We Used to Bring Power to Sites. Now We Bring Sites to Power' - A Data Center Farmer's Tale

If that phrase resonates with you, you might just be a data center expert.

Two weeks ago, I attended a fascinating conference hosted by I.D.C.A (Israeli Data Centers Association), led by Yonit Goldberg and Oren Nauman. The topic? "Data Centers 2025: Aligning Financial Strategy with Market Challenges for Maximum Returns."

Picture this: bankers, business development experts, and entrepreneurs all in one room, sharing their unique perspectives on the data center world. The insights were eye-opening:

Did you know a "small" data center (say, 16 megawatts) consumes as much power as an entire small city? Or that building a data center costs roughly four times more than traditional income-producing real estate?

Here's an interesting parallel: financing a data center project is surprisingly similar to financing a senior living facility. In both cases, your tenants typically arrive at the end of the process, meaning you need to be comfortable operating under significant uncertainty.

What do financiers look for? Three key things:

1. Access to dual power sources
2. Premium fiber optic connectivity2
3. Potential anchor tenants3

But as always, the real secret sauce is having an experienced team with diverse thinking.

Side note: The conference was held at Deloitte Israel's impressive new offices in Rishon LeZion.

A week after the conference, we had our first consulting meeting with a client interested in purchasing significant land for a data center. Yonit and Oren joined us via Zoom from a Data Centers conference in Dubai - talk about global perspective.

Commercial real estate in Israel

The Hamat Group Ltd. decided to establish a logistics center in an area of approximately 25,000 square meters in the northern industrial zone of Ashdod.

Kardan Israel Ltd. and partners, which together own land in an area of approximately 27.4 dunams in the Shoham industrial area, intended for the establishment of a server farm, entered into a memorandum of understanding with potential partners that include a foreign corporation with significant global activity in the field of server farms, according to which the partners will invest in a venture that will own the project, approx. - 75 million NIS, against the transfer to the project of the owner's rights in the project in a scope estimated at approx. 300 million NIS.

Commercial real estate overseas

A subsidiary of Medipower (Overseas) Public Co. Limited signed an agreement to purchase a commercial complex (the area of the buildings for rent is about 10.3 thousand square meters) in New Jersey, USA, for 37.5 million dollars.

Hertz Properties Group, Limited entered into an agreement to sell the company's Brookhollow Central property in Texas, USA, for approximately $64 million.

Real estate in the headlines

Congratulations to Avishi Kimmeldorf on his appointment as CEO of Shikhon and Binoi Real Estate.

Congratulations to Revital Ofer on her appointment as VP of Marketing and Sales at Ashstrom Properties.