Chinese data center firm VNET (formerly 21Vianet) has formed a joint venture with an unnamed sovereign wealth fund to develop and operate build-to-suit hyperscale data centers in China.

Under the agreement, VNET will establish individual project companies to undertake the development of each data center, which, upon completion of the development of each facility will transfer 49 percent equity interest in each project company. VNET will hold the remaining 51 percent equity interest of each project company and also provide management and operating services to all the JVs.

The first targeted capital commitments from VNET and the unnamed partner are expected to reach RMB 5 billion ($785.6 million).

“We are excited to partner with the sovereign wealth fund to form joint ventures for the development and operation of multiple hyperscale data center projects in China,” said Samuel Shen, VNET CEO. “As the entire market maintains its ongoing trend towards digitalization, the demand for hyperscale data centers continues to show strength. These joint ventures will serve as dedicated vehicles focusing on the development and operation of build-to-suit data centers in China, allowing us to capitalize on growing data center demand and further strengthen our market position.”

VNET operates 36 self-built data centers and 59 partnered data centers in more than 30 cities throughout China.