Redefining High Streets
Istanbul’s prime streets have performed well over the last decade. This has been driven by a substantial increase in Istanbul’s middle-class population and sustained long-term growth in both international and domestic tourism. However issues on the main thoroughfares including Nişantaşı District, Istiklal Street (European Side) and Bağdat Street (Asian Side) have emerged. In particular, visual and noise pollution has increased and vacancy rates have risen in the recent term.
Economic conditions, political uncertainties, regional conflicts and the extreme depreciation of the Turkish Lira (TRY) against the US Dollar (USD) and Euro (EUR) have impacted retailer activity. A large number of retailers who had managed to break even over the last few years started to make a loss in 2016. Therefore, some brands have closed their shops on prime high streets or relocated, most likely to smaller stores with a lower rent. Along with additional taxes applied in a number of sectors, import duties have aggravated the business operations of foreign brands in the Turkish retail market. At the same time, a decline in the number of foreign visitors has adversely affected the performance of international retailers. Tourism drives a large proportion of retail sales in many markets – luxury sales in particular – and has become a key indicator for international retailers assessing expansion opportunities.
Meanwhile, brands that have strong financial positions and willingness to invest are predicted to take advantage of the fact that rent levels have declined up to 40% since Q1 2016. The strong demand from some retailers, has not always been met due to the poor quality of the existing supply and extensive renovation effort taking place of outdated stock.
High street retail is really making a resurgence for retailers and investors in Istanbul as well as across Europe’s key cities. As the significant change in consumer behaviour, retail streets become less about simply shopping more about ‘retailability’ and ‘attractiveness’. Using best practice management techniques honed in shopping centres might be the way to create successful retail places. Improving access, parking, brand mix, entertainment and leisure on the high street. While also offering a clean and safe pedestrianized environment with 24/7 appeal.