AI-driven data center boom lifts construction cost as Vietnam emerges as low-cost hub

The Asia Pacific Data Centre Construction Cost Guide 2026 by the commercial real estate services firm shows that the rapid expansion of AI workloads is reshaping how data centers are designed, powered and built, increasing capital expenditure and widening cost gaps between markets.

Japan remains the most expensive market in the region for data center construction, at US$19.2 million per megawatt (MW), followed by Singapore at $17.9 million per MW.

Taiwan is significantly lower, at around $7.9 million per MW.

Data center capacity is measured by total electrical power available to support computing systems rather than physical size or server count.

As a result, construction costs are typically calculated based on power capacity.

With lower costs, Vietnam is becoming a key hub in the region’s next wave of data center expansion.

In Ho Chi Minh City and Hanoi, construction costs range from $5.7 million to $8.7 million per MW, averaging around $7.2 million per MW.

This aligns with earlier estimates from CBRE, which put Vietnam’s data center construction cost at about $7 million per watt.

Andrew Green, head of Data Center Group of Asia Pacific at Cushman & Wakefield, said AI demand is reshaping technical standards for data centers, from power density and cooling systems to structural requirements.

He said these changes are driving up investment costs and creating notable differences between markets, depending on power availability, workforce capacity, and local deployment conditions.

Vietnam’s data center market is currently led by two major hubs, Hanoi and Ho Chi Minh City, with around 73 MW of operational capacity and an additional 137 MW expected to be added by 2030, according to Cushman & Wakefield.

These figures point to steady expansion, although the market still lags behind its regional peers such as Singapore, Thailand, and the Philippines.

However, the biggest challenge at present lies in access to power, which is becoming a key factor in the feasibility of data center projects.

Le Hoang Lan Nhu Ngoc, senior director and head of strategic consulting at Cushman & Wakefield Vietnam, said Vietnam benefits from competitive costs and rising demand driven by cloud computing, AI, and the digital economy.

She said Vietnam is still at an early stage of development, which also creates strong long-term growth potential.

As a result, Vietnam could emerge as an alternative destination as more established markets in the region face resource constraints, provided it can address power supply challenges and select suitable locations.