New Business market report from Business Monitor International: "Turkey Real Estate Report Q4 2013"

Boston, MA -- (SBWire) -- 10/02/2013 --The Turkey real estate report examines the commercial office, retail, industrial and construction segments throughout the country in the context of the advantageous position of the real estate sector in spite of increasing economic and political uncertainty.

The downwards revision of Turkey's economic growth forecast for 2013 by our Country Risk team has informed our decision to reduce the real growth rate in Turkey's residential and non-residential sector this year. With slower economic growth predicted, demand for new build projects will likely be postponed until more the country is on a more solid economic footing. Strong demographic fundamentals still provide a strong foundation for growth in the sector and a government backed urban regeneration programme, as well as a large-scale healthcare infrastructure development programme will provide a multitude of opportunities. As such, we maintain our upbeat outlook for the Turkish residential/non-residential building industry over the long-term. That said, the potential for borrowing costs to increase in light of higher interest rates and a depreciated lira present downside risks to our view.

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With a focus on the two principal cities of Istanbul and Ankara, the report covers the rental market performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the country's long-term domestic demand credentials. Key commercial real estate indicators registered growth across all CRE subsectors.

This is increasingly impressive when viewed alongside the performance of its EU neighbours and the precarious start to 2012. Nevertheless, BMI would highlight the increasing risks to this stellar performance to date, as the risks of a hard-landing in Turkey are ever increasing and the cracks are beginning to show with several of our key indicators returning negative results.

It is also our view that demand for office space will prove resilient and increase over 2013 as the government continues with its policy of positing Istanbul as a regional financial hub. Reflecting the activity in and increasing liberalisation of Istanbul's financial sector, Mizuho Financial Group Inc., Mitsubishi Corp., OAO Sberbank and Burgan Bank SAK have all begun operations in the city. Investment will flow towards new business districts in the capital, as development continues apace in Atasehir - the location for the planned Istanbul International Financial Centre, which Bloomberg estimates may cost in the region of US$2.6bn.

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