Digital Realty Demonstrates Commitment to Digital Core REIT
AUSTIN, Texas, April 21, 2022 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of carrier- and cloud-neutral data center, colocation and interconnection solutions, announced today it has agreed to provide a cash flow guarantee to Digital Core REIT (SGX: DCRU), a publicly traded vehicle listed on the Singapore Stock Exchange sponsored by and externally managed by Digital Realty, related to a recent customer bankruptcy.
On April 11, 2022, Digital Core REIT’s fifth-largest customer, a privately held IT service provider occupying 2.7 megawatts of capacity in Toronto and representing approximately $5 million of annualized revenue, or 7.1% of Digital Core REIT’s total revenue, filed for bankruptcy protection. The customer remains current on its rental obligations to Digital Core REIT through the month of April and has disclosed that it has obtained $95 million of debtor-in-possession financing. The customer has also publicly stated that it intends to pay suppliers in the normal course of business for goods and services delivered going forward.
In keeping with Digital Realty’s continued commitment to the success of Digital Core REIT, it has reached an agreement in principle to guarantee the rental income stream to Digital Core REIT in the event of a near-term cash flow shortfall due to the customer bankruptcy. Given the current customer stance as well as the strength of the Toronto market and the cash flow guarantee, the customer bankruptcy is not expected to have a material impact on Digital Core REIT’s distribution per unit, or DPU.
"Digital Core REIT is a strategic capital partner, and we are pleased to demonstrate our commitment to their success," said Digital Realty Chief Executive Officer A. William Stein. "This support is a direct reflection of the strength of Digital Realty’s global platform as well as the depth and breadth of our large and growing installed customer base."
This same customer is also Digital Realty’s 23rd largest customer and leases approximately 10.5 megawatts directly from Digital Realty across six facilities in four markets, totaling approximately $22 million of annualized revenue, or 0.7% of Digital Realty’s total revenue. Digital Realty expects to provide an update on the impact, if any, to its 2022 core FFO per share outlook when it reports first-quarter results after the market close next Thursday, April 28, 2022.
About Digital Realty
Digital Realty supports the world’s leading enterprises and service providers by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL®, the company’s global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture (PDx™) solution methodology for scaling digital business and efficiently managing Data Gravity challenges. Digital Realty’s global data center footprint gives customers access to the connected communities that matter to them with over 280 facilities in nearly 50 metros across 25 countries on six continents. For more information, please visit digitalrealty.com or follow us on LinkedIn and Twitter.
About Digital Core REIT
Digital Core REIT (SGX: DCRU) is a leading pure-play data center REIT listed in Singapore and sponsored by Digital Realty, the largest global data center owner and operator. Digital Core REIT aims to create long-term, sustainable value for all stakeholders through ownership of a stabilized and diversified portfolio of mission-critical data center facilities concentrated in select global metros. For more information, please visit digitalcorereit.com.
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Digital Realty
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Helen Bleasdale
Digital Realty
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Safe Harbor Statement
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to a customer bankruptcy and expected cash flow guarantee, the related impact on Digital Core REIT’s DPU and outlook, and the related impact on Digital Realty and its outlook. For a list and description of risks and uncertainties, please see the company’s reports and other filings with the U.S. Securities and Exchange Commission. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Digital Realty Trust
Symbol: DLR
CIK: 1297996
Exchange: NYSE
Founded: 2004 (20 years)
Type of REIT: Equity REIT
Listing Status: Public
Market Capitalization: Large-Cap
REIT Sector: Data Centers
REITRating is REITNote's Real Estate Investment Trust industry-specific rating and ranking system. The overall score is out of ten points, with ten being the best score.
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Last updated: 2024-11-23 - v1.3