DigiCo has agreed to sell its CHI1 facility to an unnamed buyer (Image: Skybox Datacenters)
ASX-listed DigiCo Infrastructure REIT has agreed to sell its nearly complete Chicago data centre for $750 million, according to a statement released on Wednesday, as the trust’s sponsor, HMC Capital, struggles with underperforming investments.
DigiCo has agreed to sell its CHI1 facility to an undisclosed North American fund manager at a premium of approximately five percent over its November 2024 purchase price, at a passing yield of 5.8 percent. The REIT said it is also exploring options to sell its two Los Angeles projects — LAX1 and LAX2, which carry a combined book value of $71 million — after withdrawing a development application at LAX1 last month following opposition from local residents.
Proceeds from the US asset disposals will reduce DigiCo’s net debt to around A$500 million ($355 million) from A$1.5 billion ($1.1 billion), cut gearing from 36 percent to 17 percent, and lift available liquidity to A$900 million ($639 million), releasing net cash of approximately A$360 million ($256 million) after repaying debt secured against CHI1, the statement said. The sale is expected to close in the third quarter of this year.
“The release of capital from CHI1 provides additional financial flexibility and capacity to accelerate the delivery of the SYD1 development program,” said Chris Maher, interim chief executive of DigiCo. Following the deal announcement, DigiCo’s stock rose 25 percent on Wednesday to A$2.90, but remains well below its December 2024 IPO price of A$5.00.
US Retreat
Disposing of the Chicago facility will leave DigiCo with two smaller operating assets in the United States — KCM1 in Kansas City and DAL1 in Dallas, Texas — which have combined capacity of 12 megawatts and are leased long-term to the same investment-grade occupier. Although DigiCo said it would continue managing those centres, the REIT is likely to sell them in the future, a market source told Mingtiandi.
HMC Capital managing director and CEO David Di Pilla
The exit marks a reversal for HMC less than two years after DigiCo’s $2.7 billion IPO, with the trust seeded with a $1.5 billion portfolio of three North American enterprise and hyperscale data centres alongside its Australian assets. David Di Pilla, chief executive of HMC Capital, said at an investor conference in Sydney on Wednesday that the firm would “scale back US operations” to focus on its “higher growth Australian data platform,” according to a presentation released through the exchange.
HMC Capital is also shutting down its HMC Capital Partners Fund — through which it held stakes in Baby Bunting, Ingenia Communities and Lendlease — and returning capital to investors via a mix of cash and distributions of the fund’s listed holdings, according to the presentation. The firm said it saw significant potential in the portfolio and was confident it could realise that value over the next 18 months.
HMC Capital is separately in discussions to raise more than A$1 billion ($710 million) from multiple institutional investors for commercial real estate lending, which would expand its private credit portfolio from A$2.2 billion ($1.6 billion) at the first half of the financial year to more than A$3 billion ($2.1 billion), according to the investor presentation.
Staying Close to Home
DigiCo said it has reached practical completion on the first 15 megawatts of a 20-megawatt upgrade at its SYD1 facility in Sydney, with the remaining five megawatts on track for delivery before 30 June 2026. The centre will reach 88 megawatts of total power capacity on completion of planned upgrades and has been awarded Certified Strategic status under the Australian government’s Hosting Certification Framework, according to the statement.
SYD1 sits less than one kilometre (0.6 miles) from the Sydney city centre and is close to submarine cable landing points and telecommunications exchanges, according to DigiCo. HMC Capital bought Global Switch Australia, which owns SYD1, for $1.93 billion in 2024 as the seed asset for the REIT.
DigiCo reaffirmed its FY2026 underlying EBITDA guidance of A$125 million ($89 million) and said the US asset sales are expected to be materially accretive to funds from operations from FY2027, according to the statement. DigiCo owns seven other data centres across Australia, a market attracting heavy investment from operators and technology companies.
HMC Capital’s shares were removed from the S&P/ASX 200 Index on 22 December 2025 and, despite gaining around 17 percent on Wednesday, have fallen more than 40 percent over the past 12 months.
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