International investors interested in entering the Turkish real estate market would be well advised to look at secondary cities outside the big three – Istanbul, Ankara and Izmir. That was one of the key messages that emerged at the PropertyEU Investment Briefing on Turkey held on Thursday at the London office of Aberdeen Asset Management.
‘Investors have to do their homework when they go to Turkey,’ warned Arda Tasarkan, Business Development Director CEFIC Turkey. ‘Otherwise they could end up in the wrong place.’
Tasarkan pointed out that Istanbul was high on the list of many international investors but that local developers were already dominant in this market. Turkey is more than Istanbul, he argued, citing regional centres such as Mersin, Trabzon and Kayseri. ‘Turkey has 81 cities and foreign investors are only active in 55 of these.’
Herman Kok, international research director at retail specialist Multi Corporation, said Turkey had undergone a major transformation in the past 10 to 15 years and described the market as ‘exciting and dynamic’.
‘Volume and growth – that’s what makes Turkey such an interesting market,’ he said, pointing out that the country has a population of 75 million while GDP is still growing. ‘Half of the population are 25 or younger which contributes to the market dynamics…The economics, the demographics, the growth parameters are all positive, especially in an international context.’
While GDP growth has slowed in 2012 to 3% from 9% in 2010 and 6% in 2011, the country is forecast to see growth average between 4-5% a year in the five-year period to 2017. ‘That compares to zero or stable growth in the rest of Europe,’ he noted.
Kok also pointed out that Turkey was experiencing a high rate of urbanization and that there were now over 40 cities throughout the country with 100,000 to 500,000 inhabitants in addition to dozens of cities with 500,000 to 1 million inhabitants. Moreover, Turkey’s star is rising thanks to its geographic position in relation to the rest of the world, Kok argued. ‘Turkey is at a crossroads between the Middle East, Asia and Africa. It is not just a bridge to Europe, it is also a hub and it is using the central location that it has…Turkey is the biggest emerging market in the European market space.’
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