Agaoglu may cancel Canary Wharf towers

Agaoglu Group, a construction and real estate company, one of Turkey’s largest, may cancel the construction plans of two towers near Canary Wharf if the company and the Greater London Authority don’t resolve differences over the specifications of the project, the company’s president Ali Agaoglu said.

“When we first started the project we were planning to have 54 floors but the municipality is trying to reduce it to 40 floors and it’s a major problem,” Agaoglu, who is ranked as Turkey’s tenth-richest man with a fortune of $2.1bn, said.

“The project will be losing its essence and all its peculiarities and that is why if they push us to do so we may cancel the project.”

Agaoglu had planned to build two towers of 157 meters and 122 meters that would include residential units and a hotel near Canary Wharf, London’s financial and business district.

Agaoglu would have earned about £567m in revenue from the project which would have cost the £189m to build. The two towers would have included a total of 371 apartments and a five star hotel with 210 rooms. The project if completed would be the developer’s first outside of Turkey.

Agaoglu Group plans to issue $2bn in sukuk, or Islamic bonds to help with the financing of construction work that is part of Istanbul’s international Financial Centre. Aktiv Bank is advising the group and Agaoglu will issue the Islamic debt in a series of tranches of $250m, he said.

Aaoglu, founded in 1981, is expanding its development projects as it seeks to capitalize on new legislation that allows foreigners to buy property in Turkey and tap the wealth of investors from the Gulf in projects like its 322,000 square meter Maslak 1453 development.

The group expects to more than double its sales to Arab investors from $350m last year to $850m in 2013.

The property market in Turkey is booming and ranked among Europe’s top five markets according to studies by PricewaterhouseCoopers and Ernst & Young.