By Ceyda Caglayan, Saeed Azhar and Riham Alkousaa

ISTANBUL/DUBAI – Many property companies report that Russians are investing large sums of money in Turkey and United Arab Emirates in search of financial safety in the wake Moscow’s invasion and Western sanctions.

Gul Gul (co-founder, Golden Sign Istanbul real estate firm) said that they sell 7 to 8 units per day to Russians. They buy cash and open Turkish bank accounts. Or they bring in gold.

Thiago Caldas (CEO of Modern Living) has appointed three Russian-speaking agents in Dubai to help him meet Russian interests, which has risen tenfold.

Since the February 24th invasion, sanctions have been imposed against Russia. These include the exclusion of Russia from SWIFT’s banking system and targeting individuals such as those deemed close to President Vladimir Putin.

Turkey and UAE both criticize Russia’s offensive. Ankara, however, opposes non U.N. sanctions against Russia. Ankara and Russia have good ties and continue to operate direct flights. This could potentially open the door for Russians with their money and cash.

Gul, of Golden Sign, one the dozen real estate firms interviewed by Reuters said that they were wealthy Russians and not oligarchs. “They’re looking at ways to send their money to Turkey.”

Gul said that there are buyers who buy three- to five flats.

Russians are big buyers of Turkish properties for many years. They have followed Iranians and Iraqis in this regard, but real estate agents said that there has been an increase in the demand over recent weeks.

Even though it’s early days, figures in the industry are bolstering their accounts. For example, Russians snapped up 509 homes in Turkey last February as they pushed on the border with Ukraine. This is almost double what they did last year.

The data were available before Western sanctions became effective. Agents said that the demand would continue to increase, fueled in part by increased global awareness of the COVID-19 pandemic.

Ibrahim Babacan of Istanbul, who owns and operates a company that builds and sells Turkish real estate, stated that in the past, many Russians wanted to reside in areas like the Mediterranean Antalya. To invest their funds, they now buy apartments in Istanbul.

Reuters reached Russian homebuyers. However, they declined interviews because of the sensitive situation.

THOUSANDS OF MILLIONS

Turkey and the United Arab Emirates both offer incentives to residents who buy property. Turkey offers a Turkish passport to foreigners who purchase a property in Turkey for $250,000 and hold it for 3 years. Dubai is a Middle East hub that offers three-year residence visas for a smaller amount.

The majority of apartments have sold for 750,000 dirhams ($205,000), which is the minimum threshold to be eligible for visa eligibility. But more luxurious properties such as Dubai’s Palm Jumeirah, where the price tag can reach 6 million dirhams according to experts in real estate.

According to Elena Milishenkova, real estate broker Tranio, with offices in Moscow and Berlin and a special focus on Russian buyers of property abroad, “Investors want both capital protection as well as the chance to obtain a residence visa in the UAE for temporary relocate.”

She said that her company had received nearly three times as many requests for Dubai apartments during the first three months in 2022 than in the previous year.

According to some companies, demand may be even greater.

Caldas, of Dubai’s Modern Living said that “Right before the invasion of Ukraine began, we launched an operation in the region. The number of people who reached us was… at least ten times more than usual.”

According to the CEO who employed the Russian-speaking agents, the buyers were making preparations for the conflict and shifting funds from Russia before it broke out one month ago.

CASH AND CRYPTOCURRENCY

The process for Russians with bank accounts in Dubai is quite simple according to Elena Timchenko, broker Royal Home Real Estate. She is based here.

Some people have reached out to their friends and contacts, but some find it difficult to raise the funds for purchases.

She said that “the desire to purchase in Dubai is one thing; the ability to do it is another.” This was in reference to difficulties associated with bringing funds into the Gulf state.

Many Russians who have recently arrived in Turkey are having difficulty making deposits or transfers to banks which don’t want them violating the sanctions. The difficulty is exacerbated by additional compliance requirements and the exclusion of Visa (NYSE/:) and Mastercards (NYSE/:).

In an effort to curb illicit financial flows, the UAE gave guidelines to banks to improve procedures for identifying suspicious transactions. The UAE was added, along with Turkey, to the FATF’s global watchdog for financial crimes.

According to an Emirati bank senior executive, the bank had been doing the same customer checks as the previous year and was not receiving any new direction from the central bank.

Babacan, an Istanbul real estate seller and builder, said in the meantime that Russian clients he had dealt with so far were easy to pay via their banks.

Alex Cihanoglu (a Turkish realtor) said that Russians are using cryptocurrency-converted cash now that financial transfers have become more complicated due to sanctions.

Caldas stated that crypto is the most popular channel for transactions. Cryptocurrency, especially in these markets, and the challenges they face, is what is being used.