A new luxury Mandarin Oriental resort in Turkey’s Bodrum has seen a surge in Arab buyers snapping up off-plan properties following a change in the country’s investment laws, according to the project’s developer.
The €600m (US$780m) Mandarin Oriental Bodrum, the Asian operator’s first European resort, will feature 98 villas and 118 apartments with views overlooking the Aegean Sea, as well as a 102-room hotel.
Astas Holding, the Istanbul-based developer behind the project, said that since beginning off-plan sales ten months ago, approximately 50 percent of the residences have been sold. Prices range from €1.2m for to €6m, with handovers set to begin early next year.
“We’ve generally had Turkish, European and CIS [buyers], and from the Middle East we have customers,” Astas Holding’s chairman Vedat Asci told Arabian Business. “We can’t say the names, but we’ve had 15 customers from the Gulf countries. Our target is one year from today we will have sold everything.”
Astas has financed the project through a combination of its own cash reserves, loans from Turkish banks and receipts from pre-sales, Asci said.
Until July last year, buyers from the Gulf were unable to invest in Turkish real estate due to the country’s reciprocity law. Following the withdrawal of this legislation, Asci said he expects more investors from the region to target luxury Turkish property, primarily as holiday and retirement homes.
Figures from Turkey’s Ministry of Culture and Tourism showed that the number of visitors to the country from the UAE and Saudi Arabia increased by 82.84 percent and 96.15 percent last year, respectively. The country’s economy will grow 3.5 percent this year, down from 3 percent in 2012, according to an International Monetary Fund projection.
“The last ten years, the Turkish economy has been very strong and very positive. A lot of Arabic people are coming to Turkey to holiday, to buy and for investments,” Asci said.
“There’s a lot of opportunity, you buy real estate in Turkey and the price will increase. The economy is booming, it’s a young population and people are spending a lot.” Asci added that he expected the price of luxury property in Turkey to increase by 20 percent to 30 percent annually, due to a shortage of high-end developments in the country.
He added that the impact of the euro zone crisis and the Arab Spring political unrest had helped direct capital flight from these markets into Turkey, which Asci said has increasingly been viewed as a safe haven.
Asci said that for the Mandarin Oriental project, Astas was primarily targeting buyers who planned to use the properties as holiday homes, although buy-to-let investors could potentially make US$60,000 by renting out residences over Bodrum’s busy summer period.