DigiCo Infrastructure REIT signs 15‑year contract for 71 MW in Sydney
SYD1 is fully contracted, but the customer and rent remain undisclosed and the first expansion income is expected in late fiscal 2027.
Julian Okafor
A 71-megawatt tenant contract has filled a Sydney data centre's planned capacity before its expansion starts generating income. DigiCo Infrastructure REIT ASXDGT, the listed owner, operator and developer of data centres, announced the 15-year agreement on Thursday.
DigiCo identifies the customer only as a global technology firm with investment grade credit support. Its Oct. 15 notice does not disclose the tenant's name, annual rent or total contract value, and the lease remains subject to customary conditions and approvals.
The agreement takes SYD1 to 100 per cent contracted across 88 megawatts, including capacity still to be built. The first 10 megawatts of the expansion are expected to be energized and income producing in late fiscal 2027, with the balance delivered progressively during fiscal 2028.
DigiCo's securities were down 2.9 per cent at A$2.00 on the ASX as of 4:10 p.m. AEDT on Thursday, according to Google Finance's ASXDGT. The Oct. 15 announcement leaves its fiscal 2027 underlying EBITDA guidance unchanged at A$120 million to A$125 million.
The Contract Reallocates 20 MW Of Existing Commitments
Of the 71 megawatts assigned to the new tenant, 20 megawatts were already contracted and have been reallocated. The remaining 17 megawatts of SYD1's planned capacity are leased to co-location customers, according to the Oct. 15 notice.
The contract has a 15-year term plus renewal options. DigiCo says it lifts the Australian portfolio's weighted average lease expiry from about three years to more than 10 years.
That lease-duration calculation is pro forma as at Sept. 30 and assumes all 88 megawatts are producing income. It is weighted by contracted income excluding electricity and other pass-through recoveries, so it describes the anticipated income profile after delivery.
Annual escalations average approximately 3 per cent on an income-weighted basis, combining fixed increases and CPI-linked reviews that assume inflation of 3 per cent. The Oct. 15 release also reports average Australian portfolio renewal spreads of about 8 per cent since the IPO.
"The 15-year agreement with a global technology firm provides long-term earnings visibility, supported by investment grade credit backing," DigiCo co-head and chief financial officer Simon Mitchell said in the Oct. 15 release.
Construction Contract Covers A 52 MW Expansion
SHAPE Australia Corporation Limited ASXSHA, a Sydney-based fitout and construction specialist, is the head contractor for the 52-megawatt expansion. Its Oct. 15 ASX announcement values the fixed price design and construction contract at approximately A$800 million.
SHAPE says SYD1 had 16 megawatts of existing capacity before its recently completed 20-megawatt first-stage upgrade. The new works are expected to start immediately and contribute materially to SHAPE revenue across fiscal 2027 and fiscal 2028.
DigiCo's capital spending plan covers SYD1 and the ADL1 project. The Oct. 15 notice estimates their combined capital expenditure at A$1.2 billion across fiscal 2027 and fiscal 2028. It forecasts A$300 million to A$500 million of spending in fiscal 2027, concentrated in the second half.
The issuer says the SYD1 expansion is fully funded from existing liquidity, available debt facilities and proceeds from US asset sales, with no new equity required. Its Oct. 15 Australian platform EBITDA target of about A$250 million assumes stabilised occupancy and all contracted capacity online and billing at SYD1 and ADL1.
DigiCo describes ADL1 as a brownfield project to add 15 megawatts of IT capacity, underpinned by advanced customer discussions. Its Oct. 15 release does not describe those discussions as an executed tenancy, while the A$250 million estimate covers both developments.
Income Follows Staged Delivery Through Fiscal 2028
The Malaysian capacity agreement previously covered by Mugglehead shows a different contracting stage. Bitdeer Technologies Group NASDAQBTDR, the Singapore-based parent of AI cloud provider Bitdeer AI, signed an eight-year services agreement for its 60-megawatt A103 facility.
Bitdeer's Oct. 12 release says A103 had no customer offtake commitments and targets energization in the first quarter of 2028. DigiCo has a signed customer contract, but its expansion's income still depends on staged delivery.
Read more: Bitdeer Technologies Group signs eight-year deal for 60 MW AI facility
Andy Lawrence, executive director of research at data centre standards organisation Uptime Institute, warned in its Jan. 13 industry outlook that uncertainty over AI demand complicates capacity planning and resiliency strategies. The institute also identified lengthy power deployment schedules as a constraint on developers.
DigiCo holds its annual meeting on Nov. 11. Its delivery forecast faces an operating test in late fiscal 2027, when the first 10 megawatts of the expansion are expected to begin earning income.
