Not that ready for int’l land buyers

ISTANBUL- Hürriyet Daily News

This picture shows the center of the southern province of Antalya, which is among the places foreign property buyers show a great interest. New regulation paving the way for the citizens of 183 countries may lead many buyers from many different countries, each of whom will require particular methods of marketing. Hürriyet photo

Rerecent law easing property sales to foreigners has created much enthusiasm in the local real estate industry, but buyers may fall out of love with Turkey if the diversity of foreign demand is not studied.

“[The new property law] is a factor that will seriously contribute to all of Turkey, particularly the Mediterranean and the Aegean coastal band. But are we real estate firms ready, and in terms projects offered?” said Gürkan Akkuş, a manager at Realty World Turkey, in an email reply to Hürriyet Daily News questions.

The Turkish real estate sector should cater to the varying demands from different countries, he said, adding that the sector should produce appropriate real estate that meets the varying demands of different cultures.

Language skills not enough
“Are [real estate firms] adequately prepared for what kind of a residence, say, an Iranian or a Kuwaiti citizen would want? Have we produced property that suits the citizens of every country? Or have real estate firms put together portfolios meeting demand? Real estate firms that are ready to serve such needs and promote themselves in the countries [where demand comes from] will be the winners,” he said.

Foreign language skills are not enough to meet the needs of foreign buyers in Turkey, according to Akkuş. Firms should study the culture of buyers and sellers and should know how to behave to different buyers from different cultures and have a good idea of the type of residence they want.

Akkuş said, however, that construction firms should also ask themselves the same questions.

A decree listing the countries whose citizens are eligible to acquire property in Turkey was released on Aug. 6. Citizens of 183 countries are allowed to acquire fixed property, buildings and land in Turkey, with the exclusion of some countries such as Armenia.

“The important thing is how quickly the sale process, that is the [receipt of the] deed and permission process, will be. This not clear yet. It especially confuses real estate firms,” Akkuş said.

He said some activity in real estate transactions has been witnessed in Istanbul and the in the southern provinces, particularly Antalya, Muğla and Mersin, but those might be transactions that had begun before and were finalized right after the law was enacted.

Middle Eastern demand
Foreign interest in the Turkish real estate market comes primarily from Middle Eastern and Turkic countries, said Vehbi Hariri, senior executive director at CBRE Commercial Real Estate Services Turkey, in recent phone interview. Russia, Britain and France lead European countries in terms of real estate demand in Turkey, he added. The demand is mainly focused in the southern provinces of Turkey, he said.

It is hard to determine how the instability in the Middle East has affected the Turkish real estate sector due to the summer season and Ramadan, Gürkan Akkuş said, noting that initial data show that citizens of Iran, Kuwait, Saudi Arabia and Azerbaijan have shown more interest in the local property sector as the code has taken effect. Property purchases spurred by the new code will be seen in the second half of the year and in 2013, according to him.

“The situation will be clear starting from September. Actually people do not want spend their money right now. Both sellers and buyers have been on hold.”

Commercial market vibrant
As for foreign demand in Turkey’s commercial property market, several multinationals, mainly from the insurance and banking sectors, are set to relocate and expand into the Istanbul market over the next 12 months, according to a recent CBRE report.

“Even with the implementation of new projects, supply is unlikely to meet the projected demand any time soon,” the report said.

There is interest from all sorts of investors, including sovereign wealth funds, investment funds and private equity funds in the Turkish real estate market, according to a report published by Jones Lang LaSalle, a leading commercial property advisory firm, in July. Retail remains the priority market for investors, the report, which covered the first half of the year, said.