GDS Is Building an Asian Data Center Portfolio

We expect GDS Holdings to continue to purchase and build data centers in and around its focus Tier 1 Chinese cities of Shanghai, Beijing, Shenzhen, Guangzhou, Hong Kong, Chengdu, and Chongqing. As its network of interconnected data centers grows it can more easily cater to the demand from its key cloud service provider customers allowing them to expand in a flexible way in their key markets. This also enables key enterprise customers to deploy their hybrid clouds in close proximity to the networked nodes of leading public clouds. The company is also excited about its international expansion into Southeast Asia. The company has completed several equity funding deals for its international business, raising USD 1.7 billion and leaving GDS with a 37.6% stake in it on a postclosing and as-converted basis. This would value GDS' stake at USD 1.3 billion or USD 6.75 per ADR on a USD 400 million investment. An IPO of this business is a possibility down the track. The creation of a listed REIT seeded by some of GDS' mature Chinese data centers is also being considered.