From The National 21 May 09
Abu Dhabi Commercial Bank (ADCB) is no longer providing mortgages to homebuyers in Hydra Village, a project by Hydra Properties, which is based in Abu Dhabi.ADCB was the main mortgage provider to the project, which is facing a two-year delay.
"For every developer and project, we have a pre-decided limit on the amount of exposure we take on," said Arup Mukhopadhyay, the head of retail banking at ADCB.
"It is a case of not putting our eggs in one basket. Hydra has reached that limit, and we will not take on any new mortgage cases."
One investor said the bank had been reluctant to lend to the project since Hydra increased the price of some villas after changing the masterplan, which is why the project's completion date has been pushed back until late 2011.
The rise came as a result of villa sizes being increased, while homes that have been made smaller have been reduced in price.
"The bank said it wouldn't finance the additional charge slapped on the project," said the investor. "Most people got their mortgages through ADCB."
Sulaiman al Fahim, the chief executive of Hydra Properties, sought to reassure investors in the project yesterday following growing concerns that their homes will not be built.Mr al Fahim and his commercial director, Ahmed Khalil, met buyers to try to resolve some of the disputes that have centred on delays, payments and prices rises.
"There is no doubt that we are building the homes," Mr al Fahim said. "We all have to report to the Abu Dhabi Government and so we have to deliver what we promised, otherwise we'd be in trouble."
The masterplan was changed, he said, to "make the project better". The outcome of the meeting was fairly positive, according Karl Howard, the co-chairman of the Hydra Village Investors Group.
"They took things on board and we were happy to meet Mr al Fahim," he said. "At the end of the day, we'd like them to maybe stop payments at around 40 per cent, let's see some progress and then let's try and tie it there on to some sort of progress benchmark."
Defaulting customers have received emails and calls in recent weeks saying their contracts will be cancelled and all deposits kept by the developer unless outstanding dues are settled.