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Urban transformation in Turkiye is mainly shaped by financing models due to the lack of capital. The common model is flat for land and the other frequently applied models are share of revenues, presales and build-and-sell methods.

Especially large-scale urban transformations depend on if it is financeable or not. In small areas, it is easier to do transformation by the building contractor’s own resources. Particularly in big transformation projects, financing issue and public support (practical finance support, providing technical and juridical bases for financing projects) are critically important.

Recently new modes of actualizing, financing and compensating urban transformation projects have been researched in Turkiye.

Pension funds, Personal Pension System (BES) and recently introduced tools by the Capital Markets Board of Turkiye (real estate certificates, infrastructure REITs, real estate investment funds, alternative funds, project bonds etc.) are examples of financial tools. In addition to this, new incentives like increases in zoning and zoning rights transfers and the on-going incentives for investors (housing credits, interest compensations, rent grants, exemption from taxes and fees, 1% VAT) have been tried to be developed on research bases.

 “Green and Sustainable” constructions also give essential opportunities. For the increasing population, 7.560.000 houses are predicted to be constructed between 2012 and 2023. If these buildings will be constructed as green by 2023, approximately USD 25 billion of water and energy savings can be made. Bearing in mind that 6.7 million houses will be reconstructed due to disaster risks, it is possible to get the similar savings by green reconstruction.

Investors can make use of the opportunities of financing, direct project investments, project development, collaboration with the Ministry and other public enterprises, corporate or individual purchases. Participation of foreign investors in the urban transformation procedures is another issue on the agenda.

50% of 335.000 houses/year will be demolished by the private sector and the other 50% will be renewed by the owners. What can be inferred by this is that out of 587.000 houses, 419.000 will be met by the private sector and 168.000 by the owners.

*USD 58 billion annually

*USD 1.17 trillion in 20 years

Sosyal Medyada Bizi Takip Edin !