TURKEY-NETHERLANDS - Expansion into the Turkish retail market could take more work than initially expected, the €1.8bn property investor VastNed Retail has indicated.

"The market is not fully ready yet for institutional investments as insufficient transparency, such as on licenses, require extra time [to obtain]," Tom de Witte, CFO of VastNed Retail, told IPE.

"Sellers are often private parties, who sometimes have second thoughts within a market that is about to break through," De Witte explained.

VastNed Retail decided last year to focus on Turkey as its growth market as the firm said it intended to raise its Turkish stake to a maximum of 10% of its property portfolio.

VastNed has so far acquired a €9.7m retail centre in Istanbul, for a net initial yield of 7%. But De Witte commented "given the risk profile in Turkey, this percentage is a minimum," as recent acquisitions in the Netherlands generated a net initial yield of 5.2% and 6.1%.

At the same time, "VastNed has made quite some progress in negotiations on two new projects," albeit De Witte added he wasn’t able to indicate a time scale for the planned expansion as "we don’t want to increase our Turkish property at all costs".

Despite fierce competition, new acquisitions remain a priority to VastNed Retail, the company made clear in its first half figures.

"The present unrest on the financial markets could ease the pressure. But we haven’t noticed this within our market yet," De Witte pointed out.

"There is still a lot of money available, which results in aggressive bidding."

VastNed reported direct results per share of €1.86. Indirect results per share were €3.86, which was a rise of €1.05 compared to the first half of 2006.

The company’s average occupancy rate has also decreased by 0.5% to 96.8%, thanks mainly to acquisitions of part-empty property in France and Spain.

According to VastNed, property yields do not yet follow the current trend in the capital market, and have fallen during the first half year as "net initial yields have dropped by approximately 0.5% to 5.6% on average," according to De Witte.

VastNed Retail invests in individual retail objects, shopping centres and large-scale retail centres in the Netherlands, Spain, France, Belgium and Turkey.

Over 40% of its assets have been invested on behalf of institutional investors. The €86bn healthcare scheme PGGM holds a stake of at least 20% in the firm.