2024-05-27 10:00:00 ET
Summary
- Digital Realty Trust's intensified Joint Ventures already deliver sustainable growth profile along with healthier balance sheet and higher AFFO per share growth.
- Much of the tailwinds are attributed to the record leasing at higher prices, positive same capital growth, and increase in renewal spreads.
- These developments have triggered a moderate raise in DLR's FY2024 guidance, with higher rental rates on renewal basis at +6% YoY and Same-Capital cash NOI growth at +3% YoY.
- As a result, we believe that a payout hike is likely by 2025 as its AFFO payout ratio moderates below its 2019 levels and the sector median, lending strength to its dividend investment thesis.
- This is why we believe that DLR's sideway trading pattern has been a gift indeed, allowing interested investors a chance to dollar cost average.
We previously covered Digital Realty Trust, Inc. ( DLR ) in March 2024, discussing why its prudent growth strategy had been misunderstood, with the supposedly underwhelming FY2024 guidance attributed to the diversification of capital resources and eventually, balance sheet management....
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Digital Realty Trust: Record Leasing At Impressive Rates, Dividend Hike Expected Soon