REAL ESTATE
Turkey is one of the most promising real estate markets in Europe, and the mantra “location, location, location” rings especially true for this country. Strategically situated at the crossroads of Europe, the Middle East, and Central Asia, and home to almost 82 million people, Turkey offers great opportunities for real estate developers and investors by combining a large construction sector with growing commercial and industrial output.
- The real estate sector accounted for approximately 8.4 percent of GDP in the last decade. On the investment side, FDI inflows stood at USD 13 billion, with real estate and construction garnering USD 5.9 billion (45 percent) of total FDI in 2018.
- Urban renewal and mega projects dominate the agenda for the foreseeable future, particularly in Istanbul. Some projects in the city include Marmaray, Canal Istanbul, Yavuz Sultan Selim Bridge, Eurasia Tunnel, 3-Storey Grand Istanbul Tunnel, and Istanbul’s 3rd airport.
- The Urban Renewal and Development initiative will encompass 7.5 million housing units. The initiative has a budget of USD 400 billion, with a large contribution coming from the private sector.
- The total number of homes sold in the Turkish property market reached 1.4 million units in 2018; likewise, sales of real estate to foreigners began to increase following the abolishment of the reciprocity law in 2012. In 2018, 39,663 homes were sold to foreigners in Turkey, marking a year-on-year increase of 78.3 percent. Regarding home sales to foreigners, Istanbul was the top-performing province with 14,270 sales in 2018, followed by Antalya with 7,938 sales, Bursa with 2,720 sales, and Ankara with 2,133 sales.
- By 2019 year-end, the existing Grade A office stock in Istanbul will have surpassed 5.7 million square meters. Annual gross leasable area growth in the office market has been around 42 percent on average between 2010 and 2019. There is more than 1.7 million square meters of office supply under construction, and it is expected that the total grade A office supply will reach almost 7.4 million square meters gross leasable area by the end of 2023.
- 433 shopping centers are operational in Turkey with a total gross leasable area of 13 million square meters. 126 shopping centers in Istanbul with a total gross leasable area of 4.8 million square meters represent 37 percent of the total leasable shopping center area in Turkey.
- In spite of the growth in recent years, Turkey is still below the average of total leasable area per person compared to the European average. This indicates potential for further retail growth in Turkey.