Investment in the Turkish property sector is not expected to return to significant levels until the second half of 2010 at the earliest, according to Murat Ergin, head of Savills’ associate Kuzeybati Worldwide Real Estate Services in Turkey.
Investment in the Turkish property sector is not expected to return to significant levels until the second half of 2010 at the earliest, according to Murat Ergin, head of Savills’ associate Kuzeybati Worldwide Real Estate Services in Turkey.
However, since international investors only entered the Turkish market about five years ago the current crisis-driven withdrawal from new activity is not as a big a shock as it could have been, said Ergin He pointed to increased attendance at the Turkish investment panel at EXPO REAL and a significant rise in contact with his office in Istanbul as indication that international interest remains high. ‘Leasing activity from international end users remains strong,’ Ergin said.
Signs of recovery have been seen in Istanbul’s office sector, and retail values have also seen some recovery, but the large number of new space on the market has caused a ‘permanent decrease in rents,’ according to Ergin. The situation for industrial property is more problematic. ‘Logistics will take longer to recover because manufacturing is in a poor state,’ he said.
As the market waits for the return of international investors, Turkish investors have provided some market activity in 2009, particularly in the office sector along with some logistics. Among the deals this year were Sedes Holding’s acquisition of about 5,000 m2 of office space in Istanbul for €10.5 mln at a yield of 7.75% as well as investment by the country’s second largest financial group Esas Holding. ‘When Turkish interest rates came down earlier this year people thought real estate was a safe haven,’ Ergin said.