Turkey Real Estate Market Overview Half Year 2022

MARKET INDICATORS

PRIME RENTS

PRIME YIELDS

SUPPLY

DEMAND

Although planned office projects are limited, the largest supply will be Istanbul International Finance Center project.

The upward trend in leasing transactions this year maintains its continuity compared to the previous year.

Yields expected to remain stable over the medium term.

It is expected to increase in TRY in the short and medium term.

Overview

In the first half of the year, the Russia-Ukraine war, the ongoing pressure of the pandemic on the economy and the increasing inflationwith disrupted supply chainswere on the agenda all over the world and Turkey in particular. After the Russian invasion of Ukraine in February 2022, the 5th month of the occupation has passed as of June. In this process, many international companies chose to terminate or suspend their activities in Russia. Turkey, has become a priority destination preferred by many companies leaving Russia amid tensions, both due to the advantage of its geopolitical and political position. In the first half of the year, prime rents increased in TRY and US$ terms as a result of increasing inflation and the continued volatility in the exchange rate. In addition, the prime rent in the CBD region, which decreased last year along with the concern created by the floating exchange rate regime, increased with the relatively stable dollar rate this semester. As a result of all these, the process of re-pricing prime rents of the Istanbul sub-market continues. In the first half of 2022, the general supply in the Istanbul office market remained at 6,46 million sq. m. While total leasing transactions in the first quarter of the year reached 123,424 sq. m and 120,892 sq. m in the second quarter. Thus, the total leasing transactions in the first half of the year reached 244,316 sq. m. This is a two-fold increase compared to the same period of the previous year. Lease transactions agreed in the first half mainly comprised new lease agreements with a ratio of 83% and 85%, both in square meters and in numbers respectivley. Lease renewals are on the decline compared to the previous year. Occupier Focus

Vacancy

Supply (Grade A)

19%

6,46 million sqm

Transactions

6 mth 224k sqm

121k

sqm

2022 Q2

Prime Rents

CBD

Out of CBD

$23 $12

₺ 360 / sqm per mth

₺ 190 / sqm per mth

Prime Yields

CBD

Out of CBD

%7.75 %8.25

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