BBJ: Cordia takes HUF 16.3 bln loans for residential projects
Futureal Groupʼs residential developer Cordia has announced the conclusion of loans worth HUF 16.3 billion with OTP Bank and Takarékbank, for the financing of five Budapest residential projects, the company told the Budapest Business Journal.
The loans from Takarékbank will be used to finance two Budapest projects. Cordia was given a HUF 5,4 bln loan to develop Grand Corvin I, a 194-apartment development on the last plot of the international award-winning Corvin Promenade. A smaller loan of HUF 3.1 bln was provided to finance the GrandʼOr project with its 107 apartments in Nagydiófa utca (District VII.) The press release says that about 70% of Grand Corvinʼs apartments and 67% of GrandʼOrʼs homes are already sold.
The agreement with OTP covers the 275-apartment Marina Garden project in District XIII, and two building complexes located in District XIʼs Sasad Resort residential park. The total amount of financing for the projects amounts to HUF 7.7 bln.
Cordia originally bought the empty plots of Sasad Resort in 2016, and is set to build living places for 850 people in six stages up to 2021. The total value of the development is around HUF 40 bln. In case of Sasad Resort Hills, 89% of the apartments have been sold, while the ratio stands at 95% in the case of Sasad Resort Sun. Marina Garden is only 1% away from being fully sold out.
“Many believe the misconception that it is beneficial for the customers if a development is realized without financing from a bank, only using the money paid by customers, and the funds of the developer,” says Cordia CEO Tibor Földi.
“In reality, the opposite is true, as in the case of developments without the involvement of banks, the customers may have to run for their already paid money, if an unexpected issue surfaces, bringing the development to a halt. Contrastingly, in the case of bank financing, the institution handles customer payments in a separate account, and also implements a strict control to make sure that bank resources are only used for expenses arising during the construction.”