Bloom Properties, a subsidiary of the Abu Dhabi’s National Holding, has slowed down its plans to build 40,000 homes in Iraq because of the worsening conflict in the country, said a report.

The company said it had already completed all design work and won the necessary approvals to build the homes in the holy city of Karbala, reported The National.

In March 2013, at a ceremony attended by then Iraqi prime minister Nouri Al Maliki, Bloom signed a contract with the Iraqi authorities to start work on developing the Shores of Karbala housing project.

The development is planned to be divided into four districts and includes hotels, offices, markets, clinics, schools and mosques, said the report.

That was in 2013 when the Iraqi government was offering generous incentives to property developers to come and build much-needed housing.

But just more than a year after the agreement was signed, ISIL fighters began a major offensive in northern Iraq, capturing cities including Mosul and Tikrit.

“We are still in co-ordination with the local government in Iraq on slowing the project down,” Imad Mroueh, the director of construction at Bloom, was quoted as saying in the report.

“We will not move before we are making sure that the [Karbala] project is safe and the area is safe. The area is safe overall but the overall situation in Iraq, you see how it is, so we have decided to postpone actual construction,” he added.