VNET Group, Inc. announced it has executed a definitive agreement with Dajia Investment Holding Company Ltd. to jointly form a pre-REITs fund. This fund is established to invest in hyperscale data centers across mainland China, marking a significant milestone for China's data center sector and reflecting a growing trend among domestic institutional investors.
The initial assets for the Fund's investment are the first and second phases of VNET's Taicang IDC Campus, which possess a total IT capacity of approximately 210MW and an estimated value of RMB5.74 billion. The transaction implies a post-closing valuation of approximately 10.1x EV/EBITDA for these assets. VNET will retain a 51% equity interest in the assets through the Fund, while Dajia will acquire and hold the remaining 49% interest.
VNET will consolidate the financial results of the Fund and its underlying assets into its financial statements and will continue to operate the assets to ensure stable, premium IDC services. This strategic initiative is designed to effectively manage capital and asset operating cycles, bolster capital sources with long-term investors, and further enhance VNET's balance sheet efficiency, propelling its long-term growth.
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