Turkey's decade-long development frenzy continued unabated in 2011 with a record amount of shopping centre space brought to market.

Turkey's decade-long development frenzy continued unabated in 2011 with a record amount of shopping centre space brought to market.

The country currently boasts the largest development pipeline on the European continent with the exception of Russia, according to research released by Cushman & Wakefield. In 2011 alone, around 1.1 million m2 of shopping centre space was delivered, representing the highest annual figure on record.

'Positive recent operating trends have been observed in all commercial property types,' said Senay Azak-Matt, General Manager Turkey at German lender Aareal. 'Recent increasing retail turnovers indicate a sustainable environment for projects with strong fundamentals. Meanwhile, the logistics segment, due to a shortage of quality warehouses, is expected to provide further development opportunities, with still high land prices but increasing rental levels.'

In general, investment has been sluggish in the past few years, but it is expected to make a comeback in 2012, experts say. Turkey’s credit rating, which is currently one notch below the investment grade, is likely to be upgraded in the next 18 months, allowing global pension funds to invest in the market. This will boost investor demand and have a significant impact on market prices.

‘International investors continue to monitor the Turkish real estate market,' Azak-Matt said. 'Most investors are still on the sidelines amidst the continued global uncertainty and limited availability of debt funding for new projects. Over the long run, we would however expect the strong demographic and economic fundamentals of the country to support a healthy real estate sector.'

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