Construction & Real Estate
From The Report: Turkey 2012
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The construction sector responded to the 2008-09 financial crisis with promising growth on the back of rising urbanisation and a newly announced urban renewal plan to secure the nation’s cities against earthquakes. Additionally, international interest in the country’s real estate investments, particularly from the Middle East, is helping to drive the sector. With a constantly rising need for affordable, mid-class, and luxury residential properties, as well as the prominence of mixed-use buildings and commercial properties, and a vast pipeline of infrastructure projects, the industry is expected to grow persistently in the course of the next decade.

This chapter has interviews with Ahmet Haluk Karabel, the President of the Housing Development Administration of Turkey (TOKİ); Avni Çelik, the Chairman of Sinpaş; Erman Ilıcak, the Chairman of Rönesans Holding; and Anthony Khoi, the President and CEO of Aerium Turkey.

Articles from this Chapter

Overview

Planned development: Urban renewal programmes plus major infrastructure projects equal significant opportunities for investment
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With strong year-end results both in 2010 and 2011, Turkey’s construction sector emerged from the 2008-09 financial crisis in relatively good shape. A projected slowdown in the local economy due to European sovereign debt woes means the double-digit growth is unlikely to be repeated in the near term, but the underlying fundamentals look strong. Turkey is a growing country, with steady migration from rural provinces to large cities, and a burgeoning middle class. This has created demand for…

Interview

OBG talks to Ahmet Haluk Karabel, President, Housing Development Administration (TOK İ)
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Interview: Ahmet Haluk Karabel Urbanisation is a global challenge. What is, in your view, the best way to address this issue in Turkey? AHMET HALUK KARABEL: Since the 1950s, the world’s urban population has swelled from one-third to two-thirds of its total inhabitants. By 2050 it is expected that approximately 6bn people will reside in cities. Turkey has been a clear example of this trend. Urbanisation here has been rapid and unplanned. TOKİ, within the scope of its planned urbanisation and…

Interview

OBG talks to Avni Çelik, Chairman, SINPAŞ
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Interview: Avni Çelik Interest rates in Turkey have dropped in recent years. How has this affected demand for housing loans? Do you expect growth in mortgages? AVNI ÇELİK: Real interest rates are still quite high when compared to the average in the developing world. The interest rates for mortgage credit are not below 13-14%, making instalment payments high. For example, paying off the mortgage for an apartment via rental income takes more than 15 years, so purchasing with mortgage credit cannot…

Analysis

Further afield: Contractors gain profits and valuable experience by doing work abroad
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Even as Turkey gears up for a major series of investments in infrastructure, residential and commercial construction, its biggest companies are cutting their teeth in developing countries around the world. A host of contractors have been making a name for themselves internationally over the past several decades, working mainly in the Middle East and North Africa (MENA) region and the Commonwealth of Independent States. Data from the Turkish Contractors Association reveals that Turkish companies…

Overview

Rising star: An increasingly affluent population drives demand for homes, while Istanbul’s role as business centre boosts the commercial market
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Rapid economic growth, a young demographic profile, and the stirrings of gentrification in Europe’s largest city combined make Turkey one of the hottest real estate attractions around. In line with other markets exposed to the European debt crisis, however, it may see a speed bump in the near term. External factors aside, Turkey offers a healthy long-term growth horizon. However, investment in the country is subject to the typical risks of an emerging market: red tape, demand volatility…

Analysis

Buyers from abroad: A proposed law will make it easier for foreigners to purchase property
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With property values rising, the rest of the world has turned its attention to Turkey’s booming real estate market. In addition to the obvious attractions of portfolio investments in this emerging market, the past several years have seen many foreigners buying Turkish property as a first or second home. Moreover, legal changes are expected to expand this roster of home-buyers, especially by opening up the Gulf market. HISTORICAL TRENDS: Net foreign direct investment (FDI) inflows into the…

Interview

OBG talks to Erman Ilıcak, Chairman, Rönesans Holding
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Interview: Erman Ilıcak What obstacles face developers in urban renewal? ERMAN ILICAK: Since so many buildings are not earthquake resistant there will be massive renewal in cities vulnerable to earthquakes. The government has passed a bill for city transformation and renovation, and both legally and illegally constructed buildings will be evacuated and demolished under each region’s master plan. Municipalities need to create attractive environments for residential developers to invest…

Viewpoint

Anthony Khoi, President and CEO, Aerium Turkey, on the future of investment in retail real estate
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Turkey is the 16th-largest economy in the world and sixth-largest in Europe, and has made impressive progress over the past decade – a fact well demonstrated by the figures. While European countries have struggled with a number of economic problems and the sovereign debt crisis, Turkey has reached a per capita GDP of $10,444, up from $5764 in 2004. Average consumer price index was at 71.6% between 1995 and 2001, and is currently below 10%; while the public-debt-to-GDP ratio was cut to 39.4%…