GDS Holdings has set up a RMB 2.6 billion ($371 million) joint venture with a private fund management unit of state-run investment firm CITIC to develop a new data centre in suburban Beijing, as the mainland server facility specialist ramps up its capacity in top tier markets.
The Shanghai-headquartered firm’s JV with CITIC Private Equity Funds has already acquired an 82 percent stake in an entity which owns the rights to a data centre in the capital’s Tongzhou district which has capacity to yield a 63 megawatt server facility, according to a statement by GDS.
The Beijing joint venture comes after GDS snatched up two new sites during the first quarter — one each in Shanghai and Chonqqing — adding the potential for 83,000 square metres of data centre space to its mainland portfolio to support rising demand for cloud services and 5G mobile networks.
Completion Expected in 2023
“We are delighted to partner with CPE Fund in this rare opportunity to expand our presence with an unusually large scale project in Beijing,” said William Huang, chairman and CEO of GDS.
Huang’s company will initially hold a 58 percent stake in the JV with a CITIC fund holding the remaining 42 percent. The partners expect the total cost of acquiring the greenfield site and developing the facility to be known as BJ13 to reach RMB 2.6 billion by the time the 10,500 second phase of the project is completed in mid-2023.
The first phase of the 21,000 square metre data centre is slated to enter service in early 2022, adding to GDS’ 286,990 square metre (3,089,134 square foot) portfolio of carrier and cloud neutral facilities in the country.
The joint venture will acquire the remaining 18 percent stake in the project company upon completion of the data centre, with GDS assuming responsibility for construction on a turnkey basis.
Building Up in Beijing
GDS’ Tongzhou deal comes after the company spent RMB 2.5 billion in December last year to acquire a data centre campus in the capital’s Shunyi district, with Huang pointing out his preference for acquiring sites in China’s largest markets.
“In the past few years, we have successfully generated a lot of new capacity, both organically and through acquisition, in Tier 1 markets where supply is scarce In particular, we have substantially grown our market share in Beijing, the largest Tier 1 market in China,” GDS’ CEO said. He added that, “GDS will continue to focus on developments in key strategic locations and further strengthen our market leading position.”
The new site is located approximately 27 kilometers from the data centre specialist’s existing data centre cluster of BJ1, BJ2, BJ3, and BJ9 in Yizhuang district in Beijing, with GDS endorsing the Tongzhou location as a future data centre hotspot as elements of the Beijing municipal government relocate to the satellite district.