HMC Digital Infrastructure Ltd’s DigiCo REIT has surpassed its IPO guidance with strong growth in contracted IT capacity and accelerated development projects in Australia and the US, positioning itself for a $180 million EBITDA run-rate by July 2026.
- FY25 EBITDA of $99 million exceeds IPO guidance
- Australian contracted IT capacity to nearly double to 41MW by June 2026
- SYD1 88MW expansion accelerated with approval expected before year-end
- US developments LAX1 and CHI1 progressing on schedule with strong hyperscaler interest
- Capital recycling initiatives targeting $0.5 to $1 billion equity proceeds
Strong Operational Momentum
DigiCo REIT, under the stewardship of Chair Joseph Carrozzi AM and CEO Chris Maher, has delivered a robust operational update at its 2025 Annual General Meeting. The REIT reported a FY25 EBITDA of $99 million, comfortably ahead of its IPO guidance, reflecting strong leasing momentum and strategic project execution.
Australian contracted IT capacity is on track to reach 41MW by June 2026, a 95% increase from the previous year, driven by significant customer wins across hyperscale, neocloud, enterprise, and government sectors. This growth underscores DigiCo’s ability to capture surging demand for data centre infrastructure amid the AI-driven digital transformation.
Accelerated Development and Expansion
The SYD1 data centre expansion program has been notably accelerated, with the original 9MW project upsized to 20MW to meet recent customer demand. The full 88MW Design and Optimisation (D&O) project is now targeted for delivery within three years, with draft State Significant Development Application (SSDA) conditions received and final approval expected before year-end.
In the US, the CHI1 facility has commenced rental payments on schedule, de-risking the asset, while the LAX1 development is poised for approval in Q2 FY26, with construction anticipated to start in the first half of calendar 2027. Both projects have attracted substantial pre-construction interest from hyperscale customers, reinforcing DigiCo’s strategic positioning in key US markets.
Capital Recycling and Funding Strategy
DigiCo is actively pursuing capital recycling initiatives to fund higher-return development projects. Following milestone achievements, the REIT has appointed advisors to facilitate a 25-50% sell-down of Australian and US assets, aiming to release between $0.5 billion and $1 billion in equity proceeds. This capital will be reinvested into accelerated development programs, including expansions at ADL1 and BNE3 campuses.
Liquidity remains strong with approximately $700 million available across cash and undrawn facilities. Debt refinancing efforts are underway, expected to improve terms significantly, supporting the REIT’s growth ambitions.
Outlook and Market Context
Looking ahead, DigiCo expects FY26 underlying EBITDA between $120 million and $125 million, with distributions forecast at 12 cents per security, maintaining a payout ratio of 90-100% of funds from operations. The group’s billed IT capacity is projected to reach at least 85MW by July 2026, underpinning an annualised run-rate EBITDA of at least $180 million.
The company’s growth strategy is well aligned with the accelerating global demand for data centre capacity, particularly driven by AI and high-performance computing workloads. Australia’s data centre supply pipeline is forecasted to fall short of demand by 2028, positioning DigiCo advantageously to capitalise on this market imbalance.
Bottom Line?
DigiCo’s accelerated expansion and capital recycling set the stage for sustained growth amid soaring data centre demand.
Questions in the middle?
- How will DigiCo’s capital partner sell-downs impact control and future earnings?
- What risks could delay SYD1’s accelerated development timeline?
- How will rising interest rates affect DigiCo’s refinancing and cost of capital?