TURKEY - Pan-European retail property fund VastNed Retail has acquired its seventh prime high street shop in the heart of Istanbul, taking its total investment in Turkey to €90m.
The closed-end retail specialist, whose major shareholders include Dutch pension fund PFZW, now has a 1% exposure to Turkey, along with investments in the Netherlands, Spain, France, Belgium and Portugal.
VastNed Retail acquired Istiklal Caddesi 161 Beyoğlu from Yapi Kredi Bank for €29.5m, a 4,750 square metre store located on the southern part of Istiklal Caddesi, opposite one of VastNed Retail's other high street shops and near Galatasaray square.
VastNed plans to renovate the property shortly. The gross rental income is expected to be approximately €2.5m per year, taking into account €3.5m in refurbishment costs, including capitalised interest, resulting in a 7.3% net initial yield.
More than 80% of the income will be generated from the retail area. Given recent experience gained in other transactions in the same street, VastNed Retail said it expected to be able to attract the best international tenants.
The acquisition will increase the size of the Istanbul portfolio, which focuses on prime high street shops.
The majority of the high street shops are located in Istanbul's busiest street Istiklal Caddesi and on the Asian side of the Bosporus. Tenants include Turkcell, Top Shop, Abercrombie & Fitch and Penti.
Reinier van Gerrevink, chief executive at VastNed Retail, said: "With this transaction, we are well on our way to achieve our strategic goal of developing Turkey into a fifth core market.
"Our approach of limiting ourselves to prime high street shops in a small number of streets and buying vacant properties letting them back-to-back to strong retailers appears to be very successful."
He added: "Major European and American retailers are queuing up to install their flagships in the heart of Istanbul, which creates good letting opportunities for our recently acquired properties."