- Prologis is exploring additional strategies to capitalize on its data center opportunities, including potential new funds or ownership models, beyond current build-to-suit projects.
- The company has secured or advanced 5.2 gigawatts of data center capacity, representing a $15 billion investment, with plans to fully capture this value.
- Management emphasized the significance of integrating real estate, power access, customer relationships, and capital as a foundation for substantial value creation in data centers.
- There is a deliberate and disciplined approach to data center development, with active discussions ongoing with hyperscalers and a large pipeline of customer interest.
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- Adjusted EBITDA grew 13% year-over-year, reflecting revenue growth and higher fee income.
- Core FFO per share reached a record $1.87, up 13% year-over-year and 6% higher than last quarter, reflecting strong upside from hyperscale commencements and better-than-expected 0-1 megawatt plus interconnection bookings.
- Data center revenue increased 11% year-over-year, supported by strong renewal spreads, rent escalators and new lease commencements, offsetting disposition impacts.
- Development CapEx was over $900 million gross, $700 million net to Digital Realty, with 96 megawatts of new capacity delivered (98% pre-leased) and 16 megawatts of new projects started construction.
- Digital Realty posted double-digit growth in revenue, adjusted EBITDA and core FFO this quarter, driven by record lease commencements, low churn and higher fee income.
- Gross data center development pipeline stands at $9 billion with a 12.2% expected stabilized yield; land bank grew to 3.7 gigawatts, extending runway to 5 gigawatts.
- Leasing in the quarter totaled $177 million at 100% share, including $135 million at Digital Realty's share, with $90 million in the 0-1 megawatt plus interconnection category, an 18% increase over the prior record.
- Renewal leases signed in the quarter totaled $177 million with a blended 7.3% cash basis increase, exceeding prior guidance.
- Same-capital cash NOI grew 4.4% year-over-year, driven by 5.9% growth in data center revenue; on a constant currency basis, same-capital cash NOI rose 1.8%.
- Total churn declined to 1%, with negligible churn in the greater than a megawatt category.
- Realty Income entered Poland in Q2 2025, marking its eighth European country, driven by Poland's status as the second fastest-growing GDP in Europe.
- Investments in Poland included distribution centers and industrial assets, such as Eko-Okna, a leading manufacturer, with initial yields around 7.3%.
- The company sees Poland as a strategic growth market due to its large population, GDP growth, and favorable property laws, with plans to build a transaction pipeline in the region.
- The expansion into Poland is part of broader European growth, leveraging lower euro borrowing costs (~120 basis points below U.S. debt costs) and a fragmented, less competitive landscape.
- European investments now represent 17% of annualized base rent, with continued focus on industrial and retail sectors, especially in Ireland and the UK retail parks.
- Sold $175 million of self-storage properties at sub-6% cap rate, with remaining sales of 17 properties under contract for August closings.
- Achieved a spread of over 100 basis points between asset sales and new investments, with potential to reach 150 basis points by year-end.
- Reinvested proceeds into new investments with initial cap rates averaging mid-7s, primarily in industrial and warehouse sectors, supporting high-yield, long-term leases.
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