Keith’s Weekly Property News March 6-3-2022
War, pain, inflation and what remains
Had to push hard to scribble down a few utterances here today as recent events have left me uncharacteristically speechless. Like many people, the war has somehow gotten inside me. As the hope hour fades for any kind of resolution that may bring something less than a bloodbath in this fratricidal war, reality sinks in. The world is really nothing like we thought it was two weeks ago. Nuclear options are on the table as the world lets out a sustained gasp. I do not know what else to add other than to say it is a tragedy of epic proportions for both the Ukrainian and Russian peoples. I guess every 10-20 years an event occurs to make us realize we are far from any kind of world we all want to live in. All we can pray for is an unlikely deus ex machina to descend on this theatre of horrors and set the world right again. Personally. I am not even sure what that looks like at this point.
On to further uncomfortable truths. The CPI inflation of Turkey blew past 50% and no doubt many more Turks are feeling the bite of poverty-like conditions. The currency has been surging upwards again, with the culprit obviously the uncertainty of the war. If we aspire to Dr. Panglosses inane philosophy, “All is for the best in this, the best of all possible worlds”, faith in that must have been sorely tested recently.
Turkey is obviously, once again, not a minor figure on the geo-political stage. I may even go out on a limb here and say that the war has the potential to drive a further wedge between Turkey and the West. There are a few ways that could happen. Turkey, with her back to the wall economically, might be open to striking a deal to get discounted Russian oil that others refuse to buy. Surely, the longer this conflict goes on, the greater the likelihood that some hitherto unthinkable scenarios may actually happen. Right now, Turkey is delicately trying to balance their relations with both countries, which is clearly the optimal approach for Turkey. However, pressure may mount in time. Again, I am getting a bit distant from mandate of presenting properties here, so I will leave this up to zoom discussion perhaps.
On Saturday, I travelled to Izmir with the primary intention of checking out properties in great locations and with great views. I need more viewings to really calibrate, but my initial impression is that it is a deep value proposition here. If people are interested in having more than 1 property to reach CBI, this is an ideal spot to have one. A whole CBI here would also be eminently sensible, such is the value. Sweeping and majestic sea views starting from 1.25K USD per sqm (unrenovated, of course). The kind of views you could expect to easily pay 3-4 times more for in Istanbul. I will mostly look at properties in the 2 million lira and above range, but will dip my toes in the 1 million range as well. Those could make great little pied de terre for all the nomads. As I said in my whatsapp channel – without hard data to back up, rather just a hunch- I believe Izmir will be one of those world venues that does well by the waves of remote workers looking for favorable climes to conduct their affairs post-covid. In addition, again with limited research, it seems Izmir could use a few really cool AIRBNBs, maybe a bit more on the high end side. These are all things I will be exploring in the coming days. I am also hoping to visit a handful of new projects, but I covered many of those in past trips.
I plan to have a separate zoom session later this week for Izmir-only related properties. The purpose is to push the best of what I found, but anyone can join in. For the properties I viewed yesterday, I gave a rare 2 thumbs up for all 4 of them, so obviously I am bullish on Izmir. I feel I will be better-positioned in the next zoom session to discuss yields, future cap growth, property management and renovation-related issues, though I will touch on those briefly tonight as well.
It was good to have clients drop in on our property management sessions on Thursdays. Will be continuing those for as long as I see it necessary, if not indefinitely.
Well done to the whole team who seem to be managing things in Istanbul just fine without me. I plan to be back mid-week if we have any new in country arrivals.
Properties to be shared in zoom session