Modern retail stock in Turkey increased

As well as location and brand mix, professional management also gained importance in this competitive environment. Although the density of shopping center in Istanbul seems high, comparing the GLA to population, Ankara’s density is higher than Istanbul. According to statistics, Ankara’s GLA is 272sqm/1.000 people, while Istanbul’s GLA is 232sqm/1.000 people. As it is, Turkey’s average GLA is 110sqm/1.000 people. On the other hand, İzmir’s GLA is lower than the Turkey average with 85sqm/1.000 people.

Rents
To analyze retail rents, the stores in shopping centers (both anchor stores and standard stores) and high-street retail (Nisantasi Abdi Ipekci, Istiklal Street, Bağdat Street, etc.) are considered. In 2009, standard stores in shopping centers and the primary high street standard stores rents were close to each other, however, nowadays, the interest to open space has increased which caused an increase in demand and correspondingly caused an increase in rents in high street retail market. It is observed that high street store rents are 44% higher than shopping centers’ standard stores rents and over the years it is expected an increase in this ratio even more.

Between 2006 and 2008, it is seen the increase in shopping centers and high street standard store rents. In 2009, the decline in rent has been observed. In all segments of retail area, considering first half of 2012, the primary high street store rents is over 130 USD/sqm/month, primary standard store in shopping centers is 90USD/sqm/month and anchor store rents remains at 40USD/sqm/month.

Investment
Since 2008, domestic and foreign investors’ interest in shopping center investment was low. After 2010 any transaction happened apart from the transaction by Vastned(sales of Elysium Shopping Center with 4.850 sqm area).

However, as of 2012, investment activities in retail market has been recovering and the sales of Redevco’s portfolio to Blackstone, is a sign of the revival in the market. The portfolio consists of Ankara Gordion, Erzurum AV Mand Manisa Magnesia including Edirneand Manisalands. In addition to this, Amstar announced that the budget for Turkey retail development fund has risen to €95 million, reserving fund for shopping center development projects in Samsun, Şanlıurfaand Kahramanmaras. Renaissance Construction, which Amstar‘s operation partner in Turkey is one of the most active shopping center developers. Moreover, there are some other transactions which haven’t been announced yet, will probably be announced soon.

In 2008 - 2010, the yields were high due to the recession in investment market but the recovery in the market caused a decline in yield rates gradually, and a sof the first half of 2012, primary yield rate is 7.75%, secondary yield rate is 9.00%.

Outlook
In parallel to expected growth in economy, an increase in consumer demand, and correspondingly an increase in stock have been anticipated. However, it is expected a constant move in turnover rate and footfall. Especially in particular are as where shopping centers’ density is high, the retailers and investors’ expectations do not match in terms of turnover and rent rates which causes to trouble and the transformation in the projecs. On the other hand secondary cities where density is low still provide opportunities for developers.

To sum up, the revitalization of shopping malls investments in 2012 is an indicator of continuation of these transactions even after 2012.