Hungarian company Ablon, which launched the Sunset Residences real estate complex in Bucharest's Drumul Taberei district, has stopped construction on the project and closed the showroom.

Those who made down payments and paid reservation fees for a home in the project will get their money back.

The owners of the space where Ablon had its showroom for the project have verified the information.

"We had a three-year contract signed with Ablon, but it has been terminated. As far as I understand, they will put the project on hold at least until next spring," said the former footballer Gabriel Balint, who owns the space in downtown Bucharest where the Hungarian company had its showroom.

Ablon representatives on the Romanian market did not wish to provide any comment.

Sunset Residence was launched early this year on a 4.1-hectare plot of land on Timisoara Boulevard, where the construction of ten sixteen-storey blocks of flats was announced, which totalled 1,800 to 2,100 flats. This was the biggest project undertaken in Drumul Taberei, in western Bucharest.

Four blocks were supposed to be built at first, whose completion had been scheduled for 2010.

The land was acquired for 14 million euros at the end of 2006. In order to finance the construction works, the company announced a partnership with BCR. The investment in the entire project had been put at 160-170 million euros, and developers relied on getting 80-90% of it funded by banks, which is very difficult to get nowadays, with the extremely difficult financial conditions in place.

Homes in the project had built surface areas of 42 square metres for studios as well as almost 300 square metres for duplexes.

The average sale price of the homes started at 1,250 euros per square metre built, plus VAT. Ablon is a company founded in Hungary by Israeli businessman Uri Heller and is listed on the AIM market in London. The company, which also operates on the Czech and Polish markets, has a capitalization of 48 million pounds sterling, after its market capitalisation had exceeded 250 million pounds sterling at the beginning of the year.

The company's marketing expenses amounted to 0.9 million euros, mainly because of the start of the campaign for the Sunset Residences project, according to the company's half-year report.

The company continued to buy land this year, too, and acquired a 1,840 square metre plot this summer on the Tepes Voda Street in downtown Bucharest to erect an office building, as well as a 13.3 hectare lot close to the Otopeni Airport, where it intends to develop an office project with an estimated investment value of 280 million euros.

Source: Ziarul Financiar