REIFs: A New Opportunity For Foreign Real Estate Investors

    ISTANBUL, TURKEY, August 30, 2016 /24-7PressRelease/ -- Omurga Capital General Manager, Oguz Kosebay has reviewed the United Nations Conference on Trade and Development (UNCTAD) 2016 World Investment Report, and pointing out the 15% predicted drop in global foreign direct investments (FDI) in 2016, he emphasized the importance of developing different strategies in order to withstand competition. Kosebay drew attention to the fact that Turkey must develop different strategies to increase its share in global FDIs and attract new investments that will create production and employment. The fact is that "REIFs are much more responsive than real estate investments, and they carry less and distributable risks making them a strategic alternative for foreign investors," stated Oguz Kosebay.

Noting that the 2015 global volume of REIFs had amounted to 450 billion dollars, Kosebay continued, "We predict that REIFs will reach a volume of 4.5 billion dollars in Turkey, of which 70% will be foreign investors. Therefore, we expect that the contribution of REIFs to FDI will be 3 billion dollars with shares reaching 20%."

Foreigners seek new opportunities
Climbing up two degrees in 2015, Turkey came in 20th place in the list of countries drawing the highest foreign investments; but despite this performance, there was a decline of 45% in the first four months of 2016 in foreign investments flowing into the country, stated Kosebay. He further said, "This decline can be compensated somewhat by the end of the year as REIFs penetrate the market. The intense global competition in the real estate market will force inves-tors to seek new opportunities. Consequently, the REIF, as an alternative investment option, will be an important factor for drawing foreign investors to Turkey."

REIFs in accordance with EU and U.S. regulations
Stating that due to their structure, REIFs will contribute substantially both to the Real Estate and Financial Markets, Kosebay continued, "The transparency, ease in tracking, and flexibility for the investor and also the similarity to Europe and the United States regarding their regulations and operations, will make REIFs a popular FDI alternative. The Global Real Estate market has a substantial potential to grow, due to rapid urbanization and demographic changes. The increase in investable real estate in Turkey is also critically important for FDI."

Balanced distribution in investments is critical
Stating that in accordance with the global FDI dynamics and demand for investments, FDI in Turkey has also fluctuated, Kosebay continued, "When we evaluate the World Investment Reports of the last five years, we can see that Turkey's share in FDI ranges from 0.7 to 1.4 percent, similar to Turkey's share in the global economy. Notwithstanding the yearly fluctuations in figures, the real estate, production, finance and insurance markets earn an average of 20-25 percent share of the FDI. We believe that the balanced distribution in investments and the increase in real estate investments in proportion to industrial investments, is sustainable and favorable for the country's economy."

About Omurga Capital:
Founded by Omurga Real Estate, Omurga Capital, under the authority and surveillance of the Capital Markets Board (CMB) of Turkey, provides larger scale and more efficient investment opportunities for its investors by bringing them together. With their expertise in design, con-struction, real estate and finance, Omurga Capital's experienced team develops strategies to efficiently manage real estate investments and funds.

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