More Shopping Centers Planned For 2015 Despite Hitches

In spite of slowing growth in the number of shopping centers being built across the country, the union for shopping center managers announced on Monday that the Turkish retail sector will grow by 9 percent in 2015 and that new shopping malls will commence serving customers this year.

A report from the local real estate research company Eva Gayrimenkul earlier revealed that the growth in the number of shopping centers being opened slowed down in the first nine months of 2014, with contractors delaying or canceling projects. According to the report, the Turkish construction market expected 64 new shopping centers to open in 2014; however, only 16 malls were in operation as of September. In addition, the construction of the remaining 48 malls was unlikely to be completed before the end of the year, according to the report.

Nonetheless, Vahap Küçük, the head of the Turkish Federation of Shopping Centers and Retailers (TAMPF), held a press conference on Monday in which he put the growth rate for the retail sector in 2015 at 9 percent. Noting that the sector grew by 9 percent in 2014 and 20 new shopping centers will commence operations this year, Küçük said the size of Turkey's organized retail industry -- shopping centers, department stores and supermarket chains rather than local grocery stores -- will surpass $120 billion in 2015. According to Küçük, the size of the organized retail sector in Turkey amounted to $110 billion in 2014.

Addressing the challenges that the Turkish retail sector may face in 2015, Küçük listed economic and political turmoil in Russia, political conflicts in Syria and Iraq, plummeting global oil prices and the depreciation of the euro against the US dollar as the main factors responsible for weakening the bargaining power of foreign visitors in Turkish shopping centers and increasing production costs for Turkish producers. Clarifying his comments, Küçük said that though Turkish producers mostly pay for intermediary products in dollars, they get paid in euros since a considerable amount of sectoral export is bound for European countries. Küçük also highlighted that upcoming general elections will have an effect on the sector.

In his presentation to the conference, HSBC strategist Fatih Keresteci said dipping oil prices might have contributed to the current account balance of the Turkish economy since the country is dependent on oil imports; he added, however, that the government should complete the reforms necessary to improve its economic structure.

(Cihan/Today's Zaman)