CDC Valuation Surges 23.6% to A$18.5 Billion on Capacity and Pipeline Expansion

Valuation Boost Reflects Strong Contract Wins and Pipeline Growth

CDC’s independent valuation soared by 23.6% in the June quarter, reaching a mid-point of A$18.5 billion. This leap was driven by a surge in contracted capacity to over 1GW, including a landmark 555MW contract announced in May, alongside a sharp acceleration of its build programme. The valuation range now sits between A$17.5 billion and A$19.7 billion, marking a A$3.5 billion increase since March 2026.

For Infratil (NZX:IFT), which holds a 49.72% stake in CDC, this translates to a valuation uplift of A$1.76 billion, taking its share value to A$9.213 billion. This sizeable increase highlights CDC’s growing footprint in the Australasian data centre market and underscores the strategic importance of its capacity expansion.

Leasable Capacity Pipeline Extended to FY40

CDC has extended its pipeline disclosure horizon from FY34 to FY40, reflecting a longer-term development outlook. The leasable capacity pipeline has ballooned from 2.6GW to 3.9GW, with future build capacity alone rising from 1.7GW to 2.6GW. This expansion includes 1.3GW of new future build capacity not previously accounted for, primarily targeting key Australian markets where customer demand remains strong.

The build programme is visibly accelerating: leasable capacity under construction has doubled to 810MW, with new developments underway at Marsden Park (NSW) and Laverton (VIC). Meanwhile, operating capacity grew by 90MW as new data centres came online at Eastern Creek (NSW) and Hume (ACT). This dynamic pipeline supports CDC’s ability to meet growing customer demand and maintain its market position.

Rising Costs Temper Valuation Gains

Despite the positive momentum, the valuation update also factors in a 25 basis point rise in the long-term risk-free rate to 4.25%, reflecting recent Reserve Bank of Australia rate hikes and inflationary pressures. This has pushed CDC’s blended cost of equity up from 11.84% to 12.45%, partially offsetting valuation gains. The increase in forecast gearing due to debt-funded construction activity also contributed to higher assumed financing costs.

CDC’s net debt climbed to A$5.976 billion as the company accelerated its debt-funded build programme. The firm continues to diversify its funding sources, including a recent A$1 billion hybrid capital bond issuance with a blended margin of 250bps, supported by its Moody’s Baa2 (Stable) credit rating.

Regional Capacity Breakdown and Market Positioning

Operating leasable capacity now stands at 550MW across ACT, NSW, VIC, and New Zealand, with NSW leading the under-construction category at 560MW. Future build capacity is heavily weighted towards Australia (2.49GW) with a smaller portion in New Zealand (90MW). CDC’s focus on expanding its footprint in major Australian markets aligns with ongoing strong customer interest for large-scale data centre capacity.

The shift from reporting built capacity to leasable capacity provides a clearer picture of revenue-generating potential, emphasizing contracted ICT capacity over total infrastructure. This metric better captures CDC’s commercial progress and future earnings visibility.

CDC’s valuation update comes on the back of a strong FY26 for Infratil, which reported an 11% rise in operational EBITDAF boosted by CDC’s record 555MW contract win and other portfolio highlights. The valuation increase reflects the tangible benefits of these operational achievements and the company’s strategic focus on scalable growth assets.