Developer Agaoglu hopes for Turkish property market recovery

The developer behind the Istanbul International Financial Center hopes the battered Turkish property market will rebound next year despite a series of terror attacks and a recent coup attempt.

During the first seven months of the year, the number of home sales to foreigners dropped to 10,535 from 12,475 during the same period last year, according to Turkish Statistical Institute.

“We had four elections in the last two years, we in the domestic real estate market were concerned, but as the picture is clear now, we are expecting a recovery,” said Ali Agaoglu, the chairman and founder of Agaoglu Group of Companies. “The investors are more eager to invest now, and we are here to explain the situation of stability in Turkey.”

In August, the company sold US$170 million worth of residential and office units, with about 20 per cent coming from foreign investors. Last August, it made a quarter of the amount in sales, according to Mr Agaoglu.

He was in town to showcase the project at the three-day Cityscape Global Dubai, which starts on Tuesday.

The Istanbul International Financial Center, which includes six commercial towers, one residential tower, a cinema, a conference centre and retail space, is under construction with about half of the work complete.

To boost investor sentiment, Turkey introduced a real estate investment fund last year as an instrument to invest in ready assets. These are free from corporate tax, are audited and controlled by the state and independently managed by an asset manager.

Agaoglu expects to invite minority investors to buy shares in a similar fund once the centre is complete. Asset management firm Ak Portföy established Turkey’s first real estate fund earlier this year.

Of the 3 million square metres of IIFC, Agaoglu owns the private development part of 1 million square metres. The rest is owned by the state-owned banks and government entities such as the Central Bank of the Republic of Turkey, Halk Bank, Vakıflar Bank, Ziraat Bank, Capital Markets Board of Turkey, and Banking Regulation and Supervision Agency.

Agaoglu is also showcasing its Central Park residential project in Istanbul at Cityscape Global with 1,150 units. These are expected to come to the market in November with a total value of between US$1.2 billion and $1.5bn.

In Turkey there were at least six terror attacks between January and August, including a gun attack in June at Ataturk International Airport in Istanbul where 40 people were killed. Tourist arrivals have slowed. During the first half Turkey received 3.8 million tourists, down from 4.3 million tourists during the same period a year earlier. There was a coup attempt in July.

“July is not a good indicator [to gauge real estate sector sentiment] because all sectors were affected from the incidents in July, even the local ones,” said İdil Hamzadi, the head of capital markets at JLL Turkey. “We expect that the investor confidence and business activity will strongly resume in a few months’ time particularly with the positive and firm decisions taken by the government to boost economy.”

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