Australia’s HMC Capital launches new digital infrastructure trust in $1.79 billion IPO By Reuters

(Reuters) -Australia’s HMC Capital on Thursday unveiled plans to create DigiCo REIT, a new ASX-listed digital infrastructure real estate investment trust, in a A$2.75 billion ($1.79 billion) underwritten initial public offering.

Capitalizing on the global surge in data center demand driven by the ongoing AI revolution, HMC is venturing into infrastructure-style investments, identifying data centers as a valuable asset class in the current market landscape.

HMC, founded and backed by banker-turned-investor David Di Pilla, said that the new DigiCo REIT securities are set for conditional and deferred settlement trading commencing on Dec. 12.

The IPO has been expanded by A$100 million, following strong interest from both institutional cornerstone and retail investors, the company said.

DigiCo REIT will manage A$4.3 billion worth of data center assets across the U.S. and Australia, initially anchored by A$2.5 billion worth of strategic operating assets in Australia acquired from Global Switch (NYSE:) Australia and iseek. According to an earlier HMC filing, iseek will reinvest A$250 million worth of the purchase price into the DigiCo IPO.

HMC will own about a 18% stake worth A$500 million in DigiCo REIT.

Following the ASX listing of DigiCo REIT, HMC’s assets under management are projected to grow by 73% in 2024, reaching about A$17.5 billion.

The IPO is expected to boost HMC’s recurring funds management revenue and generate significant transaction-related income in fiscal 2025, HMC said in a statement.

As part of DigiCo REIT’s formation, HMC and DigiCo REIT also secured deals to acquire three North American enterprise and hyperscale data centers for A$1.5 billion, which will be incorporated into DigiCo REIT’s portfolio, the company said.

($1 = 1.5370 Australian dollars)