The stability that the Turkish economy has attained, the steps taken towards European Union membership, and the huge influx of Gulf capital have all pushed Turkey's real estate sector into a dynamic position. There is a huge boom occurring right now in real estate, ranging from housing to industrial construction, and shopping center to hotel construction.
According to Colliers International, an international real estate consulting firm, its evaluation of the market in a report entitled “2007 Turkey Real Estate Review” states that there are currently 30 various 5-star hotels either in the planning stages or under construction in the Istanbul real estate sector.
 Kanyon Shopping Center in Istanbul.
In addition to the 43 shopping centers in Istanbul, there are 35 additional shopping centers under construction and 30 are in the planning phases. By the end of 2006, the combined square-meter area of closed shopping centers reached 2,165,698 m² and is expected to reach 4,180,347 m² by 2008. The annual housing demand has reached 250,000 in Istanbul and there are currently 300 apartment complexes under construction.
OFFICE MARKET
According to Colliers International, there has been a significant increase in office supply in the most preferred regions, such as Levent, Etiler, Taksim, Gayrettepe, Zincirlikuyu, and Kavacık, although demand for quality offices in these locations continues to increase. Demand for buildings in the city center will continue in the future and tenants generally prefer quality office space in a central location.
This presents a strong opportunity for investors to redevelop areas, particularly in the business corridor between Zincirlikuyu and Levent. Refurbishing or remodeling older and insufficient B and C class office buildings to a higher standard will be able to meet the increased demand for quality office space. The increase in demand for B class office buildings due to the lack of A class office stock in these locations is highly indicative of potential investment opportunities within this segment.
RETAIL MARKET
The Colliers International report indicated that the retail market is developing considerably in Istanbul. To date, there are currently 43 existing shopping centers, with an additional 35 centers under construction, and 30 retail centers in the project planning phase. Considering that over half of the gross leasable area (GLA) in Turkey exists in Istanbul, competition in the Istanbul market has increased significantly. In an effort to differentiate themselves from the existing competition, new centers have employed strategies such as diversification of shop-mixes and brand introduction, coupled with strong project design to reinforce a particular concept. One strong example of a retail newcomer is Kanyon in Levent. Other new centers include the Maslak Power Center, Colony Outlet, D’silva, and Kaya Millenium in 2006.
INTERNATIONAL BRANDS IN ISTANBUL
2005 and 2006 saw an increase in the number of international brands present in the Istanbul market. Both Istanbul Cevahir and Kanyon were able to secure multiple tenants who had not previously operated in the Turkish market. Of particular interest is the advent of two new department stores in Turkey, namely Harvey Nichols and Debenhams. These new stores have increased department store competition, which has been until now dominated by domestic brand Boyner, and international brand Marks & Spencer. It also indicates that there is strong growth potential for this sub-sector within the retail arena in Istanbul and elsewhere in Turkey.
HOTEL MARKET
The market niche for Western-style four and five-star hotels continues to grow in Istanbul, particularly in strongly developed areas that are lacking this type of hotel infrastructure, such as the business districts on the Asian side of Istanbul. The five-star hotel market has grown progressively in the last decade, with the emergence of many international hotel chains in the Turkish market. These hotels are predominantly located on the European side of the city, in the tourism and business centers.
One-third of the total number of hotels in Istanbul falls within the four and five-star class. This would lead some to believe that there is an overabundance of high quality hotels in the city; however, it is important to note that there are not many mid-tier hotels within the city, and foreign and business travelers generally prefer to stay with names that they recognize.
There are many international hotel brands currently operating in Istanbul and elsewhere in Turkey. However, some of the five-star chains operating in Istanbul are either currently operating in more than one location or plan to do so in the near future. This is indicative of the strength of the five-star hotel market in this city, and we believe that there is space in the market for new chains to enter and operate here. This is proved further by the entrance of W Hotels, which will operate their first European outlet beginning in Istanbul in 2008.
There is also significant room for new luxury brand presence within the five-star hotel market, and many franchises are looking into developing and operating locations in Istanbul.
There are a total of 30 planned and under-construction five-star hotels entering the Istanbul market. It is unlikely that the introduction of these new hotels will be able to satisfy expected demand for five-star hotels in the city, which is expected to more than double in the next five to ten years.
SELECTED HOTEL PROJECTS
Name of Project Location Opening Date
Atik Paşa Four Seasons Bosphourus Hotel Beşiktaş 2007
Maçka Hotel Maçka 2008
Diamond of Istanbul Maslak *
Mariott Asia Kozyatağı 2007
By O Tell Kozyatağı 2007
MNG Bentur Airport Hotel Atatürk Int. Airport *
Büyük Tarabya Hotel Tarabya *
Park Hyatt Maçka *
Crowne Plaza Istanbul Old City (old Merit Antique) Laleli 2007
W Istanbul Beşiktaş 2007
Green Park Pendik 2007
Marriot Bomonti Hotel Convention Bomonti 2009
* (by Taşyapı A.Ş.) Koşuyolu 2008
* not known yet
Source: Colliers International Turkey
CLASSIFICATION OF SHOPPING CENTERS
Shopping Center Location Opening Date GLA (m2)
TRADITIONAL
VERY LARGE
Istanbul Cevahir Şişli 2005 107,000
Sub Total 107,000
LARGE
CarrefourSA Kozyatağı 1996 47,250
CarrefourSA Ümraniye 2000 60,630
Galleria Ataköy 1988 42,974
M1 Tepe Kartal 2000 42,942
Maxi Shopping City Silivri 1998 45,000
Profilo Mecidiyeköy 1998 40,600
Tepe Nautilus Kadıköy 2002 51,776
Sub Total 331,172
MEDIUM
Akmerkez Etiler 1993 34,680
Beylicium Beylikdüzü 2005 22,000
Capitol Altunizade 1993 31,000
Carousel Bakırköy 1995 24,400
CarrefourSA Bayrampaşa 2003 25,030
CarrefourSA Maltepe 2005 30,500
D’silva Büyükçekmece 2006 20,000
Kanyon Levent 2006 37,500
Metrocity Levent 2003 32,638
Migros Beylikdüzü 1997 33,000
Sub Total 290,748
SMALL
Atirus Büyükçekmece 2005 12,000
Artium Ataköy 1989 11,232
Aquarium Bayrampaşa 2005 10,500
Başak İkitelli 2005 8,724
CarrefourSA Haramidere 2000 17,831
Flyinn Florya 2003 15,300
G-Mall Maçka 2003 4,228
Kaya Millenium Beylikdüzü 2006 15,000
Kule Çarşı Levent 2000 3,679
MKM Akatlar 2004 15,000
Mayadrom Etiler 1998 2,976
Maxi City Çengelköy 2003 13,500
Maxi Center İstinye 2003 11,000
Mesa Studio Plaza Kemerburgaz 2003 6,240
Ömür Plaza Bahçelievler 2005 10,000
Paradise Beylikdüzü 2005 9,838
Sunflower Esenkent 2005 6,000
Town Center Bakırköy 2003 13,400
Uptown Etiler 2003 6,500
Sub Total 192,948
SPECIALIZED
RETAIL PARK
Maslak Power Center Maslak 2006 42,000
Sub Total 42,000
FACTORY OUTLET CENTER
Olivium Zeytinburnu 2000 33,995
Colony Sefaköy 2006 7,000
Sub Total 40,995
THEME ORIENTED CENTER
1000a Dekorasyon Merkezi Şişli 2003 8,500
Address Istanbul Okmeydanı 2005 5,800
Kadir Has Çocuk Dünyası Bahçelievler 2003 17,500
Sub Total 31,800
TOTAL 1,036,663
Source: Colliers International Turkey
THE NEW MODEL IN REAL ESTATE: THE TURKISH INVESTMENT FUND
The dynamism of the Turkish real estate sector has also brought forth new financial models with it. The Turkish Investment Fund, which was formed by English-born Barry Kartal, based in England but active in the Istanbul real estate market, presents a new financial model for real estate projects. The Fund is now carrying out construction on two 45-million dollar projects in Kemerburgaz (in Istanbul) and Bodrum-Milas. They fund the projects completely with their own funds and then sell them. Kartal is attempting to move away from the previously established model of “first sell, then construct” mentality.
 Barry Kartal, President of Turkish Investment Fund. (By Necdet Kosedag)
The Capital Courtyard project located in Kemerburgaz, the most popular suburban area of Istanbul, consists of 99 residential and 19 retail units built on 17,000 square meters. T.I.F. developed the 15 million dollar project with an international team of architects and structured the deal on a wholesale basis and plans a February 2009 opening.
The 30 million dollar Labranda Park project consists of 24,000 m2 retail space and 1500 m2 of social facilities. The Project has been contracted and is at the finance stage.
ABOUT TIF
Turkish Investment Fund is a U.K. registered Limited liability Partnership, which specializes in property investment and development. It holds LLP assets. TIF occasionally brokers mid-size investments for selected international investors.
The company is also working towards its first capital market bond, for the construction of its larger scale developments. T.I.F. is looking to invest its funds in quality, high yielding projects, which are clean and unencumbered, with planning having been granted (Imar). Should your project fit into these criteria, our project team can explore options with you for the realization of your project.
February 2008, Special Tourism Issue
|
