According to the strategic cooperation framework agreement signed by both parties, GDS and GIC will initially focus on a build-to-suit (BTS) data centre program for an internet and cloud service provider which is a strategic customer of GDS.
Under the agreement, GDS will set up individual project companies to undertake the development of each data centre and own 100 per cent during the construction phase.
Once a data centre is completed, GDS will sell a 90 per cent equity interest in the project company to GIC at development plus financing cost. It will continue to provide management and operating services to the joint venture.
No financial details were mentioned in the statement.
The partnership’s first project will be an under-construction data centre at a campus in Jiangsu province. GDS has previously completed three BTS data centres for its customer at its campus in Hebei province. The three data centres will be outside of the GIC deal.
GDS said its large internet and cloud service provider customers require substantial capacity at locations outside of Tier 1 markets to host their less latency-sensitive data and applications.
“The partnership with GIC enables us to supplement our primary offerings and cost-effectively fulfill the broader requirements of strategic customers outside of Tier 1 markets,” said GDC chairman and CEO William Huang.
GIC has been actively pursuing joint venture deals to build and operate data centres in Asia and other parts of the world.
In July, the fund said it was acquiring and developing six hyperscale data centres in Europe for more than $1 billion through its 80:20 joint venture with global data centre firm Equinix.
In June, GIC also partnered with data centre provider Polymer Connected to develop a campus in Jakarta to tap the growth of the internet economy in Indonesia as well as the region.
The asset, which will include 2.6MW Tier III and 26MW Tier IV data centre facilities, will adopt a hyperscale model and will be leased on a long-term basis to wholesale clients.
According to a study conducted by industry intelligence firm Synergy Research Group, by the end of 2017, nearly 400 hyper data centres were in operation, with only 24 companies responsible for building and maintaining these centres.