Around 20% of property investors with Abu Dhabi based Hydra Properties are struggling to meet payments on its flagship development, the company has admitted.
The property company has been dogged by complaints from investors that its $545 million Hydra Village project is well behind schedule and prices increases have been imposed without consultation.
They are also furious that those who were struggling to meet payments were sent letters threatening them with legal action.
It has responded by offering to re-schedule payments for some investors but has until now denied that there was a serious problems with defaulters.
But now it has confirmed a large number are having difficulties making payments. A fifth of unit sales money on Hydra Properties’ projects is overdue from struggling investors, deputy commercial director Matar Al Shamisi said.
Other developers have also admitted that investors are struggling. Two months ago Dubai Pearl admitted up to 30% of investors on the $4.1 billion project had rescheduled payments because of fears of defaulting.
Hydra is now reassessing some of its projects in light of the global economic crisis. Company bosses have decided that if a project is only 10% sold they are unlikely to continue with it. But it has not yet said which projects might be ditched.
Investors say their confidence has dwindled in recent months. ‘Hydra Village was originally supposed to be finished this year but there are only a few show villas completed. I would personally rather have a refund,’ said one investor.
Others are happy to have their investment payments re-scheduled. Graeme Perry, deputy chairman of an action group Hydra Investors Committee said that a lot of people are holding back because of changes to their contracts.
He explained that Hydra agreed to make some changes such as allowing investors to delay future payments until their apartment or villa is delivered and making late payment clauses less strict. But they are not yet happy with the wording of the new contracts. ‘Nobody is ready to give more money until there is more assurance,’ he added.
