€500 Million Fund in the Works: Six Hotels Planned in the US, Europe and Türkiye

BLG Capital, active in real estate development, investment and tourism, has rolled up its sleeves to launch a new fund with an international hotel group. The €500 million fund is planned to develop a total of six hotels across the US, Europe and Türkiye. BLG Capital Chairman Serdar Bilgili said, "We are convincing investors and planning a new investment." We sat down with Bilgili to discuss his new investments…

What is the total size of BLG Capital's investments to date?

In 2006, we signed an agreement with Garanti Bank and started the Akaretler project. We developed it rapidly. When we began construction, we received a partnership offer from Blackstone, the world's largest fund management firm. We met and reached an agreement, but they wanted controlling partnership on the project, which we did not accept. We then studied their system and looked at how they had built such an enormous resource globally. We decided to form a team and launch our own fund. We took our briefcases, visited 150 international funds and established BLG Capital. We brought investment to Türkiye. BLG Capital is Türkiye's first real estate investment fund. To date, we have completed more than 50 investments both in Türkiye and abroad. We have developed a total of 7.5 million square meters of space. BLG Capital manages 9.8 billion dollars of capital.

MANHATTAN'S SECOND-TALLEST

How many projects have you completed so far?

Since 2018, we have continued investing abroad — particularly in the US — through the funds we established. We delivered projects such as Mandarin Oriental Residences in New York and Beverly Hills, 530 Broadway Avenue and 711 Fifth Avenue in New York, Aman, and Rosewood The Raleigh in Miami. We later exited those projects and moved on to new investments. On the Miami coastline, The Fifth, a building of more than 6,500 square meters in total, is a significant office project. Of the 5,068 square meters of office space, 1,478 square meters have been leased — meaning 29 percent of the office area has already found new tenants. Our residential project at 125 Greenwich Street in New York is also underway. The Greenwich project includes a total of 272 luxury units, ranging from studios to spacious three-bedroom residences. It is the second-tallest skyscraper in Manhattan, a residential project with approximately 88 floors of sellable and leasable space. We acquired it in July 2023 through BLG US Holdings. We made the investment together with Italy-based Bizzi & Partners, with world-renowned investment fund Fortress Investment Group as another partner. There are some difficulties in residential sales in the US due to high interest rates, but sales continue.

Do you have any new projects?

We are now launching a new fund together with an international chain. With this €500 million fund, we will invest in hotels in Türkiye, the US and Europe. We plan to develop two in the US (New York and California), two in Europe (one in Tuscany), and two in Türkiye.

TÜRKİYE CAN BE A SAFE HAVEN

Could the issues in Dubai energize the real estate sector in Türkiye?

There is a serious opportunity in Türkiye, and it needs to be marketed well. I view the recent tax regulations introduced for foreign investors very positively. With additional legal support, Türkiye can become a safe haven for foreign investors. There are a few things that need to be done. First, the tax incentives given to foreign investors should not be limited to a single zone. For example, in Istanbul, a reduction in the Corporate Tax rate could be considered for the entire province, not only in free zones. Second, disputes in commercial courts need to be resolved more quickly.

HISTORIC VILLAS TRANSFORMED

Will you have other projects in Europe?

We have also carried out projects in the Italian cities of Tuscany, Bordighera and Milan. Villa Etelinda and Villa Regina Margherita are located in Bordighera, set within a large 12,000 square meter garden. Both are historic villas. Tenuta di Poggio Adorno in Tuscany is a 17th-century Renaissance villa. We are real estate investors and we are interested in a wide variety of projects.