DigiCo Infrastructure REIT (ASX:DGT) delivered an encouraging close to FY26, reporting Underlying EBITDA of $127 million — ahead of the $125 million guidance — alongside the acceleration of its flagship SYD1 88MW expansion project and a significant deleveraging of the Balance Sheet through planned US asset sales. The result positions DigiCo as one of the more compelling data-centre-focused Investment structures in the S&P/ASX 200, sitting at the intersection of surging AI-driven Demand and a still-undersupplied Australian hyperscale market.

About the Company

DigiCo Infrastructure REIT (ASX:DGT) is a specialist digital infrastructure real estate investment trust managed by HMC Capital. The REIT owns and operates hyperscale data centres across Australia and the United States, with its Australian platform centred on SYD1 in Sydney and ADL1 in Adelaide. DigiCo's investment thesis is built on the structural undersupply of hyperscale data centre capacity in Australia and the company's ability to capture demand from cloud providers, AI workloads, and enterprise customers requiring colocation services at scale.

Recent Development

On 21 August 2026, DigiCo released its full-year results for the period ended 30 June 2026. The headline financial metrics were Underlying Revenue of $239 million and Underlying EBITDA of $127 million, beating the $125 million EBITDA guidance issued to the market. Adjusted FFO came in at $71 million, with distributions per security of 12.0 cents per security in line with guidance. The standout operational development was the acceleration of the SYD1 88MW expansion project: the 20MW upgrade has been completed, LOIs (letters of intent) have been signed for the remaining 52MW of capacity with high-quality customers, and the full 88MW expansion is now scheduled for phased delivery across FY27 and FY28 — earlier than previously guided. The ADL1 15MW expansion is underpinned by advanced customer discussions. US asset sales remain on track, and following their completion, pro-forma gearing is expected to reduce from 39% to approximately 18%, with available Liquidity increasing to approximately $1.2 billion. DigiCo's management team has set a long-term target for Australian Platform Stabilised EBITDA of approximately $250 million, representing the annualised Earnings contribution once SYD1 and ADL1 reach stabilised occupancy and all contracted capacity is online and billing.

Sector Context

The Australian data centre market is experiencing demand growth that materially outpaces the Supply pipeline, driven by cloud providers, government workloads and the AI compute wave requiring low-latency proximity to major population centres. Hyperscale data centre capacity in Sydney — the primary Australian gateway for international cloud infrastructure — is constrained by power availability, planning approvals and the long lead times required to build fit-for-purpose facilities. This structural shortage supports strong pricing power for existing operators and a long runway for DigiCo's SYD1 and ADL1 platforms. The company's move to lock in LOIs for the full 52MW of remaining SYD1 capacity before construction completion is evidence of this demand depth.

Risks and Uncertainty

The primary near-term risk for DigiCo is execution of the SYD1 88MW expansion on the accelerated FY27–FY28 delivery schedule, as construction delays or cost overruns could defer revenue recognition from the newly contracted capacity. The reliance on LOIs rather than binding leases for the 52MW means conversion to signed agreements remains an important milestone. Power procurement risk is also a key operational variable: large-scale data centres are energy-intensive, and any disruption to power supply arrangements or grid connection could affect capacity delivery. On the balance sheet, gearing of 39% prior to US asset sales is at the top end of the 35–45% target range, and the realisation of US asset sale proceeds at anticipated values is important to the pro-forma Leverage improvement. Concentration in the Australian east coast market creates geographic exposure to local regulatory, planning and grid-related risks.

Catalysts Investors Can Watch

Completion of the US asset sales, expected to reduce pro-forma gearing to approximately 18% and increase liquidity to approximately $1.2 billion, would be a significant deleveraging event and signal the balance sheet is reshaped for the Australian growth platform. Conversion of SYD1 LOIs into binding leases and commencement of revenue billing from the expanded 88MW capacity in FY27 will be the key operational milestones. Progress toward the ADL1 15MW expansion's advanced customer discussions converting into agreements will extend the earnings growth runway beyond SYD1. Investors should also track the company's progress toward the $250 million Australian Platform Stabilised EBITDA target as a medium-term valuation anchor.