Troubled Hydra Properties project concessions welcomed

Property investors at a flagship Abu Dhabi real estate development have declared that concessions aimed at calming their fury over the pace of construction and late payment penalties do not go far enough.

After a series of meetings, including one in which angry investors were asked to leave the developers offices, Hydra Properties, agreed to scrap late payments charges on its developments and delay some down payments until early 2010.

But Paul Grant, chairman of the Hydra Properties Investor Group Commitee, which has more than 300 members, said there are still issues over the building schedule that need to be addressed.

Although Hydra has said that the Hydra Village project, which was due to be completed this year, will now be completed by 2011 the investors want payment schedules to be linked to construction milestones.

Ali Bin Sulayem, a board member of The Royal Group, the parent company that owns Hydra, personally tried to reassure investors that the project would go ahead on schedule. 'We are going forward to complete our projects and there is no reason to fear that we won't do that. We are feeling the economic situation but Abu Dhabi is strong,' he said.

He ruled out the prospect of Hydra Properties buying back units from customers.

'We have no plan to buy back properties. Our prices are more than 10 per cent below the market price,' he said.

He added that Hydra Properties had a detailed construction progress plan for the Hydra Village project as part of the company's commitment to investors.

But there is also concern about how investors will get finance to carry on. Abu Dhabi Commercial Bank has stopped lending on the project. Home loan Reem Finance said it would continue to offer mortgages on Hydra Village but would look at individuals on a case by case basis and investors would have to demonstrate they have the means to pay.