Europe ranked Istanbul third for investment

Istanbul

A recent survey of 500 real estate professionals in Europe ranked Istanbul third in Europe as a real estate investment market and first as a development market in 2009 from among 27 major urban locations. The survey determined that Istanbul is still of great interest to real estate professionals, falling only one position from its 2008 investment ranking by a similar survey.

Economic stress and related problems such as lease and loan defaults haven’t had the same impact on Istanbul’s commercial real estate as they have with many other European cities. However, according to the survey published by a leading economic and tax advisory, Turkish economic growth appears to be stunted due to political uncertainty and delays in government economic reforms required by the European Union.

Despite this economic deceleration, investors continue to look for opportunities within the city. One investor who participated in the survey said, “Istanbul will be more favorable and will be our primary location for real estate investments.”

OFFICES, HOTELS, RESIDENTIAL NEEDED

Class A office supply in the central business district is insufficient to meet demand as land in this area is limited and quite expensive. Fifty-three percent of survey participants agree, rating the Istanbul office market as a buy. Interest in the hotel sector is also strong; as 48 percent believe this sector offers buy opportunities. According to the Turkish Ministry of Tourism, tourists have almost tripled in number between 2000 and 2007, exceeding 6 million.

European real estate professionals are in accord with the report stating, “Projects in Istanbul are still relatively attractive.” “Development of residential real estate projects in Istanbul and coastal Turkey is needed.” The report continues. Even with this interest, investors in 2009 are obviously concerned with the risk Istanbul brings as it is viewed as the eighth-riskiest city in which to invest. One interviewee agrees, “Istanbul is still good, but too exotic for us.”

THE TOP 6 MARKETS

The survey ranked the top six real estate investment markets for 2009 as Munich, Hamburg, Istanbul, Zurich, London, and Moscow. Investors and industry experts believe that in general, German urban markets are relatively stronger compared to most other cities in Europe. Istanbul and Moscow are still underserved by high-quality building facilities in many sectors and have better growth potential than all other cities.

The once exorbitantly-priced London is now correcting rapidly and will offer opportunistic plays later in the year. Zurich is a relatively stable real estate market and prospects there have not fallen as much as those in other markets, raising its rank relative to other cities. Due to its strong need for more high quality office space and its steadily growing population, development prospect ratings place Istanbul in first place.

Following close behind were Zurich, Munich, and Moscow. Unfortunately for investors in Russia, Moscow is rated as the riskiest city, followed by Dublin and Madrid.

Author -Gary S. Lachman

Gary Lachman is an international lawyer formerly with the U.S. Department of State, a real estate developer, and associate professor at the Johns Hopkins University, with a consulting practice in Istanbul. He can be contacted at glachman@lachmanyeniaras.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Source – Didim Today Altinkum Local News