Shopping Malls in Turkey and Retail Legislation
HERDEM Attorneys At Law - Istanbul Office
|January 10, 2014|
Previously published on January 10, 2014
Number of shopping malls and visitors also their value have still been on rise.
Investment in Shopping Malls Still Advantageous
To start with, Turkey has been becoming a “shopping mall heaven” ever since 1988 which is the time that the first shopping mall was built in Turkey. The shopping mall sector is now twenty five years old, and has an effective acceleration. Shopping mall industry has reached the turnover of fifty billion Turkish Liras annually in 2013. And Turkey has now a dominant position in Europe as second highest number of shopping malls in Europe (after Russia). Considering Turkey’s current situation e.g. young population, rise of retail sector etc, it seems that the number is gong to increase day by day.
In fifty seven of all Turkish Cities, there are totally or more than 327 shopping malls. Turnover of shopping malls in Turkey has reached 12% and expecting to rise more than that in the future years because there are increasingly continuing investments in Shopping Malls nowadays by funds, banks and foreign investors.
In addition, Turkish retail and shopping mall sector has becoming more attractive for investors in last ten years. Despite crisis in European Union and United States real estate, Turkey has becoming a new market for the foreign investors.
Besides, investors started to invest mostly in Istanbul compared to other cities in Turkey because of population growth, immigrations from the countryside of Turkey and modernization of real estate and retail sector. Especially, modernization of the retail and real estate sector has a significant role so that Turkey has been attracting investors in the recent years.
Although Istanbul is regarded as Turkey’s biggest shopping mall market, the city, especially the districts where the population is dense, seems crossed the saturation line in regard to number of shopping centers. And there are more on their way to be built; because of that investing in Anatolian cities e.g. Bursa, Antalya and even eastern cities of Turkey which have no shopping malls may provide new gateway for investors to earn much.
On the other hand, in 2014, thirty five more shopping malls are expected to be put into service valuing seven billion Turkish Liras. Therefore, shopping malls seem profitable in the upcoming years too.
The New Law is On the Way
Turkey has not a specific law defining shopping malls and retail sector yet. However, in the middle of 2013, a new draft of a law started to be discussed. The draft is expected to bring new standards in regard to branding, payment terms, competition and force retail sector agents to use software called PERBIS (Perakende Bilgi Sistemi). The draft law is on the agenda of Turkish Grand National Assembly (TBMM) Commission.
In addition, the draft law defines several concepts as shopping mall, chain store and fast moving consumer goods etc. Besides, in the shopping malls allocating place for merchants and craftsmen will be compulsory according to law.
Finally, as an advantage, some incentives to be released by Council of Ministers of Turkey are foreseen in the draft law. Therefore, if the draft law comes into force it is obvious that the sector will have standards and provide investors a guideline to come more confident to invest in.
In despite of fluctuates in Turkish economy, investing in shopping malls seems still advantageous regarding the rise of the sector. Because Istanbul now has many shopping malls, almost 100, it seems quite profitable for investors to invest in developing districts in Istanbul or other cities in Turkey. Considering the new law to be expected to come in to force in 2014, the retail sector and shopping malls will have standards so that sector will be more modernized.
The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
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