TURKISH SHOPPING CENTRE MARKET BOOMS
Today, shopping centres are much more than simply retail outlets, but rather serve as lifestyle destinations – a trend well evident in Turkey’s rapidly growing shopping centre market.
For over a decade the Turkish economy has experienced impressive economic growth, something which obviously didn’t go unnoticed in its retail real estate market.
“The Turkish shopping centre industry has shown a phenomenal development over the past decade and is at a quite mature state currently,” says Togrul Gonden, Managing Partner, Cushman & Wakefield, Turkey.
According to the firm, there are 368 shopping centres operational across Turkey, the vast majority of which (322 centres) was opened between 2005 and today. “That’s an average of 29 openings per year and lacks any comparable in Europe or even the world,” Gonden says.
These very well developed shopping centres became visitor magnets, some of which receive an annual footfall above a staggering 30 million people. Gonden attributes their success to offering much more beyond shopping, such as being destinations for weekend activities as well as for dining and entertainment. “There are three waves of shopping centre developments in my view which I would classify like the following:
“1st Generation: Standard shopping centres with limited entertainment, usually just a cinema, and a large hypermarket anchor.
“2nd Generation: More sophisticated design with open air features, more diverse entertainment and dining offer, diverse anchors.
“3rd Generation: Thematic concepts and stronger focus on certain offers (i.e. F&B)
“4th (Future) Generation: Semi street – semi shopping centre concepts embedded in urban environments,” says Gonden.
As the Turkish market became more and more attractive to international retailers, the tenant mix became increasingly diverse throughout the past decade, allowing certain successful centres to differentiate themselves from the rest, the C&W expert explains. “Design features have developed significantly and there are some very unique concepts out there.”
Mixed-use retail trend
As the Turkish economy grew and people’s living standards have changed, this has been reflected in real estate investments in Turkey. A result of this has been the growth of mixed-use projects, and with it, shopping centres in mixed-use projects.
Gonden says that another reason why mixed-use projects are currently so popular in terms of development is zoning and land prices. “A lot of projects need to satisfy zoning and/or leasehold requirements. As developers are predominantly developing in the city centres again there are a lot of leasehold properties partially with historic uses, such as hotels. But also increased land prices have forced developers to create as much synergy as possible to make the feasibility of the project work,” he says.
In addition to this, growing competition in each real estate sector has driven developers to rethink concepts and create lifestyle destinations with diverse offers.
As one such example Gonden cites the future Hill Town project on the Asian side, which, according to him, is well positioned to become a successful mixed-use project with offices, hotel and a shopping centre. “Mall of Istanbul and Kanyon on the European side and Akasya on the Asian side are other good examples of mixed-use projects. The majority of new shopping centres are actually embedded in a mixed-use project and therefore this becomes the norm in the future.”
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