GDS has signed a strategic cooperation framework agreement with GIC, Singapore’s sovereign wealth fund, to develop and operate hyperscale build-to-suit (BTS) data centres outside tier-1 cities in China.
GDS and GIC will focus initially on a BTS data centre program for an internet and cloud service provider, which is a strategic customer of GDS. In parallel with the agreement, GDS has also signed a memorandum of understanding with the customer for multiple BTS data centres at several of its campuses serving different regions of China.
Under the terms of the agreement with GIC, GDS will enter into contractual commitments with the customer for BTS data centres. GDS will set up individual project companies to undertake the development of each data centre and own 100% during the construction phase.
Upon completion of each data centre, GDS will sell a 90% equity interest in the project company to GIC at development plus financing cost, subject to certain conditions. GDS will continue to hold the remaining 10% equity interest of the project company and provide management and operating services to the joint venture. GDS will earn a return over the life of the project from its equity investment plus recurring service fees.
The first project covered by the agreement, a data centre under construction by GDS at the customer’s campus in Jiangsu province, is nearly complete and a 90% equity interest in the relevant project company will be offered to GIC shortly.
By partnering with GIC, GDS will be positioned to offer customers a solution for outsourcing their hyperscale data centres outside of tier-1 markets, with deep capital-backing.
The partnership will enable GDS to broaden its addressable market, strengthen key customer relationships, and generate a new stream of recurring fee income, while maintaining strategic focus and equity returns.