Active Turkish shopping centre market still undersupplied: JLL

Turkey's shopping centre market has been very active over the last two years, but it remains undersupplied by European standards, according to a report from Jones Lang LaSalle on the country's retail market.

While Istanbul remains the centre of shopping development activity, JLL sees a shift to secondary cities, noting almost half of all Turkish provinces do not have any modern concept shopping centres.

Foreign investors' interest in the market remains strong, with many luxury brands entering the country in 2007 and a number of major international retailers announcing important expansion plans for 2008 and subsequent years. Among these are electronic retail chain Darty, which recently announced plans to open five new stores in Turkey this year while Tesco has said it will open 100 stores in Turkey over the next five years.

While Turkey's economy is also showing some signs of a slowdown, JLL said its growth is still expected to remain significantly higher than in developed countries. The increased purchasing power of Turkish consumers and the expanding middle class has helped to fuel the expansion of both domestic and foreign retailers and the expansion of new shopping centre space.

'Although market penetration is rising in parts of Istanbul and Ankara, these cities and particularly the untapped markets in the rest of Turkey still offer major opportunities for retailers and developers,' JLL noted. 'Going forward, the increased competition between new shopping centres means that retailers, developers and investors will need to examine these opportunities more carefully.'