Azrieli jumps on 1b Norwegian data centers deal

The share price of Azrieli Group (TASE: AZRG) rose 8.9% in afternoon trading today on a positive report about the company’s data centers activity. Israel’s largest real estate group reported that it has signed an agreement to provide 80 megawatts of data centers services to an unnamed leading international tech company.

The services will be provided on a new campus that will be built in Norway by Azrieli’s fully owned subsidiary Green Mountain Global, and other subsidiaries.

The company estimates that the project will cost about €1 billion to build, plus estimated financing costs of €60 million. The group is negotiating with banks to finance the project.

The agreement is expected to generate an average annual NOI (net operating income) for Azrieli of €117 million, about NIS 437 million at the current exchange rate, assuming full capacity is supplied. This is a major increase of 17% for the group: As of the end of the third quarter of this year, Azrieli’s annual NOI rate was about NIS 2.6 billion.

According to the company’s announcement, the capacity will be supplied in stages over a period of two and a half years, in accordance with the schedules set out in the agreement. The delivery date for the first 20 megawatts will be at the end of March 2027.

The service period for each phase is 15 years from the date of delivery, with the option of extension for a cumulative period of up to a further 15 years. The customer will have the option to cancel the agreement at its discretion, subject to payment of a cancellation fee that will be calculated proportionally to the remaining balance of payments until the end of the service period.

Azrieli notes that there is some uncertainty on the delivery of the first 20 megawatts on the specified date (March 2027), due to the dependence on many conditions, such as obtaining permits and approvals related to, among other things, electricity supply and building permits.

IBI: “An excellent deal”

As of the third quarter of 2025, Azrieli reported that 17% of its assets are in the data center sector. The group entered the sector in 2019 when it identified growth potential, and in 2021 it acquired all of Green Mountain’s shares at a value of NIS 2.8 billion. In 2023, the subsidiary contracted with TikTok Norway to provide data center services.

At the end of the third quarter, Azrieli and its subsidiaries had five income-generating assets in the sector, four of which are in Norway and one in England; and in the first three quarters of the year, the sector’s revenue grew by 173% to NIS 633 million, and its NOI reached NIS 342 million.

Last week, Azrieli also reported that a joint venture company had entered into a financing agreement with financing entities totaling €592 million (the company’s share – approximately €296 million), to build a data center campus in Frankfurt, Germany.

IBI commented on Azrieli’s announcement and wrote that this was “an excellent deal by the company, which after a long time (since the TikTok project) is reporting a substantial agreement in the field and allaying concerns about a slowdown in the company’s main growth engine.

“It should also be noted that the price per megawatt is twice as high as the price set in the deal with TikTok, and we believe that the current contract will accelerate the process of preparing a partner/investor for the data center field at a higher value than initial estimates and will result in a significant enhancement of value in the company.”

Overtaken Israel Discount Bank Azrieli, controlled by chairwoman and acting CEO Dana Azrieli, is traded on the TASE at a market cap of NIS 42.7 billion after a 20% increase in the share price in 2025, including this week’s surge. The company is ranked seventh in value on the TASE, after overtaking Discount Bank.

In the first three quarters of the year, Azrieli Group recorded a 20% growth in revenue from rental fees, management, maintenance and net sales, totaling NIS 2.86 billion. Bottom line, net profit reached approximately NIS 1.17 up 16.8% from the corresponding period in 2024.

Data provided by Azrieli at the end of the third quarter showed that 80% of the value of its income producing real estate is attributable to real estate in Israel, and the average occupancy rate in Israel is 97%. The group also noted that it owns income-producing properties with a total leasable area of 1.4 million square meters, including, among others, 23 shopping malls and commercial centers and 17 office properties.

Published by Globes, Israel business news – en.globes.co.il – on December 30, 2025.

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