Boston, MA -- (ReleaseWire) -- 05/28/2014 -- Turkey's real estate market is, on the whole, following a positive growth trajectory, with retail the outperformer. Industrial is the Achilles heel of the sector, lagging behind both retail and office space in terms of rent, yields and construction growth. However, with export growth anticipated to improve over the forecast period, we could begin to see this sub-segment in a positive light.
With a focus on the two principal cities of Istanbul and Ankara, this report covers the rental market's performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the country's long-term domestic demand credentials.
Positive economic fundamentals and construction growth are underpinning our positive outlook for Turkey's real estate sector, with annual average GDP growth of 3.2% expected over the 2014-2018 period. A penchant for Western shopping trends and brands is driving large retail developments across the country, particularly in Ankara and Istanbul. This is attracting wealthy foreign players, such as Apple and Taurus Investment, which in turn is buoying rental rates and getting the attention of other players.
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Office space is also faring well, with around 800,000 square metres (sq m) currently being developed in Istanbul. This is sorely needed, as Istanbul's central business district (CBD) has a vacancy rate of less than 1.0%, with supply insufficient to meet demand. Both office and retail will provide healthy rental rates and yields over the forecast period to 2017.
Industrial real estate will fare less well, even after a few rocky years. That said, export growth is on the cards, especially with regards to textiles and jewellery. January-October 2013 saw textile exports reach USD6.9bn, prompting the country to draft plans regarding a logistics centre for textiles, apparel and leather, to reduce the clustering of textile, garment and leather industries.
- In April 2014, Apple opened its first Turkish store, in Istanbul. It is to be in a shopping mall alongside other high-end retailers. Three more stores for Turkey are in the pipeline. - - The average value of residential real estate in Turkey rose by 10-15% in the first nine months of 2013, leading the European rise in prices, according to estimates by property consultant Knight Frank. - - In March 2014, US-based hospitality company Marriott International opened a new five-star hotel in Istanbul in a bid to expand its presence in the region. The opening of the Istanbul Marriott Hotel Sisli takes the company's total number of properties in Istanbul and in Turkey to seven and 11, respectively. - -
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