Digital Realty Reports Fourth Quarter Financial Results and Strategic Ventures

Digital Realty, a provider of data center solutions, has announced its financial results for the fourth quarter of 2023, along with several strategic developments and joint ventures.
Digital Realty data center locationsAccording to the report, Digital Realty’s revenues for the fourth quarter amounted to $1.4 billion, reflecting a 2 percent decrease from the previous quarter but marking an 11 percent increase from the same quarter in the previous year.

Digital Realty posted a net income of $20 million for the quarter. Adjusted EBITDA stood at $700 million, showing a 2 percent increase from the previous quarter and a 9 percent increase over the same quarter last year.

Andy Power, President & Chief Executive Officer of Digital Realty, highlighted the company’s efforts in bolstering and diversifying its capital sources through the formation of two new development joint ventures. He emphasized the company’s focus on capturing opportunities in artificial intelligence (AI) within its portfolio.

In terms of leasing activity during the fourth quarter, Digital Realty secured total bookings expected to generate $110 million of annualized rental revenue. This included significant contributions from both the 0–1 megawatt category and interconnection services. Additionally, renewal leases representing $210 million of annualized rental revenue were signed during the quarter, with rental rates on renewal leases showing an increase of 8.2 percent.

Digital Realty also finalized agreements with Brookfield Infrastructure Partners, Cyxtera Technologies, and Digital Core REIT during the quarter to resolve its relationship with Cyxtera. These agreements were part of Brookfield’s acquisition of Cyxtera. As part of the agreements, Brookfield would acquire Digital Realty’s interest in four data centers.

Furthermore, Digital Realty closed transactions related to the agreements and exercised its purchase option to acquire a data center outside of London, UK, with the deal expected to close by the end of the first quarter.

In other developments, Digital Realty formed joint ventures with Realty Income Corporation and Blackstone. The joint venture with Realty Income Corporation aims to support the development of two data centers in Northern Virginia, while the venture with Blackstone involves the development of four data center campuses across Frankfurt, Paris, and Northern Virginia.

Moreover, Digital Realty completed various land transactions during the quarter, including the sale of land in Sydney, Australia, and the acquisition of land in Paris, France, and near Athens, Greece, to support future data center developments.

Additionally, GI Partners increased its interest in two hyperscale data center buildings in Chicago, resulting in additional gross proceeds for Digital Realty.

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