Turkey Financial News » Real Estate

Contractors pin hopes on gov’t for repayment of debts in Libya

meb — Thu, 03 Nov 2011 09:11:51 +0000

Turkish contractors, long unable to receive payments for projects in an unstable Libya, woke up Wednesday with renewed hope as Economy Minister Zafer Çağlayan arrived in Tripoli to discuss a solution for the problem with the country’s new rulers, the National Transitional Council (NTC).

Following months of heavy fighting against dictator Muammar Gaddafi, NTC fighters gained full control of Libya last month. Turkish construction companies that have the largest share of Turkish investments in Libya had to suspend projects following the national unrest.

Companies have failed to receive payment for projects — estimated at around $1.5 billion — they had completed prior to the uprising.

Economy Minister Zafer Çağlayan and a group of Turkish construction contractors met with Libya’s National Transitional Council (NTC) to discuss the future of payments of around $1.5 billion during a one-day visit on Monday. Observers said the visit had significant importance considering this is the first face-to-face interchange with the NTC on construction project payments following the council’s recent internationally recognized victory over Gaddafi forces. The minister met with Mustafa Abdul Jalil, head of the NTC on Wednesday in Tripoli. Speaking prior to the meeting, Abdul Jalil said they were grateful for Turkey’s support during the conflict and that Turkish companies will have a significant role in rebuilding the country’s civil war-torn towns. “Turkish companies will reconstruct buildings all across Libya, and some of these will be allocated to Libyan residents. This will be a great example of solidarity for future generations,” he explained. “Turkish companies had undertaken great projects in Libya, and they are famous for their quality work,” the NTC head added. Turkey has lent financial support as well as humanitarian assistance to victims of the Libyan conflict. Both Çağlayan and Abdu Jalil were expected to inform reporters about unpaid debts through the end of the day. The problems, however, may not come to an end as security is another issue that remains to be solved in the North African country.

Some Turkish contractors voiced concerns a possible authority gap in the post-Gaddafi Libya could endanger projects, currently underway at a total value of $15 billion. Turkish businesspeople are now hoping the government will also help secure the business rights they enjoyed during Gaddafi’s rule. But the issue that needs to be addressed first is the current unpaid debts. Evaluating the developments to Today’s Zaman on Wednesday, Association of Turkish Building Material Producers (İMSAD) Chairman Hüseyin Bilmaç said they attached utmost importance to healthy cooperation between Turkish advisors, industrialists and contractors in Libya. “This is crucial in maintaining our leadership in the Libyan construction market. … We are expecting the new government to address the safety concerns in the coming months,” he argued.

Speaking in Ankara on Wednesday, Union of Turkish Construction Industry Employers’ Union (İNTES) President Şükrü Koçoğlu said they “have to find an addressee with whom to discuss the future of Turkish projects in the country.”
source: todays zaman

Turkey should renew 8 million houses in 20 years

meb — Thu, 03 Nov 2011 09:02:22 +0000

The number of buildings needing to be renewed in Turkey over the next two decades is estimated to be 8 million, according to a chief construction sector representative.

“The renovation of 8 million dwellings over the next 20 years will generate an annual value of 28 billion Turkish Liras for the Turkish economy and the employment of 1 million people,” Tahir Tellioğlu, chairman of the Construction Contractors Federation (TİM-FED), said in a recent interview.
The country’s annual construction capacity is around 400,000 buildings, according to Tellioğlu. “Estimations show there is a total of about 19 million buildings in Turkey, of which 50 to 60 percent are unsoundly built. They must be transformed,” he said, adding that if the construction capacity was doubled, the country would be able to renovate 4 million dwellings per decade.

“Twelve years have passed [since the 1999 Gölcük earthquake] and no building has been renovated. Had we repaired at least 40,000 houses a year, about 500,000 houses would be [soundly restored] today,” Tellioğlu said.

The average cost for the renovation of a building was about 70,000 liras, he said, adding that renovating 400,000 dwellings would generate 28 billion liras yearly.

Meanwhile, Chairman of the Istanbul Developers Association (İNDER) Nazmi Durbakayım said the cost to renovate 5 million 100-square-meter houses would be 425 billion liras. “If [all renovations are] realized within 10 years, this would generate 42.4 billion liras annually, which is about one-third of Turkey’s gross domestic product in 2010.”

The work would also boost suppliers for the construction sector, such as iron and cement, Durbakayım said. “Thus, we can easily forecast that Turkey may become a G-7 country due to the chain reaction in construction,” he said.

Istanbul’s traffic and parking problems could also be solved during the urban renewal in the framework of the old houses’ renovation, according to the chair of Turkey’s Ready-mixed Concrete Association, Ayhan Güleryüz.

Discussions on illegally and unsoundly constructed buildings heated up as Prime Minister Recep Tayyip Erdoğan said recently they would demolish all illegally built and unsound buildings, although this could bear a heavy cost for the ruling Justice and Development Party (AKP’s) popular support.
source: hurriyet daily news

Foreigners pass up on home purchases in Turkey due to extraordinary bureaucracy

meb — Sun, 19 Jul 2009 13:36:36 +0000

The process involved in sale of homes to foreigners in Turkey is still full of problems for all sides. Various bureaucratic barriers and security investigations that take a long time are turning out to be quite expensive for Turkey in the end.

In Antalya alone, the spot in Turkey that sees the most real estate sold to foreigners, there are 2.5 billion euros of sales that are blocked annually for various reasons. The fact that permission often takes six months to come from the Aegean Army Command headquarters means that many foreigners simply give up on their plans to buy homes in the end. According to information provided by sector representatives, around seven out of 10 sales wind up being cancelled due to these factors. It appears that the wounds have still not healed from the experience of having the Turkish Constitutional Court render decisions on two different occasions to cancel permission for the sales of homes to foreigners. Now real estate agents are calling for the bureaucratic barriers blocking the sales of homes to foreigners in Turkey to be finally lifted, with hopes that this will help enliven the housing sales sector.

The president of the Antalya Chamber of Real Estate Agents, Şeref Sağlam, is calling for the process of home sales to foreigners to be cut back to 15 days, as it is in Spain. “Those who want to invest in real estate are fully within their rights. But bureaucracy is preventing this from happening,” Sağlam said. The general manager of the Ekşioğlu Construction Group, Atilla Aksoy, sums up the handicaps being experienced on this matter in Turkey: “Never mind six months, there are some foreigners who don’t get deeds for one year. People come and look at the properties. They are maybe even planning on buying three or four villas. But when they find out it will take up to six months to get the deeds, they pass up on their plans.”

The head of the Antalya Chamber of Trade and Industry’s (ATSO) Construction Commission, Faruk Sayın, says that putting more authority into the hands of fewer officials would increase the sales of homes to foreigners. Noting that when foreigners buy homes in Turkey, it also works to bring about a steady flow of tourism, Sayın suggests this solution for security worries: “The properties that are not open to being sold to foreigners due to their being military security zones should be explained to the Regional Bureau of Deeds.”

According to data from the General Directorate of Deeds, there are a total of 51,516,170 square meters of real estate belonging to 86,273 foreigners in Turkey. The bulk of real estate in Turkey is bought by Germans, British and Greeks. The most popular places for these real estate purchases are in Muğla and Antalya — coastline spots. Antalya is at the top of the list, with 22,903 homes sold to foreigners there. As for Muğla, there are 10,557 homes belonging to foreigners there and in Istanbul, 8,811.

In sales of homes to foreigners, the sale of a home in the same building to a foreigner does not establish a precedent for a second sale of a home in the same building. In other words, a foreigner buying a second home in a building must go through the same long procedure the second time around. Aksoy notes that this situation makes no sense and calls for this kind of sale to establish a precedent for the foreigner involved.

The general manager of Model Invest, Halil Ocaklı, says that when homes are being sold to foreigners, the necessary permission should be issued at the start of the process. “Firms which are marketing their homes to foreigners should apply for permission at the start of the project, and then we could take these requests to the Aegean Army Command headquarters. They could then examine these requests and issue the necessary permission. Therefore, we will be able to compete with other countries in this matter.”

Thus, it appears that the greatest barriers to the sales of homes to foreigners in Turkey are a number of bureaucratic problems, with some deeds taking as long as six months to be issued, in turn leading to great economic losses for Turkey.

The process involved in buying a home as a foreigner means:
Both the seller and buyer must first apply to the deeds bureau
The deeds bureau then writes a letter to the garrison commander
The garrison commander then sends this letter to the Aegean Army headquarters to be inspected for safety
The Aegean Army headquarters then officially queries whether the property in question lies within the garrison’s military region or a historical region
After it has completed its research, the garrison headquarters send its final report to the Aegean Army headquarters
If the sale is approved, the Aegean Army headquarters sends its documents to the garrison headquarters
The garrison headquarters then sends its written permission to the deeds bureau for the sale to go ahead.

The top 5 countries whose citizens buy homes in Turkey

Country No of people No of homes
Germany 18.571 21.887
England 24.829 17.306
Ireland 5.848 4.364
Denmark 5.008 3.933
Netherlands 4.668 3.721

source: Sunday’s Zaman

Tourist hubs see boost in residential sales following government tax incentive

meb — Wed, 15 Apr 2009 01:57:11 +0000

A reduction of the value-added tax (KDV) in the real estate sector, part of government’s efforts to fend off the ongoing global financial crisis, has led to an increase in the sale of residences in Turkey’s prominent tourism destinations.

After experiencing a 70 percent contraction in sales amid global financial turmoil, real estate agents in Alanya and Bodrum said sales had increased by 40 percent in just the last few weeks compared to the period prior to the KDV cut. Upon hearing of the tax break, parties interested in buying property here came from Norway, Denmark, Germany, the Netherlands and Ireland.

Alanya Real Estate Agents Association (ALEKOD) President Kerim Balıktay said the KDV reduction was the perfect “medicine” for the ailing sector. Underlining that they expect to sell some 10,000 residences in the coming months, he said they hope to earn 1 billion euros from the sales.

Bodrum Real Estate Agents Union (BEMDER) President Ömer Yetgin said sales in Bodrum increased by 45 percent following the KDV reduction. “Our sales contracted by around 90 percent, but now there is great interest — especially among foreigners — in the purchase of residences. Some of our colleagues had no chance but to close their real estate agencies amid a terrible financial bottleneck; however, there is a serious recovery in the market, at least for the time being,” he said.

Noting that the lowered KDV had reinvigorated the sector, Fethiye Real Estate Agents Union President Nevzat Tilkici said the price of residences fell by 40 percent compared to previous years. He said they had seen a 50 percent increase in sales, particularly in Side, Datça and Çeşme.

Nevzat Ersoy, the head of contractor Ersoy İnşaat, said their customers predominantly come from Norway, Denmark and the Netherlands. Tourists mainly choose residences by the seaside or with a view of the forest, he said.

Prices of residences in tourism hotspots

In Alanya, Antalya province’s famous tourist center, prices vary between 35,000 euros and 200,000 euros. In some of the most attractive parts of this famous district, a triplex villa with a view of the sea sells for 150,000-400,000 euros.

In Fethiye, know as the “pearl of the Aegean,” residences go for 30,000-100,000 euros, while prices in Bodrum, famous for its natural beauty, hover around 50,000-240,000 euros.
source: Today’s Zaman

Too many homes, just a few buyers in Turkey

meb — Thu, 05 Feb 2009 11:01:22 +0000

The boom in Turkey’s construction industry has gone bust, affected by the global economic crisis, as industry players find themselves with many properties and no buyers.

Thinking that the housing demand they experienced in 2004 and 2005 would continue, many companies operating in the construction industry accelerated their home-building speed. Now the crisis has caught them unprepared, as construction companies have housing in their hands to sell than they can find buyers.

The construction industry has been hit hard by the global economic crisis, said Erhan Boysanoğlu, chairman of Mesa Mesken Inşaat. “We expect the market to be revived by the last quarter of the year, which will hopefully enable us to get rid of our housing stock by the spring of 2010.”

Measures
“Following the 2001 economic crisis that hit Turkey, plenty of new players surfaced in the construction industry. We foresaw that it would eventually be a problem. We have taken the necessary measures. Currently we are not experiencing any troubles,” Boysanoğlu said.

Currently the value of ready-to-sell residences in Mesa İnşaat’s hands totals 200 million Turkish Liras. The residences still under construction by the company are worth 800 million liras.

Ağaoğlu İnşaat’s unsold residences are worth 500 million liras.

“Ağaoğlu currently has 850 residences in stock. The companies that have stock in times of crisis will have a serious advantage when the market comes back to life,” said Ali Ağaoğlu, chairman of Ağaoğlu Holding. “Some one million residences should be constructed to renew the current residence stock. Crises end and these residences will be sold,” he said. “Those who construct in times of crisis guarantee a future profit. We had five projects back in 2001. Construction costs also decline in times of crisis. When the market rekindles you have an advantage,” said Ağaoğlu.

“This month I will start up projects worth a total of $3 billion. I am expecting revenue of $5 to 6 billion,” he said.

Aşçıoğlu İnşaat also has unsold residences in stock, which are worth a total of $150 million.

The oversupply of unsold residences is not a problem just for the private sector. The state-owned Housing Development Administration of Turkey, or TOKİ, which sold 274,000 residences during the past six years, is currently stuck with 19,307 residences in its hands that are ready to be sold. Some 66,000 residences are also under construction.

It has been said that the value of the ready-to-sell residences held in stock has reached 20 billion liras, while the debt of contractors, who often work by obtaining credit, has neared $6.5 billion.

Although the industry’s current situation looks troublesome, the representatives of the construction industry remain hopeful for the future. They believe this crisis will be overcome just like the 2001 economic crisis. From their experience in the 2001 crisis, the sector players believe they will be able to sell the residences in stock rapidly after the global economic crisis draws to an end.

Believing in the fact that they will recover losses as soon as the crisis passes, the construction sector’s players are seeking a little support from the government, just to help them survive the current crisis without grave losses.

Discrepancy
“No one thought about the supply-demand equilibrium. Too many residences were built thinking that the sales would continue the way they were in 2004 and 2005. That has generated an imbalance,” said Erdal Eren, president of the Turkish Contractors Association, or TMB.

“Then the interest in real estate declined and banks’ means to issue loans contracted due to the deepening impact of the global turmoil,” said Eren. “No one is able to predict when things would get better. Therefore, we have explained at a meeting of the Economy Coordination Council that the efforts of the private sector would not be enough to revive the entire construction sector,” he said. “We have said that the revival of the sector plays a major role in reviving the economy. Therefore, we told them that the state should help the sector stand tall,” added Eren. “We are still waiting.”

“The industry should liven up with a reduction in deposit and loan interests. Real estate will continue to be the most dependable investment medium,” said Necati Akyazıcı, chairman of the Canan Yapı.
source: Hurriyet daily news

Construction sector in 2009: Only the fittest will survive

meb — Fri, 02 Jan 2009 23:15:55 +0000

As Turkish construction companies seek ways to stay afloat under the strain of the financial crisis, which continues to batter global markets, the weakest links will not escape elimination in 2009.

Since the most destructive effects of the crisis are hitting the construction sector, Turkish companies are also feeling the heat. Having seen a drop of 4.3 percent in the third quarter of 2008, the sector shrank by 1.1 percent in the first nine-month period of the year. Four years ago no construction company would have imagined such a downfall in the sector. Beginning in 2004, the construction sector entered a new era. Due to economic stability, real estate interest rates fell dramatically and the sector experienced in its heyday. Numerous new mass building projects were introduced, people flocked to the sales offices of construction companies to buy apartments, paying large sums of money. This trend grew, turning big cities into giant construction sites. The breathtaking increase in demand encouraged many companies that had never worked in construction before to enter the construction sector. However, it seems companies that entered the sector without enough capital and experience will have to leave the stage soon.

The first hit came in May 2006, when interest rates reached 2 percent and sales slumped. Problems have mounted since then and reached a peak in 2008. Now, due to fluctuation in the markets, new projects are on the verge of being totally cancelled. Many authorities agree that 2008 was a year of losses for the Turkish construction sector.

Many suggest that the shrinkage in the sector will continue in 2009 because of uncertainty in the markets. Banks are reluctant to extend loans, a situation that will trigger an increase in interest rates. Companies will feel compelled to introduce promotions to attract more customers; however, no significant decline in prices is expected.

It has long been said that a decline in demand would lead some companies to go bankrupt. Many companies said they had difficulties paying their debts. Bekir Cumurcu, president of the Real Estate Investing Partners Association (GYODER), recently said some companies would not be able to survive through the end of 2009 due to the crisis. Additionally, those hoping for a recovery in the market in 2009 may have to wait longer.
source: Today’s Zaman

Dubai ruler buys stake in Turkey’s Damac-report

meb — Fri, 12 Dec 2008 16:13:58 +0000

Dubai’s ruler Sheikh Mohammed bin Rashid al-Maktoum has bought a 40 percent stake in private developer Damac Properties that plans to invest $6 billion in a Turkish coastal project, Vatan daily reported on Friday.

The project includes construction of hotels, houses, shopping malls and marinas on the southwest coast of Turkey, which attracts millions of tourists every summer.

“Dubai’s Sheikh al-Maktoum will gain a right in the project by buying 40 percent in the group,” said Cenk Fis Unlucerci, an official at Debba, a subsidiary of Damac Properties in Turkey, was quoted as telling Vatan newspaper.

Damac Properties has purchased land worth $500 million in the region, the newspaper said.

The first stage of the project is planned to start next year and finish in 2011.

In 2007 Dubai Holding’s property unit Sama Dubai made a winning bid of $705 million in a tender competition for key land in Istanbul’s thriving business centre, but the project has been delayed by a court challenge.
source: Hurriyet daily news

Investing in Turkish property made easy

meb — Mon, 17 Nov 2008 09:18:35 +0000

The government is taking steps to make it easier for the citizens of Gulf states and Turkic republics to buy real estate in Turkey by taking into consideration whether or not Turkish citizens are allowed to invest in real estate in those countries.

After making it possible for Turkish citizens abroad to bring money back into Turkey under the Varlık Barışı tax regulation, the government is now looking for ways to make it easier for citizens of the Gulf states and Turkic republics to buy real estate in Turkey.

The Varlık Barışı code made it easier for Turkish citizens abroad to invest in Turkish assets by lowering and under certain circumstances eliminating the heavy taxes levied on foreign holdings coming into the country.

Taking action
The first step the government is taking to make it easier for the citizens of the Gulf States and Turkic republics to buy real estate in Turkey is taking into consideration the reciprocity principle. This principle is based on the idea that the ability to purchase real estate is a reciprocal right, whereby, if a Turkish citizen can buy real estate in the country in question, then the citizen of that country may purchase real estate in Turkey.

Citizens in oil rich countries in the Arabian Peninsula, such as Saudi Arabia, the United Arab Emirates, Qatar and Kuwait, as well as citizens from the Turkic republics in Central Asia, have been lining up to buy real estate in Turkey. Their efforts have been thwarted thus far because there has not been an agreement on the reciprocity principle.

The demand in real estate from these parts of the world has brought to attention the need to reconsider the agreements in place. The Ministry of Foreign Affairs is updating the running list of reciprocity agreements in an effort to bring the practice in line with the current circumstances. After the Ministry of Foreign Affairs updates the old list and produces a new one, the legal framework will be renewed to better reflect the updated reciprocity list. The relevant ministries will then sign off on the new legal framework making it easier for citizens of the Gulf States and Turkic republics to buy real estate in Turkey.

Exceptions to the rule that citizens of the Gulf States and Turkic republics cannot buy real estate have been made but at the highest echelons of government. For example, because there was no reciprocity agreement when King Abdullah bin Abdülaziz of Saudi Arabia wanted to buy 57 acres of land in Sevda Tepesi overlooking the Bosphorus, the Turkish Cabinet had to make a special provision for it.

The Ministry of Foreign Affairs has taken the first step in making it easier for foreigners to own property in Turkey by taking the reciprocity agreements under review, said Land Registry Agency vice president Şinasi Bayraktar noting the complexities of figuring out the polices in place in different countries. “The issue of the reciprocity principle is one that requires expertise and detail oriented attention,” said Bayraktar. The complexity of determining whether relations between two countries obey the reciprocity principle can lead to confusion. “Situations arise where in some countries it looks like there is reciprocity when there is not and in others it looks like there is not but in reality there is,” said Bayraktar. There are times, according to Bayraktar, when the official channels are not sufficient to discover whether or not there is reciprocity in land ownership. “Sometimes it is not healthy to hash out the details of this issue with just embassies,” noted Bayraktar.

“We are going to take up this issue once again. The Ministry of Foreign Affairs is already taking it under consideration,” said Bayraktar. “There is a lot of demand from the Gulf states and the Turkic republics,” he said.
source: Hurriyet daily news

Trade gap narrows unexpectedly

meb — Mon, 03 Nov 2008 10:41:17 +0000

Turkey’s trade deficit shrank unexpectedly in September as a weaker Turkish lira, or YTL, helped boost exports to neighboring countries and reduce demand for imported goods.

The gap narrowed to $5 billion from $5.4 billion a year earlier, Turkish Statistical Institute, or TÜİK, in Ankara said on its Web site late Friday. The deficit, which narrowed for the first time since April 2007, was forecast at $5.8 billion, according to the median estimate of 12 economists surveyed by Bloomberg.

“Our exports are growing and at the same time capital goods and consumption imports are losing momentum,” said Ozan Gazitürk, an economist at Şekerbank in Istanbul. “Turkish companies have less tendency to invest and buy imports.”

The YTL fell 6.7 percent against the dollar in September, making Turkish exports more competitive in terms of price. Manufacturers are seeking more customers for their goods in markets in the Gulf and Africa at a time when consumer demand is slowing in the European Union, the destination for about two thirds of Turkish exports.

Exports jumped 42 percent to $12.8 billion, TÜİK said, outpacing an increase in imports, which rose 24 percent to $17.9 billion.

Turkey’s economic growth is slowing along with the EU, curbing demand for imported goods. The economy expanded at 1.9 percent in the second quarter, the slowest since the country emerged from a recession six years ago. That trend is expected to continue in the second half, Economy Minister Mehmet Şimşek said yesterday. Turkey’s trade gap has expanded in the past 18 months as oil prices rose to a record and a stronger currency made imports cheaper.
source: Turkish Daily News

IMF Committee visits TOKİ for the first time

meb — Thu, 30 Oct 2008 12:36:01 +0000

Representatives of the International Monetary Fund met with Turkey’s Mass Housing Administration, or TOKİ, for the first time Monday, to find out the challenges faced by Turkey’s housing industry.

The IMF committee, which included Rachel Van Elkan, who will become IMF chief to Turkey, and IMF representative Davide Lombardo, met withTOKİ chief Erdoğan Bayraktar and other TOKİ officers for 1.5 hours.

“Does Turkey confront problems in the financing of the houses?” asked the IMF committee during the meeting. They also wanted to know whether the provision of mass housing could provide a model for other countries.

The IMF committee was informed about the institutional structure and major activities of TOKİ, while TOKİ officers gave a visual presentation on the administration’s areas of operation.

TOKİ has handed over major activities of Emlak Bank other than those involved in the banking sector. Afterwards, legal problems on the bank’s lands located in Ataşehir, Ataköy and Bahçeşehir were settled. TOKİ has received noteworthy amount of revenue from this lands, was the answer given by TOKİ officers concerning the budget and financing of the administration.

In addition, TOKİ has carried out extremely lucrative projects in İzmir’s Mavişehir district, Ankara’s Eryaman district and Istanbul’s Kayabaşı district. On the other hand, they have bought and made use of the idle lands owned by public institutions. The majority of TOKİ’s revenue comes from these sources, TOKİ officers informed the IMF committee.

Moreover, TOKİ never sells these houses at a loss. They earn money from these projects as well, officers said.
source: Turkish Daily News

Crisis presents opportunities for real estate investors

meb — Wed, 29 Oct 2008 11:27:10 +0000

The crisis that started in the United States and has spread globally has started to affect Turkey as well. In these difficult times, shopkeepers and tradesmen are looking to stay afloat, which may mean letting go of some of their real estate holdings.

These conditions provide opportunities for both investors and people who need real estate, commented Retürk Real Estate Board President Aşkın Çınar. “There are a lot of people who sell during a crisis. Anyone who is about to hit bottom sells,” said Çınar.

Çınar, using the expression “crisis equals opportunity,” said now is a good investment time for people looking for real estate because the biggest opportunities take place during a crisis. Real estate prices drop when there is a crisis and there is room for prices in Istanbul to drop even lower, said Çınar. You might never find opportunities like this again.

In real estate, it is easy to sell even when there is not a crisis, as long as the price is below the market value. During a crisis more people are willing to sell at below market value and therefore there will be people looking to buy. In the end this is an opportunity for investors, said Çınar.
source: Turkish daily news

Flat prices soar in Istanbul’s Beyoglu despite crisis

meb — Sat, 25 Oct 2008 13:37:59 +0000

The rent and the prices of the flats in one of Istanbul’s oldest neighborhoods, Beyoglu, continues to rise despite the global financial crisis due to urban renewal plan undertaken in the region, Hurriyet daily reported.

Around 3,500 buildings have been restored and the local municipality has started a rigorous urban renewal plan called the Beautiful Beyoglu Project, the report said.

Restored buildings in Istanbul’s hip Beyoglu neighborhood have broken sales records despite the global crisis, thanks to the area’s historical importance and central location.

This is due, in large part, to the fact that developers have renovated 3,500 of the 7,000 decrepit buildings. These newly restored buildings accommodate studio units, which generally fetch higher rents and have a high resale value.

These renovated buildings, which are located primarily in Istiklal Street and spread throughout Galata, Tarlabasi and Cihangir districts, bring in anywhere between two to four times as much as the initial investment. The number of renovated buildings in Beyoglu increases daily, as both foreign and domestic investors notice the possibilities for profit.

RESTORATION PUSH PRICES UP

The sharp increase in the occupancy rate of renewed buildings is clearly visible, so too is gentrification of the neighborhoods and the inevitable rise in prices, the report also said.

Prices for apartments that range between 150,000 YTL and 200,000 YTL that are not fully developed, can get as high as 500,000 YTL.

In buildings and neighborhoods where there is a view of the sea, prices are comparable to those found in the Bosporus corridor.

Commercial spaces are also getting their share of the real estate boom with rents starting at around YTL 2,500. On Istiklal Street, store rents range from 12,000 YTL to 40,000 YTL, with sales prices varying between 2 million YTL to 5 million YTL. In Cihangir square, prices per square meter start 3,000 YTL.

When Tarlabasi Avenue was widened to ease the traffic problem in 1988 and Istiklal Street became pedestrian only in 1990, the stage was set for the transformation of Beyoglu. The metro line, completed in 2003, and development plans like the French Street renovation that took place in 2004, injected life into Beyoglu.

The municipality is continues its Beautiful Beyoglu Project, which encompasses urban development and renewal projects. “The Project has lead to big changes in the area,” Ahmet Misbah Demircan, Beyoglu mayor told to Hurriyet.

“7,000 buildings have received notices of approval for restoration, repair and renovation projects. 3,500 of these have been completed. The Beautiful Beyoglu Project also encompasses new buildings. For all these new structures the municipality undertook the task of designing the exteriors. So our area has become even more beautiful,” Demircan also said.
source: Hurriyet daily