GDS Announces First Ever Monetization Of Data Center Assets In China Through Sale To A Private REIT

Core Viewpoint - GDS Holdings Limited has announced a significant transaction to monetize a 70% equity interest in certain data centers, marking a pioneering move in the Chinese data center sector with an implied enterprise value to EBITDA multiple of approximately 13 times [1][2]. Group 1: Transaction Details - The total enterprise value for the transaction is approximately RMB 2.9 billion, with total equity consideration reaching around RMB 1.7 billion, or RMB 1.2 billion net of GDS's 30% reinvestment in the Asset Backed Security (ABS) [2]. - GDS will receive net cash proceeds of approximately RMB 500 million at closing, with an additional RMB 700 million contingent on meeting specific milestones related to the data centers' ramp-up [2]. - The transaction involves the deconsolidation of data center project companies, including existing debt and other net liabilities of around RMB 1.2 billion at closing [2]. Group 2: Strategic Importance - This transaction is characterized as a first P-REIT transaction in the China data center sector, showcasing a true sale and successful monetization of data center assets [3]. - The participation of China Life Insurance Company Limited as an anchor investor underscores confidence in GDS's capabilities and the sector's outlook as it transitions into the AI era [3]. Group 3: Company Overview - GDS Holdings Limited is a leading developer and operator of high-performance data centers in China, strategically located in primary economic hubs to meet high demand for data center services [4]. - The company offers a range of services, including co-location and managed hybrid cloud services, and has a diverse customer base that includes hyperscale cloud service providers, large internet companies, and financial institutions [4]. - GDS has a 24-year track record in service delivery, fulfilling the needs of some of the largest customers for outsourced data center services in China [4].