The Azrieli Real Estate Group reports on a significant deal for its data centers (information centers) activity, in which the Green Mountain subsidiary will build campus data centers for the social network TikTok Norway. a total of 90 MW.
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The campus will be built in several stages and the plan is that already during the fourth quarter of 2023, the first 30 megawatts will be delivered under an 11-year contract. The remaining capacity, amounting to 60 megawatts, will be provided in two additional phases during 2024, in 10-year contracts. The customer was offered several options to increase the capacity by dozens of additional megawatts.
The data center in Norway is being established as part of a project announced this week by the social network, to strengthen the security and protection of information of TikTok users in Europe, as part of which the network undertakes to store European users’ data locally. The center in Norway joins two in Dublin, Ireland, which was launched by Tik Tok.
The transaction is expected to generate for Azrieli an average annual NOI (net operating income) of about 79 million dollars in the full operation of the campus. Green Mountain’s total investment is expected to amount to approximately 750 million euros, and the company intends to finance the transaction from its own sources or through financing that has not yet been decided on its scope and format.
The field of data centers constitutes the third largest activity in the Azrieli Group and is responsible for 15% of all the group’s assets, with a total value of approximately NIS 7.4 billion. As of the reports for the third quarter of 2022, the data center activity yielded Azrieli NOI of NIS 35 million compared to NIS 7 million in the corresponding quarter a year earlier.
Eyal Hankin, CEO of the Azrieli Group, stated that “This project joins the development momentum we are in in the data center business, which is expected to grow at a significant rate in the coming years with the completion of the many projects under development. Green Mountain is establishing itself as a major player in the European market, and this transaction is expected to be another step in the development of this field in the Azrieli Group’s portfolio.”
Data Centers activity in Europe and North America
The Azrieli Group is the largest yielding real estate company in Israel, operating mainly in the areas of commercial centers and offices. In recent years, the group has also entered into activities in the field of data centers and server farms, and in 2021 it purchased the Norwegian company Green Mountain for NIS 2.8 billion.
Green Mountain has three main activities: planning and building server farms with high information security, providing advanced server farm services to organizations and wholesale customers, as well as operating efficient server farms using only renewable energies.