Q3 2021 Macroeconomic & Real Estate Market Figures of Turkey
JLL Turkey’s Q3 2021 research report, including macroeconomic & commercial real estate market figures is published.
- Rabia Kurban
Following 7.2% y/y growth in Q1 2021, Turkey economy continued to rebound in Q2 showing 21.7% y/y and 0.9% q/q expansion despite the lockdowns applied between April and May. While base effects lifted growth rate in annual terms, recorded expansion in Turkey economy was mainly driven by household spending and gross fixed investments.
Manufacturing PMI (Purchasing Managers’ Index) was above 50 for fourth consecutive months and recorded at 52.5 as of September 2021 by the rise in output and new orders. Meanwhile, both Producer Price Index (PPI) and Consumer Price Index (CPI) were continued their upward trend in Q3 2021 and recorded at 43.96% y/y and 19.58% y/y as of September 2021, respectively. On the other hand, CBRT cut the policy rate by 100 bps to 18.0% on 23 September.
The FDI inflows to Turkey, which was decreased by 15% in 2020, rose by 38% between January and June 2021 compared to same period of previous year.
Retail Market Overview
The existing shopping centre supply in Turkey reached the level of 13.7 million sq m in 445 centres, by the addition of three shopping centre openings having total of 100,000 sq m gross leasable area (GLA) as of Q3 2021. Istanbul hosts the majority of the supply with a share of 37% and was followed by Ankara and Izmir with the shares of 13% and 5%, respectively.
Currently, there is circa 1.2m sq m GLA in 37 centres under construction, adding up to circa 14.9 million sq m supply by the end of 2024.
In line with this, the retail density in Turkey, which was recorded at 161 sq m per 1,000 inhabitant in the same quarter of the previous year, increased to 164 sq m as of Q3 2021 and expected to reach 172 sq m by the completion of under construction projects in 2024.
Office Market Overview
While the existing Grade A office supply in Istanbul reached to 5.7 million sq m GLA as of Q3 2021, there is circa 1.8 million sq m office supply under construction and it is expected that the total grade A office supply will outpace 7.4 million sq m GLA by the end of 2023. Atasehir on the Asian Side and Levent in the Central Business District (CBD) have become prominent in terms of take-up transactions as of Q3 2021. Computing & technology, pharmaceuticals and serviced offices were the most active companies in terms of leasing transactions in 2021. Although vacancy in premium Grade A office buildings decreased, overall vacancy rate in CBD, which was recorded at 16.9% as of Q2 2021, has increased to 18.3% due to the addition of new supply.
Logistics Market Overview
As of Q3 2021, total existing logistics supply in the Marmara region, including the Istanbul and Kocaeli sub-markets was recorded at 10.52 million sq m. There is also 6.76 million sq m non-owner occupied logistics supply, which was constructed for lease and/or sale purposes.
According to the available data, 17,370 sq m logistics leasing transaction was realized in Q3 2021, reaching 221,636 sq m in 2021 overall. The vacancy rate is circa 11.1% as of Q3 2021.
The logistics market continued to seen as one of the most positive and sough-after position for the post-covid crises in Q3 2021. On the other hand, leasing transactions were dominated by retail and e-commerce companies with the shares of 37% and 35% respectively, and followed by 3rd Party Logistics (3PL) with 21% share in 2021.