Payment breaks for Hydra investors

Investors in Hydra Village, a residential project developed by Hydra Properties on the outskirts of Abu Dhabi, have been given a break in payments to give them more time to raise money and limit defaults. Investors who have paid 50 per cent or more will have until the middle of next year to resume their instalments, while penalties for late-paying customers who have invested less will be waived. The move comes after a long­running dispute between the developer and its customers over construction delays, payments, price rises and contract changes, and is the first sign that investor revolts can be successful. In recent weeks, hundreds of investors received e-mails and calls saying their contracts would be cancelled and all deposits kept by the developer unless outstanding dues were settled. "Legal notices are our final resort but we're now trying to support our customers who are not able to continue with their payments in innovative ways," said Ahmed Khalil, the commercial director at Hydra Properties. Ali bin Sulayem, a member of the board at Royal Group, the company that owns Hydra, sought to reassure investors that Hydra Village would be built despite a delay of more than two years. The Dh2 billion (US$545 million) project was launched in 2006 and was due to be completed this year. It will now be delivered in phases through to the end of 2011. "We are going complete our project," Mr bin Sulayem said. "There is no reason to fear that we are not doing this, but we can understand the economical situation that is keeping people from feeling they are in a good position." Karl Howard, one of 350 members of the Hydra Investors Group, said the company had told investors changes were being made gain to the contract. Clauses in the current contract stipulate that people will not be entitled to a full refund if their home is not finished within six months of the deadline, and the company will not be responsible for delays caused by an economic crisis. The contract also allows Hydra to keep 50 per cent of the total value of properties if an investor defaults, as opposed to 20 per cent in the previous contract. "Whatever changes they announce, great, but let's see these changes happen," said Mr Howard. "Let's see them modify the contract and build something. They've made announcements in the press before and have not delivered." Meanwhile, Sulaiman al Fahim, the chief executive of Hydra who flies to the UK today to finalise a deal to buy Portsmouth Football Club, said most of the customers complaining were those who had been hit badly by the financial crisis. Mr al Fahim said the company had no intention of buying back any properties from customers who defaulted. "We sit down with all our investors and try to solve their problems," he said. agiuffrida@thenational.ae