DigiCo Infrastructure REIT locks in major SYD1 contract and reaffirms guidance

The DigiCo Infrastructure REIT (ASX: DGT) share price is in focus after the company secured a 15-year, 71MW contract at its SYD1 data centre and reaffirmed its FY27 EBITDA guidance.

What did DigiCo Infrastructure REIT report?

• 15-year contract for 71MW at SYD1 signed with a global technology firm backed by investment grade credit
• SYD1 now 100% contracted across 88MW of total capacity
• Weighted average lease expiry extended to over 10 years; annual rent escalations average 3%
• Design & Construct contract finalised for SYD1 52MW expansion, fully funded with no new equity needed
• FY27 underlying EBITDA guidance reaffirmed at $120–125 million

What else do investors need to know?

The recently inked SYD1 contract includes reallocating 20MW of previously leased capacity to the new customer. The remaining 17MW of SYD1’s capacity is leased to co-location customers, with renewal rental growth averaging around 8% since DigiCo’s IPO.

DigiCo has locked in a fixed-price design and construction deal for the ongoing expansion at SYD1, which remains on track and fully funded through existing liquidity and asset sale proceeds. The first 10MW of this expanded capacity is expected to be operational and generating income in late Q4 FY27, with the balance delivered in FY28.

What did DigiCo Infrastructure REIT management say?

Simon Mitchell, Co-Head and Chief Financial Officer of DGT, said:

Execution of the 71MW contract at SYD1 is a key milestone for DGT, taking the site to 100% contracted across 88MW of total capacity. The 15-year agreement with a global technology firm provides long-term earnings visibility, supported by investment grade credit backing. It validates the quality of our infrastructure and strengthens the quality of cashflows from our portfolio. When we acquired SYD1, our business plan was to fully lease and develop the site to 88MW over five years, and we now expect to reach that milestone well ahead of our original plan.

What’s next for DigiCo Infrastructure REIT?

DigiCo says its strategy is to steadily grow contracted capacity through the delivery of the SYD1 and ADL1 expansions. Together, these projects are expected to underpin DigiCo’s pathway to around $250 million in annual Australian Platform Stabilised EBITDA once fully operational.

Management reaffirmed FY27 EBITDA guidance, noting the expansion is fully funded and on schedule, with staged delivery designed to meet customer requirements. No new equity capital is required for current growth plans.

DigiCo Infrastructure REIT share price snapshot

Over the past 12 months, DigiCo Infrastructure shares have declined 32%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 3% over the same period.

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The post DigiCo Infrastructure REIT locks in major SYD1 contract and reaffirms guidance appeared first on The Motley Fool Australia.

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