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Turkey
Turkey has a large and dynamic market, with
a relatively high quality labour force and
economic location advantages, with easy
access to regional markets.
The real estate market is comparatively small, but
growing and has doubled in size since 2006. As a
result investment activity remains relatively low; this
is reflected in lower levels of liquidity.
Legislation to create REITs came into effect in 1995.
There are currently 29 REITs trading on the Istanbul
Stock Exchange. Their market share has been
relatively low in recent years.
The retail sector has been the biggest capital
recipient due to the relatively high growth potential
of this sector and availability of investment grade
property. The office sector is also being successfully
targeted by investors, with more modern stock
being developed and let to a growing number of
tenants. There is lack of quality in the industrial
property sector and demand is mostly driven by local
companies.
Commercial and saving banks grant loans of varying
maturities, underwrite, issue, and trade in securities
for customers. They account for the largest portion
of the business volume and are active in most
types of banking operations. Besides, development
and investment banks serve to finance the big
investments and infrastructure constructions.
In order to catch its potential Turkey has to build
confidence in its economy by ensuring transparency,
political and regulatory stability.
Market sizing
Turkey
Europe
Invested stock
(Total stock)
EUR 28bn
(EUR 442bn)
EUR 3,335bn
(EUR 8,201bn)
Liquidity ratio
(10y average)
0.6%
(2.5%)
5.6%
(4.6%)
2014 volumes
(10y average)
EUR 0.2bn
(EUR 0.3bn)
EUR 187bn
(EUR 142bn)
Market pricing – Istanbul (Q4 2014)
Office
Retail
Industrial
Current Yield
7.00% 6.25%
8.50%
Min/Max (10y)
7.00-10.00% 6.25-12.00% 8.50-11.00%
Yield definition
Net initial yield
Source: DTZ Research
Investment activity by source of capital, 2014
Investment activity by asset type, 2014
Source: DTZ Research
Source: DTZ Research
Domestic
Non-European
European
Office
Mixed Use
Retail
Industrial
Other
100%
93%
7%
116 Investors Guide to Europe 2015