Archive for the ‘Turkey’ Category

Confessions of a MIPIM virgin

Thursday, March 14th, 2013

jon nealePosted by: Jon Neale
Head of Research – UK
Jones Lang LaSalle

I feel almost embarrassed to admit that this is the first time I have visited MIPIM. My excitement and interest in being here – and my enjoyment of the distinctly sunny, spring-like weather – is tempered by a slight sense of guilt. Apparently in below-zero Sussex, schools are closed and my wife is trapped inside with two under-5s.

The exhibition halls at Cannes provide ample evidence for a central argument made by Jones Lang LaSalle’s research teams: the property market is increasingly about competition between cities rather than countries. It is like an EasyJet itinerary of European cities: Gothenburg. Dusseldorf. Toulouse. Edinburgh. Poznan. Milan.

The hierarchies of European city-regions are also apparent. London and Paris have large tents outside the main hall – although admittedly the largest such structure belongs to the Russians. The fact that Turkey is the ‘country of honour’ – and that there are many conversations about the growing appeal of Istanbul – further demonstrates how the economic power of Europe’s eastern fringe is growing.

As head of UK research, though, my main interest is in how British cities try to grasp the opportunities presented by MIPIM. London, a case apart for obvious reasons, has no problems in grabbing the limelight; for what seems like several hours photographers and journalists appear to be circling Boris Johnson. Meanwhile, its tent is bursting with opportunities and initiatives, from Nine Elms and Crossrail to Hounslow High Street and Ealing. How the regional centres fare, though, will be the subject of my next blog.

How about Turkey….high return, low risk ?

Friday, March 11th, 2011

Kivanç Erman - Jones Lang LaSalle

Posted by:
Dr. Kıvanç Erman
Jones Lang LaSalle Turkey

As you may be aware, Turkish Real Estate markets have been subdued for the last three years.

Since the beginning of the economic crisis, we have been arguing that Turkey will be able to profit from this turmoil as we are the only country in Europe which did not spend a penny on the banking system. In 2009, when the crisis was much deeper, the Turkish retail sector has seen a net real growth of 20% with projects delayed but not cancelled. Turkish banks had piles of cash and nowhere to put it, therefore we did not have a cash squeeze either. Although our stated prime yield (speculative of course) was 8% for retail & offices, we are ready to bring it down to 7.5% in the first half of 2011 and most probably to 7% at the year end. Thus, in such an environment, it is expected to have a huge interest from the international investor, looking for a high return / lesser risk.

Whilst I arrived in MIPIM with a few spare slots in my diary, inevitably I ended up with no spare time left due to speculative client meetings. I observed a huge demand from international institutions, not only for existing schemes but also for developments as well. This MIPIM, I think the Turkish team met the most possible number of clients, local & international. Zorlu’s sponsorship of the opening cocktail party was a Turkish team success, namely down to our Chairman Avi Alkas, and this was an important event to make people remember Istanbul & Turkey.

It was not only the Turkish team who promoted Turkey but also our Pan- European Capital Markets team, in particular Jeremy Eddy as well as our Retail CEO Robert Bonwell. We all worked together to illustrate to international investors that Turkey has changed and is now similar to a unicorn in that you don’t believe in its existence and it is something you can only dream of. I personally talked about at least five possible deals that we couldn’t have even dreamt of a year ago and this is hopefully a good sign of what’s to come this year.

The Russians are coming…… again!

Friday, March 11th, 2011

Jeremy Eddy - Jones Lang LaSalle

Posted by:
Jeremy Eddy
Jones Lang LaSalle

Thank goodness for that. The slightly conservative event that MIPIM has been over the last couple of years has seen a boost again this year with a much larger Russian contingent. This market has its obvious attractions of strong growth and scalable city markets market. Russia has attracted cyclical investment to date from a limited investor base, however we believe this year will see investors taking significant positions in what is Europe’s most accessible BRIC economy. Similarly Turkey, ULI’s number one investment destination in 2011, exhibits the same growth characteristics and a burgeoning real estate sector.

Both these markets appear to have appeal for return driven investors, however the principal challenge in terms of further internationalisation of the market and real delivery on this appeal, would appear to be to avoid the “all that glitters is not gold” analogy. As we have experienced in these markets the biggest tangible risk is vendor related, with irrational pricing decisions, unappealing ownership structures as well as inconsistency in technical and legal aspects, the reward is clearly not without risk.

However we believe that now is the time for these markets, having missed out during the last cycle. More challenging is the business case for the North African markets, many of whom must have taken up the MIPIM early bird booking form! Many projects in this region are now looking extremely ambitious from a financing perspective however we have been reassured that as things settle in these economies and the outlook becomes clearer, occupiers and developers are poised to take advantage of the latent potential of these underdeveloped markets.

The great news is that we have real strength in Russia, Turkey and indeed the MENA region so wherever the action is we will be there.

International investors are back in the market!

Thursday, March 10th, 2011

Stephen Von Barczy - Jones Lang LaSalle

Posted by:
Stephan von Barczy
Jones Lang LaSalle

The re-internationalisation of the market continues with an increasing presence of American, South Korean, Kuwaiti and Qatari investors.  I have witnessed a new trend in the market as German open funds, traditionally highly active in the acquisition market, have increased their disposal activity, accelerating the natural rotation of their assets.  This is being attributed to the effects of a booming market or to a real need to generate liquidity.  As a result these funds are net sellers for the second time (2006 being the first time this was observed).

Insurance companies and pension funds seeking returns more lucrative than government bonds are particularly active too.  French REITs have made the most of the market conditions as well. Private investors have reinforced their strong positioning regarding secure assets of between 5 and 30 million Euros. Opportunistic and value add investors are progressively coming back, even if many have confirmed to me that they are being held back by a lack of supply adapted to their business models.

On the demand side, I think that French investors – fuelled by an improvement in their capacity to invest – and to a lesser extent by German investors, will constitute the core of the market. Considering available assets, I am betting the high level of demand we have witnessed in 2010 will remain stable.

Clients First….

Wednesday, March 9th, 2011

Kivanç Erman - Jones Lang LaSalle

Posted by:
Kivanc Erman,
Jones Lang LaSalle

I arrived in Nice on a packed plane from Istanbul on Monday afternoon and since then have been with clients and at lunches and dinners.

The MIPIM bound flight from Turkey was full of developers, investors and agents.  Business started at the airport with everyone chatting about the markets and expectations for MIPIM. The preliminary stats of participants looked promising and everyone agreed that it would be a better MIPIM this year.

During MIPIM, Cannes is transformed and is a complete contrast to when MAPIC or any other property event in EMEA. The town’s population nearly doubles and is concentrated in the centre, around the Palais. The roads are busy and the bars are full.  Peaceful Cannes becomes a noisy monster where you can struggle to get a decent night’s sleep.  You cannot easily find a place to eat breakfast, lunch or dinner unless you have reservations. It is certainly not a typical relaxed small French riviera town. Yet we are not here for the Cannes Cinema Festival are we.

The first day of MIPIM was very active for us.  I met a lot of clients, some current some prospects and had meetings with lots of other people.  There is a common expectation that 2011 will be a much better year and the show will go on in Turkey. We have even started to see some potential product on the market.

The first day was launched with the opening party at the Carlton Hotel, sponsored by Zorlu Center, with Jones Lang LaSalle Turkey is involved in. The show was really marvellous;  a sufi dancer followed by Burhan Ocal, the percussion master and some additional shows followed.  Full with Turkish music and food, the invitees seemed happy and danced the night away.  A good start to a promising week!