Turkey Commercial Construction Market Size
![Turkey Commercial Construction Market Summary](https://s3.mordorintelligence.com/turkey-commercial-construction-market/1673275989364_turkey-commercial-construction-market_Market_Summary.webp)
Study Period | 2020 - 2029 |
Base Year For Estimation | 2023 |
Forecast Data Period | 2024 - 2029 |
Historical Data Period | 2020 - 2022 |
CAGR | > 5.00 % |
Market Concentration | Low |
Major Players![]() *Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Turkey Commercial Construction Market Analysis
The Turkey Commercial Construction market is estimated to register a CAGR of greater than 5% during the forecast period.
- The construction sector in Turkey has been contracting for 5 consecutive quarters with increasing rates since the third quarter of 2021. The construction sector contracted by 14.1%. The contraction in the construction sector is not unique to the third quarter of 2022. Though Turkey's economy, has been growing under the leadership of construction for many years, the construction sector has contracted in 14 of the last 17 quarters as of December 2022.
- In other words, since the summer of 2018, construction has only been able to grow for 3 quarters. Another construction-specific change in GDP data is noticeable. The construction sector's, share in the overall economy increased from 4% to 9% in the 2000s but it has been rapidly losing this weight in recent years.
- As of 2017, first the sector began to lose momentum and then began to contract. In this process, the share of construction in the economy also declined and decreased to 4.8% in the first 9 months of 2022. This is the lowest value since 2003.
- In other words, the share of the sector in the economy has returned to about twenty years ago. In order to return to growth in the sector, there is a need for a revival in construction investments and a solution to the problem of an increase in chronic input costs.
- As of mid-year 2022, Istanbul has a 68.8% occupancy rate, followed by Antalya with a 57.2% occupancy rate. As a result, there was a greater need for hotel building in these cities. 100,700 square metres of warehouse trades were reported for the first quarter of 2022.
- Therefore, 553,671 sq. m. was the overall transaction volume for the year's first three quarters. Currently, there is a shortage of suitable warehouses and a significant demand for facilities with sizable interior spaces. As a result, the industrial sector will see a rise in building activity due to the limited availability and rising demand for suitable warehouses.
- The commercial construction sector in Turkey is driven by increasing demand for office space, warehouses, hospitals, shopping centers, and hotels. The lodging industry's recovery reached new levels in the first half of 2022, despite increasing global economic and geopolitical uncertainty. The recovery continued to favor leisure and resort destinations.
- Urban markets also saw greater momentum as more employees returned to the office and leisure travelers returned to city centers with the lifting of mask mandates and restrictions. As of mid-year 2022, 16.4 million foreigners visited Turkey. The highest number of foreign visitors was recorded during June, with more than 5 million visitors. While the number of foreign visitors increased by 185.7% compared to the previous year, it was 9.5% below the pre-pandemic period, but nevertheless signalled an accelerated recovery.
- Due to COVID-19, the construction industry in Turkey was the most negatively impacted industry. Due to the epidemic, Turkey's locomotive industry, the construction sector, was through some very trying times.
- Work had ceased at several construction sites, and many companies were attempting to finish their projects remotely or on a rotational basis. With the easing of pandemic limitations, the industry is attempting to regain its prior vigour. Although the sector's financials are negatively impacted by growing prices and declining turnover, a rebound is anticipated depending on the actions implemented in the second half of 2021.
Turkey Commercial Construction Market Trends
Office Space Demand Fuelling the Market Growth
The commercial real estate market in Turkey has become an attractive option for investors due to the growing demand for offices since the pandemic's impact has reduced. While the existing Grade-A office supply in Istanbul remained stable at 5.8 million sq m GLA as of 2022 mid-year, there is approximately 1.5 million sq m office supply under construction and it is expected that the total Grade-A office supply will outpace 7.3 million sq m GLA by the end of 2023. Approximately 90% of the future supply consists of the Istanbul International Financial Centre project located in Ataşehir, which is expected to be completed by the end of 2022. Demand for office space remains strong, with the vacancy in the CBD continuing its downward trend for the fourth consecutive quarter. The vacancy rate decreased from 18% at 2021 year-end to 16.1% in 2022 mid-year. As occupier demand for quality space remains healthy, availability in premium office buildings continued to be limited in H1 2022.
A total of 37,781 sq m office take-up was realized in H1 2022. While take-up volume was 32% down in terms of size, the total number of new leasing transactions was 9% higher than the same period of the previous year. Levent in the CBD, and Kozyatagi, Libadiye and Ataşehir on the Asian side have become prominent in leasing activities. While prime office rent remained stable at 25 USD per sq m compared to both yoy and qoq, it increased sharply by 89.2% yoy to TRY 350 (USD 18.65) per month as of 2022 mid-year, as a result of a concentration of activity in the most central locations and the upward trend in inflation. In the third quarter of the year, the general supply in the Istanbul office market remained at 6,46 million sq. m. While total leasing transactions in the third quarter of the year were recorded as 106,118 sq. m. Thus, the total leasing transactions in the three quarter of the year reached 350,582 sq. m. This is a two-fold increase compared to the same period of the previous year. This growing demand for office space is fuelling the market growth.
![Turkey Commercial Construction Market - Number of Office Building Permits Issued, in Units, Turkey, Q1 2019 - Q3 2022](https://s3.mordorintelligence.com/turkey-commercial-construction-market/1675857514966_turkey-commercial-construction-market_Number_of_Office_Building_Permits_Issued_in_Units_Turkey_Q1_2019_-_Q3_2022.png)
Growing Retail Sector to Support the Market Development
The existing shopping center supply reached the level of 14 million sq m in 448 centers in Turkey as of 2022 mid-year. Shopping center openings, which accelerated in H2 2021, maintained their momentum. With approximately 120,000 sq m leasable area, a total of five shopping center projects entered the retail market during H1 2022. Currently, approximately 882,000 sq m GLA in 29 centers is under construction, adding up to 14.8 million sq m supply by the end of 2024. Istanbul hosts the majority of the supply with a share of 37%, followed by Ankara and Izmir with shares of 12% and 6% respectively. In the first half of 2022, shopping center footfall improved in comparison to 2021, though levels are still down compared to 2019. However, despite lower footfall, the turnover performance of shopping centers fully recovered to pre-pandemic levels. In April and May, in particular, the monthly turnover of many shopping centers surpassed 2019 levels of bairam and holiday shopping.
As of mid-year 2022, EUR-based shopping center rent remained stable at EUR 70 per sq m/month (USD 75.62 per sq m/month). However, TRY-based prime rent was recorded at TRY 1,050 (USD 55.95) per sq m/month, with a rise of 5% qoq and 50% yoy respectively. In the third quarter of 2022, the increase in demand in the retail market draws attention. Another reason for the increasing demand is that the number of foreign visitors after the pandemic almost caught up with the pre-pandemic period. Although increasing costs due to inflation and fluctuating exchange rates continued to affect the sector, significant occupancy rates were observed both in shopping malls and on main streets. There is an increase in rents in both USD and TL terms with this increase in demand in the retail market and limited supply. In the third quarter of 2022, it was observed that investors continued their growth strategies despite the difficulties in finding empty stores. Thus, the growing retail sector in Turkey will support the market development.
![Turkey Commercial Construction Market - Number of Wholesale and Retail Trade Building Permits Issued, in Units, Turkey, Q1 2019 - Q3 2022](https://s3.mordorintelligence.com/turkey-commercial-construction-market/1675857521976_turkey-commercial-construction-market_Number_of_Wholesale_and_Retail_Trade_Building_Permits_Issued_in_Units_Turkey_Q1_2019_-_Q3_2022.png)
Turkey Commercial Construction Industry Overview
The Turkey construction market is quite competitive, despite the major local and international players have created enough competitive environments in the sector. Still, the market opens opportunities for small and medium players due to increasing govt investments in the sector. The Turkey commercial construction market presents opportunities for growth during the forecast period, which is expected to further drive market competition. With large players competing with others for a significant share leaves the Turkey commercial construction market with no observable levels of consolidation.
A few key players in the market include ENKA Insaat ve Sanayi A.S., GAP Insaat, Yapi Merkezi Holding, Ronesans Holding, Albayrak Group, Yenigun Construction, and YDA Group. With loads of private/Public companies competing in the liberal regulatory environment of the construction sector, it is quite easy for any player, local, national, or multi-national to enter the market with ease and create its own share.
Turkey Commercial Construction Market Leaders
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ENKA İnsaat ve Sanayi A.S.
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GAP Insaat
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Yapı Merkezi Holding
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Rönesans Holding
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Albayrak Group
*Disclaimer: Major Players sorted in no particular order
![Turkey Commercial Construction Market Concentration](https://s3.mordorintelligence.com/turkey-commercial-construction-market/turkey-commercial-construction-market_1673275965375_market_concenration.webp)
Turkey Commercial Construction Market News
- December 2022: The European Bank for Reconstruction and Development (EBRD) will provide a long-term convertible loan of EUR 75 million (USD 79.5 million) to a subsidiary of Turkey's Ronesans Holding for hospital infrastructure investment. Ronesans Saglik Yatirim, the unit of the conglomerate that runs hospitals, will undertake to complete the newly acquired hospital project in their portfolio. Rönesans currently has five operational hospital projects in progress, with a combined construction area of 3.2 million m2 and a total capacity of 7,100 beds. Once all of these projects have been completed, Rönesans will reach a total capacity of 9,000 beds.
- August 2022: Construction of a new stadium has just begun in the Turkish capital, on the site of Ankara 19 Mayıs Stadyumu, which was demolished in 2018. The venue was originally planned to have a capacity of 55,000 spectators. However, the project has been skimmed and the arena will ultimately be able to accommodate 45,000 people.On June 13 2022, a deal was signed with the contractor, which became a consortium of Yıldızlar Grup and ASL İnşaat. The value of the contract is TRY 4.52 billion (USD 0.24 billion), all coming from public funds. Construction of the stadium is expected to be completed by 2025 at the latest. The auditorium will consist of high, two-tier stands, surrounding the pitch on all sides.
Turkey Commercial Construction Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Current Market Scenario
4.2 Technological Trends
4.3 Government Regulations
4.4 Value Chain / Supply Chain Analysis
4.5 Overview of Commercial Construction Market in Turkey
4.6 Brief on Construction Costs (average cost, office and retail space, per sq feet)
4.7 Insights into the newly office space completions (sq. feet)
4.8 Impact of COVID-19 on Turkey Commercial Construction Market (Analyst View)
5. MARKET DYNAMICS
5.1 Drivers
5.1.1 Office Space Demand Fuelling the Market Growth of Commercial Construction
5.1.2 Growing Retail Sector to Support the Market Development in the Turkey
5.2 Restraints
5.2.1 Shortage of Skilled Labour in the Construction Industry
5.2.2 Complex architectural designs or unique project requirements can pose restraints.
5.3 Opportunities
5.3.1 Governments is investing in infrastructure development projects
5.3.2 Green and sustainable construction
5.4 Industry Attractiveness - Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Consumers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitutes
5.4.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION
6.1 By Type
6.1.1 Office Building Construction
6.1.2 Retail Construction
6.1.3 Hospitality Construction
6.1.4 Institutional Construction
6.1.5 Others
7. COMPETITIVE LANDSCAPE
7.1 Market Concentration Overview
7.2 Company Profiles
7.2.1 ENKA İnsaat ve Sanayi A.S.
7.2.2 GAP Insaat
7.2.3 Yapı Merkezi Holding
7.2.4 Rönesans Holding
7.2.5 Albayrak Group
7.2.6 Yenigün Construction
7.2.7 YDA Group
7.2.8 Zorlu Group
7.2.9 Umut Construction Tourism Industry. ve Tic. Inc.
7.2.10 Sinpas GYO İstanbul Sarayları*
- *List Not Exhaustive
8. FUTURE OF THE MARKET
9. APPENDIX
9.1 Macroeconomic Indicators (GDP Distribution by Activity, Contribution of Commercial Construction to economy)
9.2 Insights on Capital Flows (investments in Commercial Construction Sector)
Turkey Commercial Construction Industry Segmentation
Commercial construction involves building projects that can be leased or sold in the private sector. These spaces can be anything from offices and manufacturing plants to medical centers and retail shopping centers.
The report provides a comprehensive background analysis of the Turkey Commercial Construction market, covering the current market trends, restraints, technological updates, and detailed information on various segments and the competitive landscape of the industry. Additionally, the COVID-19 impact has been incorporated and considered during the study.Turkey Commercial Construction Market is segmented by Type (Office Building Construction, Retail Construction, Hospitality Construction, Institutional Construction, and Others). The report offers market sizes in value (USD) for all the above segments.
By Type | |
Office Building Construction | |
Retail Construction | |
Hospitality Construction | |
Institutional Construction | |
Others |
Turkey Commercial Construction Market Research FAQs
What is the current Trukey Commercial Construction Market size?
The Trukey Commercial Construction Market is projected to register a CAGR of greater than 5% during the forecast period (2024-2029)
Who are the key players in Trukey Commercial Construction Market?
ENKA İnsaat ve Sanayi A.S., GAP Insaat, Yapı Merkezi Holding, Rönesans Holding and Albayrak Group are the major companies operating in the Trukey Commercial Construction Market.
What years does this Trukey Commercial Construction Market cover?
The report covers the Trukey Commercial Construction Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Trukey Commercial Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Turkey Commercial Construction Industry Report
Statistics for the 2024 Turkey Commercial Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Turkey Commercial Construction analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.