The carrier-neutral internet data centre (IDC) services provider in China signed the strategic investment deal to form the JV and establish a digital real estate platform in China, to pursue development and acquisition opportunities in the wholesale and built-to-suit segments of China's data centre market.
21Vianet is set to seed the JV with four existing high-performing IDC assets, which are valued at over $300 million and will continue to own 51% of the equity interests, and Warburg Pincus will contribute direct capital and extensive industry network and resources in the real estate sector. Future projects developed by the JV will see the equity stakes reversed with Warburg Pincus to take 51% of the future interests.
"We are extremely excited to partner with Warburg Pincus, one of the world's leading private equity firms, and establish a specialised platform to address China's wholesale data centre market. While the company stays focused on its core retail colocation and cloud services, which are centered on interconnection and an open cloud ecosystem, the JV will help strengthen our IDC competitive advantages through broader product offerings and specialized business solutions,” said Steve Zhang, CEO of 21Vianet.
“As China's data centre industry moves towards increased specialization and verticalisation, we firmly believe that the JV will enable us to effectively capture incremental market opportunities from diverse customers and attract more world-class talent."
21Vianet was in the news earlier this year when DYXnet Group merged its virtual private network operation with 21Vianet’s Content Centric Internet Backbone (CCIB) unit, boosting its total internet capacity to 1000G.
Ellen Ng, managing director of Warburg Pincus, added: "Data centres have been one of the best performing real estate asset classes globally and one supported by compelling secular trends in China. We have tracked the sector in China for years and are delighted to collaborate with 21Vianet to form the JV.”
With strong demand for data centre space driven by the exponential growth in data usage and cloud services, the JV will serve as a dedicated vehicle that focuses on wholesale customers and enterprises and an expanded product offering across turn-key data centres, standard modules and built-to-suit solutions. The goal is for the platform to grow to 80,000 to 100,000 cabinets over the next five to seven years.
The JV agreement is expected to close in H1 2017.
