Nasdaq-listed GDS Holdings, a developer and operator of data centres in China, announced on June 26 that the China Securities Regulatory Commission (CSRC) and Shanghai Stock Exchange have approved the registration and launch of an initial public offering (IPO) for its China REIT (C-REIT).
The transaction involves the sale by GDS of 100% equity interest in a project company that holds stabilised data centre assets to a newly formed C-REIT. The C-REIT will fund the acquisition through an IPO on the Shanghai Stock Exchange.
GDS will subscribe for 20% of the units to be issued by the C-REIT, with the remaining 80% to be subscribed by institutional and retail investors. 50% of the units have already been pre-placed with cornerstone institutional investors, with lock-up commitments of between one to three years. The remaining 30% will be offered through an institutional book-building process and a retail public offering.
The appraised valuation of the underlying data centre assets to be acquired by the C-REIT, as per the valuation report contained in the offering memorandum, is approximately RMB1,933 million. The final offering price for the C-REIT units will be determined following completion of the institutional bookbuilding, which is expected in approximately one week’s time.
The transaction is expected to close within the next few weeks and is subject to certain closing conditions.
According to the Nasdaq website, the positives are: approval from the CSRC and SSE for the registration and launch of the C-REIT, which demonstrates regulatory confidence in GDS Holdings and its business model.
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Secondly, the C-REIT allows GDS to divest stabilised data centre assets while retaining a 20% interest. This shows strategic capital management and alignment with investor interests.
Pre-placement of 50% of the C-REIT units with cornerstone institutional investors reflects strong initial demand and confidence in the asset valuation of approximately RMB1.93 billion.
In January, GDS International rebranded as DayOne. On March 19, GDS announced DayOne completed and closed its Series B equity raise on December 31, 2024.
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At closing, GDS’s equity interest in DayOne was diluted from 52.7% to 35.6%. GDS deconsolidated DayOne as a subsidiary and recognised DayOne as an equity investee.
In the consolidated financial statements for the quarter and year ended December 31, 2024, DayOne’s operational results and cash flows have been excluded from the company’s financial results from continuing operations and have been separately itemised under discontinued operations.
Retrospective adjustments to the historical statements of operations and cash flows have also been made to provide a consistent basis of comparison for the financial results.
On June 11, Maybank announced it is underwriting RM2.5 billion Islamic Financing for the development of DayOne data centres in the Johor-Singapore Special Economic Zone.
