Digital Realty Trust (DLR) disclosed its first-quarter 2024 core funds from operations (FFO) per share at $1.67, outperforming the Zacks Consensus Estimate of $1.63. Despite impressive leasing activity, an upsurge in operational costs affected the quarter's performance negatively.
Andy Power, the CEO and president of DLR, attributes the solid results to the escalating demand and effective deployment of AI-centric prospects.
Quarter Overview
DLR experienced a 1.8% year-over-year rise in total operating expenses to $1.18 billion. This elevation was driven by increased property taxes, depreciation, and amortization, as well as general administrative costs and other miscellaneous expenses. The company sealed renewal leases amounting to $248 million annualized cash rental revenues during the quarter. The rental rates on these renewals grew by 11.8% on a cash basis and 13% on a GAAP basis.
Portfolio Developments
In Q1, Digital Realty collaborated with Mitsubishi Corporation to institute a joint venture for data center development, aiming to benefit from the soaring demand for data infrastructure. Moreover, the company kickstarted the initial phase of a $7 billion hyperscale data center development joint venture with Blackstone Inc.
