Sunday, July 11, 2010

Property Investors Turn to Turkey - Promising Real Estate Market

Here is an article in Financial Times about the interest in Europe for buying property in Turkey. The article suggests that the rental yields in Turkey are around 5,48% and this is higher than in comparable markets in Europe.

There is even an example of a development in Beylikduzu that is marketed by Experience International and the property investors are protected by a rental guarantee of 7.5% during the first 2 years. However, the right question should be "what happens after those two years?"

Assuming there is a reasonable supply-demand ratio in a market for both hi-end and low-end properties, the luxury properties usually have lower yields. For example, if there is only a few hi-end developments in a city and there is more demand, the prices will go up and luxury properties will yield better prices than others in a city. However, there is enough of both types of properties in Istanbul. And, as it is the case anywhere else, luxury properties have lower yields.

Yield is one part of the equation where the capital gain is the other important factor. So, the right question here is if you decide to sell this property in Beylikduzu after 2 years, will you be able to sell it for more than you bought? For the same amount, less or more? This depends on how much you paid, if there is demand at the time you try to sell and how quickly you will want to liquidate.

The article mentions an interest rate of 4.05% per annum with a loan to value of 70%. So, if you make an investment where the yield is around 5% and the interest is 4% you make some money out of this. But, what if you can't sell the property for the same price? These rental guarantees are usually built into the selling price giving the developer a higher margin to finance the future payments.

It all comes down to the location and sales price. Beylikduzu is a neighborhood outside of city center of Istanbul which is approximately 30-45 minutes by car. There are a lot of other developments in the area so we will need to know how much stock there will be in a couple of years and how many people wants to live in Beylikduzu.

Also, once the rental guarantee is finished, it may be very difficult to find a property manager to take care of the property and rent it out on behalf of the owner.

Articles like this may intend to show the strength of a city but it is not that easy to go ahead and make a purchase that will be profitable in the long term while providing peace of mind and positive cash flow.

I will suggest investing in the city center of Istanbul where there is always more stable demand and practically no increase in supply since there is nowhere to build new developments at a considerable rate. These properties offer similar yields, better capital gain potential and quicker liquidity.

Take a look at the article, it is an interesting read that suggests the bearish outlook of the Turkish real estate market.

Wednesday, July 7, 2010

Luxury Serviced Apartments Throughout Istanbul - Asian and European Sides

For business travelers coming to Istanbul, there is a wide range of options in Istanbul. There is nice post on the Istanbul Turkey Apartments blog about several luxury serviced apartments options throughout Istanbul. The listed properties include those both on the Asian and European side of Istanbul.

Corporate managers like Manzara are listed on site along with smaller property managers like Manzara Istanbul and I'zaz in Beyoglu.

Noa is also another property manager which is actually the management subsidiary of a development company. They seem to start renting out apartments for daily and weekly basis. This can be a good alternative if you are looking to stay at a central location within close proximity to many restaurants and bars.

The Asian part of Istanbul has been expanding rapidly with many industrial areas attracting foreigners for Short to medium terms. There are several good options listed in the article if you will be staying on the Asian side of Istanbul.

A further post with options on economic accommodation options is set to follow.

Thursday, May 20, 2010

Serviced Apartment Industry in Istanbul

Istanbul Turkey Apartments blog provides some unorganized text taken out of a business plan prepared for investment funds interested in creating a branded serviced apartment chain in Turkey. It is basically about the serviced apartment industy in Istanbul.

The text is interesting in some ways; not only because most of the concepts outlined are specific for Turkey, they can probably be apllied anywhere in the world. Marketing concepts are creative but not specific to Turkey. The data about the competition in the market is deleted along with most other parts of the plan.

The growth timeline is the only part of the business plan that gives an idea of what is possible in the serviced apartment industry in Turkey. Unique selling point is very interesting where it suggests upholding the principles of hygiene, safety and hi-tech equipment.

It is completely true that the serviced apartment industry in Istanbul and Turkey is under-penetrated and presents an early-mover advantage. A good investment and property manager with local experience can work together with foreign investors to develop and manage property investment portfolios with limited downsides and significant profit potential. 60 months is also a very reasonable period not only to create the leading serviced apartments brand in Turkey but also to build enough brand recognition to obtain the highest possible valuation during the exit.

I'd also like to note soem of the several problems with the current competitors making the investment idea a homerun for newcomers;

Most of the competitors in the market suffer from low capitalization and have limited number of units under management. Of those, who have easy access to capital, they choose to remain in the high-end part of the industry which results in focusing on only a small part of the market that are high-income travelers seeking upscale accommodation options.

Some competitors have portfolios that are made up of smaller properties with generally 5 to 8 units in different locations owned by multiple landlords. Targeting a limited type of travellers generally result in property managers to choose a part of the portfolio to focus on and increase the occupancy rates while other landlords suffer from low occupancy rates.

While there are no brands in the market with an established reputation for providing accommodation at multiple key locations and an expected level of services in all premises, there are several companies offering serviced apartments in limited quantities.

I am also confident that the serviced apartment industry in Istanbul and Turkey presents a great potential for foreign investors.

Cheap Apartment for Rent in Center of Istanbul

Falcon Building is a newly renovated 4-storey building in Aynalicesme region of Istanbul. Aynalicesme is

a neighborhood in Beyoglu right across the British Consulate in Galatasaray, on the other side of the Tarlabasi Street and with easy access to public transportation and is only minutes away from Galatasaray Square, Galata tower, Pera and Taksim Square.

Falcon building is designed to accommodate couples as well as up to 2 single guests in individual rooms if requested.
The building consists of 4 1+1 apartments and 2 studios. The commercial part in the entrance was converted into an art exhibition and artist meeting place and it is currently being used by Turkish photographers.

The apartments are currently being rented within a range of 500 - 700 euro per month depending on the length of the stay. Utilities such as electricity and gas are charged separately to tenants expense accounts at the end of each month.

Falcon Building is designed in a minimalist style using very light colors both on the walls and furniture.

If you are traveling to Istanbul and in need of a cheap or reasonable priced and new place to stay in, this is a good option that is worth a look.

Promotion of Art in Living Spaces in Istanbul

CCD, a property manager in Istanbul that focuses on student housing and economic apartments have announced addition of a couple of new properties under their portfolio of furnished apartments and rooms for rent.


The new buildings are mostly located in AynaliCeshme (Beyoglu) and Harbiye (Sisli) region and most of the apartments are designed to accommodate up to 2 guests in 1+1 apartments.

Aynalicesme, in the past months, made the headlines in newspapers like Hurriyet as the upcoming neighborhood for investors and was compared to other neighborhoods like Galata and Chinagir that showed much development in the past decade to become some of the most hip locations in Istanbul. Cihangir and Galata were both broken-down neighborhoods around 10-15 years ago and most buildings in the region were inhabitable. Following the quick restoration of the region, many high-income singles relocated to the area and hip bars, restaurants, boutiques, pizza parlors started popping up.

One interesting aspect of CCD is that the company also promotes art in the region which it sees as an essential way to attract new tenants. The company builds and rents under-priced art studios and galleries as part of their buildings. This, in turn, attracts artists to the area which helps develop the region much quicker than it naturally would.

If interested in staying at a location where art and living is combined, feel free to contact CCD to see availability and pricing informaiton for their properties.

CCD
Address: Kilic Aslan Sokak No:10/1 Beyoglu 34437 Istanbul - Turkey

Tel: 90-212-361-3310
General e-mail: info (at) roomsinistanbul.com

Holiday villas For Sale in Turkey

There is a constant demand for holiday homes and villas for sale in the Mediterranean part of Turkey and a quick Google search can give you clues that the number of properties offered in these regions are quite more than the property stock in Istanbul. Many foreigners have preferred to spend their summers in Turkey by renting a holiday villa and a quite high number of retired Europeans also live in these regions.


Again, a quick search shows that the most popular regions in the south part of Turkey are Marmaris, Datca, Akbuk, Didim, Bodrum, Antalya, Alanya, Kemer, Belek, Kas, Kalkan, Yalikavak, Gumbet, Torba, Cesme and possibly some other locations I failed to mention here.

In this post by a broker, it is possible to see that there is a constant demand from clients for more listings of villas for sale in Turkey from trustworthy developers. This Kalkan Villa, although seems to be sold by the time of this post, seemed to attract a client quickly due to its unique look and possible its reasonable price.

According to the news sources, the prices of holiday houses had fallen dramatically in 2008 and 2009. Now, the prices for these type of properties are possibly more stable. Many developers pushed buyers into purchasing their holiday villas by presenting them as investment tools. But, as an investment, unless I live inside the house as my primary residence, I would never touch a holiday home. These type of properties almost never generate high enough yields.

If retiring or have enough time to spend in your property during the summer, some of these properties offer great advantages. There are different parts of Turkey that are preferred by guests from specific countries. Take a look the listings and if interested, you might find something.

Also, if you use the form to the right, requests are distributed to hundreds of brokers to see who has the ideal property and then one single broker is given your contact info to make his proposal. If searching for a holiday house, a villa or an apartment anywhere in Turkey, you can try the form to the right.

Turkish Real Estate Trends - Residential Sector

Strong fundamentals for residential demand remain intact while short-term demand and supply has been reduced by the lack of liquidity, making distressed residential real estate an attractive investment alternative.

Strong fundamentals for residential demand:
Based on Deutsche Bank’s 2007 forecasts, 5.3 million (3.7 million being households and appr 1.6 million being replacements) of new housing units will be needed between 2007 and 2017. Furthermore, according to the State Planning Agency data, more than 8% of buildings in Turkey are categorized as ‘in ruins’ or inhabitable and only an estimated one-third of all housing units in Turkey have building permits.

Economic circumstances hold up demand in the short-term:
Housing market activity has significantly slowed down in the months following the global crisis, indicating a temporary hold up of demand until the economic picture clears up.

Supply up due to lack of sales and credit facilities:
Many development projects in Turkey are financed through planning and construction phase sales. Accordingly, many new developments have been put on hold when sales saw a sharp decline. High cost of debt and general lack of credit availability has led to offer deep discounts.

The residential market is more stable following the decline in prices by developers willing to go ahead with quick sales instead of holding to the properties. Prices have started showing signs of increases in the last 2 quarters of 2009 and in 2010.

Why Invest in Istanbul Real Estate? Find apartments with high capital gain potential

Why Invest in Istanbul Real Estate? Several different factors had been instrumental in effecting the real estate markets in the U.S . and in Europe and almost all global markets were effected following the economic crisis sparked by the collapse of sub-prime mortgages in the United States. However, several countries had major advantages that resulted in quick recoveries due to strong local demand and having different banking systems. Turkey is one of these countries. If you are searching for the ideal city or region in which to acquire an income generating or off-plan residential property, Turkey is globally one of the best options available at the moment.
  1. Istanbul is 1st ranked development and 3rd ranked investment market in Europe, underserved by high-quality product in many sectors and has better growth potential than all other European cities surveyed. (According to the ULI Emerging Trends in Real Estate Europe 2009 Report)
  2. Institutional opportunistic real estate investment in Turkey remains relatively underpenetrated and presents an early mover advantage for investors with global know-how.
  3. Opportunities to buy undervalued assets in the short to medium term, primary focus on cash generating A and B class commercial properties in Tier 1 cities and finished or nearly finished A and B+  residential developments in Tier 1 and 2 cities with good covenants.
  4. Other opportunities in the medium term on cash generating high street retail properties and retail shopping centers in Tier 1 and Tier 2 cities.
Other factors include; Turkish real estate has been less affected by the global credit crunch due to the infant state of its mortgage market. Unleveraged first-home purchases make up majority of residential demand. Turkey is unique in its position being an emerging market with a young and growing population, however it is also developed enough to offer opportunities in institutional quality residential, retail and commercial projects.

The single-family units are still considered a great investment for those looking to acquire affordable properties with high capital gain potential and high yields. Istanbul Properties offers a wide range of properties ideal for foreigners and also more properties are offered upon request.

Wednesday, May 12, 2010

Home Rentals Turkey

One site that offers a variety of furnished rental apartments in Istanbul is Home Rentals Turkey. The company run by Catherine Erhun offers a range of rental properties that are not much advertised in other sites. A quick look at the page can help finding alternative properties if you already checked out other sites.

Throughout the portfolio, it is possible to find apartments for as low as 550-750 euros per month and most of the other apartments listed fall into the 1,500 - 3,000 euro p.m. range.

While there are several listings in the Asian side of the city as well, the majority of the apartments are located in the Cihangir, Nisantasi, Asmalimescit neighborhoods in the European part of Istanbul. There are also some other properties available in the Princess Islands, Antalya and Bodrum.

If searching for furnished apartments in Istanbul, the site is definitely worth a look.

Contact Info for Home Rental Turkey:
Address: Valikonagi Cad. Samsun Apt. 57/6 Nisantasi - Istanbul - TURKEY
Telephone: +90-212-241-1758
Fax: +90-212-241-1758
E-mail: info@homerentalsturkey.com

There is also a contact form available on the website.

Thursday, May 6, 2010

Prices Rise Slightly in Istanbul for Furnished Accommodation

Prices for furnished rentals in Istanbul seem to be in the rise over the past 6 months. Property managers seem to have increased the rental prices on their websites by 10 - 20% since the beginning of 2010.

Most of these lanlords offer apartments all inclusive since the guests usually stay short term around 2 to 4 weeks. It is not really possible to charge short term guests for the utlilities and other expenses unless the actual bill is received for the term they stayed in. Such expenses also are on the rise and this effects the bottom line for the landlords.

Also, there seems to be an incresing demand from foreigners for furnished apartments and rooms.

Wednesday, March 17, 2010

Prices Recover in Beyoglu.

Although there are no reliable source or centralized listing service to follow up on the real and current property sale prices in Istanbul, according to some sources the property prices in Beyoglu has recovered around 10-15% in the past 6 months to almost reach the previous peak levels in 2008.

The brokers confirm the extensive increase in interest during the last 6 months and the number of transactions completed increased substantially.

Let us know if any of you can find reliable data we can publish that shows the statistics during the last 3 years covering the peak prices, the downturn following the global crisis and the governement;s desicison to stop sales to foreigners and the recovery period.

Serviced Apartments Istanbul

Serviced apartments Istanbul is another source to find articles, opinions and news about the rental apartment industry in Istanbul. Although the site is new, more info is like to follow.

Art as a part of Furnished Rental Living Spaces in Istanbul

It has been a while since we last posted on this blog. It is time we get back to posting more frequently and share the latest news and information about the developments in the furnished apartment industry in Istanbul.

CCD, an Istanbul located property manager which we previously covered, have added several objects to their portfolio. Most of the new properties are located in Aynalicesme and Harbiye regions of Istanbul.

One unique aspect of CCD's portfolio is that the company promotes art as a part of their project development and design of their apartments. The company designs and builds art studios and galleries in buildings in combination with living spaces and aims to attract more tenants and promote these neighborhoods using art.

The company has several objects in development and more information to follow soon...