As the annual International Council for Shopping Centres (ICSC) European conference takes place this week in Istanbul, it is worth reflecting on one of the world’s newest global cities. Often portrayed as being located at a key crossroads between the east and west, Istanbul is a fascinating mix of two vastly differing cultures. This divergence is clearly echoed in the city’s retail market, where the centuries old Grand Bazaar sits alongside some of the most impressive new shopping centres in the world.
As we highlight in JLL’s Istanbul Retail City Profile, the retail market is revolutionising at a great speed. We are witnessing the development of some world class retail destinations, which are playing host to top international retailers, on both the European and Asian sides of Istanbul. On the European side, the preeminent commercial scheme is now the $2.5bn JLL let and managed Zorlu Center, which opened late last year. On the Asian side, the Galerie Lafayette anchored Emaar Square development, also leased by JLL, is scheduled to open shortly, creating a new landmark downtown destination.
Image: “The JLL leased and managed Zorlu Center”
Istanbul is a regional powerhouse, partly a result of two trends that we have identified that are redefining the global retail market. The first, urbanisation, is a truly global phenomenon. While half of the world’s fastest-growing large cities are in Asia, Eastern Europe and the Middle East are also witnessing rapid urbanisation, with Istanbul at the forefront. In 1960, the city had a population of one million, today it is over 13 million!
Istanbul also looks set to benefit from a second trend, multi-speed economic growth. Turkey, along with Russia, looks set to outperform the rest of Europe economically in the medium term. The expanding macro-economy, favourable demographics and rapidly-growing middle class are driving the development of Turkey’s, and specifically, Istanbul’s retail market, which looks set to remain an attractive destination for international retailers, real estate investors and developers alike. As always, however, where there is opportunity, risk is never too far away, as highlighted by the recent geo-political instability in the region.
But despite, and maybe even because of these risks, Istanbul remains the perfect place for the ICSC to host its annual European Conference. The conference brings the biggest names in the shopping centre industry together, to discuss the latest challenges and trends facing the European retail market. I, for one, cannot think of a better place to witness these trends first hand than in the cultural and retail melting pot that is Istanbul.
James Brown is JLL’s Head of European Retail Research. He advises international investors and occupiers on their retail real estate strategy across Europe.