Digital Realty Achieves Operational Excellence For 11th Year
Zacks Investment Research | Mar 27, 2018 10:37PM ET
Data Center REIT — Digital Realty Trust, Inc. (NYSE:DLR) — announced that for the 11th consecutive year it has achieved "five nines" of uptime, surpassing 99.999% availability throughout 2017. This reflects the company’s efficiency in developing and delivering data center solutions, which can be relied upon by customers.
This operational excellence has been achieved despite growth of the company’s portfolio over the years, which expanded from 74 data center suites at the beginning of 2007 to more than 750 by the end of 2017.
Moreover, recently, the company exceeded 1.7 billion operating minutes across its 205 data center properties. These properties included around 27 million square feet in 33 metropolitan areas internationally. The company noted that though hurricanes Harvey and Sandy left large regions without power, its data centers could uphold steady uptime.
With projected growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data-center REITs are experiencing a market boom. In fact, demand is outpacing supply in the top-tier data center markets and despite enjoying high occupancy, the said markets continue to randomly absorb new constructions at a faster pace. This, along with improved outlook for economic growth, is anticipated to drive demand for data centers.
Amid these, accretive acquisitions and development efforts are expected to boost top-line growth for Digital Realty. In September 2017, the company announced the completion of a merger with DuPont (NYSE:DWDP) Fabros in an all-stock deal for an enterprise value of about $7.8 billion. This move enhanced Digital Realty’s portfolio in the top U.S. data center metro areas across Northern Virginia, Chicago and Silicon Valley. It helped it to upgrade hyper-scale product offering and grow blue-chip customer base. The company is also focused on expanding its footprint in Europe and Australia.
However, given the solid growth potential of the data center real estate market, competition is expected to intensify in the upcoming period from existing as well as new players. Amid all this, an aggressive pricing pressure is anticipated in the data center market.
Digital Realty has a Zacks Rank #3 (Hold). The stock has gained 3.8% in the past month, outperforming 1.4% rally of the Zacks Investment Research
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