Share
KUALA LUMPUR: Turkey continues to attract international retailers despite anticipation of lower visitor numbers and turnover rents for many shopping centres amidst the current gloomy economic environment.
According to the “Best Buy” report by international property advisor Savills, key fashion brands such as Tommy Hilfiger, C&A, Accessorize, Zara, Mango and Gap are undeterred by the current market sentiment to penetrate the Turkish retailers market.
International home products retailer IKEA has recently opened its fourth store in Turkey's Bursa while French DIY retailer Leroy Merlin is preparing to enter the market, Savills said in a press release on April 22.
The modernisation of its market and the growing demand for western products in Turkey are among factors for the entry of demand-driven international retailers.
This, combined with an increase in domestic car ownership, has led to a transition from traditional high street locations to out-of-town formats and large scale formats, said the report.
Although consumer confidence was down 22.3% in January 2009 compared with the same period last year, Savills said the Turkish economy’s strong growth in previous years coupled with an increase in supermarket and fast food spending should help cushion the negative impact of the global econmic crisis on this market.
Rent rates are under pressure due to the present economic climate. The report showed rental rates at Turkey’s prime shopping centres currently stand at US$1,080 per sq m per year and US$480 per sq m per year for units with gross lettable area (GLA) of 150 sq m, and those between 1,000 and 1,500 sq m respectively.
Rent levels vary depending on factors such as the location, the type of centres, size and the purchasing power of the catchment area concerned. Savills cited effective management as an important factor in sustaining rental levels.
Development of new centres has already begun to be delayed or postponed but the Savills report stated that the stronger schemes that do get realised will see renewed investor interest when the economic situation improves.
Murat Ergin, head of Savills' associate Kuzey Bati, said: "In the current context of weakening consumer spending, the performance of a shopping centre relies heavily on the quality of the catchment area, tenant mix and its management. As the economy recovers, we expect successful shopping centres to attract investors’ interest leading to yield compression."
