The FINANCIAL -- The EBRD and Nef a leading real estate developer in Turkey, are joining forces in a US$ 120 million venture to invest in modern, earthquake-proof and energy-efficient property in a move to promote urban regeneration and greener standards in the construction sector.
“Green” is among the six transition qualities the EBRD has identified as the characteristics of a successful economy, which should also be competitive, well-governed, inclusive, resilient and integrated.
Established in 2007, Nef is the sector leader in terms of units sold and revenue. In the last five years, the firm has developed over 25 projects totalling more than 1 million m2 and worth over US$ 2.4 billion.
The two partners are contributing US$ 60 million each to roll out Nef’s unique housing concepts aimed at Turkey’s growing middle class: the Fold home, which is a block of flats with up to 24 shared facilities such as guest rooms, a cinema, fitness centre, meeting rooms, kitchen and dining rooms; and NOVU, a student accommodation concept launched for the first time in September 2016 at Istanbul’s Merter complex.
The joint venture will be managed by Intus Capital, a real-estate private equity firm in Istanbul and an affiliate of Nef, according to EBRD.
The investments will focus on urban regeneration, including redevelopment of buildings in earthquake-prone areas. Located in a region of high seismic risk, Turkey is among the countries most vulnerable to earthquakes.
The projects developed by the joint venture will also incorporate design features that will enable them to receive LEED (Leadership in Energy and Environmental Design) Gold certification, a mark of excellence. The certification recognises significant energy savings and includes requirements for more sustainable management of construction sites, for water efficiency, recycling and reuse of construction materials, and minimisation of construction waste.
Erden Timur, founder and CEO of Nef, said: “We are pleased to begin this long-term partnership with the EBRD and continue investing in Turkey’s future. This is an important vote of confidence in our economy and its long term-growth. Nef is Turkey’s leading brand in residential real estate development, and we are proud to also lead the sector in attracting international institutional investors. The EBRD’s track record of successful partnerships gives us confidence in our joint success. We look forward to building exemplary projects throughout Turkey together.”
Signing the transaction at the Bank’s London headquarters, Jean-Marc Peterschmitt, EBRD Managing Director for Industry, Commerce and Agribusiness, commented: “We are delighted with this first EBRD investment in the Turkish residential and student housing sectors in partnership with Nef. Turkey is one of Europe’s largest residential markets, with over 600,000 new homes sold every year. It is also Europe’s largest student housing market with over three million university students. This joint venture will help meet the demands for residential and student housing in Turkey.”
Claudia Pendred, EBRD Director for Property and Tourism, added: “We are pleased to be entering this long-term partnership with Nef and becoming part of its unique Fold concept. What sets this transaction apart is its strong focus on sustainable construction and operation, which is at the very core of our joint investment strategy. We look forward to developing successful housing projects together with Nef in the near future, contributing to the Turkish government’s policy goals of delivering modern, earthquake-safe residences for Turkish families and students.”
Bülent Kozlu, Managing Partner of Intus Capital, said: “We are excited to establish this partnership between the EBRD, one of Europe’s most reputable institutional investors, and the local sector-leader Nef. We see attractive opportunities in Turkey’s residential and student housing and we already have a strong pipeline of projects. Turkey’s growing population, the increase in mortgage financing and the urban regeneration process led by the government underpin our focus on the residential sector. In the student housing segment the tripling of the student population in the last 10 years and the lack of accommodation have created unique demand and investment opportunities.”
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. The country is a top destination for the Bank’s finance, with €1.9 billion invested in 2016 alone. To date, the Bank has invested over €9 billion in Turkey through more than 220 projects across various sectors and has mobilised nearly €20 billion for these operations from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.