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In Istanbul and Dubai, Russians are piled up on property to protect them from sanctions

  • Some buy for investment, others look for a home
  • Both United Arab Emirates and Turkey maintain flights to Russia
  • Some Russians may have prepared prior to the invasion

Istanbul / Dubai, March 28 (Reuters)-According to many real estate companies, wealthy Russians have poured money into real estate in Turkey and the United Arab Emirates, financially following Moscow’s invasion of Ukraine and western sanctions. Seeking heaven.

“We sell 7-8 units daily to Russians, whether they buy in cash or open a bank account in Turkey,” said Gull Gull, co-founder of the Golden Sign Real Estate Company in Istanbul. Bring money. “

In Dubai, Thiago Caldas, CEO of Modern Living Real Estate Company, has hired three Russian-speaking agents to meet the interests of Russia.

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Sanctions imposed since the February 24 invasion include Russia’s exclusion from the SWIFT banking system and the targeting of individuals such as the oligarchs, who appear to be close to President Vladimir Putin.

Turkey and the United Arab Emirates have criticized Russia’s attack, but Ankara opposes non-UN sanctions against Russia, and both countries have relatively good relations with Moscow and operate direct flights. And may provide a route for Russians and their cash.

“They are wealthy Russians, but not oligarchs. They are finding a way to bring money to Turkey,” said Gull of Golden Sign, one of the 12 real estate companies interviewed by Reuters. ..

“There are customers who buy 3-5 flats,” Gul added.

Russians have been the largest buyers of Turkish real estate after Iran and Iraq for years, but realtors have said demand has skyrocketed in recent weeks.

Although still in its infancy, industry figures strengthen their accounts; in February, Russians bought 509 homes in Turkey when they rallyed on the Ukrainian border before the troops advanced.

The data is still before Western sanctions come into force, and realtors expect the numbers to increase further, boosting the demand already prepared by the emergence of the world from the COVID-19 pandemic. Said.

Ibrahim Babakan, whose Istanbul company builds and sells real estate primarily to foreign buyers in Turkey, said in the past many Russians wanted to live in resorts such as the Antalya region of the Mediterranean. I was currently buying an apartment in Istanbul to invest money.

Reuters contacted some Russian homebuyers but refused to interview due to the sensitivity of the situation.

Thousands and millions

Both Turkey and the United Arab Emirates offer residential incentives to real estate buyers. In Turkey, foreigners who pay $ 250,000 for real estate and keep it for 3 years can get a Turkish passport. It is offered by Dubai, a major business hub in the Middle East, for a small amount of money. 3 year residence visa.

According to real estate experts, apartments worth 750,000 dirhams ($ 205,000) (visa qualification threshold) make up the majority of demand, but more expensive real estate on artificial islands such as Dubai’s glamorous Palm Jumeirah. Is purchased for up to 6 million dirhams.

“Investors are looking for both capital protection and the opportunity to receive a residential visa in the UAE for temporary relocation,” said Elena Milishenkova of Moscow and Berlin-based real estate agent Tranio.

She said her company received almost three times as many requests for an apartment in Dubai in the first three months of 2022 compared to the same period last year.

Some companies have stated that demand is even higher.

“Immediately after the start of the invasion of Ukraine, we launched a campaign in the area and the number of people who contacted us was … at least 10 times more than usual,” said Cardas of Modern Living in Dubai. ..

The CEO, who hired a Russian-speaking agent last week, said it seems that really wealthy buyers were preparing and transferring money from Russia even before the war broke out a month ago.

Cash and cryptocurrencies

For Russians with a bank account in Dubai, the process is relatively straightforward, said Elena Timchenko of Emirate-based broker Royal Home Real Estate.

Some people ask for help from friends and contacts, but she added that the challenge of collecting money for purchases has been too much so far.

“There is one desire to buy in Dubai, and the ability to do so,” she said, citing the difficulty of funding the Gulf countries.

Some new Russians arriving in Turkey are having a hard time making deposits and remittances at banks that are wary of violating sanctions. The additional layer of compliance and exclusion from Visa and Mastercard add to the difficulty.read more

Last year, the United Arab Emirates issued guidelines to banks to step up steps to identify suspicious transactions in order to stop the flow of illegal funds. Still, it was not added to the list of countries monitored by the FATF’s global financial crime watchdog, like Turkey.more

A senior executive at Emirati Bank said the bank is doing the same customer checks as before and has not received any new guidance from the central bank.

Meanwhile, in Istanbul, real estate builder and seller Babakan said so far his Russian customers have been paying through banks without any problems.

Caldas and Alex Cihanoglu, also realtors based in Turkey’s largest cities, said sanctions have made financial transfers more complex and some Russians are using cash converted from cryptocurrencies. ..

“I think most of the transactions we see are in cryptocurrencies. Cryptocurrencies are the channel used in the challenges we are facing, especially in this market right now,” Caldas said. He added.

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Additional reports by Ceyda Caglayan and Jonathan Spicer in Istanbul, Saeed Azhar, Riham Alkousaa, Lisa Barrington and Alexander Cornwell in Dubai, written by Ezgi Erkoyun and Dominic Evans, edited by Pravin Char

Our Criteria: Thomson Reuters Trust Principles.

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