QTS Realty Trust, a leading colocation data center operator, reported consolidated revenues of $126.3 million for the quarter ended March 31, 2020, an increase of 12.1% compared to the same period in 2019. EBITDA amounted to $66.8 million, up 13.5% yoy.
QTS said that leasing of new data center capacity in Q1 was driven by continued hyperscale strength combined with steady enterprise demand. Leasing was +15% above the prior four quarter average leasing.
QTS renewed leases with total annualized rent of $11.3 million at an average rent per square foot of $871, which was 5.0% higher than the annualized rent prior to their renewals. The increase in the renewal rate of 5.0% for the quarter ended March 31, 2020 was primarily attributable to a large number of hybrid colocation renewals with power and/or connectivity increases upon renewal.
However, QTS noted that since the beginning of the economic disruptions from COVID-19, it has experienced a "modest increase in customer requests for payment relief, primarily concentrated in the retail, oil and gas, hospitality and transportation customer verticals. As of March 31, 2020, less than 10% of the Company’s MRR balance was generated from these industries. The total revenue associated with customers requesting some form of payment relief represented less than 5% of the Company’s revenue for the three months ended March 31, 2020. Importantly, of the small number of customers requesting some form of payment relief, as of March 31, 2020, the large majority of these customers were current on their rental payments and while QTS has not reduced their future payments, it has in certain circumstances provided additional flexibility in the form of extended payment terms. In addition to these customer requests for payment relief, the company also has experienced modest delays in construction activity in a few of its markets primarily as a result of availability of contractors and slower permitting."
“In the midst of unprecedented disruption across the economy as a result of the COVID-19 pandemic, QTS’ business has continued to execute well,” said Chad Williams, Chairman and CEO of QTS.
Williams added, “Following a year of record leasing performance in 2019, we are pleased to extend our momentum with another strong performance in the first quarter. Our strategic differentiators, record booked-not-billed backlog and strong balance sheet and liquidity position QTS well to continue to drive market share growth.”
