The company to watch is HMC Capital (ASX:HMC).

On October 10, 2024, Stock Watch host Chris Pedersen highlighted HMC’s strong earnings growth and attractive P/E ratio. At the time, HMC was trading at $8.74. Fast forward to today, and it has skyrocketed to $11.74 in just 40 days, a stunning 34.3% gain. During the same period, the S&P/ASX200 index rose 1.8%.

Much of the rise is due to HMC’s plans to launch a global digital infrastructure platform comprised of DigiCo REIT (scheduled to go public later this year) and institutional private funds (first announced on October 24) ). By HMC Capital.

The DigiCo REIT IPO is set to be the largest Australian IPO since 2021, targeting a total of $2.6 billion in new shares. Provides exposure to the rapidly growing data center sector driven by advances in artificial intelligence (AI) and cloud technology.

The REIT is supported by two recent acquisitions.

• The “seed asset” acquisition of Global Switch Australia in October was made for an upfront consideration of $1.937 billion (expected to close in Q1 2025). Underwritten for $300 million. Comprised of two adjacent data center sites in Sydney, Global Switch Australia is the only large-scale data center campus in the tightly connected Sydney CBD and one of the largest data center campuses in Australia. is.
• It was announced on November 11 that it would acquire Australian colocation data center operator iseek for $400 million. (A colocation center is a shared space where multiple organizations can ‘co-locate’ their IT equipment.) The iseek portfolio includes seven data centers across Queensland, South Australia and New South Wales. , with 6MW of IT capacity and expansion pipeline installed. Approximately 28MW. Iseek’s customer base spans over 500 clients including government agencies, enterprises, and hyperscale tenants. The transaction consisted of $150 million in cash and $250 million in proceeds.

The platform will initially include a portfolio of 13 data centers serving 586 customers across North America and Australia. Driven by $4 billion in assets under management, the REIT aims to deliver a 4% distribution yield and development-led growth.

HMC Capital has committed $500 million to secure a 19% stake in DigiCo REIT, demonstrating confidence in the platform’s potential.