GDS Holdings, the largest carrier-neutral data center operator in China, today announced its Q3 2021 earnings and provided updates on its data center portfolio, utilization, leasing, development pipeline, geographic expansion into Nongsa Digital Park in Indonesia as an outpost for Singapore, and restructuring of its build-operate-transfer (B-O-T) data center joint venture with GIC.

Financial Performance in Q3 2021 – GDS Holdings

In Q3 2021, GDS Holdings reported revenue of RMB2,061m ($320m), a 10.6% increase quarter-over-quarter, and adjusted EBITDA of RMB962m ($149m), a 7.4% increase quarter-over-quarter. Therefore, the company’s EBITDA margin was 46.7% in Q3 2021, a ~140 bps decline quarter-over-quarter.

GDS’ revenue growth was in-part attributable to new capacity brought on-line organically and through acquisition at its Shanghai 14 (SH14) Phase 1, Shanghai 19 (SH19) Phase 1, Changshu 1 (CS1) Phase 1, Changshu 2 (CS2) Phase 1, Beijing 8 (BJ8), Langfang 8 (LF8), Beijing 17 (BJ17), and Beijing 18 (BJ18) data centers.

Operational Performance in Q3 2021 – GDS Holdings


In Q3 2021, GDS brought 27.8k sqm (299k sqft) of area into service. In turn, the company’s total capacity reached 610k sqm (6.6 million sqft), of which 453k sqm (4.9 million sqft) was in service and 157k sqm (1.7 million sqft) was under construction.


In Q3 2021, GDS’ utilized space by customers increased by 18.7k sqm (201k sqft). Additionally, the company’s utilization rate for area in service was 66.3% as of Q3 2021, a 2.7% decline quarter-over-quarter.

Notably, the company’s commitment rate for area in service was 95.9% as of Q3 2021. Therefore, as new lease commencements occur, GDS’ utilization rate should trend closer towards its commitment rate. However, GDS notes a slower pace of move-in for customers during Q3 2021 and expects Q4 2021 will have reduced move-in activity as well. William Huang, GDS’ CEO noted that “server shipment” timing and “energy shortage” impacts have “led a lot of customers to slow down their move-in”.

Monthly service revenue (MSR) per sqm increased 1.3% quarter-over-quarter to RMB2,361. However, GDS changed the basis for this metric in Q3 2021 to include its build-operate-transfer (B-O-T) joint venture data centers. For full-year 2021, GDS expects that monthly service revenue (MSR) per sqm will decline by a low single-digit percentage year-over-year.


During Q3 2021, GDS signed a total of 61+ megawatts of power capacity, across 26.6k sqm (286k sqft).

Of this total, GDS secured five notable hyperscale commitments, comprising 53.0 megawatts of power capacity, across 21.6k sqm (233k sqft). Specifically, these hyperscale commitments include:

  • SH17 Phase 2 (Shanghai): 7.0 megawatts of IT power capacity, across 2.9k sqm (32k sqft) of area
  • CS1 Phase 2 (Changshu): 14.1 megawatts of IT power capacity, across 5.0k sqm (54k sqft) of area
  • BJ13 (Beijing): 14.1 megawatts of IT power capacity, across 5.6k sqm (61k sqft) of area
  • TJ1 Phase 1 (Tianjin): 7.6 megawatts of IT power capacity, across 3.5k sqm (37k sqft) of area
  • SZ8 (Shenzhen): 10.2 megawatts of IT power capacity, across 4.6k sqm (49k sqft) of area

In terms of customer profile, two of these orders were with a top customer of GDS, two were from one of China’s largest internet platforms (a new logo for GDS), and one was with a major Chinese bank.

Additionally, 3.7k sqm (40k sqft) of GDS’ Q3 2021 leasing was attributable to customer agreements from the closing of acquisitions.


Overall, GDS’ backlog reached 231k sqm (2.5 million sqft), which now includes its build-operate-transfer (B-O-T) joint venture data centers. Of this total, 58% or 134k sqm (1.4 million sqft) is backlog for area in service. While 42% or 98k sqm (1.1 million sqft) is backlog for area under construction.

Development Pipeline – GDS Holdings

GDS’ total development pipeline, as of Q3 2021, stood at 596k sqm (6.4 million sqft). Decomposing this development pipeline further, GDS’ largest markets are Greater Beijing, Greater Shanghai, and the Greater Bay Area:

  • Beijing: GDS has 161k sqm (1.7 million sqft) held for future development. This is primarily located in Langfang and other edge of town locations
  • Shanghai: GDS has 135k sqm (1.5 million sqft) held for future development. This is principally located at three edge of town sites in Changshu Province
  • Bay Area: GDS has 199k sqm (2.1 million sqft) held for future development

Geographic Expansion – Indonesia and Malaysia to Access Singapore

During Q3 2021, GDS made a geographic expansion into Indonesia as part of supporting the Singapore data center market.

Nongsa Digital Park – Batam, Indonesia

In November 2021, GDS agreed to acquire greenfield land in Nongsa Digital Park, located in Batam, Indonesia, which is situated 15.5 miles (25 kilometers) from Singapore. At this site, GDS plans to construct two new data centers, comprising 28 megawatts of total IT power capacity and a total net floor area of 108k sqft (~10.0k sqm).

GDS’ development in Nongsa Digital Park will complement its existing 54-megawatt development project in Nusajaya Tech Park, Johor Bahru, Malaysia. Together, these two developments form the core of GDS’ Singapore Plus strategy in the region.

GDS Singapore Indonesia Malaysia Data Center Map

GDS now controls two large-scale development projects to both the North and South of Singapore. In turn, the company intends to create unique ecosystems and interconnectivity in-and-around the Singapore hub. By locating in neighboring Malaysia and Indonesia, GDS can build large hyperscale facilities. In contrast, GDS cannot directly in Singapore, given natural geographic constraints and the ongoing moratorium on new data center permitting.

Importantly, GDS has recently entered into a strategic cooperation agreement with a major Chinese cloud service provider to support its international expansion. Through this agreement, GDS will be prioritized as the customer’s data center provider in the region – which includes Singapore and neighboring countries.

Finally, Nongsa Digital Park is also a notable location because this is where Gaw Capital Partners, through its new joint venture called Data Center First, is building a 30-megawatt facility.

Build-Operate-Transfer (B-O-T) Data Centers – GDS and GIC Joint Venture

During Q3 2021, GDS and GIC, Singapore’s sovereign wealth fund, restructured their build-operate-transfer (B-O-T) data center joint venture in China. Previously, GIC would acquire a 90% equity interest in the different project companies, while GDS would retain the remaining 10% minority equity interest. As part of the new agreement, GDS will now own a 51% majority equity interest in the joint venture companies, while GIC will acquire the remaining 49% equity interest.

Initially, GDS viewed the joint venture arrangement with GIC as a way to maximize management fees and minimize capital invested. Effectively, GDS would be developing data centers using a capital-light approach. However, GDS’ view changed, such that the opportunity to deploy and earn a return on a higher quantum of capital outweighed the strategy to generate a higher yield on capital through primarily management fees.

xScale Joint Venture – Parallels to Draw?

Equinix’s xScale joint venture has a similar ownership construct to GDS’ original joint venture and it is also with GIC. Particularly, Equinix owns a 20% equity interest, while GIC owns an 80% equity interest in the xScale joint venture companies.

Perhaps Equinix may also follow a similar path to GDS and decide to increase their equity contribution to the xScale joint venture in the future. Indeed, with xScale presently at over $7.5bn and 675+ megawatts of power capacity, it is a sizable total addressable market (TAM) for Equinix to deliver 80% of, to joint venture partners.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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