Bosporus Blog…BRICKS & MORTAR: Turkey puts 2B land up for sale, at last
BRICKS & MORTAR: Turkey puts 2B land up for sale, at last
April 24, 2012
Follow Bosporus Blog on Twitter
On April 18, the Turkish parliament approved the sale of 2B land, or deforested land owned by the treasury, according to Erste Bank. The ability to sell such land should help push up land valuations and advance “urban transformation” projects that the government has made a key priority.
The law allows the government to sell 2B land at “70% of its fair market value,” according to Erste. There is about 4.1m acres of 2B land in Turkey, with about 80% of it located in major cities in the west of the country. Such a description might make the eager investor jump to the conclusion that such land is mostly in Istanbul. However, only 4% of the total 2B lies in Istanbul, according to Erste. Antalya, Mersin, Mugla, Adapazari, and Balikesir are the provinces where about 90% of the land is located, according to local daily Today’s Zaman.
The government aims to complete sale of the 2B land by the end of the year. “We expect [the government’s Housing Development and Public Participation Administration] TOKI to be the main beneficiary of this process,” writes Erste. “Thus, where the acquisition of 2B land is concerned, the greatest [real estate investment trust] beneficiary among listed real estate companies would be Emlak Konut REIT, given that TOKI is its main shareholder. Emlak Konut REIT is able to acquire land from TOKI without a tender.”