Turkish developer Emlak Konut is currently in the process of selling off a 25% stake in the company, in the form of 625 million shares priced between 1.60 and 2.15 liras – up to 70% is expected to be sold to foreigners. The sale is expected to raise over 1.3 billion Turkish liras.
This is the 6th IPO by Turkish real estate companies this year, and now 19 developers are operating on the Istanbul Stock Exchange. With interests rates so low and the economy one of the fastest growing in Europe, the IPOs are unsurprisingly doing very well indeed. In fact, according to the Turkish Capital Markets board the IPOs not counting that of Emlak Konut are worth over 600million liras combined.
But it is not just the IPOs that are doing well, in fact, the IPOs are the direct result of massive growth in the wider property market. With the aforementioned interest rates at record lows and exceptional growth in the economy, demand for housing in Turkey is growing massively.
Owned by government housing authority Toki, Emlak Konut was in an excellent position to capitalise on that growth. The company buys land from government institutions and then hires contractors to construct housing compounds. The revenue that is brought in is divided between the parties.
So far this year the firm has constructed 350,000 homes and has contracts out for a further 100,000. The money raised in the IPO is to be used for projects and is part of a 6 billion fundraising effort.
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