Bank Asya Sukuk illustrates strong GCC investor interest in Turkey (By IFN)

Bank Asya Sukuk illustrates strong GCC investor interest in Turkey

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TURKEY: On the 25th March, Bank Asya raised US$250 million through the issuance of a subordinated Sukuk; of which 35% of its investors originated from the Middle East. The country’s robust political climate and steady economy has placed Turkey in a unique position as a pocket of stability amidst an increasingly cacophonous neighbourhood. Following that, Turkey-based construction and real estate conglomerate Agaoglu Group announced earlier this month that it is looking to issue up to US$2 billion in Sukuk, in which proceeds from the issuance will be used towards the construction of the Istanbul International Financial Centre. According to sources, the issuance, should it take off, is expected to see a healthy uptake by GCC investors. At the end of 2010, trade investment flows between the UAE and Turkey totalled at US$10 billion. Market analysts are now expecting an influx of GCC investors into the Turkish real estate market following the Turkish government’s 2012 amendment to its property law. The amended law now offers opportunities to foreign investors including the GCC to own real estate property in the country and given Turkey’s prime position as a gateway between Europe and Middle East, there are high hopes for this sector to kick off — in both the conventional and Shariah compliant space. In 2008, the National Bank of Kuwait set up its Islamic Turkey Real Estate Fund to take advantage of GCC interest in the Turkish real estate sector. The fund, which has a minimum investment of US$250,000 focuses on investments in high-growth real estate areas. As of the 31st December 2011, the Islamic Turkey Real Estate Fund comprised of two development projects in Turkey — the Skymark project in Istanbul and Terra City in Antalya. According to its unaudited financial statement dated the 31st December 2011, the fund has invested approximately US$224.4 million in equity in the two projects.