It was noted in the report that the construction-development sector, which feeds many sectors, maintains its importance in terms of employment and national income, and that interest in real estate investment funds continues to grow. ‘increase. The size of real estate investment funds, which is among the investment instruments that have received the most attention over the past two years, increased by 18.1% compared to the previous year and reached 13 billion TL by the end of 2021.
According to the report, a total of 83 real estate funds, whose issuance period continues, received investments last year. It has been observed that the real estate mutual fund market has grown in every quarter from the last quarter of 2018 to the last quarter of 2021.
On the other hand, rising costs and financial difficulties faced by build-sell projects have led to a decrease in investment in housing projects. Although demand for building permits revived from 2022 as the housing stock began to dwindle, difficulty in completing projects due to rising construction costs led to a contraction in the supply of accommodations. Underlining the expectation that house prices will rise above inflation in the short to medium term, the report stresses that in the long term, the need for housing will be more decisive than investment.
Funds provide risk diversification
To make statements on the results of the real estate sector report, Re-Pie Portfolio Management Inc. Chairman of the Board of Directors Dr. M. Emre Çamlıbel said: “Considering the trend of real estate investment in our country, real estate investment funds, which allow investors to allocate their assets according to their risk preferences during the pandemic process, continued to be at the forefront in 2021 as in 2020. . We expect this growth process to continue this year as well. Looking at the period between the third quarter of 2018 and the last quarter of 2021, the strategic distributions of real estate investment funds were recorded as housing (20%), offices (18%), shopping centres/retail of retail (7%) and land. -earth (2%). We believe that investments in this area will increase with the increase in financial literacy rates in Turkey in the coming period.
Prices will increase due to increased costs
Although sales of new and used homes continue in 2021, unit prices per square meter have risen and continue to rise due to tight supply and rising costs. According to Central Bank data, in January 2020, the average sales unit price per square meter in Turkey was 3,000,404 TL. In the same period, while the selling unit price per square meter in Istanbul was 5,000,530 TL, in December 2021 Turkey’s average increased to 4,000,545 TL, while Istanbul increased to 6,000,800TL.
Analyzes of industry organizations show that the construction costs of projects for the upper-middle income group have increased to the level of 9,000-10,000 TL per square meter. The report also predicts that housing costs will rise in line with the dollar index in the coming period and that the new housing price index will be shaped by cost, profit and land markup. Thus, the new housing price index, which is in the range of 600 in 2022, is expected to reach a value between 1,000 and 1,600 in 2023.
The expectation of vitality with the return to the office
According to the report, the demand for next-generation office resulting from the effect of the pandemic and flexible and remote working is expected to continue in 2022. It is observed that the vacancy rate, which has increased in some regions, especially on the Istanbul office market, is offset by rentals in other regions. It should be noted that the tendency of tenants to change offices and regions has increased with the expectation of a more reasonable rent.
This situation is accepted as an indication that tenants are ready to change buildings and, if necessary, regions for more reasonable rents. Additionally, lower rent expectations in times of financial hardship have been observed to have a positive impact on occupancy. The fact that the Istanbul Financial Center (IFC) will be put into practice after 2022 is expected to significantly affect the occupancy of existing MIA regional office buildings and the demand for high-income housing on the Anatolian side.
Malls will focus on entertainment and education
Around the second quarter of 2022, malls are expected to shift from a sales orientation to an entertainment, service and education orientation as the number of visits increases due to the need of socialization and the need to buy by experience and e-commerce coming to the fore. Considering the pandemic conditions, it is expected that outdoor shopping malls will come to the fore in the near future.
The average square meter of land in Istanbul is 1.680 TL
When zoned residential land in Turkey is valued with the unit price per square meter, Istanbul is in first place with 1,680 TL per square meter, while Izmir follows Istanbul with 567 TL per square meter. Looking at the annual averages, at the end of February 2022, the provinces that gained the highest value in terms of residential zoned land in Turkey were İzmir, Gaziantep, Muğla, Aydın and Ardahan, respectively. In Turkey, Istanbul comes first with a unit price of 210 TL per square meter of land, vineyards, gardens and fields. Izmir was registered at 97 TL and Ankara at 47 TL per square meter. Looking at the annual averages, at the end of February 2022, the provinces that lost the most value for residential land in Turkey were Mardin, Siirt, Trabzon, Burdur and Giresun, respectively.
According to the Endeksa Turkey commercial real estate price index, in December 2021 it increased by 1.3% and reached the level of 221.06 points. Compared to the same month of the previous year, an increase of 26% was observed in the index. Office rents in Turkish liras (TL) increased in the second half of 2021 compared to the first half of 2021. In the second half of 2021, the average rent for Class A office buildings in Istanbul was 165 TL/m²/month. Compared to the second half of last year, rents in TL have increased by approximately 48%.
Increased demand for warehouses in cities
In the second half of 2021, the logistics market was the market where the negative effects of the epidemic were the least felt compared to other sectors. Despite the slowdown and shutdown of production in industrial facilities, the demand for urban warehouses has increased with the increase in e-commerce during this period. With the increase in demand, rents increased in TL terms, but remained stable in dollar terms. In the second half of 2021, the decline in the vacancy rate in regions where both logistics and production facilities are concentrated, such as Gebze and Tuzla, was remarkable when the increase in demand for production facilities slowed down. adds to the demand for facilitated last mile logistics, which has increased since the start of the pandemic, compared to the first half of the year. It increased due to the addition of new stocks in Dudullu, Esenyurt and Dilovası.