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.
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 U.S. 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.
Thanks, Jordan, and thanks to everyone for joining our call. The first quarter of 2025 was fraught with attention-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 percent 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 to 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 medium place strategy. We completed nearly $325 million of greater than a megawatt leasing in the quarter, reflecting the demand we are capturing and executing across PlatformDIGITAL in the quarter. At our share, greater than a megawatt leasing was $172 million. Demand for large capacity blocks remains strong and diverse. Over the past 5 quarters, we've topped $100 million of leasing volume in the greater than a megawatt category 4x with 4 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 likely to rhye rather than repeat. Each customer typically beats to its own drum. So when some slow or pause, others push forward.
Today, we continue to be encouraged by the secular 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 in 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 risk posed by elevated uncertainty and capital 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 intra-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. It 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 well-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 expanding on PlatformDIGITAL to add private AI by increasing their HPC platform to a new market while improving cloud access and business continuity. An 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 ServiceFabric 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.
In closing out our connectivity-oriented advances, this morning, we announced the addition of 3 new Azure on-ramps, one in Atlanta, one in Brussels and in Vienna. These on-ramps expand our global relationship with Microsoft as we now host 15 cloud on-ramps across 4 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 U.S. 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 U.S. metros, including Northern Virginia, Dallas, Atlanta, Charlotte, New York Metro and Silicon Valley. We've seeded the portfolio with 5 operating assets and 4 land sites 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 field 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 global sustainability progress. During the first quarter, we opened FRA18, 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.
FRA18 is optimized for AI and high-performance compute applications with advanced liquid cooling 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-party 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 for biomass and other regionally sourced renewables to fully cover our load. 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.
Thank you, Andy. Digital Realty continued to post healthy results in the first quarter as strong leasing pushed our backlog of 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% 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 2 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 4-quarter average bookings by nearly 10%. We also signed $172 million within the greater than a megawatt category at our share, largely driven by hyperscaler leasing in North America. Consistent with our objective of improving Digital's long-term sustainable growth, more than 85% of our bookings included fixed rent escalators of at least 4% or were linked to CPI. Our backlog at Digital Realty share totaled $919 million at quarter end, an increase of 7% above our prior record as $119 million of commencements was more than offset by our strong new bookings. Looking ahead to the rest of 2025, we expect to see strong commencements in the next 2 quarters, providing momentum into the end of the year and beyond. For 2026, we currently have $440 million scheduled to commence while another $100-plus million 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 4% to 6% full year guidance. Renewals in the first quarter were heavily weighted toward our 0 to 1 megawatt category with $127 million of renewals at a 3.8% uplift. Greater than a 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 pre-leased, while we started another 219 megawatts of new projects, highlighted by 200 megawatts in Northern Virginia that is 50% pre-leased. 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 were also pleased to announce the formation of our first U.S. 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 5 existing operating assets with an aggregated 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 have 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 5.1x, while liquidity remained robust at more than $5 billion before considering the capital from our new fund. Early in the quarter, we raised EUR 850 million of 3.875% notes, which was used to pay off the GBP 400 million of maturing 4.25% gilts with the balance used to reduce outstandings on our credit facility. This leaves us with EUR 650 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-U.S. 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 towards the high end of the range through 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 a 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?
[Operator Instructions]. The first question is from Jon Atkin with RBC Capital Markets.
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, 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.
The next question is from Richard Choe with JPMorgan.
I know there's a lot of uncertainty around this question, but the best you could, given current state of things and tariffs kind of come through your supply chain when should we expect to see that in your development costs? And how would you indicate that?
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 are 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 circumstances, 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 U.S. focused as well as if not U.S., 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.
Next question is from Aryeh Klein with BMO Capital Markets.
Can you provide a little bit of color on the land acquisitions in Atlanta and Charlotte, both of which are 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 hesitant to expand into the U.S. markets. What makes these attractive, particularly Charlotte?
I'll pass it to Greg to touch on our expansion of our capabilities in those markets.
Yes. 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 in 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 recently been awarded an on-ramp. So when you look at that and 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 me remind you, Charlotte is home to a large number of enterprises, especially in the financial services business and 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 apply to Atlanta as well. We've purchased a parcel of land that's going to have a mix between hyperscale and colocation. 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 of 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 2 projects over 600 megawatts of developable capacity.
Next question is from Matt Niknam with Deutsche Bank.
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?
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 deepSeek 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 it also makes 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, call it, steaming ahead. I think you've seen that now in the last, call it, 5 quarters where we've had robust signings in the 4 largest of those quarters, the largest lease, each 4 of those was signed by a different customer. So 4 different hyperscalers call it front of the pack for us at digital. And none of those 4 are actually our top customer. So further emphasizing the diversity of that demand. But Chris, why don't you speak a little bit to some of the DeepSeek implications as well?
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, which is 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've referenced in the prepared remarks.
The next question is from Alex Waters with Bank of America.
Maybe just to start off, Andy, you noted in your prepared remarks, you had the largest lease in kind of that greater than 1 megawatt. Could you help us frame just kind of the size of that? And then what portion of that greater than 1 megawatt was "AI related"?
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 kind of 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 2/3, 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.
Next question is from Michael Elias with TD Cowen.
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 kind of what the thought is there? And then also just an update on Ascenty and if there's anything that's likely to happen there.
Greg, do you want to hit both those?
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 2 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 [indiscernible] 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 Platform Digital, 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.
Next question is from Jim Schneider with Goldman Sachs.
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 kind of diminution there? And then can you maybe just sort of talk about the kind of current environment and whether any or any kind of activity you're seeing in the current quarter would prevent you from sort of sustaining strong leasing quarters in Q2 and Q3?
Thanks, Jim. So -- and just, I think, pipeline, just -- and I will touch on backlog because I think it's important or 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 ask -- 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.
Next question is from Frank Louthan with Raymond James.
This is Rob on for Frank. 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?
The -- so let's -- maybe to -- Rob, break that down into the 2 components. In the 0 to 1 megawatt side, we had caught -- 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.
The next question is from David Guarino with Green Street.
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.
Sure. Thanks, Dave. I hope you're well. Well, look, the 2 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 an 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, we 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, call it, high 5s cap rate, give or take.
The next question is from Irvin Liu with Evercore ISI.
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 $257 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 were these new leases were in? So any details on this would be helpful.
The success recently has been very U.S. 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 U.S.-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 U.S. in particular.
The next question is from Eric Luebchow with Wells Fargo.
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, 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. [indiscernible] call in a little bit to provide some color on what the results we saw in the pipeline ahead.
Thanks, Eric. Yes, 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 quarter 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 has 55% of the overall opportunity and the trend is very much hybrid. On the commercial side, as we define 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.
Next question is from Vikram Malhotra with Mizuho.
Just maybe breaking up your thoughts between sort of 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.
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 of both the 0 to 1 and also greater than megawatt, great, I think, 600-ish new customers to the fold, great vertical 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 got several innings left in this game for this year, but 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.
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.
Next question is from Michael Rollins with Citi.
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 kind of working on a path that's complementary to your current prospects.
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 obviously, it's a multi-legged stool to do that. Having the balance sheet that we've got today with, call it, $5 billion of liquidity, the commitments in hand for our first fund to fund that growth are key -- is a key attribute required and allows us to move more expeditiously to seize upon opportunities.
Having the supply chains set up and having folks on site constructing in a contiguous 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 -- I would -- 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.
Next question is from Nick Del Deo with MoffettNathanson.
You've disclosed working with a leading NewCloud customer in a couple of locations. Can you talk about what sort of demand you're seeing from NewCloud is more broadly and how you're thinking about them from a new business perspective and a credit risk perspective?
So that's correct. We have been -- we have supported -- we have been expanding our customer base to support the NewCloud 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, call it big and small.
And we've, I'd say, won 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 NewClouds to the punch because they sometimes move faster or they want something that is really critical to them, and we try to help them, and we try to help all of our customers. So I can't say that the NewClouds 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 rooting for them. We want to expand the hyperscale customer base. We want to expand 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.
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.
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.
The conference has now concluded. Thank you for joining today's presentation. You may now disconnect.
