Last Updated on 09/03/2023
Purchasing commercial real estate in Turkey entails a variety of options. In reality, investors have a wide range to choose a commercial property that offers a sıgnificant return on investment, such as a hotel, restaurant, or retail. Experts claim that investing in commercial real estate in Turkey may involve much more dangers than doing so for residential properties. Yet, the monthly return on investment is higher and the profit is more interesting. Additionally, it ensures high, stable, and assured rental income.
What is Commercial Real Estate?
According to Investopedia, any real estate used for commercial purposes is referred to as a commercial real estate. We can note hospitals, manufacturing facilities, storage facilities, retail establishments, office buildings, and any other place for a business organization.
Types of Commercial Real Estate in Turkey
Keep reading to find out what are different types of Commercial Real Estate in Turkey and their features
Features of Commercial Real Estate?
Commercial real estate refers to real estate that is used specifically for commercial or income-generating reasons. It varies from residential real estate in that it can bring investors both rental income and capital growth. we can divide commercial real estate into 4 different types; offices, industrial areas, multifamily rentals, and retail.
Multifamily Commercial Real Estate in Turkey
The intermediary between residential and commercial real estate is multifamily buildings.
Although they can primarily be used as residences, the objective of this kind of property is generally for investment.
The range of assets in the multifamily asset class ranges from a duplex to an apartment complexes with more than 100 units.
Any property that generates money but is also used for residential purposes is considered multi-family commercial real estate in Turkey. A multifamily property, in contrast to single-family rental dwellings, must contain at least two units to qualify as such.
Among multifamily properties we can find:
- Duplexes and Triplexes
- Quadruplexes
- Garden condominiums
- Mid and high-rise apartments
Office Spaces
These commercial real estates are leased spaces found in office buildings and are used by enterprises to conduct their operations. An accounting firm or investment adviser may use the room as a general office. Other uses include a research lab or a dentist’s office.
We can find low, mid, and high-rise commercial office buildings as well.
A mid-rise structure is normally five to six floors high with an elevator. However, a high-rise building is more than six stories. Moreover, a low-rise building is only a few stories tall and typically does not require an elevator.
We can classify office buildings as follow
- Class A: Usually the best construction and location.
- Class B: Less desirable location, but with the construction that is comparable to Class A’s.
- Class C: Presumably dilapidated and situated in a less desirable area.
Industrial Spaces
As the name refers to, industrial commercial real estate is any property with industrial use. They are typically utilized as production, distribution, and/or logistics facilities, according to this definition. There are three types of industrial properties.
Warehousing Manufacturing Storage Logistics Showrooms Industrial CRE might encompass a range of structures that fall under the following categories:
- Huge facilities (50,000–1,000,000 square feet) utilized for product distribution are known as bulk warehouses.
- Flexible storage: Easily adaptable Space; also known as mixed-use
- Industrial manufacturing: Facilities for special use; most major manufacturers employ their assembly frequently utilized for office space, product assembly, and storage.
Retail
Retail properties in commercial real estate include big-box retailer centers, grocery, and restaurant retail facilities, as well as strip malls or shopping centers.
Is it advisable to invest in Commercial Real Estate in Turkey?
Investing in commercial real estate in Turkey might bring Impressive returns and important monthly revenue. It generally involves greater skill and larger capital from investors than does residential real estate, but it can yield substantial profits. Investors, though, could run into issues if they don’t fully comprehend the industry.
Moreover, you should know that the Turkish real estate industry, which also includes residential real estate, includes a highly developed sector that includes commercial real estate . As a result, this industry offers a wide range of solutions for different price ranges.
For instance, Istanbul has an 18 million-person population that is increasing at a rate of 5% annually. The future demand for real estate in Istanbul comes, consequently, from young and aspiring professionals and freshly married couples with or without kids. This market has a lot of potential for growth in terms of revenue. Therefore, you can anticipate affordable luxury residential and commercial properties.
Tips for Buying Commercial Real Estate in Turkey
Finding an adequate property takes time and effort because the money involved in these transactions is typically enormous. Purchasing commercial property yet is a big risk. so you’ll want the best team on your side to make sure you don’t mess up. And make sure you consider the following facts.
Investigate the Commercial Real Estate Market in Turkey
Entrepreneurs should consider where they are buying before deciding what to buy. Tax rates, land inventory, and environmental concerns vary according to the local market. It’s important to take into account the availability of trained labor in the region.
Cooperate with an expert
As affordability is a significant problem in commercial real estate nowadays, you should consult an accountant to establish your budget before visiting a bank. Be sure to account for all potential charges in your budget.
Real estate deals might involve complicated tax operations as well. Consultation with a knowledgeable advisor in commercial real estate transactions is crucial for this reason.
For instance, an experienced consultant will be able to inform you if the purchase qualifies as a business or personal transaction. Planning for succession, transition financing, and decisions regarding how to divide assets are additional concerns when buying commercial real estate in Turkey.
Make sure you have good financing
It’s difficult to get authorized for commercial real estate financing. Lenders will want accurate financial records and proof that your business is keeping all of the profits they lend you. All of this will have a significant impact on whether you are approved for the commercial real estate loan you need.
Moreover, it makes sense to compare finance offers. Remember that while the interest rate is significant, it is not the only factor to consider. you should evaluate other considerations like the percentage of the acquisition that a financial institution is ready to finance.
Also, you should resist the urge to influence lenders with overly positive projections because payment issues in the future could increase costs and limit your flexibility.
Choose the right partner
You want to search for reputable, who pays attention to your needs. Experience, promptness, and industry understanding are important qualities of good constructors.
For instance, the developer you choose should be knowledgeable about the food industry if your building needs to meet industry standards. The developer’s financial background should also matter. You don’t want, for instance, a contractor taking your deposit to pay for a past job they couldn’t finish. Check your credit history if you have any concerns.
FAQs about Commercial Real Estate in Turkey
Which commercial real estate is the most profitable?
The answer to this question is based on the reason you are buying the business property. You should determine the required size, storage space, parking, and floor number based on the type of business. Also, the surroundings and location are crucial for growing your organization.
