2023 Real Estate Market Figures

VS Partners’ Q3 2023 Turkiye Real Estate Marker Figures research report is published!

Our research report includes the latest data and our market evaluations regarding the retail, office, logistics, hotel, and residential markets, along with the real estate investment market. Our key findings are as follows:


While high financing costs are the major challenge for the Turkish investment market, valuations are adjusting in line with the risk calculations based on higher rates.

Total foreign investment inflows to Turkiye accounted for 6.62 billion USD in the first nine months of the year, with a 34.7% yoy decline compared to the same period of the previous year. Commercial real estate prime yields remained stable with the previous quarter and were recorded at 8.25% for shopping centres, 7.00% for high-street shops, 8.00% for offices, and 8.50% for logistics assets.


As retail sales momentum signaled a softening, the overall trend of shopping center performance remained positive, with 26% inflation-adjusted turnover growth.


As of Q3 2023, the existing shopping centre supply is at 14.1 million sq m across 453 centres in Turkiye. With approximately 117,000 sq m leasable area, a total of four shopping centre projects entered the retail market in the first three quarters of the year. The retail categories recording the highest turnover growth are electronics and technology, DIY stores, cosmetics, men’s and women’s wear, and active wear, respectively.


The vacancy rate in the CBD dropped below the 10% level and recorded as 8.8%.


The existing Grade-A office supply in Istanbul increased to 6.6 million sq m GLA, while 788 thousand sq m is underconstruction. TRY-based prime rent rose to 1,000 per sq m per month, a 150% yoy rise. While the majority of the Grade-A buildings located in the Ataşehir and Kozyatağı regions reached almost full occupancy, vacany rate in the sub-market decreased to 3% as of Q3 2023.


The high-quality warehouses are entering the market with almost full occupancy before construction works completed.


Logistics warehouse take-up volume more than tripled in the first three quarters of the year, recording at 135 thousand sq m. While the total existing logistics supply in the Marmara region, including the Istanbul and Kocaeli submarkets, was recorded at approximately 11 million sq m as of Q3 2023, TRY-based prime logistics rent rose to 240 per sq m per month, a 140% yoy rise. 



The downward trend in hotel occupancy rates may lead to an adjustment of average room prices, which have increased significantly in recent years.


While the overall occupancy rate in Turkiye was recorded at 67% in the three quarters of the previous year, it decreased to 59% in the same period of this year. Revenue per available room (RevPAR) increased by 49% compared to the pre-pandemic period, recording 80,1 EUR with the year-to-date figures as of September 2023. While Russian visitors took the highest share with 13% of the total number of visitors, German visitors followed with 12% and English visitors with 8%, respectively.



Residential construction activities gained momentum; however, mortgaged sales continued to decline due to rise in mortgage rates.


While the total number of residential units receiving construction permits rose by 24% yoy in the first nine months of 2023, the total number of residential units receiving occupancy permits dropped by 21% in Turkiye. The construction cost index continued its upward trend, mainly stemming from a sudden rise in demand due to reconstruction efforts in the earthquake-affected areas. While the total residential sales numbers were decreased by 22%, mortgaged sales dropped by 30% in the same period.