Palm Hills Developments announced on March 24 that its subsidiary, Arkan Palm for Real Estate Investment Company, has signed a co-development deal with the New Urban Communities Authority (NUCA) to develop a mixed-use innovative urban project in Sheikh Zayed, west Cairo, on a revenue sharing basis, Invest-Gate reports.
Spreading over 205 acres, and overlooking 26th of July Axis, the new project is set to comprise a number of high-rise multi-tenant buildings and standalone units, as well as, commercial facilities, including medical, administrative, hospitality, and recreational spaces, according to a recently released statement.
Under the deal, NUCA is entitled to generate annual revenue from the project of EGP 10 bn over 12 years, in addition to EGP 100 mn once the contract is officially signed, with a total value of EGP 2.5 bn at 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 EGP 13 bn, equivalent to a net present value of EGP 3.5 bn (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 the built-up area of 95,500 square meters (33,000 square meters residential and 62,500 square meters of commercial space),” read the statement.
According to the statement, Badr El-Din Real Estate Development Company, the majority shareholder of Arkan – which Palm Hills owns 40% stake, will be responsible for all operating and financing activities, construction, development, and marketing of commercial units.
Palm Hills will oversee all sales and marketing activities of residential units, while NUCA will only offer the land plot, along with all external project infrastructure, the statement added.
Meanwhile, Palm Hills earlier revealed on March 24 its intentions to develop a new project across 100 or 200 acres in New Mansoura city and is currently preparing the project’s feasibility studies.
Additionally, Tarek Elghamrawy, real estate portfolio director at the company, told Invest-Gate that Palm Hills is planning to sign partnership agreements with a private company in the coming period to manage some of the service projects within Badya project in west Cairo – a co-development with the state.
