Amazon to expand operations in Israel

The NIS 37 million a year deal biggest in Tel Aviv office market in years

July 3, 2017 13:27
1 minute read.

Amazon boxes are seen stacked for delivery [File]. (photo credit: REUTERS)


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Amazon will pay Azrieli NIS 37 million a year, including the parking spaces, for the offices in a new Tel Aviv tower.

Amazon, the world's largest Internet retailers and cloud services provider, which is expanding its business in Israel, has signed a lease with Azrieli Group Ltd. (TASE: AZRG) to rent 25,000 square meters on 11 floors of the new Azrieli Sarona Tower in Tel Aviv, sources inform "Globes."

The deal includes 300 parking spaces at NIS 1,200 per space. Amazon will pay Azrieli NIS 37 million a year, including the parking spaces, but not including management fees. The deal is the largest in the tower and the largest in the Tel Aviv offices market in recent years.

Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), for example, which is renting most of the floors in the Triangle Tower in the nearby Azrieli Center, is renting 22,000 square meters.

Amazon was founded in 1994 and held its IPO on 1997. From operating a selling website, initially mainly for books, Amazon became the world's largest retailer, and later expanded into other sectors, such as cloud computing services. Its current market cap is $463 billion. The company is continually expanding its business in Israel.

The Azrieli Sarona Tower recently received an occupancy permit, after being built at a cost of NIS 1.5 billion. The tower contains 61 office floors with NIS 115,000 square meters in total space over three shopping mall floors with NIS 11,000 square meters in total space. The tower has the biggest office floor in Israel, with 2,400 square meters. High-tech companies have rented large spaces in the tower, including ironSource (10,000 square meters), Teddy Sagi's Playtech Cyprus Ltd. (LSE:PTEC) (10,000 square meters), and Waves (4,800 square meters); according to recent reports, Facebook is negotiating to transfer its offices from the 22 Rothschild Tower to Azrieli Sarona, because the Rothschild Tower lacks space to accommodate the company's expansion.

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