The recent economic downturn has heavily impacted leisure-related markets, specifically hitting integrated golf and real estate resorts across the traditional regions of Spain and Portugal.
However, according to Dr Andrea Sartori, Head of KPMG’s Golf Advisory Practice in Europe, Middle East and Africa, the emergence of Turkey as a prime location for golf development and private investment looks set to fast-track the region as one of the preferred destinations for European golfers.
GBN: What advantages does Turkey have over other emerging and more traditional, fully-developed golf regions like Spain and Portugal?
Andrea Sartori: The climate in Turkey’s Mediterranean coastal region is similar to that of Spain and this is driving the region’s attractiveness as a second-home destination. If you look at more developed countries like Spain and Portugal, particularly in the years prior to the international financial crisis, they all experienced significant levels of over-development compared to Turkey, which preserved many of its tourist areas.
Compared to other emerging markets like Croatia, for example, investors, developers and individual consumers are now choosing Turkey because the country’s laws allow foreigners to have full ownership of any purchased property. Market prices, by comparison, are also relatively low which is proving attractive to potential investors – both individuals and financial institutions – who see potential returns from property developments in golf-related resorts and communities.
GBN: How has the international financial crisis impacted upon Turkey as a destination for golfers to visit?
Andrea Sartori: In 2009, Turkey welcomed 32 million foreign visitors. This represents an increase of 3.5% on the previous year and, interestingly, if you analyse this figure in more depth, close to 40% of those visitors arrived from Germany, the UK, the Netherlands and the US, all of which are already developed, traditional golf markets in their own right.
Turkey’s reputation is growing as both a destination to visit and a country to invest in. At present, Belek offers the most attractive proposition for individuals seeking to purchase golf holiday homes as there are several golf-integrated resorts in the pipeline, and it is the only region that has built a significant international reputation as a golfing destination.
We expect to see Turkey capitalise on this in the short to medium term with traditional holiday resorts on the Aegean Coast focusing more and more on golf as a main tourism product.
GBN: Is the domestic economic outlook influencing the growth of Turkey’s golf-integrated resorts and community developments?
Andrea Sartori: Turkey expects strong economic growth over the next few years and personal wealth is also expected to increase among its population. This will undoubtedly create a domestic demand for new integrated golf communities from buyers wanting to experience an improved lifestyle and standard of living outside the city limits, but within a commuting proximity to their place of work.
Secondly, a strong culture already exists in Turkey for domestic ‘second home’ purchases among the upper classes that desire an additional property in, most commonly, a tourist destination for recreational purposes. I expect this trend to continue, and grow, in the short and mid term.
GBN: Accessibility always plays a major part in maximising the benefits of any location for a developer. How would you rank Turkey against other, more developed, European destinations?
Andrea Sartori: If we take the Antalya/Belek region, the most popular golf area, it could be regarded as one of the most accessible destinations in the Mediterranean. Belek is just 30 minutes by car from Antalya airport, which is consistently served by a large number of budget airlines. Antalya also receives numerous frequent, direct flights from main source markets such as Germany, UK and Russia and this ease-of-access is adding to the attractiveness of the area.
From a golf perspective, it is also important to mention that Antalya continues to receive flights during the cooler months – the best time to play golf – when demand to experience the area’s championship-standard courses is at its greatest.
GBN: Are there any factors that could negatively influence the projected growth of Turkey as both a development and investment opportunity?
Andrea Sartori: The reduction in issues like corruption and a heavily bureaucratic system – traditional barriers for many foreign investors – are making the region more attractive to individuals and investment companies.
Water supply issues will also influence the site of developments. Supply limitations make certain locations, the Bodrum area for example, less attractive for golf and real estate developers who require certain standards of utility supply to make a development operate on a day-to-day basis.
Fragmented ownership of land rights can also present problems for developers wishing to build in Turkey. This can become a particular issue when very large areas of land are required for development. In some cases, multiple owners may exist and this can present developers with significant difficulties in the early stages of securing an appropriate site.
From a tourism perspective, the Turkish tourism industry is still influenced by the overall opinion of the country being an all-inclusive and low-budget destination. In order to improve the appeal of Turkey as a tourism destination, the Turkish Government highlighted in the Tourism Strategy of Turkey 2023 document six tourism products, one of these being golf, on which to base future developments and investments. Different agencies within Turkey are implementing specific strategies to support the growth of integrated golf and real estate projects and public land has been highlighted in five Tourism Development Regions for golf resort development.
GBN: What other future factors could further enhance the appeal of Turkey as both a destination of choice and a target for investment?
Andrea Sartori: There are a number of significant milestones that make Turkey a very exciting place to invest. The long-term perspective of EU partnership/membership makes investment even more appealing. A step such as this will further enhance the business environment in Turkey, improve the macro-economic and political landscape in the country and build on the structural reforms we’ve seen over the past 10 years.
GBN: What evidence is there that Turkey is regarded by many businesses as a hotspot for growth in the coming years?
Andrea Sartori: I think KPMG is a good example, as we are taking our annual Golf Business Forum to Turkey for the first time (Gloria Resorts, Belek, May 12-14, 2010). Currently, Turkey is one of the most exciting, opportunity laden regions in Europe and we would like our delegates, our business partners and golf industry leaders from across the world to experience what Turkey has to offer. Anecdotally, Golfbreaks.com, Europe’s largest golf travel company, has also highlighted Turkey as a major emerging destination for its customers in 2010 and beyond. Last year, they sent over 130,000 golfers on breaks across the UK, Europe and the rest of the world, and pre-bookings and enquiries for 2010 are already highlighting Turkey, and its host of five-star golf resorts, as an emerging destination of choice for its customers.
For more information about the KPMG Golf Business Forum at the Gloria Resorts, Belek, May 12-14, 2010, visit: www.golfbusinessforum.com
Turkey has a strong tourism offering, particularly in terms of climate, a rich cultural heritage and natural landscapes that can be compared or even considered superior to more mature tourism and second-home markets, such as Spain. However Spain, at present, does benefit from more developed, higher-standards of tourism infrastructure.
The growth in tourism arrivals in Turkey during 2009, notwithstanding the global crisis, outline the health of the Turkish tourism industry and a large number of Europeans also chose Turkey as a country for their second homes, particularly Germans, Danish, British and Scandinavians. Further growth in highly desirable residential products will increase this demand further and reach more affluent buyers.
Moderate pre-financial crisis real estate speculation preserved a large part of tourism resorts in Turkey, with few exceptions. This safeguarded a host of gorgeous coastal settings that are perfect for the development of environmentally-friendly, low impact, high-end developments, such as golf resorts. Furthermore, a low-level of speculation maintained prices at a competitive level, compared to other Mediterranean destinations.
A dynamic domestic population in Turkey is growing in wealth and is actively looking for new standards of living.
Turkey is one of Europe’s most accessible countries, offering a significant number of scheduled and budget flights into key areas, including Antalya.
Governmental support, backed by economic and political reforms, are making Turkey a more attractive and easier market to consider for foreigner investors and private buyers. The ability to obtain full ownership of a property, compared to other competitive markets such as Croatia, is a positive draw for investors. The perspective of EU partnership/membership is also growing Turkey’s reputation as a serious investment opportunity.