GDS Announces First Ever Monetization Of Data Center Assets In China Through Sale To A Private REIT
GDS Holdings (NASDAQ: GDS; HKEX: 9698) has announced a groundbreaking asset monetization deal through the sale of data center assets to a private REIT (P-REIT) in China. The company will sell a 100% equity interest in certain data center project companies at an enterprise value of RMB 2.9 billion, with an EV/EBITDA multiple of 13x.
The transaction structure involves an Asset Backed Security (ABS) that will be listed on the Shanghai Stock Exchange. China Life Insurance Company leads a group of institutional investors acquiring 70% of the ABS, while GDS retains 30% ownership and continues operating the data centers. The total equity consideration is RMB 1.7 billion, with GDS receiving net cash proceeds of RMB 500 million at closing and approximately RMB 700 million upon meeting certain data center ramp-up milestones.
The deal will result in the deconsolidation of data center project companies, including RMB 1.2 billion in existing debt and other net liabilities. The P-REIT structure is designed to potentially transition into a public REIT (C-REIT) when qualified.
GDS Holdings (NASDAQ: GDS; HKEX: 9698) ha annunciato un accordo innovativo di monetizzazione degli asset attraverso la vendita di asset di data center a un REIT privato (P-REIT) in Cina. L'azienda venderà una partecipazione azionaria del 100% in alcune società di progetto per data center a un valore d'impresa di 2,9 miliardi di RMB, con un multiplo EV/EBITDA di 13x.
La struttura della transazione prevede un Asset Backed Security (ABS) che sarà quotato sulla Borsa di Shanghai. China Life Insurance Company guida un gruppo di investitori istituzionali che acquisiscono il 70% dell'ABS, mentre GDS mantiene il 30% della proprietà e continua a gestire i data center. Il corrispettivo totale in equity è di 1,7 miliardi di RMB, con GDS che riceve proventi netti in contante di 500 milioni di RMB al closing e circa 700 milioni di RMB al raggiungimento di determinati traguardi di aumento della capacità dei data center.
L'accordo porterà alla deconsolidazione delle società di progetto per data center, inclusi 1,2 miliardi di RMB di debito esistente e altre passività nette. La struttura del P-REIT è progettata per potenzialmente transitare in un REIT pubblico (C-REIT) quando qualificato.
GDS Holdings (NASDAQ: GDS; HKEX: 9698) ha anunciado un acuerdo innovador de monetización de activos mediante la venta de activos de centros de datos a un REIT privado (P-REIT) en China. La compañía venderá una participación del 100% en ciertas empresas de proyectos de centros de datos a un valor empresarial de 2,9 mil millones de RMB, con un múltiplo EV/EBITDA de 13x.
La estructura de la transacción implica un Asset Backed Security (ABS) que será listado en la Bolsa de Shanghái. China Life Insurance Company lidera un grupo de inversores institucionales que adquieren el 70% del ABS, mientras que GDS conserva el 30% de la propiedad y continúa operando los centros de datos. La consideración total en capital es de 1,7 mil millones de RMB, con GDS recibiendo ingresos netos en efectivo de 500 millones de RMB al cierre y aproximadamente 700 millones de RMB al cumplir con ciertos hitos de aumento de capacidad de los centros de datos.
El acuerdo resultará en la deconsolidación de las empresas de proyectos de centros de datos, incluyendo 1,2 mil millones de RMB en deuda existente y otras pasivos netos. La estructura del P-REIT está diseñada para potencialmente transitar a un REIT público (C-REIT) cuando califique.
GDS Holdings (NASDAQ: GDS; HKEX: 9698)는 중국의 사모 리츠(P-REIT)에 데이터 센터 자산을 판매하는 혁신적인 자산 수익화 거래를 발표했습니다. 회사는 특정 데이터 센터 프로젝트 회사의 100% 지분을 29억 위안의 기업 가치로 판매하며, EV/EBITDA 배수는 13배입니다.
거래 구조는 상하이 증권 거래소에 상장될 자산 담보 증권(ABS)을 포함합니다. China Life Insurance Company는 ABS의 70%를 인수하는 기관 투자자 그룹을 이끌며, GDS는 30%의 소유권을 유지하고 데이터 센터 운영을 계속합니다. 총 자본 고려액은 17억 위안이며, GDS는 거래 종료 시 5억 위안의 순 현금을 받고 데이터 센터 용량 증가 이정표를 충족할 때 약 7억 위안을 받게 됩니다.
이 거래는 데이터 센터 프로젝트 회사의 비수익화를 초래하며, 여기에는 12억 위안의 기존 부채와 기타 순부채가 포함됩니다. P-REIT 구조는 자격을 갖추면 공모 리츠(C-REIT)로 전환될 수 있도록 설계되었습니다.
GDS Holdings (NASDAQ: GDS; HKEX: 9698) a annoncé un accord révolutionnaire de monétisation d'actifs par la vente d'actifs de centres de données à un REIT privé (P-REIT) en Chine. L'entreprise vendra une participation de 100% dans certaines sociétés de projet de centres de données à une valeur d'entreprise de 2,9 milliards de RMB, avec un multiple EV/EBITDA de 13x.
La structure de la transaction implique un Asset Backed Security (ABS) qui sera coté à la Bourse de Shanghai. China Life Insurance Company dirige un groupe d'investisseurs institutionnels acquérant 70% de l'ABS, tandis que GDS conserve 30% de la propriété et continue d'exploiter les centres de données. La contrepartie totale en actions s'élève à 1,7 milliard de RMB, GDS recevant des produits nets en espèces de 500 millions de RMB à la clôture et environ 700 millions de RMB lors de l'atteinte de certains jalons d'augmentation de la capacité des centres de données.
L'accord entraînera la déconsolidation des sociétés de projet de centres de données, y compris 1,2 milliard de RMB de dettes existantes et d'autres passifs nets. La structure du P-REIT est conçue pour potentiellement se transformer en un REIT public (C-REIT) lorsqu'elle sera qualifiée.
GDS Holdings (NASDAQ: GDS; HKEX: 9698) hat einen bahnbrechenden Vermögensmonetarisierungsdeal durch den Verkauf von Rechenzentrumsvermögen an einen privaten REIT (P-REIT) in China angekündigt. Das Unternehmen wird eine 100%ige Beteiligung an bestimmten Rechenzentrumsprojektgesellschaften zu einem Unternehmenswert von 2,9 Milliarden RMB verkaufen, mit einem EV/EBITDA-Multiple von 13x.
Die Transaktionsstruktur umfasst ein Asset Backed Security (ABS), das an der Börse Shanghai gelistet wird. China Life Insurance Company führt eine Gruppe von institutionellen Investoren an, die 70% des ABS erwerben, während GDS 30% der Eigentümerschaft behält und weiterhin die Rechenzentren betreibt. Die gesamte Eigenkapitalkompensation beträgt 1,7 Milliarden RMB, wobei GDS bei Abschluss einen Nettobetrag von 500 Millionen RMB erhält und etwa 700 Millionen RMB bei Erfüllung bestimmter Ausbau-Meilensteine der Rechenzentren.
Der Deal wird zur De-Konsolidierung der Rechenzentrumsprojektgesellschaften führen, einschließlich 1,2 Milliarden RMB an bestehenden Schulden und anderen Nettverbindlichkeiten. Die P-REIT-Struktur ist so gestaltet, dass sie potenziell in einen öffentlichen REIT (C-REIT) übergehen kann, wenn sie qualifiziert ist.
- First-ever successful monetization of data center assets in China through P-REIT structure
- Significant debt reduction through deconsolidation of RMB 1.2 billion in liabilities
- Strong validation from major institutional investors led by China Life Insurance
- Substantial cash proceeds of RMB 1.2 billion while maintaining operational control
- Potential future upside through conversion to public C-REIT structure
- Reduction in owned asset base through 70% equity sale
- Future earnings impact from reduced ownership stake in data center assets
- Dependent on meeting milestones for RMB 700 million of delayed proceeds
Insights
GDS's landmark transaction represents a significant financial engineering achievement that simultaneously strengthens the balance sheet while maintaining operational control of assets. The deal's 13x EV/EBITDA multiple indicates strong valuation for data center assets in China, especially notable given current market conditions.
The transaction's structure delivers several immediate benefits: RMB 500 million in upfront cash proceeds, RMB 700 million in milestone-based payments, and removal of RMB 1.2 billion in debt and liabilities through deconsolidation. This effectively represents a
Securing China Life as lead investor demonstrates institutional confidence in both GDS's operational capabilities and the Chinese data center sector's growth trajectory in the AI era. The P-REIT structure pioneered here creates a potential blueprint for future asset monetizations and establishes a pathway toward C-REIT qualification.
The transaction's cash component strengthens GDS's liquidity position, potentially accelerating growth initiatives while the deconsolidation improves leverage ratios and financial flexibility. By retaining operational control and
This transaction establishes a revolutionary capital recycling mechanism for data center operators in China, potentially transforming how infrastructure assets are valued and monetized. The ABS listing on Shanghai Stock Exchange creates a standardized, liquid investment product that bridges private and public REIT markets - previously unavailable for data center assets in China.
The structure demonstrates sophisticated financial engineering: GDS maintains operational control while transferring
The 13x EV/EBITDA multiple sets a valuation benchmark for the sector and validates the premium investors are willing to pay for digital infrastructure with AI-driven growth potential. For context, established US data center REITs typically trade between 15-20x EV/EBITDA, suggesting potential valuation upside as the market develops.
This deal's innovation extends beyond immediate financial benefits - it creates a template for future transactions and establishes GDS as a pioneer in infrastructure monetization. The pathway to eventual C-REIT conversion represents another potential valuation catalyst, as public REITs typically command premium multiples over private market valuations due to enhanced liquidity and governance structures.
GDS has engineered a landmark financial innovation for China's data center industry, successfully monetizing assets while maintaining operational control. The transaction's 13x EV/EBITDA multiple represents strong valuation, especially compared to similar infrastructure assets in the region that typically trade at 10-12x multiples.
The financial benefits are multifaceted: RMB 500 million immediate cash proceeds strengthen liquidity, future milestone payments of RMB 700 million create upside tied to operational performance, and deconsolidation of RMB 1.2 billion in debt significantly improves leverage ratios. This financial engineering effectively creates a
The P-REIT structure with ABS issuance represents genuine financial innovation in China's infrastructure sector, creating a standardized, exchange-listed security that bridges private and public markets. Securing China Life as anchor investor validates both the asset quality and GDS's operational capabilities.
Beyond immediate financial benefits, this transaction establishes a capital recycling framework that could transform GDS's growth model. By maintaining operational control while reducing capital intensity, GDS can potentially accelerate expansion while improving return metrics. The pathway to eventual C-REIT conversion represents an additional potential valuation catalyst.
This deal effectively transforms GDS from a capital-intensive developer-operator to a more asset-light model with improved financial flexibility, while maintaining the operational expertise that drives customer relationships and facility performance.
SHANGHAI, China, March 10, 2025 (GLOBE NEWSWIRE) -- GDS Holdings Limited (“GDS Holdings”, “GDS” or the “Company”) (NASDAQ: GDS; HKEX: 9698), a leading developer and operator of high-performance data centers in China, today announced that it has entered into definitive agreements to monetize, on a net basis, a
The total EV for the transaction is up to approximately RMB 2.9 billion. The total equity consideration is up to approximately RMB 1.7 billion, or RMB 1.2 billion net of the
“We are delighted to announce this breakthrough deal for our asset monetization program,” said William Huang, Chairman and CEO of GDS. “This is a first P-REIT transaction in the China data center sector, featuring a true sale and successful monetization of data center assets. We highly appreciate the participation from China Life as anchor investor, and China Life Investment Management Company Limited as coordinator and advisor (the alternative investment platform of China Life Group), which highlights their confidence in our capabilities as a leading data center operator in China, as well as in the outlook for the sector as we move forward into the AI era.”
The transaction is expected to close within the next three months and is subject to certain closing conditions.
About GDS Holdings Limited
GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698) is a leading developer and operator of high-performance data centers in China. The Company’s facilities are strategically located in and around primary economic hubs where demand for high-performance data center services is concentrated. The Company’s data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancies across all critical systems. GDS is carrier and cloud-neutral, which enables its customers to access the major telecommunications networks, as well as the largest PRC and global public clouds, which are hosted in many of its facilities. The Company offers co-location and a suite of value-added services, including managed hybrid cloud services through direct private connection to leading public clouds, managed network services, and, where required, the resale of public cloud services. The Company has a 24-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services in China. The Company’s customer base consists predominantly of hyperscale cloud service providers, large internet companies, financial institutions, telecommunications carriers, IT service providers, and large domestic private sector and multinational corporations. The Company also holds a non-controlling
For investor and media inquiries, please contact:
GDS Holdings Limited
Laura Chen
Phone: +86 (21) 2029-2203
Email: ir@gds-services.com
Piacente Financial Communications
Ross Warner
Phone: +86 (10) 6508-0677
Email: GDS@tpg-ir.com
Brandi Piacente
Phone: +1 (212) 481-2050
Email: GDS@tpg-ir.com
GDS Holdings Limited
FAQ
What is the total enterprise value of GDS Holdings' data center asset sale to P-REIT?
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What percentage of the ABS will GDS retain in the P-REIT transaction?
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