Power and beauty: Foreigners snap up Istanbul’s iconic waterfront mansions

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Real-estate brokers in Istanbul said that out of around 600 waterside yalis along the Bosphorus, 60 were currently up for sale. (AFP)
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Prospective buyers of the yalis are likely to be from the Middle East. (AFP)
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Prospective new owners can expect to pay up to $100 million for one of the premium properties along the Bosphorus River coast on the Asian side of Istanbul. (AFP)
Updated 09 October 2018
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Power and beauty: Foreigners snap up Istanbul’s iconic waterfront mansions

  • Dozens of yalis are now up for sale as Turkey enters a more troubled economic period and owners seek to cash in their luxury assets
  • Prospective new owners can expect to pay up to $100 million for one of the premium properties

ISTANBUL: They are among Istanbul’s most iconic sights — magnificent waterside mansions strung out along the Bosphorus as the waters of the strait dividing Europe and Asia lap almost at their front doors.
Once the preserve of the Ottoman elite and affluent foreigners working in what was Constantinople, the mansions, known as yalis, were made famous in novels and more recently through modern Turkey’s hugely successful TV soap operas.
But dozens are now up for sale as Turkey enters a more troubled economic period and owners seek to cash in their luxury assets.
Prospective new owners can expect to pay up to $100 million for one of the premium properties — but have the chance of obtaining a Turkish passport thrown in.
With such a hefty asking price — as well as the opportunity of becoming a Turkish national — buyers are likely to be foreigners, heralding a drastic shake-up in the mansions’ ownership.
Real-estate brokers in Istanbul said that out of around 600 waterside yalis along the Bosphorus, 60 were currently up for sale.
The Turkish lira this summer plunged in value as markets reacted to a bitter spat with the United States and many buyers think now is the perfect time to snap up property assets while the currency is cheap.
Sales have to be in Turkish lira — President Recep Tayyip Erdogan’s government has banned the sale, rent or leasing of property being conducted in, or indexed to foreign currencies.
Brokers say that in a major turnaround, prospective buyers are almost never Turkish and are likely to be from the Middle East, especially Ankara’s closest Gulf ally, Qatar.
“With the lira losing value, Istanbul has become a paradise for people from the Gulf with higher purchasing power in their hands,” Hamed Elhamian, sales director at ANKA Invest, said.
“Investors from the Gulf believe that the lira will rise in value in the near future and their investments will appreciate in a very short time,” he said.
Ugur Ayhan, a luxury real-estate consultant, also said foreign buyers had been showing greater interest in Turkey over recent months.
“Our potential clients are largely from Middle Eastern countries. We see people from Azerbaijan and Iran but we have a customer portfolio dominated by Qatar,” he said.
Along with the financial incentives, another attraction of buying a property is the possibility of gaining a Turkish passport, which offers eased or visa-free travel to key destinations.
Under a decree issued last month, Turkey made it easier for foreigners to become Turkish citizens by reducing the financial and investment criteria for citizenship.
Foreigners now need to have $500,000 deposited in Turkish banks — down from the previously required $3 million — while fixed capital investment was cut from $2 million to $500,000.
And crucially, individuals owning property worth $250,000 or more are now also entitled to become Turkish citizens, compared with the previous value necessary of $1 million.
Yet Ayhan said that, while the latest measures would ramp up demand for newly-built apartments in Istanbul, a yali was an ultra-luxury asset beyond the range of most buyers.
“It is not possible to buy a luxury apartment, let alone a yali with $250,000,” he said.
Among the hundreds of mansions along the two sides of the Bosphorus, 360 of them are of historic value, according to real-estate broker Pinar Ayikcan Tuna.
For the historic mansions, potential buyers need to receive permission from both the development directorate of the Bosphorus and the council of monuments for any renovations or to fortify a building’s exterior facade.
“Turkish laws require that historic buildings are renovated or restored according to the original,” Ayhan said.
Some of the mansions are still owned by members of the Turkish elite, including the two largest family conglomerates: Koc and Sabanci.
However, said Elhamian: “The domestic interest in the real estate is very low.”
“Many local Turkish citizens and developers are looking to sell their real estate to foreigners who are looking to buy luxury properties worth more than the $250,000 needed for citizenship.”
Turkish soap operas, often with dozens of episodes lasting two hours each, hold the Arab world in thrall and have also tempted potential buyers from the Middle East.
Many of the soaps, which range from modern romances to historic dramas, have evocative settings in waterside mansions on the Bosphorus. Tour companies in Istanbul even offer Arab tourists bus trips to the locations.
Interest surged in particular following the hit 2008-2010 series “Ask-i Memnu” (“Forbidden Love”), which ran to almost 80 episodes and was wildly popular in the Arab world.
Its dramatic scenes of love and betrayal within a rich Istanbul family — based on an over 100-year-old novel but updated to the present day — were filmed in a historic yali in the city’s Sariyer district.
“Those soap operas are actually our big advertisement overseas,” Tuna said.
“People from Middle Eastern countries come and buy these kinds of properties here because having a Bosphorus mansion in Istanbul is like a signature of power and it is a very unique beauty.”
Reha Grandjean, French-Turkish and family owner of a mansion on the Bosphorus, said to own such a place was special.
“It is a particular property because as soon as one of them is put on sale, everyone wants their ‘yali’, everyone wants their little paradise.”


‘Substantial progress’ made on major China trade deal that excludes US

Updated 17 min 47 sec ago
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‘Substantial progress’ made on major China trade deal that excludes US

SINGAPORE: Substantial progress has been made on hammering out a China-backed trade deal, Singapore’s leader said Wednesday, driving ahead the world’s largest commercial pact which the United States is excluded from.
World leaders gathered in the tropical city state this week for a summit where a massive Beijing-backed agreement covering half the world’s population has dominated discussions.
Diplomats have been trying to nail down details as Beijing entices its neighbors to join a commercial alliance seen as an antidote to President Donald Trump’s “America First” protectionist trade policy.
The US has imposed tariffs on roughly half of what it imports from China, prompting Beijing to retaliate with its own levies.
Beijing’s leaders have recast themselves as the defenders of global commerce — with the United States under Trump relegated to the sidelines.
China, Japan and India are among 16 Asia-Pacific countries negotiating the Regional Comprehensive Economic Partnership (RCEP).
“Substantial progress has been made this year to advance the RCEP negotiations,” Singaporean Prime Minister Lee Hsien Loong said Wednesday evening, adding talks were now “at the final stage.”
“With the strong momentum generated this year, I am pleased to note that the RCEP negotiations are poised for conclusion in 2019,” he added.
But he cautioned any further delays could risk “losing credibility” for a deal — which has already taken six years to negotiate.
This week’s meetings are the biggest in a series of annual gatherings organized by regional bloc the Association of Southeast Nations (ASEAN), and are attended by 20 leaders.
RCEP was given extra impetus after US President Donald Trump pulled the US out of the rival Trans-Pacific Partnership (TPP) in early 2017.
That deal was spearheaded by his predecessor Barack Obama and aimed to bind fast-growing Asian powers into an American-backed order to counter China.
The TPP is still alive even without Washington — and will come into effect in December — but RCEP, if realized, will be the world’s biggest trade deal.
However, the Beijing-backed pact is much less ambitious than the TPP in areas such as employment and environmental protection.
Beijing had hoped to have the meat of the deal done by the end of this year, but the timetable has now slipped to 2019.
However, this has not stopped Chinese leaders from basking in the progress already made.
During a meeting with Southeast Asia leaders, Chinese Premier Li Keqiang said he was hopeful talks would “break through the ceiling” and take regional trade “to new heights.”
Trump is not at the Singapore summit, nor will he attend a subsequent gathering of world leaders in Papua New Guinea at the end of the week, having sent Vice President Mike Pence instead.
National Security Adviser John Bolton, however, told reporters in Singapore that the president’s no-show should not be seen as a lack of commitment toward the region.
He blamed a “schedule crunch” after a particularly frenetic few weeks that included the midterm elections, attending the World War I armistice commemorations in France and preparing for the G20 in Argentina later this month.
There are still major sticking points in RCEP talks — with regional rival India particularly nervous about giving Chinese companies greater access to its markets, and wealthier nations wanting to see more progress on labor reforms.
Disagreements on intellectual property rights, goods tariffs and financial services are also on a long list of issues that still need to be concluded.
Also, the spectre of possible leadership changes with several general elections scheduled early next year — India, Thailand and Indonesia — have also complicated the timeline for a deal.
Aaron Connelly, an expert on Southeast Asian politics at the International Institute for Strategic Studies, said the fact that RCEP negotiations were not concluded at this year’s ASEAN could indicate China has some way to go to convince neighbors to sign up.
“It’s interesting that when Beijing is at its most vulnerable on trade, with US tariffs biting, they weren’t willing to concede enough to their neighbors in terms of market access to get a deal done,” he told AFP.
At the same time, trade ministers across Asia Pacific have sounded a largely positive tone this week, saying they expect the pact to be agreed sooner rather than later.
“The future lies in RCEP,” Indian trade minister Suresh Prabhu told reporters earlier in the week.