Israel’s largest lease transaction: Google will lease a third of the ToHa2 tower in Tel Aviv for ILS 115 million per year

The transaction, considered to be Israel’s largest to date, began taking shape about six months ago, and has now been finalized; Google will lease 60 thousand sqm in Gav-Yam and Amot’s ToHa2 tower located near the Hashalom train station in Tel Aviv. The building is expected to be completed and obtain a certificate of occupancy in late 2026

Simulation of the ToHa2 tower; architecture: Yashar Architects and Ron Arad Architects (simulation by Viewpoint)

About 18 months after first reports, the mega deal of leasing office space to Google is underway. This is a joint transaction with the income-generating property company Gav-Yam and Amot, which own the ToHa2 Tower in Tel Aviv equal parts.

According to the updated agreement, Google is expected to lease about 60 thousand sqm from Gav-Yam and Amot at the building envelope level in the tower’s upper part. The deal will also include several hundred parking spaces, and its term is 10 years (with a single exit point after five years). The lease of the office space is expected to commence in Q1 of 2027, following the completion of the tower’s construction, and rental fees were set at ILS 115 million per year.

Google’s lease transaction in the Electra tower is expected to end in the same period when the ToHa2 agreement starts, and the industry assessments are that Google will terminate the Electra lease agreement and move its employees to the new ToHa2 tower.

According to a report by Gav-Yam, the construction of ToHa2 is in full swing and around 40% of the structural work has been completed, in accordance with the planned timeframe, and construction is expected to be completed and a certificate of occupancy obtained in late 2026. The scope of spaces to be leased by Google as well as the rental fees even point to an expansion of the company, as initial reports from around 18 months ago suggested a lease of 55 thousand sqm with a rental fee of ILS 105 million per year.

Nathan Hetz, the controlling shareholder of Alony-Hetz, which is the controlling shareholder of Amot (photograph: Amit Sha’al)

The ToHa2 tower is located on Yigal Alon adjacent to ToHa1 and near the Hashalom train station. The tower that is currently under construction will have 77 floors and an area of 2,500-3,000 sqm per floor for a total of approximately 160 thousand sqm; Google’s lease transaction is for approximately 24 floors, which constitute around a third of the tower’s area.

20 thousand people will work in the two towers (1 and 2), however due to the proximity to public transport hubs including the light rail and the train, as well as two nearby metro stations, and in light of the planning entities’ policies, the number of parking spaces will be limited to about 1,500. The cost of the project is estimated to be ILS 3 billion, and rental revenues are currently estimated to be ILS 280 million per year.

Since 2011 Google has been located in Electra tower, just a few hundred meters away; at the beginning it leased around 8,000 sqm and later expanded to an additional 1,500, so that even now the area it is about to lease is 5 times larger than its current space. The company currently employs around 2,000 workers, and according to the large office space the company will be leasing it intends to significantly expand in the future.

To date, this is Israel’s largest office lease transaction ever, both in terms of office space and price. Runner up is the Facebook transaction, which leased around 51 thousand sqm for around ILS 100 million per year. Microsoft leases a campus in Herzliya Pituach with an area of 44 thousand sqm for ILS 50 million per year, less than half the amount Google will pay. Another mega deal involves Wix, which will move to 30 thousand sqm in Glilot for an estimate amount of ILS 40 million per year.