Participants

Jordan Sadler; Senior Vice President - Public and Private Investor Relations; Digital Realty Trust Inc

Andrew Power; President, Chief Executive Officer, Director; Digital Realty Trust Inc

Matthew Mercier; Chief Financial Officer; Digital Realty Trust Inc

Gregory Wright; Chief Investment Officer; Digital Realty Trust Inc

Christopher Sharp; Chief Technology Officer; Digital Realty Trust Inc

Colin Mclean; Chief Revenue Officer; Digital Realty Trust Inc

Jonathan Atkin; Analyst; RBC Capital Markets

Richard Choe; Analyst; JPMorgan

Aryeh Klein; Analyst; BMO Capital Markets

Matthew Niknam; Analyst; Deutsche Bank

Alexander Waters; Analyst; BofA Global Research

Michael Elias; Analyst; TD Cowen

James Schneider; Analyst; Goldman Sachs

David Guarino; Analyst; Green Street

Irvin Liu; Analyst; Evercore ISI

Eric Luebchow; Analyst; Wells Fargo

Vikram Malhotra; Analyst; Mizuho Securities

Michael Rollins; Analyst; Citi Investment Research

Nicholas Del Deo; Analyst; MoffettNathanson

Presentation

Operator

Good afternoon, and welcome to the Digital Realty first-quarter 2025 earnings call. Please note, this event is being recorded. (Operator Instructions) I would now like to turn the call over to Jordan Sadler, Digital Realty's Senior Vice President of Public and Private Investor Relations. Jordan, please go ahead.

Jordan Sadler

Thank you, operator, and welcome, everyone, to Digital Realty's First Quarter 2025 Earnings Conference Call. Joining me on today's call are President and CEO, Andy Power; and CFO, Matt Mercier. Chief Investment Officer, Greg Wright; Chief Technology Officer, Chris Sharp; and Chief Revenue Officer, Colin McLean, are also on the call and will be available for Q&A. Management will be making forward-looking statements, including guidance and underlying assumptions on today's call.
Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see our 10-K and subsequent filings with the SEC. This call will contain non-GAAP financial information. Reconciliations to the most directly comparable GAAP measure are included in the supplemental package furnished to the SEC and available on our website.
Before I turn the call over to Andy, let me offer a few key takeaways from our first-quarter results: first, we posted strong overall leasing in the first quarter of $242 million, consistent with the record pace set in 2024 and driving our backlog of booked-not-billed leases to a new record of $919 million.
Activity was robust across our primary product segments; second, Core FFO per share growth accelerated ahead of our expectations for the quarter and with our record backlog have strong visibility for the remainder of 2025 and growing momentum for 2026; and third, we further evolved our funding model this quarter, following the successful formation of our first US hyperscale fund, enabling us to meet the growing needs of our customers while scaling our balance sheet and enhancing our returns.
With that, I'd like to turn the call over to our President and CEO, Andy Power.

Andrew Power

Thanks, Jordan, and thanks to everyone for joining our call. The first quarter of 2025 was fraught with the tension grabbing headlines focused on advances in AI and the potential implications for the ongoing AI infrastructure build-out. But Digital Realty continued to execute our full spectrum meeting place strategy and posted strong results with the strength of our 1Q results, and the visibility provided by a record backlog, we remain confident in our 2025 growth targets and are encouraged by the 40%-plus increase in our 2026 backlog since the beginning of this year.
At 100% share, our backlog of signed but not commenced leases exceeded $1.3 billion at March 31, 2025. Despite the headlines, demand for data center capacity remains strong, and our value proposition continues to resonate, evidenced by nearly $400 million of new leasing completed in the quarter, or $242 million of new leasing at digital share with healthy contributions from both our major product categories. Leasing in our 0-1 megawatt plus interconnection segment was $69 million, our second highest ever behind only last quarter's record. This quarter's total included $15 million of interconnection bookings.
The leasing achieved in the first quarter in this segment was ahead of pace relative to last year's record $250 million of leasing, which is a reflection of our team's intense focus and execution on our median place strategy. We completed nearly $325 million of greater than 1 megawatt leasing in quarter, reflecting the demand we are capturing and executing across PlatformDIGITAL in the quarter.
At our share, greater than megawatt leasing was $172 million. Demand for low capacity blocks remains strong and diverse. Over the past five quarters, we've topped $100 million of leasing volume in the greater than a megawatt category 4x with four different customers signing the largest lease in each of those quarters, including this quarter.
In fact, the single largest lease in the first quarter of 2025 set a new record for Digital Realty in terms of total annualized rent signed. In our experience, hyperscale customer activity is more like to rhyme rather than repeat. Each customer typically to its own drum. So when some slower pause, others push forward.
Today, we continue to be encouraged by the cellular demand drivers of digital transformation, cloud and AI, which have been in place for the last several quarters, and are supporting consistent interest across our portfolio, including large capacity blocks.
Reflecting this dynamic, pricing reached a new milestone in the quarter, with the overall rate on new data center leasing reaching $244 per kilowatt per month, up 10% from the prior record, reflecting strength within the greater than a megawatt category.
Looking ahead, our pipeline remains healthy and diverse. Customer and partner interest and engagement were high throughout the quarter and continued into 2Q. Customers continue to see significant value and contiguous capacity in core markets that can support multiple use cases from network optimization to hybrid clouds to artificial intelligence.
While it is important to acknowledge the risks posed by elevated uncertainty and [cattle] markets volatility, Digital Realty's product pipelines remain near record levels. In the meantime, we continue to focus on serving our 5,000-plus customers in the major markets around the world.
This quarter, bookings were strongest in North America hyperscale, but we are seeing demand from all regions and for both products. To meet this growing demand, we increased our development pipeline by another 170 megawatts since year-end to 814 megawatts at 100% share.
Of this total, 63% is pre-leased with the lion's share of the remaining hyperscale availability focused in Northern Virginia. We continue to see healthy inter-region activity across our global platform in the first quarter. EMEA was the biggest importer with strong activity from all other regions. We also had very strong enterprise export activity from the Americas and APAC with EMEA as the preferred destination from each region.
It is clear that our global full spectrum data center platform is a key differentiator for Digital Realty is a key component of our value proposition as customers may onboard to PlatformDIGITAL with just a cabinet, but can then scale to a case that leverages hyperscale cloud compute and will soon provide access to AI for all customers.
During the first quarter, we added another 119 new logos, including a leading global semiconductor equipment manufacturer, deploying high-performance computing in Paris to take advantage of the developed cloud and network communities along with an emerging AI community on PlatformDIGITAL.
Other key wins in the quarter include a leading high-frequency trading fintech is extending on PlatformDIGITAL, to add private AI by increasing their HPC platform to a new market while improving cloud access and business continuity.
And Oracle partner is expanding its footprint on PlatformDIGITAL to Zurich to support Oracle's dedicated region integrated solution for private cloud to address data localization and data sovereignty.
A leading blockchain provider is also expanding to a new metro on PlatformDIGITAL, to deploy infrastructure to support decentralized private and public networks. A Fortune 500 payments and transactions company is expanding their global presence on PlatformDIGITAL into the Nordics to solve compliance and data localization needs.
And an AI inference and training company and a new logo is utilizing the connectivity available on PlatformDIGITAL, to provide a scalable solution for their AI inference applications. We continue to expand the reach and connectivity of PlatformDIGITAL during the first quarter with our entrance into Indonesia.
We partnered with a leading Jakarta-based carrier-neutral data center platform to create Digital Realty Bersama, which will expand its connected campus, offering direct access to a wide array of networks and services including a direct connection to Indonesia's largest Internet exchange provider. Supported by a young and large population, growing cloud adoption and access to multiple subsea cables Jakarta is an attractive expansion location that complements our existing APAC footprint.
We also launched our Heraklion 1 data center in Creek earlier this month, which complements our Athens campus and adds a key connectivity hub in the Eastern Mediterranean, strategically linking Europe with Asia, the Middle East and East Africa via a dense network of highly connected subsea cables.
Also during the quarter, Digital Realty and Console Connect announced a strategic collaboration that will expand the reach of service fabric to more than 100 new third-party data centers with access to more than 75 new cloud on-ramps, enriching the global connectivity options available to enterprises across PlatformDIGITAL.
And closing out our connectivity-oriented advances, this morning, we announced the addition of three new Azure onramps, one in Atlanta, one in Brussels and one in Vienna. These onramps expand our global relationship with Microsoft as we now host 15 cloud onramps across four continents.
Moving over to the financing side of the business. After more than a year of hard work across our team, this year, we announced our first US hyperscale data center fund, continuing to evolve our funding model and further expanding the pool of capital available to support the growth of hyperscale data center capacity.
The fund offers a unique opportunity for private institutional investors to invest directly in hyperscale data centers alongside the world's largest data center provider. It is dedicated to investing in high-quality hyperscale data centers located across top-tier US metros, including Northern Virginia, Dallas, Atlanta, Charlotte, New York Metro, and Sillicon Valley.
We exceeded the portfolio with five operating assets and four land sets for data center development and have received very strong interest and limited partner commitments from some of the world's savviest investors, including sovereign wealth funds, pension funds, insurance companies, endowments, and other institutional investors.
The investors have done their due diligence, committed capital and placed their trust in Digital Realty. We are targeting $2.5 billion of equity commitments from our LPs and we expect to maintain a 20% or greater interest to ensure alignment.
All told, the fund will support approximately $10 billion of hyperscale data center investment, enabling us to serve the robust demand of our customers while enhancing our returns through fees. We received more than $1.7 billion of commitments through our first closing, placing us ahead of schedule relative to our year-end target and we continue to feel investor interest.
As Matt will discuss in a moment, our progress puts us well on track to meet our capital recycling guidance for 2025 and to fund growth in 2026 and beyond. Before turning it over to Matt, I'd like to touch on our goal sustainability progress.
During the first quarter, we opened Friday team, a 16-megawatt data center, adaptively reusing the historic and iconic site while delivering cutting-edge technology solutions with a deep focus on sustainable performance and water conservation. DFW18 is optimized for AI and high-performance compute applications with advanced liquid corn along with the integration of Service Fabric for enhanced data security and connectivity.
Importantly, this state-of-the-art brownfield development is powered by 100% renewable sources as are all our facilities in EMEA. This sustainable building in Frankfurt continued Digital Realty's leadership in the industry, with high-performance green buildings. We added 190 megawatts of third certified green data centers in 2024.
Also in the first quarter, Digital Realty reached 100% renewable energy coverage for our operations in Singapore, a top priority in that market given the country's resource constraints and its Smart Nation initiative. We have installed solar on our facilities over the past couple of years and in the first quarter, signed a PPA with [Tuas Power] for biomass and other really sourced renewables to fully cover our it.
This further expands the more than 150 data centers around the world that are matched with 100% renewable electricity and adds to our portfolio of 1.5 gigawatts of contracted renewable capacity.
And with that, I'm pleased to turn the call over to our CFO, Matt Mercier.

Matthew Mercier

Thank you, Andy. Digital Realty continued to post healthy results in the first quarter as strong leasing pushed our backlog is signed but not yet commenced leases to a new record, while the formation of our first hyperscale fund added a new horse to our funding stable.
These milestones enhance our visibility and predictability of earnings growth, improve our returns and further reduce our reliance on any single capital source while enabling digital to responsibly invest to serve the needs of our customers.
In the first quarter, we grew core FFO by 6.1%, posted strong leasing results and increased the capacity under development by another 26% and despite delivering nearly 50 megawatts of new capacity during the quarter, a great start to the year.
We signed aggregate leases representing nearly $400 million of annualized rent at 100% share in the first quarter, which was the second highest in Digital Realty's history. At our share, we signed $242 million of new leases in the first quarter, with notable strength across each of our two segments.
We completed nearly $69 million of bookings in our 0 to 1 megawatt plus interconnection segment, which marked the second highest quarter for digital following last quarter's record. This activity also exceeded the prior four quarter average bookings by nearly 10%. We also signed $172 million within greater than a megawatt category at our share largely driven by hyperscale leasing in North America.
Consistent with our objective of improving Digital's long-term sustainable growth, more than 85% of bookings included fixed rent escalators of at least 4% over linked to CPI. Our backlog at Digital Realty share totaled $919 million at quarter end, an increase of 7% above our record as $119 million of commencements was more than offset by our strong new bets.
Looking ahead to the rest of 2025, we expect to see strong commencements in the next two quarters, providing momentum into the end of the year and beyond. For 2026, we currently have $440 million scheduled to commence while another $100 million-plus commences in 2027 and beyond, providing strong visibility for multiyear growth.
For context, our 2026 backlog is already more than double the backlog we had for 2025 at this time last year. During the first quarter, we signed $147 million of renewal leases at a blended 5.6% increase on a cash basis, consistent with our 40% full year guidance.
Renewals in the first quarter were heavily weighted toward our 1 megawatt category with $127 million of renewals at a 3.8% uplift. Greater than megawatt renewals were relatively sparse at only $5 million with a 4.6% uplift. We remain on track to meet our full year guidance.
For the quarter, churn declined and ended at 1.5%. As for earnings, we reported first quarter core FFO of $1.77 per share, up 6% year over year, reflecting strong same capital operating results, combined with new commencements over the past year. On a constant currency basis, we reported core FFO per share of $1.79 in the first quarter.
During the quarter, operating expenses were $0.01 to $0.02 lower than expected due to a slower ramp in repair and maintenance spend following an uptick in the fourth quarter, while property taxes benefited from a $0.01 refund in the quarter. Data center revenue was up 7% year over year as the combination of strong renewal spreads rent escalators and new lease commencements more than offset the drag associated with the dispositions completed over the last 12 months.
Adjusted EBITDA increased by 11% year over year reflecting the growth in data center revenue combined with expense controls. Same-capital cash NOI growth was healthy in the first quarter, increasing by 5% year-over-year on a constant currency basis, driven by 5.7% growth in data center revenue.
Moving on to our investment activity. During the quarter, we spent approximately $1 billion on development CapEx on a gross basis, including our partner share and roughly $700 million on a net basis to Digital Realty. We delivered nearly 50 megawatts of new capacity, 83% of which was preleased, while we started another 219 megawatts of new projects highlighted by 200 megawatts in Northern Virginia that is 50% preleased.
At quarter end, our data center development pipeline increased to $9.3 billion at a 12.5% expected stabilized yield. In addition, as Andy highlighted, we invested approximately $95 million for a 50% interest in Digital Realty Bersama, expanding into a highly connected platform in Indonesia.
We are also pleased to announce the formation of our first US hyperscale data center fund, which has the potential to support up to $10 billion of data center investments. In the second quarter, Digital expects to contribute a portion of five existing operating assets with an aggregate agreed value of more than $1.5 billion, which will satisfy the majority of our disposition guidance for 2025. Turning to the balance sheet. We spent the last 2.5 years positioning digital for the opportunity that lies ahead by deleveraging our balance sheet and bolstering and diversifying our capital sources.
Leverage is still well below our long-term target at 5.1 times, while liquidity remained robust at more than $5 billion before considering the capital from our new fund.
Early in the quarter, we raised EUR850 million of 3.875% notes, which was used to pay off the GBP 400 million of maturing 4.25% gilts with the much used to reduce outstandings on our credit facility. This leaves us with EUR250 million of maturing debt through the rest of 2025. Looking further out, our maturities remain well laddered through 2035.
Moving on to our debt profile. Our weighted average debt maturity was 4.5 years, and our weighted average interest rate ticked down to 2.6%. Approximately 83% of our debt is non-US dollar denominated, reflecting the growth of our global platform and our FX hedging strategy. Approximately 93% of our net debt is fixed rate and 96% of our debt is unsecured, providing ample flexibility for capital recycling.
Let me conclude with our guidance. We are increasing our core FFO guidance range for the full year 2025 by $0.05 to $7.05 to $7.15 per share to reflect our updated FX assumptions for the full year. The new core FFO per share guidance now aligns with our constant currency guidance.
It is worth noting that while our constant currency core FFO per share is trending toward the high end of the range in the first quarter, we have chosen to maintain this guidance range, given the heightened degree of macro and geopolitical uncertainty today.
The midpoint of our core FFO per share guidance represents approximately 6% year-over-year growth, reflecting the underlying strength in our business, balanced by a meaningful step-up in development spend and the substantial reduction in leverage year over year.
On a normalized and constant currency basis, we continue to anticipate total revenue and adjusted EBITDA growth of more than 10% in 2025, reflecting the strong underlying fundamentals of our business. In accordance with our updated FX assumptions for the year, we are increasing both our revenue and adjusted EBITDA guidance ranges for 2025 by $25 million, while our G&A assumption increased by $5 million. We are maintaining the rest of our guidance assumptions for 2025.
This concludes our prepared remarks. Now we'll be pleased to take your questions. Operator, would you please begin the Q&A session.

Question and Answer Session

Operator

(Operator Instructions) Jon Atkin, RBC Capital Markets.

Jonathan Atkin

So I was wondering, as you factor in the trends that you saw in the first quarter and coupled with some of the recent commentary surrounding hyperscaler demand and the increased uncertainty we've seen over the last several weeks, how do you see the leasing environment over the next several quarters? Thanks.

Andrew Power

Thanks, Jon. So we're obviously offer a very strong start to the year both in the enterprise colo segment and also in hyperscale. And including in the hyperscale that largest signing we had was signed in the month of March, so not that long ago.
Now the backdrop has certainly changed in just the last few weeks, which has certainly created significant market volatility and a fair bit of uncertainty. But despite this, our pipeline across both of those customer segments remains very robust.
So on the enterprise front, even coming off of now a string of several pretty fantastic quarters, our pipeline is at a record level. And on the hyperscale side of the equation, you can see from what we've disclosed, we have a runway of numerous sites with those large contiguous capacity blocks in sought after locations.
And I can tell you in just the last several days, quotes for those large capacity blocks have been requested by customers and are going out across multiple markets. I think it's important though to remember something that's a differentiating point about our strategy.
So one, when it comes to the markets, we have and we continue to focus on markets with both robust and diverse demand so enterprise service providers, cloud availability zones for compute and now AI, serving locational and latency-sensitive workloads, and those markets have and we continue to see experiencing supply constraints; two, we never lost our focus or eye on the ball when it came to accelerating our enterprise and colo execution on multiple fronts.
So you see that in the customer wins, the new signings where we're growing, as we highlighted in the prepared remarks, all the way to our latest new country entry with Indonesia.
And then lastly, when it comes to hyperscale we focus on places where we believe we can best serve our hyperscale customers. We're not trying to be all things to all hyperscalers. So be it our tremendous track record for delivery and operational excellence.
Having these must-have runways for growth or that boots on the ground experience. This has really allowed us to support those hyperscale customers when they need us most to solve critical capacity problems often in our core markets when others simply cannot.

Operator

Richard Choe, JPMorgan.

Richard Choe

I know there's a lot of uncertainty around this question, but the best you could, given current state of things and tariffs come through your supply chain when should we expect to see that in your development costs? And how would you indicate that? Thank you.

Andrew Power

Thanks, Richard, for the question. So first off, I think you've got to take a step back as it relates to digital in that question because I don't think the answer is going to be all data center providers is going to be created equal in this category.
As you heard from us for several quarters, if not years, we have, call it, long-standing vendor and partner relationships with vendor managed inventory programs and the consistency building and delivering and operating in our markets call it being our folks at work with consistency, which I don't think I could say that if I was at a different data center provider.
From our standpoint, based on the current facts and services, which we all know are evolving almost minute by minute, we're seeing a very modest, call it, less than 5% impact to potential build costs when it comes to digital. That has a lot to do with how we operate our business.
That has to do with our supply chains being both very US focused as well as if not US, very Mexico and Canada and governed under current USMCA carve-outs from tariff implications, so nothing but very modest numbers. At the same time, we are not sitting idly.
We have been even leading up to the chain of events that have unfolded been proactively getting out ahead of this and our supply chain team owes a lot of kudos for that in terms of ordering components wherever we could to pull forward components that we need t de-risk potential incremental volatility or outcomes that on the tariff front.
So I don't think you'd see this really unfold and probably until call it, several quarters when it comes to actual development cycles, given what you have today under construction, have called actual contractual orders for equipment. And I do think it's going to be pretty modest, assuming there isn't a dramatic tumor of events to what our current understanding of the tariff implications.

Operator

Aryeh Klein, BMO Capital Markets.

Aryeh Klein

Thanks. Can you provide a little bit of color on the land acquisitions in Atlanta and Charlotte, but with your markets where you've had a retail presence, but not much of a hyperscale one? I think previously, you've been perhaps a little bit has tenant to expand into the US market. What makes these attractive, particularly Charlotte? Thanks.

Andrew Power

I'll pass it to Greg to touch on our expansion of our capabilities in those markets.

Gregory Wright

Yeah. Thanks for the question. Aryeh, let me start with Charlotte. Look, I think it's not surprising. I think all investors on the phone know that traditional markets are expanding.
And Charlotte meets our criteria in terms of a target market. Let me just remind folks, we've operated in Charlotte for a long time. We have the key connectivity hub and what's called Uptown Charlotte. But now we're seeing availability zones coming in from several of the major cloud providers.
So as we see this, we're creating this campus that's consistent with our traditional connected campus strategy by developing a hyperscale campus that's within 10 miles of a highly connected facility. And again, just to remind folks again, our facility there, we have, I think it's north of roughly 25 networks, significant cross-connect counts, roughly 40 customers, and we've really been awarded an on-ramp.
So when you look at that, look at the components of what makes a market competitive and attractive, we really do believe Charlotte is well on its way to be a Tier 1 market and we have a location that's a latency-sensitive location.
So it checks all those boxes that we tend to like Also, let remind you that Charlotte is home to a large number of enterprises, especially in the financial services business in many of the Fortune 500 companies. And one last point, and then I'll get to Atlanta is that our site in Charlotte has power available on a very competitive basis.
So I guess another way to say it is it's land with precious power time lines, if you will. And most of those points we've made all applied to Atlanta as well. We've purchased a parcel of land that's going to have a mix between hyperscale and local location.
The colocation facility will be within 10 miles of Downtown Atlanta, which we love, obviously, given our ownership of 56 Marietta. And as you know, when you look at the underlying fundamentals of a market like Atlanta, there's a lot -- the vacancies are very low, 1% or less.
Power, same thing. It's -- the power is in place on a very competitive basis. So when we look at that, we think those are both critical markets for us, and we're really excited to have between those two projects over 600 megawatts of developable capacity.

Operator

Matt Niknam, Deutsche Bank.

Matthew Niknam

Hey, guys. Thanks so much for taking the question. My question relates more to hyperscale. And I guess in recent weeks and months, we've been reading more about deep seek more efficient AI models? And I guess also a little bit more questions around revenue use cases tied to AI.
And so I'm wondering whether less so macro, but more around recalibration of overall CapEx being invested into AI, whether you're seeing or hearing any evolution in how some of your larger cloud and hyperscale customers are approaching CapEx investment plans?

Andrew Power

Thanks, Matt. Maybe I'll start off briefly and then kick it over to Chris to talk a little bit about the evolution of the infrastructure and some of the deep sea early implications. I think -- again, I don't think all hyperscale is equal.
And I think it comes back to focusing on markets that have diversity of demand, so serving cloud availability zones and AI being incremental use cases to that. I think could also make sure you're not in places with numerous cloud availability zones as we shared in the prepared remarks, the flow of business when one customer may be slowing down, others are called steaming ahead.
I think you've seen that now in the last, call it, five quarters where we've had robust signings in the four largest of those quarters the largest lease each of those was signed by a different customer. So four different hyperscalers, call it front of the pack for us at digital. And none of those four are actually our top customer. So further emphasizing the diversity of that demand.
But Chris, why don't you all speak a little bit to some of the deep simplifications as well.

Christopher Sharp

I appreciate the question, Matt. Yes, so no one hardware or software advancements are going to win. So no single model, no single vintage of GPU it's an amalgamation of multiple capabilities coming together in the market. And I think that's what was represented with DeepSeek. It was a pretty substantial step in efficiencies associated with models coming to market.
But you're going to see more of these. And I think what's interesting is the capabilities and ecosystems are driving a new utilization unlocking performance across the overall landscape of infrastructure represented in the market today.
I think it's important to really emphasize that we're always focused on enabling inference because the second part of your question is around the monetization of AI. And so inference is where that monetization will happen and also associated with private AI deployments coming into the facility as well.
So we're always focused on how can we support the interconnectivity and that broader ecosystem of capabilities coming to market. And that's really what's represented in our portfolio and some of the pipeline that we referenced in the prepared remarks.

Operator

Alex Waters, Bank of America.

Alexander Waters

Perfect. Thanks so much for taking the question. Maybe just to start off. Andy, you noted in your prepared remarks, you had the largest lease and the greater than 1 megawatt could you help us frame just the size of that? And then what portion of that greater than 1 megawatt was AI related. Thanks.

Andrew Power

So Alex, without going into the nitty gritty of individual customer contracts, let me frame it this. So we did about $400 million total signings, 100% and our share was that $240 million plus. So you can get back into portions flowing into builds or operational capacity that we are delivering and managing on behalf of private capital partners. AI overall was about just over two-thirds, I would say, of our signings. So the new high watermark in terms of contributions.
Again, as you look, all of those signings again were into our traditional core markets that we've been serving for some time. So certainly, customers pushing their AI needs into the major markets that also have cloud availability zones.
If you look at the composition of AI wins, I would say more hyperscale driven than enterprise this quarter, in particular, but if you look at the pipeline we have on the enterprise AI use cases, I would say we've seen a step up in size and quality of pipeline, the deal sizes when that obviously not major deals, but they're growing in size as well as power density. So I think that fits well with where our portfolio could help see these customers scale their infrastructure.

Operator

Michael Elias, TD Cowen.

Michael Elias

Great. Thanks for taking the question and congratulations on the leasing quarter and kudos to you, Greg, for getting the fundraise. Just a blast from the past here, going back to the Teraco and the Ascenty acquisitions that you did, can you just give us a reminder in terms of Teraco, if there is an option for the remaining stake and what the thought is there? And then also just an update on Ascenty and if there's anything that's likely to happen there.

Andrew Power

Greg, do you want to hit both those?

Gregory Wright

Yes, sure. Thanks, Michael. I appreciate the kind words. Look, first, in the order of the question, let's go to Teraco. In Teraco there is in 2026, there's a put-call mechanism that may or may not take place.
And then that goes on -- originally, it's a put period for two years. And then if that's not exercised, there's a call period after that. So that's a midway through '26. It may be a quarter or so off, but that's roughly the time period there.
But look, I think that business continues to perform exceptionally well, and we couldn't be happier with the investment in the management team there. They really do have a dominant position down there in South Africa.
With respect to Ascenty, again, Ascenty is going well. Partnership with Brookfield is great. Chris Torto and his team continue to execute. We're happy that market remains strong. They've made a lot of progress on the enterprise front down there. Historically, that was a more of a hyperscale play. But Chris and the team have been working really hard they've adopted Andy strategy here at PlatformDIGITAL, and they're doing a great job down there.
So look, I would say -- and just as with Teraco, we're very pleased with the team, with the assets and the performance. So -- and that -- there's no rights for exit or anything like that. So hopefully, that answers your questions.

Operator

Jim Schneider, Goldman Sachs.

James Schneider

Good afternoon. Thanks for taking my question. I was wondering if you can make a couple of comments. One on the backlog comment you made. I guess you talked about record backlog in enterprise is the hyperscale backlog also at a record? Or has there been any diminution there?
And then can you maybe just talk about the current environment and whether any or any activity you're seeing in the current quarter would prevent you from sustaining strong leasing quarters in Q2 and Q3? Thank you.

Andrew Power

Thanks, Jim. So -- and just, I think, pipeline, just -- and I will touch on backlog because I think it's important and Matt can amplify that. So pipeline, we did call out record in the enterprise side. I'm not sure if we're at a necessarily a record on the other piece of the equation, but I'll tell you the speed of where the deals have been moving in that category are -- have been exceptionally fast. Including, I think, our largest signing last quarter may have been done in record pacing for -- especially for a large deal.
And as I mentioned at the -- in response to the first question, we are actively engaging with customers who are requesting new quotes for those large capacity blocks. You did a -- you did mention backlog, which we probably could touch on as well. I mean we do have a record backlog of signed but not commenced contracts. $1.3 billion in total, our shares just over $900 million. Those are at attractive rates and returns, long-term contracts, attractive escalators, call it either CPI or north of 4% or higher.
And we just had to call it -- if you look at the 2026 component, that stepped up about 40% in just the last quarter, which is really is going to help contribute to our algorithm of accelerating our bottom line and generating better long-term sustainable growth per share.

Operator

Frank Louthan, Raymond James.

Hey, guys. This is Rob on for Frank. Thank you for taking my question. So you might have touched on this a tad earlier, but -- what would have to change on your end in order to see re-leasing spread dig in? And do you potentially see pricing weakening in any of your markets?

Andrew Power

The -- so let's -- maybe to -- Rob, break that down into the two components. In the 0 to 1 megawatt side, we had it close to 4% cash mark-to-markets on the new steel signing side, the new signing component in a call it, second highest quarter in the company's history off the back of a record quarter back to back.
We have positive price action in almost every single one of our markets across the board in that 0 to 1 category. So I don't see any lack of momentum continuing there. And on the larger deal side, we also had positive price movement. You can see that by the overall rates we were able to achieve in that category.
And that -- the latter that be it more hyperscale somewhat comes back to supply-demand dynamics. And when you look at where we've concentrated our bets to support those hyperscale customers, we really focused on places like I said previously, that has robust and diverse hyperscale demand where customers need to put those workloads and grow.
Where they have ability to land large capacity blocks and have future prove growth. And where supply constraints do not seem to be really being relieved to a great extent rapidly. Which all those ingredients together in the places where we're supporting hyperscalers seems to keep pricing from on our behalf.

Operator

David Guarino, Green Street.

David Guarino

Thanks. This one probably go to Greg. Given the volatility in interest rates and equity markets we've seen over the past few weeks, have you seen any change in cap rates for stabilized turnkey data centers? And then if you could just comment too. I think you said $1.5 billion of stabilized assets would go to the new fund. What was the cap rate on those? That will be helpful for modeling.

Gregory Wright

Sure. Thanks, Dave. I hope you're well. Well, look, the two points are related. But look, the answer is -- and look, you've seen this and I've seen this over time, cap rates are impacted not just by interest rates but also by growth rates, right?
So I think when you look at the data center space today, clearly, cap rates have gone up. But I would also say there's been more than the offset in terms of commensurate growth, if you will. So the answer is we have not seen a change in cap rates that's meaningful.
In fact, you see that across the board actually in the different transactions we're seeing in the market, they've remained consistent. Again, rates are higher. But I think people are underwriting greater growth now. So that's the offset. With respect to the cap rate on the -- it's a little north of $1.5 billion of the assets that went into the fund. That was a high 5s cap rate, give or take.

Operator

Irvin Liu, Evercore ISI.

Irvin Liu

Hi. Thank you for the question. So I had another one related to pricing for new leases. I think positive trends are mostly broad-based but especially pronounced in the Americas, greater than 1 megawatt segment at $2.57 per kilowatt. So can you just talk about the drivers of pricing strength on some of your new leases, whether there were any one-offs or which markets where these leases were in? So any details on this would be helpful. Thanks.

Andrew Power

The success recently has been very US focused because you've seen call a compounding of demand from traditional enterprise IT, digital transformation, cloud computing demand, AI training, and the budding of AI inference from hyperscalers. And that's been a heavily US-focused phenomenon to date.
We have, in the last several quarters, captured that in a few markets, including Northern Virginia, Dallas, Chicago and this last quarter was particularly Northern Virginia led. I do think this phenomenon is -- will continue to globalize just like cloud computing globalized on the back of data sovereignty over time.
And you're seeing that for numerous countries looking to really invest and grow AI and data center infrastructure. So I think that we are well positioned when that globalization phenomenon starts to bud, but it's what I just described as really driving the situation of pricing in the US in particular.

Operator

Eric Lubchow, Wells Fargo.

Eric Luebchow

Great. I appreciate you taking the question. Andy, I think you mentioned that your enterprise funnel was at record levels, if I heard you. So I wanted to dig into the enterprise segment in the less than 1 megawatt. And I suppose there's some of the larger footprint as well. Obviously, there's been a little concern just in the past few weeks with all the tariff and macro noise, there could be some delayed decision-making at the enterprise level. So I just wanted to confirm you're not really seeing that at this point.
And I think you've talked about growing your less than 1 megawatt bookings this year versus last. Just wanted to make sure that's still on track. Thanks.

Andrew Power

Thanks, Eric. I'm going to turn it to Colin, but the one thing I just wanted to highlight, I can't recall if we've mentioned this, it's phenomenal. It's great to be out of the gate strong in that category, in particular. On the backs of two really strong third and fourth quarters to put up a number in the first quarter in the 0.1 megawatt interconnection, but let's call it is 10% above the pacing we did last year, and last year was a great year overall. But I'll let Colin in a little bit to provide some color on what the results we saw in the pipeline ahead.

Colin Mclean

Thanks, Eric. Yeah, as Andy highlighted previously, the demand profile continues to be robust and diverse across the regions. In our segments, global large enterprise and commercial, as Andy quickly just highlighted, just a quick reminder on Q1. Second highest booking quarters to date. That's a third straight quarter, 0 to 1 megawatt performance, strong contribution, large enterprise, in particular, that's 53% of the overall bookings.
We saw 16 industry subsegments book over $1 million and a strong interconnection performance, which speaks really the value of our platform. As it relates to the future pipeline, we have the largest 0 to 1 megawatt pipeline on record.
Regarding the overall opportunity creation within the global accounts, we continue to see multiple use cases emerge across network and compute enterprise at 55% of the overall opportunity and the trend is very much hybrid. On the commercial side, as we define it as $1 billion and below, there's record new logo pipeline performance. So that's all underscored with a really strong partner contribution, which is about 33% of the overall pipeline. Key use cases and characteristics, hybrid cloud continues to emerge.
Data localization, which is really driving distributed architecture is becoming prime and we're seeing early stages of artificial intelligence as part of the overall pipeline. So as it relates to the 0 to 1 megawatt pipeline, we're continuing to see demand really across all our markets.

Operator

Vikram Malhotra, Mizuho.

Vikram Malhotra

Thanks for taking the question. Just maybe breaking up your thoughts between hyperscale and more cloud or enterprise demand. Can you talk about the visibility you have in both segments from the perspective of historically, perhaps cloud is maybe a little bit more economically sensitive versus maybe on enterprise, it's obviously very specific.
So I'm wondering just in light of your comments last quarter where you talked about delayed decision-making. How do you see both those segments in today's environment? And just if you still believe this year is likely a record year.

Andrew Power

Thanks, Vikram. So maybe parse through that here. So at a high level, going back to the last piece, you're saying, we had a landmark 2024, $1 billion of signings. And within that great composition, both the 0 to 1 and also greater than megawatt great, I think, 600-ish new customers to the fold, great verticals, segmentation, imports and exports. So all in all, great and to be out of the gates now, almost pacing where we were -- in the first quarter is a great start.
Now we've got several innings left in this game for this year, but I'm quite pleased where we are out of the gates. Maybe I'll let Colin talk to a little bit more about the enterprise versus the hyperscale cloud in terms of buying cycles and any potential thoughts related to the macro environment implications.

Colin Mclean

Sure. Yes. Thanks for the question. As Andy mentioned, hyperscale demand continues to really cement around large contiguous capacity blocks. So we're having active conversations frankly, in our core markets where we have available capacity.
On the enterprise side, the buying cycle typically is a little bit shorter, although we haven't really seen any real changes, frankly, quarter-over-quarter in terms of time line to make decisions and execute, that's been pretty solid as it relates to enterprise and cloud compute.

Operator

Michael Rollins, Citi.

Michael Rollins

Good afternoon. Curious if you could discuss the opportunity to try to compress the time frame to bring new development online, especially where there may be energy constraints. And within that context, if you're able to shorten this time frame based on the conversations that you're having with the hyperscalers, do you think that would yield more sales steer or based on the time frames that they're on you're working on a path that's complementary to your current prospects.

Andrew Power

Thanks, Michael. So the compressing time lines is, I think, remains a key attribute to increasing your win probabilities and better outcomes. There's no question about that. And we have been doing that and we continue to do that on multiple fronts. And it obviously, it's a multi-legged stool to do that.
Having the balance sheet that we've got today with, call it, $5 billion liquidity, the commitments in hand for our first fund to fund that growth.
RP is a key attribute required and allows us to move more expeditiously to seize upon opportunities. Having the supply chains set up and folks on site constructing in a continuous fashion is a key element as well. And having now our development pipeline, call it, $9.5 billion to date, very highly pre-leased, call it, almost 65% overall with the lion's share of the unleased play in the prime markets of like Northern Virginia, that allows us to call it work more nimbly as well.
And then lastly, these one of the key attributes that Greg touched on a little bit in a prior question is the land that's been recently acquired, that has been competitively advantaged land that has opportunity to serve customers in the nearest windows.
So things that are most attractive. And that is a big kudos to our team finding these opportunities, working with utility partners, working with other partners to seize upon them to essentially help customers in more critical locations like we have been doing and delivering the results you've seen in the last several quarters.

Operator

Nick Del Deo, MoffettNathanson.

Nicholas Del Deo

Hey. Thanks for taking my question, guys. You've disclosed working with a leading Neo Cloud customer in a couple of locations. Can you talk about what demand you're seeing from Neo Clouds more broadly and how you're thinking about them from a new business perspective and a credit risk perspective? Thanks.

Andrew Power

That's correct. We have been -- we have supported -- we have been expanding our customer base to support the Neo Cloud universe. We are I can tell you, we're obviously being judicious like we are with almost any customers to make sure we're curating our customer base and campuses with diverse demand to preserve and create long-term value for us and the customers. And that has been something that's been consistent with us for some time. We've seen demand from those customers called big and small.
And we've -- I said one, our fair share of that without being overexposed certainly, and in some instances, we're in environments in the markets where we're serving customers where we already have other major customers that sometimes beat those Neo Clouds to the punch because they sometimes move faster or they want something that is really critical to them, and we would try to help them, and we try to help all of our customers. So I can't say that the Neo Clouds have climbed the ranks with us and some of our other customers have rapidly climbed.
And then last but not least, some of them, not all but have been tremendously successful to date, and we're waiting for them. We want to expand the hyperscale customer base. We want met all of our customer base and allow numerous technology providers to take advantage of the infrastructure they are providing through their GPUs and so on.

Operator

This concludes the Q&A portion of today's call. I'd now like to turn the call back over to President and CEO, Andy Power, for his closing remarks. Andy, please go ahead.

Andrew Power

Thank you, Gary. Digital Realty led off 2025 with strong results in the first quarter, continuing the momentum we demonstrated in 2024. Demand for data center capacity remains resilient and broad-based given the strong secular growth and proliferation of technology across the globe. Digital Realty continues to work to support our customers' growing requirements as evidenced by the substantial growth in our development pipeline and the successful evolution of our funding model.
We remain focused on our key strategic priorities and expect success to be realized through the acceleration of bottom line growth in 2025 and increased visibility of better long-term sustainable growth. Scaling our business across the globe is a tremendous effort and I am extremely grateful and appreciative of our incredibly talented and dedicated team. I'm excited about the future and remain focused on seeing the opportunity at hand. Thank you all for joining us today.

Operator

The conference has now concluded. Thank you for joining today's presentation. You may now disconnect.