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Highlights
- DigiCo REIT IPO valued at AU$2.75 billion, making it the largest in 2024.
- HMC Capital’s shares hit a record high, surging as much as 2.2% to AU$11.99.
- DigiCo REIT to manage AU$4.3 billion in data center assets across Australia and the U.S.
Australia’s HMC Capital (ASX:HMC) announced the launch of DigiCo REIT, a new digital infrastructure real estate investment trust (REIT) focused on data centers. With an IPO valued at AU$2.75 billion (US$1.8 billion), DigiCo REIT marks the largest initial public offering of 2024 in Australia.
HMC’s shares reached a record high of AU$11.99 in early Thursday trading, rising by 2.2% and outperforming the S&P/ASX 200 Index, which was up by 0.4%. The surge reflects investor enthusiasm for the new REIT, which aims to capitalize on the global demand for data centers fueled by advancements in artificial intelligence and digital technologies.
Record-Breaking IPO
The DigiCo REIT IPO will surpass previous large listings this year, including Cuscal’s AU$337 million offering and Guzman y Gomez’s AU$335.1 million listing. This IPO is set to cap off a strong year for the Australian Securities Exchange (ASX), which has seen 77 IPOs as of November 20, a significant recovery from the 57 listings in fiscal 2023—the lowest in a decade.
The offering attracted robust investor demand, allowing HMC to expand its size by an additional AU$100 million. Trading for DigiCo REIT is expected to commence on December 12.
Portfolio and Strategy
DigiCo REIT will oversee AU$4.3 billion in data center assets, with an initial focus on AU$2.5 billion worth of operating assets in Australia acquired from Global Switch Australia and iseek. Notably, iseek will reinvest AU$250 million of the proceeds from the transaction into DigiCo REIT.
As part of its expansion, DigiCo REIT has also secured deals to acquire three North American enterprise and hyperscale data centers for AU$1.5 billion, which will be integrated into its portfolio.
Upon the IPO, HMC Capital will retain an 18% stake in DigiCo REIT, valued at AU$500 million. The IPO will significantly bolster HMC’s assets under management (AUM), which are expected to rise by 73% to AU$17.5 billion in 2024.
A Catalyst for Growth
The formation of DigiCo REIT positions HMC Capital as a major player in the digital infrastructure space, leveraging surging demand for data centers driven by global technological shifts. Founded by banker-turned-investor David Di Pilla, HMC has demonstrated strategic foresight in tapping into this high-growth sector, aligning its future with the booming AI and cloud computing industries.
