Palm Hills co-development agreement inked with NUCA for 205 feddan mixed-use development in Sheikh Zayed City
Palm Hills Developments (“PHD” or “the Company”) announce that Arkan Palm for Real Estate Investment Company (40% owned subsidiary) signed a co-development agreement with the New Urban Communities Authority (“NUCA”) on a revenue sharing basis for an innovative mixed- use development. The project is expected to encompass residential components (high rise multi-tenant buildings and standalone units) and commercial facilities including medical, administrative, hospitality and recreational components. The project spread over 205 feddan, strategically located in Sheikh Zayed City, overlooking 26th of July Axis, adjacent to Nile University.
Through this co-development agreement, Badr Al Din Real Estate Development Company (the majority shareholder of Arkan Palm Real Estate Investment Company) will be responsible for all operating and financing activities, construction, development as well as sales and marketing of commercial components. PHD will oversee all sales and marketing activities of residential components. NUCA will contribute with the land plot alongside all external infrastructure to the project’s boundaries. The Company expects to concludethe project’s masterplan during this year.
NUCA will be entitled to fixed annual cash portion of up to EGP10 billion payable over 12 years excluding an advance payment of EGP100 million upon signing the agreement, implying a net present value of EGP2.5 billion after applying a discount rate of 16%. In addition, NUCA will receive an annual revenue share of 12.5% from the project’s annual proceeds with an aggregate payment of EGP13 billion, equivalents to a net present value of EGP3.5 billion (at a 16% discount rate) payable over 10.5 years, starting after 1.5 years from signing the agreement. NUCA will be entitled to an in-kind portion of built-up area of 95.5k sqm (33k sqm residential and 62.5k sqm of commercial space).