Turkish developers are buoyed by Arabian Gulf investors’ demand for multimillion-dollar property investment.
A new law has proved to be the turning point for foreign investment in Turkish real estate. In May last year, the reciprocity law allowed residents of 183 countries to buy property in the country in all areas except military zones. Earlier, buyers had been restricted by nationality.
At least one Turkish developer is looking to net US$2 billion worth of property deal at Cityscape Global in Dubai as Gulf interest in all things Turkish soars.
“We have had inquiries of more than US$1 billion only in the Istanbul International Financial Center from Dubai [investors],” said Halil Ibrahim Demirhan, vice chairman at Agaoglu Group of Companies in Istanbul, on the first day of the event. “And around $300 million in the same project from Abu Dhabi.”
Agaoglu is one of the 30 Turkish exhibitors at the Cityscape Global show in Dubai this year.
A property consultancy from Istanbul, Projebeyaz International, is at the show to promote 23 projects from Turkey, including Kempinski Residences Astoria in Sisli and Trump Towers and Macka Residences in Istanbul.
“We expect to close a deal for 60 units worth $15m in one of the projects with a Saudi buyer,” said Tolga Han, vice president of Projebeyaz International, on the second day of the event. “Overall, we can have deals worth around $20m.”
At Cityscape, almost 90 per cent of the potential buyers are individuals. A majority of these are from the UAE, but it is Saudi buyers who tend to invest more in a given project, Mr Han said.
Construction on Agaoglu’s project at the Istanbul International Financial Center started six months ago. In the mixed-use facility, which is to have office, residential, retail, conference, hotel and park space, the Agaoglu Group is developing 3.2 million square metres. The facility is expected to house the governing bodies of the Turkish financial market as well as state-owned and private banks. Handover is expected to begin in 2016.
Overall, about 40 per cent of the buyers in Agaoglu’s continuing projects are from Saudi Arabia, and are followed by those from Kuwait, Qatar and the UAE. The buyers from the Emirates comprise a quarter of all investors for the company.
Of these, more than 70 per cent lease out property as a long-term investment, said Levant Kutulu, deputy general manager of the Agaoglu Group.
It was reported in April that the developer had sold 469 properties, or 10 per cent of all the properties in its flagship mixed-use Maslak 1453 project in Istanbul, to a Saudi businessman for $190.7m.