Europe

Istanbul at the crossroads

As political instability in Turkey fuels nervousness among overseas investors, the country’s real estate market is preparing for a slowdown.

Property companies in Istanbul, Turkey’s biggest city and the fastest-growing city in Europe, anticipate a short-term slowdown in activity following the summer’s Turkish airstrikes in Syria and the resulting impact on the Kurdish peace process.

Avis Alkas, chairman of JLL in Turkey, said: “There have been some adverse affects of the political uncertainty here, both to the west with the human tragedies in Syria and to the north with the economic issues across Russia and Ukraine. And we were very surprised by the airstrikes in Syria. People like to travel to and invest in calm countries, so we might see a short-term dip. But in the medium to long term, Turkey, and Istanbul especially, will continue to be very good investment opportunities because of planned infrastructure upgrades and the growing population.

“In Istanbul new luxury hotels are opening up a new, high-end market here. And the development of a third bridge across the Bosphorus and a third airport will open the city up even more.”

Erkan Sonmez, chief executive of Turkish developer Aydinli, added: “The political issues could have an effect right now. But they will not last forever. They will be sorted out. And when that happens, Istanbul will remain a very strong investment option.

“There is no public realm here. No green space. It is desperately needed along with the right residential and commercial developments to support the growing population. We are developing whole new urban regeneration projects like Vadistanbul, which will deliver 3,000 new homes and where the offices have sold before the buildings have been completed. That is a first in Istanbul, I believe.”

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