An Olive-Oil Factory Turned Eight-Bedroom Home
$1.77 MILLION (13.5 MILLION TURKISH LIRA)
This restored, 19th-century olive-oil factory is in a rural section of Milas, an ancient city in Mugla Province, on the southwestern coast of Turkey. Rescued from disrepair by its current owners in 2015, it’s now a residential compound on 2.5 acres of active gardens and farmland. Its sleek interiors contrast with original stone walls and rough-hewn timber.
A hulking, 100-year-old mechanical olive press, restored by the owners with parts sourced from its original British manufacturer, anchors an airy, modern great room. “These old factories are mostly broken down and in disuse, so this is definitely an unusual property,” said Heike Tanbay, managing director of Engel & Völkers Bodrum and the listing agent. “This is a very rural area, so it’s a real surprise when you come in.”
Built in 1850, the eight-bedroom, 10-bathroom residence sprawls across 8,255 square feet, including an attached two-bedroom guesthouse. Original stone walls surround the property and demarcate the grounds. The stone-inlaid driveway leads to the home’s covered front patio and main entrance. Inside, the original olive-oil production room has been transformed into a high-ceilinged great room with concrete slab floors. A 750-square-foot commercial kitchen, equipped to serve as many as 150 guests, connects to the great room.
The roof, floors and mechanicals have been replaced throughout the home. “Whatever they changed, they chose good quality,” Ms. Tanbay said. Sirio Pellegrini, one of two business partners who restored the property and live there now, said the restoration cost more than $600,000. “We kept everything as original as possible, including the walls and old woods,” he said. “But the infrastructure of the house is new,” including a generator that carries the home through the region’s occasional power outages.
The home’s warren of living spaces extends in an “L” shape from two sides of the great room, ensuring privacy even when guests fill the home, Ms. Tanbay said. Two small rooms behind the great room function as private living rooms. A gallery has a library and reading lounge, and another room is equipped as a recording studio; Bulent Tercanli, an artist and producer known as DJ Tutan, is Mr. Pellegrini’s business partner and co-resident. The owners have separate bedrooms, with en suite bathrooms and kitchenettes, on opposite sides of the property. “There are eight bedrooms listed, but you could make 13 in total if you convert these additional rooms,” Ms. Tanbay said.
Toward the rear of the property, a large room with a fireplace has been converted to an office, with built-in bookshelves and original wood ceilings reinforced with steel beams. The office opens to a large wood deck and swimming pool. The owners also built an enclosed sunroom that overlooks the pool, with a retractable ceiling and sliding glass doors.
Two guests suites, one with a kitchenette, have a separate entrance at the front of the property, “almost like a little hotel,” Ms. Tanbay said.
The grounds produce summer vegetables, herbs such as rosemary and thyme, and pine nuts, which the owners package and sell. Mr. Pellegrini also wholesales bottled olive oil and tomato sauce produced on site. “We’re calling this ‘sustainable living,’ which has become very appealing for people from cities during the pandemic,” Ms. Tanbay said. “It’s suitable to run as a professional organic farm, alternative business space, or a holiday home.”
The ancient city of Milas “is a very prominent summer holiday destination,” Ms. Tanbay said, though this home is in a quieter area. The Aegean coast city of Iassos, with 4,000-year-old historic sites in its ancient quarter, is a 30-minute drive, and Milas-Bodrum Airport is about 20 minutes. The Aegean port city of Bodrum, with about 30,000 residents, is 30 miles southwest.
While there is no centralized database for real estate transactions in Turkey, the Central Bank of the Republic of Turkey’s Residential Property Price Index reported impressive growth in September 2020, with a monthly increase of 1.6 percent and a year-over-year gain of 27.3 percent. In the region that includes Mugla province, prices increased 36.3 percent year over year, making it one of Turkey’s better performers.
But the higher prices belie some depreciation tied to the poor performance of the Turkish lira, the world’s worst-performing currency in 2020. “After a huge boom that lasted until about 2013, the real estate market has been in decline for five or six years, and transactions are down dramatically in the last two years,” said Ali Onuk, managing partner of Aon Invest, a real estate advisory company in Istanbul. At the same time, the sagging lira has made real estate “more affordable for foreign buyers, and there’s greater demand in the A+, $3 million and up segment.”
Prices vary wildly across Turkey depending on the type and location of property, said Neli Devidas, a Realtor with Keller Williams Platin in Istanbul. Homes and apartments can range from about $140 a square foot in central Istanbul to more than $750 a square foot for units in high-end branded developments, which are popular in Turkey, she said. In the popular coastal resort city of Bodrum, branded residences range from about $370 to $560 a square foot, with homes in surrounding areas starting around $185 a square foot.
Bodrum has long been the costliest property market on Turkey’s coast, and “prices in these areas are still rising because of Covid-19,” Ms. Devidas added. “Turks want to move out of cities into homes or mansions with stand-alone gardens. That’s the trend right now.”
The migration has helped jump-start other segments of the market. “For three years, we had difficulty selling a development of luxury townhouses and villas about 20 minutes outside Istanbul,” Ms. Devidas said. “Now, because of Covid, they’ve sold quickly, and prices have already gone up more than 10 percent.”
Bodrum in particular has seen “much bigger sales numbers this year, very strongly from Turkish buyers,” Ms. Tanbay said. “Bodrum has benefited from this terrible crisis. There’s a big surplus of buyers and visitors.”
As of Nov. 17, Turkey had reported 417,594 cases of Covid-19 and 11,601 deaths, according to the New York Times’s Coronavirus world map.
Who Buys in Turkey
The Turkish government has made several moves to entice outside buyers, said Mr. Onuk of Aon Invest, calling real estate “one of the key sectors in Turkey as part of the macroeconomic condition, especially in recent years.” The most significant move came in 2018, when the government lowered the purchase-price threshold for foreign buyers to gain Turkish citizenship, from $1 million to $250,000.
The campaign has been a success, though the pandemic has curbed residential sales to foreigners, according to an October report from the Turkish Statistical Institute (TurkStat). Only Iranians, the largest foreign market for Turkish property, increased in number, along with Chinese buyers, who are relatively new to the market.
North Americans make up a “negligible” segment of the market, Mr. Onuk said: “They might buy not for citizenship, but for true value, investment and utilization of a vacation home.”
Istanbul, Turkey’s largest city, remained the most popular city for foreign buyers, followed by the resort town of Anatolia, and Ankara, the Turkish capital, according to TurkStat.
For U.S. citizens, there are few restrictions to buying property in Turkey, according to Melih Sisa, partner attorney at the Saban Law Office in Istanbul. They include prohibitions on purchasing property near “strategic places involving national security,” or land exceeding about 75 acres, Mr. Sisa said. While cash transactions prevail, foreign buyers can obtain mortgages from Turkish banks, with no added requirements for down payments.
Most transactions in Turkey take place without a lawyer or notary. A buyer and seller may simply sign a purchase agreement, which is validated by a local title-deed registry office. “It’s a continuation of an interesting Ottoman system,” Mr. Sisa said. Still, he recommended that foreign buyers work with a lawyer who can perform due diligence on a property.
Foreign buyers must also obtain a report from a property-evaluation company attesting to a home’s true value.
Languages and Currency
Turkish; Turkish lira (1 lira = $0.13)
Taxes and Fees
Broker commissions total around 4 percent; buyers and sellers each pay 2 percent of the total transaction value, Ms. Tanbay said. Likewise, Mr. Onuk said, buyers and sellers both pay a 2 percent stamp-duty tax based on the value of the transaction.
Annual property taxes on this home are about $500. “Since it’s a rural area, taxes are low,” Ms. Tanbay said.
Heike Tanbay, Engel & Völkers Bodrum, 011-90-532-243-73-47, evbodrum.com