Turkish real estate.
Turkey’s largest city is home to just over 15 million people in total, and for the first time, tourist numbers are set to top that, with 15.5 million visitors to Istanbul expected by the end of the year.
Istanbul Chamber of Commerce president Sekib Avdagic said the city’s occupancy rate was almost 90%, and that tourists were pushing hotel prices up by 27%.
He added that the new Istanbul Finance Centre, on the city’s Anatolian side, will only increase the flow of visitors and investment into the city.
The historic visitor levels were a result of Turkey’s unique geographical position in the world, which puts 1.7 billion people in reach of the city, providing opportunities for export and tourism Avdagic said.
“Tourists’ travel habits are changing,” Property Turkey director Cameron Deggin said. "Once upon a time, a hotel room would've been a go-to. But travellers are moving away from places with a check-in counter and a small, soulless room, and looking for somewhere that acts more as a home away from home.”
But a home with bells on, he added.
“Well, it's not quite like their own home, it's better: travellers are targeting serviced apartments with five-star facilities, like concierge, room service, pools, saunas, spas.”
“You get the luxury of a five-star hotel but the privacy of your own home, at a much lower cost,” Deggin said.
Investors are getting on board
As with any tourism trend, the rise in demand for serviced apartments has had a knock-on effect on property investment. Eager to capitalise on the tourist swell, investors are targeting five-star serviced apartments in central areas.
Deggin points to options in suburbs like Sisli, Maslak, Beyoglu, Zeytinburnu. "These are central areas, or on the fringe of the centre, but with good travel links to the centre. Each of these places has its own local flavour, with all the amenities you could wish for: restaurants, shops, bars, cafes, supermarket and hospitals," Deggin said.
The advantage for investors
Higher rental yields
Research shows that long-term residential yields typically sit between 3-4%, compared to service apartments that can bring in up to 9% annual returns.
“This is because these five-star apartments target business people or tourists happy to pay a bit more for the extra features,” Deggin said.
“Of course, the downside is that the short-stay nature of serviced apartments means a higher volume of tenants, but with excellent management you can make more in the weekends than you would over a month.”
As well as being sought-after by short-term tenants, five-star serviced apartments are in high demand by young Istanbul professionals. When it’s time to sell, you’ll have no problem finding a buyer for your property, allowing a swift exit.
Serviced apartments have the added bonus of being regularly cleaned and maintained, another plus when it comes to selling.
Deggin recommends investors target their purchase carefully.
"As an investment, a serviced apartment is a solid one - but it has to be the right development, in the right area. Then, you're onto a winner."
For more information on investing in serviced apartments, email [email protected]
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