As the Eurozone implodes around an epicentre of PIIGS debt, and the Arab Spring continues to unnerve investors, Turkey’s property market is enjoying a surge from individuals seeking a wealth haven.

The Hagia Sofia, Istanbul

Four years ago, Buckinghamshire-based entrepreneur Nick Williams was casting around for a property investment. He settled on a two-bedroom penthouse in Alanya, on the southern coast of Turkey, for €168,000 ($238,000). Four years later and its value has soared a third to €225,000.  “It’s the best investment I ever made,” he told WealthBriefing.

Williams is not alone. As the eurozone slowly implodes around an epicentre of PIIGS debt, and the "Arab Spring" continues to unnerve investors, Turkey’s property market is enjoying a surge in popularity among individuals seeking a wealth haven.  

Turkish property sales to foreign nationals are surpassing pre-crisis levels, according to Turkey’s Association of Real Estate Investment Companies (GYODER). GYODER chairman Işık Gökkaya said in a recent report: “In 2009, property sales to foreign nationals totalled $1.2 billion. Last year, sales more than doubled to $2.5 billion”.

Turkey’s government is not wasting an opportunity. It recently tweaked its laws to allow foreigners to buy more and with greater ease. In May, the High Court of Turkey passed a foreign real estate ownership law which relaxed restrictions on firms and individuals buying property and changed the mortgage laws to allow overseas investors to obtain non-status Turkish mortgages. The move is expected to trigger a surge in demand. 

“The Turkish government have outlined a target that from 2015, $10 billion worth of Turkish property will be sold to international investors over the next ten years annually,” says Turkish billionaire and property developer Sabri Yiğit.

A new concept

Yiğit is one of a number of developers launching large-scale residential developments in the country. The Turkish entrepreneur has earmarked $1.5 billion to spend on five luxury property developments between now and 2015 – starting with Turkey’s buzzing metropolis Istanbul.

“Istanbul is not only a world city, it is also a rapidly growing real estate industry. We thought that it was the right time to introduce the branded home concept to our clients,” said Yiğit, who is chairman of technology firm Say Yapi Teknoloji.

The project is yoo Istanbul, a $300 million joint venture between Yiğit and luxury developer yoo. The project of over 100 boutique futuristic villas, built entirely out of transparent and opaque glass, is scheduled for completion next June.

Co-founded by French designer Philippe Starck and property developer John Hitchcox, yoo has projects in 27 different countries. “Many existing clients are building up a collection of yoo properties in different countries because they like the brand so much,” said Yiğit. “They make a great investment.” said Yiğit. “yoo properties increase at least 50 per cent in price from when they are bought off-plan to when they are built.”

Yoo founders John Hitchcox and Philippe Starck

The off-plan villas are priced between €550,000 to €2.9 million and range from 90 square metres for a studio, to 620 square metres for a four-bedroom penthouse. The site is 500 meters from the iconic Bosporus and immersed in Istanbul’s bustling ambiance, where East blends seamlessly with West.

Residents of the yoo complex will enjoy access to the common areas including an onsite spa, gym and library with a feature fireplace. Miami-style cabanas surround the teak-decked pool while the designer gardens will be filled with semi-exotic shrubs, aromatic trees and lavender.

Around a third of the villas have already been reserved, said a spokesperson for yoo. Buyers will be able to choose a theme for their property, styled with one of four design palettes: Culture, Classic, Minimal and Nature. Furnishings will be according to the owner’s discretion, but the classic yoo style combines tasteful antique with the coolest of modern design. In the showroom, a black Mooi rabbit lamp perches atop a 17^th century hand-painted French oak desk. “The design and lifestyle element of yoo has made it the top brand success story in property worldwide,” said Yiğit.

A hot investment

Experts agree Istanbul is currently one of the best regions for property investment. This year Istanbul ousted London as the top spot for new property acquisitions in Europe, moving up from fifth place a year ago, according to The Emerging Trends in Real Estate 2011 report published by PricewaterhouseCoopers and the Urban Land Institute.

Meanwhile, the Global Property Guide, an online publication, last year identified Turkey as "Europe's most attractive property market", offering "unusual value" due to low property costs, much lower than comparable European countries. Yield on rentals are as high as 7.5 per cent, according to the report, and Turkey is also a lesser-known tax haven. There are zero capital gains taxes on properties held more than five years in the Mediterranean country.

And the hype is not just for residential property. Some are calling Turkey the new BRIC, in reference to its commercial real estate investment potential. “The acronym ‘BRICs’ (Brazil, Russia, India and China) has become popular in economics. But for commercial property, the attention of investors and market analysts has turned more specifically to the “...CBTPs, namely China, Brazil, Turkey and Poland,” 
said Real Capital Analytics president Robert White, in a report published by Hürriyet Daily News and Economic Review. White added that Turkey was among the most frequently queried destinations on RCA’s website, with the retail sector being the most targeted property type. 


Increasingly, Global Investor is citing Turkey as one of its top destinations for acquiring commercial property. “London and Paris are ‘priced to perfection,’ and investors will have to broaden their horizons. When London is so expensive and one can double the yield elsewhere, emerging markets will be compelling,” according to the magazine.

And one of most evident signs of Turkey's growing street-credibility is its increasingly well-attended art Biennial. Between mid-September and November this year the city will host its 12th Biennial along the shores of the Bosphorus. Here, a number of cutting edge artists will showcase experimental installations including contemporary art, design and photography. The exhibition will bring together artworks that connect political and social subjects with aesthetic and formal concerns, said a spokesperson. Of special interest is the work of the Cuban-American artist Felix Gonzalez-Torres whose pieces in different media are both politically outspoken and aesthetically progressive.

It all spells good news for the country that six years ago was hammering on the door of the European Union, desperate for membership. Today, its citizens are beginning to feel they have had a lucky escape.

“Are we still trying to enter the EU? Officially, yes. But is it a concern? Not really, nowadays!” says Yiğit. “We are more interested in cultivating the growth in the arts, tourism and real estate businesses that have been going on here.”