Torunlar Real Estate Investment Trust plans to invest a total of 1 billion Turkish Liras (around $268 million) in three years, the company’s chairman has said.
“We will focus on depleting our stocks in 2020 and use proceeds to complete ongoing investments,” chairman Aziz Torun told reporters.
He noted that the value of Torunlar REIT’s real estate stocks stands at 5 billion liras and said that the revenues of the company amounted to 991 million in 2019.
“Due to the 778 million financial cost, we closed the year 88 million liras in red,” Torun explained.
As far as the company’s ongoing projects are concerned, Torun informed that Mall of Istanbul Hilton with 180 rooms will open in June while the construction of some 3,200 units in the 5th Levent development have been completed.
The company will launch work to build another 700 units in the second phase of the 5th Levent project in the final quarter of 2020, Torun said.
Torunlar REIT targets to complete its hotel projects in Istanbul’s Beykoz district, in Galataport, and the popular holiday destination Antalya by the end of 2023.
Torun admits that it was a mistake for his company to shift focus from middle-income groups to high earners and develop projects for the latter segment.
“The Torun Center in Istanbul’s Mecidiyeköy quarter is an example of this. A slower economic growth, foreign investors’ wait-and-see approach towards Turkey had a negative impact on the sales from this project,” he noted.
The company is working on a new model to market the unsold units in the Torun Center, Aziz Torun said, adding that they inked a deal with an international firm to this end.
Developers have changed their business models, he also said.
In the past developers embarked on the sell-and-build scheme because of strong demand, Torun said. “Under this scheme, companies would first sell units from a project and then develop the project with proceeds collected from customers. But this has changed now.”
“Today’s market conditions dictate this: Deplete the stocks, repay debts and invest then,” he added.
Hurriyet Daily News