zorlu pays 800 million for most

Zorlu pays $800 million for most valuable lot in Istanbul

One of the most valuable properties in Istanbul, the lot that belonged

to the State Highway Authority's 17th District Office, was sold

yesterday to Zorlu GYO (Real Estate Investment Trust) of the Zorlu

Group, which had the highest bid at $800 million.

Chairman of Zorlu Group Nazif Zorlu said they had entered a new sector

as of yesterday and they will design a building project appropriate

for Istanbul on this land and start building as soon as possible.

During the sale auction held at Ankara's Swissotel yesterday, 10 real

estate companies submitted bids, namely Zorlu Real Estate Investment

Trust, Emaar Real Estate Development, Astay Real Estate Construction

Investment, Akfen-Osmanli Joint Venture Group, Sama Dubai Istanbul

Real Estate, Toray and Eren Talu Joint Venture Group, Nural-Fiba Joint

Venture Group, Limak Construction-MSREF VI Living Daylights BV Joint

Venture Group, Tasyapi Construction and Global-Bogazi�i Joint Venture

Group.

The Privatization Administration (�IB) renewed the zoning plan of the

96,505 square meter field that now allows 84,500 square meters of

construction after roads and green fields are deducted. The price of

the property located between the Ortak�y area and the E-5 highway in

the district of Zincirlikuyu, was initially estimated at YTL 460

million. The new zoning plan of the �IB is believed to have effected

the price in the auction.

According to the conditions of the tender, this property could be

employed for housing, commerce or tourism purposes. A special note

attached in the zoning ordinance reads that buildings on the land can

only be 28 stories at the most.

Fierce competition:

During the first phase of the tender conducted by �IB Deputy Chairman

Hasan K�ktas, written bids were submitted. The lowest bids were

eliminated during that phase, starting with Tasyapi, Astay and the

Akfen-Osmanli Joint Venture. The price started with $505 million and

rose to $691 million.

An auction started at $720 million. Sama Dubai Istanbul and

Global-Bogazi�i Joint Venture withdrew in the first round followed by

Nural-Fiba and Toray and Eren Talu in the second round when the price

hit $730 million.

Emaar started bidding aggressively in the third round pulling the

price up to $751 million. Emaar's aggressive bidding continued in the

fourth round with $776 million offers.

Limak Construction-MSREF VI Living Daylights BV Joint Venture

announced it was withdrawing at the beginning of the fifth round.

Emaar bid $780 million and Zorlu responded with $781 million in this

round.

In the sixth round, Emaar offered $785 million and Zorlu came up with

$786 million. In the seventh round, Emaar went up to $787 million and

Zorlu offered $788 million. Emaar used its aggressive bidding tactic

again in the eighth round to offer $799 million. When Zorlu did not

back down and offered $800 million, Emaar withdrew, ending the

auction.

The winner of the tender, Zorlu Group, said they were considering

spending $350-400 million for construction, noting that this figure

may go down or up depending on the course of the project.

Answering questions on the options of payment, Zorlu said they were

planning to make a down payment, adding that it may vary depending on

the day of the payment. �We may make a down payment of 50

percent and pay the rest in one to two years. We will decide on that

later.�

The tender is technically finalized but is awaiting the approval of

the Supreme Privatization Board (�YK).

Meanwhile, a labor union Yapi-Yol Sen declared that the sale was

against the public interest and said that the same lot was also put up

for sale in 2004 and the sale was cancelled after Yapi-Yol Sen filed a

lawsuit.