Al Khobar, Saudi Arabia - Sumou Real Estate Company will develop, build, market and sell mid-rise residential buildings on a 28,292 sq m plot south of the Boulevard in Downtown Al Khobar, under an agreement with Saudi Downtown Company (SDC).
SDC is wholly owned by Saudi Arabia’s Public Investment Fund (PIF). It was set up in 2022, chiefly to create modern mixed-use downtowns and commercial destinations in 12 Saudi cities, and also to lift local economies, add to non-oil GDP and improve quality of life.
The land is SDC’s contribution to the partnership. Sumou, which is listed in Saudi Arabia, will put in part of the investment and pay for the rest of the development from off-plan sales proceeds, the company said in its stock exchange filing.
Its role covers development, construction, marketing and sales over a 48-month term, counted from the date the agreement takes effect.
The developer expects the scheme to have a positive effect on its financial results once the agreement is in force and work starts.
The south Boulevard plot is one of three 48-month agreements Sumou signed with SDC for housing in the downtown, Argaam reported. The second is for mid-rise housing on 28,346 sq m on the Boulevard’s northern side, and the third for a residential high-rise on a site of 4,827 sq m, the area given in Sumou’s filing for the tower.
Sumou is developer, contractor and marketer on all three. In return it earns 6.5% of total development costs as a development management fee and 2% of total sales for marketing and selling the units, plus 32% of the net profit on each project.
SDC welcomed the tie-up and said it is studying a real estate fund with Sumou that would build five- and four-star hotels, as well as serviced hotel apartments, inside Downtown Al Khobar.
Prince Saud bin Naif bin Abdulaziz, Governor of the Eastern Province, launched the waterfront downtown on 1 November. It spans more than 829,000 sq m and is planned to hold over 4,000 residential units, more than 500 hotel rooms and over 40,000 sq m of office space.
The Al Khobar deal comes six months after Sumou’s agreement with Saudi Airlines Real Estate Development in Jeddah.
Across its target cities, SDC said it will concentrate on retail, entertainment, offices, housing and hospitality, on a combined land area of about 10 million sq m.
