Big changes are on the way in Turkey’s shopping mall world, with a wave of ownership transfers set to begin as early as 2025, says Nevzat Yavan, chief operating officer at industry leader Esas Properties. Driven by easier access to capital and the desire of some investors to sell, the changes will coincide with a shift in the mix of mall categories.
Expected Ownership Changes: Yavan expects the pace of sale transactions and ownership changes in Turkey’s shopping malls to accelerate next year. The sector, which consists of around 450 malls with 14 million square metres of leasable space, has seen investment decline due to rising operational costs, including raising funds in foreign currencies while generating revenue in Turkish lira. Asset Liquidation Ambitions: Yavan predicts that easier access to capital and the desire of some investors and public institutions to liquidate assets will drive these changes, leading to a significant increase in activity over the next three years.
Old shopping mall faces costly renovation
Another important development in this area is the need for physical renovation of older shopping malls, Yavan noted, noting that 30% to 35% of shopping malls in Turkey will need renovation within the next five to 10 years due to aging infrastructure.
Financial challenges: Such a transformation would be expensive—Yavan estimates that a typical mall renovation would cost between $5 million and $15 million—but securing funding remains a major challenge, as a sufficient revenue stream is needed to support such an investment.
Shopping mall trends shift from fashion to logistics and technology
As part of the transformation, the category mix within the mall is also expected to change.
Emerging categories: Yavan highlighted that fashion-related categories are declining and shifting towards health, education, logistics and technology sectors. New concepts include stores with large logistics spaces for the fulfillment of online orders and the integration of technology hubs and data centers within shopping mall complexes. Shared office space and diverse food and beverage offerings are also expected to increase.
Domestic growth and international expansion
Despite some foreign retailers withdrawing from the Turkish market, Yavan observed two contrasting trends over the past year: international retailers partnering with strong local groups, and local retailers expanding their reach and launching new brands.
Structural challenges: However, the sector faces structural challenges, especially in meeting the growing demand for space, with many malls already at full occupancy. Addressing these issues could pave the way for investment in new malls in areas that currently lack them.
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