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Investing.com - GDS Holdings (NASDAQ:GDS) stock climbed Thursday after China’s National Development and Reform Commission (NDRC) announced new guidelines that will allow more frequent infrastructure REIT applications in the country.
The NDRC’s notice permits existing REITs to expand their assets just six months after initial establishment, a significant reduction from the previous 12-month waiting period. This change follows what the commission described as the "initial success" of infrastructure REITs in China.
The regulatory body expressed explicit support for increasing the issuance of infrastructure REITs, specifically mentioning datacenters as a target sector for development. The move is designed to help companies recycle capital more efficiently.
Morgan Stanley highlighted the announcement as "positive in general for all datacenter names, as the issuance of REIT could help them recycle cash over a faster time period." The investment bank noted this regulatory change would be particularly beneficial for GDS Holdings.
The bank specifically pointed out that GDS has "a further Rmb6bn of projects in the pipeline, which could be recycled at an even earlier time" under the new guidelines, potentially accelerating the company’s ability to reinvest in growth opportunities.
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