In 2021, when SolarEdge (Nasdaq: SEDG) was at its peak, it signed a huge deal with Azrieli Group (TASE: AZRG) for the construction and leasing of an office campus close to Cinema City at the Glilot Interchange, at the meeting point of Tel Aviv, Herzliya, and Ramat Hasharon. Now, when the company is undergoing a crisis in its business and is reportedly about to carry out a further downsizing, the question arises, what will become of the huge campus, due to be ready for occupancy in 2025?
The campus under construction for SolarEdge, which develops systems for maximizing power output from solar energy installations and related products lies north of the Cinema City complex and east of the Big Glilot site under construction nearby. The SolarEdge site is 16.5 dunams (4.125 acres) in area. The campus will have 43,000 square meters of space on five floors, and underground parking. A permit for excavation and lining work was received in June 2022, and a full building permit for the whole project was received in October 2023.
In Azrieli Group’s latest report on the acquisition of the site for the project and the agreement with SolarEdge, it states that the total cost of the project, including the land, is estimated at NIS 990 million, and that the estimated annual NOI (net operating income) from leasing the project is NIS 78 million. The lease agreement is for fifteen years, with an option to extend to 24 years and eleven months, from the handover date.
Under the agreement, Solar Edge is responsible for management and maintenance of the campus. It may try to find sub-tenants to defray its costs, as Wix.com (Nasdaq: WIX) did for its campus, which is also close to the Glilot Interchange (south of Cinema City).
SolarEdge declined to comment on the report.
SolarEdge has a production facility in the Tziporit industrial zone, while its head office is in Herzlia Pituah. The factory at Tziporit is called Sella 1, after the company’s founder and former CEO, the late Guy Sella, who died in 2019. The Sella 2 factory is located in South Korea, where SolarEdge acquired a company a few years ago. In addition, the company has sites that it leases in the US, various countries in Europe and Asia, and in Australia.
Before its previous downsizing round in January this year, SolarEdge employed 5,633 people, 3,160 of them in Israel. In January, it laid off 900 employees, 500 of them in Israel. The move was explained as an attempt to adapt the company’s cost structure to changed market conditions, and to return to profitable growth. The company estimated that the layoffs would save $75-80 million quarterly. The difficult period in SolarEdge’s business has, however, continued in the months since it carried out those layoffs.
Published by Globes, Israel business news - en.globes.co.il - on July 15, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.