The shopping center stock in Turkey is set to increase by around 60%* over the next two years according to the latest Turkish Retail Market Report from Jones Lang LaSalle and Alkas Consulting. The shopping center market in Turkey has seen significant development in the last two years; the number of centers has increased by 33 since the beginning of 2007 and totalled 188 in February 2008. An additional 66 centers are currently under construction and a total of 84 are planned.
Based on the study jointly prepared by Jones Lang LaSalle and its strategic partner Alkas Consulting, Richard M Davies, Director, Jones Lang LaSalle, said: "The increasing purchasing power of the Turkish consumer and expanding middle-income group is fuelling the expansion plans of both domestic and international retailers. This is supporting the rapid expansion of new shopping centre space in Turkey."
Avi Alkas, Chairman of Alkas Consulting, commented: "Political uncertainty and market volatility has caused some slowdown in consumer demand for retail goods, but Turkey's economic prospects are still bright, and are underpinned by a large, young and rising population, and strong economic growth. These fundamentals are sustaining foreign investor interest in the market."
Although market penetration is rising in parts of Istanbul and Ankara, these cities and particularly the untapped markets in the rest of Turkey still offer major opportunities for retailers and developers. Moving forward, the increased competition between new shopping centres means that retailers, developers and investors will need to examine these opportunities more carefully, and differentiation is becoming an important issue.
Entertainment and leisure have become a crucial aspect of the new wave of retail developments. In addition to the ubiquitous cinema and restaurants, developers are being more adventurous with their leisure offer; an attraction such as a large aquarium in Forum Istanbul is scheduled to open later this year.
The entrance of international luxury brands to the Turkish market was a key feature of 2007, starting with the introduction of Harvey Nichols in 2006 and continued with the openings of Istinye Park and Akaretler project. International retailers continue to target Turkey and above 50 international luxury brands whose presence in Turkey was confined to leading department stores opened stand-alone stores in 2007.
Local companies continue to dominate the development market, but international developers are growing in importance. Developers and investors are shifting their attention to the secondary cities (Anatolian cities) as almost half of the provinces in Turkey do not have any modern concept shopping centres.
Foreign investor interest in the Turkish market remains strong with the preparation of Saks Fifth Avenue to arrive in Turkey along with other major international retailers. In addition to this the existing retailers are announcing plans for further investment in Turkey in 2008. This includes the Metro Group which is committed to