TÜRKİYE REAL ESTATE MARKET OVERVIEW YEAR END 2023

ECONOMY OVERVIEW 

Following the May 14 general elections, tight monetary policy tools were used to combat inflation and pressure on foreign exchange supply. The dollar exchange rate, which was 19.68 in May, reached 26.03 in July. The dollar exchange rate, which remained relatively stable in the second half of the year, closed the year at 29.73 in December.

OFFICE MARKET OVERVIEW

In 2023, inflation and exchange rate fluctuations continued, leading to further increases in prime rents in ₺ and US$ terms. Occupancy rates reached its peak level of the last nine years as a result of the continued trend of companies returning to offices, increased demand for Grade A offices and the central business district (CBD)

RETAIL MARKET OVERVIEW

Despite the negative impacts of inflation and fluctuating exchange rates on the sector, it is observed that the density in shopping centres and main streets has reached significant levels. Despite the increase in demand in the retail sector, rental rates have risen significantly in both US$ and ₺ terms due to the limited supply in the market.

INDUSTRIAL & LOGISTICS OVERVIEW

According to available data, warehouse space leasing activities amounted to approximately 59,000 sq.m, bringing the total transaction volume to 225,060 sq.m in 2023. As a side effect of the uncertainty ahead of the general elections, 34% of leasing transactions took place in the first half of the year, while 66% took place in the second half.

RESIDENTIAL OVERVIEW

In 2023, Türkiye's housing market declined due to rising house prices and increased interest rates. Sales to foreigners decreased by 48.1% year-on-year to 35,268, with Antalya ranking first with 12,702 sales despite a 42% decline. İstanbul fell to second place with 11,229 sales, a significant decline of 55% compared to the previous year.

HOSPITALITY OVERVIEW

The tourism sector has started to perform at a high level again as the pandemic has lost its impact, while exchange rates have made Türkiye an attractive destination for foreign tourists. Türkiye's hotel occupancy rate for 2023 was down 8.9% y-o-y to 60%, compared to 67.6% in İstanbul.

STUDENT HOUSING OVERVIEW

In the academic year 2022-2023, the total number of students in Türkiye decreased by 16.1% compared to the previous year and was recorded as 6.95 million. The total number of dormitories in Türkiye decreased by 1.8% to 5,373, but the total dormitory capacity increased by 8% to 1.32 million.