HMC Capital, an Australian alternative asset manager, is preparing to unveil a significant initial public offering (IPO) for its data centre business, DigiCo Real Estate Investment Trust (REIT), with a valuation of £2.05 billion ($2.6 billion). This upcoming listing on the Australian Stock Exchange (ASX) will be the largest Australian IPO since 2021, marking a major milestone for the rapidly growing Australian data centre sector.
A Strategic Move into the Expanding Data Centre Market
The DigiCo REIT portfolio is anchored by strategic acquisitions that provide the foundation for its growth. Among these, the purchase of iseek, an Australian co-location platform, for £204 million ($259 million) and the acquisition of Global Switch Australia for £992 million ($1.2 billion) stand out as key moves to diversify and strengthen DigiCo’s position. These assets bolster DigiCo’s portfolio, which now includes 13 data centres and serves 586 users across Australia.
The data centre market in Australia has seen rapid expansion in recent years, driven by increased demand for cloud services, digital infrastructure, and storage capacity. As businesses in Australia and across the Asia-Pacific region rely more on digital services, the need for secure and reliable data centre facilities continues to grow. This shift positions DigiCo REIT as an attractive investment opportunity, offering exposure to this booming sector.
Expansion and Growth Potential
One of the standout features of DigiCo’s portfolio is the integration of the recently acquired iseek platform, which enhances the company’s reach across key Australian markets, including Queensland, New South Wales, and South Australia. iseek’s data centres currently offer 6 megawatts (MW) of IT capacity, with a potential expansion capacity of 28MW. This provides DigiCo with the opportunity to scale its operations and meet the growing demand for data storage and computing power in high-demand cities like Brisbane and Adelaide.
David Di Pilla, Managing Director and CEO of HMC Capital, highlighted the strategic advantages brought by these acquisitions, particularly the geographic diversification and expansion of customer bases. He noted that the integration of iseek and Global Switch Australia will further strengthen DigiCo’s position as a leading player in the data centre sector, both within Australia and in North America. Di Pilla emphasized that the DigiCo platform would employ over 100 dedicated professionals across the iseek, Global Switch, and StratCap entities, all contributing to the development of world-class digital infrastructure.
Promising Future for DigiCo REIT
HMC Capital is confident that the IPO will attract significant interest from both retail investors and global institutions. The IPO will allow investors to gain exposure to institutional-grade digital infrastructure assets, which are increasingly viewed as valuable long-term investments. DigiCo REIT’s focus on high-quality data centre assets positions it as an attractive proposition in the alternative asset class space.
While HMC has not officially confirmed the exact date of the IPO, reports indicate that the listing could take place as soon as December 16. If the IPO proceeds as planned, DigiCo REIT could become one of the ASX’s most high-profile offerings in recent years, with strong potential for long-term growth.
A Broader Trend in the APAC Region
DigiCo’s IPO comes amid a broader trend in the Asia-Pacific (APAC) region, where data centres have become increasingly attractive to investors, particularly in the real estate investment trust (REIT) space. A recent report from CBRE found that data centres are now considered the preferred alternative asset for APAC REITs. This shift is largely driven by the region’s growing demand for digital infrastructure, as well as the limited investment opportunities in certain markets.
For example, Singapore, a key regional hub for data centre development, has implemented a moratorium on new data centre construction, which has led to a scarcity of investment opportunities in the country. This has only further fueled interest in Australian data centres, which are now seen as an attractive alternative for institutional investors looking to gain exposure to this vital sector.
Conclusion: The Digital Infrastructure Investment Boom
HMC Capital’s launch of DigiCo REIT is a significant development in the growing data centre investment market. As more businesses and governments transition to cloud-based services and digital infrastructures, the demand for secure, reliable data storage and processing facilities will only continue to rise. DigiCo’s strategic acquisitions and ambitious growth plans position it to capitalize on this demand, offering a promising investment opportunity for those looking to tap into the rapidly evolving digital infrastructure market.
With strong backing from HMC Capital, an experienced Australian asset manager, and an expanding portfolio of high-demand assets, DigiCo REIT looks set to become a key player in the global data centre investment landscape. As the IPO approaches, all eyes will be on the ASX to see if the listing can live up to its potential and deliver value to investors in the fast-growing digital infrastructure sector.
References:
- HMC Capital’s DigiCo REIT IPO Announcement – HMC Capital news release on the upcoming listing of DigiCo REIT on the Australian Stock Exchange.
- ISEEK and Global Switch Australia Acquisitions – Information on HMC Capital’s acquisitions of iseek and Global Switch Australia, expanding DigiCo’s footprint.
- CBRE Report on Data Centres and REITs – A report by CBRE detailing the rise of data centres as preferred alternative assets for APAC REITs.
- Singapore’s Data Centre Construction Moratorium – Information on Singapore’s moratorium and its impact on the data centre investment landscape across Asia-Pacific.
This expanded context highlights both the strategic importance of DigiCo’s IPO and its potential for future growth in a market that is becoming an increasingly critical part of the global economy.
