Digital Realty Trust (DLR) RBC Capital Markets 2026 Global Communications and Infrastructure Conference summary

AI and interconnection demand trends

• Early-stage but accelerating demand for agentic AI, with record growth in 0-1 MW deployments and interconnection services over the past three quarters.

• Diverse enterprise and service provider deployments are increasing globally, with larger space and power requirements now common, including 1-5 MW becoming standard for inference-oriented workloads.

• Interconnection and ServiceFabric demand are at record highs, with bulk fiber needs rising to connect dense, carrier-heavy facilities.

• Expansion of interconnected assets is integrating training-related deployments into broader campuses worldwide.

Capacity, pipeline, and regulatory environment

• Current operating capacity is 3 GW, with 1.4 GW under development and 7 GW of land capacity to be brought online over the next 2–5+ years.

• About 3.5–4 GW of land has secured power agreements, supporting a potential doubling of capacity in the medium term.

• Supply-demand imbalance is driving pricing up globally, with Europe and Singapore experiencing constraints earlier than the U.S.

• Record renewal spreads, especially for contracts over 1 MW, and expiring rents are trending downward versus rising market rates.

• NIMBYism and regulatory constraints have not altered investment plans due to strong demand visibility and portfolio diversity.

Customer mix, capital strategy, and regional focus

• Recent signings have focused on investment-grade hyperscalers, with cautious exposure to Neoclouds, mainly in smaller, interconnected deployments.

• Development pipeline has shifted from Europe to the U.S. due to the scale of AI and cloud demand, but APAC is increasingly attractive for AI-friendly policies.

• APAC expansion includes new assets in Malaysia and Japan, while EMEA sees record 0-1 MW activity and the U.S. leads in large-scale workloads.

• Competitive advantage is maintained through lower leverage, diversified capital sources, and recent successful bond offerings, including a CHF 600 million Swiss bond at 2%.

• Project finance is used selectively, with capital access abundant for high investment-grade customers but more discerning for lower-rated or unrated clients.