DigiCo Infrastructure REIT Secures Major 71MW Lease for Sydney Data Centre Facility

Key Points

• Major 15-Year Deal: DigiCo Infrastructure REIT has executed a 15-year contract for 71MW of capacity at its SYD1 data centre facility in Sydney with an unnamed global technology firm.
• Full Capacity Reached: The agreement brings the SYD1 facility to 100 per cent contracted status across its planned total capacity of 88MW once ongoing expansions are completed.
• Capacity Reallocation: The deal includes the reallocation of 20MW of existing contracted capacity to the new tenant, while the remaining 17MW continues to be leased to existing co-location customers.
• Staged Expansion Timeline: The first 10MW of the SYD1 expansion is scheduled to be energised and generating income by late Q4 FY27, with the remaining balance delivered progressively across FY28 aligned with customer requirements.
• Significant Financial Impact: Supported by investment-grade credit backing, the contract extends DigiCo’s Australian portfolio weighted average lease expiry (WALE) from approximately three years to over 10 years, incorporating ~3 per cent weighted average annual escalations.

Sydney (Placeholder) October 15, 2026 – DigiCo Infrastructure REIT has secured a major customer for its SYD1 data centre facility in Sydney, Australia, marking a significant milestone in its domestic growth strategy.As reported by Dan Swinhoe of Data Centre Dynamics, the ASX-listed real estate investment trust announced it has executed a 15-year agreement for 71MW of capacity at the facility with an unnamed global technology firm, supported by investment-grade credit backing.The deal fully leases the site’s planned total capacity of 88MW once current upgrades and expansions are completed, substantially ahead of the company’s initial five-year timeline.

What are the key details of the 71MW Sydney data centre lease agreement?

Under the terms of the newly finalized 15-year agreement, DigiCo Infrastructure REIT has committed 71MW of capacity at its SYD1 facility in Sydney to an unnamed, tier-one global technology partner.As reported by Dan Swinhoe of Data Centre Dynamics, the transaction involves the reallocation of 20MW of existing contracted capacity to the new global technology firm.The remaining 17MW of the facility’s overall 88MW capacity remains fully leased to co-location customers.

The transaction represents a notable transformation of DigiCo’s financial profile. As reported by the Economic Times staff, the long-term contract substantially strengthens portfolio cash flows, raising the weighted average lease expiry (WALE) across DigiCo’s Australian portfolio from approximately three years to more than 10 years on a pro forma basis.Furthermore, the contract incorporates weighted average annual rent escalations of approximately 3 per cent, structured through fixed escalators and CPI-linked review mechanisms.

When will the expanded SYD1 data centre capacity become operational?

DigiCo Infrastructure REIT is currently undertaking a major expansion at its SYD1 site in the Ultimo area of Sydney, which will effectively double the facility’s historical capacity to reach 88MW.

According to official corporate statements cited by Dan Swinhoe of Data Centre Dynamics, construction and energisation are being executed in stages to align with customer delivery schedules. The company expects the first 10MW of the SYD1 Expansion to be fully energised and income-producing in late Q4 FY27.The remaining capacity balance will be delivered progressively throughout FY28.

As reported by TechPartner News staff writer, Shape Australia has been appointed as the head contractor for the SYD1 expansion project under a fixed-price lump-sum contract, working alongside delivery partner Laing O’Rourke.The expansion utilizes an established data centre site benefit from pre-approved grid connections and existing water access rights.

What did DigiCo executive leadership say about the 15-year Sydney contract?

Executive leadership at DigiCo Infrastructure REIT highlighted the strategic significance of the agreement for the fund’s asset growth and long-term earnings stability.

Background of the particular development

The SYD1 facility comprises a two-building data centre complex located in the Ultimo suburb of Sydney, Australia. The asset was acquired in 2024 by investment manager HMC Capital as part of its acquisition of Global Switch’s Australian business footprint. Following the transaction, HMC Capital established and publicly floated DigiCo Infrastructure REIT on the Australian Securities Exchange (ASX:DGT) as a specialized, externally managed real estate investment trust designed to hold, operate, and develop digital infrastructure assets across Australia and North America.

Upon taking control of SYD1, DigiCo instituted a strategic master plan to expand and fully lease the facility up to 88MW over a five-year horizon. The execution of this 71MW anchor lease completes the commercial leasing phase of that mandate ahead of schedule. To fund its domestic developments, including the SYD1 expansion projects expected to yield AU$250 million in annual Australian EBITDA, DigiCo has pursued asset sales in North America—such as planned divestments in Los Angeles—to reduce gearing from 39 per cent to a pro forma 18 per cent and increase available liquidity to approximately AU$1.2 billion without requiring new equity.

How this development can affect the digital infrastructure market and investors

The complete leasing of DigiCo’s 88MW SYD1 facility is poised to deliver direct impacts across institutional investors, hyperscale cloud vendors, and the broader Australian digital infrastructure sector:

• Institutional Investors and Unit Holders: The securing of a 15-year, investment-grade commitment dramatically derisks DigiCo Infrastructure REIT’s revenue profile. By extending the Australian portfolio WALE to over 10 years and embedding ~3 per cent annual escalation clauses, the REIT secures highly predictable, long-duration cash flows.This structural stability enhances dividend security and provides a solid foundation for underlying EBITDA guidance (reaffirmed at $120 million to $125 million for FY27).
• Hyperscale Tech Vendors and Enterprise Customers: The absorption of 71MW by a single global technology firm underscores the severe supply tightness for high-capacity, grid-connected data centre space in Sydney’s central metropolitan corridors.With SYD1 now 100 per cent contracted, competing cloud providers and enterprise buyers face tightening availability for near-term capacity in Sydney, likely accelerating pre-commitment leasing across alternative suburban and regional data centre developments.
• Australian Data Centre Ecosystem: The rapid execution of this contract validates the strategy of repurposing legacy inner-city facility footprints with existing power and water entitlements. As demand driven by artificial intelligence workloads and cloud migration continues to outpace new grid allocation in tier-one Australian markets, real estate funds capable of energizing brownfield expansions ahead of schedule will likely capture premium hyperscale tenancy contracts.