Turkey is a safe haven for property - King Sturge

Turkey is emerging as a key high-growth property development and investment market, according to the first Turkey Property Market Report issued by King Sturge. The property consultant found that sustainable economic growth, greater political stability, wider investment in infrastructure and favourable demographics ‘all contribute to a very positive sentiment’.

The research highlighted exponential growth which is driving large transactions, a rapid rise in office rents and continued demand for retail developments as key components of the property market. The report also found that logistics and warehouse stock is on the increase and that yield compression is down to Western European levels. Commercial property yields were in the order of 10-12% just two or three years ago, but the report finding show that offices and industrial have since compressed to around 8%, with retail currently around 7%.

According to the findings, growth in the Turkish economy has led to greater demand for commercial property space, particularly in the more established market of Istanbul. 'High demand for popular locations on the European side of Istanbul, such as Maslak and Sisli, ensures that vacancy rates in these areas are virtually zero. Rents have correspondingly grown by as much as 25% over the last two years and prime rents are currently as high as EUR 20/m2/month, with some asking prices already approaching EUR 26/m2/month.'

The retail market also continues to show major prospects with a strong development pipeline of new retail space. Around 35 new shopping centres are currently under construction in Istanbul and a further 30 modern schemes are being built across the country.

Warehouse and logistics stock in Istanbul and its suburbs currently totals 1.2 million m² and is expected to increase to 1.4 million m² over the next year.