Azrieli expands London data center in eight-year, $34M-per-year deal
Green Mountain's 13.6 MW agreement will start generating income from early 2027.
Guidelines from the Electricity Authority have raised question marks regarding the development of data centers in Israel. Meanwhile, Azrieli, which operates in the industry outside of Israel, has entered into a binding agreement to supply data center services at a facility it owns and is expanding in London, an agreement that will generate Azrieli an average annual NOI (net operating income) of £24.9 million, about NIS 100 million ($34M), starting from the beginning of 2027.
This is an agreement entered into by Green Mountain – the subsidiary that consolidates Azrieli's activity in the field and which is managed by Eyal Henkin, the former CEO of the group as a whole – for the supply of services at a capacity of 13.6 megawatts for a period of eight years, with the client holding an option to extend it by an additional two years. Handover of the facility to the client is estimated to take about 100 days, so it is expected to start generating revenue for Azrieli within just a few months.
Azrieli acquired the facility in London in 2023, and last year began work to double its installed capacity from 7 megawatts to 14. It is in talks with several potential clients regarding the establishment of an additional data center facility with a capacity of 16 megawatts on land adjacent to the existing facility, which it acquired as part of the 2023 deal.
Azrieli's NOI from the data center field reached NIS 449 million last year, meaning the addition from the new facility is equivalent to 22% of the most recent annual NOI. Most of it is attributed to a 90-megawatt data center campus that the company began operating at full capacity in Norway in the first quarter of 2025, as part of an agreement with TikTok.
A series of agreements were signed by Azrieli during 2025, among them an agreement for the establishment and operation of an additional campus in Norway with a capacity of 80 megawatts and an average annual consideration (after reaching full operating capacity) of about NIS 440 million; as well as agreements for the supply of services at a campus in Frankfurt, Germany, with a capacity of 54 megawatts and an average annual consideration of about NIS 145 million. These deals bring Azrieli's expected annual NOI from contracts already signed with its clients to an annual total of about NIS 1 billion. However, the operation of these facilities is expected to begin gradually, starting from the end of this year and throughout next year, and accordingly the additional yield from them will also arrive gradually.
Azrieli, which is known for its shopping malls, is the income-producing real estate company with the highest market capitalization on the Tel Aviv Stock Exchange: NIS 49.4 billion. The data center field is the company's third-largest business branch, alongside its shopping mall and office activity, but it constitutes its main growth engine over the past several quarters. Accordingly, aside from Mega Or, which has recently been identified mainly with its activity in this field, Azrieli is the only company among the major income-producing real estate companies whose share has recorded a positive return since the start of the year (11.7%), while those of Melisron, Big, Mivne, Amot, Gav-Yam and AFI Properties recorded a negative return during this period.
