İnanç Kabadayı, Chairman of the Board at Ege Yapı, elaborated on the real estate sector and company targets for Business Diplomacy readers.
One of the issues that has been on the agenda lately is the increase in housing prices. How do you elaborate this increase? What can you say about the real estate sector?
The sector adapts to new realities and takes steps accordingly. Currency increases have led to a significant rise in the costs in the construction sector as well as in all other sectors. The vast majority of companies were put on hold, and investments also slowed down in this process. The fact that the product and money values differed greatly, unfortunately, had a negative impact on the business volume that could occur.
Even though the rate of home ownership has decreased in recent years throughout our country, the demand for residential or investment property purchases by saving continues. The number of houses that have changed owners in Türkiye in the last 5 years is around 7 million 125 thousand and the decline in the rate of home ownership reveals the need in this area. Supply-demand imbalance goes on in the housing sector. Housing producers have difficulties in producing housing in new housing projects due to the excessive cost increase in both financing and material prices, fuel, in particular.
Due to rising costs, the number of building permits obtained by real estate developers has decreased to a large extent. On the other hand, it should be noted that 700-800 thousand new houses are needed every year for residence purposes, as the number of households, which is 4 on average, has changed to 3 in recent years due to reasons such as increasing population, moving out for university education, divorce, etc. TurkStat data indicates that only 450-500 thousand houses were built last year. Therefore, this situation negatively affected the supply-demand balance, leading prices to increase. I believe that the project announced by the government is significant for the future of the sector. The presentation of 2+1 residences to the public at a price of TRY 608 thousand and 3+1 residences at a price of TRY 850 thousand will liven up the sector. Besides these incentives, additional measures may be taken, such as taking steps to develop cost-effective lands to increase housing production, increasing production by accelerating urban transformation processes, and so on. I predict that as a result of these steps the balance will settle back within a year. Despite the difficult year we had as a sector, the housing sector has a very high market potential… It is a sector that is open to development and progress, and I believe that there are many opportunities for companies that want to invest in this aspect, as a result of the recent developments.
Following the pandemic, in particular, smart and healthy living spaces entered the world’s agenda. How do you elaborate on this transformation?
The pandemic led houses with balconies, gardens, and fewer floors to become preferred. Following the pandemic, housing purchase preferences changed to houses with balconies, in a site or with gardens. Taking all these insights into consideration, we implemented our projects with large balconies and large gardens. We redesigned the common working areas and social areas in the projects, taking into account the needs.
In addition, the flexibility of working from home led people to continue the search for real estate in coastal areas. Those who are bored with the chaotic lifestyle of the big city are looking for more spacious living spaces for themselves. Based on this need, we are working to develop villa housing projects that can be used as both houses and offices, mainly in coastal cities.
As Ege Yapı, you have significant completed and ongoing projects. Could you tell us about these projects and what you have brought to the sector as Ege Yapı?
To date, we have produced more than 5 thousand housings and built dozens of office, hotel, school and commercial center structures. The total value of our completed projects is over USD 1.2 billion. We have already delivered 2 million square meters of construction projects, and also, the planning and construction of new 600 thousand square meters of projects continues. When these projects are completed, we aim to reach a value of USD 2 billion.
In all the projects we developed, we changed the scenery of the region we worked in and made the region a living centre. In particular, Batışehir, which was selected as the Best Mixed Project in Europe in 2012, as well as Pega Kartal, Iz Tower, Iz Park, Kordon Istanbul, Camlıyaka Mansions, Cer Istanbul and The Superior Suites are among the projects we have completed.
In order to develop the qualified building stock that our country needs, our investment move of TRY 7 billion worth of 7 projects in the most valuable locations of Istanbul and Izmir proceeds at full speed. The first step of this move was ModernYaka, which has been rising with an investment amount of TRY 1 billion 800 million in Ispartakule, the developing region of Istanbul. We will soon start the sales transactions in Beyoğlu, Çekmeköy, Kasımpaşa, Şile in Istanbul, and in Urla, Dikili and Alsancak in İzmir.
In addition to your real estate work, you also engage in art-oriented activities. What subjects does Ege Yapı focus on in the field of art? Will you have new projects?
As Ege Yapı, we follow art and artists closely and offer all the support we can for the development of art. We often come together with the artists of Atölye Cer (Railway Workshop), which we started especially to support young and talented artists.
Here, I would like to also mention CER ISTANBUL. Atölye CER, which we brought to life through our CER ISTANBUL project, the address of firsts, was established to provide workshop and exhibition opportunities for young artists who have just started their art career. We support the artists involved in this project through the workshop we have allocated under the CER ISTANBUL project and the exhibition area we have built to display their works and enable them to sell these works. At the same time, we help our artists to bring their works together with art lovers by supplying all their materials.