Digital Realty Trust (DLR) Citi's 2024 Global TMT Conference summary

Strategic positioning and growth outlook

• Balance sheet strengthened, reducing leverage from 7x to 5.3x and securing $4B in liquidity, enabling a more offensive growth strategy.

• Robust demand environment driven by AI, cloud, and digital transformation workloads, with positive pricing trends and improved same-store growth.

• Development pipeline exceeds 430 MW, with average yields north of 10% and 65% pre-leased, supporting baseline 5% growth in 2025 and potential acceleration in 2026 and beyond.

• Capital recycling and joint ventures, notably with Blackstone, have diversified funding sources and positioned the company to meet large-scale hyperscale demand.

• Focus remains on core markets and a balanced asset mix to optimize value and minimize overexposure to hyperscale.

Demand environment and customer trends

• Record signings in Q1 2024 ($250M) and strong Q2 ($160M+), totaling over $400M in bookings for the first half, double the prior year.

• Both hyperscale (AI-driven) and sub-megawatt segments show strong, stable demand; over $50M in quarterly bookings from the latter.

• AI-related bookings comprised half of Q1 2024 signings and a quarter in Q2, with a material AI presence in the pipeline.

• Majority of bookings come from existing customers, but new customer acquisition remains a focus, with over 100 new logos added per quarter.

• Sales teams can market up to 3 GW of potential capacity, with 430 MW under development and significant land capacity available.

Capital allocation and financial strategy

• Dividend has been flat for over a year; future growth tied to bottom line and internal cash flow growth.

• Capital needs are met through a mix of internal cash flow, debt, joint ventures, and opportunistic equity, aiming for self-funding where possible.

• Joint ventures, especially with financial partners like Blackstone, provide incremental returns and support large-scale development.

• Focus on maximizing retained cash flow to fund high-yield development projects and support future dividend growth.