VNET Group, Inc. announced that the Company has successfully issued a holding-type real estate green asset-backed security under its newly-launched private REIT (the "Private REIT Project"), marking a first in China's IDC industry. The Private REIT Project will be listed on the Shanghai Stock Exchange as a standardized security product. This innovative special-purpose equity scheme will empower VNET to revitalize its existing IDC assets and recycle capital to fund its capacity expansion and other general corporate purposes, while reducing the Company's leverage ratio and optimizing its capital structure.
Under the Private REIT Project, VNET will transfer a 100% equity interest in one of its existing retail IDC projects to a private REIT. 93% of this REIT will be subscribed by leading domestic institutional investors, including China Pacific Insurance (Group) Co. Ltd. ("CPIC"), while VNET will subscribe 7%.
The overall offering size will be approximately RMB860 million, with equity consideration of approximately RMB800 million, indicating a valuation of approximately 13x EV/EBITDA. Following the completion of this transaction, VNET will serve as the issuer and originator for the private REIT Project and will remain responsible for the IDC project's operation to ensure its healthy long-term development. This is the highest possible rating in the relevant evaluation system, underscoring VNET's strong market position and commitment to sustainable development.
The Private REIT Project's underlying data center asset is a premium retail IDC project located in a tier-one city in China, where demand for IDC services is robust and growing. Supported by premium network infrastructure, this IDC offers fast data transmission and low latency, seamlessly meeting customers' demand for reliable, premium services. Its high-quality, loyal customer base, including financial institutions and internet companies, generates stable and predictable cash flow.
