Istanbul’s high streets see sharp increases in rents

ISTANBUL

In the high street market, which is dominated by Istanbul's three most popular shopping streets, high occupancy rates and high demand led to significant increases in rents in 2023, according to a report by Cushman & Wakefield.

In 2023, the most visited street was İstiklal Avenue, the most expensive street was Abdi İpekçi Street and the street with the highest number of foreign brand leases was Bağdat Street, according to the study.

Average footfall increased on all streets compared to 2022, the report said.

Last year, the weekday footfall was 207,000 on İstiklal Avenue, while on weekends the footfall was 313,000. On weekdays some 144,000 people visited Bağdat Street, on the Asian side of the city, but this figure was 130,000 on weekends.

The footfall on weekdays and weekends on the streets in the Nişantaşı area on the European side were 82,000 and 96,000, respectively.

Istanbul's high streets recorded a 66.7 percent year-on-year increase in primary rent in the U.S. dollar terms, according to the report.

The monthly prime rent on Abdi İpekçi Street on the European side of the city was $220/month in the fourth quarter of 2023, pointing to a 100 percent increase from a year ago.

It was $200 for İstiklal, up 46.7 percent year-on-year, and $150 for Bağdat Street, rising 150 percent.

Abdi İpekçi Street became the most expensive street again, replacing İstiklal Street, which had been the most expensive street for 13 years, the report said.

For comparison, the prime rent on London’s Bond Street grew 11.5 percent to $2,480, while the increase was 2.86 percent for Champs Elysees in April to $1,395.

Due to supply constraints and high rents on the streets, stores, especially in the food and beverage sector, have spread to the side streets connected to the high street, the report said.

Most transactions are in the apparel-shoes-bags category, followed by the food and beverage (F&B) category, and 40 percent of stores that were vacant the previous year were leased.

Domestic brands dominate more than 80 percent of the market.

As in the previous year, in 2023, the highest number of foreign brands was recorded on Bağdat Street with 21 percent, followed by İstiklal Avenue with 16 percent and the Nişantaşı area with 15 percent.

In the first quarter of 2023, due to the earthquake disaster, urban transformation works increased compared to the previous year, especially on Bağdat Street, the report said.

These regulations are expected to have a positive impact on the retail sector, with new buildings to be added to the supply in the coming years, it added.