Global Technical Realty and KKR add Tel Aviv to data centre portfolio

Global Technical Realty and KKR add Tel Aviv to data centre portfolio

Israel is fast becoming a hotspot for technology innovation, particularly within the data centre sector. Here, Franek Sodzawiczny, Founder and CEO at GTR, provides us with some insight as to why the organisation decided to invest in this part of the world when broadening its data centre portfolio, and how he expects the country’s data centre landscape to evolve over the coming years.

Global Technical Realty (GTR), a US$1 billion European build-to-suit acquisition data centre platform, has announced the launch of a new 10.5MW data centre in Petah Tikva, Israel’s premier data centre hub. The location of the campus has a connectivity ecosystem currently made up of seven cloud service providers, the Israeli Internet Exchange (‘IIX’) and multiple carriers. In addition, Petah Tikva has developed into a base for many high-tech multinationals and communications companies.  

The data centre will be a secure underground site, built to suit hyperscale specifications, comprising of 4,800m² across two floors, with each floor offering 8MW and 2.5MW of IT capacity respectively. GTR will be designing the leading-edge facility with existing construction partner, Mercury, directing and managing the build process. The project will be built to a N+1 Tier III Infrastructure rating, offering a high standard of power usage effectiveness (PUE) at under 1.17 on full load. The facility will be delivered in two phases with the first phase expected to be fully operational by Q2 2023.

“I am excited to announce the launch of our second data centre in one of the fastest growing global tech hubs, shortly after the launch of our first project in July,” said Franek Sodzawiczny, Founder and CEO at GTR. “The dynamic, rapidly evolving data centre sector is experiencing an unprecedented level of global investment activity. As a well-capitalised agile platform with a clear strategy and experienced team, we are able to move quickly when we identify opportunities in our priority markets.”

Andrew Peisch, Director at KKR, said: “Israel is an entrepreneurial hub for high-tech innovation and an important market for our data centre strategy in EMEA. We are pleased to make this investment in a high-quality project to help accelerate the Digital Transformation that is underway in the region.”

GTR was launched last year by leading global investment firm, KKR, and Franek Sodzawiczny, a highly experienced and successful serial entrepreneur in the data centre sector who has a focus on delivering leading-edge designs that support sustainability objectives. The company’s focus is on designing, building and operating bespoke data centres across the EMEA region for large technology clients, meeting growing demand for third-party data centre provision amid ever-increasing growth in data usage and cloud services adoption. KKR’s original investment in GTR was made primarily from its third global infrastructure fund.

Franek Sodzawiczny, Founder and CEO at GTR, offers some further insight into the data centre landscape in Israel and discusses why it is such a technology hotspot.

Can you offer some insight into why Global Technical Realty chose to invest in Petah Tikva?

Petah Tikva is Israel’s premier data centre hub and is already a base for many high-tech multinationals and communications companies such as AWS, Google and Microsoft, among others. Israel has made a strategic long-term investment decision to develop multiple new business and financial centres, and the dynamic environment continues to draw numerous organisations to the country – ranging from those in financial tech to security, through to the biotechnology field and into the medical devices sector. It’s an exciting space to be part of, and investing here made sense given the expertise we can bring to such fast-moving and agile businesses that rely heavily on data.

What defines Israel as an entrepreneurial hub for high-tech innovation?

There are clearly many factors that define an area as an entrepreneurial hub. For Israel, it could be argued that a clear connection is because software development has become such a huge part of the infrastructure. Where there is thriving software development, there is thriving tech talent and as the competition in the market accelerates to find the right skillsets, more investment and market attention is likely to come. To that end, Israel will not refer to itself as a ‘startup’ hub indefinitely, and its progress to becoming a more established business hub is already apparent with multiple well-known brands establishing offices in the country, alongside continued significant investment in the supporting infrastructure.

What future advantages do you predict for your organisation after this investment?

Our ability to remain agile is most definitely a key advantage for GTR. The data centre sector is both fast moving and competitive but a lot of potential investors get caught up in business red tape and outdated procurement processes which means they cannot be responsive to opportunities in the same way that we can be. Our experience and knowledge mean that not only can we get further ahead, faster, we can also close increasingly quickly on the sites we know will hold longer term business value and interest for our clients.

Why is Israel an important market for your data centre strategy across the EMEA region?

Any market that our customers want us to be in is part of our data centre development strategy but ultimately, it’s our intention to establish ourselves in any new region just ahead of our customers and prospects deciding to be there. Israel is key because of ongoing investments in the infrastructure, the talent pool and of course becoming a critical part of the ecosystem that will help encourage new businesses to the country. In addition, the ultra-high speed fibre network linking Europe to Israel is a very significant investment, providing an impressive bandwidth capacity of 800 gigahertz with a rapid Internet traffic volume of 33 terabytes. This will transform communications in the region overnight.

How would you describe Israel’s data centre landscape and how do you expect it to evolve over the next five years?

With several global hyperscalers already established in the region, as well as a burgeoning local market, the data centre sector in Israel is on an upwards trajectory. We believe Israel has the potential to be a key component of the world’s communication hub and joining this dynamic ecosystem is very compelling.

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