TBY talks to Osman Toprak, Member of the Board at Astay Yatırım, on developing the Four Seasons Hotel chain, the company’s residential projects, and his sectoral outlook.
TBY Astay worked on the development of the Four Seasons Hotel chain in Istanbul. What opportunities did the company see for the development of five-star hotels in the city?
OSMAN TOPRAK We started as a real estate company in 2004 and saw a lack of luxury five-star hotels. We saw an opportunity to develop the Four Seasons brand here. The second Four Seasons Hotel in Istanbul is located on the shores of the Bosphorus and was opened in 2008. It has 170 rooms with 28 suites. The peak season for Istanbul is May and June, with another peak season being between September and the end of October. It is sometimes hard to get a room, even in winter. This means that there will be a great need for more hotels in the future. We are now working on the Four Seasons Residences, and this will be the third Four Seasons development in the city.
How do you evaluate the real estate and construction sector in Turkey over the last few years?
Turkey was affected the least by the global financial crisis, and recovered quickly. In 2010 the rates per square meter began increasing, and land costs have tripled in places. Istanbul has great potential in that regard. Strict measures have been taken by the government in order to avoid the development of a bubble, such as those seen in the US and Europe. Banks are giving loans more generously, and there is still big potential. We don’t want to see a bubble, and further measures being taken may result in a slowdown in the sector, but this will be positive.
Astay is currently working on the Onaltıdokuz residential project. What further potential remains in the sector for additional fully integrated residential developments?
There is still big potential. Onaltıdokuz is located close to the Zeytinburnu district of Istanbul. This area has been designated by the government for urban development. It will become somewhat of a pilot district for the city in terms of renovation. Mixed-use projects, therefore, will be springing up in the region. Onaltıdokuz is therefore going to be the first project in that area. This campaign to develop underdeveloped regions will be a catalyst for further developments like this one.
What potential do you see for real estate developments outside of Istanbul?
In addition to our Four Seasons project in Bodrum, we are looking to begin four new projects in the coming years. Istanbul is the most populated city in Turkey with around 15-20% of the country’s population living here. After that, beyond Istanbul, there is going to be more interest in Izmir, Ankara, and Bodrum. Many companies are trying to buy land in Bodrum, with much land already having been bought. Istanbul will remain the heart of the nation, with the city looking to become a regional financial center. So, as well as development in other parts of Turkey, there is still vast potential in Istanbul as well. Istanbul still has a lack of housing, and this means we are able to sell at a higher price, and thus our interest, as well as the interest of other developers, is focused on this city. Once this market becomes saturated, I predict that developments will move to surrounding areas such as Bursa and Edirne.
In terms of Turkey’s overall attractiveness for FDI, how successful has the real estate and construction sector been?
At our Onaltıdokuz project, 15% of sales to date have been made to foreigners, mainly from Egypt, Lebanon, Kuwait, and Saudi Arabia, and also from the UK. This city has a promising future and we expect to see more Arab interest in Istanbul and Turkey, especially in terms of tourism, as many Middle Eastern citizens like to come here and invest in property instead of staying at a hotel. Furthermore, in addition to simple property purchase investments, the country is also attracting investment in terms of real estate and construction development. Turkey is a comfortable place to work in. It is easy to establish a company here, and it is easy to develop partnerships. ISPAT is also supporting investors well, and that organization has been positive. Astay is also revelling in this environment. We have a great reputation and good contacts. Finalizing the Four Seasons project has also given us excellent experience, and we are now on a comfortable development path, and can easily discuss and get along with investors.
What makes Astay such a good partner for foreign companies?
Our team members are very highly qualified. We have the ability to deliver in terms of finding the right partners and labor force. We also have a huge financial advantage and the right know-how in
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