More than 500 hundred chateaux have been abandoned at the Burj Al Babas luxury housing development in Turkey after its developer filed for bankruptcy last November. The homes were crafted for wealthy Gulf investors in Turkey’s northern Bolu province, but as soon as the country slipped into an economic recession, the land development project collapsed.
About halfway between Istanbul and Ankara, the Burj Al Babas development will contain 732 chateaux when, or if, it ever finishes.
Started in 2014, hundreds of homes have been left unfinished since the downfall of the Turkish economy in 2018 led to developer Sarot Group to file for bankruptcy in November. The group has debts of $27 million, the AFP elaborates on the housing crisis unfolding in Turkey.
“Unfinished and empty housing projects are strewn across the country, testimony to the trouble the construction sector, and the wider economy, now finds itself in. The construction sector has been a driving force of the Turkish economy under the rule of [Turkish president Recep Tayyip] Erdogan, who has overseen growth consistently above the global average since he came to power in 2003. But the sector contracted 5.3% on-year in the third quarter of 2018.”
“Three out of four companies seeking bankruptcy protection or bankruptcy are construction companies,” said Alper Duman, associate professor at Izmir University of Economics.
Clients from Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates purchased 350 of the homes, according to Hurriyet, at $370,000 to $530,000 per unit.
Sarot Group Chairman Mehmet Emin Yerdelen blamed the company’s insolvency issues on deadbeat clients.
“We couldn’t get about 7.5 million dollars receivables for the villas we have sold to Gulf countries,” Hurriyet quoted Yerdelen as saying. “We applied for bankruptcy protection but the court ruled for bankruptcy. We will appeal the ruling.”
The group constructed 587 villas before it filed for bankruptcy protection. The court ordered the group to halt all construction for 2019, yet Yerdelen believes the project will restart in the near term.
“The project is valued at $200 million,” he said. “We only need to sell 100 villas to pay off our debt. I believe we can get over this crisis in four to five months and partially inaugurate the project in 2019.”
The villas, which here built in the style of miniature French chateaux, are all three stories and look like a medieval fortress.
Happy #BrutalMonday! Burj Al Babas (Turkey) pic.twitter.com/ydbFDaVgqG
— Mateo Arquitectura (@mateoarq) January 14, 2019
While Turkey has seen an economic boom over the last several decades, the country’s economy has been hit with a severe downturn in real estate, inflation skyrocketing, and political turmoil emerging around the slowdown. As for the hundreds of abandoned castles, well, maybe Turkish President Erdoğan could repurpose the site for a new refugee camp.
via ZeroHedge News http://bit.ly/2DwN5j0 Tyler Durden