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Rema Real Estate Investment Inc.: International Investment Analysis

Rema Real Estate Investment Inc. is an investment company that is based in Turkey. The main aim of this company is to bring together a pool of investors under the company shield in a bid of diversifying their investment bids. As a result, the investors get the opportunity to invest in broader areas unlike in a situation where they invest on their own or as a small group. This in turn leads to guaranteed increased returns from this form of investment. In addition, there is a spread of loss over a broader area in this investment scheme thus the individual impact of loss on an investor is negligible.

The main investment strategy that the company uses is the purchasing of old buildings that need to be repaired or renovated. Most of these buildings have a historical, artistic or scenic value. They are mainly situated in Beyoğlu and its surroundings. After the renovations are complete, the investors generate revenue from these investments through the lease or sale of the floors of these buildings. The investors thus benefit from their investments through the increase of the value of these assets and the revenue that is generated from renting them. Beyoğlu is located in a strategic location. Its proximity to Istanbul, the availability of government offices, an efficient transportation hub and high numbers of locals and foreigners including tourists provide a high demand for these houses (Miles 154). It is, therefore, a guarantee that these investments will yield a tremendous financial return. Through its practices, Rema Real Estate Investment Inc. has made most of its investors realise their long term goals and dreams.

Beyoğlus Location

Şişli and Beyoğlu are part and parcel of Istanbul, one of the biggest cities in Turkey. Due to this fact, these towns are located in the most strategic region of the country. The towns are found between Haliç and Bosphorus which are situated in the southeastern side of Istanbul. This is the side of Istanbul that is in Europe. This is thus a prime area for individual to make capital investments in, especially in the real estate industry (Ayadi 12).

As a result of reliable, effective and efficient transportation system, Beyoğlu is a region that is easily accessible. The region has one of the most reliable transportation hubs in the whole Istanbul and Turkey, in general. Therefore, to access Beyoğlu at this point, it will be easier to use the E-5 and TEM highways (Jones 51). These are the most reliable routes to use by road. However, the region can also be accessed by using the two Bosphorous bridges along the Black Sea and the Marmara Sea. Individuals can also access the region via the Atatürk Airport. This airport is located approximately 20 km away from Beyoğlu. Therefore, the region can be easily accessed by international business people, tourists, locals, and so on. Other transporation options within the city include taxis, private vans and express busses. These transporation options make the movement within the region easy, hence making Beyoğlu a prime area for investing in.

The region of Beyoğlu and Şişli form the cultural and financial center of Istanbul and Turkey as a whole. The region is located on the boder between Europe and Asia. As a result, it comprises a mix of both the European and Asian cultures. There is, therefore, a rich cultural diversity within the region. This acts as a major tourist attraction of the region as it attracts both local and foreign tourists (Faroqi 256). The region is also meant to be a financial center of Istanbul. It has a number of government offices and institutions being found in the area. For instance, there are the Italian High School and the Austrian High School. Furthermore, Beyoğlu and Şişli have a rich social life. This is encouraged by the massive shopping and recreation centers that it has. These do not limit to the malls, stadiums, religious centers, parks, historic sites, clubs, bars and so on. Such developed ifrastructure makes it easier for individuals of different cultures and backgrounds to meet and interact (Faroqi 256).

Beyoğlus Potential

From the above analysis, a number of factors have been mentioned that make Beyoğlu a potential investment region in Instanbul. Perhaps, the rich history and culture of the region are the major factors that make Beyoğlu a potential region to invest in. Most of the buildings that are found within this area were constructed between 1900 and 1960 (Freely 429). As such, these buildings have a rich archeological and cultural history of the region. The design of these buildings is also spectacular. They have high ceilings and unique designs. This makes them attractive to the eye of many individuals.

Beyoğlu also has a high population. The İstiklal Street, for example, is estimated to have approximately 3 million pedestrians per day (Slobodan and Miroslav 139). This influx is supported by the effective and efficient transportation system of the city which consists of shuttles, metros, express bus services, maritime services and Atatürk Airport. The city also has a variety of hotels that can accommodate local and foreign tourists. According to Coillers International (“Turkey Hotel Market”. Coillers.com.), Turkey had 25.5 million international visitors in the year 2009, most of whom resided at the Beyoğlu region (2). The chart below shows a summary of the 2009 visitors in Turkey (“Turkey Hotel Market”. Coillers.com. 2).

a summary of the 2009 visitors in Turkey

Why Should International Investors Invest in Turkey

  1. Since the year 2008, the real estate industry in Europe has been on the downfall. This has been due to the global economic crisis that has destabilized many economical sectors of the region and the world at large. However, the status of the industry in Turkey has been relatively stable. In the second quarter of 2011, for instance, the number of apartment sales in Turkey had increased by 18 % in comparison to the same period in 2010 (Investment Support and Promotion Agency of Turkey 1). The entry of global investors into the sector coupled with massive mergers and acquisitions have increased the competitiveness of the real estate industry in Turkey. This has created a favorable environment to meet the market demand of housing in the country. At the present moment, the number of dwellings in the country is much lower than the number of inhabitants in the country. It is thus wise for foreigners to invest in the country to exploit this ready market.
  2. The country has also put in place a number of legislations that have made real estate investments to be safer and more profitable. This includes amends to land registry, mortgage and tax laws. In addition, the country has a sound banking system, reputable construction companies, and is ranked the third among emerging countries in the world to invest in real estate (Investment Support and Promotion Agency of Turkey 6).

Investment Strategy

The general investment strategy in this region will follow the following procedure:

  1. Careful investigation of historical buildings by agents and in-house analysts. This is because the architectural protection board (Anıtlar Kurulu) closely monitors these historical sites. However, the development of any architectural site is under the jurisdiction of the Beyoğlu Municipality. The company, therefore, needs to get the approval of the these bodies.
  2. The buildings should be located in Şahkulu, Asmalı Mescit, Tomtom, Firuzağa, Kâtip Mustafa Çelebi and Hüseyin Ağa. They should also encompass İstiklal Street as it is a prime area for investment.
  3. The buildings should be safe and in a good condition that allows extensive renovations.
  4. The cost of these buildings should be between $2000-$2,500. This price depends on the status of the building and its location.
  5. The company should then purchase buildings that have historical value in the region and renovate/develop them as per the current needs and requirements of the real estate market. This should take approximately 10 months before the properties are available for lease or sale.

The company is currently analyzing the following buildings:

Nane Sokak
Nane Sokak – Area: 325 m2 – Price: $600,000
Tornacibasi
Tornacibasi – Area: Büyük Hendek – Price: $1,500,000

The cost of renovation should be between $500 and $1,000 depending on the location of the property and the prices of materials and equipment that are required for the renovation practice. On completion, these buildings could be sold or leased as offices or residential houses. The selling price of these properties shall range between $3,000 and $5,000. This price is in line with the current market price of similar properties within the region. The selling strategy of these properties will depend on whether the renovated units are sold or leased independently or as a whole. However, the main goal is to get the maximum price possible within the shortest time. This is to meet the main goal of the company that is to keep the equity capital investment efficiency at the maximum level. This will in turn guarantee maximum returns to our investors.

Works Cited

Ayadi, Ingvar. The Impact of Reference Pricing System on Brand Name’s Prices: The Case of Tunisia. Tunis: Mashall publishers, 2009. Printю

Faroqi, Suraiya. Subjects of the Sultan: Culture and Daily Life in the Ottoman Empire. Istanbul: I.B.Tauris, 2005. Print.

Freely, Jason. History of Ottoman Architecture. Istanbul: WIT Press, 2011. Print

Investment Support and Promotion Agency of Turkey. “Real Estate Industry Report”. Invest.gov.tr. Invest in Turkey, 2010. Web.

Jones, Mitchel. The 21st Century Economy. London: Sage, 2005. Print

Miles, Peters. Planning and Decision Making. Boston: Yale Publishers, 2002. Print

Slobodan Naumović and Miroslav Jovanović. Childhood in South East Europe: Historical Perspectives on Growing up in the 19th and 20th Century. Istanbul: LIT Verlag Münster, 2004. Print

“Turkey Hotel Market”. Coillers.com. Coillers International. 2010. Web.

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