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Abu Dhabi caps commercial property loans for UAE nationals at Dh70m
The Abu Dhabi government has put a ceiling of Dh70 million on loans at easy terms that it provides to citizens to invest in commercial property.
- By Ahmed A. Elewa, Senior Reporter
- Published: 01:22 February 22, 2008
Abu Dhabi: The Abu Dhabi government has put a ceiling of Dh70 million on loans at easy terms that it provides to citizens to invest in commercial property.
General Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, issued a decree on Wednesday stating that the amount of a commercial property loan a national can obtain should not exceed Dh70 million.
The term 'commercial buildings' refers to the real estate generating commercially feasible returns as opposed to public housing. Nationals in Abu Dhabi have been enjoying loan facilities from the government for years at comfortable terms compared with funding provided by commercial banks.
Order
"The decree sets some order in the government's funding for commercial buildings developed by local investors," Khalfan Al Ka'abi, chairman of the construction and development committee at the Abu Dhabi Chamber of Commerce and Industry, told Gulf News.
The decree specifies in detail the role of Abu Dhabi's Department of Treasury in supervising the utilisation of the funds, including service of the loans, in the form of administrative fees varying from one per cent up to the prevailing interest rate set by the UAE Central Bank for Certificates of Deposit, with a maximum limit of five per cent.
UAE nationals in Abu Dhabi can also enjoy significant discounts in cases of early settlement of loans acquired to fund commercial buildings, ranging from 15 per cent if the outstanding balance exceeds 50 per cent of the loan, to four per cent if the remainder is less than 10 per cent.
"The decree has great significance as demand for loans to finance commercial buildings is soaring due to the huge gap in the commercial property market in Abu Dhabi, along with robust growth in the emirate, which is attracting more and more foreign investors and businesses," Al Ka'abi said.
The decree also replaces the Department of Social Services and Commercial Buildings by the Abu Dhabi Department of Treasury, which is now in charge of financing commercial buildings in the emirate.
"The Department of Treasury is transferring all the buildings it manages to Abu Dhabi Commercial Bank [ADCB], as a vast majority of the buildings will be delivered by July 1. New applications for loans are now being considered by the Financing Committee within the department," a source at the Department of Treasury told Gulf News.
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