Turkey Commercial Real Estate Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Turkey Commercial Real Estate Market Trends and Insights

Nearshoring And Export-Led Manufacturing Boost Logistics/Industrial Demand

European automakers expanded capacity in Turkey during 2024, prompting a 100% rise in industrial rents as Organized Industrial Zones filled rapidly. Renault’s USD 220 million Bursa outlay lifted EV output and sparked ancillary warehouse leasing within a 100-kilometer radius. Manufacturing FDI climbed 32.5% year-on-year to USD 2.3 billion, diversified across Dutch, German, and U.S. investors. Government policy now targets USD 10 billion per year of fresh FDI, chiefly by enlarging OIZ capacity and streamlining permits. These measures shorten supply chains to Europe, trimming logistics costs up to 18% versus central Anatolia locations.

Tourism Rebound Supports Hotels, Retail, And Mixed-Use In Coastal And Heritage Cities

Tourism receipts hit USD 61.1 billion in 2024 as 52.6 million visitors flocked to coastal resorts and historic districts. Five-star occupancy in Antalya exceeded 85% between May and October, reviving stalled hotel pipelines. Istanbul’s Tersane waterfront melds shopping, dining, and museums across 140,000 square meters to capture visitor spending.^{[2]Turkey Real Estate Market Report H1 2024, Cushman & Wakefield, cushmanwakefield.com} Luxury high-street rents on Bağdat Avenue reached USD 250 per square meter per month, a 40% premium over secondary sites. A VAT-exemption program for hotel renovations over 50 rooms accelerates cap-ex cycles and sustains tourism-led demand.

Urban Renewal And Seismic-Resilient Rebuilds Create Grade-A Development Pipelines

Law 6306 mandates demolition of non-compliant stock, generating a multi-decade Grade-A pipeline. ISMEP financing of USD 1.26 billion will retrofit 1,095 public buildings by end-2024. New code compliance adds 15%–25% to costs but secures rent premiums of up to 30% as tenants prioritize safety and insurers lower premiums^{[3]Turkey Economic Monitor, World Bank, worldbank.org}. Emlak Konut’s USD 150 million Yeni Fikirtepe scheme outlines 11,000 seismically sound units plus retail amenities. Istanbul, Izmir, and Bursa host 70% of transformation sites, setting long-run demand for engineering and materials.

Growing E-Commerce Accelerates Modern Warehousing And Last-Mile Hubs

Online sales jumped to USD 66.6 billion equivalent in 2023, lifting warehouse take-up to 179,700 square meters in H1 2024—a 138% leap. FedEx opened a USD 130 million, 25,000-square-meter hub at Istanbul Airport in September 2025, slicing regional transit times by 30%. Amazon’s Tuzla fulfillment center employs 1,500 staff and handles same-day delivery across Marmara. SMARTIST’s 205,000-square-meter first phase underscores Istanbul’s air-cargo prominence. Government-designated logistics zones supply land 40% cheaper than private sites, catalyzing national distribution footprints.

Currency Volatility, High Inflation, And Financing Costs Complicate Underwriting

The Turkish lira lost 30% against the dollar in 2024 while inflation reached 64.77%, squeezing unhedged returns. A 50% policy rate translates into 55%–65% commercial loan costs, rendering leverage unworkable unless rents reset 40% yearly. Dollar-pegged leases and swaps offset exposure but erode 3%–5% of gross yield spreads. İş GYO and Akfen postponed equity raises after the REIT index fell 18% in lira terms during the first nine months of 2024. Cash-rich conglomerates and sovereign funds thus dominate acquisitions, sidelining highly leveraged private equity.

Seismic Code Compliance and Construction Inflation Elevate Project Budgets

Mandatory seismic isolators and reinforced concrete add 15%–25% to baseline costs, while steel and cement outpaced CPI by up to 15 points in 2024. Retrofitting a 10-story block in Kadıköy can cost USD 800–1,200 per square meter versus USD 600–900 for new builds on vacant land. Permit approvals average 18–24 months in fragmented ownership scenarios, inflating carrying costs and deferring revenue. Insurers now refuse non-compliant buildings, pushing landlords toward upgrades or tenant churn. Smaller developers without deep balance sheets exit or merge, catalyzing consolidation.

Segment Analysis

By Business Model: Rental Dominance Reflects Yield-Seeking Capital

Rental assets accounted for 73.7% of the Turkey commercial real estate market share in 2025, driven by investors favoring dollar-indexed income streams that protect against lira depreciation. Pension funds and GYOs structure triple-net leases delivering 8%–10% annualized returns on Grade-A offices and malls. The build-to-rent wave is enlarging stock aimed at young professionals as home-ownership dips to 58%. Fractional ownership via the August 2025 tradable certificate launch on the USD 1.51 billion Damla Kent project could narrow the rental-sales gap by unlocking liquidity for retail investors. Sales transactions remain smaller but command premiums in luxury coastal enclaves, where Bodrum villas appreciated 12%–18% during 2024.

Rental growth is forecast at a robust 9.42% CAGR, supported by seismic-upgrade completions that achieve 20%–30% rent premiums. Conversely, sales activity faces headwinds from higher citizenship thresholds and mortgage costs exceeding 30%. Long-run upside exists for sales via digital platforms that shorten settlement cycles and through master-planned communities that offer integrated amenities. Still, rentals will remain the ballast of the Turkey commercial real estate market as institutions prioritize predictable cash flows and dividend visibility.

By Property Type: Logistics Surge Contrasts With Retail Maturity

Retail led the 2025 revenue table at 37.1%, underpinned by 441 shopping centers totaling nearly 14 million square meters of GLA. Yet logistics assets are projected to post the fastest 9.81% CAGR as e-commerce and nearshoring tighten warehouse vacancies. Warehouse rents in Istanbul’s Tuzla corridor doubled year-on-year, while Izmir’s port expansion supports cost-effective distribution into Europe. FedEx’s USD 130 million airport hub and SMARTIST’s scalable air-cargo campus exemplify institutional bets on Turkey’s logistics spine.

Although brick-and-mortar retail faces online cannibalization, experiential formats—cinemas, indoor ski slopes, and food halls—keep occupancy above 95% at flagship centers like Mall of Istanbul. High-street strips in Nişantaşı achieve USD 250 per square meter rents, leveraging tourist luxury appetite. Office demand rebounded strongly, with Grade-A Istanbul occupancy touching a 12-year peak of 89.7% on the back of consolidations into seismic-compliant towers. Data-center and hospitality pipelines diversify the asset mix, ensuring that the traditional office-retail dyad no longer dominates the Turkey commercial real estate market.

By End-User: Corporations and SMEs Lead Occupier Mix

Corporates and SMEs held 44.9% revenue share in 2025, underlining their role as primary drivers of the Turkey commercial real estate market. The country’s 3.5 million registered enterprises, plus USD 1.2 billion in 2023 venture-capital inflows, feed a constant appetite for modern offices, light-manufacturing sheds, and data-center plots. Multinationals rented 60% of Istanbul’s new Grade-A supply in 2024, gravitating to seismic-proof towers with LEED certification that slash insurance costs. SMEs, especially e-commerce startups, favor co-working environments; flexible-space operators expanded footprints by 25% in 2024.

Individuals and households account for a smaller slice but sustain luxury coastal schemes. Bodrum villas appreciated 18% in 2024 after a wave of high-net-worth buyers from Gulf markets piled into branded residences with marina access. Government-subsidized rent support for tech startups under the KOSGEB program nudges SMEs into specialized tech parks in Ankara and Istanbul, reinforcing the forecast 10.03% CAGR for corporate-driven demand. The Turkey commercial real estate market share of corporates is expected to inch higher as crowd-funded certificates begin to finance tenant-specific shells.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Istanbul’s 52.3% grip on national value rests on unmatched infrastructure density and deep consumer spending. The city absorbed 138,597 square meters of Grade-A office stock in H1 2024, a 32.9% leap from the prior year, while the Istanbul Financial Center sealed full occupancy for anchor towers housing the central bank and capital-markets regulator. Prime logistics rents inside the airport corridor doubled as tenants fought for the last developable plots within the third-ring highway. Even so, seismic retrofitting curbs older stock; ISMEP demolished 592 sub-standard buildings by end-2024 and unlocked a USD 1.26 billion pipeline of code-compliant reconstruction.

Ankara, long a bureaucratic town, sharpened its tech profile after Google committed USD 1.2 billion to a data-center campus in Sincan. Office rents at USD 18 per square meter per month offer 60% savings versus Istanbul, prompting state agencies and foreign embassies to pre-lease Grade-A space in Çankaya. Government incentives reimburse up to 50% of rent for startups inside Bilkent and Hacettepe technoparks, feeding SME demand. Meanwhile, Izmir’s 10.23% CAGR outlook reflects the Aegean port expansion that will quadruple container throughput by 2030 and pull in nearshoring manufacturers seeking duty-free land.

Rest-of-Turkey markets exhibit pockets of resilience. Antalya’s 52.6 million national tourist arrivals in 2024 channeled USD 61.1 billion in visitor receipts that spill over into hotel and retail schemes. Bursa’s automotive corridor benefited from Renault’s EUR 200 million plant upgrade, sparking ancillary warehouse demand within a 100-kilometer radius. Municipal digitization of permit workflows cuts project timelines by 20-30% in the largest metros, but smaller municipalities still struggle with fragmented land titles, sustaining higher carrying costs for developers.