Mortgage crisis directs foreigners toward commercial property, also in Turkey    2007-09-16

  Turkey is one of the countries that has started to emerge as a potential investment target. “Many institutional investors worldwide are looking for new targets to invest in, especially after the crisis that emerged in August,” says John Kriz, Managing Director responsible for Real Estate Finance at Moody's, the international ratings institution.

  Some international investors are focusing on commercial real estate in East Asia, Latin America and Central and Eastern Europe. However, there are more investors that are looking to buy commercial real estate in relatively untouched regions like Turkey.

  According to Kriz, especially Istanbul, with its high quality office buildings, business centers, hotels and shopping malls, is an unprecedented opportunity for investors. The commercial real estate sector, when compared to residential real estate, is still healthy and has notable growth potential.

Real estate investment trusts to become popular:

  Real estate investment trusts (REITs) that invest in real estate projects with high-income potential are going to become popular. “Turkish economy needs commercial real estate to grow. You need to invest in real estate while the economy diversifies. REITs are a good solution to finance these investments. They provide liquidity for the market and confidence for investors at the same time,” said Kriz.

  “REITs are global brand names for publicly owned real estate assets. Moody's has many clients who want to invest in international property that is not listed on the stock exchange. REITs are the best way to do so.”

Public ownership of commercial real estate:

  Moody's is expecting an increase of public ownership in the commercial real estate sector, Kriz said. He also noted that publicly owned REITs are more beneficial in finance when compared to private REITs.

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