Real Estate Investor Magazine South Africa December / Jan 2016 | Page 64

TURKEY

Turkey
Istanbul Real Estate Sees Significant Growth
BY DREW HOOK

I

stanbul is the biggest city in Turkey and is arguably
Turkey’s biggest economic powerhouse. It is also
showing excellent signs of strong performance
as a destination for property investment in 2015 and
beyond.
In particular, three of Istanbul’s streets have recently
been singled out in a report by Cushman & Wakefield
for their exceptionally strong property performance.
Indeed, these streets have reportedly displayed some
of the most significant rental growth in the world
today. The streets in question are Bagdat Avenue on
the Asian side of the city and Istiklal Avenue and Abdi
Ipekçi Avenue on the European side. All three ranked
in the global top ten streets for rental growth.
In 2014, these streets saw a total of 17,500m2 of real
estate rented out. Rents, meanwhile, grew by 24.4% on
Bagdat Avenue, 27.3% on Istiklal Avenue, and 20.9%
on Abdi Ipekçi Avenue.
The exceptionally strong performance of Istanbul’s
property market is down in no small part to tourism,
which is boosting the real estate sector across the
country. Turkey ranks sixth in the list of the world’s
most popular destinations for tourists. It is particularly
popular with visitors from the UK, Germany and
Russia. US citizens also make up a significant and
growing portion of Turkish tourist numbers.
Last year, Turkey’s GDP received around €26bn from
the flocks of international tourists, which numbered
just short of 37 million individuals. This represented
year-on-year growth in the tourist sector of 5.5% and
this boosted a number of key sections of the Turkish
economy, including real estate.

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DEC/JAN 2016 SA Real Estate Investor

Naturally, those markets that directly accommodate
tourists are booming as a result. In particular, the
Turkish hotel market is currently showing signs of
exceptional health. However, the robust state of the
Turkish tourist trade has also boosted businesses and
driven increases in employment and earnings, fueling
demand for residential properties as well as shorterterm accommodation for tourists.
This has been a key driving force behind growing
demand and the rapid growth of rental yields, creating
an attractive situation for investors. In the suburbs
of Istanbul, a one-bedroom property can currently
be purchased for around €50,000 on average, and
commands average rents of roughly €300 per calendar
month. This represents respectable yields of 7% and that
is before the potential for capital growth is considered.
Such one-bedroom properties are of particular interest
to many investors at present, because there is a short
supply of this type of property compared to relatively
high levels of demand from young professionals.
As a result, property investors have been keen to take
advantage of this situation. Over the course of 2014,
there was a 56% increase in foreign investment in
Turkish real estate. A particular increase in investment
activity came from Middle Eastern investors, but
buyers around the world have been taking an interest.
Overall, 1.16 million Turkish residences were sold last
year to domestic and international buyers – a 2% yearon-year rise in the number of transactions.

RESOURCES
www.nuwireinvestor.com
www.reimag.co.za