvy population, rapid pace of development of tech SMEs, and growing high-tech investments in the country,” said Kok Chye Ong, head of data centres for Asia (excluding China) for Gaw Capital.

Progressive ESG Goals

Expected to be completed in 2024, the hyperscale facility is planned to cover a gross floor area of 18,168 square metres, with Gaw promising that the development will “adhere to progressive ESG objectives.”

Gaw describes the carrier neutral tier III data centre as a seed investment for its pan-Asian data centre platform, which the company expanded beyond its original base in mainland China in July last year by hiring Ong, who had formerly served as an executive with Singapore’s Keppel Data Centres.

“Gaw Capital targets to become the industry-leading IDC investor in Vietnam, and with Ho Chi Minh City developing as a key data center market in Southeast Asia, we will continue to look for new investment opportunities and partnerships in the country,” Ong said.

The site is located close to Vietnam’s Highway 1, which links HCMC to Hanoi in the north, and enjoys access to a metro station scheduled to open next year. Before establishing this foothold in the Southeast Asian nation, Gaw Capital had previously announced data centre projects in China, Indonesia, Japan and South Korea.

Infrastructure Hub

Saigon Hi-Tech Park is rapidly becoming a digital infrastructure hub serving the country’s largest city, with a number of data centre operators announcing projects in the development over the past year as investors rush to supply one of Asia’s most rapidly developing economies.

“Vietnam is one of the fastest growing regions in Southeast Asia exhibiting powerful macroeconomic trends and strong demand for internet data centers,” said Vo Sy Nhan, co-founder and chief executive of Gaw NP Capital, the Hong Kong firm’s primary joint venture in the country.

Vo added that, “Due to the impact of the Covid-19 pandemic, Vietnamese businesses are now more aware of the role of digital technology in their production and business activities, which will drive the growth of digital transformation and data usage.”

Gaw NP Capital is the master developer of OneHub Saigon, an integrated business park in Saigon Hi-Tech Park where the new data centre will be located. Gaw NP Capital’s Saigon Bund Capital Partners broke ground on OneHub Saigon in 2015 in a joint venture with Ascendas, which is now part of CapitaLand Group.

Japanese telecom giant NTT said in March that it would be partnering with Vietnam’s QD Tek to develop a 6 MW data centre in Saigon Hi-Tech Park, after Singapore-based Worldwide DC Solution said in December that it had obtained an investment license to develop a server facility in the zone at a total investment capital of $70 million.

Despite this flow of projects into the 913 hectare (2,256 acre) tech park, property consultancy Savills believes that space and connectivity constraints will lead to investors searching out new location opportunities as more data centres move into Vietnam’s urban clusters.

“Data center development opportunities at technology/science parks in Vietnam remained extremely limited as these parks are close to full,” Eric Chong, director of capital markets research for the firm said in a social media post. He added that, “Savills believes investors will need to look for opportunities outside the parks. In additional, sourcing power remains a major challenge as the government is working hard to produce sufficient power for the sector.”