Digital Realty (DLR) Surpasses Q1 FFO Estimates Despite Revenue Shortfall: A Deep Dive into Coin Performance
- Digital Realty Trust (DLR) has reported its first-quarter 2024 core funds from operations (FFO) per share of $1.67, surpassing the Zacks Consensus Estimate of $1.63.
- The results reflect robust leasing activity, but increasing operating expenses have dampened the quarter’s performance.
- DLR’s president & CEO, Andy Power, attributes the strong performance to accelerating demand and successful execution of AI-oriented opportunities.
Digital Realty Trust (DLR) outperforms estimates in Q1 2024, driven by strong leasing activity and AI-oriented opportunities. However, rising operating expenses pose challenges.
Quarter in Detail
Total operating expenses for DLR increased by 1.8% year over year to $1.18 billion. This rise was due to increased property taxes, depreciation and amortization, general and administration costs, transaction and integration expenses, and other expenses. The company signed renewal leases worth $248 million of annualized cash rental revenues during the quarter. The rental rates on these renewal leases increased by 11.8% on a cash basis and 13% on a GAAP basis.
Portfolio Activity
During the first quarter, Digital Realty partnered with Mitsubishi Corporation to form a data center development joint venture. This collaboration aims to capitalize on the growing demand for data infrastructure. Digital Realty also established the first phase of their $7 billion hyperscale data center development JV with Blackstone Inc.