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Alternative asset manager HMC Capital (ASX: HMC) has been inundated with institutional demand for a $2.746 billion capital raising to establish a new real estate investment trust aiming to capitalise on surging demand for data centres in Australia and the US.
The proposed ASX-listed Digital Infrastructure REIT (ASX: DGT) will have an enterprise value of $4.3 billion, taking HMC’s assets under management to about $17.5 billion – up 73 per cent this calendar.
The IPO for Digital Infrastructure REIT (DigiCo REIT) was boosted by $100 million to $2.746 billion after HMC received significant demand from institutional cornerstone and retail investors. HMC will own $500 million of the new entity, representing 18 per cent of total issued capital.
The DigiCo REIT portfolio will be seeded with $2.5 billion of existing assets in Australia via the acquisitions of data centre operators Global Switch Australia and Iseek.
HMC and DigiCo REIT also have agreements to acquire three North American enterprise and hyperscale data centres with 44MW of contracted capacity for $1.5 billion which will be added to the portfolio.
When completed, these acquisitions will comprise a portfolio of 13 data centres, among them five in the US, and 586 customers.
“The establishment of the DigiCo REIT represents another landmark transaction by HMC and demonstrates our ability to build scalable growth platforms via large scale transactions,” says HMC’s CEO David Di Pilla.
“DigiCo REIT provides a global operating platform in the rapidly growing digital infrastructure sector. The oversubscribed raising and upsized IPO is a testament to the significant level of investor demand for DigiCo’s high quality global portfolio, customer base and development pipeline.”
The IPO for DigiCo REIT comprised the issue of 399 million shares at $5 each, with 100 million of those shares held by HMC Capital. The total of shares on issue is 549 million, capitalising the new trust at $2.746 million.
Forecast revenue from the completion date of 16 December 2024 to the end of June 2025 is $75 million with a forecast distribution yield of 4 per cent for the current financial year.
“DigiCo is well positioned to capture the growth in data centre demand across government, hyperscale, enterprise and co-location customers,” says DigiCo Infrastructure REIT chair Joseph Carrozzi.
“The REIT will aim to deliver stable and growing distributions, long-term capital growth and positive environmental and social impact.”
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