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“People will be talking about Emlak Konut as they would about Microsoft, Apple etc.”

Interview - October 3, 2013
The lack of higher quality residential supply in Turkey means thriving business for those who can produce it. Benefitting from a strong home brand, solid business models and a focus on quality and detail, Turkey’s largest real estate investment company Emlak Konut is one such developer and doubled in size between 2003 and 2010. General Manager Murat Kurum talks to World Report about the high demand for the company’s middle and upper-middle income projects from buyers across Turkey, the Middle East, the Gulf region and neighbouring European countries, and its plans to become a major global brand within five years
MURAT KURUM, GENERAL MANAGER OF EMLAK KONUT
MURAT KURUM | GENERAL MANAGER OF EMLAK KONUT
In 2012, the Turkish contracting sector ranked second in the world, only behind China. What are the reasons for the success of the contracting sector in your opinion and what can be done to surpass China and be the number one in the world?

The construction sector drives the economy. Turkish contractors are ranked second in the world. Turkish firms are doing business all over the world. If we want to surpass China, we should also produce construction materials and implement new construction technologies in our sector. The population is important for Chinese growth. They can produce cars and planes, and they have construction production technologies as well. They are using these for their benefit. 
 
When we met Dr Ertaş from the Capital Markets Board, he stressed the importance of trust and confidence in the economy to the overall growth of the Turkish economy. Considering the events earlier this year in Gezi Park and around Turkey, do you think investor confidence has been shaken? If so, what needs to be done to regain the trust of the international community in Turkey?

We may have been the best people in Turkey to experience the negative media coverage of these protests because we were in London. We also talked with Mr Ertaş during this process. Turkey’s perception in the world is very important.

There are so many options open to investors in the world. An investor is like a flower and it is influenced by humidity, wind, the weather – everything. The mortgage crisis, the financial crisis and the Arab Spring – Turkey is trying to get experience from all of those things, and it has tried not to be influenced so much. While the world is suffering from the mortgage crisis, our banks took some measures and the Government had reviewed the law and regulations to reduce the effect of the financial crisis.

We strongly believe that Turkey will be much stronger in the future after the protests. It has been a good thing. All parties have learnt from the protests, and that is why we do not think that it is going to be a tangible problem. Turkey is a strong country and we do not think that our background and strength will be affected by those minor protests. 
 
Emlak Konut was founded back in 1953 and has since become the largest housing developer in Turkey. Could you tell us a little about this impressive journey?

It was established back in 1953 and we became a real estate investment company in 2002. We are the largest real estate investment company in Turkey. In 2010 we completed the fifth largest public offering in Turkey’s history. Our shares are traded on the Borsa Istanbul (Istanbul Stock Exchange). Our net assets amount to over 9 billion Turkish liras. We usually produce residential units for middle and upper-middle income buyers. We also produce social facilities in these regions. We have produced 90,000 independent units.
 
Last year the Government amended a rule and dramatically increased the ability of foreigners to purchase property in Turkey, in a bid to increase levels of investment in the real estate sectors as a whole. How has this affected Emlak Konut?

After the removal of the reciprocity rule, the number of countries purchasing property in Turkey increased from 55 up to 88. We are producing middle and upper-middle income projects, and that has had a very positive effect on our sales, particularly from the Middle East, Gulf region and countries in near Europe. Demand has been strong and sometimes on a blocks basis. Over the past six months, we have achieved 3.5 billion Turkish liras overall. Roughly 10% of this can be considered as foreign sales.
 
You mentioned earlier that 70 to 75% of your shareholders are foreign and in effect British citizens. Why do you think that UK investors are so interested and positive about Emlak Konut?

We are an established company. From 2003 to 2010, our company doubled. We have strong and profitable business models. In Turkey, our brand perception in the eyes of homebuyers is very strong. We have done very well in terms of sales since the early days. Our sales prices have increased continuously. There is also a lack of quality residential supply in Turkey, and that is why the projects we build are always one step higher in quality. 
 
Given the enormity of the construction sector and real estate and housing development, do you see a need for increased foreign direct investment (FDI)? If so, what advice would you give to UK investors who are looking to enter the Turkish market?

There are already some partnerships in the sector (foreign and local). I think we will need these partnerships in the future. The world is global right now. In a couple of hours, you are in London, and in New York in just 10. It is getting smaller. We support Turkish investors in London and vice versa. This supports globalisation. We support it.
 
As General Manager of one of the affiliates of the Housing Development Administration of Turkey (TOKI) in Turkey, being the largest real estate investment trust (REIT) company in the country, you are giving back so much to the economy. Do you feel a responsibility to the Turkish people and the Turkish economy?

Of course. We are doing our best to reflect this responsibility and sensitivity to the people in our projects. We have always been able to complete all of our projects; even when the contractors went bankrupt, we completed the projects. This has contributed to the positive perception of our company in the eyes of homebuyers, together with this experience and the reliability effect. It is a win-win principle with our projects.
 
If we were to come back here and interview you in five years’ time, ideally what achievements or accomplishments would you like to have had?

We aim to make Emlak Konut one of the world brands within five years. We believe that the Emlak Konut brand image will be very different in the eyes of our customers, not in the financial sector or amongst investors, but also amongst the regular citizens of the US or the UK. They will be talking about Emlak Konut as they would about Microsoft, Apple etc. We will become one of the largest real estate companies in the world. Proof of this is the fact that our value increased twofold in two years, and if we continue on this growth path, in five or ten years, we will be one of the largest in the world.
 
What final message would you like to send to our readers about Emlak Konut or Turkey as a whole?

Thank you very much for coming here and for giving us this opportunity. The country believes in growth and tries to establish good relationships between its neighbours. We have not had any serious problems so far, and we do not think that we will in the future. As a foreign perspective, your experiences and opinions are very important to showing the world the real face of Turkey. It is important for our country. 

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