Realty Income raises the dividend for the 115th time in a row and moves into data centres

Realty Income raised its quarterly dividend for the 115th time in a row in the second quarter of 2026. Distributions in the quarter were 0.8115 dollars per share, which corresponds to 74.5 percent of adjusted funds from operations. On an annual basis the dividend stood at 3.252 dollars per share on 30 June.

The property trust has raised its distribution for 31 consecutive years.

Revenue rose 9.7 percent to 1.55 billion dollars and beat expectations by more than seven percent. Adjusted funds from operations per share gained 3.8 percent to 1.09 dollars.

Reported earnings per share came in at 37 cents, below the estimate of 42 cents. Net profit nevertheless rose clearly, from 196.9 to 344.0 million dollars.

The short version

• Realty Income raised its quarterly dividend for the 115th time in a row, with distributions of 0.8115 dollars per share in the quarter.
• Revenue rose 9.7 percent to 1.55 billion dollars and adjusted funds from operations per share 3.8 percent to 1.09 dollars.
• A joint venture with Cloud Capital worth six billion dollars for data centres was launched.

Why a different measure counts at property trusts

In this asset class reported profit says little. The reason is depreciation on buildings, which arises in the accounts without money flowing out.

Property trusts therefore use funds from operations as their central measure. Depreciation is stripped out, as are write downs and gains from property sales.

In the second quarter reported earnings contained among other things write downs of 54.2 million dollars and a gain from sales of 38.3 million dollars.

Guidance raised

For 2026 the group now expects adjusted funds from operations of 4.44 to 4.45 dollars per share, after 4.41 to 4.44 dollars previously. That corresponds to around four percent growth at the midpoint.

The investment target was raised from 9.5 to 10.0 billion dollars. Around nine billion of that is to stay on its own balance sheet.

For reported earnings per share the expectation was by contrast lowered slightly to 1.59 to 1.60 dollars. The occupancy rate is to run at around 98.5 percent and same store rent growth at 1.1 to 1.3 percent.

Six billion dollars for data centres

The most striking event of the quarter concerns a new business area. Realty Income has started a joint venture worth six billion dollars for data centres together with Cloud Capital.

With that a provider that has mainly let retail space for decades enters the market for facilities that carry the build out of artificial intelligence.

In the quarter the group invested around 2.6 billion dollars at an initial yield of 7.3 percent. About 65 percent of that fell on industrial property. In Europe around 400 million dollars were invested at a yield of seven percent.

Properties worth 161 million dollars were sold.

Less dependence on the equity market

One point management highlights concerns financing. Only 18 percent of the investment volume was financed this year through the issue of new shares.

That is notable for a property trust. Such companies pay out most of their earnings and therefore often finance acquisitions with new shares, which dilutes existing holdings. The expansion of the business with private capital partners reduces that dependence and produces fee income on top.

Available liquidity stood at more than 5.7 billion dollars after financing measures. The ratio of net debt to earnings before interest, tax, depreciation and amortisation was 5.4.

In July the group issued bonds worth 600 million euros at a coupon of 3.625 percent maturing in 2032. Fitch started coverage with a rating of A and a stable outlook. Realty Income is therefore among the few American property trusts with that grade.

The occupancy rate stood at 98.8 percent across 15,588 properties. On re lettings 102.7 percent of the previous rent was achieved, with 105.8 percent for industrial properties and 112.9 percent internationally. The share of tenants with good credit standing rose from 32 to 34 percent of annual rent.

Frequently asked questions

Why does a different measure count at property trusts

In this asset class reported profit says little, because depreciation on buildings arises in the accounts without money flowing out. Property trusts therefore use funds from operations as their central measure.

What does the move into data centres mean

Realty Income has started a joint venture worth six billion dollars for data centres together with Cloud Capital. With that a provider that has mainly let retail space for decades enters the market for facilities that carry the build out of artificial intelligence.

Why does financing without new shares matter

Only 18 percent of the investment volume was financed this year through the issue of new shares. Such companies pay out most of their earnings and therefore often finance acquisitions with new shares, which dilutes existing holdings.

This analysis is for information only and is not investment advice.