Cultural and legal issues challenge maturing Turkish property market

Turkey’s lenient planning laws can still thwart foreign developers and investors keen to build up a position in this emerging country on the fringe of Europe, Barlas Balcioglu, partner, head of Istanbul real estate at Salans, told the PropertyEU Turkey Investment Briefing hosted on Thursday by Aberdeen Asset Management at its London office.

‘It can still happen that a new shopping centre is built right next to a new one,’ he said. ‘Planning laws remain an issue and I see no change in the immediate future.’

He added, however, that this will change as the market grows further. ‘The future looks bright, but we’re not there yet in terms of planning.’

Anthony Labadie, managing director, Turkey at CBRE, concurred that more restrictions were needed in the area of planning, but pointed out that the market was changing due also to the influx of foreign retailers. ‘The market is becoming more sophisticated. Retailers are becoming more demanding and are asking for more information about a location and are more sensitive about planning decisions.’

Labadie noted that foreign investors also needed to be aware of cultural differences in Turkey. In the office market, for example, ownership structures differ significantly from most other countries in western Europe. Multiple ownership of a single office building and even a single floor is not uncommon, he said.

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