Real estate: Large Turkish investments in the Aegean islands

From Rhodes to Santorini, from Mykonos to Corfu and from Crete to Lesvos, Chios and Samos we find Turkish investments or the activity of small and large Turkish businesses. Even Turkish individuals are increasing their presence, showing greater interest in the real estate market, in tourism (accommodations and catering). Their total presence in recent years may exceed 1 billion euros, with 350-500 million euros concentrated in the Greek islands.

These are relatively small, but many investments, which are also carried out through holding companies, where Arab or even American funds appear. Thus, they are not easily detected by market radars and are not accurately captured by official statistics. This does not mean that the Greek authorities do not know how the Turks are active in Greece and the exact figures.

For example, the stock of Turkey‘s foreign direct investment in Greece just exceeds 100 million euros, according to data from the Bank of Greece and the Ministry of Foreign Affairs. However, figures from the Turkish Ministry of Foreign Affairs estimate these investments to be much higher, around 400 million euros. However, both sides agree that in 2022 the flow of foreign direct investment almost doubled, to 49 million euros, from 27 million euros in 2021.

Indirect investments

Market sources who monitor the activity of Turkish investors and businessmen in Greece explain that their presence does not always appear as direct foreign investment, but most often indirectly, such as for example hotel constructions that may be owned by Greeks or Arab, American, German funds.

Indeed, if one adds up just a few of the investments and activities of large Turkish groups in recent years, one will find that the figures are larger than we think.

Akfen Participations, which is active in agricultural production, appeared in Chios to buy estates for 20 million euros in 2022. Cengiz Holding appeared a few years earlier to participate in the construction of a highway in Rhodes. Another one, Limak, appears to be participating in the construction of a project at the airport of Samos. Another case is Yildirim Holding with the construction of a plastics factory, not on an island in the Aegean, but in Corfu.

However, there are also larger and direct Turkish investments in Greece. Such as that of the Koc group, which, among other things, acquired Avis (car rentals), while it also recently entered into the management of the marina of Mytilene.

In the past, the Dogus group had a large presence, which had entered the construction, tourist and marina sectors, while it had become particularly well-known from its participation in a luxury hotel in Mykonos, as well as many other fillet sites on the islands and in Attica. However, due to his own financial problems he has disinvested. Other large Turkish groups such as Setur, Istikbal, Eren Hloding (paper mill), Pak Holdings, Polisan (chemicals), Suoz Energy (photovoltaic technology) also showed a similar course and subsequent contraction or complete exit from the market.

And to all this should be added the acquisition by the Turkish company Dardanel of the majority of the shares of the frozen seafood company Kallimanis.

Talking to local actors, investments by Turkish interests are found, even in wind farms or small photovoltaic plants on various islands.

Even at the level of individuals, Golden Visa data now shows Turkish investors with residence permits to be the second largest nationality after the Chinese, surpassing the Russians.

Real estate

The interest of the Turks is mainly focused on real estate, with the purchase of real estate or plots of land in Attica and on the islands. Turkish groups and Turkish businessmen, as they face the problem of being blocked from strategic projects (such as infrastructure) in the Aegean islands and especially those close to Turkey (Rhodes, Lesvos, etc.), limit their tourism activities, such as in the development of luxury accommodation (hotels) and catering. They show activity in various constructions (e.g. hotels) owned by other investors, but also in trade and small industrial units or small RES.

The presence of Turkish businesses and investments in Greece and the Greek islands is mainly linked to the approach of Europe and the West in their strategic plans. They bet on the development of the Greek real estate market and the prospects of tourism, but also more generally on stability and the structure of the Greek economy.

Sources dealing with political and geopolitical developments explain that, contrary to public threats from Turkey, these investors do not believe in imminent tension. In addition, Turkish interests in the Aegean islands, but also throughout Greece, are rather a discouraging factor for increasing integrations from the neighboring country or for moves that could degrade the environment or the prospects of Turkish investments.