Istanbul’s two main shopping streets are now among the world’s 20 most expensive streets to rent retail space, according to a new report by a leading commercial property consultancy.
Rents for retail outlets in the streets of Bagdat Caddesi on Istanbul’s Asian side and Istiklal on the European side are together ranked 20th in a list ranking key shopping streets around the world in terms of rental value, compiled in a report by Cushman & Wakefield.
This is encouraging news for investors in Istanbul’s property market, both commercial and domestic, as it demonstrates a growing demand for retail space, fuelled by the Turkey’s increasing middle classes, an appetite for international brands and rising levels of wealthy foreign visitors.
The two streets commanded annual rents of $312/square foot in 2014, according to the report. This compares with $3,500/square foot for the most expensive street, Upper 5th Avenue in New York, and $1,216/square foot in London’s New Bond Street, ranked 4th.
Encouragingly, Istanbul’s latest position represents a vast improvement on its previous ranking of 29th in the 2013 edition of the report. In addition, three streets in the city saw the highest rates of growth in rental value in 2014, with Istiklal Street’s 27.3 per cent being the second highest level of growth globally after San Francisco and the highest level out of all EMEA countries. Not far behind were Bagdat Caddesi with 24.4 per cent growth and Abdi Ipekci with 20.9 per cent.
“The strongest growth in the EMEA region was registered in Turkey (15.6 per cent),” said the report. “Where healthy consumer spending, an expanding middle class, better quality retail space and the arrival of more international retailers continued to support the market.”
Meanwhile, in a further boost to Istanbul’s real estate market, in March the Wall Street Journal described the Karakoy neighbourhood in the European side as the city’s most stylish area. The article notes that in anticipation of the proposed Galataport cruise terminal, Karakoy is undergoing a major face-lift and is now home to a selection of chic new restaurants, cafes, hotels and art galleries.
Further proof of Istanbul’s flourishing market comes from the recent ‘2014 Istanbul Branded Residence Study’, which revealed that branded residential projects there increased by 18 per cent last year and now account for 7.7 per cent of all of the city’s residences. There are now 1,007 ongoing branded residence projects, containing 430,000 residences in Istanbul, compared to 855 projects and 395,000 residences at the end of 2013.
The same study revealed the Bomonti-Fulya-Şişli-Büyükdere district as the most expensive residential area on Istanbul's European side, with property costing an average of TL15,500 per square metre. Bahçeşehir-Başakşehir was shown to be the least expensive residential area on the European side, costing an average of TL 2,370 per square metre, while Esenyurt and Beylikdüzü were identified as areas gaining popularity.
On the Asian side of the city, Bagdat Avenue was named the most expensive residential area, costing an average of TL16,300 ($6,400) per square metre. The eastern-most Tuzla district was shown as the cheapest residential area on the Asian side, costing an average of TL2,800 per square metre.