Business

Investors flocked to real estate funds during the pandemic

The “Real Estate Sector Report” prepared by Re-Pie Portföy Yönetimi A.Ş. revealed important data on expectations for the future, as well as the performance of the sector in the pandemic process.

In the report, which noted that the real estate sector, like many other sectors, was affected by the conditions of the pandemic, it was highlighted that in 2020, due to uncertainties, investors turned to real estate investment funds that allow them to distribute their assets to your risk preferences. The report also draws attention to changing business models in different industry segments and investor preferences and expectations that change based on conditions.

THE REAL ESTATE COMPANY HAS INVESTMENT FUNDS IN THE NEW NORMAL

Re-Pie Portfolio Chairman of the Board of Directors, Dr. Emre Çamlıbel said: “In this report, we focus on real estate investment funds, along with residences, offices, shopping centers, logistics and accommodation facilities, which are the components of the real estate sector.

We see that the pandemic process has different effects on these components. Especially on the housing side, the interest rate reduction campaign led by public banks allowed property developers to deplete their stocks and the housing market, which was far from its former dynamism, to show a positive behavior periodically.

Also, with the development of e-commerce in recent years, while the demand for logistics centers has increased, we see an increase in rents. While offices, shopping malls, and lodging facilities faced difficulties during the pandemic process, interest in real estate investment funds increased during this period.

The size of the Real Estate Investment Fund increased by 20 percent compared to the previous quarter and reached TL 8.5 billion.

Between September 2020 and December 2020, we see that the CMB granted the permission for the establishment of 2 new real estate investment funds and the approval of the issuance certificate for 1 real estate investment fund. As the pandemic continues, we see that the real estate sector is restructuring under “new normal” conditions.

Taking into account the trend of real estate investment in our country, we can easily comment that real estate investment funds, which allow investors to distribute their assets according to their risk preferences during the pandemic period full of uncertainty, come to the fore in 2020 ”.

THE HOUSING MARKET REGENERATED IN 2020

According to the report, the total sales of 1,499,316 housing units were made in Turkey in 2020. As of December, the amount of mortgage sales amounted to 573,337 among them. After stagnant 2018 and 2019 years, the housing sector performed above expectations despite pandemic conditions and economic contraction.

The campaigns of public banks and the lowering of housing interest rates have achieved the highest annual volume of mortgage sales in the last 10 years and surpassed the sales of the last two years.

If the campaigns of the public banks had not been implemented, the annual mortgage sales would be 350-400 thousand; total sales would remain at 1.2 million units. The report also emphasizes that while there is a collapse in the housing stock due to the campaigns, rapidly rising construction costs cause a decrease in the number of new projects and an increase in the value of homes in the medium term.

OFFICE TENANTS DRIVEN TO CHANGE THE BUILDING AND LOCATION

Turkey’s commercial property price index was performed at the end of December 2020 at a level of 177.19 points. The index showed an increase of 35 points compared to the same month last year, and a monthly increase of 2.53 points. The index, which started 2020 at the level of 146.97 points, increased 30.22 points in the 12-month period.

During the pandemic process, it is observed that the increases in the availability rate in the Istanbul office market in some regions are partially balanced by the occupancy in other regions. This indicates that tenants prefer to exchange buildings and regions for more favorable rents.

CAN OPEN THE NEW NORMAL CONCEPT OPEN AIR SHOPPING MALL

According to data from the Shopping Center Billing Index that is not adjusted for inflation, the sector contracted 11 percent in November 2020 compared to the same period last year. The increasing volume of e-commerce during the pandemic period, competition in the shopping center sector, ongoing shopping centers and shopping streets stand out as the new determinants of competition in this area. In the new period, it seems possible that shopping malls will become entertainment rather than shopping, and the number of outdoor malls will increase rapidly, especially in the summer season.

WITH E-COMMERCE, THE CITY’S LOGISTICS INCREASED AND THE RENTAL OF FACILITIES INCREASED

In the second half of 2020, the market where the negative effects of the pandemic were least experienced compared to other sectors was the logistics market. Although production at industrial facilities slowed and stopped in some places, the demand for city logistics facilities increased with the rise of e-commerce in this period. With increasing demand, rents increased in TL terms. In 2021, the declines in unemployment rates are expected to continue with the effect of the epidemic and in parallel with this, rents will increase in TL per square meter.

DECREASE IN HOTEL CONSTRUCTION LICENSES

Culture and Tourism in the third quarter of 2019, according to data obtained from the Ministry of the total number of foreign visitors arriving in Turkey approximately 18.4 million tons, for the third quarter of 2020 it can be observed that this value is 4.4 million . It was observed that building permits issued by municipalities for hotels and similar buildings decreased by 42 percent in 2019 compared to the previous year, and occupancy permits decreased by 12 percent in 2019 compared to the previous year .

As of September 2020, there are 485 building permits and 388 building permits. In line with the data, it is estimated that the future of the tourism sector, which is one of the sectors with the most negative effects of the epidemic, will be configured in parallel with the severity and duration of the epidemic process.

REAL ESTATE INVESTMENT FUNDS GROW 20 PERCENT

At the end of December 31, 2020, 7 of the 23 portfolio management companies authorized by the CMB were authorized to establish only Real Estate Investment Funds, and 7 were authorized to establish both Real Estate and Venture Capital Investment Funds.

There are 47 real estate investment funds under the management of these portfolio management companies, including those whose issuance period continues or who have made investments for the first time, including 8 Re-Pie Portfolio funds, while the total size of these funds is 20 percent compared to the previous quarter and reached the level of TL 8.5 billion.

When the investment strategy of the funds was examined, the strategies highlighted by number of funds were mixed (38 percent), housing (24 percent), and office (24 percent).

FILE: UNITED STATES INTEREST IN TURKISH HOUSING

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