DigiCo Infrastructure REIT has signed a 15-year contract for 71 MW of data centre capacity at its SYD1 facility in Sydney, an agreement that takes the site to 100 percent contracted across its planned 88 MW capacity.

The deal is with an unnamed global technology firm and includes investment-grade credit support.

A long-term anchor tenant for SYD1

The contract covers 71 MW of SYD1's total 88 MW capacity, including 20 MW of existing contracted capacity that has been reallocated to the new customer. The remaining 17 MW is leased to colocation customers, according to DigiCo.

The agreement significantly extends the income profile of DigiCo's Australian assets. It increases the weighted average lease expiry of the company's Australian portfolio from around three years to more than 10 years on a pro forma basis.

Weighted average annual escalations are approximately 3 percent, reflecting fixed escalators and CPI-linked reviews.

Expansion work moves ahead at Sydney

Alongside the leasing deal, DigiCo has executed a fixed-price, lump-sum design and construction contract for the next 52 MW of SYD1 capacity. Shape Australia has been appointed head contractor, while Laing O'Rourke will continue as the project's integrated delivery partner.

The expansion will reuse an established data centre site with approved grid capacity and water access. Construction is to be staged around customer requirements.

The first 10 MW is expected to be energised and generating income in late Q4 FY27, with the remaining capacity progressively energised through FY28.

Funding without new equity

DigiCo said the SYD1 expansion remains fully funded through existing liquidity, available debt facilities, and proceeds from US asset sales, without requiring new equity.

The combined capital expenditure estimate for the SYD1 expansion and a 15 MW brownfield expansion at its ADL1 facility in Adelaide is USD 829.08 million over FY27 and FY28.

Once fully operational and stabilised, the two projects are expected to support approximately USD 172.73 million in annual Australian platform EBITDA.

Simon Mitchell, DigiCo's co-head and chief financial officer, said the contract marked a key milestone for the company. He noted that the 15-year agreement provides long-term earnings visibility.

US asset sales underpin the Australian pivot

The contract comes as DigiCo reshapes its portfolio around Australia, prioritising capital deployment into its Australian data centre platform. The company completed the sale of its Chicago data centre, CHI1, on 10 September for USD 750 million.

DigiCo has also agreed to a conditional sale of its LAX1 and LAX2 sites in Los Angeles, with completion of that transaction expected in the first half of FY27.

The planned US divestments are expected to reduce gearing from 39 per cent at the end of FY26 to a pro forma 18 per cent, increasing available liquidity to approximately USD 829.08 million.

Accelerating the Australian growth strategy

The 71 MW agreement fully contracts SYD1's planned 88 MW capacity and, according to the company, accelerates DigiCo's Australian growth strategy.

With a more than 10-year pro forma weighted average lease expiry, roughly 3 percent annual escalations, and USD 829.08 million of expansion capex already committed across Sydney and Adelaide, the company has now laid out a funded pathway to its target of approximately USD 172.73 million in annual Australian platform EBITDA.

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