Bio Istanbul is the vision of Bio City Development Company, the world's leading emerging markets healthcare infrastructure investment company, in partnership with the Ministry of Urbanization and Environment, TOKI, and the TOKI affiliate, EPP. On completion Bio Istanbul will include advanced laboratories, grade-A office space in a park environment, a children's hospital and associated high-end housing. Bio City is advised by Savills. Real Estate Publishers (REP) asked Tobias Levey, Chairman, Bio Istanbul and Chief Executive Officer, Bio City Development Company, to share his insight on the ambitious project.
By Bernd Struben, Editor-in-Chief, REP
Tobias Levey, Chairman, Bio Istanbul
"Five years ago the Turkish government via TOKI expressed an interest to build an advanced pediatric hospital. Istanbul, with some 18 million people, is one of the largest cities in the world without a children's hospital. We were approached by the Turkish government as we'd already developed 10 major hospitals around the world over the past 18 years. We were interested but told them they needed much more than that, since Turkey's R&D sector is only a tiny fraction of what you'd expect from an economy and population of that size.
"In emerging markets today you don't have real innovation clusters; you do have business parks or free trade zones or even areas called science parks, but in most cases they're set up from a purely real estate perspective and the underlying science that would drive a western multinational to create small molecule R&D therein is absent the right incentives aren't usually there.
"On the positive side Turkey graduates hundreds of thousands of people with higher degrees each year; they have talented scientists, but the most talented are usually going abroad to the US or Europe for higher degrees and then they generally stay. The goal with this project is to give Turkey over a ten year period a biomedical R&D sector in the form of a real research park, which will help keep their talented scientists at home and bring in western enterprises. And this fits nicely with the children's hospital as it makes children's diseases easier to study and in children one has single incidence of disease, which means diseases can be studied in isolation.
"TOKI, the housing authority which approached us for this project, is a very productive and ambitious authority. They've built 550,000 residential units, 150 hospitals, and some 350 schools. They had the power to give us a good deal on the land and help us with building permissions and licenses. We decided to create a joint venture to carry out the project. The negotiations came during the middle of the Great Recession, but by 2010 we found a suitable structure: a US $220 million bond to fund a seven year bond, the type of long-term finance you need for this type of project.