David Di Pilla flags $4b data centre float
HMC Capital, led by deal-making dynamo David Di Pilla, plans to launch a $4 billion data centre investment trust on the ASX next month, after securing crucial seed assets for the platform.
The proposed IPO would be the largest in years for the real estate investment trust sector and comes amid a massive upsurge of investor interest in data centres.
The use of AI has boosted an already accelerating demand for cloud computing, while the so-called ‘AirTrunk effect’ – following the world’s biggest data centre deal this year at $24 billion-plus – has underscored how big the opportunity to invest is.
On Monday, Mr Di Pilla’s ambitions for the listed data centre play took another a big step forward with a $400 million deal by HMC Capital to acquire iseek, an Australian co-location data centre operating platform.
HMC Capital is the ASX-listed fund management platform established by Di Pilla five years ago.
Last month HMC secured Global Switch Australia, a $2 billion data centre campus on the fringe of the Sydney CBD and now with its latest acquisition of iseek, it has control over $2.5 billion of operating assets in Australia.
As well, HMC is in exclusive due diligence on a further $1.6 billion of data centre assets in North America. It already owns US-based digital infrastructure platform StratCap, which has $700 million of assets and a $1 billion pipeline.
These acquisitions will seed an ASX-listed platform called DigiCo Infrastructure REIT, which will launch with a $4 billion portfolio.
Mr Di Pilla said the iseek portfolio – seven co-location data centres in Queensland, South Australia and New South Wales – was “highly complementary” with last month’s Global Switch Australia acquisition.
“The DigiCo platform will have over 100 dedicated people across iseek, Global Switch Australia and StratCap, and represents the beginning of our strategy to build a world-class operating platform providing investors with exposure to institutional grade digital infrastructure assets in both Australia and North America.”
The plan to list the data centre platform, DigiCo REIT, by the end of this calendar year is on track, HMC said. It plans to raise around $2.6 billion of new equity to back the platform and its $4 billion portfolio. The platform is targeting a distribution yield of 4 per cent.
A big-name board for the new REIT has also been announced, to be chaired by former PwC managing partner Joseph Carrozzi. Also on the board are former federal politicians Mark Arbib, a Labor powerbroker, and former prominent Liberal Kelly O’Dwyer, who is already on the HMC board.
Along with Mr Di Pilla, the board will include Rachel Grimes, Stephanie Lai and Chris Maher.
Mr Di Pilla has made no secret of his data centre ambition as being a key driver for the growth of HMC’s fast-expanding funds platform.
The platform was initially set up as pure-play landlord to house the former Masters hardware portfolio, but has rapidly evolved into a fund manager, with more than $16 billion of managed assets in real estate, private equity, energy transition, digital infrastructure and private credit. HMC stock closed 4 per cent higher on Monday.
Speaking to analysts last month, Mr Di Pilla said HMC’s new digital infrastructure platform represented a $10 billion to $20 billion investment opportunity for the group “if we get it right”.
