Key Highlights

  • FY26 distributions met guidance at 12 cents per security.
  • FY27 distribution guidance rises to 15 cents per security.
  • The SYD1 20-megawatt upgrade has been completed.
  • Pro-forma gearing could fall materially following planned US asset sales.

DigiCo Infrastructure REIT (ASX:DGT) met its FY26 distribution guidance while progressing a larger Australian data centre expansion programme. The trust is targeting higher FY27 distributions, expanding Sydney and Adelaide capacity and pursuing the sale of its North American assets.

What DigiCo actually does

DigiCo listed on the ASX in December 2024 as a specialist real estate Investment trust that owns, operates and develops data centres, positioning itself to capture Demand from Cloud Computing and artificial intelligence workloads. The stapled security's Australian portfolio comprises ten facilities spread across Sydney, Adelaide, Brisbane and Townsville, while it has also held interests in North American sites in Dallas-Fort Worth and Kansas City. The trust is externally managed, with backing and origination support from ASX-listed alternative asset manager HMC Capital, and Equity Trustees acting as responsible entity.

Latest verified developments

Alongside the FY26 result, DigiCo confirmed a 20-megawatt upgrade at its SYD1 Sydney Facility has been completed, part of an 88MW expansion programme, with letters of intent signed covering the remaining 52MW of planned capacity. The company said the first 10MW Tranche of the newer expansion phase is targeted to come online by the fourth quarter of FY27. A separate 15MW expansion at its Adelaide (ADL1) facility is being progressed alongside customer discussions. Management also disclosed it is proceeding with the sale of its US data centre assets, while extending existing leases at the Kansas City and Dallas-Fort Worth sites through to 2036 in the meantime, and has agreed a longer-term target of roughly $250 million in stabilised EBITDA from the Australian platform once expansion capacity is fully leased.

Financial and operational evidence

For FY26, DigiCo reported underlying Revenue of $239 million and underlying EBITDA of $127 million, ahead of its own $125 million guidance, with adjusted funds from operations of $71 million. Gearing stood at 39% at year-end, within the trust's targeted 35–45% range, and available Liquidity was $706 million. Management said that, on a pro-forma basis allowing for the flagged US asset sales, gearing would fall to around 18% with liquidity of roughly $1.2 billion, materially strengthening the Balance Sheet ahead of the capital-intensive SYD1 and ADL1 build-outs. FY27 guidance points to underlying EBITDA of $120–125 million ($110–115 million excluding the CHI1 asset) and Capital expenditure of $300–500 million weighted to the second half.

Risks worth weighing

DigiCo's model depends heavily on continued hyperscale and enterprise demand for data centre capacity, and on successfully converting signed letters of intent into binding leases; an LOI is an expression of interest, not a locked-in tenancy, so some slippage is possible. Execution risk around the SYD1 and ADL1 build-outs, funding a large capital programme while distributions are rising, and the timing and pricing achieved on the flagged US asset disposals could all affect the outlook. As a relatively newly listed trust with a concentrated asset base of ten operating sites, DigiCo is also more exposed than diversified property peers to delays, cost overruns or power and connectivity constraints on any single project. A negative payout-ratio figure attached to DGT in some screeners looks like a data artefact rather than a genuine distress signal, likely arising from how funds from operations and distributions interact for a newly listed, still-ramping trust.

What to watch next

Investors will be watching for binding Lease conversions on the remaining SYD1 capacity, confirmation of pricing and completion timing for the US asset sales, progress on the ADL1 expansion, and whether the FY27 distribution guidance of 15.0 cents per security is reaffirmed at upcoming updates. The trust's next scheduled disclosure points are quarterly portfolio updates and the FY27 interim result, which should show how quickly signed interest converts into paying tenants.