Tuesday, June 24, 2008


When it comes to buying a holiday home or investment property in the Mediterranean, most people tend to think of Spain or Italy. But Turkey, with its stunning scenery and wealth of antiquities, is fast emerging as a new property hot spot. Straddling Europe and Asia, Turkey is blessed with some of the best coastline in Europe, especially in the country's southwestern corner where the Mediterranean and Aegean seas meet.

With Turkey expected to join the European Union within the next decade, property experts say those who get in early stand to see a substantial return on their investment.

The combination of rapidly rising house prices and Turkish property market reforms has made the country an increasingly popular destination for international investors. Five years ago the government passed legislation making it possible for non-Turkish citizens to buy property. Since then, foreigners have spent more than $7.2 billion on an estimated 30,000 homes, according to the Turkish government. Over the last year alone property sales to foreigners soared by 59% to $2.9 billion.

Moreover, recent changes in legislation have also created the country's first ever mortgage market. As a result, it is now possible to get a mortgage at interest rates that are roughly 50% less than the traditional home loans buyers used in the past. "Now that the government has made it easier for foreigners to buy, demand is soaring," says Ahmet Rauf Saatci, chief executive of real estate agency in Istanbul.

Bright Spots
The sunny Mediterranean climate is only a small part of Turkey's attraction. For starters, property prices are on average 30% to 50% less than those found in more well-trodden hotspots such as the Spanish, French, and Italian coasts. Property experts compare the country to the Spanish property market in the 1970s. And London-based international real estate agency Knight Frank predicts property prices will increase by 12.5% in 2007.

Not only is it cheaper to buy, it is also much cheaper to live. Economists reckon that the cost of living is between 40% and 60% less than in continental Europe. And according to the Organization for Economic Cooperation and Development, Turkey is the fourth least expensive place to live in a recent survey of 30 member countries.

The vast majority of international buyers are focusing mainly on coastal resort towns. Towns such as Bodrum, Marmaris, and Fethiye, all long-popular with vacationing Turks and Europeans alike, have experienced a development boom. Over the last five years, numerous modern apartment complexes and gated private communities have sprung up to cater to demand.

Good Returns
Turkish real estate company Seaside Properties Turkey exclusively markets its portfolio of modern villas and apartments to Europeans. Since ownership laws for foreigners have been liberalized, interest in investment properties in the Bodrum Peninsula has accelerated, according to Seaside Properties Turkey

Those who have bought properties in Turkey are already seeing good returns.

Over the last year, prices in coastal areas have appreciated between 30% and 50%. New, modern, gated developments with pools and other amenities such as tennis courts are in high demand. Take the seaside resort town of Antalya. Fifteen months ago, Umit Sutoglu, a real estate agent with Turyap Lara in Antalya, recalls how one of his clients bought two three-bedroom homes in Antalya for $112,000 each. Within one year, he sold one of the homes for $272,000, pocketing well over 100% profit on the deal, Sutoglu says.

Returns in Turkey's big cities, such as Istanbul, Ankara, and Izmir, are more conservative but still attractive, averaging 10% to 15% a year. Turkey's biggest and most expensive city, Istanbul, offers yields of around 9%, says Century 21's Saatci. "But in Istanbul's new suburbs such as Beylikduzu, Cekmekoy, and Umraniye, returns can climb to 20% or more." He says foreign buyers are increasingly heading to these newly developed suburbs to buy land and build themselves.

Straightforward Sale
The buying process is straightforward. There are no restrictions for Americans or European Union citizens on buying property in Turkey. Most experts recommend consulting a local solicitor to handle the conveyancing and contracts. Typically buyers can expect to pay 25% of the purchase price as down payment. Additionally, purchasers need to factor in taxes—which run 0.3% for houses 150 square meters and less—plus real estate agent commissions of around 5% to 10%, and legal fees of approximately 10% of the purchase price, says real estate agent from Lara.

If you are buying the property to rent, expect to pay 20% tax on the rental income to the Turkish government. If you hold the property for more than four years, you will be exempt from capital gains. But if you decide to sell before then, you will pay 20% capital gains tax locally. Sounds like it's time to board a big bird to Turkey.

Saturday, June 14, 2008


Just as Turkey looks as if it is shaping up to become the next major holiday-home and investment destination, its government has stopped title deeds being issued to foreigners.

Safe as houses: Bodrum Castle overlooks the lively old town. The peninsula is popular with British and Turkish buyers alike
The country did it for six months in 2005, too, in an attempt to prevent large tracts of rural land being bought up. The latest ban - announced in April and awaiting ratification in parliament - has a similar purpose, limiting foreign ownership to 10 per cent of the land in any town.

Agents selling in Turkey expect the restriction to be lifted soon. "I don't see it as a problem, as you could never expect to receive your title deeds within three months anyway," says Julian Walker from Turkish property specialist Spot Blue. "For anyone buying now, the suspension will have ended by the time they reach completion."

Even 10 per cent foreign ownership of land is a high figure that is unlikely to ever be met, Walker points out. "Even in Spain, 95 per cent of sales are to the domestic market. In Turkey, there are 77,000 foreign property owners out of a population of 77 million, which is 0.1 per cent, so 10 per cent is light years away," he says.

"You have to remember Turkey is a poor country, 20 years behind the West in its property market, laws and business practice. And even though finance is available, it is also still typically a cash market."

advertisementApart from this blip, Turkey's property market is proving resilient, with prices expected to rise by 10-15 per cent this year, says Knight Frank.

The currency exchange company Moneycorp reports that British interest in Turkish property has trebled in the past year. A NatWest survey of mortgage lenders predicts that Turkey - where 22,650 Brits own property - will be the third most popular

destination for UK buyers in the next three years, with most sticking to the area between Kusadasi on the Aegean coast and Alanya on the Med.

In its attempts to double tourist numbers to 10 million by 2010, the Turkish government is investing in infrastructure and attractions, including new golf courses in Dalaman and Belek.

It is also encouraging new air routes and airport expansion. EasyJet now flies to Dalaman and Istanbul, BA to Antalya. A new international airport at Edremit will open up areas around Ayvalik, north of Izmir - until now, despite good beaches, great windsurfing and attractive property, the preserve of Turkish buyers.

Beyond its appeal as a value-for-money location for holiday homes - outside pricier Istanbul or Bodrum, the average two-bedroom apartment costs £35,000-£90,000 - Turkey is also drawing investors to Istanbul, where new development is taking place on both sides of the Bosphorus.

Prices average about £700-£900 per square metre, with studios from £40,000 in developments such as Life Studio near Ataturk international airport (through The Right Move Abroad), or Astrum Towers, six miles from the airport, which agent Regnum predicts will see annual growth of 30 per cent.

So, this Christmas - or whenever the restrictions ease - why not vote for Turkey?


Lively resorts, leisure facilities and low-priced newbuild properties make the Bodrum peninsula one of Turkey's best-known areas for British visitors, while quieter spots such as Yalikavak and Gumusluk appeal to wealthy Turkish property buyers wanting £1m-plus villas.

"Bodrum is one of the most popular coastal regions," says Jane Griffiths, managing director of Regnum, "and Turkey's appeal is widening to take in growing numbers of Eastern European holidaymakers as well as British. Small apartments can achieve rents of £300 a week."

Saturday, June 7, 2008


The saturation and high prices of the European property market has directed buyers to the Turkish property market.

Research carried out in 30 OECD countries revealed that Turkey ranks fourth with cheapest prices. According to the comparative price levels, Switzerland, Denmark and Norway appeared to be the most expensive countries while Turkey is among the least expensive, followed by Slovakia, Czech Republic and Poland.

Basak Soner, a Board Director of TURYAP, stating that currently Turkey is a haven for foreigners, said: "Turkey’s traditional competitors Greece and Spain rank among the expensive countries. A product which costs 100 units in Turkey, is priced 155 units in Greece and 160 units in Spain.”

Cheapest properties are in Turkey

Using a comparison of sales data on properties with similar characteristics best explains why Turkey is a haven for foreigners. According to date gathered by TURYAP, a 3+1 detached house costs 570,000 Euros in Spain, The UK and Greece, 430,000 in Germany, 380,000 in The USA and 300,000 in France, while in Turkey it only costs 100,000. Experts agree that property in Turkey would increase in value, and state that the trend of investing in properties is "the most appropriate and profitable investment" for any foreign investor.

Monday, June 2, 2008

Tourism in turkey

Turkey's five-star hotel sector is booming. Indeed, upscale Turkish hotels have become important spots for national and international business travelers and holidaymakers -- with İstanbul being almost shaken by a wave of new upscale hotel openings.

Frank Reichenbach, general manager of the Mövenpick Hotel İstanbul and the hotel chain's regional manager for Turkey, describes what it is that makes Turkish cities attractive for a number of upscale international hotel brands. In an interview with Today's Zaman he talks about the potential and difficulties of the Turkish five-star hotel sector and forecasts that "it is quality and service which will be the engine of the Turkish hotel business."

"We are a good upscale brand," Reichenbach added about the Mövenpick group. With two types of accommodation, business and conference hotels, as well as holiday resorts, the company has clearly defined its position as a first-class establishment. In İstanbul, İzmir and Bodrum there are currently three five-star hotels in operation.

Most notably, opening five years ago, the İstanbul location shows a capacity utilization of over 50 percent regular guests, which Reichenbach calls "more than satisfying." Around 65 percent of these are foreigners -- with the core markets being European countries, especially the UK, Germany, Switzerland and France - and approximately 80 percent of guests are business clientele.

İstanbul top in business and convention segment

Our focus group comprises business travelers and convention guests, explains Reichenbach. "İstanbul, especially the rapidly developing and central business district of Levent, is really an excellent location for business travelers and convention guests," he underlines, adding that this segment is surely the strongest one among the Turkish five-star industry. Therefore, all of the 249 İstanbul rooms, including 71 executive rooms, 21 superior suites and a Skyline Deluxe suite on the panoramic 20th floor, are tailored towards the requirements of businesspeople. All manner of meetings and conferences and every imaginable type of banquet can be completely catered in the Mövenpick İstanbul.

Is İstanbul also well equipped for big events, Formula 1, for example, which took place for the fourth time in İstanbul this May? "Generally, yes," Reichenbach says. "Over the last couple of years the city has made significant progress in this regard. Even I would wish to have one or two more important events here."

However, he points out that the city still suffers from serious infrastructure problems. "It shouldn't be that our clients spend three hours on a flight from Europe to İstanbul and then get stuck in traffic for another two hours to get to the hotel," he underlines and urgently recommends better coordination and cooperation among the city's administrative districts. "There are currently more than 20 municipalities in İstanbul alone. Sure, they are doing good things, but to handle the traffic problems of a big city like İstanbul, everyone has to pull together," he emphasizes, expressing his hope that the status of being a European Capital of Culture in 2010 will be an effective incentive.

Nonetheless, in his opinion, İstanbul is currently one of the best cities for operators to have a hotel in, and he points out that over the last couple of years city tourism in İstanbul broke one record after the other in terms of visitor numbers. Indeed, according to a ranking done by the New York-based Travel and Leisure, one of the world's most popular travel magazines, İstanbul is the third-best city in Europe, after Florence and Rome. It was further ranked eighth in the favorite world cities category, leaving New York and Bangkok behind.

And the market is still open for newcomers, "With regard to the rising number of city tourists, we don't have too many hotels yet in İstanbul," Reichenbach said, hinting that in terms of revenue, the upscale segment holds the best potential.

The Mövenpick Hotel İstanbul general manager knows all about his holding's establishments in the Turkish Mediterranean part as well. Discussing difficulties related with shrinking revenue and a lack of utilization capacity in this region, he adds, "Well, regarding our own establishments in İzmir and Bodrum, we as the Mövenpick Hotels & Resorts are looking optimistically to the future." But he admits it is not easy to guarantee high capacity utilization in these regions.

For this reason, the company counts on business travelers in the Mediterranean region. The Mövenpick Hotel İzmir, which opened its doors in mid-February 2008, is clearly established as a five-star business hotel. The hotel has been extensively refurbished over the past two years, today offering 185 rooms, which include 38 executive rooms, 17 junior suites and a royal suite.

The exclusive Mövenpick Resort Bodrum is also business oriented; opening in the beginning of July 2007, it offers three meeting rooms equipped with state-of-the-art audiovisual technology for up to 100 people as well as a business center that "is ideal for out-of-town meetings," Reichenbach explains. Centrally located and situated on the hilltop area of Bitez, with 92 generous rooms, including nine suites all decorated in Mediterranean style, the hotel ensures a pleasant and relaxed atmosphere for holidaymakers but also draws a lot of local business clientele from the bigger cities as well. "In the Bodrum region one has to get creative," and for that reason, the company introduced a special business idea that allows clients to rent the entire resort in the summer.

The Turkish market openly accepts these methods of diversification, as the Turkish director underlines. "Mövenpick Hotels & Resorts is a brand highly regarded by business travelers and holidaymakers. İstanbul, İzmir, Bodrum and soon Ankara -- all in all I think, this is a good balance," he says. However, in the Mediterranean region, revenues are generally much lower and occupancy is usually around 20 percent less on average.

Quality and service against shrinking revenue

When asked what could be handy tools in raising customer profiles, he urged a shift away from the current, predominant low-cost and all-inclusive business. "Quality and service will be the engine of the hotel business" he is certain, and suggests that the government and tourism authorities can also help to ensure better standards, "for example, by distributing their stars more carefully," he says.

Quality and service is also what makes Mövenpick's secret of success. "Punctuality, reliability, security and a certain passion for detail is what marks our values," Reichenbach added, noting that the company's Swiss heritage is a point of pride. "We put additional emphasis on good food and excellent gastronomic service. In İstanbul, for example, we offer at least six open bottles of wine every day, and surely everyone knows our world-famous Mövenpick premium ice cream," he adds enthusiastically. For that reason the company builds only on its long-term, owner-operator relationship and predominantly runs its hotels in the form of leasing or management contracts. "We would never do franchising, but always keep a certain influence to ensure the Mövenpick quality standards," he emphasizes. And as he underlines, these standards "marry very well" with uncompromising Turkish hospitality. "I really praise Turkish warmth. It is even better than what you experience in many European locations," he says.

Does the Mövenpick Hotels & Resorts expansion plan include adding new hotels to its lineup in Turkey? Reichenbach says "yes," while underlining that the current situation of the business is very promising. "A large and well-educated labor market, a huge domestic market, a relatively stable lira and continuous growth between 5 and 7 percent over the last several years are definitely positive location factors for investors in Turkey," he states.

For now, and as a first part of its portfolio expansion in Turkey, the Mövenpick group recently signed a management agreement with the Varan Group for a five-star business hotel in Ankara. Comprising 150 rooms and suites, it is scheduled to open in 2010. "I hope to be in the Belek/Antalya region soon. A hotel in this region should certainly be part of our portfolio. Also, a second establishment in İstanbul could be interesting. Well, there are many, very exciting locations across the country," he says, speculating about possible expansion ideas.

Mövenpick aims for upscale guests

Mövenpick Hotels & Resorts, an upscale hotel management company with 12,000 employees, represents over 90 hotels in 25 countries. Serving around 5.8 million guests per year, the international hotel group with roots in Switzerland is still forging ahead with its expansion and has a stated objective of increasing its hotel portfolio to 100 by the year 2010. With two hotel types, business and conference hotels, as well as holiday resorts, Mövenpick Hotels & Resorts has established a clearly defined presence in the upscale four and five-star segment. The hotel group is owned by Mövenpick Holding (66.7 percent) and the Kingdom Group (33.3 percent).