Loft targets Germany and US, as demand falls

Akfen Holding, which creates real estate projects in Istanbul and Ankara under the Loft brand, has set its heart on foreign climes amid fears of a shrinking housing market. Akfen currently has two ongoing projects in Ankara, worth a total investment of TL 800 million, but Akfen Insaat Chairman Selim Akin believes increasing construction costs and competitive market conditions in Turkey have led to reduced opportunities.

As a result, Akfen is making plans to enter countries such as Germany and the US with its Loft brand. “After the election to be held in 2019, the market is likely to open up. We are not considering to stop investing as a company,” said Akin. “We will look at projects we come across. We will identify areas such as dormitories, other sectors and other countries. We have TL 700 million-worth of apartment stock. If this falls to TL 200 million, we will start another project.”

Akin attributed poor sales to a lack of demand in the market. “We have sold 600 houses in 45 days in the first campaign we made for our Incek Loft project. We could only sell 35% of our Bulvar Loft project, which we put in the market a year ago,” he said. “July 15, the presidential referendum: we have not survived a single alien invasion.” He added there is no shortage of supply in Ankara, with 50,000 migrations per year, stating that “the reason demand remains dense is Turkey’s agenda. People expect a predictable environment.”

Plann ng to bu ld add ct on cl n cs

Talking about the contracts Akfen has made for three city hospital projects in Isparta, Eskisehir and Tekirdag, Akin said: “There is a slight slowdown in this area. If these projects continue, we can bid for one or two city hospital auctions.” He added that Akfen has plans to build addiction clinics as the company deems the government’s alcohol and substance addiction treatment center (AMATEM) insufficient. “A Dutch partner has seen potential in Spain and Turkey. There is a bit of a legislation problem. If we solve this, we plan to make 10 [addiction treatment centers] in the first instance, which will apply psychological treatments. The first will be for the A-plus segment. Then we are thinking about making [similar places] for lower income groups,” he said.

Akfen also owns 20 hotels and Akin assessed the current state of the tourism industry. Talking about the hotels Akfen has built under the Loft brand in Bodrum, Akin said: “Occupancy rates – especially in Trabzon – are good but there is a pricing problem. However, we are not at the price levels we hope to be in Ankara, Eskisehir and Izmir.”