Profiteers of Istanbul’s urban transformation

A new breed of profiteers known as “çantacı” (baggers) have recently begun to trail contractors and property owners in financial difficulties. Their aim is to acquire real estate at bargain prices on the Anatolian side of Istanbul’s Bağdat Street, where urban transformation is taking place at full speed.

The construction industry is where Turkey had pinned its hopes in terms of growth. It is necessary for employment and creates dynamics for almost 250 sectors, ranging from furniture to ceramics.

Although it looks as though sales are increasing and projects are ongoing, the sector is not as peaceful and happy as it has been in the past.

Mortgages that do not function in real terms, high home interest rates and a struggle to create land, figure among the largest obstacles to those who aspire to home ownership.

I would remind you that this is not first time that the expression “çantacı” (baggers) has reached Turkey’s agenda.
Profiteering that previously sought to obtain licenses in the energy sector has also emerged in the real estate sector, especially in the context of urban transformation in areas such as the Fikirtepe neighborhood in the Kadıköy district on the Anatolian side of Istanbul.

After some further research I discovered that a similar process is going on in Istanbul’s Bağdat Street and Kadıköy on the Anatolian side.

Hundreds of contractors that want to work on urban transformation projects have honed in on this area.
According to the head of the Istanbul Contractors’ Association (INDER), Nazmi Durbakayım, some 100 projects in the area have problems.

What are the nature of these problems and why have they occurred?
“Companies who do not know the business very well have given unrealistic ratios to prospective buyers in order to attract them. Where we offer 60 percent of the land to the owner, they offer 70-75 percent and thereby secure the contract … But they cannot finish the job. Some projects are abandoned halfway while others are finished but with deficiencies in their construction. These people have ruined the precious Bağdat Street altogether. Some companies that do not wield any significant financial clout have had to lower their prices. We warn consumers not to do business with companies that cannot complete the job,” says Durbakayım.

Those who know the business already know that most completed buildings in areas that have been turned into building sites in the name of urban transformation are now for sale.

The delay of sales creates financial distress and distress creates profiteers.
According to the statements of real estate agents in the area, constructors and property owners who are in need of money are obliged to sell their properties to profiteers at a cheap price.

And profiteers aware of this situation are going to real estate agencies with a bag in their hands to offer them a bargain.

Businessman Polat Holding Chairman Adnan Polat has expressed the cash troubles in the sector very clearly.
“Construction companies are experiencing serious problems regarding cash. If precautions are not taken, there will be huge chaos,” he said in an interview published by daily Dünya.

Cash flow problems, the decline in sales and failure to disclose real urban transformation policies, undermine the morale of the industry.

Unless a new model emerges in which those from the middle class who are actually in need can become homeowners, difficult days are in store for the sector and for Turkey.