Franklin Templeton Real Estate Advisors is looking for funds operating in Turkey to invest in.
Currently, the firm has invested in one private real estate fund, which has two local partners in Turkey. Franklin Templeton's real estate investments in Turkey consist of a retail unit and residential properties. The firm manages assets totalling approximately $5 billion, some half of the sum being invested in 75 private real estate funds worldwide.
Turkey a ‘developed emerging market'
Turkey is an attractive investment target because it is a very young market and a large economy, and there is little modern stock in residential, retail and office properties, Raymond J. Jacobs, managing director of Franklin Templeton Real Estate Advisers, told the Turkish Daily News at the annual meeting of the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) in Istanbul yesterday.
“It is important to note that Turkey is not a developing emerging market, but a developed emerging market. Turkey as a market is similar to Brazil in the sense that both countries are developed emerging markets. Whereas Brazil is a more developed emerging market than China and India are, so Turkey is a more developed market than, for example, Ukraine and Romania are,” Jacobs said.
‘Turkish market strongest in Europe'
Hakan Kodal, president and chief executive officer of Krea Real Estate Development and Investment in Istanbul, said at the conference that Turkey offers notable future potential for real estate investment because of its population dynamics, the high number of medium and large cities with unsaturated real estate markets, the lack of quality assets across all market segments and the limited use of leverage.
“The total housing demand is estimated to be around 6.9 million units over 10 years, making the Turkish market the strongest in Europe in terms of new housing over this horizon,” he said. Kodal also noted that approximately 60 percent of the current stock in Istanbul must be replaced due to lack of occupancy permits, sub-standard building quality and earthquake risk. “This means notable investment opportunities in the sector. […] It is the right time to take a medium to long-term position in investing in Turkish real estate.”
The annual conference of INREV, which was attended by nearly 400 real estate investment professionals, ended yesterday.