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CURRENT HIGH RETURN INVESTMENT PROJECTS IN BEYOGLU, ISTANBUL
(Initial investment from £150,000 to £2m, average ROI over 100%, life span up to 5 years.)
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Project |
Investment Required |
Work needed |
Profit Margin |
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5 Storey property adjacent to one of the busiest streets in Beyoglu |
£0.5m |
Modest renovation for commercial lettings |
115% |
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4 Storey property in a very up & coming area with fast price appreciation expected |
£0.2m |
Completely renovate and convert into residential lettings |
167% |
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6 Storey listed property in Galatasaray - prestigious and busy area |
£0.6m |
Renovate maintaining classic charm but with modern design for residential and commercial lettings |
146% |
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7 Storey property in Gumussuyu minor work needed |
£0.7m |
Minor renovations to target middle and upper sectors of the rental market |
105% |
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5 Storey under-utilised property due to poor floor planning - very high potential |
£0.4m |
Significant renovation to rearrange floor plans and maximize potential |
138% |
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5 Storey property near prestigious Galatasaray High school |
£0.5m |
Major rearrangement of the lay out and floor plans to convert into studio and 1 bedroom apartments |
110 % |
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5 Storey property in need of aesthetic uplift to convert in to trendy space |
£0.5m |
Minor renovation and aesthetic uplift to market as café shops and trendy residences |
113 % |
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Reference: IST2821APT
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| Property Advertised By: |
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Bargain 1 Bedroom apartments with 9% rent guarantee.
The apartments have open plan kitchen with spacious living and dining area and spacious bedroom.
Facilities:
24/7 Security with CCTV came... |
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Completion Status: Off Plan |
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Category: Bargain Property, Investment Property, |
Property Type::
Apartment
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More Info |
Contact Us |
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Reference: IST2822APT
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| Property Advertised By: |
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Bargain 2 Bedroom apartments with 9% rent guarantee.
The apartments have open plan kitchen with spacious living and dining area and spacious 2 bedrooms with 110m2.
Facilities:
24/7 Security ... |
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Completion Status: Off Plan |
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Category: Bargain Property, Investment Property, |
Property Type::
Apartment
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More Info |
Contact Us |
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Reference: IST2926APT
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| Property Advertised By: |
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Ultimate Luxury Istanbul Apartments with Unmissable Interest Free Payment Terms.
An impressive new project in the Beylikduzu area of Istanbul,
offering distinguishing technological advancements to c... |
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Completion Status: Off Plan |
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Category: Bargain Property, Investment Property, |
Property Type::
Apartment
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More Info |
Contact Us |
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Reference: IST1754AP
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| Property Advertised By: |
Private Owner |
Reserve Now at Off Plan price levels to take advantage of rising prices in upcoming Beylikduzu region of Istanbul. This Istanbul development offers very spacious accommodation as well as suitabl... |
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Completion Status: Off Plan |
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Category: Investment Property, Bargain Property, |
Property Type::
Apartment
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More Info |
Contact Us |
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| You are viewing results 1 to 10 of 92 |
1 |
Place Overseas, in partnership with Aslan Emlak of Istanbul, Turkey, is looking for investors who are interested in entering into or expanding within the Istanbul real estate market. We currently operate two investment consultancy houses, in London, UK and also within the center of Istanbul, focused on identifying potential investment opportunities, with a niche on residential and mixed-use buildings. Our business model is designed to offer a series of investment services, ranging from managing real estate transactions and property management to orchestrating the complete redevelopment of underutilized properties.
Our current investment parameters range from 4-10 storey buildings (£150,000 upwards) to commercial opportunities such as hotel projects and retail outlets.
We have identified the following central locations as prime regeneration areas, where high return on investment can be achieved:
- Beyoglu, Istanbul (main focus)
- Ortakoy, Istanbul
- Besiktas, Istanbul
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Investing in the Istanbul Centre | Go to top |
A consequence of the high urbanization is the ever growing housing requirement. In Turkey’s largest city Istanbul with a current recorded population of 12.5 million, expected to reach 23 million by 2020, this is an inevitable fact. By using conservative assumptions of 1.2% population growth and a 2.3% urbanization ratio, it is expected that demand for residences will stay high. In addition, with rising income levels among metropolitan residents and a booming young population there is a positive momentum for real asset appreciation and yield earning potential from investing in Istanbul.
As a result of the shortage in the Turkish housing market, the residential sector experienced the highest price appreciation in the last two years compared to office and retail sectors. The Istanbul housing market, which contains 45% of Turkey’s residential real estate value, took the first spot in 2005 among the 25 EU countries with 37% in terms of house sale prices due to the unleashing of the delayed demand for luxury units and easy financing.
The construction sector will continue to benefit from the gains of the current economic program in the medium and long run and the steady march towards EU entry. Improvement in economic conditions and growth of spending power are stimulating investment on housing of new service facilities and factories. Istanbul is fast attracting foreign companies as a hub with new players coming to establish bases from which to market their products and existing foreign companies growing their size of investment.
Interest rates over the last few years have been lowered in parallel with the declining inflation which has helped the housing sector to recover. In the last 3 months there has been an uptick in inflation which has stalled the downward momentum in rates, however the central bank comments this is likely to be a short lived event. Mortgages were introduced last year to home buyers (previously bank credits were used) but the real impact of more efficient financing for homebuyers will be seen once the secondary market starts for Turkish mortgages which is expected in the second half of 2008. Current Turkish lira mortgage rates are between 15.5 – 17.5% and Euro mortgages are around 7%.
Among the main problems of the housing sector is that there is a very large shortage in properly permitted dwellings. In urban areas an average of 62% of the housing stock is properly authorized, but if occupancy permits are taken into consideration rather than planning permissions, the proportion falls to 33%. In other words, 67 of every 100 buildings are not properly licensed. According to the State Planning Organization, only 26% of the housing requirement is met legally.
This adds another very positive dynamic for our investors. As the mortgage market in Turkey, now in its infancy, continues to grow, the demand will focus upon properly constructed and legally permitted buildings. The legal documentation that mortgage companies require is not available for many properties in Istanbul, thereby creating a significant supply constraint of properties for investors to utilize leverage on. The additional significance of this issue is that even if the urbanized area population does not significantly increase, redeveloping 67% of the housing that is not correctly licensed presents enormous growth prospects for investors.
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Transportation | Go to top |
We have primarily focused on the Beyoglu submarket for investment properties due to our belief that the area is the most undervalued area in Istanbul for long term growth potential.
Beyoglu district of Istanbul is one of the City’s oldest established districts, near Taxim Square and on the European bank of the Bosporus.
Beyoglu is considered the city centre for the transportation network, social scene and cultural venues, but over the past several decades have see the city’s elite move to the suburbs where newly constructed housing and plentiful land offered a better lifestyle. Recently however, there has begun a shift of people moving back to the city centre as roadway traffic has become a major issue and the municipalities have started to undertake action to regenerate much of the problematic aspects associated with living in the city center. Istanbul’s highways and streets are at capacity and in many areas expanding mass transit is the only available alternative to relieve this congestion. As you can see above, Beyoglu is very well served by public transportation. Beyoglu‘s mass transit infrastructure includes a regional bus hub, a major metro station, two ferry ports, a light rail line, a funicular, and the Tünel (the world’s 2nd oldest underground trolley). In addition, the Turkish government is currently extending the metro line south to the seaside city of Yenikapi and north to the Maslak business district.
Beyoglu which is steeped in history from the Ottoman times with many buildings exhibiting classic Greek and Armenian architecture had been discarded for some time by the more well heeled Istanbulites. The area had become a dangerous place to walk late at night despite the vibrant nightlife. Much of the building stock had been left untended and discarded. This however is changing, the Beyoglu municipality has been actively working to redevelop the area while keeping the cultural integrity intact. A critical mass of redevelopment work has begun and the momentum for change in the area is becoming more obvious by the day. Rents have started increasing as high income individuals have become more keen to live there.
- Population
- Istanbul has an official population of 12,573,000 but the actual number is closer to 16-18 million. This is due to millions of villagers who return to the cities and villages where they originated from during the census to ensure tax revenues are dispersed to their place of birth.
- Beyoglu is a residential area consisting of 45 districts and about 225,000 residents, but the daily population reaches up to a million being a center of commerce, entertainment and culture.
- Income/Employers
- Approximately 4.5 million people are employed in Istanbul and nearly 2.5 million jobs are located within a 90 minute commute of Beyoglu.
- The last census of employers showed that Beyoglu had 3.904 established companies of which; 3.708 employed 1-9 employees, 75 had 10-24 employees, and 41 had over 25 employees.
- There are over 4,000 foreign companies based in Istanbul.
- Education
- The percentage of the Turkish population attending higher education increased by 33% between 2001-2006 at 12.3% and 16.7%, respectively.
- Family Size breakdown
- Average family size in Istanbul is 3.85 people.
- Average blue collar worker 800 -1.400 YTL per month
- Average white collar worker 1.050-1.725 YTL per month
- Specialized white collar worker (engineer, manager) 2.100-7.000 YTL per month
- Typical Household expenses:
| Household Expenses (Istanbul) |
Percentage (%) |
| Food |
20.0 |
| Alcohol & Tobacco |
3.1 |
| Clothing & Footwear |
5.5 |
| Housing & Rent |
32.2 |
| Home Furnishing |
5.2 |
| Health |
3.0 |
| Transportation |
10.5 |
| Communication |
4.6 |
| Entertainment |
3.0 |
| Education |
3.1 |
| Restaurants/Hotels |
5.9 |
| Various goods & services |
3.9 |
As of 19 May 2009 £1 is 2.45YTL.
- Young Professionals
- Beyoglu is a very popular area among young professionals due to the extensive social and nightlife options found around Taksim. The area’s atmosphere is fast-paced and busy and is accessible by public transportation from nearly every major region in Istanbul. A majority of the high-paying industries such as banking, energy, telecoms, real estate, and medical services can be found near the major Central Business District corridor that includes Maslak, Levent, Gayrettepe, Şişli, and Taksim and they are all conveniently connected to Beyoglu via the Metro line.
- International Corporations “buying a hotel room”
- International Corporations are a potential client of residential properties that is often overlooked by investors. Many companies look to purchase or rent properties to house temporarily stationed employees rather than continuously booking hotel rooms. With a concentration of international corporations in the vicinity of Beyoglu, this market segment has significant potential.
- Foreign second home buyers
- Beyoglu is one of the most popular districts in Istanbul for foreign buyers of real estate. As a result, several neighborhoods in Beyoglu have reached the ceiling of 0.5 percentage of land in any given district that can be owned by foreigners as described by in the Turkish Foreign Direct Investment law of 2003. The law is changing to allow more foreign persons to purchase by increasing the ceiling to 10%.
- Couples w/o children
- Dual income couples without children are often able to better afford the kind of lifestyle that Beyoglu offers. Many of the same amenities that appeal to single young professionals also apply to professional couples; parks, cafes, upscale restaurants, plentiful retail options, and are all available in Beyoglu.
- Urban families
- There is a segment of families in Istanbul that either prefer an urban environment or find it a necessary due to the location of their jobs and decide to settle down in the core Istanbul neighborhoods. While this segment often cannot afford the price points of many of the renovated or newly constructed buildings that our investors will provide the market with, it is important to take note of this segment and continuously try to find opportunities to broaden the spectrum of potential customers.
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Product-Customer mix and Rental Yields (for Beyoglu) | Go to top |
- We understand that developing a successful project requires thorough planning on who should be targeted as potential customers. With Turkey’s average wages considerably lower than those of Western Europe and America, it is important to build the desired product for the segment of society that can afford it. Individual purchasing power is still relatively weak due to high interest rates and a middle class with any significant disposable income is only beginning to emerge. Our task is to determine what potential customers possess wages that will allow them to afford a product in our investment portfolio. The table below provides an example of our targeted customer groups and the corresponding product we will market to them:
| Group Type |
Studio |
1 Bedroom |
2 Bedroom |
3 Bedroom |
Penthouse |
Income Potential |
| Executive type individuals |
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X |
X |
X |
10.000 YTL+ |
| Specialized (manager, engineer) two-income |
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X |
X |
X |
X |
6.000-12.000 YTL |
| Specialized (manager, engineer) one-income |
X |
X |
X |
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2.500-6.000 YTL |
| White Collar two-income couples |
X |
X |
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2.000-3.500 YTL |
| White Collar-Three individuals |
X |
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3.000-5.200 YTL |
| Blue Collar-Three Individuals |
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2.400-4.200 YTL |
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750-1.200 |
1.250-1.800 |
1.800-2.700 |
2.500-3.600 |
3.500-6.000 |
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Monthly rent (YTL) |
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As of 19 May 2009 £1 is 2.45YTL.
Having more relevant and more detailed information than your competitor will always provide a huge advantage. In Istanbul, we noticed that there is little detailed public information regarding the real estate market as a whole, let alone individual submarkets. Also, the market reports we obtained from companies whose job was to analyze the market were comparatively weak in substance when compared to our experience in the UK and US. This led us to develop our own in-house database of current real estate pricing and trends to help us better understand the underlining dynamics of the market. We also take the time to research historical trends and past events within our neighborhoods to determine why certain neighborhoods are built the way they are and if their development plans still apply to the present day needs of the market.
By analyzing the relationship between past and present with both a macro and micro perspective, we feel confident that our market knowledge will provide our investors with the confidence needed for them to invest in the future.
- Sales Commission & Management Services
- The most basic investment service that we offer is to help the investor acquire a property and take care of the subsequent rental management of the property. We will assist in finding a property that possesses the desired characteristics of the investor, help with contract negotiations and real estate transfer procedures, and proceed with organizing the long term collection of rent and the general maintenance to ensure the property remains a strong and hassle-free long-term investment.
- Specific Property Investment Options Consultation
- Each potential investment has several options to have its overall value increased over time. Newer build properties bought with all the sub-units in contract may require little additional capital to maintain current cash flow. An investor of these properties will find increased value primarily in the form of market appreciation of both assets and rent. Older properties will require a substantial amount of renovation in order to bring the property up-to-date to current building codes, fix structure or aesthetic issues, or to rearrange the product mix to maximize profit potential. These properties attract investors looking for greater potential profit, but who possess a risk tolerance level and timeline expectation that is more conservative than speculative.
- Pre-construction Development
- Many properties in the Istanbul Centre are either outdated or not built to code, therefore cannot demand their maximum rent or sales price potential. Once we find a building that fits your investment profile we can begin the redevelopment process by obtaining the necessary building plans and governmental permits that will allow you to take the project from a rough concept to precise construction drawings, definite cost estimates, and a workable construction timeline. At this point, upon your instruction, we will transfer the project leadership to a third party project developer.
- Development Process Liaison
- We, in addition to the services offered in Option 3, can act as a liaison between the investor and project developer throughout the development process. During construction, we will not only help maintain effective communication between all parties, but we will also be in position to begin the pre-sale or pre-leasing process to ensure that future residents can move in as soon as possible upon the successful conclusion of construction. This option is most suitable for more complex projects that require a larger project developer.
- Project Developer
- For most redevelopment projects, we are in the position to manage all stages of redevelopment. We have the capacity to obtain pre-development plans and permits, manage the renovation or construction process through the use of subcontractors, and complete the sale or lease-out process to finalize the investment. Utilizing us as the project developer also provides substantial cost benefits due to our ability to be involved in every stage of development, whereas a third-party project developer will typically charge of fee of around 40% of the project’s profit and be involved in only one stage of development.
We will gladly work with you to discuss what option best fits your financial, timing, and risk tolerance requirements. Our goal is to produce the best investment on every project to guarantee we protect and enhance our reputation and ensure that our investors desire to do business with us again in the future.
Real estate investments are most effectively utilized as long-term growth assets. While there are rare situations when a substantial profit can be made in a relatively short amount of time, such scenarios are not generally our focus. We believe such scenarios possess high level of risk and often require luck over the use of solid planning, skill, and market expertise to turn out successful.
While our investment beliefs may turn off some speculative investors, they do provide the foundation for making lucrative long-term capital gains for systematic structured investors. Being an emerging market, Turkey possesses a sufficient amount of inherent risk that requires both skillful management and careful navigation. We have categorized what we believe are the different types of investors that will find the Istanbul real estate market attractive and their likely corresponding investment preferences.
- Conservative-Passive Long-Term Investor
- This type of investor is often looking to diversify their investment holdings, but prefers not to be involved in the daily activities to maintain the investment. This investor typically will purchase a property that is a high quality construction, requires minimal maintenance, and is located in an established and mature community. The intent of this investor is often to hire a real estate agency to manage the property’s rent collection and maintenance and wait for the market to produce long term gains in rental income and asset price appreciation. The timeline for this investment is typically at least five years and can remain in existence perpetually.
- Conservative-Active Long-term Investor
- This type of investor looks for long term gains in rental income and asset price appreciation, but they desire a more active personal approach to ensure that their property is most efficiently structured to take advantage of the needs of the market. They are more inclined to buy underutilized properties with the intent to renovate them into their highest and best use. They may want to reorganize the tenant mix to allow more diversity between residential and commercial uses or change the floor plan of the property to capture an underserved segment of the market. The timeline for this investment is typically at least 5 years and can remain in existence perpetually, but it may require periodic changes in strategy and additional inflows of investments.
- Aggressive Long-Term Investor
- This type of investor often looks for investment opportunities that possess a much greater potential of return on the investment. Such opportunities often require purchasing dilapidated properties that require extensive renovation or complete demolition, followed by new construction. While these investments can produce exceptional returns on investment, they require an investor with a higher tolerance for risk, a considerable amount of financially flexibility, and a patient demeanor necessary to deal with the inherently lengthy redevelopment schedule. These investors will almost always want to provide a considerable amount of input into the development process and will need to think about property’s longevity in the market. This type of long-term investor would look to hold the property for many years and rent out the property upon the completion of its construction. The timeline for this investment is often at least 5-10 years and can remain in existence perpetually.
- Aggressive Short-Term Investor
- This type of investor will also look to redevelop underutilized properties into newly constructed, highly desirable buildings. What makes this investor different from the long-term investor however, is their desire to sell the property, in its entirety, upon the completion of the redevelopment process. This investor must possess a higher tolerance for risk and an extensive knowledge of the real estate market. This investment requires extensive planning in the timing of the projects due to the cyclical nature of real estate markets. Whereas, a long term investor is prepared to endure possibly several up and down ebbs in the market, a short term investor must be confident that their project’s completion occurs at a higher point of the current market upswing than when their initial projections took place. The timeline for this investment is often in the range of 1-5 years.
We understand that each investor has different needs and expectations and we look forward to working with you to help customize your personal Istanbul investment profile.
We believe Istanbul’s location, combined with Turkey’s economic liberalization movement, creates a very favorable investment environment for many years to come. Housing prices are still considerably below those of major western and central European cities which will continue to help draw foreign companies to set up or expand operations in Istanbul.
The Beyoglu neighborhood is in position to continuously maintain its strong demand for housing due to its central location, proximity to the transit networks, cosmopolitan atmosphere, exceptional views, and historical importance. Most importantly, with the existing housing supply requiring such substantial redevelopment to meet modern building codes and customer expectations, investors are presented with ample investment options.
While this environment breeds competition, we are confident that our structured investment approach, combined with our detailed knowledge of the market, provides the necessary advantage to obtain and maintain long-term success.
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