Istanbul's Need for New Office Districts

Istanbul, Turkey's economic heart, strategically enables companies operating in Europe and the Middle East to establish their management offices. Therefore, the city is positioned to become one of the world’s key business hubs. Real estate investment reports also highlight that, after Moscow, Istanbul is the most promising city for real estate investments, supporting this expectation. However, to achieve its goal of becoming an international center, it is essential to create work environments in Central Business Areas (CBAs) that meet international standards.

At Propin Property Investment Company, we categorize Istanbul’s office buildings under 12 office regions. The locations of these regions and their transport axes are shown on the map below.

Our studies show that the vacancy rate in office buildings along the Büyükdere Avenue Axis, within the CBA, is around 4.5%. It can be noted that this vacancy rate was around 14% during the same period in 2007. It is evident that demand in the Istanbul office market has significantly increased compared to the same months last year. With the depletion of the existing stock, both intermediaries and end-users in the commercial real estate sector are complaining about not being able to find buildings that meet the demand for “qualified office space.”

The occupancy rate in the Levent region is almost 100%. The primary reasons for the high demand in this region are the ease of access, established technical infrastructure, developed social environment, organized construction, and the high-quality buildings it offers. When examining the land stock in the region, it is almost completely depleted. The existing land stock pushes developers to be cautious about investing due to the high cost of land.

Recently, the inability to meet the demand for quality office space in both the current CBA and non-CBA office regions, the limited land available for new office projects in these areas, and the high land costs have led to another solution: “Creating new office regions.”

In Istanbul, where land is extremely valuable, we must learn from the past while developing new areas. For example, Maslak. The challenges faced in this region serve as a model for new office areas, and the lessons learned here should be avoided in the new regions to be developed.

Although Maslak has only a short history as an office area, around 10–12 years, it has experienced and continues to experience problematic processes. The rapid construction of tall buildings developed on irregular and fragmented ownership structures without considering surrounding parcels is the first noticeable mistake in the region. Projects built with the "I built it, so it's done" approach, without considering public spaces, leads to several issues in the short term. These challenges include the lack of public spaces, low accessibility, overburdening existing urban infrastructure, increasing density around the area, and imposing traffic loads. As a result, the region is often not a first choice for users when selecting an area.

In contrast, Ümraniye, which developed later than Maslak, is following a different growth path and continues to evolve.

Ümraniye is one of the newest regions developed to meet the demand for new office spaces. The region's development has accelerated over the last five years. The demand for the area clearly shows that the existing office regions cannot meet the needs of users. Its ease of access, both from the European and Asian sides and its proximity to the main arterial road, the TEM highway, are among the region's advantageous features. In the early 2000s, Bayer Pharmaceuticals became the first large international user to move its headquarters to Ümraniye. Over time, Citibank, Lafarge, Renault, and similar companies followed suit. Despite areas like IKEA and Meydan Shopping Mall, the region's most significant shortcoming remains the lack of social facilities. However, we foresee this deficiency being addressed over time.

As mentioned earlier, due to the land shortage in the CBA, there is a need to develop new office regions in Istanbul. To achieve international standards and transform Istanbul into a global center, these new regions must be supported by public spaces, be easily accessible, free from infrastructural issues, and offer high-quality buildings that meet user demands.

I will discuss the regions I predict will develop as office areas in my next article.