“Office for Rent” from Scratch

When we evaluate the office investments of companies in the Istanbul Office Market, we see that the majority of companies strategically prefer not to own real estate. Some of such companies have an investor buy the land they choose instead of buying a ready-made building that does not fit 100% of their needs. The design and implementation of a project specific to the needs of the company on the purchased land is called 'build-to-suit'. This practice enables companies to rent a building that fits their needs exactly.

In the 'build-to-suit' system, the user determines their own needs. Suitable land and, in parallel, investors and developers are sought in locations that are thought to meet this need. After the land selection, the investor purchases the selected land. The user, together with the developer and investor, realizes the design of the project that reflects their needs. In some cases, the project may be developed by the user and its cost may be determined by the user.

The main bargaining point is how many years it will take the investor to recover the investment cost. Based on this, the rental unit square meter rate is determined. The advantage that the user provides to the investor is a minimum ten-year, non-cancellable lease agreement. In this investment model, since the user is usually an international company, the investor is in an advantageous position in terms of financing, because he can take loans both domestically and abroad by showing this signed lease contract as collateral.

The biggest problem in this process in the Istanbul Office Market is finding suitable land. It is not easy to find problem-free land in a location that meets the needs of the user. In this case, the user may have to determine their location based on the available land.

Our service provided to corporate users who want to have a building built in line with their needs and become tenants in this building, in order to find the most suitable land and developer, is “Needs Specific Project Development Consultancy”. Internationally known as 'Build-to-Suit' real estate development method is at the cutting edge of speculative investments.

Propin realized the application example of this model in 2014 between Bosch and Rönesans Real Estate Investment in Küçükyalı, Istanbul. At the end of the development process based on extensive analysis and studies, Bosch leased an office building with a leasable area of 18,000 m2 on a long-term basis.