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Digital Realty Trust has raised its full-year adjusted funds from operations (FFO) and revenue forecast after reporting strong second-quarter results, supported by sustained demand for data centres from cloud and artificial intelligence (AI) customers. The real estate investment trust (REIT) recorded higher revenue and earnings that exceeded market estimates, reflecting continued leasing momentum. The company is also expanding its footprint through strategic investments, including a USD 3.5 billion deal to increase its stake in data centres in Northern Virginia, one of the world's largest data centre markets.
Digital Realty Trust has raised its full-year financial outlook after reporting stronger-than-expected second-quarter results, supported by continued demand for data centre capacity from cloud computing and artificial intelligence (AI) customers.
The Austin, Texas-based real estate investment trust (REIT), which owns and operates data centres, colocation facilities and interconnection infrastructure, said it now expects adjusted funds from operations (FFO), a key performance metric for REITs, to be between USD 8.15 and USD 8.20 per share for fiscal 2026. This is higher than its earlier guidance of USD 8.00 to USD 8.10 per share.
The company also revised its full-year revenue forecast upward to USD 6.85 billion to USD 6.95 billion, compared with its previous estimate of USD 6.65 billion to USD 6.75 billion.
For the quarter ended June 30, Digital Realty reported revenue of USD 1.92 billion, a 29% year-on-year increase that exceeded analysts' average estimate of USD 1.66 billion, according to LSEG data. Adjusted FFO for the quarter stood at USD 2.65 per share, surpassing the market expectation of USD 1.86 per share.
The improved performance comes as demand for data centre infrastructure continues to grow globally, driven by the rapid adoption of AI applications and cloud computing. Generative AI workloads require large-scale computing capacity and specialised facilities, increasing the need for high-performance data centres and related infrastructure.
To capitalise on this demand, Digital Realty has continued expanding its portfolio and entering new markets. Earlier this week, the company announced plans to acquire a larger stake in three data centres in Northern Virginia from asset manager Blackstone in a USD 3.5 billion cash-and-stock transaction. The acquisition is expected to strengthen Digital Realty's presence in Northern Virginia, widely regarded as the world's largest data centre market.
The company has been actively investing in capacity expansion across key global markets as hyperscale cloud providers, enterprise customers and AI companies continue to increase their infrastructure requirements. Industry analysts expect demand for data centres to remain strong over the coming years as AI deployment accelerates and digital transformation initiatives continue across sectors.
Source Reuters
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