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January 10, 2018

Digital Realty forecasts $3.2bn revenues for 2018

Initial outlooks show funds from operations per share rising 8% year on year.

By CBR Staff Writer

Full-scale data centre provider Digital Realty predicted strong growth figures in its preliminary outlook for 2018, buoyed by high performance levels on its global platform last year.

Core funds from operations (FFO) are projected to rise 8% from the midpoint of 2017, bolstered by revenue expectations of $3bn-3.2bn.

The company, which is used by customers such as Facebook and IBM reported that its revenue over the data centrelast five years has grown by an average of 15%, nearly doubling from $1.28bil in 2012 to $2.46bil in 2016. Q3 figures were up 11.6% year-on year at $609.9mil, and a Q4 announcement is expected next month.

Digital Realty currently owns 182 data centres in 30 countries. It completed a $7.8bil merger with rival DuPont Fabros last October.

“The strength of our global, connected, sustainable platform – supported by strong secular demand drivers – provides the framework for our expectation of delivering high-single-digit growth in 2018 core FFO per share,” said Digital Realty CEO A. William Stein.

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These growth figures will fall in line with the company’s existing expansion strategies. Digital Realty’s November outlook noted tentative plans to allocate capital towards growing its existing global footprint, as well as accelerating growth through operating efficiencies.

It currently holds 2 million square feet of capacity, 80% of which is based in North America. The company announced a $350m 50/50 joint venture last year with Mitsubishi Corp to enter the Japanese market, which is anticipated to rise to $1.76bil by 2022.

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Growth in Internet of Things (IoT), artificial intelligence, VR and cloud computing are attributed as key drivers for the company heading forward. Digital Realty has proven well equipped, with a broad range of clients in Fintech, cloud & tech services, manufacturing, consumer and gaming.

It performed well last year on the S&P 500, gaining 18.87%, but trailed the 29% rise for main rival Equinix over the same period.

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