DigiCo Infrastructure REIT (ASX:DGT) Shares Drop Nearly 3% on Monday

DigiCo Infrastructure REIT (ASX:DGT) Shares Drop Nearly 3% on Monday – Here’s Why

Sonal Goyal

21 September 2026 04:20 AM AEST

DigiCo Infrastructure REIT (ASX:DGT) Shares Drop Nearly 3% on Monday – Here’s Why

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DigiCo Infrastructure REIT (ASX:DGT) shares closed at AUD 2.48 on 21 September 2026, down 2.75% for the session. The latest share-price movement might follows the REIT’s recent completion of the CHI1 data centre sale in Chicago, part of a broader US asset divestment program. DigiCo said proceeds from the planned disposals are expected to reduce net Debt and support funding for its SYD1 development project in Sydney.

Latest Development

The completion of the CHI1 sale follows the original announcement of the transaction on 6 May 2026. DigiCo also confirmed that the sale of its LAX1 and LAX2 assets, announced on 12 June 2026, is now in the final stages of due diligence, indicating that transaction remains subject to completion of that process before finalisation.

The company outlined the financial impact of both transactions together, described as the 'US asset sales.' On a proforma basis, DigiCo expects the combined proceeds to increase Liquidity to $1.2 billion, reduce net debt from $1.6 billion to approximately $0.5 billion, and reduce the REIT's gearing to 18%. These figures are based on cash as at 30 June 2026, senior undrawn debt facilities including additional capacity from a Facility upsize completed after that date, and anticipated net Equity sale proceeds from the US asset sales after repayment of gross debt and subject to selling and transaction costs.

Simon Mitchell, Co-Head and Chief Financial Officer of DGT, said the US asset sales reflect the continued execution of the REIT's Capital recycling strategy and enable DigiCo to fully fund delivery of the SYD1 88MW project — a significant Sydney data centre development that the enhanced Balance Sheet capacity is now positioned to support without additional external funding.

The transaction structure reflects a broader theme in DigiCo's Portfolio Management approach: selling stabilised or non-core international Assets to redeploy capital into development projects within its core markets, in this case the SYD1 project in Sydney, while simultaneously reducing overall Leverage across the REIT.

Sector Context

DigiCo Infrastructure REIT operates in the data centre real estate Investment trust sector, a segment that has attracted substantial investor interest globally given the surging Demand for data centre capacity driven by cloud computing, artificial intelligence workloads, and broader digital infrastructure growth. Capital recycling — selling mature or stabilised assets to fund new development — is a common strategy among REITs and infrastructure investors in this sector, allowing companies to fund growth projects without solely relying on new debt or equity issuance.

The data centre sector specifically has seen strong appetite from institutional buyers for stabilised, income-producing assets, which can make asset sales like CHI1 and the pending LAX1/LAX2 transactions an efficient way for developers to unlock capital at attractive valuations. A meaningful reduction in gearing, as flagged by DigiCo's expected drop from $1.6 billion to approximately $0.5 billion in net debt, is also generally viewed favourably in the current environment, where elevated interest rates have made balance sheet strength and reduced leverage a greater focus for real estate investors.

Risks

Completion risk on the LAX1 and LAX2 asset sale, which remains in the final stages of Due Diligence and is not yet finalised.
Development and execution risk associated with the SYD1 88MW project, which the enhanced balance sheet capacity is intended to fund.
Currency risk, given the proforma financial figures are based on an AUD/USD hedged Exchange Rate assumption of 0.71, and actual outcomes could vary from that assumption.
Transaction cost and completion adjustment risk, with the anticipated net equity sale proceeds subject to selling and Transaction Costs that could affect the final financial outcome.
Broader data centre sector risks, including competition for tenants, technology and hyperscale customer demand trends, and Capital Expenditure requirements for ongoing development.

What to Watch Ahead

Completion of the LAX1 and LAX2 asset sale, currently in the final stages of due diligence following its announcement on 12 June 2026.
Progress on the SYD1 88MW project, which the enhanced balance sheet capacity from the US asset sales is intended to fully fund.
Actual realised proceeds, net debt reduction and gearing outcomes once both the CHI1 and LAX1/LAX2 transactions are fully reflected in DigiCo's financial position.
Any further capital recycling activity as part of DigiCo's ongoing portfolio management strategy.
Broader trends in data centre real estate valuations and investor appetite for stabilised international assets, which underpin the attractiveness of this type of transaction.

The Bottom Line

DigiCo Infrastructure REIT (ASX:DGT) confirmed on 10 September 2026 the completion of its Chicago data centre sale, a meaningful step in a broader capital recycling strategy that, together with the pending LAX1 and LAX2 divestment, is expected to substantially strengthen the REIT's balance sheet. The proforma outcomes flagged by the company — liquidity rising to $1.2 billion, net debt falling from $1.6 billion to approximately $0.5 billion, and gearing reducing to 18% — would represent a material de-risking of DigiCo's financial position while fully funding the SYD1 88MW development project. For investors following DigiCo Infrastructure REIT (ASX:DGT), the completion of the still-pending LAX1 and LAX2 sale is the next key milestone to confirm the full financial benefit of this capital recycling strategy.

FAQs

Q: What did DigiCo Infrastructure REIT announce on 10 September 2026?

A: DigiCo confirmed the completion of the sale of its Chicago data centre facility, CHI1, a transaction originally announced on 6 May 2026, as part of a broader capital recycling strategy that also includes the pending sale of its LAX1 and LAX2 assets.

Q: How will the US asset sales affect DigiCo's balance sheet?

A: On a proforma basis, DigiCo expects the combined CHI1 and LAX1/LAX2 asset sales to increase liquidity to $1.2 billion, reduce net debt from $1.6 billion to approximately $0.5 billion, and reduce gearing to 18%.

Q: What will the proceeds from the US asset sales be used for?

A: According to CFO Simon Mitchell, the proceeds from the US asset sales enable DigiCo to fully fund delivery of the SYD1 88MW data centre development project in Sydney.

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