Press Release

Palm Hills co-development agreement inked with NUCA for 205 feddan mixed-use development in Sheikh Zayed City

Cairo/London, 24/03/2019

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).


Press Release

Palm Hills and Sarwa Capital concludes securitization of EGP760 million receivables portfolio


Palm Hills Developments (“PHD” or “the Company”) and Sarwa Capital (“Sarwa”) announce the closing of the latest issue of securitization bond for PHD, backed by receivables portfolio related to 670 delivered units in the following projects: Golf View, Golf Extensions, Palm Hills Katameya Extension (1&2), Hacienda Bay and Hacienda White 2.

The receivables portfolio’s net present value stood at EGP609 million, after applying a discount rate of 16.04% on the gross receivables portfolio of EGP760 million, calculated based on the average coupon of the Bond’s three tranches issued by Sarwa Capital. The three tranches received ratings of AA+, AA and A by Middle East Ratings and Investors Service (MERIS).

Sarwa Promotion & Underwriting acted as the Financial Advisor, Lead Manager and Arranger of the transaction. The issue was fully underwritten and co-arranged by Banque Misr and Arab African International Bank.

Yasseen Mansour, Chairman & Group CEO of PHD commented: “This latest and important issue comes in line with our plans to deleverage the Balance Sheet via monetization of receivables program of up to c.EGP5 billion, which started during 2017”.

Commenting on the bond issue, Ayman El Sawy, Managing Director of Sarwa Promotion & Underwriting, said “We are pleased to successfully close the third securitization bond for Palm Hills Developments issued as part of the agreed securitization program. In total to date, we have issued bonds for gross receivables of EGP1.6 billion out of the c.EGP5 billion program. We look forward to continuing the program with subsequent issues.”