Turkish Real Estate Market
NGR / 000 WWW.NOVAGLOBALREALTY.COM
MAIN INDICATORS OF TURKISH ECONOMY
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Strong Fundamentals 18 th largest economy: USD 800 billion GDP in 2014 Economic growth: 2.9% in 2014, 4.0% in 2015 Expected to become within the first 14 economies in the world by 2030 FDI to real estate in Turkey: Over USD 4.3 billion during 2014 USD 3.7 billion November 2015 78.7 million population: Median age 31.0 - European median age 42.5 +20 cities over 1 million population 36.2 million tourists in 2015
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GDP of Countries G20 list October 2015 United States China Japan Germany UK France India Italy Brazil Canada Korea Rep. Australia Russia Spain Mexico Indonesia Netherlands Turkey Switzerland Saudi Arabia
17,968 11,385 4,116 3,371 2,865 2,423 2,183
Turkey is the 18 th economy in the world with, 722 bn. USD GDP.
1,819 1,800 1,573 1,393
GDP Growth realized 4.0% in 2015.
1,241 1,236 1,221 1,161 873 751 722 677 632
0
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5,000
10,000
15,000
20,000
Top 20 countries by GDP on a PPP basis (constant 2011 US$ b)
2014
2030
PPP rank
Country
GDP at PPP (2014 US$bn)
Country
Projected GDP at PPP (2014 US$bn)
1 2 3 4 5 6 7 8 9 10 11 12 13
17,632 17,416 7,277 4,788 3,621 3,559 3,073 2,587 2,554 2,435 2,143 2,066 1,790 1,652 1,579 1,564
China United States India Japan Indonesia Brazil Russia Germany Mexico United Kingdom France Saudi Arabia South Korea
36,112 25,451 17,138 6,006 5,486 4,996 4,854 4,590 3,985 3,586 3,418 3,212 2,818
15 16
China United States India Japan Germany Russia Brazil France Indonesia United Kingdom Mexico Italy South Korea Saudi Arabia Canada Spain
18 19 20
Iran Australia Nigeria
1,284 1,100 1,058
Italy Nigeria Canada Spain Iran Egypt
2,591 2,566 2,219 2,175 1,914 1,854
14 17
Turkey
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1,512
Turkey
2,714
National Income GDP per Capita grew from $3,326 to $10,283 between 2002 and 2008, stabled around $10k between 2010 and 2014.
8
0 -2 -4 -6
732
2,5 2,1
0,7 0,2 -0,3 -0,8
1,9 -2,8 -4,4
2008
-4,8 -5,2
2009
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822
799
722
4,2
400
2015 F 2016 F 2017 F 2018 F
200
$9,286 $9,364 $10,030 $10,659
1,8 1,7
2,2 2,1
1,6 0,7 -0,4
2010
8,8 775 789
600
0
2011
2012
2011
2012
4,5
5,0
854
8%
5,0
2013
2014
6% 4%
2,9
2,1 2010
4,0
736
796
10%
2%
2015 F 2016 F 2017 F 2018 F
0
GDP (USD bn) GDP growth (% y-o-y)
8,8
6 2
800
9,2
9,2
10
4
1,000
4,2 1,7 1,5 0,3 2013
3,0 2,9 2,4 1,5
2014
GDP growth rate is estimated 4%-5% between 2015 and 2018
4,0 2,6 2,5 1,9
2015 F
USA UK Turkey Euro Area
Turkey CPI & USD/TL Index 250 200 150 100 50 0
108
118
100
100
105
2004
2005
2006
100
128
87 2007
141
150
160
113
112
115
2008
2009
2010
176
187
142
133
2011
2012
201
218
237 218
159
2013
173
2014
2015
Foreign currency risks are mitigated by several factors: - Most of the liabilities of the corporate sector are long term, which reduces rollover risks. CPI (Index) USD/TL (Index)
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- Lending in foreign currency for housing credits has been forbidden since 2009.
www.novaglobalrealty.com -4
-5
-6
-4 -4
-6 -6 -4
-3
-4
-1
-2
-3 -2 -2
Italy
Holand
Czech Repuclic
Poland
France
Portugal
3
-3 -2
Hungary
Turkey
Austria
1 -1 Estonia
0 Spain
3
Germany
1
Maastricht
2
Greece
1 Bulgaria
Turkey
India
Russia
Mexico
Brazil
China
Poland
Czech Republic
60
Bulgaria
98
UK
34
Spain
87 75 89 95
Maastricht
Japan
Italy
50
Australia
France
UK
250
Irland
0
103
Germany
100
Canada
150
USA
Turkey - Government Debt / GDP (%) 230
200
132 66 59 43 50 41 33 31 18 28
Budget Deficit / GDP (%)
-3 -4
Actual Credit Ratings of Turkey Foreign Currency
Local Currency
Credit Rating Inc
Grade
Long-Term
Outlook/Watch
Long-Term
S&P Moody’s Fitch JCR
Sovereign Upgrade Investment Grade Investment Grade Investment Grade
BB+ BAA3 BBBBBB-
Negative Negative Stable Stable
B BAA3 BBB BBB-
Turkey's rating is upgrated to investment grade in 2012-2013
Actual Credit Ratings Comparison With Brics Foreign Currency S&P
Foreign Currency Moody's
Foreign Currency Fitch
Country
Long-Term
Outlook/Watch
Long-Term
Outlook/Watch
Long-Term
Outlook/Watch
Turkey Brasil Russia India China South Africa
BB+ BB+ BB+ BBBAABBB-
Negative Negative Negative Stable Stable Negative
BAA3 BAA3 BA1 BAA3 AA3 BAA2
Negative Stable Stable Positive Stable Negative
BBBBB+ BBBBBBA+ BBB-
Stable Negative Negative Stable Stable Stable
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FDI to Turkey and Real Estate Market (USD mio) 34%
25,000
22,046 20,000
27%
18,269
24%
16,176
26%
20%
15,000
21% 16%
10,000
8,629
13%
13,282
14,116 12,457
12,530
9,099
12%
5,000
2,926 0
2007
2,937
2008
2,494
1,782 2009
2010
FDI Total Real Estate Real Estate / FDI
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2,013
2011
2,636
2012
3,049
2013
4,321
2014
3,706
Nov.2015
Ratio of FDI to Real Estate increased considerable after 2012 following the amentment of Reciprosity Law, enabling 183 country citizens for buying property from Turkey.
Sale of Real Estate to Foreigners (sqm) 8,000,000
7,127,000
7,000,000
5,725,000
6,000,000
Impact of the Amendment of Reciprocity Rule
5,000,000 4,000,000
3,605,451
3,000,000 2,000,000 1,000,000 0
1,640
1,842 k sqm
141 k sqm JORDAN159 k sqm RUSSIA 228 k sqm USA 251 k sqm IRAQ 332 k sqm QATAR 396 www.novaglobalrealty.com
2014
SAUDI ARABIA k sqm
OTHER
AZERBAIJAN k sqm
2013
2015 UNITED KINGDOM k sqm
1,033 KUWAIT
GERMANY k sqm
507
598 k sqm
FDI Real Estate is realised 4,3 billion $ in 2014. In the long term it is forseen to reach
10 bn $ per year.
2015
New Investments 1 2 3 4 5 6 7 8 9 10 14 20
2011
2012
2013
2014
2015
2016
Istanbul
Istanbul
Munich
London Munich Stockholm Berlin Warsaw Hamburg Paris Frankfurt Copenhagen
Moscow Munich Stockholm Hamburg Warsaw Berlin Zurich Paris London
Dublin Hamburg Berlin
Berlin Dublin Madrid Hamburg Athens Birmingham Copenhagen Amsterdam Lisbon London
Berlin Hamburg Dublin Madrid Copenhagen Birmingham Lisbon Milan Amsterdam Munich
Istanbul Berlin Hamburg Zurich London Paris Warsaw Moscow Frankfurt
Istanbul
London Frankfurt Munich Stockholm Copenhagen Madrid
Istanbul
Istanbul is one of
the most attractive RE market for development prospects in Europe.
Istanbul
Development Prospects Turkey distinguishes itself from other emerging markets by its growing development potential supported by new projects and regulations.
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1 2 3 4 5 6 7 8 9 10
2011
2012
2013
2014
2015
2016
Istanbul
Istanbul
Istanbul
London Munich Stockholm Berlin Warsaw Hamburg Paris Frankfurt Copenhagen
Moscow Zurich Warsaw Munich Stockholm Paris London Hamburg Berlin
Munich Zurich Hamburg London Warsaw Berlin Paris Moscow Stockholm
London Munich Hamburg Moscow
Berlin Dublin Munich London Stockholm Hamburg Birmingham Copenhagen
Berlin Munich Hamburg Stockholm Copenhagen Dublin
Istanbul
Berlin Zurich Stockholm Frankfurt Vienna
Istanbul Brussels
Istanbul
Birmingham Edinburgh Vienna
Istanbul Population (1965-2015)
The population of Istanbul increased
6.4 times since 1965 and 47% between
15
14,7 13,3
2000 and 2015.
11,8
12
10,0 8,7
9
7,3
6
3
0
2,3
1965
3,0
1970
3,9
1975
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4,7
1980
5,8
1985
1990
1995
2000
2005
2010
2015
Real Estate Confidence Index
113.2
120
97.9
98.2
2014 Q3
2014 Q4
100
93.4
102.7
103.8
101.8
2015 Q2
2015 Q3
2015 Q4
80 60 40 20 0
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2015 Q1
2016 Q1
RESIDENTIAL MARKET
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Demographics and Urbanization Years
Population (000)
Urbanization Rate (%)
Urban population (000)
Size of Urban Household Person
Number of Urban Household (000)
2011 2012 2013 2014 2015 2017 2023
74,724 75,627 76,550 76,903
76.8 77.3 78.0 78.6 79.8 81.0 84.0
57,388 58,460 59,709 60,446
3.8 3.7 3.6 3.6 3.5 3.4 3.1
15,102 15,800 16,586 16,790
78,738 79,366
83,894
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62,833 64,286
70,471
17,952 18,908
22,733
Demographics and Urbanization Years
Population (000)
Urbanization Rate (%)
Urban population (000)
Size of Urban Household Person
Number of Urban Household (000)
2011 2012 2013 2014 2015 2017 2023
74,724 75,627 76,550 76,903
76.8 77.3 78.0 78.6 79.8 81.0 84.0
57,388 58,460 59,709 60,446
3.8 3.7 3.6 3.6 3.5 3.4 3.1
15,102 15,800 16,586 16,790
78,738 79,366
83,894
62,833 64,286
70,471
Total Population Increase;
5.1 mio
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17,952 18,908
22,733
Demographics and Urbanization Years
Population (000)
Urbanization Rate (%)
Urban population (000)
Size of Urban Household Person
Number of Urban Household (000)
2011 2012 2013 2014 2015 2017 2023
74,724 75,627 76,550 76,903
76.8 77.3 78.0 78.6 79.8 81.0 84.0
57,388 58,460 59,709 60,446
3.8 3.7 3.6 3.6 3.5 3.4 3.1
15,102 15,800 16,586 16,790
78,738 79,366
83,894
62,833 64,286
70,471
Total Population Increase; Urban Population Increase;
7.6 mio
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5.1 mio
17,952 18,908
22,733
Demographics and Urbanization Years
Population (000)
Urbanization Rate (%)
Urban population (000)
Size of Urban Household Person
Number of Urban Household (000)
2011 2012 2013 2014 2015 2017 2023
74,724 75,627 76,550 76,903
76.8 77.3 78.0 78.6 79.8 81.0 84.0
57,388 58,460 59,709 60,446
3.8 3.7 3.6 3.6 3.5 3.4 3.1
15,102 15,800 16,586 16,790
78,738 79,366
83,894
62,833 64,286
70,471
17,952 18,908
22,733
Total Population Increase; Urban Population Increase;
7.6 mio
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5.1 mio
Number of Urban Household Increase;
4.8 mio
Housing Sales Yearly Comparison
1,500,000 1,200,000 900,000 600,000
1,289,320
1,165,381
1,157,190 628,061 529,129
623,827 541,554
690,653 598,667
300,000 0
Total Housing Sales First Sales 2nd Hand Sales
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2013
2014
2015
Housing Credits Constant growth in mortgage market. Total size of housing loan is 44bn$ by 2015 Q3. Multiplied by
3.5 since 2008
150
132,6
120
101,3
90 60
37,3
42,7
57,6
69,8
115
79,6
30 0
2008
Housing Loan (bn TL)
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2009
2010
2011
2012
2013
2014
2015 Q3
Housing Market; Growth Potential for Housing Credits Mortgage Credit / GDP %, 2014
Russia Turkey Romania Bulgaria Slovenia Lithuania Chec Repu Hungary Croatia Latvia Poland Italy Slovakia Aurstria Estonia Greece Germany France Finland Euro Area Malta Belgium Ireland Eu-28 Luxembourg Spain Portugal Cyprus Usa UK Norway Sweeden Netherland Denmark
3.5 6.5 6.7 8.3
14.4 16.4 16.6 16.6 18.3 19.5 20 22.2 23.1 27.5 31.1
Growth potential for housing credits.
38.8 42.4 43.3 43.7 44.1 45.4 49.1 49.4 49.6 50.7 55.4 59.2
40
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60
Non performed housing credit ratio is one of the lowest in Europe;
0.48%
(2015) Source: Central Bank
66.4 67.6
75 75.8 78.8 80
95.7 100
114 120
Existing Home Price Index (2010 = 100)
250
210 200
172
150
100
100 100 100
110 109 115
130 126 123
147
189 158
136 132
155
142
50
0
2010
2011
Existing Home Price Index House Rent Index Inflation
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2012
2013
2014
2015
‘’Urban Regeneration Law’’ There are around 22 mio housing units in Turkey. 78% of the existing units do not meet today’s earth quake code requirements. 6,5 mio housing units planned to be regenerated under the Urban Regeneration Law. Law provides the ease of the procedures of regeneration from planning, ownership and financial aspects. It is programmed to regenerate 6,5 million houses in the next 15 - 20 years with a budget of 400 billion USD
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Conclusions - Mainly a sales market, not a rental market. - An indivudial investment tool both for local and foreign investors. - New home sales are expected to grow based on fundamental drivers such as ; 1. The need for renewal 2. Demographics 3. GDP per capita growth and social security related issues 4. Increased demand from the gulf region
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OFFICE MARKET
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Istanbul as a Financial Centre
Z/YEN Global Financial Centres Index
Istanbul is now classified by Z/Yen as an 'Established Transnational Centre' -meaning it is a regional hub with global traits- a radical transformation from a merely 'local' financial centre in 2010.
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Office Inventory in Istanbul (mio sqm)
Existing Stock
4.7
mio sqm 5
1.5
mio sqm
4,7
4
2003
2015
Istanbul; Financial Center
3
2
2,7
1,5
1,6
1,7
1,8
2003
2004
2005
2006
2,9
3,1
3,4
3,7
4,0
4,2
2,1
1
0
Grade A office supply
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2007
2008
2009
2010
2011
2012
2013
2014
2015
Istanbul Office Market 8,000,000 7,000,000
1.63 mio sqm of
6,000,000 5,000,000
A Class leasable office stock in Istanbul scheduled to be added over in the next 3 years.
1,630,000 4,700,000
4,000,000 3,000,000 483,996 1,952,735
2,000,000 1,000,000 0
415,714 467,607 Total
Europe-CBD
Pipeline (sqm, 2016-2018) Stock (sqm) Total Pipeline (sqm, 2016-2018) Total Stock (sqm)
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Europe-CBD Periphery
90,800 726,910
West Istanbul
248,728 370,876 Asia-CBD
113,800 427,856
East Istanbul
277,300 755,162 Asia-Other
Istanbul Office Future Stock Evolution 50,000 sqm 100,000 sqm
Next 3 years
200,000 sqm
1.63
500,000 sqm
mio sqm 1,000,000 sqm
Maslak Kağıthane Şişli Basın Ekspres
Levent
Kavacık
Beşiktaş
Beyoğlu Altunizade Kozyatağı
Ümraniye Ataşehir Maltepe Kartal
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Office Prime Rent ($/sqm/mo)
BLACKSEA New Airport Project Area 3 rd Bridge Project
North Marmara Highway Project $22
TEM Highway E-5 Motorway
$15
$30
North Marmara Highway Project
$21
$45 $23
$23 $28 $17
MARMARA SEA
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Office Prime Rent & Vacancy 50
Office Rental Growth & Yield 20%
15%
80% 70%
12%
15%
60% 50%
30
9%
20
(Yield)
10%
40% 30%
6% 5%
10
20%
(Rental Growth)
40
10% 3%
0 -10%
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Vacancy Rate (%) Prime Rents (USD/sqm/mo.)
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0
0
Dec.05 Dec.06 Dec.07 Dec.08 Dec.09 Dec.10 Dec.11 Dec.12 Dec.13 Dec.14 Dec.15
Yield-Prime Yield-Country Average Rental Growth-Prime Rental Growth-Country Average
-20%
Turkish Real Estate Sector Report, 2016 March, Luxembourg
Major Global Office Markets 14.6 836
5.5 366
12.1 553
3.3 83
14.4 349
2.6 230
2.9 141
2.8 98
1.9 89.2
30
2,500
25
Stock (million, sqm)
20 1,500 15 1,000 10 500
5
0
0 London
Singapore
Prime Rent (USD/sqm/year) Stock (million sqm)
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Moscow
Population (million) GDP (PPP, bn USD)
Dubai
Istanbul
Frankfurt
Warsaw
Budapest
Prague
Prime Rents (USD/sqm/year)
2,000
Conclusions - High potention for growth - New office areas to be created - More organized and institutionalized investment market - Moving from residential offices/strata sales to organized single ownership - More green buildings - More A class buildings - Income generation in foreign currency - Istanbul financial center is under development - Bluechip tenants - Availabiltiy of investment grade product in the last 3-5 years www.novaglobalrealty.com
RETAIL MARKET & SHOPPING CENTERS
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Retail Market & Shopping Centers 52 bio $
Investments
14 bio $
Foreign Investment
10.5 mio sqm
3,75
2007
Leasable Area
6,29
2010
360
Shopping Malls
7,56
2011
8,23
2012
9,25
2013
9,80
2014
10,56
2015 0
2
4
Shopping Centers; Total Leasable Area (million sqm)
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6
8
10
12
Shopping Malls of Turkey KIRKLARELİ
1
İSTANBUL
EDİRNE
103
3
6
TEKİRDAĞ YALOVA
ZONGULDAK KOCAELİ
10
2
BURSA BALIKESİR
1
4
KÜTAHYA
3
MANİSA
4
İZMİR
22
AYDIN
1
ÇANKIRI
3
1
37
3
16
KARAMAN
KAYSERİ
6
ADANA
MALATYA
1
ELAZIĞ
MERSİN
6
1
DİYARBAKIR
6
BATMAN
1
ŞANLIURFA
3
GAZİANTEP
6 3
BİTLİS
2
2
1
HATAY
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2
OSMANİYE
3
11
151 sqm/1000 persons + 101-150 sqm/1000 persons 51-100 sqm/1000 persons 0-50 sqm/1000 persons
ERZURUM
K.MARAŞ
1
1
1
2
1
ANTALYA
1
ARTVİN
3
ERZİNCAN
2
8
ISPARTA
1
3
KONYA
5
TRABZON
2
KIRIKKALE
AKSARAY
DENİZLİ
MUĞLA
TOKAT
NEVŞEHİR
3
GİRESUN ORDU
AFYON
UŞAK
8
3
ANKARA ESKİŞEHİR
6
KASTAMONU KARABÜK
BOLU
BİLECİK
11
6
1
5
SAMSUN
2
SAKARYA
ÇANAKKALE
4
DÜZCE
MARDİN
2
SİİRT
2
VAN
2
Shopping Malls of Turkey KIRKLARELİ
1
İSTANBUL
EDİRNE
103
3
6
TEKİRDAĞ YALOVA
ZONGULDAK KOCAELİ
10
2
BURSA BALIKESİR
1
4
KÜTAHYA
3
MANİSA
4
İZMİR
22
AYDIN
1
ÇANKIRI
3
1
37
3
16
KARAMAN
ERZURUM
2
KAYSERİ
6
MALATYA
1
ELAZIĞ
ADANA
2
MERSİN
DİYARBAKIR
6
3
1
6
1
BATMAN
1
SİİRT
2
ŞANLIURFA
OSMANİYE
3
BİTLİS
2
K.MARAŞ
1
1
1
2
1
ANTALYA
1
ARTVİN
3
ERZİNCAN
2
8
ISPARTA
1
3
KONYA
5
TRABZON
2
KIRIKKALE
AKSARAY
DENİZLİ
MUĞLA
TOKAT
NEVŞEHİR
3
GİRESUN ORDU
AFYON
UŞAK
8
3
ANKARA ESKİŞEHİR
6
KASTAMONU KARABÜK
BOLU
BİLECİK
11
6
1
5
SAMSUN
2
SAKARYA
ÇANAKKALE
4
DÜZCE
GAZİANTEP
MARDİN
2
6
11 HATAY
3
151 sqm/1000 persons + 101-150 sqm/1000 persons 51-100 sqm/1000 persons 0-50 sqm/1000 persons
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Total 360 Shopping Malls
VAN
2
Turkey: GLA per 1,000 Inhabitants 160
GLA per 1000 inhabitants is projected to increase 147 by 2020 which is still considerably below the average of Europe
140 120 100 80
2 nd largest shopping center pipeline in Europe among lowest GLA per capita
147 133
60 40 20 0
2000
2001
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2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015 2020 (E)
Europe: GLA per 1,000 Inhabitants Greece Serbia Bosnia Herz. Bulgaria Russia Belgium Turkey Hungary CEE Avarage Romania Czech Rep. Slovakia Germany Italy EU-27 Sum/Average Spain Poland WE Average Malta UK France Portugal Croatia Denmark Lithuania Latvia Austria Switzerland Ireland Netherlands Slovenia Finland Sweden Luxembourg Estonia Norway
133 140
235 251
0
100
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200
300
400
500
600
700
800
900
Average Annual Disposable Income of Households (in TL) Among the Top 5 European cities for retail spending (US $)
LONDON
224bn
MOSCOW
175bn
PARIS
ISTANBUL
149bn
25,000 20,000
15,102
18,827
19,328
2007
2008
21,293
22,063
2009
2010
24,343
42bn
66bn
35,000 30,000
MADRID
26,577
29,479
32,000
15,000 10,000 5,000 0
2006
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2011
2012
2013
2014
Shopping Mall Yield & Rental Growth 15%
40% 35% 30%
12%
20%
9% (Yield)
15% 10%
6%
5% 0
3%
-5% -10%
0
Dec.05
Dec.06
Yield-Country Average Yield-Prime Rental Growth-Prime Rental Growth-Country Average
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Dec.07
Dec.08
Dec.09
Dec.10
Dec.11
Dec.12
Dec.13
Dec.14
Dec.15
-15%
(Rental Growth)
25%
Conclusions - There is still room for growth and new investments - ~ 1/3 of the market by international investors - Rental income in foreign currency - Strong demographics and increased disposable income - Growing connectivity (Turkish Airlines) makes Istanbul a regional retail destination. - Disposable incomes are now 45% higher in Istanbul than 10 years ago, while growing connectivity has made Istanbul a regional retail destination, with tourist spending up 76% over the last five years. It is forecasted to be among the 10 largest retail growth markets globally until 2030. (JLL)
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TOURISM MARKET
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Top Destination Cities 2011 1 2 3 4 5 6 7 8 9 10
London Paris Bangkok New York Singapore Dubai Kuala Lumpur Hong Kong
2012 15.3 13.9 13.8 10.3 10.1 9.2 9.0 8.4
Istanbul
7.5
Barcelona
6.9
Bangkok London Paris Singapore New York Dubai Kuala Lumpur
2013 15.8 15.5 14.3 11.1 10.6 10.2 9.3
Istanbul
8.8
Hong Kong Seoul
8.4 7.5
Bangkok London Paris Dubai Singapore New York
2014
Istanbul
17.5 16.8 15.5 12.1 11.9 11.1
9.9
London Bangkok Paris Dubai New York Singapore
Istanbul
11.3
Kuala Lumpur Hong Kong Seoul
9.8 8.3 8.0
Kuala Lumpur Seoul Hong Kong
10.5 9.8 8.3
Top Destination Countries 2011 1 2 3 4 5 6 7 8 9 10
France USA China Spain Italy
Turkey UK Germany Malaysia Russia
2012 81.6 62.7 57.6 56.2 46.1 34.7 29.3 28.4 24.7 22.7
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France USA China Spain Italy
Turkey Germany UK Russia Malaysia
France USA Spain China Italy
Turkey Germany UK Russia Greece
17.8 16.9 15.6 13.2 11.9 11.5
London Bangkok Paris Dubai
18.8 18.2 16.1 14.3
Istanbul
12.6
New York Singapore Kuala Lumpur Seoul Hong Kong
12.3 11.9 11.1 10.4 8.7
500,000
2013 83.0 67.0 57.7 57.7 46.4 35.7 30.4 29.3 25.7 25.0
2015
84.7 69.8 60.7 55.7 47.7 37.8 31.5 31.2 28.4 26.5
additional bed capacity is needed by
2023
50 million accomodated visiters targetted for
2023
International Tourist Arrivals and Tourism Income in Turkey International tourist arrivals to turkey increased
3.5 times
since year 2000
35 30 (mio)
25 20 15
10.4
10 5 0
2000
11.6
13.2
14.0
10.4
12.4
13.8
2002
2003
2001
17.5 17.1
21.1 20.3
18.6
20.9
26.3 25.4
25.1
28.6 24.9
31.5 28.1
29.3
32.3
36.8
36.2
40 35
34.3
31.4
30 25 20 15 10 5
2004
2005
Tourism Income in Turkey (bn $) Number of International Tourist Arrivals, Turkey (mio)
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19.8
23.3
27.1
31.8
34.9
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
(bn $)
40
Number of International Meetings 2014 Taipei Stockholm
92 95
Rome
97
Budapest
97
Hong Kong
98
Seoul
99
Beijing
104
Copenhagen
105
Lisbon Brussels Prague Istanbul Amsterdam Singapour
Istanbul ranked in the top 10 for:
Number of International Meetings #130
109 112 118 130 133 142
London
166
Barcelona
182
Berlin
193
Madrid
200
Vienna
202
Paris
214 150
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200
250
Top 20 Destination Cities by International Visitor Spendings (bn USD) Munich
5.58
San Francisco
5.64
Rome
5.65
Istanbul ranked in the top 10 for:
6.03
Sydney
6.26
Madrid
6.62
Miami
7.37
Tokyo
7.84
Los Angeles
International Visitors Spendings 2014
8.08
Kuala Lumpur
8.28
Hong Kong Istanbul
9.38
Taipei
10.81
Dubai
10.95
Barcelona
11.25
Seoul
11.51
Bangkok
13.04
Singapore
14.34
Paris
17.02
New York
18.57
London
19.27 5
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10
15
20
Istanbul; A Global City Years
THY Total passengers mln
Istanbul Airports Total Passengers mln
2007 2008 2009 2010 2011 2012 2013 2014
16,9 22,6 25,1 29,1 32,6 39,0 48,3 54,7
26,9 32,9 36,3 43,3 50,5 59,5 70,0 80,5
Istanbul is a hub, with 2 international airports 3 rd airport under construction with capacity of
150 mio
passenger / year
Turkish Airlines is the
World’s 7 th and Europe’s 2 nd biggest
airline company with its 32 million international passengers (2014)
Turkish Airlines is ranked
1 st worldwide
in regard to international destinations nb.219 (2014)
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Tourism Investment Licensed and Tourism Operation Licensed Facilities in Turkey Last 15 Years: CAGR in
Operation Licensed Facilities: 4% Growth in Operation Licensed Facilities: 72% 4.300 licensed facilities in Turkey
Many international hotel brands operate in Turkey mostly in Istanbul, Ankara, Izmir and Bodrum. In the last few years major brands started investing in other populous cities like Konya, Adana and Kayseri.
There are in total 1,6 mio bed capacity both in ministry and municipality licensed facilities.
5,000 4,000 3,000 2,000 1,000 0
3,150 3,200
3,200
1,850 2,000
2,100
1,300 1,200 2000
2001
3,350
3,570
3,475
3,330
3,272
3,338
3,379
4,038
4,248
3,524
3,705
3,830
2,870
2,982
3,131
2,250
2,450
2,475
2,500
2,500
2,566
2,625
2,647
2,783
1,100
1,100
1,120
1,000
830
772
772
754
877
922
960
1,056
1,117
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total Tourism Investment License Tourism Operation License
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Tourism Investment Licensed and Tourism Operation Licensed Facilities in Istanbul Last 15 Years: CAGR in
Operation Licensed Facilities: 5% Growth in Operation Licensed Facilities: 95% 660 licensed facilities in Turkey
Istanbul constitutes 15% of the total licensed tourism facilities in Turkey.(2014)
800 700 600 500 400
340
350
360
250
265
275
300 200 100 0
380 290
400 310
410 325
435 350
435 350
455 370
437 350
487
380
395
410 130
90
85
85
90
90
85
85
85
85
87
90
92
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Total Tourism Investment License Tourism Operation License
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540
470
2012
595
425
658
472
170
186
2013
2014
Conclusions - Growth potential based on Istanbul’s increased connectivity and Turkey being 5 th most preferred tourism destination - Secondary cities should be considered for investment based on cultural tourism - New entries in upscale hotel segment (Le Meridien, Shangri-la, The Edition, Jumeirah, Raffles, St. Regis, Mandarin Oriental, The Address (2015)) - Growth potential both in luxury and budget segment
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LOGISTICS MARKET OVERVÄ°EW
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Market Snapshot
10,000,000
Istanbul and Surrounding Area
8,541,860
Prime Rent
USD 7
Average Rent
USD 5-6
8,000,000
Expected Yield
9%
2015 Take-up
6,000,000
693.002 sqm
4,000,000
4,000,000
1,905,047
2,000,000
Total Stock
Total Pipeline Total Planned
742,020 293,732 0
Istanbul Europe Existing Stock (sqm) Under Construction (sqm) Planned (sqm)
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3,198,940 2,034,489
2,000,000
917,927 0
3,308,431
264,753 59,343 Istanbul Asia
898,274 564,852 Kocaeli
Vacancy Rate (%) & Take-up (k sqm) ISTANBUL EUROPE
ISTANBUL ASIA
KOCAELI 3% 3% 4%
During 2015,
693k sqm of logistics
OCCUPIED AREA
leasing transactions were realized, an increase compared to the same period in 2014
90%
Overall vacany rate is
10% as of Q4 2015
350
310
300 250
200
200
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100 50 0
180
125
150 Q1 Q2 Q3 Q4
225
40
60 2012
75
100
60 2013
200
170
150 65
2014
75
2015
100
Main Industrial Markets in Istanbul
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Conclusions - With the strong demand and planned supply Turkey is among the emerging markets in the EMEA region. - Marmara Region (Istanbul and Kocaeli in particular) is considered as the primary and the most important logistics market. - Important infrastructure projects such as 3 rd bridge, 3 rd Airport and Port City Project will have its impact on Turkey’s logistics market. - In 2015, significant increase was realized in total volume of leasing transaction. - Logistics, retail and f&b companies are the most efficient actors in rental business. - With the rapid increase of e-commerce, investments in logistics will be needed in the international standarts especially in the specified regions.
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Vision 2023 for Turkish Real Estate
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Istanbul Rail Transit Network Investments Istanbul will have one of the largest transport rail network in the world with a total of 400 km of new track to be build by 2019 for the 775 km target
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Final Remarks
Turkish real estate market has been growing and it is projected that it will continue to grow, presenting opportunities and not affected by international and domestic political issues. Capital Markets Board has in the past 5 years created and imported new instruments, that are projected to enrich the investment and development potentials as well as institutionalization of the market. REIFs being the most recent one.
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New York Ofis +1 212 521 41 01 +1 212 521 40 44 nyc@novadanismanlik.com 590 Madison Avenue 21st Floor Manhattan 10022 NYC USA
ND, Nova Group Holding iştirakıdır. www.novagroupholding.com