There is a saying in Turkish about Istanbul: Its stone and earth are made of gold. Never mind the historical wars fought over the city and the determination of the Turks to win it from the Byzantines — in modern times, too, governments have done all they can to make the most of its gold.
This story first appeared in the May 20, 2013 issue of WWD. Subscribe Today.
The result? “This city has not one square meter left to expand,” said Mücella Yapici, deputy secretary of the Chamber of Architects.
The AKP government, committed to neo-liberal policies, disagrees. Urban transformation projects suggest Istanbul has lots of potential for expansion, and more growth and wealth. The government is changing planning laws to address the complaints of the chambers as it goes ahead with the plans. Taksim Square, the heart of the city, is being dug up and remodeled, and the contract for a new airport, said to be Europe’s biggest, has gone out for a record price. And that is just one of the government’s grand plans, often personal dreams of Prime Minister Recep Tayyip Erdogan, referred to by some Turks as “crazy projects.”
One thing’s for sure: The gold mine of the city is no longer industry or production, it’s construction, real estate and retail. That’s currently the biggest wealth-creator in Turkey after the textile industry, and by far the biggest in Istanbul, the locomotive of the economy.
Whatever the potential problems in the long term, Turkey’s growing wealth is becoming increasingly attractive for foreign investors, especially in light of economic regression in Europe.
“There are many new brands that are coming to Turkey due to economic growth, particularly on the retail real estate sector,” said Kerim Cin, managing partner of Colliers International real estate firm in Turkey. “In the last 10 years, many shopping malls have been built in Turkey, luring many brands. But the number of malls is excessive at the moment, and not all of them are successful. So it is very common for brands to move toward the streets where there’s more foot traffic.”
He noted that the most popular regions for brands are Nisantasi for the high-end, Beyoglu for more moderate and bohemian boutiques, and Bagdat Street for both.
Zadig & Voltaire has wanted to come to Turkey for some time and was looking for the right place. Sahar Kadra, area manager of the brand, said they waited to find a location on Abdi Ipekçi street, the Nisantasi street famous for high-end brands. “We chose Istanbul because it’s becoming more fashionable,” she said. “Abdi Ipekçi is a prime location for us because it’s an old neighborhood with very Europeanized residents. Eighty percent of our clients already knew our brand because they are always traveling.”
Zadig & Voltaire is already opening another shop on Bagdat Street. The company had to move from its original building on Abdi Ipekçi temporarily, due to renovations. This highlights one problem with high-street stores in Istanbul: “Many of the buildings on the shopping streets in Istanbul are old, and their ground floors are small, not very suitable for shops,” said Cin. “That’s one issue that the urban planners want to sort out.”
Still, brands from H&M and Converse to Dirk Bikkembergs and Moncler are attracted to the city.
“Istanbul is a growing market and Bikkembergs is a growing brand. This year it will open 45 shops around the world. And it will quadruple its shops in Istanbul in two years,” said Emin Acar, owner of the first Bikkembergs shop that opened in March on Abdi Ipekçi. Two more shops are planned for high-end venues, one at Kanyon mall and the other on Bagdat Street.
In the first quarter of 2013, 11 malls opened in Turkey, and 14 are under construction. Out of 306 malls in Turkey, 92 are in Istanbul. Some, like Kanyon and Istinye Park, have won international awards.
“Those who first come to malls also want to open another store on a popular street,” says Nihat Sandikçioglu, general secretary of the Shopping Mall Investors’ Foundation.
Population: 13.8 million
Population change, last five years: +1.8 million (13 percent)
Projected population, next five years: 15.5 million
Per-capita income: $18,000 (2011 figure)
Key industries: Finance retail, construction, tourism, freight (cargo shipping), textiles
Growth sectors: Retail and construction
Number of malls: 92
Mall developments: 14 (nationally)
Major projects: Third airport; Galataport (a port in Karakoy, near Taksim, for cruise ships along with mall developments); a third bridge over the Bosphorus; mall in Taksim as a part of urban transformation in the region; Marmaray (railway under the sea that will connect Europe and Asia).
HOT SPOT: TAKSIM SQUARE
Taksim Square, the heart of Istanbul, opens onto the famous pedestrian Istiklal Street, once the Grande Rue de Pera. It’s still the city’s cultural center. It has the highest density of cinemas and galleries, hosts film festivals and biennales, and its new clubs have lured smart-set Turks to Beyoglu. In the last five years or so, it has also become a shopping center. A million people visit every day and two million on weekends, according to the Beyoglu municipality. Naturally, it’s a magnet for brands, even if only for visibility. It’s still a hub for midmarket chains and bohemian shops, with the exception of the newly restored side street toward the Galata Tower, where Turkish designer shops cluster.
Change is coming, though, driven by government plans for urban transformation. Soon, there’ll be a huge mall in Taksim; road traffic will be redirected underground; old stores will disappear, and the whole area is seen as shifting upmarket.