David Di Pilla’s HMC Capital has successfully executed one of Australia’s largest public company listings in recent years, driven by investor interest in the rapid expansion of AI-powered data centres.
HMC’s new real estate investment trust (REIT), DigiCo, will start trading on the ASX on December 12 with an initial market capitalisation of A$2.74 billion. Strong investor demand led to a A$100 million upsizing of the offering, backed by institutional underwriters.
“That reflects the quality of the underlying assets and the desire of investors to get exposure to the digital sector, clearly something that’s hard to get high-quality exposure to,” Di Pilla said.
AI boosts data centres
The surge in artificial intelligence (AI) applications, such as ChatGPT and Synthesys, has not only boosted tech giants like Nvidia and Alphabet (NASDAQ:GOOGL) but also enhanced the value of property firms managing data centres, critical infrastructure for cloud computing.
The sector's prominence was underscored in September when AirTrunk’s sale to Blackstone (NYSE:BX) fetched A$23.5 billion, reinforcing the market’s growth trajectory. Morgan Stanley (NYSE:MS) estimates Australia’s data centre energy demand will climb from 2% to 8% of the country’s total electricity generation by 2030, with DigiCo positioned to benefit.
HMC has assembled a 13-asset portfolio for DigiCo, underpinned by recent acquisitions of Global Switch Australia (A$1.9 billion) and iseek (A$400 million). The Global Switch portfolio, including large-scale Sydney developments, has potential to expand from 26 megawatts to 88 megawatts, solidifying its place as one of Australia’s largest data centres.
US growth
Looking abroad, Di Pilla highlighted the significant growth potential in the US, where DigiCo aims to capitalise on a market he considers “10 times the size of any other globally”.
HMC’s evolution from transforming Woolworths' abandoned Masters stores to launching multiple REITs, including HealthCo and Daily Needs REIT, underscores its meteoric rise in the property sector. Its latest offering further cements its reputation as a dynamic property investment manager.
The DigiCo REIT prospectus has been lodged with the Australian Securities and Investments Commission (ASIC).