For Turkey, one of Europe’s most promising real estate markets, the phrase “location, location, location”, which is frequently used in real estate markets, is a very appropriate expression for the country. With its strategic location at the crossroads of Europe, the Middle East and Central Asia and a population of close to 81 million, Turkey offers great opportunities for real estate developers and investors by combining its strong construction sector with its ever-growing commercial and industrial production.
Some important data and figures regarding the real estate sector in Turkey are as follows:
The real estate sector has accounted for about 8.4% of GDP over the last ten years. On the investment side, the total foreign direct investment (FDI) inflow was recorded as USD 10.8 billion in 2017, while the share of the real estate and construction sectors in this amount was USD 4.6 billion (42.9%).
Urban transformation studies and mega-projects, especially for Istanbul, direct the activities in the near future. Marmaray, Kanal Istanbul, Yavuz Sultan Selim Bridge, Eurasia Tunnel, 3-Storey Grand Istanbul Tunnel and Istanbul’s 3rd airport can be counted among the mega projects in the city.
The Urban Renewal and Transformation initiative will cover 7.5 million residences. The private sector contributes greatly to this initiative, which has a budget of 400 billion USD.
According to the Knight Frank Global Housing Price Index, Turkey ranked 6th among 56 locations in the third quarter of 2017 in the annual price increase index. Turkey has become one of the best performing housing markets in the world, leaving behind Australia, Latvia and India, with prices increasing 11.1% annually.
The total number of houses sold in the Turkish real estate market reached 1.4 million in 2017. With the abolition of the reciprocity law in 2012, real estate sales to foreigners started to increase. A total of 22,234 residences were sold to foreigners in 2017, an increase of 22.2% compared to the previous year. In terms of house sales to foreigners, Istanbul ranked first with 8,182 sales in 2017, followed by Antalya with 4,707 sales, Bursa with 1,474 sales and Yalova with 1,079 sales.
Class A office stock in Istanbul exceeded 5.3 million square meters in 249 office buildings as of the end of 2017. The average annual increase in gross leasable area between 2010 and 2017 in the office market was approximately 12%. More than 1.2 million square meters of office supply is under construction and by the end of 2020, the total Class A office supply is expected to reach approximately 7.1 million square meters of gross leasable area.
There are 401 shopping centers operating in Turkey; The total gross leasable area in these shopping centers is 12.2 million square meters. The total gross leasable area of 4.2 million square meters belonging to 114 shopping centers in Istanbul corresponds to 34% of the total leasable shopping center area in Turkey.
According to the JLL 2016 Cross-Border Retail Attractiveness Index, Istanbul is the 6th most attractive market in Europe after London, Paris, Moscow, Milan and Madrid.
Despite the growth in recent years, Turkey still lags behind the European average in terms of average leasable area per capita. This indicates that the growth potential in the retail sector continues.
According to the data of the Ministry of Culture and Tourism, as of the end of 2016, there are 3,641 rated hotels and 426,981 rooms in these hotels. While 5-star hotels account for 42.7% of the hotel stock, the share of 4-star hotels in this stock is 24.8%; The share of 3-star hotels is 12.6%.