Azrieli CEO Eyal Henkin.

Azrieli Group investing $780 million to build new data center for TikTok

The center will be set up in Norway through Azrieli’s subsidiary Green Mountain

The Azrieli Group has secured a huge deal in the data centers sector. The company’s Norwegian subsidiary Green Mountain will build a campus of data centers in Norway for the use of social network TikTok at an estimated cost of NIS 2.8 billion (approximately $780 million). The capacity of the complex will be 90 megawatts, which is three times higher than the total capacity of its server farm today.
Azrieli is expected to record an average annual NOI (net operating income) of NIS 285 million ($79 million) from operating the campus, which is three times higher than Azrieli's total NOI from the data centers sector in January-September 2022.
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Azrieli CEO Eyal Henkin.
Azrieli CEO Eyal Henkin.
Azrieli CEO Eyal Henkin.
(Photos: Orel Cohen and Amit Shaal)
The server farm will consist of several buildings, the construction for which began last year. Delivery of the first 30 megawatts is expected during the fourth quarter of this year, and during 2024 two more phases will be completed. The agreement is for a period of 11 years from the establishment of the first phase.
In Azrieli's estimation, the investment required to establish the project is $780 million and it intends to finance it from its own sources or through external financing whose scope and format have not yet been decided.
The deal with TikTok will double the output of Green Mountain's data centers from 30 megawatts today to 60 megawatts by the end of the year and to 160 megawatts by the end of 2024, with an option to expand by an additional 60 megawatts.

Azrieli began operating in the field of data centers in 2019 when it purchased 20% of the Compass company for approximately NIS 480 million ($135 million). It invested an additional NIS 432 million ($120 million) in July and September of last year to increase its holdings to 32%. Compass operates 13 active sites in North America, mainly in the central and eastern U.S. and in the Montreal area in Canada. As of March 2022, Compass had a total production capacity of 250 megawatts, of which 70% are leased or reserved, with eight additional sites under construction.
In July 2021, Azrieli purchased Green Mountain, which currently operates three server farms in Norway, for $850 million. The activity of the data centers segment yielded Azrieli NOI of NIS 97 million in the first nine months of 2022, which constituted 7% of its total NOI in that period. As of the end of September 2022, the value of Azrieli’s assets in this sector reached NIS 7.4 billion, about 15% of the value of all the group assets.