Published on and written by Cyril Jarnias
Commercial real estate in Turkey is entering a pivotal phase. After a decade marked by the roller coaster of inflation, successive devaluations of the Turkish lira, and a surge in construction costs, the market is gradually rebalancing. For a foreign investor, this recalibration period opens a rare entry window: assets remain depreciated in hard currency, while rents, indexed to an still-inflationary economy, continue to rise.
The Turkish real estate market offers varied opportunities in offices, logistics, retail, and hospitality, driven by dynamic consumption. However, these opportunities differ greatly depending on the segment and location. It is crucial to master the new regulations, especially environmental and seismic ones, to succeed.
An unstable macroeconomic context… but favorable for real estate
The Turkish real estate market operates against a paradoxical economic backdrop. The Turkish lira has lost approximately 18 to 21% of its value against the dollar over one year (as of summer 2025), following a long downward trend. Inflation peaked above 85% in 2022, before falling back to around 33% in summer 2025, while the policy rate was sharply raised to 50% in 2024, then gradually lowered.
According to estimates, the combination of inflation and lira depreciation offers an effective discount of 15 to 25% for an investor paying in hard currency.
Medium-term prospects reinforce this picture. The medium-term economic plan foresees a reduction in inflation toward a range of 9–21% by 2026, with interest rates that should gradually decline to 25% in 2026. Rating agencies (Fitch, S&P, Moody’s) improved their assessment of the country in 2024, and international institutions (IMF, World Bank, OECD) anticipate GDP growth of around 3–4% per year, with a gradual return to more controlled inflation.
For commercial real estate, this means a likely scenario of moderate but real price increases in inflation-adjusted terms, combined with dynamic rents and gross yields frequently above 7–8%, sometimes exceeding 10% in certain niches (logistics, tourism, prime offices).
Why Turkish commercial real estate remains structurally promising
The strength of demand is not solely due to cyclical effects. It is based on strong fundamentals: a population of over 85 million, with a median age around 29–32 years, a rising urbanization rate, strong internal migration to major centers, and a structural deficit of housing and quality space. New supply has only covered half of demand in recent years, while also needing to upgrade after the February 2023 earthquakes, which accelerated demand for safer and more efficient buildings.
Turkish exports reached a record $262 billion in 2024.
Tourism is the other pillar. Turkey is among the most visited countries in the world, aiming for over 60 million visitors in 2026, and some cities like Antalya are already in the global top destinations. This fuels a constant need for hotels, tourism residences, shops, service offices, and logistics platforms to serve this flow.
The country offers a citizenship-by-investment program (starting at $400,000 in real estate, with a mandatory holding period of 3 years), residence permits accessible from $200,000, and a favorable tax regime including low property tax, capital gains exemption after five years, and numerous VAT exemptions for foreigners under certain conditions.
Istanbul, the beating heart of offices and major tertiary operations
Istanbul concentrates the bulk of the country’s added value: over 30% of GDP, nearly 20 million inhabitants in the metropolitan area, and the majority of multinational company locations. It is also where most of the high-end office market plays out.
A class A office stock under pressure
In one decade, the office space has literally doubled. Total office stock reached over 6.4 million sq m by early 2022, up from 3.2 million in 2012, of which approximately 5.8 to 5.9 million sq m of class A. Including the pipeline, the stock already exceeded 7.1 million sq m in 2020.
Yet, no major office investment was launched between 2017 and early 2024. Meanwhile, part of the stock was converted into hotels, clinics, or residences, and some land parcels changed use. Result: nearly frozen new supply while demand for modern, well-connected offices compliant with new seismic and environmental standards remains unabated.
The best indicator of market dynamism is the continuous decline in vacancy rates in Istanbul’s Central Business District (CBD), which includes the neighborhoods of Levent, Maslak, Gayrettepe/Zincirlikuyu, Beşiktaş, Şişli, Kağıthane, Seyrantepe, and Ayazağa. The rate went from about 18% in 2021 to 14.4% in 2022, then to approximately 11.1% in Q3 2023, before plummeting to around 4% by end of 2023. A slight rebound to 6.5% in early 2024, due to one-off movements of large tenants, does not change the trend. This market tightening shows that space is becoming scarce for truly prime office buildings.
Prime rents rising and attractive yields
This tension is reflected in rents. In the most sought-after class A buildings in the CBD, rents have exceeded pre-pandemic levels. Prime rent stood at around $38–39 per sq m per month at end of 2023, with projections of $40 in 2023, $45 in 2024, and up to $47 in 2025. On certain historic benchmarks, like Levent, rents had reached $41 per sq m in 2016 before falling back to around $22 per sq m in 2021 due to currency depreciation; they have since recovered ground.
For a long-term investor, the premium office market in the city center (CBD) of Istanbul offers a rare profile in Europe: rents collected in hard currency or indexed, scarcity of quality assets, and gross yields around 8.25%. This rate is significantly higher than the usual 3-5% in major European capitals. The stability of supply and gradual economic recovery suggest a future wave of development, thus creating an opportunity for early investors before this new phase.
The International Financial Center, accelerator or new center of gravity?
On the Asian shore, between Ataşehir and Ümraniye, the gigantic Istanbul International Financial Center (IIFC) is intended to shift part of the tertiary power toward Anatolia. This project, announced with a budget of approximately $1.5 billion, will house financial regulators, major public and private banks, corporate headquarters, and associated services.
The complex represents 1.5 million sq m of leasable office space within a total of 4.2 million sq m including hotels, residences, retail, and conference spaces. Once completed, it could raise Istanbul’s total office stock to over 7.5 million sq m. For investors, the opportunity lies in positioning within or near this new hub, anticipating future demand for services, hospitality, retail, and housing for the thousands of expected employees.
Toward new hubs and formats: flex office and co-working
The rigidity of supply in prime neighborhoods is also driving demand spillover to alternative areas, such as Kağıthane, Ayazağa, Seyrantepe on the European side and Küçükyalı, Maltepe, Kartal on the Asian side. These sectors fully benefit from metro line extensions and highway connections.
At the same time, the rise of remote work and entrepreneurship has boosted flexible spaces. Co-working and flex office surfaces grew by 23% year-on-year to reach over 300,000 sq m in the first quarter of 2024. More and more large companies see it as a way to reduce fixed costs and offer their teams more agile, modular, often better technologically equipped spaces.
For an investor, financing or acquiring buildings suited to these uses (modular floors, large column-free floor plates, shared services) constitutes a credible avenue, especially since demand for flex seems less sensitive to macroeconomic cycles than traditional office demand.
Key data for the Istanbul office market
| Indicator | Value / Recent Situation |
|---|---|
| Total office stock (2022) | ~6.47 million sq m |
| Class A office stock | ~5.8–5.9 million sq m |
| Total stock (including pipeline 2020) | >7.1 million sq m |
| Istanbul office vacancy (global 2022) | ~21% |
| CBD vacancy Q3 2023 | ~11.1% (↓ from 18.3% in 2021) |
| CBD vacancy end of 2023 | ~4% (before temporary rise to 6.5% in Q1 2024) |
| Prime rent (Q3 2023) | $38–39 per sq m/month |
| Prime office yield CBD (2023) | ~8.25% |
| Flex space growth (Q1 2024) | +23% in one year, 308,000 sq m of flex office |
| IIFC – planned leasable offices | ~1.5 million sq m |
Logistics and warehouses: the winning bet of the “Eurasian Bridge”
Beyond offices, it is arguably the logistics/warehouse segment that holds the strongest potential. Turkey is aligning its geopolitical, industrial, and logistical ambitions around one goal: becoming the major transit platform between Europe, Asia, and the Middle East.
A logistics market in strong expansion
The freight & logistics sector is expected to grow by over $13 billion between 2024 and 2029, with an average annual growth rate exceeding 8%. Forecasts put the logistics market at around $67.8 billion in 2026 and $82.6 billion in 2031. The storage and warehousing industry alone generated nearly €2.2 billion in revenue in 2025.
This dynamic is driven by a combination of factors: weight of the manufacturing industry (about 25% of GDP), growth of domestic and cross-border e-commerce, explosion of online B2C consumption (40% of the population had already made online purchases in 2021), diversification of exports to the EU and the Middle East, and a national “logistics hub” strategy supported by a multitude of infrastructure projects.
Infrastructure and corridors: the master card
The country is deploying an ambitious multimodal infrastructure strategy. Vision 2023 and the Logistics Master Plan notably provide for logistics villages, reinforced railway and maritime corridors, with modal shift targets: reducing the share of road transport to 72% in favor of rail and maritime.
Billion Turkish liras allocated to roads and an equal amount to rails in the 2025 transport budget.
Istanbul Airport, now a global cargo hub, hosts major operators (FedEx opened a large transit base there in 2025). The country’s central location provides access to over 1.5 billion consumers within a four-hour flight radius.
Warehouses, urban logistics, and industrial yield
In this context, demand for modern warehouses, regional distribution centers, last-mile hubs, and cold chain capacities is exploding. The warehouse market certainly experienced slower growth between 2013 and 2018, but it has become more sophisticated: generalization of WMS (Warehouse Management Systems), automation, rise of urban logistics and micro‑hubs.
Overview of yields and characteristics of industrial assets in major Turkish cities.
The yield for industrial real estate was around 8.5% in the first quarter of 2024.
The yield for industrial real estate was around 9.5% in the first quarter of 2024.
Assets well-positioned on major road axes or near ports benefit from solid leases.
Sustained demand in the retail, e-commerce, and agri-food sectors.
A key point is the growth of cold chain logistics, driven by rising demand for perishable products. The cold chain segment, still a minority, is growing faster than the conventional segment, with prospects of higher rents and structurally lower vacancy.
Some numerical benchmarks for logistics and warehousing
| Indicator | Value / Trend |
|---|---|
| Logistics market size (2022) | ~$45 billion (projection > $67.8 billion in 2026) |
| Annual freight & logistics growth | ≈ 8% (2024–2029) |
| Warehousing & storage market (revenue 2025) | ~€2.2 billion |
| Road freight share (2025) | ~75.8% of revenue |
| Sea/waterways share (2025) | ~45.5% of revenue (in multimodal combination) |
| Prime industrial yield – Istanbul (Q1 2024) | ~8.5% |
| Prime industrial yield – Ankara (Q1 2024) | ~9.5% |
| Share of non-refrigerated warehouses (2025) | ~81.2% of market |
| Cold chain growth (CAGR) | ~3.9% |
In a still very fragmented market – with large international groups (DHL, Kuehne + Nagel, CEVA, Maersk, DP World) alongside powerful local players (Netlog, Borusan, Ekol, Omsan…) – the underlying real estate demand for logistics platforms is expected to remain strong for years. For an investor, targeting assets located along major corridors (Marmara, Aegean coast, Ankara–Kayseri axis, Eastern Mediterranean) offers a particularly attractive risk/return profile.
Retail, shopping centers, and destination retail
Turkish retail has amazed by its resilience. After the pandemic shock, the sector rebounded vigorously: some indices mention a retail market performance rising nearly 94% at one point, supported by spontaneously strong domestic consumption as soon as restrictions eased.
A shopping center supply still below European standards
The national shopping center stock reached approximately 14 million sq m of gross leasable area (GLA) by end of 2021, spread across over 450 centers, with about 1.2 million additional sq m under construction. Istanbul concentrates about 37% of this supply, Ankara 13%, Izmir 5%. Despite this, the GLA per thousand inhabitants remains around 164 sq m, well below the European average of 235 sq m.
Many French cities lack a modern shopping center or have limited retail space. This situation represents significant development potential for new projects, particularly in regions experiencing strong population growth or supported by tourism.
Prime rents in retail have increased – by about 7% in 2021 – to reach approximately €75 or 750 TRY per sq m per month in the best locations (iconic avenues, premium centers). Occupancy rates in major destination centers are high: Galataport Istanbul, for example, opened with nearly 90% occupancy, testifying to this appetite.
Retail evolution: from the “box” shopping center to a living space
Commercial projects are no longer sold solely on surface area. The global trend of transforming centers into true “lifestyle centers” is evident here: integration of leisure, dining, event spaces, cultural offerings, immersive play areas… The example of the Hupa Lupa entertainment center (6,000 sq m within Metropol Istanbul) illustrates this transformation.
This is the number of stores the Malaysian retailer Mr. DIY plans to open in Turkey, with an investment of $40 million.
Where are the opportunities in retail?
Major metropolises remain a priority, but appetite is also shifting toward underserved secondary cities: certain industrial cities (Bursa, Gaziantep, Kocaeli), tourist areas (Muğla, Mersin, Balıkesir, Çanakkale), or dynamic university towns (Eskişehir, Samsun). A well-conceived regional center, combining retail, leisure, dining, and sometimes hospitality, can capture a very broad clientele – from residents to tourists to populations from neighboring cities.
Conversely, some poorly located or oversized retail assets, or those highly indebted, suffer more from consumption pressures and the rise of online commerce. In such cases, repositioning (partial conversion to offices, leisure, public services) becomes a specific but more technical investment theme.
Hospitality and tourism real estate: an engine for returns
Turkey is one of the most visited tourist destinations globally. Statistics mention over 56 million international visitors in 2023 and tourism revenues exceeding $54 billion, accounting for nearly 12% of GDP. The Mediterranean and Aegean coastal cities – notably Antalya, Bodrum, Fethiye, Alanya – have become brands in their own right.
Very competitive occupancy rates and yields
After the pandemic, the hotel sector quickly recovered. In 2021 already, the national average occupancy rate was back to 52%, an increase of 45% over the previous year; in Istanbul, it reached 55% with an average daily rate (ADR) of around €91 (€82 nationally). Since then, the increase in tourist flows has continued, boosting demand for classic hotels, serviced residences, all-inclusive resorts, but also aparthotels and managed vacation homes.
In certain highly touristic areas like Antalya and Bodrum, rental yields on residences and hotels can exceed 10% gross. This potential is explained by high seasonality (with occupancy rates of 70 to 90% in summer), a diversified international clientele (Russian, European, Middle Eastern), and professional management. Short-term rentals (like Airbnb) can generate two to three times the income of a conventional annual rental, subject to complying with the new regulations requiring a permit, registration, and condominium approval.
Examples of tourist locations with strong commercial potential
Antalya is emblematic: ranked among the ten most visited cities in the world, with over 10 million annual tourists, it offers opportunities at several levels: hotels, managed residences, seasonal shopping centers, amusement parks, medical tourism clinics. The districts of Lara, Konyaaltı, Altıntaş, and Alanya are in high demand, with gross yields potentially well exceeding 8–10% on the best operations.
Bodrum, on the Aegean Sea, is an upscale destination with five-star villas and resorts, as well as marinas like Yalıkavak and Gumusluk, attracting an affluent international clientele. Prices per sq m are higher than the national average, but the market offers solid growth, especially in foreign currency, with projections of 20 to 30% increases for villas in the coming years.
For an investor, commercial tourism real estate (hotels, residences, tourism-related retail) offers a yield/risk profile to watch, taking into account seasonality, geopolitical risks, and regulatory changes on short-term rentals.
Turkish REITs: a listed vehicle for investing in commercial real estate
Rather than buying directly, it is possible to access commercial real estate via Real Estate Investment Trusts (REITs), highly developed in Turkey. The legal framework was established as early as 1995, with stock exchange listing starting in 1996. These companies benefit from corporate and income tax exemption, provided they float at least 49% of their capital and comply with the rules of the Capital Markets Board (CMB).
REITs (Real Estate Investment Trusts) in Turkey have a broad investment scope, including offices, retail, hotels, warehouses, land for development, and real estate-backed securities. They can also, under certain conditions, invest in assets abroad. Although their market capitalization is still modest compared to major developed markets, it is experiencing rapid growth.
Recent data on the REIT sector
As of January 19, 2026, the cumulative market capitalization of Turkish REITs stood at approximately 455.1 billion TRY, with revenue of about 48.1 billion and profits of 22.2 billion. Sub-sectors do not all show the same performance: industrial REITs outperform (yield around 14.9%), residential near 7%, hotels and resorts around 3.9%, offices at 2.9%, diversified REITs at 0.38%, while retail REITs are temporarily in the red (-1.61%).
Investing in Turkish REITs offers immediate diversification across several real estate segments (offices, logistics, retail, hospitality), professional management, and transparency of valuations via approved experts. It benefits from the liquidity of the Istanbul Stock Exchange, potentially favorable tax treatment according to international agreements, and allows participation in the dynamics of major urban projects and megaprojects.
An increasingly green and regulated market: constraint or opportunity?
Beyond the numbers, one of the major changes affecting all commercial real estate in Turkey is the environmental transition. The country has set a goal of carbon neutrality by 2053 and a 41% reduction in greenhouse gas emissions by 2030 compared to the business-as-usual scenario. The building sector is at the heart of the issue: it accounts for nearly 31% of final energy consumption and about 30% of emissions.
Toward nearly zero energy buildings
Since January 1, 2023, regulations require that any new building over 5,000 sq m be a “Nearly Zero Energy Building” (NZEB), with an energy performance level of at least class B and a minimum of 5% of primary energy supplied by renewable sources. As of January 1, 2025, this threshold will be lowered to buildings over 2,000 sq m, with a minimum 10% share of renewable energy.
Since 2011, the generalization of Energy Performance Certificates (EPC) and the introduction of a national “green certificate for buildings and neighborhoods” label form a regulatory framework encouraging the market to develop more efficient, better insulated, and more effective buildings.
For commercial assets, this evolution is far from neutral. Buildings that do not meet future requirements risk discounts or being harder to lease, while certified assets (LEED, BREEAM, YeS‑TR…) lease better, at higher rents, with lower vacancy and better quality tenants. The additional construction or renovation cost is partly offset by lower operating costs (energy, maintenance) and by public support (energy efficiency plans, green finance instruments).
Tables of some “green” requirements and instruments
| Measure / Objective | Main Content |
|---|---|
| NZEB (since 2023) | Buildings > 5,000 sq m, energy class ≥ B, ≥ 5% RES energy |
| NZEB extension (2025) | Buildings > 2,000 sq m, RES share ≥ 10% |
| Energy Performance Certificate (EPC) | Mandatory, class ≥ C for new buildings since 2011 |
| National Green Certificate (YeS‑TR) | Label for sustainable buildings and neighborhoods |
| NEEAP 2017–2023 | 55 actions, target of 14% reduction in primary consumption |
| Energy Efficiency Plan 2024–2030 | New series of measures for buildings |
| National ETS system (in preparation) | Toward an emission quota trading market |
| CBAM (EU) | Impact on construction materials exported to the EU |
This environmental upgrade is added to the need for seismic safety, particularly after the 2023 earthquakes. Investors are well advised to favor recent, compliant assets, or to integrate the cost of upgrading into their business plan. The market is beginning to clearly value “green & safe” buildings, both in rents and exit prices.
Highly differentiated cities and segments
Even though Istanbul captures attention, other cities present attractive profiles.
Ankara, the political and administrative capital, offers a more stable office market, driven by the state apparatus, embassies, NGOs, and universities. Office rents remain lower than in Istanbul, but yields are generally slightly higher – in residential, one ranking mentions a yield of over 10%, and industrial assets also show nearly 9.5% prime yield.
Residential real estate prices in Izmir have increased by more than 20% year-on-year.
Antalya, already mentioned, remains the capital of beach tourism and a prime area for hospitality, tourist retail, and seasonal logistics. The strong presence of foreign residents, notably Russians, reinforces demand for services, shops, and offices for companies linked to tourism, real estate, or health.
Commercial rental yields in Bursa are often between 5 and 8%.
Finally, certain so-called “secondary” cities like Adana (gross rental yields up to 10.7%), Konya (around 8.7%), Gaziantep, Mersin, Samsun, or Eskişehir stand out for demographic or economic growth rates above average, a solid industrial base, and catch-up in commercial and logistics infrastructure.
A relatively favorable legal and tax environment
For a foreign investor, the legal framework is central. Turkey allows real estate acquisition by most nationalities, with some exceptions (e.g., certain restrictions for Syrian citizens) and prohibitions in military or strategic zones. The total surface area held by a foreign national cannot exceed 30 hectares, except by special authorization.
Obtaining a Turkish tax number and opening a local bank account are necessary to carry out transactions. Property transfers are formalized via the Tapu (land title), with a transfer fee of 4% of the declared price, often shared between seller and buyer.
Current taxation is competitive: low annual property tax (0.1–0.6% of the cadastral value), no wealth tax, and exemption from capital gains tax on real estate after five years of ownership. Rental income is taxed progressively (15–40%), with a standard deduction or deduction of actual expenses. For new acquisitions, VAT can reach 18%, but exemptions exist for foreign investors under certain conditions, notably for a first purchase.
The citizenship-by-investment program, with a threshold of $400,000 in real estate (commercial or residential), and the requirement to hold the property for at least three years, continues to attract an affluent international clientele. The holder, their spouse, and minor children obtain nationality, with the possibility of retaining other nationalities. A residence permit is accessible from $200,000 in real estate investment.
Risks, common pitfalls, and mitigation strategies
No high-yield emerging market comes without risks. In Turkey, the main factors to watch are lira volatility, persistent high inflation, regulatory adjustments (especially on short-term rentals, taxation, or access to residency/citizenship), regional geopolitical risks, and of course seismic risk.
Several microeconomic risks should be considered: paying an overvalued price for over-hyped peripheral projects instead of favoring the secondary market downtown; neglecting to thoroughly verify the Tapu (mortgages, use restrictions); underestimating delays and developer default risks; and ignoring new stringent regulations on Airbnb-type rentals (license, condominium authorization, penalties).
Professionals systematically recommend working with an independent specialized lawyer, favoring developers with an established reputation (or projects backed by REITs or institutional developers), requiring an official appraisal compliant with Capital Markets Board standards for citizenship applications, and thinking about an exit strategy from the moment of purchase (neighborhood liquidity, market depth, future buyer profile).
A window of opportunity for patient investors
Projections for the 2026–2030 horizon converge: moderate but relatively solid economic growth, gradually declining inflation, continuation of major infrastructure projects, growth of the logistics sector, still dynamic tourism, structural deficit of modern space – whether residential, tertiary, or logistics.
For commercial real estate, price scenarios speak of nominal increases generally between 8 and 25% per year depending on the segment by 2026, implying expected real gains of 5 to 10% once inflation is deducted. Gross rental yields range from 6–7% on prime offices to over 10–12% on well-chosen logistics or tourism assets.
Monetary tightening, constrained domestic demand due to high credit rates, and a weak currency create a window of opportunity. International investors can enter the market at realistic values, with reduced local competition, while securing indexed rental income and medium-term appreciation prospects.
The choice remains: class A offices in Istanbul or Ankara, warehouses along major logistics corridors, regional shopping centers in catch-up cities, hotels and tourism residences in coastal hubs, or a listed portfolio via specialized REITs. In any case, commercial real estate in Turkey, far from being a purely opportunistic speculative bet, presents itself as a long-term play, provided it is approached with a fine reading of cycles, an understanding of local risks, and a real demand for asset quality, location… and construction.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
