An inaugural survey by Jones Lang LaSalle reveals Turkey to be on top of the markets expected to be the next emerging logistics location. More than one quarter of all respondents have ranked the country in their top three emerging locations across EMEA (Europe, Middle East and Africa).
Poland and Romania follow as the next single markets while respondents attributed strong potential to the Eastern Europe and Africa regions as a whole.
Respondents ranked geographic location (83%), economic growth (81%) and political stability (68%) as the three most required attributes for an emerging logistics location.
"Turkey offers all attributes required to become an emerging logistics market. Its geographic location bridging Europe with Middle Eastern, Asian and African countries is ideal to make it an international logistics hub, its economy is growing strongly based on a stable political framework, there have been and are still significant investments in infrastructure, a large and young population base offers a huge labor pool which is increasingly well trained, domestic consumer spending is on the rise and foreign direct investment has significantly picked up over recent years", comments Alexandra Tornow, Head of EMEA Logistics & Industrial at Jones Lang LaSalle.
"We expect a number of recent reforms - which also sustained ongoing increasing transparency in the Turkish real estate market as shown in our latest Real Estate Transparency Index (June 2012) as well as the countries' significant retail market and increasing trade flows to drive demand for more effective distribution and as a result an accelerating development of modern logistics space", she adds.
Despite its significant retail market and trade volumes, the Turkish logistics market is currently underdeveloped and dominated by local players and small family businesses. Whilst the availability of modern logistics space has increased significantly in recent years, much of the stock that has been produced has been quite far from being considered grade-A modern institutionally investable logistics stock. The amount of the grade-A stock in the market is still relatively at very low levels limiting the international investment in the market.
Meanwhile, the investment market is mainly dominated by owner occupiers and local investors. The main activity in the market involves development projects based on a partnership between the developer and the landowner. Due to high land prices which makes logistics investments quite unfeasible, this method appears to be the only way in practice for new development.
However, Turkey's logistics industry is significantly changing in line with strong economic growth, increasing high quality organized retail stock (with increasing exposure of foreign brands) as well as improved retail demand and spending.
Strong growth in container traffic in the main seaports around Istanbul (Ambarli, Mersin, Izmir and Haydarpasa) is another driver for the Turkish logistics market. In 2010 together they recorded a total container throughput of 4.5 million TEU, similar to Bremerhaven and Valencia (respectively ranked 4th and 5th in the European comparison). Driven by growth in throughput in the two main ports, Ambarli and Mersin, they were amongst the fastest growing European container ports in 2010.
"Turkey's geographic location along with significant investment in infrastructure means the market also holds an exceptional potential to morph into an international logistics gateway hub.", comments Avi Alkaþ, Country Chairman at Jones Lang LaSalle Turkey.
"The government has an aggressive investment program to expand the express train and motorway networks and to improve connections between major cities. For example, the North Marmara Motorway project will connect Adapazari to Tekirdað via Istanbul, also involving the construction of the third bridge in Istanbul.
"The Marmaray Project is also a hugely significant transportation infrastructure project which will actually connect the European rail networks to the Mi