Property investors optimistic on Istanbul

Posted on 14 February 2011

Date: 09/03/2010
Property investors optimistic on Istanbul

Istanbul, Turkey’s biggest city, ranks at the top in real estate development expectations, according to a joint report by PricewaterHouseCoopers and the Urban Land Institute, or ULI. The city ranked fifth in new real estate purchases and stood at number seven in Europe for existing investment performance.

The “Emerging Trends in Real Estate 2010 Europe” report includes predictions by more than 600 sector representatives, including real estate company executives and creditors.

As credit channels open and property values find a balance, the European real estate sector is predicted to recover this year, the report said. However, this will be a slow and gradual recovery.

Istanbul stood at number one for the second consecutive year in development expectations, but it declined in investment expectations and existing investment performance. It ranked fifth in new real estate purchase expectations.

In development expectations, Turkey’s largest city was followed by Hamburg, Warsaw, London and Zurich. In investment expectations, Munich topped the list, followed by Hamburg, Paris and London.

The new real estate purchases list was topped by London, followed by Munich, Hamburg, Paris and Istanbul.

Due to the effects of the crisis, investors are orienting toward developed and less risky markets such as Germany, France and the U.K. Still, Turkey and Istanbul are attractive with their long-term potential. The interest in Istanbul relies on Turkey’s young population and positive growth expectations.

Gradual recovery

Commenting on Istanbul’s potential, sector representatives said 2009 was a tough year, but this year will see stability returning back to the market. “Nothing could be worse than 2009, but the recovery will not be fast,” said one.

Domestic investors were very optimistic on Turkey and Istanbul, while international investors were cautious. European investors were mostly warm toward retail investments, as 28.3 percent advised real estate purchases in retail. Nearly 20 percent said buying office and residential space is a good idea.

Speaking to reporters in Istanbul on Monday, Firuz Soyuer, board member at ULI Turkey, said Istanbul stands among the top in development, especially in retail. “But these investments will not manifest themselves as shopping centers,” Soyuer said. “We will probably see bigger portfolios. Investors might also look toward different areas to spread risk. Maybe shopping streets will come to the fore again.”

In office investments, Kagithane and Kartal districts will receive interest, Soyuer noted. “For this, the mass transportation system should be well built.”

In land investments, Silivri and Tuzla are of interest, he said. “But international investors are still wary toward investing in logistics,” he said. “Meanwhile, hotels in Istanbul still do not number many. Thus, we will see an increase in the supply of four-star hotels on the Anatolian side especially.”

Speaking at the press meeting, Kees Hage of PwC said the sector is in a state of measured optimism due to the recovery of European economies. Still, there are some uncertainties, Hage said. “Government [aid] continues in all countries. What will happen when that gets cut?”

9 March 2010 Source – Hurriyet Daily News

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