Sumou Real Estate signs 3 residential agreements in Khobar Downtown
Sumou Real Estate signed 3 agreements with Saudi Downtown Company to develop and sell residential projects in Al Khobar, covering 28,292 and about 4,827 sq m.
Sumou Real Estate Company signed three agreements with Saudi Downtown Company, wholly owned by the Public Investment Fund, to develop, build, market and sell residential projects in the area, according to Argaam.
The agreements cover plots of 28,292 square metres and others of about 4,827 square metres inside Khobar Downtown, with a development period of 48 months for each agreement.
Under the agreements, Sumou Real Estate receives 6.5% of development costs, 2% of sales and 32% of net profit.
The three agreements define the division of roles between Sumou Real Estate and Saudi Downtown Company in developing and selling the residential units, a step indicating the project's move from launch to implementation.
What do these terms mean?
Development costs: The total expenses borne by the developer to turn land into a ready project, including construction, infrastructure and fees.
Net profit: What remains of revenue after deducting costs and expenses, divided among the parties according to the agreement.
Development agreement: A contract that sets out the responsibilities of the landowner and the developer in carrying out the project, its duration and how returns are distributed.
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