DigiCo Infrastructure REIT has received key regulatory approval to expand its SYD1 data centre in Ultimo, NSW, enabling a significant capacity upgrade amid strong tenant demand.
- State Significant Development approval granted for SYD1 expansion
- Capacity upgrade to 88MW as part of densification and optimisation program
- SYD1 positioned as Australia’s most strategic and interconnected data centre
- Strong tenant demand driving expansion outlook
- Part of DigiCo’s broader portfolio growth across Australia and North America
Regulatory Milestone Achieved
DigiCo Infrastructure REIT (ASX, DGT) has secured State Significant Development (SSD) approval from the New South Wales Department of Planning, Housing and Infrastructure for its SYD1 data centre expansion project in Ultimo. This approval marks a critical step forward in the company’s densification and optimisation efforts, allowing the upgrade of SYD1’s IT capacity to 88 megawatts (MW).
Strategic Expansion Amid Growing Demand
CEO Michael Juniper highlighted the significance of this approval, noting that the SYD1 data centre is central to DigiCo’s strategy as Australia’s most interconnected and strategically located facility. The upgrade is designed to meet robust tenant demand, reflecting the increasing importance of digital infrastructure in the region. The densification program aims to optimise existing assets rather than simply expanding footprint, a move that aligns with industry trends towards efficiency and sustainability.
Portfolio Context and Growth Prospects
DigiCo’s portfolio spans 13 data centres across key Australian and North American markets, with a total planned IT capacity of 232MW. The SYD1 expansion is a key component of a 156MW development pipeline, underscoring the REIT’s commitment to growth through both stabilised assets and value-add opportunities. This approval not only enhances SYD1’s capacity but also strengthens DigiCo’s position in a competitive market where connectivity and scale are paramount.
Looking Ahead
While the announcement did not specify timelines or capital expenditure details, the approval sets the stage for accelerated development. Investors will be watching closely for updates on construction progress and leasing activity, which will provide clearer insights into the financial impact of the expansion. The strong tenant interest cited by management suggests positive momentum, but execution risks remain as with any large-scale infrastructure project.
Bottom Line?
With regulatory hurdles cleared, DigiCo’s SYD1 expansion could redefine Australia’s data centre landscape; next steps will reveal how swiftly this potential is realised.
Questions in the middle?
- What is the expected timeline and capital cost for completing the SYD1 expansion?
- How will the increased capacity affect DigiCo’s revenue and leasing profile?
- Are there plans to replicate this densification strategy at other data centres in DigiCo’s portfolio?