28.6.08

Istanbul

Istanbul's Fener, Balat, Ayvansaray, Galata and Tarlabaşı districts have recently become centers of attraction for the upper echelons of society and particularly the business world. The Fener, Balat and Ayvansaray districts are located on the shores of the Golden Horn, while Galata and Tarlabaşı are situated above these districts. The prices of residences have increased 10-fold in some areas.

The Golden Horn, which has been a center of culture and amusement for ages, had been regarded as an area most people wanted to move away from due to the unplanned construction of industrial buildings, irregular urbanization and environmental pollution. Parallel to this, the Fener, Balat, Ayvansaray, Galata and Tarlabaşı districts failed to attract appropriate attention from society. However, the bleak picture concerning these districts began to alter as crucial changes are taking place in these areas under the umbrella of urban transformation projects.

One of the major reasons behind this change is the increased interest of higher income groups in houses in these areas. The fact that the upper echelons of society began to reside in these areas with higher payments, resulting in the forced migration of the previous residents of the areas, entirely changed the face of social life in this region. The increase in house prices also altered the characteristics of business life in the vicinity, since classic businesses in the area were replaced by elegant restaurants and cafes.

Among the 1,400 parcels of land in the Fener and Balat districts, 750 are considered historical heritage. The UNESCO project, which began nine years ago, had a crucial impact in changing the face of the region, since the area has been experimenting with a significant transformation of its characteristics as compared to a couple of years ago. The project “Rehabilitation Program of the Fener and Balat Districts,” which is being undertaken in cooperation by the European Union and Fatih Municipality, was launched in January 2003. The EU supports the project with an economic package of 7 million euros and the project encompasses the restoration of 200 historical houses, the construction of a social center, the reorganization of Balat Bazaar and improvements in the solid waste system.

Meanwhile, the Galata district has also become a center of attraction recently, and as in the case of the Balat and Fener districts the prices of even ramshackle houses now range from $200,000 to $300,000. It has become impossible to find houses available for rent at a price of YTL 500 in the area, with the rents of certain houses with a view increasing to $3,000. The houses in Galata have predominantly received the attention of foreigners. This interest in the area by foreigners reached a peak in the aftermath of the purchase of some houses by foreign professors. In this regard, the Galata region has become one of the most popular areas of residence for Europeans working in Istanbul.

rates

The Federal Reserve left US interest rates unchanged at 2% yesterday, ending the most aggressive series of rate cuts in 20 years, as America tries to perk up its flagging economy and avoid a full-blown recession.

Fed Chairman Ben Bernanke said in a statement: “Although downside risks to growth remain, they appear to have diminished somewhat and the upside risks to inflation and inflation expectations have increased.”

It’s hoped that the central bank’s decision not to cut interest rates for the fist time in 10 months, will signal the start of an economic recovery for the US. This in turn could offer the UK economy a much-needed boost. However, with the costs of crude oil and commodities rising rapidly over the past year, the reality is that the risk of a recession continues to loom over the US.

The Fed said: “In light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.”

Many observers now expect US interest rates to remain unchanged over the next few months.

Economist James Knightly of Dutch bank ING said: “The outlook for corporate profits and therefore investment is deteriorating, with downside growth risks intensifying given market borrowing costs continue to rise despite the stable policy rate. The threat of a prolonged recession remains very real.”

Related story
European Central Bank president Jean-Claude Trichet has implied that multiple eurozone interest rate rises were possible, after refusing to rule them out. The bank is widely expected to raise the cost of borrowing to 4.25% next month in a bid to counter inflation. This in turn could strengthen the euro currency further against the UK pound, which would increase the cost of buying property in the eurozone.

Trichet said: “I didn’t say that we could envisage a series of increases. That being said of course, we never pre-commit. The observers, the market, know that pretty well.”

20.6.08

Izmir

A Turkish company, in partnership with a Russian-based firm, has launched an all-service shopping mall project in Turkey's third-largest city İzmir.
Construction on the mall, to cover a 54,000 square meter area, will start within the first quarter of 2009 and is expected to be finished by the end of 2010.

Sitting right in the city center, the project is designed to unify the two sides of the Agean city. Tekfen-OZ Real Estate Development Co. Inc., founded by Tekfen Real Estate Development Co. and the U.S.-based Och-Ziff Capital Management Group, a global institutional alternative asset management firm with approximately $30 billion of assets, and Renaissance Construction, an international construction company founded in 1993 in Russia with Turkish capital, are equal participants in the joint venture, the Tekfen-OZ Renaissance Shopping Mall.

With expectations of 12 million visitors annually, the project includes a shopping center, offices, houses, cultural areas, cafes, restaurants and a 2,600 vehicle parking lot.

“This is the largest real estate development project in Izmir that is being processed under a single project,” Mehmet Erktin, board chairman of Tekfen-OZ Renaissance, said at a press conference in Istanbul yesterday.

“Despite having a considerable shopping center potential, there is a lack of real estate investments in Izmir. The city will receive a living quarter that it deserves through our project,” Erktin added.

The project includes a 60,000 square meter leasable shopping center area and a 60,000 square meter area for residences and office blocks, for a 200,000 square meter total construction area.

“Turkey ranks below the world average in terms of shopping centers, but Istanbul exceeds that measure. There is a shopping center deficit in İzmir in spite of the fact it is a large city when European standards are considered. We aim to make up that deficit,” said Erktin.

The project aims to provide wide and spacious open air areas, compatible with the Aegean lifestyle and climate, rather than the classic closed door shopping mall concept.

At the shopping mall, set to be the largest in the region, Izmir residents will have easy access to various services, including cinemas, cultural activities, offices and houses. The project is expected to provide employment for 5,000 people and is valued at nearly $250 million.

16.6.08

golf

FOUR investors have visited Didim this week to investigate the potential of kick-starting the much-vaunted golf course projects.

Two Swedish and two Turkish groups visited the area to look at land off the road on the way to Akbük which has been allocated by government ministers for golf tourism.

The visit on Wednesday (June 11) came two years after Spanish company FADESA investigated the potential of setting up a top quality golf course in Didim, but declined to follow up their interest.

The four investors visited Mayor Mümin Kamacı and the Didim Estate Agencies Association before the association’s deputy chairman Sevim Külekçi took them on a site visit. The investors left Didim the same day.

One investor Fuat Yücel, speaking to Voices Newspaper by phone, said they were pleased with the visit. He added: “We want to be involved in golf tourism with our foreign partners in the Aegean region and we see great potential in Didim.

“We have a planned budget of 20 million Euros for a project, but we still need to investigate other areas in Bodrum and Ayvalık before we make a firm decision.

“If we decide on Didim, we will open the golf course in three years.”

14.6.08

Turkey

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?

BODRUM FAR FROM HUMDRUM

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."

13.6.08

altinkum

The act that regulates property sales to foreigners has caused much debate. The Constitutional Court had canceled the pertaining article on Jan. 16, causing sale of land to foreigners to come to an abrupt halt. The draft was once again discussed in Parliament yesterday. Experts are divided on the subject, with some in support and some listing drawbacks

YASEMİN SİM ESMEN
ISTANBUL - Turkish Daily News


Parliament yesterday debated the law that regulates the sale of land to foreigners. Some experts believes the new act will allow for more land to be sold to foreigners, while others believe it will bring more limitations, as it will make the procedures more confusing.

Yet, another long-standing issue is will selling land to foreigners become a threat to Turkey's security and independence?

“It should not be overlooked that taking hold of land [by foreign entities] will also mean giving away political and cultural independence,” read a press statement by the Union of Chambers of Turkish Engineers and Architects, or TMMOB.

But some, like Center of Economics and Foreign Policy Studies, or EDAM, Chairman Sinan Ülgen, do not agree. “It is not appropriate for Turkey to have harsh implementations with regard to property sales to foreigners, except for those also stated in the act, as having strategic importance for security reasons,” he said. Ülgen does not believe the lands bought by foreigners can be used as a tool for political leverage.

Istanbul Real Estate Agents Chamber Vive President İzamettin Aşa also supports sales to foreigners, although a bit more conservatively. “I support property sales to foreigners. I do not think it should be restricted. However, it should be under a certain legal framework and in the best interest of Turkey,” Aşa said. He suggested a team composed of military men, bureaucrats, real estate agents, and technical experts, collaborating to study the situation, will be in Turkey's best interest.

Another issue is an economic one. Ülgen finds foreigners' acquisition of land to be beneficial for Turkey economically. “It is a contribution to Turkey's economy. The land that is sold to a foreigner does not become the property of another country,” he added.

Aşa does not agree that selling land to foreigners has any additional economical benefits. “I, too, am an economist. But as real estate agents, we have the chance to see things first hand in the field, with the people. I would like an economist to explain how selling to foreigners is more advantageous,” said Aşa.

He explained that years ago selling to foreigners was more beneficial. “They would compare the prices in Turkey to other countries, find it cheap, and buy. This happened mostly in the Aegean region. But for the past two years, they have been buying at market prices, and have even started bargaining like Turks,” said Aşa.

Another much debated point is the reciprocity principle. It states that citizens of countries that Turkey has reciprocity treaties with, can acquire property in Turkey, just as Turkish citizens can buy property in those countries. There are 88 such countries. “This principle states that if property is sold to Turkish citizens in a country, then property can be sold to that country's citizens in Turkey,” said Ülgen. He explained the amount of land sold to foreigners in Turkey or the amount of land sold to Turkish citizens in other countries were never compared or held as a determining factor.

The list of countries that Turkey has a reciprocity treaty for real estate, used to be announced by the Deeds and Cadastre Directorate, explained Aşa. “But the list has not been announced for the past 1-1.5 years. Now a foreigner [willing to acquire property] has to apply to Deeds and Cadastre Directorate and wait for their answer as to whether he or she can buy the property,” he said. He added that this caused concern among real estate agents that land may be sold to citizens of countries not having a reciprocity treaty with Turkey.

Ülgen dismissed concerns that it is impossible to determine the amount of land owned by companies with foreign partnership or foreign ownership. “It is clear under which companies these lands are registered. The capital structures of these companies are clear; there are no such risks,” he said.

Ziya Ercan is the chairman of Muğla Real Estate Consultants Association and deputy president of Turkish Real Estate Consultants Federation. He explained that even though the Deeds and Cadastres Directorate kept the data on reciprocity treaty, there were some ways to bend the law. “For example, a Turkish citizen would establish a company with a foreign partner. As long as the Turkish share is more than 51 percent, they can buy property. Then the Turkish partner transfers his rights to the foreigner.”

As a whole, Ülgen believes the new act will be beneficial for Turkey. He explained the sale of property to foreigners had become impossible when the Constitutional Court canceled the Deed Act's articles, pertaining to the sales of property to foreigners.

Aşa, on the other hand, is not so optimistic. He said the Constitutional Court had canceled the Act as it gave “unlimited rights” for property sales to foreigners. “But they have increased the rights and brought the act onto the agenda once again. It seems like the Constitutional Court will cancel it again. Such a chaos should be prevented,” he said. In fact, the Republican People's Party, or CHP, is expected to take the issue to the Constitutional Court once again. Aşa added, “It is hard to understand why the pertaining law is being toyed around with so much lately. The rights drawn up by the previous law were clear.”

Aşa said even without the additional confusion, the real estate sector has been suffering. “The Housing Development Administration of Turkey, or TOKİ, and the high inflation rate have already blocked the sector.”

Even though he believes the new act will be beneficial for the real estate sector, Ercan agrees with Aşa that the real estate sector has been suffering. He showed TOKİ's constructions as an element that affected the construction sector adversely. Another element, Ercan explained, was the cheap housing loans the banks have been offering since 2004. “There was a big interest in housing loans between 2004 and 2006. Now the buying power has decreased because of that. And the sector has come to a halt,” he said.

4.6.08

Marmaris

Last week's hottest news occupying international and local press about Marmaris was the funny – tragicomic, actually – story in Russian media about sharks on the coast of Marmaris.

According to Russian radio news and some Web sites, the beaches around Marmaris and Bodrum were closed off because of shark attacks! The source of the news was unknown, and some Web sites even used shark photos from different parts of the world to decorate their pages.

As expected, this shocking information provoked genuine panic among Russian and Ukrainian tourists preparing for a holiday in the area. Russian tour operators answered hundreds of phone calls from their clients asking about the situation. Tour operators and hoteliers in the area immediately asked Turkish officials for an explanation, although they knew there was not a bit of truth to the shark news.

In a written explanation, the Culture and Tourism Ministry denied the information aired by Russian press on the closing of several beaches on the Aegean coast because of sharks in the area. “Nothing of the sort is possible. No sea resorts were closed,” the ministry said. So, what did really happen and how did it turn out in the press?

All it was was a bit of “over-imaginative journalism.” The truth about sharks around Marmaris is completely different and has indeed been known for a long time. Boncuk Bay in the Gulf of Gökova was declared a protected site in 1990.

Another declaration was made by ICRAM (Italy's Central Marine Research Institute) in 2004 at a meeting of the EEA (European Elasmobranch Association) to explain the results of the observation of the sandbars in the bay. The bay hosts sandbar sharks (Carcharhinus Plumbeus) every year from May to August in what is the only known procreation area of sandbar sharks in the Mediterranean Sea.

The Environment and Forestry Ministry's Authority for the Protection of Special Areas (ÖÇKKB) started a project in Boncuk Bay in 2007 aiming to observe, research and protect sandbar sharks, “sensitive” inhabitants of the coast. For this reason, the bay was sealed off to tourism, or any visits, a short time ago. Currently, officials in Boncuk do not allow people to enter the bay.

Under the protection rules, all kinds of fishing, swimming and scuba diving, as well as anchoring and sailing activities have been prohibited in the area along the bay marked with buoys. The project will hopefully save the sandbar sharks, which are no danger to humans, and it is a blow to the long-established tourism business in the region.

The next phase will also include the education of the people. Visitors, local people and especially fishermen will be educated by volunteers and SAD (Underwater Research Society) members in order to increase their awareness and environmental consciousness regarding sandbar sharks. A variety of marketing material including brochures, presentations, small books and VCD and DVD films will be prepared and used for this purpose.

Unfortunately, some Russian journalists misunderstood and mangled all these scientific efforts and they announced to their people “shark attacks” instead of “shark protection”! This greatly affected many people in Russia, Ukraine and other neighboring countries. Moreover, several Web sites in Germany and the UK quoted the discussions and carried the topic on their forum pages.

But it is likely the panic mood will be over in a few days after the explanations of local and national authorities. Ali Acar, mayor of Marmaris, summarized the truth in a very clear way when talking to a Ukranian TV channel about the misunderstanding on sharks, “Since my birth in Marmaris, I have never seen or heard of any sharks in our bays, except the sandbar sharks in Boncuk Bay. It would be nice to see some of them in other bays, because they really are harmless and very sensitive animals.”

The words of a British diver on a forum page prove how the Russian journalists made a big mistake by saying “sharks attacks:” “I think someone is pulling someone's chain! Although sharks are present in that part of the world, they are few and far between. I've been diving in Turkey for years and would love to come across a shark in those waters, but have failed miserably! … The waters around Marmaris don't offer the right habitat characteristics for most shark species, not ones you'd be concerned with anyway… It would be useful if they reported on species, if indeed they even know what they were. The authorities are right to be cautious, but journalism like this doesn't do anyone any good and will only harm the tourist industry.”

Turkish economy

As the global economy enters a tumultuous period, Turkey offers an optimistic picture to those abroad because of its current stability and the strong fundamentals of its economy, according to a European Union representative.
Despite political uncertainty in the country, both the International Monetary Fund (IMF) and the EU remain optimistic about Turkey's growth stability. “Global and domestic challenges have increased. Clearly, it is going to be more difficult to achieve the growth rate we saw between 2002 and 2007, which was 7 percent on average,” Ulrike Hauer, head of the trade, economy and agriculture section of the Delegation of the European Commission to Turkey, told the Turkish Daily News.

Speaking on the sidelines of the European Finance Convention in Istanbul yesterday, Hauer said that today “the fundamentals of the Turkish economy are so much better.”

“I think this is the view of not only my colleagues, but possibly also of the commission in Brussels,” she said. “We would probably say a 4 percent growth is realistic for Turkey this year. Turkey needs to raise its sustained growth rate significantly. But today it is in a much better position than it was five years ago.”

Despite high unemployment, Turkey presents a reassuring picture to the EU in terms of economic stability, she noted, adding, “We no longer see a risk that Turkey will collapse into some kind of financial crisis. Turkey's economy has been much more stable and resilient to these kind of shocks.”

The IMF representative at the conference, meanwhile, noted that the current slowdown in the Turkish economy is linked to external factors.

“We expect Turkey to grow in a range between 2 and 4.5 percent this year,” said Hossein Samiei, the permanent representative of the IMF to Turkey. “Growth is slowing down while inflation rises. But obviously, what brought this slowdown was the shock of rising energy and commodity prices.”

Turkish banks are “less dependent on external resources,” Samiei noted. “This fact clearly shows that Turkey's banking sector is safe and sound.”

Title deeds law in turkey

The New Regulations



The Government has changed the parts of the law abolished by the Constitutional Court. In the new law, foreigners are allowed to buy property accounting for up to 10% of the city boundaries within the development or future development plan. Each city title deed office will announce the qouta every year in January.



Military Checks Finishing



The Ministry of Defence will give the military plans to each title deed office. As a result of this, foreigners who would normally have to apply for military clearance will now not be required to do so . The clearance checks, which in some cases were taking 6-8 months to complete, should now be dealt with in 1 day at the local title deed office.



Sources claim the new law will be passed through parliament within 2 weeks.

Hassle ban in Altinkum

Police investigators are using covert methods to catch businesses hassling holidaymakers, after warning them they face tough sanctions if they continue to offend.

Yalcin Akalinli, the Chief of the Police, said: "Didim is to have a peaceful season this year.” The hassling inspections, which were the duty of the municipal police (zabita) until this year, will be carried out by the city Police. Chief Akalinli, stating that hassling abuses are being noted by undercover police officers using hidden recording equipment said: “This is only the beginning; we are empowered by law, to impose sanctions of up to 30 days of closure. Businesses engaging in hassling may get a five day closure for a first offence, but this penalty will be increased substantially for any subsequent violations. If necessary, we may close them for the rest of the season. Peacefulness in Didim is our first priority. The Governor has stated clearly that this year this matter will be closely monitored and hassling will not be tolerated.”



Thirteen businesses in Altinkum have so far, received five-day closure sanctions, imposed by the police under the scope of the campaign against hassling that started two weeks ago.

The Didim police, who have assigned different teams on day and night shifts against hassling particularly along the Altinkum beach, claimed that following the imposition of sanctions, the seriousness of the matter will be better understood by every business.

Residents of Didim agreed that in recent years, the fight against hassling has been inadequate, due to the closures being imposed towards the end of the season and added that the sanctions should be imposed during the season.

Commenting on the matter, Police Chief Akalinli said “These sanctions will be imposed during the height of the season” and warned businesses to be more careful.

Deniz Atabay, Chairman of Didim Tourism Enterprises Association, congratulated the police on their initial success, adding: “I believe that this year will be a very successful one in the fight against hassling. We will get the first results towards the end of June. Didim must change its image. This must start with businesses. We must understand that Didim is on its way to becoming an important tourism centre of Turkey and the Mediterranean Sea. Those who harm the city for financial reward must be penalised.”