If you want to invest in Turkish real estate in order to receive regular income from it, one of the options is hotels and hotel-type residences. A kind of “intermediate option”: on the one hand, it is 100% commercial real estate, on the other hand, it is intended for living: short-term and long-term. And besides, it is very popular, especially if you buy a branded villa: this type of housing is in great demand in Turkey for the second season, and this summer brings its owners up to 2000 euros per day. And you can buy an apartment in the ownership in a less popular area for the amount that will cost a seasonal rental of a villa on the coast.
CONTENT:
- “NETWORK MARKETERS”: INTERNATIONAL AND LOCAL BRANDS
- HOTEL BRAND RESIDENCES
- “NON-NETWORK” OPTIONS
- EXAMPLE OF A HOTEL FOR SALE
Yes, hotels are considered somewhat of a risky asset. Many people know the fate of the fashionable Mardan Palace, which belonged to the Russian oligarch, which was closed for several years after the bankruptcy and recently opened its doors again, but under the Titanic brand. In spring, there was no certainty what would happen to the summer season, given the ongoing pandemic, and even medium and small hotels in resort regions changed their profile - for example, in Marmaris, a number of non-chain accommodation facilities were converted by their owners into apartments for rent.
However, when the Russian Federation again - and very suddenly - allowed charter flights to resorts, the demand for rental housing skyrocketed. Thus, if you invest thoughtfully, carefully choosing an object (and if it is a branded hotel or residence), and pre-consult with specialists, then a considerable benefit is expected.
In addition, unlike the sole proprietors of large hotels - legal entities and individuals - it is possible to diversify risks by purchasing individual rooms or villas in hotel residences. Or, in general, to acquire not a unit of real estate, but a share in it for the available amount and receive an appropriate percentage of the profit.
True, the latter option is not offered by all hotel brands, Turkish and international, but there is still a choice.
The obvious benefits of such a solution are the following: your property is managed by a management company - an experienced operator who rents it out themselves (to tourists, business travelers, local residents); they themselves control payment, monitor technical serviceability, repair, and also provide full reporting.
Yes, the commission for services is higher than when working with a real estate agency - after all, hotel companies also take money “for the name” - but the hassle is incomparably less: no problems with defaulters living for years, no urgent payments for the repair of communications.
In addition, if you write down an appropriate clause in the contract, you still have the opportunity to use “your” hotel room or residence when you want to go on vacation with your family (just do not forget to agree on this).
If you prefer to buy not a unit / share in a hotel property from large international chain companies (Hilton, Accor, etc.), but a small hotel with several rooms in a detached building, then this also has its advantages. It will be much easier for you to modify it according to demand, turning the premises from hotel rooms into long-term apartments or a kind of hostel for young people in the “off-season”, and back “switch” to the hotel format - in the “season”. If you take care of the appropriate technology in advance, organize at least a semblance of a kitchen, etc. And, of course, it is imperative to clarify the legal side of the issue.
Returning to the experience of hoteliers in Muğla, the owners of accommodation facilities with the temporary transformation of the hotel into a long stay apartment did not fail: the guests are charged a monthly payment, the cost of living includes the use of the infrastructure of the hotel, turned into an impromptu site (closed complex of buildings). Thus, dozens, if not hundreds of medium-sized hotels in Marmaris quickly adjusted to the rapidly changing situation, and are already accepting clients with might and main as “luxury apartments” - despite the fact that the units offered are not so large: 1 + 1, 2 + 1, 3+ 1 (with one, two and three bedrooms). And you do not have to worry about the lack of profit: in same Muğla, in Bodrum, where the number of the population for the season approached a million, vacant real estate - especially villas - was simply “dared”, although the apartments as well: almost everything was dismantled.
The advantages of hotel rooms or apartments owners in Turkey for the second summer are obvious; thus, the choice is yours.
We will briefly tell you about some of the new interesting hotels and residences that have recently appeared in the resorts of Turkey or are scheduled to open in the coming year.
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“NETWORK MARKETERS”: INTERNATIONAL AND LOCAL BRANDS
Despite the pandemic, the pace of hotel launches across Turkey is accelerating. Recently, we have already talked about the appearance of several significant hotels in Bodrum (Muğla province) at once. Radisson Collection Hotel Bodrum is among them. Aksa Tourism is also thinking about opening an accommodation facility here.
MGallery The Bodrum Hotel Yalıkavak - a representative of the premium hotel brand from the Accor group, distinguished by bright interiors and magnificent architecture - opened in the vicinity of the “Turkish Riviera” on 1 July 2021. There will be 102 rooms, 35 of which are suites.
Accor Group has increased its investments in Turkey by investing $ 35 million in this project. Hotel construction was in charge of İnci Turizm A.Ş., a subsidiary of the well-known development holding Delta Project architect - Mustafa Toner.
Accor's portfolio in Turkey consists of 56 hotels in 13 brands, not counting the newly opened one.
In late June 2021, the eighth facility of the Cactus Group opened: the luxury boutique hotel Elementa with 52 rooms. Moreover, in Yalikavak - that is, also in Bodrum, which attracted a record amount of investments from all over the world over the past year, namely - $ 2 billion; now it is by far the most popular resort region. It will be the ninth property in the Cactus Group's hotel portfolio.
On the Antalya coast, one of the brightest discoveries of this season was Kirman Calyptus Resort & Spa, which hosted the first tourists on 1 July 2021. The 5 * spa hotel is located in Kumköy, 4.7 km from the center of Side, 60 km from Antalya Airport. It is 450 m to the beach; and, by the way, the “highlight” of the hotel, which you will not find in other accommodation facilities is a soon opening underground road, a kind of mini-metro, which will take you from the hotel directly to the mentioned beach.
The fashionable Kirman Calyptus Resort & Spa has 420 rooms, including the categories “standard”, “junior suite”, family room and deluxe family room. The infrastructure includes a fitness center, a tennis court in addition to an impressive spa center.
This hotel will be a worthy addition to the portfolio of the Kirman hotel chain and will certainly interest the luxury-loving Russians.
Kilit Group, one of the leading companies in the tourism sector in Turkey, is actively investing in new hotels. On 29 May 2021, Nirvana Cosmopolitan was officially “presented” in Antalya (Lara). This is the 21st hotel property in the company's portfolio.
A week earlier, another discovery took place on the Antalya coast: NG Phaselis Bay 5 * in Göynük (Kemer), with an investment value of 1.5 billion Turkish lira. It was built by NG Group (which partly explains the choice of the name); and the opening ceremony was even attended by President Recep Tayyip Erdoğan.
Among the increasingly popular resort regions, and the iconic hotel complexes that will soon appear in them, be sure to mention Swissôtel Çeşme in the resort of Çeşme near Izmir; this resort is rapidly becoming more expensive, becoming the “dark horse” of the past year. The opening is scheduled for the next season – 15 June 2022; investor is Dilek Holding. Swissôtel Çeşme will have 248 rooms, including 68 apartments. Of particular interest are the two duplex penthouses, each with an area of 1,300 square meters, with their own private pools and terraces.
The hotel infrastructure will also include a ballroom with an area of 700 square meters and a capacity of 450 guests; there will be also several bars and restaurants.
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HOTEL BRAND RESIDENCES
As for the hotel residences - as well as the acquisition of some of them, with an eye to the earliest return on investment through the lease of a detached building with the opportunity to use the entire hotel infrastructure - a good example is the Swissôtel Residences Bodrum Hill complex, built by the Ağdaş Holding Group.
It will offer its tenants various residences including duplexes and triplexes. Its location is also attractive - in the very center of Bodrum, opposite the historical fortress.
The infrastructure of the residential complex will also include the largest health and spa center in the resort, a ballroom, exhibition and conference rooms, a business center and restaurants.
Swissôtel Residences Bodrum Hill is designed for year-round operation. Thus, the number of objects that allow you to stay in Bodrum for months and years, and not only in the summer season, is increasing.
The second example of a successful investment in hotel residences is in Bodrum, branded options are especially popular in terms of rental. And, for example, the monthly rent at the Ritz-Carlton Residences in Yalikavak (Bodrum) is about 1.25 million Turkish lira. For comparison: a very simple apartment in Turkey can be purchased for 125,000 TL. That is, even for a net profit literally from one month of rent, minus expenses, maintenance, etc. you can buy up to 7-8 “baby” apartments (for example, studios) in “cheap” locations, or 2-3 decent apartments in resorts.
“NON-NETWORK” OPTIONS
An atypical, but very interesting object, among those put up for sale just for turning into a boutique hotel or a hotel-club with 25 rooms is a villa of Ahu Aysal, one of the famous Turkish public figures: he recently decided to sell his luxury villa, just the one where he used to host celebrities - both local and international.
This villa in Gündoğan has a very attractive location: a large plot of land, its own dock which is perfect for mooring yachts.
Another non-standard option, which, by the way, will certainly be especially popular among outdoor enthusiasts, is “hotels for athletes”.
Thus, this year, one of the Alanya hotels decided to invest and redesign, having received a special certificate of the hotel's compliance with the requirements of cyclists.
Alanya is not just a popular vacation and beach destination: it hosts many competitions, including stages of international tours. Orienteering, cycling, triathlon are popular. Many athletes from different countries come to the city. More recently, a 30-kilometer cycle path along the coast has been completed in the city. Therefore, Alanya continues to develop day by day in the field of sports tourism.
As a result, Sunpark Hotel was one of the first to apply for “bicycle certification”, confirming that all criteria requested by the Ministry of Culture and Tourism were met.
Thus, this is a win-to-win solution for the hotel. There are also prospects for “hotels for athletes” in other resort regions. Even a small and inexpensive hotel that takes care of the availability of space for bicycles, windsurfing equipment or alternatively motorcycles will quickly attract a regular clientele even if you only invested in a mini-hotel with literally a dozen rooms.
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EXAMPLE OF A HOTEL FOR SALE
And finally, let us talk about an example of investment in hotels, so to speak, in numbers. This is a real object, which you can claim to buy right now.
We are talking about a hotel for sale in Antalya (Muratpaşa), the cost is about 77 million TL.
The hotel in Muratpaşa (Kyzyltoprak District) has 158 rooms + 2 rooms for people with disabilities. A total of 160 rooms which allow for a maximum one-time capacity of 320 people (not counting small children).
The infrastructure of the facility also includes:
- second class restaurant with à la carte service for 200 seats;
- class I restaurant for 160 seats;
- several conference rooms with a capacity of 120 to 400 people;
- billiard room;
- game room;
- children entertainment area.
As for “health” rooms and options there are outdoor and indoor swimming pools, Turkish hammam, sauna, steam room, “snow” room, “salt” room, gym, four massage rooms at once; men's and women's hairdressing salons, three outlets (shops).
As for parking, a closed garage for 40 cars and an open parking lot for another 20 cars are envisaged. Staff quarters are also provided, including accommodation options.
The tender for the sale of this property will be hold on 2 September 2021 at 10.00 am.
Thus, you can clearly imagine what you can really count on, having 77 million TL at your disposal (or about 770 million rubles at the current exchange rate). Moreover, we are talking about a very large hotel facility - more than 150 rooms; but offers for the sale of a private hotel with 15-20-30-50 rooms periodically appear on Turkish “real estate exchanges”. If you are interested in this kind of investment, please contact Turk.Estate specialists for advice.
Thus, the decision is yours: whether to prefer a “partial” investment in the form of a separate room / penthouse / villa in residences under the brands of famous hotel brands - Turkish or international - or to calculate the costs and possible income from owning a small off-chain property that can be disposed of at your own discretion without tedious coordination of all issues with partners- “networkers”. This includes modifying - if necessary - a hotel into an apartment and vice versa, following the changing demand.
We have briefly talked about hotels in resort regions and the opportunities provided by Turkish and international hotel companies; we will only add that in 2021, the Turkish authorities announced a possible extension of holiday season until the New Year holidays - early 2022. Thus, there is still an opportunity right now (or in the coming months) to invest in hotels or hotel residences in order to start receiving tangible profits from “holiday season” already in autumn; we only strongly recommend that you consult real estate agents and other experienced professionals in the real estate industry.