GDS Holdings Announces Unique Monetization Deal for Data Centers
Shanghai, China, March 10, 2025 – In an innovative move, GDS Holdings Limited (GDS), a leading developer and operator of high-performance data centers in China, has announced plans to monetize a significant portion of its data center assets. The deal, which involves selling a 70% equity interest in certain data centers, is expected to fetch an impressive enterprise value to EBITDA multiple of approximately 13 times.
Transaction Details
GDS is selling a 100% equity interest in specific data center project companies to a private REIT, known as a P-REIT. This special purpose equity scheme is being facilitated by the issue of an Asset Backed Security (ABS).
Top-tier institutional investors in China, led by China Life Insurance Company Limited, have subscribed for 70% of the ABS. GDS, on the other hand, will purchase the remaining 30% and retain the rights to operate the underlying data centers.
Impact on GDS Holdings
This transaction is expected to provide GDS Holdings with significant capital to reinvest in its business, potentially fueling further growth and expansion. The company will continue to manage and operate the data centers, ensuring the high-quality services its clients have come to expect.
Global Implications
The success of this deal could pave the way for more data center monetization deals in the future. This trend could lead to increased investment in the sector, driving innovation and growth. Additionally, it may attract more institutional investors to the data center market, further strengthening its position as a viable asset class.
Listing on the Shanghai Stock Exchange
The ABS will be listed on the Shanghai Stock Exchange as a standardized security product. This listing could increase transparency and liquidity for investors, making it easier to buy and sell stakes in data center assets. It also highlights the growing importance of the data center sector in China’s financial markets.
Conclusion
GDS Holdings’ innovative monetization deal marks an exciting development in the data center industry. By selling a portion of its data center assets through a P-REIT structure, GDS is not only securing significant capital for future growth but also paving the way for increased investment in the sector. As the world continues to rely more on digital infrastructure, deals like this are sure to reshape the landscape of the data center market.
- GDS Holdings sells 70% equity interest in data centers for an implied EV to EBITDA multiple of around 13 times
- Transaction involves a private REIT (P-REIT) and an Asset Backed Security (ABS)
- Top-tier Chinese institutional investors, led by China Life Insurance Company Limited, subscribe for 70% of the ABS
- GDS retains rights to operate data centers and purchases the remaining 30% of the ABS
- ABS to be listed on the Shanghai Stock Exchange as a standardized security product
- Deal could lead to increased investment, innovation, and transparency in the data center sector
