Digital Realty Reports Record Q3 2024 Performance

Digital Realty (NYSE: DLR), a global provider of data center solutions, has showcased exceptional results in the third quarter of 2024. The company's new leasing volume reached an all-time high of $521 million, with many leases exceeding 1 megawatt in North America.

The backlog of leases poised to commence has surged to nearly $860 million, signifying a strong demand for data center capacity. Additionally, Digital Realty's development pipeline expanded by 50% to 644 megawatts, with 74% already pre-leased.

Digital Realty's successful strategy has positioned it favorably for future growth amidst ongoing digital transformation and the rising demand for data center services.

Key Takeaways

• New leasing volume reached $521 million in Q3 2024.
• Lease backlog increased to $860 million.
• Cash renewal spreads improved by 15%; new leases included 4% escalators.
• Development pipeline grew to 644 megawatts, with significant pre-leasing.
• Core Funds From Operations (FFO) achieved $1.67 per share.
• Issued EUR850 million in green bonds, reinforcing commitment to ESG.

Company Outlook

• Core FFO guidance for 2024 raised to $6.65 – $6.75 per share.
• Forecast anticipates mid-single-digit growth for 2025.
• Over 85% of backlog leases expected to commence by the end of 2026.

Market Highlights

• Rising costs are managed strategically, focusing on efficient project delivery.
• Approximately 50% of bookings stem from AI-related demand. Strong vendor relations and capital investments are expected to support efficient delivery.

Conclusion

Digital Realty's third quarter of 2024 exemplifies a transformative phase for the company. With strong performance metrics and a commitment to sustainability through green bonds, Digital Realty remains primed to meet the growing global demand for data center infrastructure driven by digital transformation and AI expansion.