VS Partners’s 2023 Year-End Türkiye Real Estate Market Overview

VS Partners’s 2023 Year-End Türkiye Real Estate Market Overview research report is published!

Our research report includes the latest data, market overview and and future forecasts regarding the capital markets, real estate investment market, retail, office, logistics, hotel and residential markets, along with the macroeconomic outlook. Additionally, within this edition, the research report includes a special section for Istanbul Financial Center project. Our key findings are as follows.



In the Turkish real estate investment market, the transaction volume saw an adjustment in many asset types by declining gradually through 2023.


Türkiye recorded a total of 10.6 billion USD in foreign direct investment (FDI) in 2023 with a 22.1% yoy decrease.

While high asset prices were a concern factor in investment decisions, pressure from higher interest rates following the elections and persistent inflation also affected investment activities, resulting in a 36% yoy fall in overall transaction volume in 2023.



While the improvement cycle in the retail market was more evident in 2023, investors are expected to focus on the sustainability of recorded revenue growth and return on their investments.


As of 2023 year-end, the existing shopping center supply reached the level of 14.1 million sq m across 453 centers in Türkiye. With approximately 197,000 sq m leasable area, a total of six shopping center projects entered the retail market.


Besides the continuous growth in inflation-adjusted shopping center turnover figures, footfall maintained its trend in positive territory with an increase in momentum. While the electronics, white goods, furniture, and men’s and women’s clothing categories, whose performance was accelerated in recent years, remained firm, expansion appetites shifted towards secondary and tertiary locations as the prime destinations approached full occupancy.



Due to the continued downward trend in vacancy rates, occupiers may face high levels of competition for prime products.


The existing Grade-A office supply in Istanbul increased to 6.6 million sq m GLA in 2023, a significant rise of 11.8% yoy, with the opening of the public banking complex of Istanbul Financial Center (IFC).

Due to the strong demand for qualified office space, vacancy rates continued their downward trend, and some well-performing office buildings reached full occupancy. While the vacancy rate in the CBD decreased to 7.8%, it decreased to a record low rate of 1.1% as of Q4 2023 in the Ataşehir and Kozyatağı submarkets, which are in the near vicinity of IFC.


While the supply-side pressures persisted in the logistics market, warehouse projects are being built in line with the larger space requirements of occupiers.


The total existing logistics supply in the Istanbul and Kocaeli submarkets was recorded at approximately 11 million sq m with a slight rise of 1.3% as of 2023 year-end. Even with few completions, the total supply was slightly increased; however, the vacancy remained comparable to the previous year due to the newly completed warehouses entering the market fully leased.


While the hotel market prospects remain robust with record high tourist inflows, operators are focusing on cost–profitability balances while keeping occupancy rates at desired levels.


In 2023, a total of 57.1 million visitors, of whom 49.2 million were foreigners, visited Türkiye, with a 11% increase compared to the previous year and a 10% rise compared to 2019. Based on the Euromonitor Top 100 City Destinations Index 2023 report, two of the four most-visited cities in the world are in Türkiye. Istanbul tops the list with 26% yoy growth in the number of international arrivals, followed by London with 17% yoy, Dubai with 18% yoy, and Antalya with a 29% yoy rise.

While RevPAR was still solid in Antalya, with an 8% yoy growth, the Istanbul market saw a decline of 8% yoy.


The momentum gained in residential sales numbers in previous years slowed down in 2023 due to record high prices and mortgage rates.


Total number of residential units receiving construction permits in 2023 rose by 20.9% yoy in Türkiye and 33.4% yoy in Istanbul. A total of 1.2 million residential units sold in Türkiye in 2023, decreasing by 17.5% yoy in Türkiye and 23.5% yoy in Istanbul in 2023. Residential sales to foreigners also saw a notable decline, with 48.1%, and accounted for 35,000 units.