A Guide to Investing in Commercial Properties in Istanbul

A Guide to Investing in Commercial Properties in Istanbul

“If the earth were a single state, Istanbul would be its capital”

    -Napoleon Bonaparte

The impressive progress made by the Turkish real estate sector has caught the attention of the global financial sector. The Mediterranean country has become the center of trade and investment in the world due to the secure environment and facilities it offers to investors across the world. As the markets are pumped with foreign capitals, Turkey has witnessed a massive proliferation of real estate developments and establishments in recent years. 

Real Estate Market in Istanbul

Istanbul, Turkey’s economic and financial capital, officially tops the list for being the most favorable and preferred cities for industrial expansions. The unprecedented movement of immigration in the country has also made it an ideal destination for diversified investments and lucrative commercial and economic businesses. 

Real estate investment in Istanbul is immensely attractive and profitable. As the government has formulated viable tax and property regulations, certain VAT exemptions have been put into force for foreign property buyers. The ‘Turkish Citizenship by Investment’ program has also opened new doors for Arab and foreign nationals to explore new possibilities in the expanse of the Middle-East, Europe, Asia, and Africa in general. 

Moreover, the high capital appreciation of residential and commercial properties in Istanbul further enables property investors to recover and recycle capitals in relatively shorter time spans. Taking that into account, commercial real estate in Istanbul is one of the best investment opportunities in terms of capital growth and high profitability in the short term. 

What to consider while purchasing a commercial property in Istanbul?

To avail maximum return on real estate investments, ensure that the commercial property that you intend to purchase has:

  • Easy access to the city center and main roads
  • The commercial space/office should have an uplifting working environment
  • The property should have enough windows for proper ventilation
  • The commercial building should have a well-planned infrastructure
  • It should at least have an internal/external parking or valet service
  • Central cooling and heating features should be available
  • The property should preferably be closer to commercial banks or ATMs
  • Proper maintenance of buildings and lifts should be done periodically

Why is Istanbul the perfect city to buy real estate in Turkey?

Istanbul has picturesque landscapes, pleasant temperatures, and moderate climatic conditions, making it a perfect destination for tourism. Since it is the cultural and financial capital of Turkey, the occupancy rates in the hotels are nearly 85% on average all around the year. While restaurants, shops, cafes, hotels, and retail businesses record overwhelming sales in Istanbul, the net capital return and rental yields are significantly higher compared to other cities. More than that, the commercial stores in the region catch the eyes of global investors and in recent times it is being considered as a pioneering investment with stable returns and profits. 

Nevertheless, government facilities and incentives to foreigners in the real estate sector, in particular, are solid additions to trade confidence in Istanbul’s promising financial market. 

Is it safe to invest in commercial real estate?

The commercial real estate market usually clock higher profits as compared to the residential sector. According to real estate experts, a commercial property recovers its capital in 11 years while it takes approximately 15 years to recuperate investments in residential real estate. Also, returns on residential properties are usually around 7-10% annually whereas a commercial store or office can fetch around 10%-14% returns annually. 

Commercial real estate investment in Istanbul is often characterized by the length of contracts or lease. For instance, an investor or a seller does not search for a property for a short term but rather opts for a long-term lease in order to establish his business or commercial project. 

Commercial Real Estate Investment in Istanbul

In recent years, Istanbul has become the gateway to economic industrialization and businesses from East to West. It is an attractive destination for commercial industries and offers remunerative investment opportunities. Within the boundaries of Istanbul, Levent, Ataşehir, Şişli, and Maslak are among the most targeted districts for commercial expansions and development. The booming city is the preferred destination for those seeking to make safe investments in the commercial real estate sector. 

By and large, Istanbul is the heart of business and industries in Turkey and home to approximately 16 million people. While the sale of commercial real estate in the city is on a buoyant rise, it is steadily climbing up the ladder of being the most preferred property investment city in the world.

If you want to explore investment opportunities in the commercial real estate in Istanbul, navigate through our attractive portfolio listings, or contact our real estate professionals here.

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