But again, it doesn’t appear that way when the total receivables balance has increased. But again, I think the two sailing points are only – roughly only half of our – that balance is tied to what I call trade receivables, which are actual rent and other billings that are sent to customers. A good chunk is related to VAT receivables tied to our construction, which has been the part that’s been growing more substantially, which also has, a liability offset as well.
Operator: The next question comes from Ari Klein of BMO Capital Markets. Please go ahead.
Ari Klein: Thanks. Maybe following up on the JV question. Fundamentals are really strong. It feels like you believe there’s a lot of runway there. Obviously, there are funding considerations. But have you rethought perhaps pursuing a JV versus going at it on your own and essentially keeping the upside to yourself?
Andrew Power: Hi, thanks Ari. So I don’t – I think consistent with what I just shared reiterated on this call, we believe that this opportunity when it comes to our space, digital transformation, cloud computing, hybrid IT and now the advent of artificial intelligence really coming to fruition is so large, long-term, capital-intensive that really tapping into both private and public capital in different measures is the right way to maximize value for our shareholders. And we are certainly experiencing an inflection in our operating fundamentals that has built upon good results throughout the year. We’ve been doing a tremendous amount of deleveraging this year. We’ll be, call it, rounding third base on the deleveraging next year, getting back to the targets Matt’s laid out.
And we also have headwinds when it comes to, call it, some – a modest amount of debt coming due in terms of refinancing. But we view that the development joint venture remains to be the right move to drive more to the bottom line. And again, as I said in a question or two ago, we are not tying ourselves to this strategy and partner for all time, right? This has allowed us to accelerate those earnings and then have be able to throttle the levers here as to how much we share in terms of development joint ventures with partners down the road.
Operator: The next question comes from Simon Flannery of Morgan Stanley. Please go ahead.
Simon Flannery: Thanks a lot. Good evening. If I could just check in on the development CapEx point. Again, you raised the guidance $400 million at the midpoint for this year. We’ve obviously just got a couple of months left here. Could you just go through a little bit what we’re seeing that increase being spent on? Is that higher cost per megawatt coming through on some of your existing projects you’re pulling stuff forward from – next year, what else might be contributing to the increase? Thanks.
Andrew Power: It’s not budget overruns or anything like that, it is called conviction in the demand landscape. And I mean we can – Matt can run through it. But I think the biggest piece is Northern Virginia, which goes back to our success in freeing up, call it, 100-plus megawatts in the Loudoun County pinch point and now activating that. But Matt, anything else I’m missing there?
Matthew Mercier: No. I think, Andy, you hit it. I mean the majority of our development pipeline increased the call roughly 60 megawatts. We had 100 megawatts of new starts vast majority of that was in North America and in Northern Virginia specifically. If you look at our supplemental quarter-over-quarter, our cost per megawatt, I think broadly globally has been roughly flat. So it’s just a view of new development starts looking to get those completed as quickly as possible. So, if we can deliver on time for our customers and take advantage of the market that we’re in.
Operator: The next question comes from Nick Del Deo of MoffettNathanson. Please go ahead.
Nick Del Deo: Hi. Thanks for taking my question. Andy, you’ve talked about being more disciplined about returns and the sort of deals you accept. Do you feel like you’re successfully winning your targeted share of higher value or more strategic deals at your desired returns for each product? And kind of along those lines, do you feel like customers’ perceptions of what you have to offer and where you add value is consistent with how you’re trying to reposition the company’s assets?
Andrew Power: Hi. Thanks, Nick. So, I could tell you just yesterday, my team and I were on a called recurring check in with one of our top cloud customers. And that dialogue was multifaceted. It was obviously concentrated on how we can support their growth in their availability zones, how we can commence faster. There’s operational elements, it ranges across all the theaters and it also had how we can drive greater consumption to their cloud. And their services from our 5,000 existing customers from the 100 plus we added this quarter and the next quarter, how we’re integrating them onto our service fabric natively. And so, I think we are – and I think you’re seeing those results paying dividends in that customer appreciation.
And you’re seeing that in the litany of, call it, magnetic destinations, be it the on-ramps we announced around the world as well as the pickup in the demand that we characterize as less than megawatt interconnection accelerating. So, I do see a connection there. I think we’ve delivered a tremendous amount of value to our customers, improving their top line and their bottom lines in a safe, secure fashion. And when obviously, I think some of your question was dovetailed also to some of the larger customers, I think that we’re just being transparent and honest with these customers that we’re really trying to build a durable business to stand the test of time. And that doesn’t mean we try to win 100% of a hyperscales market share, but if we’re in 50 metropolitan areas, there’s probably 25 or 30 where we have something that they really need, and we can really help them like no other.
And that’s through our supply chain, our large campuses that future-proof their growth, operational excellence and other value adds and just being a one-stop shop for all their needs. So, I think that’s a long, long-winded answer to yes.
Operator: The next question comes from Erik Rasmussen of Stifel. Please go ahead.
Erik Rasmussen: Yes. Thanks for taking the question. Just getting back to the development JV. This is obviously the missing piece in the capital recycling efforts. But – and I saw that you raised the disposition guidance for the year. Is $750 still a good range for this? And I guess, from your commentary, it seems like there’s more than one deal that this can represent?
Gregory Wright: Hi Eric, this is Greg. The answer is yes, $750 is still a good deal. And yes, we are working on more than one.
Operator: The next question is a follow-up from Michael Elias of TD Cowen. Please go ahead.
Michael Elias: Great. So I wanted to ask about the unlevered return environment, particularly for hyperscale. I think earlier in the call, you mentioned something to the effect of double-digit unlevered yields. When you’re thinking about doing some of these larger footprint deals with your top customers, just curious where you’re seeing those deals clear? And as part of that, where do you think that this could evolve to over, call it, the next year? Thanks.
