Digital Realty Trust Inc

NYSE:DLR

Earnings Call Transcript 2021-Q3

[Operator]

Good afternoon and welcome to the Digital Realty Third Quarter 2021 Earnings Call. Please note this event is being recorded. During today's presentation, all parties will be in a listen-only mode. Following the presentation, we will conduct a question and answer session.

Callers will be limited to one question plus a follow-up and we will conclude promptly at the bottom of the hour. I would now like to turn the call over to John Stewart, Digital Realty's Senior Vice President of Investor Relations. John, please go ahead.

[John Stewart]

Thank you, Operator. The speakers on today's call are CEO, Bill Stein and CFO, Andy Power. Chief Investment Officer, Greg Wright, Chief Technology Officer, Chris Sharp, and Chief Revenue Officer, Corey Dyer is also on the call and will be available for Q&A. Management may make forward-looking statements, including -- including guidance and underlying assumptions.

Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For 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 net income are included in the supplemental package furnished to the SEC and available on our website. Before I turn the call over to Bill, I'd like to hit the tops of the waves on our third quarter results. We further strengthened connections with customers, landing record new logos, and delivering our fourth consecutive quarter with over $100 million of bookings.

We also continued to deliver for our customers around the world despite volatility in the global supply chain, leveraging our scale, diversification, and strategic procurement processes to continue to deliver on-time and on-budget for our customers. We continue to enhance our global platform by expanding into new markets with tremendous growth potential while continuing to expand capacity in existing markets around the world.

We delivered solid financial results with double-digit revenue growth, leading to a beat in the current quarter and our raise to the outlook for the balance of the year. Last, but not least, we further strengthened our Balance Sheet by raising approximately $600 million of low coupon Swiss Green bonds and over $1 billion of common equity to fund our future growth. With that, I'd like to turn the call over to Bill.

[Bill Stein, CEO]

Thank you, John. Good afternoon. And thank you all for joining us. Our formula for long-term value creation is a global, connected, sustainable framework. And we made further progress on each front during the third quarter. We continue to globalize our business with significant bookings and solid performance across regions. Our bookings were diversified by both region and product type, reflecting our unique, full spectrum, global product offering.

We also announced our entry into two high potential emerging markets, India and Nigeria, during the third quarter, while expanding our connectivity capabilities by working with Zayo to develop the largest open fabric-of-fabrics that will interconnect key centers of data exchange. We're also extending our capabilities for customers to the edge with the announcement of what will be one of a few strategic partnerships in this arena.

Let's discuss our sustainable growth initiatives on Page 3. During the third quarter, Digital Realty was honored to be recognized by GRESB as an overall global sector leader in the technology and science category for exemplary ESG performance, receiving a coveted five-star rating from this leading global ESG benchmarking organization, and reflecting Digital Realty’s commitment to being a global leader in ESG.

We also became a UN Global Compact signatory in September, aligning our ESG goals and commitment to the UN Sustainable Development goals with a global initiative. We also advanced our sustainable financing strategy, raising our first-ever Swiss green bonds, and publishing the allocation of $440 million of proceeds from our September, 2020 Euro green bond, which funded sustainable data centered development projects in 4 countries across 3 continents, certified in accordance with leading sustainable rating standards.

We are committed to minimizing our impact on the environment while simultaneously meeting the needs of our customers, our investors, our employees, and broader society, while advancing our goal of delivering sustainable growth for all of these stakeholders. While on the topic of energy, I'm pleased to report that Digital Realty experienced only a small negative impact from the substantial rise in energy costs during the third quarter.

In Europe, where concerns of an energy crisis were most acute, we typically contract for energy supplies a year or more in advance, providing price feasibility and certainty for our customers. Elsewhere around the world, energy costs are typically passed through to customers, minimizing our direct exposure.

We continue to keep a close eye on energy prices, but given the resiliency of our business model, we do not expect rising energy costs to impact our reported results by more than a few pennies. Let's turn to our investment activity on Page 4. We continue to invest in our global platform. As previously announced, we entered into a joint venture with Brookfield to expand PlatformDIGITAL into India, a giant under-served market with the fifth largest GDP in the world.

Like many emerging markets, India presents some unique challenges, underscoring the need for local knowledge and experience. To that end, we were pleased to announce the hiring of Seema Ambastha as CEO for the India joint venture. Seema has years of experience in the Indian IT sector broadly, and in the data center industry specifically, where she most recently served as a Senior Executive Leader with the NTT Netmagic Data Center business across India.

We believe the India data center market has the potential to experience significant growth over the next decade, and we're thrilled to have such a strong partner and strong leader in this exciting new venture. During the third quarter, we continued to expand iColo, our Kenyan datacenter operator, acquiring a land parcel in Mozambique to build a facility positioned to land subsea cables and other connectivity-focused customers.

We also acquired a controlling interest in Medallion Communications, the leading collocation and interconnection provider in Nigeria, in partnership with our existing African partner, Pembani Remgro. As the African Internet economy matures, we expect Nigeria will represent a significant growth opportunity given its large and relatively young population of growing and diversifying economy, as well as the maturing regulatory environment.

Given the connectivity to Africa from our existing hub in Marseille, our platform will now offer the market leading destinations connecting Africa to Europe and beyond. We're also investing to organically expand our capacity. As of September 30, we had 44 projects underway around the world, totaling almost 270 megawatts of incremental capacity, with over 250 megawatts scheduled for delivery before the end of 2022.

We continue to invest most heavily in EMEA, where we now have 27 projects underway in 15 different markets totaling 150 megawatts of incremental capacity, most of which is highly connected, including significant expansions in Frankfurt, Marseille, Paris, and Zurich. Our investment in organic development is a reflection of the strength of demand across EMEA.

We're being a bit more selective in North America. We're seeing strong demand in Portland, where we have a 30-megawatt facility under construction that is 100% pre -leased and scheduled for delivery in the first quarter of next year. While we also have significant projects underway in Northern Virginia, New York, and Toronto.

Finally, in Asia Pacific, we continue to pursue strong organic development, both on our own and with our joint venture partners. We're adding capacity in Hong Kong that will open this quarter and expect to open Korea's first carrier neutral facility in Seoul in early 2022. We are building a connected campus in Seoul to provide the full spectrum of solutions for our customers.

The larger second facility will accommodate up to 64 megawatts of capacity and will be located within 25 kilometers of our first facility. Let's turn to the macro environment on Page 5. We are fortunate to be operating in business leverage to secular demand drivers, and our leadership position provides us with unique vantage point to detect developing trends as they emerge globally on PlatformDIGITAL.

Just over a year ago, we introduced the Data Gravity Index, our market intelligence tool that forecasts the growing intensity of the enterprise data creation life cycle and its gravitational impact on global IT infrastructure. Earlier this year, we published an industry manifesto, enabling connected data communities to guide cross-industry collaboration, tackle Data Gravity head-on, and unlock a new era of growth opportunity.

Recent third-party research continues to support the growing relevance of Data Gravity. According to ITC, the amount of digital data created over the next 5 years will be greater than twice the amount of data created since the advent of digital storage. This digital data creation is expected to drive exponential growth in enterprise user data aggregation, storage, and exchange providing a powerful tailwind for data center demand.

We continue to see enterprise and service provider customers deploying their own data hubs and using interconnection to securely exchange data in multiple metros on PlatformDIGITAL to accommodate their own data creation growth. Recently, for the second consecutive year, Digital Realty was ranked as the only outperformer and global leader by GigaOM for edge collocation.

This ranking reflects our continued innovation and the execution of our PlatformDIGITAL road map for delivering global differentiated capabilities and value for our customers and partners. We are honored by the strong validation of our platform and our market-leading innovation to capture the growing global demand opportunity from data driven businesses. With that, I'd like to turn the call over to Andy to take you through our financial results.

[Andy Power, CFO]

Thank you, Bill. Let's turn to our leasing activity on Page 7. For the second straight quarter, we signed total bookings of a 113 million, this time with a 12 million contribution from Interconnection. Deal mix was consistent with the prior four quarter average, sub 1 Megawatt deals plus Interconnection represented about 40% of the total, while larger deals represented around 60%.

Space and Power bookings were also well diversified by region with EMEA and APAC contributing 45% of our total, about the same as the Americas, with Interconnection accounting for the remaining 10%. The weighted average lease term was a little over 5.5 years. And we landed a record 140 new logos during the third quarter with strong showings across all regions, demonstrating the power of our global platform.

In terms of specific wins during the quarter and around the world, a leading cloud native cyber security platform is expanding its high performance computing capabilities by leveraging PlatformDIGITAL in 4 markets across North America and Europe, connected with cloud providers, improving performance, and driving down cost.

In market-leading autonomous driving technology developer partnered with Digital Realty to tailor an innovative and unique infrastructure solution for simulation workloads. Two major North American energy firms chose Digital Realty to leverage our geographic reach and re-architect their network to interconnect with cloud providers and implement security controls as part of their hybrid IT strategy.

A public university in the Eastern U.S. is launching a global research initiative with other universities in EMEA and deploying PlatformDIGITAL network hubs across 2 continents and 3 cities to help enable this project. A maker of high performance computing systems is expanding their footprint by deploying on PlatformDIGITAL across multiple regions to guarantee GDPR compliance while enhancing their security, performance, and sustainability.

And finally, a Global 500 pin-tech provider is expanding their own hybrid IT availability zones into multiple new metros using platform digital to support their data-intensive and high performance computing requirements.

Turning to our backlog on page 9, the current backlog of leases signed, but not yet commenced, rose from 303 million to 330 million as third quarter signings more than offset commencements. The line between signings and commenced, which was down slightly from last quarter, adjusted over seven months. Moving on to renewal leasing activity on page 10, we signed 223 million of renewal leases during the third quarter, our largest ever renewal quarter.

In addition to new leases signed, the weighted average lease term on renewals signed during the quarter was a little over 3.5 years. Renewal rates for sub one megawatt deals remained consistently positive.

Greater than a megawatt renewals were skewed by our largest deal of the quarter that combined a sizable 30-megawatt renewal with our largest new deal for the quarter, which will land entirely in existing, currently vacant or soon-to-be vacant capacity, across Chicago and Ashburn. Excluding this one transaction, our cash mark-to-market would have been a positive 1%.

This multi-facet transaction was a prime example of what we mean when we talk about our holistic long-term approach to customer relationship management. We believe we have a distinct advantage when we're competing for new business with a customer that we are already supporting elsewhere within our global portfolio.

And whenever we can, we try to provide a comprehensive financial package across multiple locations and offerings, including both new business, as well as renewals. In terms of first quarter operating performance reported portfolio occupancy ticked down by 50 basis points, largely driven by the sale of fully leased assets during the quarter.

Upon commencement of the large combination renewal expansion lease I mentioned a moment ago, portfolio occupancy is expected to improve by 70 basis points. Same-capital cash NOI growth was negative 5.5% in the third quarter, primarily driven by a spike in property taxes in Chicago. Where local assessors have adopted a very aggressive posture, along with the impact of the Ashburn churn event in January.

Of the 70 megawatts we got back on January 1st, approximately 80% has since been released to multiple large and growing customers. As a reminder, the Westin building in Seattle, the interaction platform in EMEA of Lamda Hellix in Greece, and [Indiscernible] in Croatia are not yet included in the same store pool. So these same capital comparisons are less representative of our underlying business today than usual.

And while we're still in the early stages of our budgeting process, we're optimistic in terms of where our same store NOI growth goes for 2022. Turning to our economic risk mitigation strategies on Page 11, the US dollar strength endured in the third quarter, providing a small FX headwind in the third quarter.

As a reminder, we manage currency risk by issuing locally-denominated debt to act as a natural hedge, so only our net assets within a given region are exposed to currency risk from an economic perspective. Our Swiss Green Bond offering during the quarter is a good example of this.

In addition to managing credit risk and foreign currency exposure, we also mitigate interest rate risk by proactively terming out short-term variable rate debt for longer term fixed rate financing. Given our strategy of matching the duration of our long-lived assets with long-term fixed rate debt, a 100-basis-point move in Lamda would have approximately a 50-basis-point impact on full-year FFO per share.

Our near-term funding and refinancing risk is very well managed, and our capital plan is fully funded. In terms of earnings growth, third quarter core FFO per share was up 7% on both a year-over-year and sequential basis, driven by strong operational execution, cost controls, and a reduction in financing costs from the debt refinancing’s and redemptions of preferred stock over the past year.

To avoid any confusion, our core FFO outperformance excludes the benefit of a nearly $20 million promote fee received in connection with the monetization of our joint venture with Prudential. Heading into the final quarter of the year, we have solid momentum, so we're raising our full-year outlook for revenue, adjusted EBITDA, and core FFO per share, to reflect this underlying momentum in our business.

Last, but certainly not least, let's turn the balance sheet on page 12. We continued to recycle capital by disposing of assets that have limited growth prospects, raising over 100 million in the third quarter for our 20% position in the Prudential [Indiscernible] and [Indiscernible] in Arizona. We also raised approximately 95 million of common equity under our ATM program in July, as well as 950 million of common equity in September forward equity offering.

Our reported leverage ratio remains at 6 times, but including committed proceeds from the September forward equity offering, the leverage ratio drops to 5.6 times, while our fixed charge coverage improved to 6 times. We continued to execute our financial strategy of maximizing the menu available capital options while minimizing the related costs and extending the duration of our liabilities to match our long lived assets.

Our 2 capital markets transactions this quarter are examples of our prudent approach to balance sheet management. This successful execution against our financing strategy reflects the strength of our global platform, which provides access to the full menu of public, as well as private capital, sets us apart from our peers and enabled us to prudently fund our growth.

As you can see from the chart on page 13, our weighted average debt maturity is over six years, and our weighted average coupon is down to 2.2%. 3/4 of our debt is non-U.S. dollar denominated, reflecting the growth of our global platform, while also acting as a natural FX heads for our investments outside the U.S. Over 90% of our debt is fixed rate, guarding against a rising rate environment.

And 98% of our debt is unsecured, providing the greatest flexibility for capital recycling. Finally, as you can see from the left side of Page 14, we have a clear runway with nominal near-term debt maturities, and no bar too tall in the out years.

Our balance sheet is poised to weather a storm, but also positioned to fuel growth opportunities for our customers around the globe, consistent with our long-term financing strategy. This concludes our prepared remarks. And now we will be pleased to take your questions. Operator, would you please begin the Q&A session?

[Operator]

We will now begin the question-and-answer session. As a reminder, participants will be limited to one question and one follow-up. [Operator Instructions] At this time, we will pause momentarily to assemble our roster. And our first question comes from Jon Atkins of RBC. Please, go ahead.

[Jon Atkins, RBC]

Thanks very much. I think I'll ask both of mine upfront. I wonder, first of all, if you could talk about the factors that are affecting your CapEx to develop incremental capacity. John Stewart, I guess in the prepared remarks talked about on-time and on-budget. But going forward, given what's happening with materials costs, I wondered whether you see an opportunity to adjust your pricing on new leases accordingly.

And then the second question is just earlier this month, you acknowledged that you're exploring the potential creation of a Singapore reach – Singapore [Indiscernible] and I wondered if you could just provide an update on that around the timing and scale and rationale that projects. Thanks.

[Bill Stein, CEO]

Thanks, John. I'll take your first question, and then I'll hand it over to Andy to adjust the -- to answer the Singapore [Indiscernible]. First of all, I think you're right about inflation in terms of the opportunity that it presents. I think there's no doubt that it disproportionately adversely affects our smaller competitors, and widens our competitive mode.

Overtime, I would expect that rental rate increases will disproportionately accrue to the larger incumbent providers. Here, the basically 2 pieces to the inflation issue. The first is development and second is operations. On the development side, we are -- our pipeline is on time and it's on budget.

And kudos to Eric Stanczak, who leads our operations and procurement team, for the vendor management programs that he's put in place, providing us fixed pricing for several years now, for diversifying our vendor mix, and for allowing our -- for locking in our general contractors. We have a lot of construction sites around the world and we're able to move them -- move our GCs around and keep them fully occupied.

And I think our global scale, as well as our maturity as a builder gives us a substantial competitive advantage here. But again, I don't think there's any doubt that the market rents will eventually need to move up to maintain risk-adjusted returns. And I think that that's both because of the increase in construction costs that shows up in the denominator.

But I think for our private competitors who are operating with more leverage, I think you'll see that'll show up in the higher interest rates. So to -- I think they're going to have to raise their costs for that reason as well. And I think that the read through here is actually really positive for our renewals. Because as our rates on new product increase, our rates will also, I expect, increase for renewals.

So the bottom line there is that modest inflation we think is quite healthy for the business. And in terms of our customers, this shouldn't come as a surprise to them because to the extent that they are doing it themselves, they're seeing this development in their own supply chains. Here relative to the operations for the P&L, I think as you probably know our lease provide for significant pass through.

So for example over 90% of our utility costs this last quarter were passed through customers, we also had [inaudible 00:26:24] generally between 2 and 3%. And then we have -- I think the highest operating, or best the operating leverage of price margins in the business.

So what that means is that labor or labor cost which I think is what most susceptible to inflationary pressure is a relatively low percentage of the revenue component and income statement. And so that I'll hand it over to Andy to talk about [inaudible 00:26:50]

[Andy Power, CFO]

Thanks Bill. So we picked up obviously an 8-K. We put out there a few weeks ago. We are heading down the path of exploring essentially an IPO of a portfolio on the Singapore market. This is not our APAC business, which has significant amounts of capacity under construction and land and the like.

This is essentially be more analogous to almost like a private capital partner to Digital Realty for stabilized, fully well-leased, high-quality core long-term hold data centers to digital. And our strategy somewhat analogous to one of our joint ventures that we've done in the past, call it a couple of years, with that -- one of which was with in a Singapore [Indiscernible]. We're still working through this; it's a long IPO process.

There's no certainty on the outcome or completion, sizing would be obviously a modest IPO size to begin with. But we do think has -- this option has the merits of being attractive long-term partner vehicle to Digital Realty.

[Jon Atkins, RBC]

Thanks very much.

[Operator]

The next question comes from Jordan Sadler of KeyBanc Capital Markets. Please go ahead.

[Jordan Sadler, KeyBanc Capital Markets]

Thanks, guys. So first, I want to follow-up, Bill, on the price increase opportunity. I'm interested specifically in the greater than one megawatt rents achieved in the Americas this quarter. They seem quite the opposite. I wonder at $80 per KW, it seems like a low point relative to recent print. I'm wondering what portion of that is a function of your geography mix, et cetera. And then, any color you can provide around the ability to push rate there.

[Bill Stein, CEO]

There is definitely a function of geographic mix. It's also a function of an extension that we were doing with an existing customer's -- they were -- we're providing some rentable concession as well. Andy, do you want to add anything to that?

[Andy Power, CFO]

Yes, I just -- maybe just a little more color. The overall sign was a strong quarter and well north of 100 in North America, as you pointed out, it was in our prepared remarks. We had a sizeable signing where we essentially came to the table with a holistic relationship-oriented solution for our customer, combining a renewal that impacted our mark-to-markets, as well as the new signing.

On the renewal, if you pulled that out of our mark-to-markets were positive 1%, but it was a 30-megawatts signing. So it's a large kind of contributor to that. And on the new signing, I think goes into 4 or so different data halls it was spread across both Ashburn and Chicago. It was a 100% into existing, vacant or to be vacated capacity.

So direct flow-through the bottom line, not call it future re-leasing. And so we think it was an attractive combination of helping the customer grows with us on our campus. And this is a customer we see future growth in years to come, so happy to support them.

[Jordan Sadler, KeyBanc Capital Markets]

Okay. And then coming back to the supply chain, I've a little bit of a 2 parter, which is one, how much urgency are you seeing from your larger customers that are looking to procure available inventory and just have line of sight to a future product and infrastructure? And then second, how far forward had you pre -bought critical construction materials like generators, PDUs, [Indiscernible] units, and [inaudible 00:30:50]?

[Andy Power, CFO]

So maybe I'll -- Jordan, its Andy again. I'll try to take them in backwards order. So we have call to approaching 300-70 something of megawatts shovels and ground all the way to opening doors as we speak. And we are insulated in terms of our cost in the procurement, whether it's through our VMI programs or through the supplier contracts and other things we do haven't been focused on building new capacity for so many years consistently.

Beyond that, we're not fully insulated, but those VMI, as I just mentioned, do extend their primarily focused in North America, they extend to 2023, so we do have a fair bit of insulation. We’re not with some by the graveyard on this topic; obviously inflation is here and will impact anyone that's called in the development arena.

But we do believe given our size scale as the largest developer and track record that we're going to fare better than our competitor set and especially any newer incumbents to development. In terms of urgency, I think our customers are always urgent despite making massive financial decisions. Maybe I'll have Corey jump in a little bit to give you a little bit of flavor on the customer plans.

[Corey Dyer, Chief Revenue Officer]

Yeah, sure. I can do that. Jordan, on the questions around this with the demand from the shortages and chips, we haven't seen it negatively affect any of our pipelines across the regions, which we've actually seen it grow.

And then also, we've got some sophisticated customers that ought to forward about what was going to happen with the chip shortages and planned accordingly and, therefore, have accelerated some of our opportunities across the globe.

So at a net perspective, we kind of see it as a positive and people are thinking through it, our customers are thinking through it, and an oriented has really helped us kind of grow our pipeline at this point.

[Jordan Sadler, KeyBanc Capital Markets]

Thank you.

[Operator]

The next question comes from David Barden of Bank of America. Please go ahead.

[David Barden, Bank of America]

Hey guys, thanks for taking the questions. I'll ask my two upfront too if I could. I guess the first one would be Bill, investors when waiting a long time to see how the big datacenter companies evolve their edge strategies. You've already struck a partnership a week or two ago. And it sounds like you're planning on doing some more.

I was wondering if you could kind of elaborate a little bit now on what you're looking for and how you settled on this path you've chosen and with the Atlas to begin with. And then maybe Andy just, I want to go back to the power thing.

90% pass-through that leaves about 20 million on the income statement. A few pennies, still about $15 million of exposure. Is that kind of what you're budgeting to potentially happen in 2022? Thanks.

[Bill Stein, CEO]

I'm going to turn it over to Chris to handle the edge questions since he spends a fair bit of his days on that particular initiative.

[Chris Sharp, Chief Technology Officer]

And I appreciate it, Bill. And thanks for the question, David. Yes. We've definitely watching the edge for some time now we do see it's still in its early stages of being a material opportunity. But one of the things that we've done is partner with Atlas edge that we think they can provide significant value in extending our platform deeper into the metro. And so that's something that we're looking at learning and understanding how to gain more intelligence in their new types of infrastructure they are bringing to market.

And quite frankly, if it expands and enhances our core -to-edge strategy so that our partners and our customers can get the benefit of extending their existing infrastructure out to the edge when it matures over time. I would also say that a critical piece that I think you picked up on David, which is great, is that we at Digital, we're open, right?

This is one of many partners and relationships that we're going to continue to prosecute because we see that there's many types of avenues out into accessing this edge infrastructure, but you're going to see a lot of partnerships over the course of the next couple of quarters where we will further invest and refine exactly how we're going to prosecute that edge opportunity.

[Andy Power, CFO]

David, on the second question, so just reviews a few facts. So 90% -- and you're looking at just P&L, 90% of the powers is reimbursed overall. We do pursue a hedging strategy primarily on our deregulated markets, where you see potential greater volatility. We're about 85% hedged with contract durations ranging for 1-3 years. We also, as you know, are incredibly focused on sustainability.

Green Power procurement is a massive part of that playbook and we pride ourselves in what we've done on that effort to further Green our portfolio, including power purchase agreements. Some of those have a potentially offsetting the impact if in the event of power prices are to surge.

That call provides an incremental hedge to power costs. So, where we see it in the event that this elevated power scenario plays out for the duration of 2022, we looked at as just a couple of cents, which called every penny's just almost $3 million. So not -- I wouldn't say a material headwind at this time.

[David Barden, Bank of America]

Perfect. Thanks Andy.

[Operator]

Your next question comes from Simon Flannery of Morgan Stanley. Please go ahead.

[Simon Flannery, Morgan Stanley]

Great. Thank you very much. Good afternoon. Andy, I just wanted to clarify. You made a comment that you were optimistic on 2022 same-store NOI growth. Does that mean you can -- you think it's going to be positive or better than this year?

Any clarity you have there and then just more broadly, Bill and team, maybe just talk about leasing has been consistently strong this year. How does the pipeline look and how does the competitive environment look going forward?

[Andy Power, CFO]

Thanks Simon. So listen, we are in the middle of budget season and I got my head of [Indiscernible] to my right and he'll step on my foot really painfully if I get out over my skis here. But that being said, listen we've got a same-store pool that's going to materially grow and I think that's in a positive direction with the addition of interaction, the Westin building, Altus IT,, our business in Athens, we've acquired higher pricing power components added to the mix.

We're also making great progress on re-leasing the capacity that was vacated at the beginning of this year. A huge portion of signings, as I mentioned we did, this quarter has been falling into vacant or vacated capacity, so quicker resumption of cash flow from that space that sat idle for a portion of 2021. So net-net, I think there's a few things that kind of point to this kind of more positive trajectory in the same-store pool, hence my comment about optimistic and where we're going for 2022.

[Bill Stein, CEO]

Thank you. Corey’s best situated to address the pipeline.

[Corey Dyer, Chief Revenue Officer]

Yes, and then also from a pipeline perspective, Simon, I would just tell you that PlatformDIGITAL and just our thought leadership around Data Gravity, has really taken hold. And our enterprise pipelines growing across all regions. So really happy with that. Gartner was forecasting solid growth in enterprise IT spend, just feels like we're in kind of the early innings of the IT transformation for the enterprises.

As mentioned in the opening remarks, this quarter represented a new high for us, new logos, at 140 new logos. So think about that as a proxy for enterprises continuing to side -- to buy and partner with us. So we feel good about the demand signals and our pipeline going forward. Hopefully that answers your questions on it.

[Simon Flannery, Morgan Stanley]

Great. Thank you.

[Operator]

The next question comes from Matt Niknam of Deutsche Bank. Please go ahead.

[Matt Niknam, Deutsche Bank]

Hey, thanks for taking the questions. Both of these are maybe piggybacking a little bit on the back of Simon’s questions. But first on the competitive landscape, I'm just wondering, you mentioned upfront being a little bit more selective because it relates to investments in the US. Just wondering if you can update us on the competitive landscape you're seeing from both public and private peers.

Whether that's changed much at all in the last three months and then secondly, as we think about core FFO, or maybe even AFFO per share growth next year. I don't want to jump the gun. I know we may get an outlook in 3 months’ time, but Andy, if there's any updates in terms of how you're thinking about that bottom line growth into '22, that'd be great. Thanks.

[Andy Power, CFO]

Sure. Matt, maybe I'll do in reverse order here for just in order of efficiency here and make sure everyone gets question. So Core FFO, we're not -- we didn't pull forward our 2022 guidance dramatically. But I think we're definitely pleased with how we're putting up results this year. That has got called double-digits top line, 7% year-over-year performance at the bottom line, we've now raise our guidance, so we're just over the 5% call year-over-year for 2021.

And you heard from Corey and Bill and the others, we're [inaudible 00:40:43] the pipeline. We think -- we're looking to grow the bottom line higher next year than this year. So that's a continuation of things I've been saying for pretty much every quarter of '21. But sorry, no sneak preview on '22 guidance just yet.

On competitive landscape, I think that refers to leasing competitive landscape, and has there been any changes on the backs of M&A or whatever in our space? I mean, Corey should chime in here, but by large, I don't think I've seen any dramatic change.

I think the trend has been our friend for now several quarters of more and more customers attracted to a global platform across 25 countries, 50 metropolitan areas, spending the full customer spectrum supporting those, most of those 4000 customers in the retail-oriented environments, all the way up to the dedicated data hauls for hyperscalers who we have in, call it north of 45 different locations.

And I've not seen any dramatic change in that. And I think you can see that now in several quarters of consistent called results with. Corey, I don't know if you have any different observations.

[Corey Dyer, Chief Revenue Officer]

No, I would just add to it that, yes, we've had consistent results for a long time. To your point