DigiCo Secures 15-Year Lease for 71 MW of Capacity at SYD1 Data Center in Sydney, Australia

DigiCo Infrastructure REIT has fully committed its SYD1 data centre in Sydney through a 15-year lease covering 71 MW of capacity.

The tenant is a global technology company whose identity has not been disclosed, and the agreement carries investment-grade credit support.

Sydney site reaches full occupancy

The lease takes the site to 100 percent contracted across its planned 88 MW.

Of the 71 MW, 20 MW represents existing contracted capacity that has been reallocated to the incoming customer, while the remaining 17 MW of the site is leased to colocation customers.

Lease terms lengthen portfolio income

The deal materially extends the income profile of DigiCo's Australian holdings. On a pro forma basis, the weighted average lease expiry of the Australian portfolio rises from roughly three years to more than 10 years. Annual escalations average approximately 3 percent, combining fixed escalators with CPI-linked reviews.

Simon Mitchell, DigiCo's co-head and chief financial officer, described the contract as a key milestone for the company, noting that the 15-year term provides long-term earnings visibility.

Next 52 MW of Sydney capacity moves to construction

Together with the leasing announcement, DigiCo has executed a fixed-price, lump-sum design and construction contract for the following 52 MW at SYD1. Shape Australia takes the head contractor role, with Laing O'Rourke continuing as an integrated delivery partner.

The expansion reuses an established data centre site that already has approved grid capacity and water access. Work will be staged to match customer requirements. The first 10 MW is expected to be energised and producing income in late Q4 FY27, with the balance progressively energised through FY28.

Capex covered without equity raise

According to DigiCo, the SYD1 expansion is fully funded from existing liquidity, available debt facilities, and proceeds from US asset sales, with no new equity required.

The combined capital expenditure estimate for the Sydney works and a 15 MW brownfield expansion at the ADL1 facility in Adelaide stands at USD 829.08 million across FY27 and FY28.

Once both projects are fully operational and stabilised, they are expected to support around USD 172.73 million in annual EBITDA for the Australian platform.

American divestments fund the Australian focus

The lease coincides with a broader reshaping of DigiCo's portfolio toward Australia, with capital deployment prioritised for its domestic data centre platform. The company completed the sale of its Chicago facility, CHI1, on 10 September for USD 750 million.

A conditional sale has also been agreed for its LAX1 and LAX2 sites in Los Angeles, with completion anticipated in the first half of FY27. These planned US divestments are expected to cut gearing from 39 per cent at the end of FY26 to a pro forma 18 per cent, lifting available liquidity to approximately USD 829.08 million.

A funded pathway to Australian earnings targets

With the 71 MW agreement contracting SYD1's full 88 MW plan, DigiCo says the deal accelerates its Australian growth strategy.

The company now points to a more than 10-year pro forma weighted average lease expiry, roughly 3 per cent annual escalations, and USD 829.08 million of committed expansion capital across Sydney and Adelaide as the basis for a funded path to approximately USD 172.73 million in annual Australian platform EBITDA.