GDS Holdings Limited (Nasdaq: GDS), developer and operator of ‘high-performance’ data centers in China, has acquired a site in Pujiang Area, Minhang District of Shanghai, for a total consideration of 1.37 billion Chinese Yuan (approximately $200 million). The Site is located around 25 kms from the GDS’ existing cluster of 11 data centers in the Shanghai Waigaoqiao Free Trade Zone.

The acquired site consists of approximately 212,000 square meters of total land area, with roughly half of it developed and half greenfield. It will be used for a major new data center campus, which GDS intends to develop in multiple phases over several years.

For phase 1, GDS intends to convert two existing industrial buildings into data centers (to be known as ‘SH16’ and ‘SH17’), yielding a total net floor area of approximately 22,600 square meters of high-power density capacity, based on the preliminary design. The construction will be initiated shortly and is expected to be completed in early 2021. Access to power has been obtained for phase 1, while the development of subsequent phases will be contingent upon obtaining additional power capacity.

“Shanghai is a high-priority location for our customers, and we’re excited to be expanding and strengthening our footprint in this extremely desirable and resource constrained Tier-1 market,” said William Huang, Chairman and Chief Executive Officer (CEO) of GDS. “We already have strong customer demand in-hand and we are confident that phase 1 will sell out quickly. The acquisition of additional land in Shanghai coupled with the strong support of the local government when it comes to the digital economy, will enable us to meet the region’s growth in cloud adoption and need for low-latency infrastructure.”

It would be an attractive location for enterprise customers, while the site’s large developable area would also be well-suited to the requirements of hyperscale customers. By acquiring the site, GDS will have long term security of tenure and control over the design and phasing of the development.

CSPs in China

GDS - Data Centers China

GDS’ data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancy across all critical systems. The company operates its facilities carrier and cloud neutral, which enables customers to connect directly to all major PRC telecommunications carriers and to the largest PRC and global cloud service providers (CSPs) hosted by GDS in many of its facilities.

The announcement follows the news of GDS acquiring a data center campus in the Shunyi district, around 8 kilometers away from GDS’ existing Beijing 5 data center, for $109,9 million. The acquired campus in Beijing comprises three data centers with a total area in service and under construction of approximately 19,700 sqm, which is 100% committed or pre-committed by two of GDS’ current largest customers. The company expects to complete the acquisition in the first half of 2020, subject to customary closing conditions.