DigiCo Infrastructure REIT has signed a 15-year contract for 71MW of data centre capacity at its SYD1 facility in Sydney, taking the site to 100% contracted across its planned 88MW capacity as the company accelerates its Australian growth strategy and sells assets in the US.
The agreement is with an unnamed global technology firm and includes investment-grade credit support. The contract is subject to customary conditions and approvals. The deal covers 71MW of SYD1’s total 88MW capacity, including 20MW of existing contracted capacity reallocated to the new customer. The remaining 17MW is leased to colocation customers, according to DigiCo.
The agreement increases the weighted average lease expiry of DigiCo’s Australian portfolio from around three years to more than 10 years, on a pro forma basis assuming the full 88MW is income-producing. Weighted average annual escalations are approximately 3%, reflecting fixed escalators and CPI-linked reviews assuming CPI of 3%.
Simon Mitchell, DigiCo’s co-head and chief financial officer, said the contract marked a key milestone for the company. “When we acquired SYD1, our business plan was to fully lease and develop the site to 88MW over five years, and we now expect to reach that milestone well ahead of our original plan,” he said.
Expansion moves ahead
DigiCo has also executed a fixed-price, lump-sum design and construction contract for the next 52MW of SYD1 capacity. Shape Australia has been appointed head contractor, while Laing O’Rourke will continue as the project’s integrated delivery partner.
The expansion will reuse an established data centre site with approved grid capacity, water access and state significant development approval. Construction is to be staged around customer requirements, with the first 10MW expected to be energised and generating income in late Q4 FY27, followed by the remaining capacity progressively through FY28.
DigiCo said the SYD1 expansion remains fully funded through existing liquidity, available debt facilities and proceeds from US asset sales, without requiring new equity.
The combined capex estimate for the SYD1 expansion and the 15MW brownfield expansion at its ADL1 facility in Adelaide, which DigiCo says is underpinned by advanced customer discussions, is AU$1.2 billion over FY27 and FY28. DigiCo expects the two projects, once fully operational and stabilised, to support approximately AU$250 million in annual Australian platform EBITDA.
US asset sales fund domestic growth
The contract comes as DigiCo reshapes its portfolio around Australia, describing the domestic market as supply-constrained and prioritising capital deployment into its Australian data centre platform.
In its FY26 annual report, DigiCo said it was moving from portfolio assembly to portfolio optimisation, using asset sales to strengthen its balance sheet and fund higher-priority development opportunities.
The company completed the sale of its Chicago data centre, CHI1, on 10 September for US$750 million. It has also agreed to a conditional sale of its LAX1 and LAX2 sites in Los Angeles, at a price broadly in line with their acquisition cost. Completion of the Los Angeles transaction was expected in the first half of FY27, subject to customary closing conditions.
DigiCo has retained its Kansas City and Dallas-Fort Worth data centres, agreeing to extend both lease terms to 10 years expiring in 2036. The planned US divestments are expected to reduce gearing from 39% at the end of FY26 to a pro forma 18%, subject to transaction costs and completion adjustments, and increase available liquidity to approximately AU$1.2 billion.
DigiCo reported underlying EBITDA of AU$126.6 million for FY26, alongside a statutory loss after tax of AU$100.8 million. It has reaffirmed FY27 underlying EBITDA guidance of AU$120 million to AU$125 million, including two months of contribution from CHI1 before its sale.
The company’s Australian expansion plans are centred on increasing capacity at existing sites, with brownfield development prioritised while it evaluates greenfield opportunities with access to low-cost renewable power.
Mitchell said the 15-year agreement provides long-term earnings visibility. Ralph Goninan, DigiCo’s co-head and chief development officer, said the design and construct contract supports staged delivery aligned to the customer’s capacity requirements, with works carried out inside an operating data centre and uptime maintained for existing customers.