Good morning and thank you for joining today's call. Before we commence, DigiCo would like to acknowledge the traditional custodians of country throughout Australia and celebrate their diverse culture and connections to land, sea, and community. We pay our respects to their elders, past and present, and extend that respect to all Aboriginal and Torres Strait Islander people today. I'm joined this morning by c . I will start the presentation on page four for an overview of our FY 2025 results. FY 2025 has been a pivotal year for DigiCo. Since completing the acquisitions and our IPO in December 2024, we have made a solid start as a listed company. First and foremost, we have delivered on our PDS guidance. More importantly, we have set DigiCo up for the future and built real momentum.
We have achieved key strategic milestones, and we have brought together the assets, building on their core fundamentals, to create a strong operating business across the U.S. and Australia that is ready to deliver on our pipeline and capture market growth. Key achievements during FY 2025 include our Sydney One Data Centre achieved certified strategic status under the hosting certification framework, consistent with the mid-year timing we had indicated to the market. This is a game changer for DigiCo. It enables us to host government workloads, public cloud deployments, and sends a strong signal to enterprise customers. We have brought in senior talent from industry to strengthen the management team. We have a strong development pipeline across the portfolio, and we are making excellent progress in executing on that pipeline as scheduled.
Specifically, we have commenced expansion of Sydney One and will deliver 9 megawatt of light liquid cooled capacity in early Q4 FY 2026. This will support high-performance compute workloads for the Sydney CBD. Our Chicago site is at advanced stages of construction and has commenced billing as contracted. Los Angeles One is progressing well and is on track for development approval in Q2 FY 2026. Sales momentum is also strong across the portfolio. Importantly, our total pipeline is much stronger than at the time of acquisition. In Sydney specifically, there is very strong market demand, and pleasingly, the shape of the demand has also changed. Five to ten megawatt deals are much more common, and as a consequence, we have modified the Sydney One expansion program to accommodate larger scale deployments and liquid cooling capacity, which is where we see the market going.
We have been working closely with our existing customers across the entire business. Specifically, in the Australian business, we have stabilized the customer base, locking in 2.6 megawatts of renewals for key customers, which is circa 15% of the tenant base. Those renewals have been locked in at an 8% premium. To summarize the key financial highlights, we have delivered on our PDS guidance. That is, FY 2026 annualized EBITDA of $99 million ahead of PDS guidance. FY 2025 dividend per security of $0.109 per security in line with PDS, and we have $740 million of available liquidity. We go into FY 2026 in a very strong financial position with a flexible capital structure and cash position to support our development pipeline with positive tailwinds and accelerating business momentum. As I said earlier, FY 2025 has been a pivotal year, and we have made a solid start.
I am proud of the way in which we have repatriated the Sydney One Data Centre to Australian ownership in partnership with the Australian government, how we have rebuilt relationships with existing customers and in market, and brought in new senior industry talent. This is a very different business to what it was even a month ago. In fact, even over the last week since we announced HCF, there has been a noticeable shift in tone and customer sentiment. I will now turn to page five to talk about HCF in more detail. Our Sydney One Data Centre was granted certified strategic status by the Australian Department of Home Affairs 10 days ago on 8 August, 2025. This is a major achievement and truly a ticket to play.
It positions DigiCo as a trusted provider of sovereign digital infrastructure in Sydney and in Brisbane, where our Brisbane 2 site is already certified, and in Adelaide, where we expect Adelaide 1 to be certified in the second quarter of FY 2026, that is, by December of this year. Importantly, this represents a win-win outcome for both the government and DigiCo. Together, we have repatriated a critical national infrastructure asset and uplifted it to the highest standard. We have a strong track record with government. Our Brisbane and Adelaide sites already host workloads for government agencies and contractors, and Sydney One has historically been a major site for government. That's why it was so encouraging to receive such a strong endorsement, as reflected in the letter from the Australian Department of Home Affairs on the slide.
Since the announcement, we have already had interest from government customers looking to return to the Sydney One site, as well as from other key customers who require HCF status. Moving to page six, I'd like to talk about the investment we have made in senior industry hires. In addition to securing HCF, another major priority in FY 2025 was strengthening the Australian leadership team. Over the past two to three months, we have welcomed four senior leaders with deep industry expertise that position us for growth as we go into FY 2026. Paul Dalev joined us a month ago as National Head of Sales. Formerly with Google and SAP, Paul brings a wealth of experience in enterprise, government, and cloud sales. He has already driven stronger market engagement and a noticeable uplift in the Australian sales pipeline.
Glen Hastings, Head of Commercial, brings deep industry experience and strong relationships from his prior senior roles at both Equinix and NextDC. Glen is playing a key role in developing new commercial opportunities and in serving our existing customers. Martin Richards has joined as Chief Information Officer. Martin is an accomplished technology leader. Strengthening our technology capability was understandably a key requirement of building confidence with the government and securing HCF. Ralph Goninan has joined to lead the Sydney One expansion. Ralph has a track record leading major construction projects, including Macquarie's Martin Place expansion. Ralph has implemented the project management rigor and discipline to support the 9 MW build at Sydney One. These four appointments have significantly improved the execution capability and growth potential of the Australian business. There is no doubt that securing HCF was a key catalyst in attracting such quality talent.
Additionally, Scott Hicks, previously the CEO of iSeek, remains with the business in an important leadership role, and we announced earlier today that Damon Reid will take on a new role as COO of the Australian business. Damon brings deep operational experience, particularly with the Sydney One site, and he will also play a key role in the Sydney One expansion. I will now move to page seven to provide an update on the Sydney One development. We have commenced the first phase of the Sydney One Development Optimization Project, also known as the D&O Project. This will deliver 9 megawatt of liquid cooled capacity in early Q4 FY 2026, which will support AI and high-performance compute workloads for the Sydney CBD.
We have made the decision to launch the 9 megawatt expansion as a direct result of securing HCF and in response to strong market demand, which I'll speak to in a moment. We have the flexibility to deliver air or liquid cooled capacity, depending on customer requirements. However, our expectation is that this first 9 megawatt will be liquid cooled based on the demand we see emerging and the fact that there is limited to no liquid cooled capacity available in the Sydney Metro market at present. More broadly, we have reshaped the D&O program to deliver contiguous blocks of high-density space, as we see significant market demand emerging for five to 10 megawatt deployments that can support AI and high-performance compute workloads. We have been working very actively with some customers to consolidate and optimize capacity to create these contiguous blocks.
The D&O program will be delivered over the next three-plus years, and we have the ability to do this in a very modular and disciplined way to ensure we are only investing and switching on 10 megawatt blocks of capacity where there is a clear market need. At the completion of the project, we will have a state-of-the-art facility in the Sydney CBD with 75% of the 88 megawatt to be brand new high-density saleable capacity. I will now move to page eight to discuss market demand. The demand environment for data center capacity is evolving and being shaped by four powerful forces that are driving sustained growth across our industry. Artificial intelligence and neoclouds are driving a fundamental shift in demand, with customers now requiring much more powerful high-density data center environments to support GPU-based computing.
Hyperscale cloud continues to expand at pace as enterprises and consumers rely on cloud infrastructure for everyday applications. Enterprise and government customers are also in the midst of digital transformation programs, which require secure and sovereign infrastructure to protect critical workloads. Edge computing is extending the network closer to users to support latency-sensitive applications. These drivers are not cyclical. They represent structural long-term shifts in how the digital economy consumes computing power. For DigiCo, these trends play directly to our strengths. Our secure, regulated, and highly connected facilities, strategically based in CBD locations, position us to serve the most demanding customer segments, whether that is AI and neocloud workloads, edge cloud deployments, or government and enterprise. We believe that sovereignty over both data and AI infrastructure will become a critical success factor, and DigiCo is well placed to deliver for customers who require both performance and a trusted partner.
I will now move to page nine to discuss how these market dynamics translate into opportunities for DigiCo. The structural shifts I referred to on the previous slide are driving unprecedented demand for data center capacity. As I said earlier, our total pipeline is much stronger than at the time of acquisition, and deployment schedules are changing. Customers are now asking for five to ten megawatts of contiguous high-density capacity, with this increasingly being driven by neocloud and other AI deployments. Over the last few months, our lack of available contiguous capacity or HCF certification has excluded us from active market opportunities. This has been a key driver for pursuing the nine-megawatt liquid-cooled expansion at Sydney One to unlock saleable capacity.
Sydney One is the only site at scale next to the Sydney CBD where power is locked in, and there is no other liquid-cooled capacity available in the Sydney Metro market at present. We can very quickly, via Sydney One, provide low latency, high-density capacity very quickly into the Sydney market. In terms of DigiCo's priorities from a go-to-market perspective, our priority in the short term is to continue to work closely with our existing customer base in Sydney. There are a number of strategic customers with strong growth potential that have been restricted by our lack of HCF. As mentioned, we are also working with Sydney One customers to optimize capacity, and there are opportunities where we can unlock capacity that will result in increased rack densities and contiguous space, which we can use to remix the site to generate better long-term value.
Our second major priority is to focus on the nine-megawatt coming online early in the new calendar year. We see a lot of demand from hyperscalers, neoclouds, and enterprises with AI and high-performance compute requirements. These organizations are looking for immediate low latency capacity that can handle high-density racks and workloads. In parallel, government will be a key focus following HCF. As I noted earlier, we have a strong track record with government, and we've had renewed interest from government customers looking to return to Sydney One. From an iSeek perspective, iSeek has strong relationships with government, both federal and state, defense contractors, cloud services and carriers, and local enterprises. iSeek has more than 500 customers with long average tenures. We see very good opportunities for the iSeek business. We are very focused on it, and we're in advanced discussions on a number of key opportunities.
I will now pass to Simon to provide an update on the portfolio and discuss the financial results in more detail.
Thanks, Chris, and let me add my welcome to those on the call. Starting with the portfolio update on slide 11. DigiCo's portfolio spans 13 properties with 76 megawatts of installed capacity and 65 megawatts of contracted capacity. Our portfolio continues to demonstrate strong customer demand and utilization, with 53 megawatts of billing capacity and 86% utilization. We have a diverse customer base of over 550 customers, including hyperscaler, cloud services, government, and enterprise, reflecting the strong market positions of each site. Around 64% of Australian gross income comes from our top 10 investment-grade customers, reflecting a stable and reliable cash flow stream. Our revenue base has stable embedded growth, with 99% of recurring revenue benefiting from contracted escalations. Moving to slide 12. DigiCo has a global portfolio across Australia and North America, with five properties in the U.S.
valued at $1.7 billion, with 110 megawatts of planned IT capacity, and eight properties in Australia valued at $2.4 billion, with 122 megawatts of planned IT capacity. Each of our sites are Tier 1 or high growth emerging Tier 2 markets, with CBD locations proximate to submarine cable landing stations, fiber, and well served by power with significant redundancy. Our portfolio is unique in offering a diversified exposure to a combination of stabilized, value-add, and development assets, which results in a balanced exposure to different growth and return profiles. Moving to slide 13. Our portfolio is geographically diverse across markets in the U.S. and Australia, and backed by long-term customer relationships. 70% of our FY 2025 revenue came from recurring service fee and rental revenue streams. A further 18% came from interconnection revenues, which highlights the high connectivity and criticality of our infrastructure.
The revenue base is also anchored by strong credit quality counterparties, with 81% of revenue coming from investment-grade enterprises and government customers. Moving to slide 14. Since taking ownership of the Australian and U.S. assets, we have developed and instilled a strong workplace health and safety culture, and we are proud today to report zero for both lost time injury frequency rate and total recordable injury frequency rate. Now turning to the financials, beginning with the earnings and cash flow on slide 16. The results presented represent trading for the group from IPO completion, that is December 18, 2024 to June 30, 2025. Today, we have published two sets of financial statements. One set for the trust, which includes the financial results of the U.S. assets, and another set of accounts for the stapled group, which consolidates the stapled co-company that contains the Australian businesses and the trust.
In this presentation, we will focus on underlying numbers from the stapled group accounts. Revenue for the six and a half month period was $105 million, broken into two main categories: $14 million of rental revenue from the U.S. assets and $91 million of revenue from the co-location business in Australia, including interconnection, cloud, and power pass-through. After total costs of $52 million, underlying EBITDA equated to $53 million, which annualizes to $99 million, slightly ahead of the PDS forecast of $97 million. Deducting net interest expense of $25 million, and after adjusting for the management fees settled in script, results in underlying cash flow, or FFO, of $39 million.
The net interest costs shown in this slide do not include the Chicago One debt costs, which are capitalized in the period prior to rent commencing, but will start to be reflected in FFO as the rental revenue phases in through FY 2026 and FY 2027. There was no tax payable by the group for the period, and we expect that position to continue for the near term, at least through FY 2026. Moving to slide 17 and balance sheet. We finished the year with cash of $425 million and net debt of $1.46 billion. Net assets were $2.5 billion, which equates to a net asset value per share of $4.53. The group's assets have been grouped under two different accounting treatments. The U.S. assets have been accounted for as investment properties, which will be valued on a semi-annual basis and updated in the balance sheet.
The Australian businesses are accounted for as property, plant, and equipment, and therefore will not be revalued in the balance sheet. An independent valuation of the group's portfolio as at 30 June, 2025 resulted in a $4.0 billion valuation. This is broadly in line with the portfolio acquisition price at IPO and also in line with gross assets reported on the balance sheet, net of financial assets. Moving to slide 18, capital position and funding. We ended the period with a strong liquidity position of $740 million, made up of $425 million of cash and $315 million of undrawn debt facilities. Debt facilities total $2.2 billion, of which $1.9 billion is drawn. Gearing was 35.1% at the lower end of the 35% to 45% range. All interest rate exposure is hedged to maturity at an effective all-in cost of 6%.
The weighted average debt tenor is four years, with no maturities before FY 2029. With a de-risking of the asset base through HCF certification of SYD1 and the stabilization of Chicago, we are well placed to refinance our Australian and U.S. debt facilities at a materially lower margin, and we expect to progress this through FY 2026. We also expect capital partnering initiatives to provide further balance sheet flexibility through FY 2026, which we will talk to later. With that, I'll hand back to Chris.
Thanks, Simon. Moving to page 20 to discuss DigiCo's growth pipeline. We have significant growth and development upside embedded in the DigiCo portfolio across the breadth of our geographic markets in Sydney, Los Angeles, Brisbane, and Adelaide. Our pipeline of projects represents an additional 156 megawatts of future IT capacity over and above the 76 megawatts of installed IT capacity today. This includes the 62 megawatts of additional capacity in Sydney One Data Centre, the two greenfield Los Angeles development projects, which will each add 33 megawatts of capacity. We also have the ability to add a new greenfield site, Brisbane 3, at our Brisbane campus, which will add 20 megawatts of IT capacity. At Adelaide 1, we have the ability to expand the existing site by 8 megawatts.
The mix of projects gives us higher confidence in our long-term growth outlook, as we have a diversity of new greenfield projects in high-growth markets such as Los Angeles, combined with expansion projects in existing markets in Sydney, Brisbane, and Adelaide, where we can leverage our existing strong market positions and customer relationships. Furthermore, from an execution perspective, what gives us confidence in delivering this pipeline is not just the quality of the opportunities, but the way in which we've positioned DigiCo to deliver on this growth. Firstly, we have the flexibility to stage each of these developments in line with customer demand, bringing capacity online in a very modular way at a timing of our choosing. Secondly, in every case, we have the land or access to the land plus access to power, thereby removing two of the biggest barriers to execution.
Thirdly, the strengthening of the Australian leadership team has been critical in giving us the capability and confidence to execute. I will now discuss each of our growth projects, so I'll move to page 21. The expansion of the Sydney One campus is our flagship growth project, and we will invest approximately $900 million over the next three-plus years. The first phase of that is underway and will add 9 megawatts of additional IT capacity by April 2026 for an investment of $27 million. The 9-megawatt project is on track, and we are seeing healthy levels of interest from both existing and prospective tenants, which gives us confidence that the incremental capacity will be absorbed quickly.
In terms of the broader expansion opportunity, that is the full 88-megawatt project, we are moving towards a 70% design phase, and we will move forward on that as the 9-megawatt project comes online in a staged manner aligned with customer demand. This is an important project for Sydney because the expansion allows us to serve both high-density workloads for AI and neocloud deployments, along with the more diverse requirements of co-location customers, all within an established campus that is already highly interconnected. As I indicated earlier, at the completion of the project, we will have a state-of-the-art facility in the Sydney CBD with 75% of the 88 megawatts to be brand new high-density saleable capacity. Moving to page 22 to discuss the Los Angeles development. Los Angeles One is progressing through final approvals. Council approval is expected in Q2 FY 2026, that is, by the end of this calendar year.
Construction is targeted to commence during calendar year 2026 with delivery by 2028. As many of you know, the Los Angeles market is an emerging high-growth Tier 2 market in the U.S. The Los Angeles market is supply constrained due to challenges in California with getting access to land and power. Consequently, with our sites, we are seeing strong early interest from AI, hyperscale, and enterprise customers for our developments. Los Angeles One and Los Angeles Two share the same characteristics as the rest of DigiCo's portfolio. Together, they will provide 66 megawatts of capacity in a central location, like all our sites, near global subsea cables, like all our sites, near fiber routes, and near core AI and cloud markets. Development and capital partner discussions are also underway in order to support delivery.
I will now move to page 23 to discuss our other development and growth projects, starting with Chicago One. Our Chicago One site is a 32-megawatt turnkey facility with a 15-year triple net lease to a global hyperscaler. The agreement includes rent escalations and extension options, providing long-term income stability. Our Chicago site is at advanced stages of construction and has commenced billing as contracted. Turning to Brisbane, Brisbane 3 will be a 20-megawatt greenfield development adjacent to our existing Brisbane sites, and we have discussions underway with Brisbane Airport Corporation. We are actively working through the timing of this opportunity, as we have live customer discussions underway, which, if they take effect, could utilize all our currently available spare capacity in Brisbane. Adelaide One will be an 8 megawatt brownfield expansion designed to maximize density and support diverse hyperscale and co-location workloads in the Adelaide market.
These mix of projects highlight DigiCo's strategy of building a balanced portfolio of stabilized income and high-growth development opportunities. I will now move to page 24 to discuss our capital partnering strategy. Capital partnering continues to be a key part of our strategy. That is the opportunity to recycle capital and reinvest in higher growth opportunities. We have a range of options across the portfolio and a number of active discussions underway. Starting with the Australian operating business, we have active discussions underway with major global partners. That includes both institutional capital partners and major global strategic investors, including investors who are unable to participate in the prior Sydney One sale process, and also including strategics who see Sydney One as a key component of their global footprint, where they have a negligible presence in Sydney today.
In terms of the Australian portfolio, the decision to bring in a capital partner is a question of when, not if. We believe the optimal time to bring a partner into the Australian business is when we have the key prerequisites in place. That is, once we have HCF, which we do now, once we've made further progress on the D&O expansion, which is well underway, and when we have more significant leasing ones. At that point, we will be better positioned to crystallize a valuation that reflects our view on the true long-term value of the Australian operating business. Turning to the U.S., in our view, in a falling rate environment in the U.S., we have a number of options to unlock value and release capital once Chicago One is complete. First, we can refinance the U.S.
capital structure, and as Simon Mitchell said earlier, that will generate material savings in annual interest costs. Then, we are in active discussions with institutions to release capital for reinvestment across the U.S. platform. We expect to be able to update the market on our capital partnering plans later this year. Moving to page 26 to discuss our outlook. The Australian business is now well positioned to secure the significant customer demand in the sector following Sydney One HCF certification and the nine-megawatt expansion works in Sydney One, which are underway. DigiCo is targeting to have contracted IT capacity of 27 megawatts by June 2026, which would represent 30% growth from June, 2025 across the Australian business. The U.S. business will benefit from the Chicago One contracted rental ramp-up, which is expected to deliver an incremental $40 million of EBITDA in FY 2026.
FFO to benefit from increased EBITDA, partly offset by cash interest payments on the Chicago One debt facility. The extent of FY 2026 EBITDA growth will ultimately be dependent on the timing of new contract commencements, renewals, and remixing of existing capacity in the Australian business. Growth CapEx in FY 2026 is expected to be in the range of $100 million to $120 million, primarily driven by completion of the Sydney One nine-megawatt expansion project and continued progression of the 88-megawatt D&O project. Distributions in FY 2026 are expected to be in line with policy of 90% to 100% payout of FFO. Thank you. I will now hand the call back to the operator for Q&A.
Thank you. If you wish to ask a question, please press star, then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star, then two. If you are on a speakerphone, please pick up the handset to ask your question. Our first question today will come from Liam Schofield of Morgan Financial. Please go ahead.
Morning, guys. Can you just outline the separation in that CapEx forecast between the nine megawatts and the D&O project? Secondly, on the Chicago One EBITDA, what's the difference there between the EBITDA and the coupon payment?
Simon, I'll hand those to you.
Yeah, hi, Liam. It's Simon. Just on the first part of that question, we've given guidance of $100 - $120 million of growth CapEx, and that includes the nine-megawatt expansion project and ongoing progression of the D&O project. We previously talked to a number of about $30 million for the nine-megawatt expansion project, so that is included in that number, the guidance number. The balance is largely to do with the further progression of the D&O, and there is also an amount in there for early site works on LAX 1, assuming we receive approval at the end of this year, as we're expecting. I might just ask you to repeat the second part of that question.
Just on the Chicago One completion, you sort of said that it will fall into FFO in the coming year. How's the mechanics of that work given the coupon payment?
We've talked about a phasing in of rental payments on that project in accordance with the contract of first rent in July. Then there's a second phase that comes through in August this year. Those two are now being paid, and the third and final phase is in August 2026. That's roughly a third for each of those three phases.
Right. Does the coupon payment equal rent?
Sorry, what do you mean by coupon payment?
I think you said that the interest received is there's a development coupon maybe on Chicago One through the development phase?
No, there's not a development coupon. What I think maybe what you're referencing is our comment around interest payments on the Chicago debt facility. While that project has been in ramp-up or construction and not paying rent, the interest payments have been capitalized, so they haven't been factored into the FFO. Those interest payments will start to be reflected in FFO as the rent phase is in.
Thanks, guys.
Thanks.
Your next question will come from Kane Hannan with Goldman Sachs. Please go ahead.
Morning, guys. I had three questions, please. Firstly, just Australia, I think you've lost a couple of megawatts there. Just talk a little bit about what happened there. I suppose as we bridge out to that 27 megawatts by the end of FY 2026, is there any more churn we should be budgeting for? Is there anything else? Hope you could help us understand some of the moving parts there, please. Did you want me to ask them one by one or in a row?
Why don't you run through the questions quickly, and then we'll take them? Thanks.
Yeah. Sort of follow on, I mean, losing a couple of megawatts, but then renewing two and a half at an 8% premium. Is that like, what's going on there? Is there something legacy with those megawatts that you did renew at that premium? Is that sort of the recontracting price point we should think about going forward? Lastly, just the cost base into FY 2026. You made the point around some of the executive hiring that's occurred. Just talk us through some of the moving parts there that might offset that Chicago One contribution that the Sydney One leasing activity would be great. Cheers!
Thanks, Kane. I'll start and then Simon can add. I think in terms of the, I think your first question was around Australian megawatts. We flagged at the time of the prospectus that there were going to be some customer exits, and that's come through as we had indicated. More broadly, we've said to the market this morning that we are targeting and expect to deliver 27 megawatts of capacity by June of 2026. That's 30% growth. That's going to be a combination of sale of the excess capacity that exists at Sydney One, some growth coming through from iSeek, and then leasing around the nine megawatts. I'm not going to give an individual breakdown around each of those. Suffice to say, we wouldn't start the nine megawatt without having a good line of sight around our ability to fill it.
I think you can assume that there are reasonable assumptions around each of those key drivers. We've also indicated that we are remixing and repositioning the Sydney site to unlock capacity because we did to meet market requirements. I think your second question was around the premium on the renewals, and yes, we're very pleased with the renewals that we've been able to achieve, the 2.6 megawatt across the Australian portfolio. That's been a very focused effort, which was to get across the customer base, and there were a number of contracts and customers that were in holdover, and we've worked through those. Yes, very positive leasing spreads of 8%. They're customer-by-customer discussions. I'm a little bit reluctant to give forward forecasts in terms of where rates are going to go.
Suffice to say, we're continuing to do everything we can to maximize the potential and optimize pricing and the long-term value of the site. On the cost base, I'll make a comment, and then maybe Simon can add. Yes, as we've indicated, we've brought in some senior leaders to strengthen the team. We've also had some exits over the period as well. Those additions shouldn't be seen as being adding to the cost base, but Simon, I don't know if there's anything more you'd like to add on that front.
Yeah, hi Kane. The other point to note on the cost base is a lot of the focus for investment in the team has been in Sales and also Development. You're probably aware that those costs are costs borne by HMC, the manager. Ultimately, there are fees charged on new leases and development spend. We're not expecting the investment in those areas to materially impact the DigiCo cost base.
Awesome. Thanks very much, guys.
Your next question will come from Roger Samuel with Jefferies. Please go ahead.
Oh, hi. Morning, Chris and Simon. Two questions from me. First one just on Sydney One, where you're expecting to deliver 27 megawatts of contracted capacity in FY 2026. Just wondering, how well progressed are you in terms of the discussions with potential customers? Do you foresee that it's going to come mainly from hyperscalers or government or enterprise, or perhaps a mix of everything? Second question is on HCF, which is great that you've got it now. My question is, what is the next step if you want to win government contracts? From here, do you need to apply to be on the new data center panel, and how long is the process going to take? Thank you.
Yeah, thanks, Roger. I'll take those questions. I think your first question was around the 27 megawatt of contracted capacity. Just to clarify, that's across the Australian business, not just Sydney One. Yes, discussions with potential customers are well advanced. They cover the full gambit, as you've indicated, neoclouds, some hyperscaler customers, including hyperscalers that are in the site today, government, and enterprises. We think we've been prudent in terms of the guidance that we've provided. As I indicated, the pipeline is much stronger than we indicated and saw at the time of the acquisition. I just can't give any more color than that other than to say that discussions are well advanced and we're confident. In terms of HCF, our iSeek site is already on the panel and we are leveraging our existing certifications and panel relationships across the business more broadly.
That's not really going to be an impediment in terms of our ability to win government business. As I indicated, we've actually had government discussions progress materially since we secured HCF. In fact, during the last quarter, we went a long way down the track with a government organization that wanted to move into the Sydney site and HCF didn't come through in time, which was unfortunate. We feel very confident about our position with government and our ability to get government customers back into the site.
What about Sydney One? Do you need to apply to be on a panel?
No, that's what I indicated. We were able to leverage, Sydney One was able to leverage the iSeek certifications and panel relationships. The opportunity I just talked about that we missed out on, maybe we missed out on because we did not have certification. The panel relationship is not really an issue. The certification has been an impediment, though.
Okay, got it. Thank you.
Your next question will come from Solomon Zhang with J.P. Morgan. Please go ahead.
Morning, Chris and Simon. Just a bit of a follow-up on Sydney One. I guess the main exit that has been flagged was the Department of Defense, which is around 10% of the contracted capacity. Could you just confirm, have they exited or are they set to exit in the second half? If so, when?
No, Australian Department of Home Affairs have exited.
Right. Effectively, that was the 2 megawatts differential in contracted capacity of 21 versus the IPO of 23.
No.
Sorry, didn't quite hear that.
No.
Solomon, just to add to that, it's a bit difficult for us to talk about individual customers. I think, at the time of the IPO, it was known that there was a major government contract that had given notice many years before our acquisition of Sydney One. That particular customer has exited, and that is built into our forecast for the 27 megawatts.
All right. You can't comment on whether they have exited as of balance date at June 25?
What we can say is the customer has physically exited.
Okay. Second question from me was just on the price point expectations in the nine-megawatt expansion. Could you just comment high level what you're expecting to achieve versus your current rent roll? Do you expect any, I guess, liquid cooling premium? Would you expect pricing to be broadly in line with your current rate card?
I think it's a bit difficult to provide guidance around pricing at this point. As you know, the site has historically been a very high premium, high-price co-location site. With the repositioning of the site, as we take it forward, where we're targeting more high-performance compute AI workloads, there will be a shift in pricing. That's the value equation that we're actively working through as we speak. We're looking to, on the one hand, preserve the pricing that the site has historically secured, with, on the other hand, the time value of money of being able to lease the site quickly. That's the trade-off we'll work through. It's a bit difficult to provide much more specific guidance on pricing than that.
Thanks. Appreciate the call.
Your next question will come from David Pobucky with Macquarie. Please go ahead.
Good morning, Chris, Simon, and team. Thanks for taking my questions. Just following up on the size and scale of the Sydney One pipeline opportunity. The D&O program has required some modification. I wanted to ask about the cost per megawatt and target yield on cost following that. Is it still $15 million and circa 12%?
Hi David, it's Simon. Are you talking about the 9 MW project or the overall D&O project?
The overall D&O project.
We're still expecting, we're still going through further design work, but we have no reason to think that the cost will be materially different to the roughly $900 million that we talked about. Yes, we are still expecting a double-digit yield on cost on that.
Thank you. This is the second question, and this refers to the pro forma $163 million of EBITDA provided at the time of IPO. When do you think you'll be able to achieve that sort of run rate?
It's difficult to provide a specific timeframe, David, because that would be effectively giving guidance one year or two years out. The building blocks that go into that are pretty well known in that it's the Australian business effectively annualized for the FY 2025 year, and it's full run rate on the Chicago business. It really comes down to your expectations on the Australian EBITDA that drives the delivery of that EBITDA.
Thank you. Just a final question on the $100 - $120 million of CapEx that you've got to in FY 2026. Is that the level of growth CapEx that you would expect on a per annum basis going forward? Did you decide to slow it down in FY 2026 versus initial expectations?
It's hard to give a multi-year forecast on growth CapEx because it's obviously very lumpy and project-dependent. What that looks like in FY 2027, for example, will really depend on where we are with the D&O project at that point. I think, as we've mentioned, the D&O project is very much focused on a modular approach. We will be looking at targeting CapEx in distinct amounts and for distinct projects to bring on incremental capacity rather than spreading it over a period to bring on a large amount of capacity at the end. It really depends on the timing of those projects. It also depends on the LAX 1 project and where we end up there with the ultimate construction partner and capital partner.
Okay. Thanks for answering my questions.
Your next question will come from Tim [Elem] with UBS. Please go ahead.
Hi guys, just two questions from me if possible, please. Simon, can you maybe talk a little bit about the pipeline of opportunities that you've got there, the discussions that you're having with those larger customers? I think earlier you guys mentioned that you couldn't pitch for some of those larger contracts or you missed out on them because of the layout of the available capacity. Do we need to wait for the 9 megawatts to come online, or will the D&O project potentially free up some capacity to allow for some of those larger customers? If it is the 9 megawatts, how do we think about the willingness of customers to sign ahead of delivery of that 9 megawatts? Do they need four months line of sight? Do they need it to be delivered before they're willing to sign the contract? That's question one.
The second question is around DA approval for Sydney One expansion. Any update and expectations around timing that you might be able to provide would be great. Thanks.
Yeah, thanks Tim. It's Chris. I'll take those. Simon can add. Firstly, if we talk about the pipeline of opportunities, and as I indicated, we do have live conversations underway with a number of larger customers. In terms of timing and what customers are looking for, candidly, they're looking for commitment and a fixed delivery date. We haven't been able to provide that to them to date. We kind of can, we can now. There are lots of people running around with land and power, but it's a different thing to have a development project underway and be able to provide a very fixed commitment. Individual customer requirements vary. The point is you need to have the megawatts available to sell, and we're now able to provide that certainty to customers. In terms of whether or not we can sell capacity before April, yes, absolutely we can.
As I indicated earlier, the other thing we are doing is remixing the site and freeing up contiguous space in the site. The inventory that we will have available to sell, and we now have available to sell going into this financial year, is better positioned to what the market is wanting than was the case at the site six months ago. On the DA process, that's advancing very well. We are well down the track on that process, and we anticipate approval. We don't see any roadblocks. We anticipate approval by the end of this calendar year.
Got it. Thank you for taking my questions.
Your next question will come from Andy McFarlane with Bell Potter. Please go ahead.
Hi guys, just one for me. In terms of delays between billing and contracting, just wondering what it is you're seeing more broadly, I guess, and your expectations for the year ahead, in particular with regards to Sydney One.
Sorry, can you provide a bit more color? I'm not sure I quite follow the question.
Just interested in the delay, if at all, between contracting the megawatts and then being able to bill it, and kind of how you're thinking about that for FY 2026.
Oh, look, I don't think there's any specific guidance we can provide around that. I think they're very kind of customer specific. What we are seeing, though, is contracting times and therefore billing periods kind of getting shorter and shorter because customers are looking for capacity available now or in the very, you know, the very near term. It'll be very kind of contract dependent, and we've indicated that in our outlook statement. The exact timing of commencement of contracts will really kind of drive the billing, but you shouldn't be anticipating long periods between contract and billing start.
Got it. Thanks, Chris.
Your next question will come from Ben Brayshaw with Barrenjoey. Please go ahead.
Hi Chris and Simon, thanks for the comprehensive presentation. It was appreciated. Just wondering if you could comment on a couple of things. You referenced in the presentation that you don't anticipate paying cash tax for the near term. I was wondering if you could say anything about taxing either FY 2027 or FY 2028, based on how you're seeing it at the moment. Just secondly, on debt covenants, again, I was wondering if you could clarify, does the group have looked through debt covenants or is the covenant on the Aussie debt facility limited to the Aussie asset base? Just if you could explain how that works, please. Thanks.
Hi Ben, thanks for the questions. On cash tax, we just referenced FY 2026 at this point, just because we feel it'd be difficult to be certain about FY 2027 and FY 2028. It really depends on the trajectory of earnings or EBITDA in the Australian business. I think you'll see in the accounts when you get a chance to go through them in detail that the depreciation and amortization in the Australian business is reasonably high. There is obviously the interest cost as well. There's quite an effective tax shield there for some time, depending on your forecast for EBITDA. On debt covenants, what we would say is that we have very industry standard covenants across all of our facilities, ranging from ICR, LVR, and net worth tests. We are in compliance with those as of the year end.
We've said in a statement in the accounts that we expect to be compliant with those in the future. That's all we'll say about covenants at this stage. Thanks.
Okay, thanks for your time.
Your next question will come from Paul Mason with Evans and Partners. Please go ahead.
Hey, just two from me. The first one, just Chris, at the start you said 2.6 megawatts was sort of renewed, and then you made a comment it was about 15% of the capacity. If you go and unwind that, it looks like it's about 17 megawatts that was billing at Sydney One. My question around this is just, I think you've said that you had 20 megawatts fully built out, and I'm just trying to get an idea of what your retail capacity today available for sale is in Sydney. I know you've got the nine megawatt project to add more, but is it about three megawatts that you can sell right now?
Thanks, Paul. Just to clarify, I think I said the word approximately 15%. I wasn't trying to provide specific guidance with that comment around the 2.6 megawatts. In terms of available capacity, I think we've indicated in the presentation that across the portfolio, the Aussie business, Simon, I think we've said there was 6 megawatts at the year end of available capacity for lease.
The second one I just had was maybe if you could provide any further color on the benefits you might be able to get from refinancing your debt facilities. Obviously, rates have fallen, but you've made some specific comments about the margins as well. If we're thinking about like a 1% benefit or something like that, is that sort of ballpark feasible or anything you can say there?
Yeah, hi Paul, it's Simon. When we took out the debt facilities on all these businesses and assets, you can imagine that Chicago was in a construction phase, and therefore the margins were sized for that kind of risk, even though we had a back-to-back guarantee on that construction delivery. We also had the HCF uncertainty on Sydney One, even though we were very confident of getting it, and obviously we have now. The risk profiles of those assets and businesses have improved significantly, and the indications we have are that we would be able to achieve close to that sort of 100 basis points saving that you've indicated.
Okay, perfect. That's it for me. Thanks a lot.
Your next question is a follow-up from Tim Plum. Mr. Plum has left the queue. There are no more questions at this time. I would like to hand the call back over to Mr. Moore for any closing remarks. Please go ahead, sir.
I'd just like to thank everyone for joining the call. Thanks very much.
This concludes our conference call for today. Thank you for your participation. You may now disconnect.