DigiCo Sells Chicago Data Center for $750 Million

DigiCo Infrastructure REIT has finalized a significant divestiture, agreeing to sell its Chicago-based data center facility, known as CHI1, for a substantial US$750 million. This strategic move marks a notable transaction within the digital infrastructure real estate sector, highlighting the enduring demand for high-quality, operational data assets.

The buyer is a prominent North American fund manager, whose identity remains undisclosed. This acquisition underscores the appetite among institutional investors for critical digital infrastructure, particularly facilities leased to major hyperscale clients. The CHI1 facility boasts a capacity of 32 megawatts and benefits from a long-term, 15-year lease agreement with a significant hyperscale tenant, providing a stable and predictable revenue stream.

This sale represents a strategic premium for DigiCo, fetching approximately 5% more than its acquisition cost in November 2024. The transaction is expected to inject approximately A$360 million in net cash proceeds into DigiCo's coffers, following the settlement of associated asset-level debt. This infusion of capital is anticipated to significantly bolster the company's financial flexibility and strengthen its balance sheet.

The digital infrastructure sector, particularly data centers, continues to experience robust growth, driven by escalating demand for cloud computing, artificial intelligence, and data analytics. Global data center colocation revenue is projected to reach hundreds of billions of dollars in the coming years, making assets like CHI1 highly attractive. The sale price reflects not only the physical asset but also its strategic location, operational efficiency, and the quality of its tenant base.

For DigiCo, this divestiture aligns with a strategy to optimize its portfolio and potentially redeploy capital into new growth opportunities or deleverage its existing financial structure. The company's ability to secure a premium on this sale demonstrates effective asset management and a keen understanding of market valuation dynamics within the competitive data center real estate market. The transaction is subject to customary closing conditions.

The broader market for data center real estate has seen increased activity, with both public and private entities seeking to capitalize on the sector's expansion. Recent comparable transactions have shown strong investor interest, particularly for facilities with established hyperscale tenants. DigiCo's successful exit from the Chicago market positions it to pursue its next phase of strategic development, potentially focusing on markets with emerging demand or expanding its footprint in existing core regions.