Despite Istanbul being named the most promising city for real estate investment 2 years running by PricewaterhouseCooper, in reality the country is still on the fringes of international real estate investment, not least because Turkey's debt rating, one level below investment grade is a hurdle preventing large global funds from being able to invest in the country's real estate.
Now, I am not going to be another one to say “Turkey looks like it may be upgraded in the next x months” because I have heard myself saying it all before. What I will say is that, upgrade or not Turkey is finally beginning to make some real moves as a real estate giant in the making.
Last week Donald Trump opened a Trump Tower in Istanbul. That is not so significant on its own, in fact it is one shopping mall out of well over 1 million square meters of shopping mall space that has been constructed over the past year. However, what is significant is the fact that Trump has chosen Turkey to make his first foray into Europe; that's right Trump Towers Istanbul is the first of its kind in Europe.
Last year 1.1 million square feet of shopping mall floor was constructed in Turkey according to a recent report by Cushman and Wakefield, giving Turkey the second largest construction pipeline in Europe behind Russia.
'Positive recent operating trends have been observed in all commercial property types,' Senay Azak-Matt, General Manager Turkey at German lender Aareal told Property EU magazine. 'Recent increasing retail turnovers indicate a sustainable environment for projects with strong fundamentals. Meanwhile, the logistics segment, due to a shortage of quality warehouses, is expected to provide further development opportunities, with still high land prices but increasing rental levels.'
After reporting on expert predictions of an upgrade for Turkey in the next 18 months (ahem), the magazine again quotes Azak-Matt saying that more and more investors are paying real attention to Turkey as it continues to be among the best performers in Europe.