Change in Investment Strategies

After the sudden change in the law regarding the acquisition of real estate of foreigners in Turkey on June 15th, 2008 and the increasing negative effects of the global crisis on the Turkish real estate market, problems only kept accelerating for foreign investors interested in this real estate market.

An article published on Apartment Turkey blog analyzes the strategy change some funds had to undertake. The switch to a holding strategy from adding value by constuction and flipping the properties in a few years of time seems to be no more feasible due to difficulties in selling the properties at premium prices.

It is a similar situation to what local investors fell into as soon as the number of transactions in the market have dropped and pressure on prices started to be felt. Investors who have chosen the suburbs of Istanbul due to the development potential they saw have run into even more problems.

According to this and similar articles, our assumption is that investors will try to hold until the market recovers from its current situation and these investors will try to reach their targeted IRR's by collecting rent for their portfolios. It seems to be the most rational decision for both investment funds and also local developers active in the Istanbul market. It is probably the same situation for many European cities.

Serviced Apartments Istanbul

There is a visible increase in the number of serviced apartments in Istanbul over the past few years. Turyap added a new serviced apartment property in Besiktas to their portfolio of 3T residences.

Several individual entrepreneurs are also either renting or acquiring properties with multiple units to rent out to prospective visitors planning to visit Istanbul and seeking furnished opportunities.

Serviced apartments Istanbul is also a site dedicated to providing information about the serviced apartment properties in Istanbul and provides location, amenities and other specific information about new developments.

Serviced apartments, considering the expansion in number of offerings in the market, will soon be a good and cheaper alternative to hotels. These types of properties are cheaper for medium term stays due to less overhead costs involved and also provide more personal space than hotels.

However, a chain of these type of apartments witha strong brand name is still non-existant in the market. There is a great chance for a developer and manager to enter the market, create their brand and pioneer the domestic market.

We will keep providing more information about the property managers and new developments in Istanbul.

Noa Property Management

A foreign funded developer that renovates luxury residences in Beyoglu area is Galata AS. Noa, the property management arm of the fund, markets and manages these uniques residences in Istanbul.

The fund is investing specifically in the Beyoglu area with a focus on creating luxury apartments for young professionals and foreigners who choose to live in the city center.

The notable buildings renovated by Galata AS include, but is not limited to, Tatar Beyi, Ali Hoca, Luleci Hendek, Serdar-i Ekrem and Faik Pasa. Noa also has a gym in their property on Ali Hoca Araligi which can be accessed for free or for a discounted fee by the tenants living on Noa properties. Pilates and yoga classes are some of those offered in the Noa Gym other than regular training opportunities.

Noa's apartments are worth a look if you are planning to stay in Istanbul for medium to long term and would like to live in the city center where you can easily access various cultural centers, art galeries, cafes, bars and restaurants within minutes.