Amdocs Ltd. (Nasdaq: DOX) has published a large-scale tender for construction of a new office complex at an estimated cost of NIS 1 billion, sources inform "Globes." "Amdocs Israel is considering concentrating its business in a new centralized office complex. Amdocs has decided to publish an invitation for bids to build the complex," the official tender recently published by the company, which "Globes" has obtained, states.
The tender states the following requirements for bidders: preparing bids for consideration of a rental agreement for an office complex to consist of several buildings to be constructed for Amdocs with 70,000 sq.m. of gross built-up space and 3,000 parking spaces. The company is also requiring bidders to provide for a possible added construction of 7,000 sq.m. in gross space and 300 more parking spaces to facilitate Amdocs's possible future expansion, with no commitment by Amdocs.
Sources also inform "Globes" that following a lengthy search for a location for its new offices, it appears that the company has decided on one of the following alternatives: Petah Tikva, the Ra'anana-Kfar Saba junction, and the northern Ra'anana industrial zone.
A crowded timetable
The tender document, which fills hundreds of pages, states that the company will rent the new building to be constructed for 25 years. Amdocs will reserve the option to exit the lease at three times: after 10 years, 15 years, and 20 years. Amdocs also lists other onerous requirements concerning the termination of its contract with the builder. In addition to the exit clause, the company will have the right to cancel its lease for part of the space on short prior notice, and will be entitled to sublet any amount of the space at any time, without restriction.
Based on rent of NIS 70 per sq.m. for built-up space and NIS 500 per parking space per month, the tender winner's rent under the lease will be NIS 78 million a year, or almost NIS 2 billion for 25 years.
Upgrading the work environment
A March 23 deadline has been set for the tender - in other words, next week. The timetable set for the bidders is very short - the complex is to be ready for occupancy by October 1, 2019.
At the same time, Amdocs states in the tender documents that bidders will also have to state a price for the purchase of the constructed complex, not just the rent for it. The bank guarantee demanded from bidders in the tender is no less than NIS 1 million per bid, indicating the major scale of the project.
The tender also states that the winning bidder will have to pave a special road to provide the sole access to the future complex, at no additional cost to the company. Amdocs also sets forth precisely and in detail how the bidders must submit their bids to the company, and requires the bidder to be a company with proven financial capability and experience in similar ventures. Amdocs explicitly states that it will pay no broker's fee for the complex or the transaction.
Amdocs said, "As has already been reported, in view of the termination of the company's lease on its complex in Ra'anana four years from now, Amdocs Israel is considering possible alternatives compatible with its needs that will upgrade the work environment for its employees, and is currently in the midst of this process. The company is not commenting on the process and its particulars at this stage"
Published by Globes [online], Israel business news - www.globes-online.com - on March 16, 2016
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