Why Should You Still Invest In Turkey?

If Turkey is taken as the midpoint of a circle whose radius is a four hour flight time, then the area that this circle covers includes a quarter of the world’s GNP, and a quarter of the world’s population. Going west from Turkey, the flight time to the UK is four hours, and if travelling East from Turkey, then four hours will take you to Dubai in the UAE on the east. The ease of which these important property market locations can be reached makes Turkey an attractive place for foreign investors.

Over the past few years investors have become increasingly aware of the potential of Turkey. During the period between 1993-2002, the FDI inflow to Turkey was on average about 1 billion dollars. In 2003 this figure increased to USD 1.7 billion, and to USD 2.6 billion in 2004. It is a striking record that the foreign direct investment entering Turkey in 2005 amounted to USD 9.7 billion. In 2006, the inflow of FDI had amounted to nearly USD 19.8 billion. 15% of this figure – about $2.9bn – was in the real estate sector, according to reports announced by the Turkish Treasury. As of October 2007, the total volume of FDI reached USD 16 billion dollars with a modest increase in comparison with the same period of previous year.

Turkey, Saudi Arabia and the United Arab Emirates continued to be the major recipients of Foreign Direct Investment (FDI) in West Asia, together accounting for almost four-fifths of total inflows to the region, according to the UNCTAD report. A few large cross-border mergers and acquisitions (M&As) and the privatization of financial services made Turkey the largest recipient with inflows doubling to $20 billion in 2006. In light of the regionĀ“s high GDP growth and ongoing economic reforms, the upward trend in inward FDI to West Asia is likely to continue, the report contends. It appears that Turkey was in the best position to benefit from outward FDI from Kuwait, and accounted for more than half of the regionĀ“s total outward FDI and will continue to benefit in the future. Outward FDI from the region is likely to expand further as a result of high oil prices and hence an increasing pool of petrol-dollars for West Asian countries and firms to invest elsewhere.

The Private Equity Confidence Survey, which was conducted in 2007 and involved 30 private equity investors who are investing in Turkey, shows that the country has remained largely unaffected by the US sub-prime mortgage crisis. Private equity investors have confidence in Turkey and some see the country as a “safe sanctuary” despite the uncertainty over global markets.