Azrieli Group (TASE: AZRG) has reported that its data center subsidiary Green Mountain, will build a data center campus for TikTok in Norway. The data center campus to comprise several buildings, with a total power capacity of 90 MW. The complex will form part of TikTok's European hub.
The complex will be built in several stages. The first 30 MW is expected to be supplied by the fourth quarter of 2023, under an 11-year contract. The remaining capacity of 60 MW will be supplied in two further stages in 2024 under 10-year contracts. The customer has been given several options to increase the capacity by dozens more MW.
The deal is expected to generate average annual NOI of 79 million, given full operation (90 MW). The total investment in building the project will amount to €750 million. The company intends to finance the transaction from its internal sources and/or through financing, the scope and form of which are yet to be decided.
This deal is part of Green Mountain's strategy of expanding its presence in the European data center market, and using the strong platform it has acquired to establish a foothold and expand in this market.
As of the end of the third quarter in 2022, Azrieli Group's data center operations accounted for some 15% of the group's total assets. This transaction is expected to triple the segment's NOI upon full operation, excluding completion of the many projects under development.
Azrieli Group CEO Eyal Henkin said, "This deal is a significant step in the development of our data center business and expansion of our presence in Europe. This project joins our development pipeline in this segment, which is expected to significantly increase in the coming years upon completion of the many projects under development. Green Mountain is establishing itself as a key player in the European market, and this deal is expected to constitute another step in the development of this significant segment in Azrieli Group's portfolio. In this context, the company is exploring various possibilities for collaboration with investors in its business in this market."
Published by Globes, Israel business news - en.globes.co.il - on March 9, 2023.
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