GDP growth rate for the third quarter of 2013 was 4.4 % which was above expectations and the Ministry of Economy estimates the GDP growth rate between 3 % and 4 % by the end of year. Inflation declined to 7.9 % by the end of September. However, it was still above the expectations of July estimations. Central Bank of Republic of Turkey (CBRT) has continued implementing a tight monetary policy framework during the third quarter of 2013 to limit the negative effects of inflation over the pricing. The emergence of Eurozone from recession and gaining momentum can be seen as a positive progress regarding the foreign demand for the third and forthcoming quarters.
Istanbul office supply saw a high increase with new supply entry in the third quarter of 2013. CBD areas including Levent-Etiler, Şişli-Zincirlikuyu on the European Side and Ümraniye on the Asian Side were the locations where new office supply entered to the market. The prime asking rent increased to 50 USD/m²/ month in Levent-Etiler Region. Total office supply reached to 1.5 million in European Side and 840,000 m² in the Asian Side.
As the end of the third quarter of 2013, total retail supply increased to 8.7 million m² across 312 centers in Turkey. Three shopping centers in three different cities are opened in this quarter. While average GLA per 1,000 inhabitants reached to 115 m² in Turkey, Ankara still has the highest GLA density with 258 m² per 1,000. As in the second quarter of 2013, Istanbul again hosted a new opening and increased its GLA per 1,000 to 239 m². Gaziantep and Antalya were the other two cities where shopping center constructions were completed and new supply added to stock.
Shopping center supply reached to 123 million m² in Europe at the end of 2012 across approximately 5,000 shopping centers. As economic conditions improve, shopping center supply will increase by over 12 million m² over 2013 and 2014. Turkey, Central & Eastern Europe (CEE) and France are the most dynamic markets in terms of shopping center development over this period. However, retailers operate at a city level to identify the most promising location for opening or extending shops. DTZ have identified a wide range of hot spots which include London and a couple of UK regional markets (Manchester, Birmingham), Bucharest and, on top, Ankara and Istanbul in their Property Times European Shopping Centres Q3 2013 report.
(This article features excerpts from the full report – please download it here)