Europe -  Istanbul, Turkey

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Located on the Bosphorus strait, and lying on both the European and Asian sides, makes Istanbul the world’s only dual-continent metropolis. The Old City has most of the historic monuments that drive leisure demand, including the Aya Sofya, the Sultan Ahmet Mosque (the Blue Mosque), the Basilica Cistern, the Hippodrome, Topkapi Palace, Suleymaniye Mosque, the Grand Bazaar and the Spice Market. Meanwhile, with its skyscrapers and shopping centres, the New City is the modern face of Istanbul, although it does retain some of the city’s history with its wooden houses bordering the Bosphorus and historic sites such as the Dolmabahçe Palace and Clock Tower, Galata Tower, Nusretiye Mosque, Yildiz Palace and Rumeli Fortress. As well as leisure demand, the city also attracts numerous corporate travellers. The Levent and Maslak financial districts are home to the headquarters of Turkey’s largest companies and banks, as well as the local headquarters of global giants of the financial sector. The 2020 UEFA Champions League Final was originally scheduled to be played at the Atatürk Olympic Stadium in Istanbul on 30 May 2020. The final was postponed and relocated to be played in Lisbon on 23 August 2020, behind closed doors, due to the pandemic. Instead, Istanbul will be hosting the 2021 UEFA Champions League Final, scheduled for 29 May 2021.

Hotel demand in Istanbul plummeted in 2016 and 2017 due to the coup d'état attempt in July 2016 and various terrorist attacks, the last major one being a shooting at an Istanbul nightclub on 1 January 2017. In 2018 and 2019, as stability returned to Istanbul, the market experienced an impressive recovery, resulting in strong RevPAR rebounds of 23.3% and 12.8% in euro terms (73.9% and 24.5% in local currency), respectively. Moreover, the continued depreciation of the Turkish lira, coupled with favourable government actions, such as the development of a new airport that opened in April 2019, resulted in a demand boost for the city, mainly from international visitors. The city has also benefitted from the return of Russian tourism after the flight ban was lifted in September 2016.

Istanbul’s strong cultural appeal as a tourist destination typically generates substantial foreign visitation (which accounts for roughly 65.0% of arrivals), although the city also benefits from around 30.0% of corporate demand. Whilst in the longer term we expect this market to regain its appeal as a prime investment market, the country’s current economic and political instability, reflected in high consumer price inflation and fluctuating GDP forecasts, are key short-term restricting factors.

Nonetheless, a modest pipeline, respectable progress in administering vaccinations (10.5% of the population as of 1 March 2021) and the continued depreciation of the Turkish lira could prompt a speedy recovery of this market. Owing to the pandemic and economic upheavals, the number of hotel transactions in the city remains muted, with no major single asset or portfolio sales since 2010. Our 2020 Hotel Valuation Index indicates a value drop of 23.5%, in euro terms (3.1% in local currency), for properties in Istanbul.

Change In Value For Market: (€Euro)

Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
[email protected]
  • +44 20 7878 7722 (w)
Nikola Miljković
[email protected]
  • +44 20 7878-7721 (w)
  • +44 7 593572865 (m)