Sama Dubai gets back at Zorlu in Istanbul property tender
Posted by meb at March 22nd, 2007
Sama Dubai Istanbul Real Estate, a unit of Dubai Holding, won an auction for a 46,241 square meter prime area of real estate in one of Istanbul’s booming business districts, Levent, owned by the Istanbul Transportation Authority (İETT) with the highest bid of YTL 980 million ($601.5 million) in a televised tender.
The second highest bid of YTL 707 million was made by the Zorlu Group for the land that is better known as the “İETT Garage.”
Sama Dubai will pay YTL 1.156 billion for the land with 18 percent value added tax (VAT).
The auction took place at an annex of the Istanbul Metropolitan Municipality Headquarters, at the Youth and Sports Directorate conference room. The auction started with the highest bid of YTL 840 million from Sama Dubai, converted to U.S. dollars with the exchange rate of the Turkişsh Central Bank, equaling to $606 million.
The joint venture of Fiba Real Estate Development and Nurol Holding withdrew from the auction. Two last bidders in the tender were Sama Dubai and Zorlu. When Sama Dubai submitted its offer of $705 million, Zorlu withdrew from the tender.
Sama Dubai accepted the request from Istanbul Mayor Kadir Topbaş to round off the figure that was corresponding to YTL 977 million to YTL 980 million.
The auction was seen as the final round of the competition between the Zorlu Group and Sama Dubai where the latter had lost another auction to its rival a few weeks ago. Zorlu Group bought another precious plot of land in Istanbul, owned by State Highways Authority for $800 million.
Sama Dubai Istanbul Real Estate, owned by Dubai crown Prince Sheikh Al-Maktum, is the international real estate investment and development arm of Dubai Holding. Sama Dubai will pay the price in cash and is entitle to build a building as tall as it wants on the 46,241 square meters of land.
Out of the 19 companies that collected documentation of terms for the tender, 12 of them did not participate. Eren Talu Architecture, Osmanlı Yapı 4 İnşaat, Pera Real Estate, Soyak Yapı, Emaar Real Estate, Yapı Merkezi, Garanti Real Estate, Afken Real Estate, Anadolu Shipping, Tahincioğlu Real Estate, İnanlar Construction and Demtaş Construction did not submit any offers.
Participating firms in the auction were Fiba Real Estate-Nurol joint venture, Zorlu Real Estate, Biskon Yapı, Limak İnşaat, Sama Dubai Istanbul Real Estate, Toray Construction and Taşyapı Construction.
In the first round of closed envelope offers, the offers were as follows: Toray YTL 401.5 million, Sama Dubai YTL 840 million, Biskon YTL 440 million, Zorlu YTL 707 million YTL, Taşyapı YTL 400 million, Limak YTL 310 million and Nurol-Fiba YTL 505.5 million. With these results, Toray, Biskon, Taşyapı and Limak were eliminated.
In the open auction with the highest three bidders, offers were taken with U.S. dollar currency figures. The auction manager Pektaş clarified that the sale was going to be made in YTL currency, but for convenience offers would be taken in U.S. dollars in this section of the auction.
Nurol-Fiba withdrew at the beginning of this round without submitting any offers. Then a tough competition began between Zorlu and Sama Dubai, similar to the Highway Authority’s land sale. The offers excluding VAT started with Zorlu’s $607 million and went up by $1 million for 15 rounds to reach $637 million.
In the 16th round, Zorlu increased the bid by $3 million and offered $640 million. Sama Dubai answered with a $1 million increase. On the 19th round, owner of Zorlu Group Ahmet Nazif Zorlu increased the bid by $5 million and made the offer $650 million. When the 22nd round was finished, Zorlu was short of breath and asked his executives to continue.
Increases of $1 million continued until the 33rd round when Sama Dubai raised the offer to $689 million, Zorlu asked for a break. In the 35th round, Zorlu offered $701 million and Sama Dubai answered with $705 million. Zorlu congratulated his opponent and withdrew.
One of the attractions of the İETT garage land is that it is exempt from the restrictions imposed on constructions by legislation dealing with protecting the Bosporus or cultural and natural assets laws.
The land in question was first publicized by the Dubai Towers project where Dubai International Properties, a Dubai Holding subsidiary, and the Istanbul Metropolitan Municipality unveiled plans to build a $500 million multi-use tower complex. Protests to the deal between the Istanbul Municipality and Dubai capital later resulted in an official sale auction for the land.
Chairman of the Ankara Chamber of Commerce (ATO) Sinan Aygün pointed out how right it was to protest the deal at the time. Aygün said their protests made the municipality win YTL 1.156 billion more.
source: Turkish daily News
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