"Turkey's impressive economic performance has attracted a flood of inward investment in recent years - close to $10bn-worth in 2005 - as multinationals have sought to cash in on the potential of a fast-growing country with a young population and a prime geographical position between Europe and Asia. European Union membership is on the horizon, albeit challenged by some member countries, and a solid reformist government is in power. Inflation has been brought under control, growth has been strong, at about 7 per cent, and a series of strong home-grown business has sprung up."

The Observer

"There are optimistic noises from Turkey, where the economy is booming, interest rates have been reduced to 15-16 per cent, inflation continues to decline and the level of direct foreign investment has increased dramatically."

The Telegraph

"Beyond the headlines and package-deal brochures there is another, attractive side to Turkey that will appeal as much to those seeking a luxurious holiday retreat as to the shrewd investor"

The Times

"In Turkey, the signs of economic revival and modernisation are everywhere."

The Guardian

"There may be a bit of steadying of prices, but it's still an excellent time to buy: it's much cheaper than other countries on the Mediterranean, and it offers a lot more than the Balkans in terms of climate, infrastructure and the exotic element."

The Times

"Moscow, Istanbul displace London, Paris as top for property investing
Survey of 485 real estate investors sees UK capital slump to 15th spot on fears over exposure to financial sector.

LONDON (Thomson IM) - Moscow and Istanbul have displaced London and Paris as the top-ranked cities for real estate investment prospects, according to a PricewaterhouseCoopers survey published today.

This is the first time in the survey's five year history that London has not featured in the top two. Paris still makes the top five behind Hamburg and Munich, but London has tumbled to 15th in the rankings from second in 2007.

Moscow and Istanbul also topped the development prospects league table, as survey respondents cited the need to investigate new markets. However, Moscow was ranked the riskiest city in the survey, followed by Athens and Budapest.
The survey appears in PWC's report, Emerging Trends in Real Estate Europe, co-published with the Urban Land Institute. It reflects the views of more than 485 property market participants including investors, developers, property companies, lenders, brokers and consultants.

London has been hit by concerns over its exposure to the financial services sector, with the credit crunch expected to dent growth prospects. 'Fewer bankers means less office space,' said one survey respondent. '[There is a] lack of clarity as to the amount of grey space that financial services companies are sitting on,' said another. A third added that London was too expensive for new acquisitions, and London's sell recommendations for its retail segment were the highest for all of the 27 European cities in the survey, at 33 pct.

John Forbes, PWC's UK real estate leader said that the UK economy was a big concern for respondents, but added that opportunistic investors who had been priced out of the market in recent years are looking to come back, as the market is 20-25 pct down on last summer. 'Although confidence levels in the financial services sector are currently very low, the key question is how quickly they will recover. Business sentiment in December was very gloomy indeed,' he added.
Conversely, Moscow is seen as attractive because of its strong rental growth, with an 80.9 pct buy recommendation for retail property, and a continued shortage of modern office space. 'This market has huge depth and breadth, nobody has begun to scratch the surface,' said one respondent.

Another noted that 'prices have gone crazy, but will stay high as long as oil stays high' whilst a third observed: 'Moscow will always be a great opportunity, though it is a difficult market - a lot of the land is highly priced.' Office real estate had a 76 pct buy recommendation from respondents whilst the hotel segment achieved a 75 pct buy recommendation.

Forbes said that investors seemed willing to accept Moscow's high risk ranking because the returns were so good: 'This is very much driven by economic fundamentals - Russia and Turkey are the top two in the survey in terms of GDP growth so the economic story is very strong, particularly in Russia, with the oil price so high.' However, he added that a number of investors had said that they wouldn't look at Russia and Turkey because they didn't think the risk was priced in properly.

Istanbul achieved ratings significantly higher than its 2007 scores, with buy recommendations at 85 pct for office space, 77 pct for industrial/distribution real estate and 74 pct for retail. One respondent commented that Turkey was 'the India of Europe' and PWC said many respondents were looking to expand their presence in Turkey or enter the market.

Germany had the best showing on a country-wide basis, with top 10 entries in the investment prospects league table from Frankfurt and Berlin as well as the third- and fourth-placed Hamburg and Munich. Hamburg scored particularly well in the hotel segment. 'We saw Munich and Hamburg climb up the rankings dramatically last year, and Berlin and Frankfurt, which have previously been at the bottom, are now moving up in terms of investor sentiment,' said Forbes.

But he questioned whether this represented an opportunity or a missed opportunity - that is, whether the investors who had made money on the German recovery had already sold out. 'It raises a similar question with Moscow and Istanbul - if everyone thinks it's a good idea it's possibly too late. It depends how long a view you are taking.'

Paris held on to a top five ranking due to improvements in the office segment, and reasonable rental growth. But other respondents were more sceptical, regarding the city as expensive.

The bottom-ranked markets included Dublin, Budapest and Athens, with Dublin scoring a 30 pct sell recommendation in its retail segment and a 29 pct sell recommendation for its office space. 'Ireland will have huge difficulties,' said one interviewee, echoing the sentiments of others.

Athens was criticised for being a difficult place to develop big projects, prompting developers to look outside in smaller towns. '[The] general institutional framework for real estate in Greece is quite limiting for new investment,' said one respondent citing tax and investment laws. 'Town planning is difficult. Change will be very, very slow.'"

PWC