Haggag Europe Expands Beyond Real Estate into Gas, Energy Storage, and Data Centers
Haggag Europe, a company previously known primarily for its real estate development in Romania, is significantly diversifying its operations. Under the leadership of Chairman Tzachi Haggag, the company is expanding into gas infrastructure, energy storage facilities, and large-scale data centers, viewing these as extensions of its real estate expertise.
The company has signed a memorandum of understanding to acquire Npower Solar Energy, which holds rights to approximately 87.5 dunams of land in southern Romania. The plan is to develop a data center with a capacity of 120-125 megawatts of IT load, potentially requiring up to 175 megawatts of power. The deal's value could reach €67.5 million, contingent on grid connection approval, but this figure excludes significant construction and operational costs.
Haggag stated that the acquisition includes the land, ready-to-build status, permits, and a crucial €16 million electricity grid connection. The company has a 12-month window to secure a client and finalize the deal, with provisions for canceling the agreement and reclaiming payments if these conditions aren't met.
Alongside these new ventures, Haggag Europe continues its core residential real estate business in Romania. Its largest project, Pipera Lake in Bucharest, comprises around 1,700 apartments, with the third phase, including approximately 600 units, already seeing 168 pre-construction sales. The company is also developing other residential projects and enhancing income-generating properties.
In its gas sector, Haggag Europe is involved in 77 projects, including planning, construction, and operation concessions, as well as gas distribution licenses. While the gas sector's revenue saw a decrease in the second quarter, Haggag anticipates a significant ramp-up in execution and high performance in the coming quarters, targeting 20%-25% profitability on execution.
The company's stock has performed well, rising approximately 53% year-to-date, despite a recent dip in August. Financially, Haggag Europe reported first-half revenues of €14.5 million, a substantial increase from the previous year, though a pro forma comparison shows a more modest 9% rise. The company incurred a net loss of €31.1 million in the first half, largely due to accounting adjustments related to options and currency exchange differences.
