Digital Realty Trust booms through recession
Posted by: Coreix in Uncategorized, tags: colo, colocation, coreix, data center, data centre, datacenter, datacentre, dc, london, recession, virtusDigital Realty Trust is living in a different world than most of the rest of the commercial real estate industry. The locally based data centre REIT’s 11-million sq ft operating portfolio is 95% leased, demand appears high and new average rents are three-times higher than expiring rents. “Despite the deepening economic downturn, DLR is seeing solid pricing and demand in almost all regions and sectors,” JMP Securities Analyst Will Marks said in a client note. “This is difficult for many to fathom, particularly in light of what happened to the data centre market during the last downturn and the severity of this global recession in comparison to the last one.”
“Today, data centres are used by a wide variety of companies, from startups to well-established giants, and are now a necessity for businesses in every sector,” Marks writes. Looking ahead, despite a constrained supply of data centres and sufficient liquidity to develop and meet debt maturities over the next two years, Digital Realty is holding back on pursuing this demand in order to maintain a strong balance sheet with a liquidity cushion, Marks reports. While it may not speculate it certainly will be willing to develop freely on a build-to-suit basis with strong tenants, and Marks thinks the demand will be there.
Source: Globe Street
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