While real estate investments continue without losing pace, experts are warning investors that if the urban transformation process is unable to be managed correctly, it carries a high risk and that it may result in losses for investors.
With the contribution of the private sector to the urban transformation activities rising every day, the projects are becoming profitable investment for private sector investors. Together with numerous old and new companies beginning to take part in the activities, the tough atmosphere of competition between owners and investors in certain regions is standing out.
Neşecan Çekici, who expressed that owners need to analyze the investors they are going to establish partnerships with very carefully in areas where there is an atmosphere of competition, stated that the failure of investors, who had entered into agreements with expectations of high profits, would create considerably high financial burdens and suffering.
Establishing the partnership structure correctly is the most important phase in the real estate project being completed with success. It is extremely important that legal and real estate professionals become involved in the process, and that the partners seek the opinions and services of experts at this stage. Teamwork, with the participation of different disciplines, plays an important role which establishes the balance of the urban transformation process and that it facilitates the equitable sharing of values and ensures that the interests of all of the parties cross over at the optimum point. It should not be forgotten that expectations for high returns will bring high risks.
Urban transformation should be considered as a social phenomenon
Çekici, who emphasized that urban transformation requires financial strength at a scale close to the GNP of a country which is developing, also said,
The renewal of millions of homes using the public budget, or the performance of the private sector of urban transformation activities in only regions they deem to be profitable, is not sufficient in the renewing of the stock of risky buildings. Therefore, the public sector and the investors need to develop new approaches and models which can be implemented in urban transformation.
The total need for transformation in Istanbul: 870 thousand 629 independent units
The urban transformation process began towards the end of 2012, and has been progressing rapidly. To date, a total of 40 risky areas in 17 districts in just Istanbul have been determined. The total of these areas covers an area close to 11 million m2. When the risky areas, which constitute 0,2 percent of the total surface area of the city, are looked at district by district, it can be seen that 36 percent of the riskiest areas are located in the district of Gaziosmanpaşa. It can also be seen that the need for transformation in Istanbul due to the risk of earthquake is comprised of 377 thousand and 97 independent units, while the need for transformation for the purposes of regenerating the city is comprised of 493 thousand 532 independent units.