Istanbul

• The population of the metropolitan area including the city and some of its suburbs is approximately 15 million.
• Average annual capital growth of 30%.
• PricewaterhouseCoopers and the Urban Land Institute have officially named Istanbul as the second best place to invest in property, behind Moscow.
• Forbes, in the US, says Istanbul has the fourth highest number of billionaires in the world.
• Global Property Guide says city-centre residential rents in Istanbul range from $1,850 per sqmto $2,500 per sqm, giving yields of 6.32%-7.58%.
• Global Property Guide says rental yields in the suburbs range from 6.5% to 8.8%.

The increasing interest from private equity funds in Istanbul's high performing property market has really started to gather pace at the beginning of 2008. Major multi-million pound deals have been struck over the last 6 months as the funds seek to cash in on the market described by Price Waterhouse Coopers as:

"Europe's top investment for overall returns"

At the heart of this phenomenal growth story are a few olid and very real factors, namely the huge population of Istanbul at around 15,000,000 and the fact that this population have only just got access to mortgages for the first time in the country's history.

Official figures reveal a massive short fall of modern housing and suggest that a supply/demand balance won't be reached until 2015 and it is these solid, measurable factors that make Istanbul Europe's top investment spot with 20% annual growth.

Within this high growth environment there are some very interesting segments that deserve special attention. Foremost amongst these is property aimed squarely at the lower middle classes who have been largely overlooked by developers keen to build for the upmaket "luxury" sector.

ISTANBUL TIPPED AS ONE OF THE MOST DYNAMIC EMERGING PROPERTY MARKETS IN EUROPE

Istanbul might not be on the top of the list of the world's most expensive cities, at number 37 [Source: Global Property Guide], but it has property to suit the taste and budget of a billionaire. Moreover, while there might be a global credit crunch, properties in Istanbul are proving popular with the younger demographic who are looking to use the new mortgage system. This has opened up the Turkish property market for Turkish nationals and buy-to-let foreign investors.

In 2007 PWC and the Urban Land Institute (ULI) picked out Istanbul as Europe's top performing property hotspot for overall growth and for capital returns. The reasons behind the growth of the property market in Istanbul are based on solid facts of supply and demand, population growth and availability of finance, i.e. real social factors as opposed to the speculative factors that are so often given for many other property markets.

Istanbul is an ancient and historic city and today 15 million people are trying to live in a space built to hold a fraction of that number. The government has instituted enormous plans to revolutionise the way people live in and move around the city. Key to this is the development of major new dormitory suburbs away from the overcrowded city centre.

Major new transport routes are joining these outlying suburbs to the rest of the city and it is these areas that the government foresees as becoming the future commuter residential heartlands of Istanbul. Whole sectors of society are now moving out of the crowded city centre to these well-planned satellite districts that offer far more comfortable lifestyle with their well-organised streets, parks and leisure facilities. These are aspirational areas highly desired by the wealthy middle class masses.