Israeli Solar Technology Company SolarEdge technologies (Nasdaq: SEDG) is looking to lease part of its new campus, which is currently under construction in Glilot. A source familiar with the matter told Globes that SolarEdge is seeking at this stage to rent an entire floor on the campus for an asking price of 120 NIS per square meter per month, although a tenant has not yet been found.
The Glilot Campus is being built north of the film city between Tel Aviv and Herzliya. The campus is being built by Azrieli Group (TASE: AZRG), which will be owned, will consist of 43,000 square meters – 42,000 square meters above ground and 1,000 square meters of underground commercial space and 1,055 parking spaces. It is estimated that the construction cost is 800 million shekels.
Azrieli signed a deal to lease the campus to SolarEdge for 15 years with an option to extend for another nine years and 11 months. Azrieli’s annual NOI will be NIS 62 million. In Azrieli’s financial reports for the first half of 2024, the campus was valued at NIS 560 million. A groundbreaking ceremony for the campus was held in April 2022 and construction is scheduled to be completed in the first quarter of 2025.
Sources in the income-generating office real estate industry say SolarEdge will have no problems finding tenants. One source said: “This is an attractively priced area in an excellent location between Herzliya and Tel Aviv. The specific location is excellent with new buildings nearby such as the Grand and Allied complexes.”
Strive for financial stability
SolarEdge, which has developed an improved DC inverter system for solar panels, has been in trouble for some time. At its peak in July 2022, the company had a market cap of $20 billion on Wall Street, when it signed a massive lease with Azrieli. Since then, SolarEdge has lost 97% of its value and has a market capitalization of just $582 million, and it is estimated that the crisis, which is mainly due to falling demand leaving distributors with excess inventories, will continue for some time. Meanwhile, the campus is approaching occupancy and the company is looking to limit the damage.
In the third quarter of 2024, SolarEdge’s GAAP operating loss was NIS 1.09 billion and net loss was $1.2 billion. “As SolarEdge goes through the most difficult period in its history, we strive to achieve financial stability, regain market share, and renew focus on core opportunities – solar and energy storage,” interim CEO Ronen Weyer said recently.
Over the past year, SolarEdge has had two rounds of layoffs with more than 1,000 employees in Israel and around the world leaving the company.
Published by Globes, Israel Business News – en.globes.co.il – on November 21, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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