• DigiCo has executed a 15-year contract for 71MW of capacity at its SYD1 Facility in Sydney with a global technology firm, subject to customary conditions and approvals.
  • On a pro forma basis, the weighted average Lease expiry of the Australian portfolio would rise from about three years to more than 10 years.
  • FY27 underlying EBITDA guidance of $120 million to $125 million was reaffirmed, with combined SYD1 and ADL1 Capital Expenditure estimated at $1.2 billion over FY27 and FY28.

DigiCo Infrastructure REIT (ASX:DGT), a data centre real estate Investment trust, announced on 15 October 2026 that it has executed a 15-year contract for 71MW of capacity at its SYD1 facility in Sydney with a global technology firm. The contract includes renewal Options and is supported by investment grade Credit support, but the company states that it is subject to customary conditions and approvals. The announcement does not list those conditions.

The contract and capacity

Of the 71MW, 20MW is existing contracted capacity at SYD1 that is being reallocated to the new customer, according to the announcement. The remaining 17MW at the site is leased to co-location customers. DigiCo says this brings SYD1 to 88MW of total capacity that is 100 per cent contracted.

The company says the SYD1 Expansion adds 52MW through adaptive reuse of an existing data centre. It describes the site as having approved grid capacity, water access and State Significant Development Approval. The release does not define whether MW means IT load or grid connection.

Effect on lease profile

DigiCo reports that, on a pro forma basis as at 30 September 2026, the weighted average lease expiry of its Australian portfolio would rise from about three years to more than 10 years. It says this is based on contracted income and excludes pass-through recoveries. Weighted average annual escalations are about 3 per cent, which the company states assumes CPI of 3.0 per cent where reviews are CPI-linked. Renewal spreads across the Australian portfolio have averaged about 8 per cent since its initial public offering.

Delivery, funding and guidance

Shape Australia Pty Ltd is head contractor under a fixed price lump sum design and construct contract, with Laing O'Rourke as integrated delivery partner. The first 10MW of the expansion is expected to be energised and income producing in late Q4 FY27, with the balance delivered progressively over FY28. DigiCo says works are being carried out within an operating data centre, with uptime maintained for existing customers.

The company says the SYD1 Expansion is fully funded and requires no new equity, with funding coming from existing liquidity, available Debt facilities and proceeds from US asset sales. Combined capital expenditure for SYD1 and the ADL1 project is estimated at $1.2 billion over FY27 and FY28. FY27 capital expenditure is expected to be between $300 million and $500 million, weighted to the second half.

DigiCo reaffirmed FY27 underlying EBITDA guidance of $120 million to $125 million, which includes two months of EBITDA from CHI1 before completion of its sale. The announcement gives no sale price, buyer or completion date for CHI1. It also says the SYD1 Expansion, together with ADL1, underpins a pathway to about $250 million of Australian platform stabilised EBITDA, which management defines as annualised EBITDA once those sites reach stabilised occupancy.

Conditions and risks

The key caveat is that the 71MW contract remains subject to customary conditions and approvals, so it should not be treated as unconditional. The pro forma lease expiry and contracted income measures depend on the contract proceeding. The $250 million figure is a management estimate that relies on stabilised occupancy at both sites, and the release says actual results may differ materially from forward-looking statements. DigiCo also states that it does not commit to updating them.

The announcement does not give a development yield, return on cost or project-level EBITDA for the SYD1 Expansion.

Confirmed milestones

The stated timeline is that the first 10MW is to be energised and earning income in late Q4 FY27, with the remainder rolled out across FY28. FY27 capital expenditure is expected to be weighted to the second half. Co-head and chief financial officer Simon Mitchell said DigiCo now expects to reach its 88MW target well ahead of its original plan.