Technology company Amdocs Ltd. (Nasdaq: DOX), which occupies a giant 75,000-sq.m. complex at the Ra'anana Junction, today notified its employees that it was looking for a new location in the central region. The company's lease with REIT 1 Ltd. (TASE:RIT1), the owner of the company's current site, expires at the end of 2019.
In its announcement to the employees, company management explained the planned move by saying that it wished to improve their working environment. Among the alternatives under consideration by the company are the purchase of a new office building to be constructed for it, renting a new office building, and renovation and adaptation of the existing complex to the company's needs. For this purpose, Amdocs has established a task force, which has already begun looking for locations.
"The search will be in the central and Sharon regions. The main guiding criteria are a better experience for the employees, including better transportation, suitable facilities in the area, business, cost, and other operation considerations," Amdocs management wrote in its letter to the employees. Assuming that Amdocs does move its offices from the current location in Ra'anana, REIT1 will have to find a new large tenant. This large size of the areas to be vacated will make this a difficult task. Amdocs Israel has been in the high-tech park at the Ra'anana Junction since 1996, and currently occupies 75,000 sq.m., not including parking, out of 82,000 sq.m. in the entire complex.
One of the other tenants in the office complex is Microsoft. According to REIT1's reports, Amdocs paid NIS 38.2 million in 2014 for its facilities in the Ra'anana site. REIT1 owns 60% of the compound, with the rest owned by S.A.N. Centers, Ganai Shefa Building & Investment, and Sunflower Sustainable Investments Ltd. (TASE: SNFL). A subsidiary of the global Amdocs company, Amdocs Israel has 4,500 employees, mostly in the Ra'anana center, and the rest in other development centers in Haifa, Sderot, and Nazareth.
Over the years, Amdocs has expanded the area it rents in Ra'anana at the expense of its offices in Hod Hasharon, in place of NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE),which also rented space in the Ra'anana Junction complex. Assuming that the company continues to expand its business in Israel, acquiring a new property to be constructed for it, similar to the agreement signed by Comverse Inc. (Nasdaq: CNSI) and Blue Square Real Estate Ltd. (TASE: BLSR) at the northern Ra'anana Junction, in which Comverse left its offices in Ramat Hahayal for the new Ra'anana Junction campus built for it, will be Amdocs's best alternative.
Amdocs Israel confirmed the particulars, saying, "In the coming days, the company will formally contact developers."
Published by Globes [online], Israel business news - www.globes-online.com - on April 19, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015