Digital Realty (NYSE: DLR) today announced the formation of a joint venture with Mivne Real Estate (TASE: MVNE), a Tel Aviv-headquartered real estate developer, owner, and operator, which enables Digital Realty’s entry into Israel’s data center market through the development of a new 20-megawatt data center campus in Petah Tikva, Israel. The duo’s new joint venture will operate under the brand name Digital Realty Mivne.
Petah Tikva, Israel – Digital Realty, Mivne Real Estate
Digital Realty and Mivne’s Petah Tikva, Israel data center campus will support the development of up to 20 megawatts of installed IT load. In terms of timing, delivery of the initial phase is anticipated in 2023, subject to customer demand, which implies that Digital Realty is building this capacity on a speculative basis.
Importantly, Mivne Real Estate has developed several large-scale real estate projects across Israel and holds a significant land bank, totaling 8.4 million sqft (780k sqm) of land reserves. However, at the same time, Mivne notes its inexperience in digital infrastructure, given that the company is “entering the field of data centers” through the Digital Realty Mivne joint venture.
Subsea Cables
Israel is emerging as an alternative (instead of Egypt) subsea cable interconnection route between the Mediterranean Sea and the Red Sea, which acts as focal point for connectivity between Europe, Asia, the Middle East, and east Africa. In turn, new routes through Israel, such as Blue (see below), enhance the availability and resilience of international subsea cable systems.
Blue and Raman Subsea Cable Systems
Google is leading the build of the 16-fiber pair Blue subsea cable system, which is expected to be ready for service (RFS) in 2024. The Blue subsea cable will connect Italy, France, and Greece – link into Tel Aviv, Israel – and then traverse onwards terrestrially through the country to Aqaba, Jordan. Once in Aqaba, the system will connect with the Raman subsea cable, another Google-led project, which will reach Saudi Arabia, Djibouti, Oman, and India.
Google is developing the Blue subsea cable alongside Sparkle (Telecom Italia) and the Raman subsea cable with Omantel (Oman Telecommunications Company).
Cloud Service Providers (CSPs)
In Israel, the four largest cloud service providers (CSPs) have all announced that they will be building cloud regions in the market of Tel Aviv:
- Amazon Web Services (AWS): Middle East (Israel) cloud region will have 3 availability zones and will be located in the market of Tel Aviv, Israel
- Microsoft Azure: Israel Central cloud region will have 3 availability zones and will be located in the market of Tel Aviv, Israel
- Google Cloud: Israel cloud region will have 3 availability zones and will be located in the market of Tel Aviv, Israel. More specifically, Google’s 3 availability zones will be in the cities and towns of Bnei Zion, Modi’in, and Petah Tikva
- Oracle Cloud: Israel 2 cloud region will have 1 availability zone and will be located in the market of Tel Aviv, Israel. Additionally, Oracle Cloud operates its Israel Central cloud region, known as il-jerusalem-1, which has 1 availability zone and is located in the market of Jerusalem, Israel
Multi-Tenant Data Center (MTDC) Operators
In the Tel Aviv market, multi-tenant data center (MTDC) operators have chosen to locate in the city of Petah Tikva, in response to cloud service provider demand. Specifically, within Petah Tikva, Global Technical Realty (GTR) launched a 10.5-megawatt data center development project. While EdgeConneX acquired local operator Global Data Center (GDC), which has existing and development capacity in Petah Tikva. Finally, Serverfarm, alongside the Israel Infrastructure Fund (IIF), is developing a 10-megawatt, 100k sqft data center just north of Tel Aviv, close to Ra’anana.
