istanbul report

ISTANBUL CITY REVIEW

Euromonitor International

February 2013

I S T A N B U L C I T Y R E V I E W P a s s p o r t I

© E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Istanbul Review at A Glance ........................................................................................................ 1

Understanding Istanbul Review Structure ................................................................................. 1

Chart 1 Overview ...................................................................................................... 1

Key Facts on Istanbul ............................................................................................................... 1

Summary 1 Key Facts On Istanbul 2006, 2011, 2020 ..................................................... 1

Istanbul Highlights ........................................................................................................................ 2

History ...................................................................................................................................... 2 Delimitation of the Metropolitan Region .................................................................................... 2

Chart 2 Map Of Istanbul Metropolitan Area ............................................................... 3

Main Business Districts ............................................................................................................. 3 Economy of the City ..................................................................................................................... 4

Industrial Make-up .................................................................................................................... 4

Chart 3 GDP By Economic Sector 2011 ................................................................... 4 Chart 4 Industrial Composition Of Istanbul 2011....................................................... 4

Productivity ............................................................................................................................... 5

Chart 5 Productivity By Economic Sector 2011 ......................................................... 5

Recent Developments and Outlook .......................................................................................... 7

Chart 6 Dynamics Of Real GDP In Turkey And Istanbul 2006-2020 ......................... 7 Chart 7 Dynamics Of Real GDP And Population In Istanbul 2006-2020 ................... 7 Chart 8 Sources Of GDP Growth 2006-2011 ............................................................ 7

Consumer Profile .......................................................................................................................... 8

City Demographics ................................................................................................................... 8

Chart 9 Population By Age 2011 ............................................................................... 8 Chart 10 Drivers Of Population Growth In Istanbul 2006-2011 ................................... 9 Chart 11 Working Age Population (15-64): Selected Cities 2011................................ 9

Household Income .................................................................................................................. 10

Chart 12 Household Distribution By Income In Istanbul 2011 And 2020 ................... 10 Chart 13 Household Distribution By Income In Istanbul 2011 ................................... 10

Consumer Expenditure ............................................................................................................... 11

Structure of Household Budget ............................................................................................... 11

Summary 2 Istanbul Household Budget Structure By Consumer Expenditure Item,

% of total .................................................................................................... 11 Chart 14 Comparison Of Household Expenditure in Istanbul and Turkey ................. 12

City Lifestyle ........................................................................................................................... 12 City Affordability ...................................................................................................................... 13

Chart 15 Household Expenditure On Housing: Selected Cities 2011 ....................... 13 Chart 16 Household Expenditure On Transport: Selected Cities 2011 ..................... 14

Definitions ................................................................................................................................... 15 Appendix .................................................................................................................................... 17

Summary 3 GDP Development, 2006, 2011, 2016, 2020 .............................................. 17 Summary 4 GDP By Origin, Current Prices, TL, Million, 2006-2011.............................. 17

I S T A N B U L C I T Y R E V I E W P a s s p o r t I I


Summary 5 Population And Labour Force, 2006-2011 .................................................. 18 Summary 6 Employed population by economic sector, % of total, 2006-2011 .............. 18 Summary 7 Population By Sex And Broad Age Groups, „000, 2006-2011 .................... 19 Summary 8 Population Growth, 2006-2011 ................................................................... 19 Summary 9 Total Population, 2012-2016, 2020 ............................................................ 20 Summary 10 Population By Educational Attainment, 2006-2011 .................................... 20 Summary 11 Structure Of Consumer Expenditure By Main Category, 2006-2011 .......... 20 Summary 12 Consumer Expenditure By Main Category, Per Household, Constant

(2011) Prices, TL, 2006, 2011, 2016, 2020 ................................................ 21 Summary 13 Households By Income Band, % Of Total, Constant (2011) Prices

2006, 2011, 2016, 2020 ............................................................................. 22 Summary 14 Households By Income Band, „000, Current Prices 2006-2011 ................. 23 Summary 15 Inflation, 2006-2011.................................................................................... 24 Summary 16 Transport indicators, 2006-2011 ................................................................ 24 Summary 17 Tourism 2006-2011 .................................................................................... 25 Summary 18 Air Pollution, concentration in micrograms per cubic metre, 2006-2011..... 25

I S T A N B U L C I T Y R E V I E W P a s s p o r t 1


ISTANBUL CITY REVIEW

ISTANBUL REVIEW AT A GLANCE

Understanding Istanbul Review Structure

Chart 1 Overview

Source: Euromonitor International

Key Facts on Istanbul

Summary 1 Key Facts On Istanbul 2006, 2011, 2020

Indicator 2006 2011 2020

Share of Services (% of total GDP)

62.2 65.8 -

Total GDP (TL million, current prices)

208,554 362,465 962,822

Real GDP Growth (%)

7.3 9.2 5.1

Unemployment Rate (%)

11.3 11.8 -

Population: January 1st ('000)

11,333 13,256 16,388




ISTANBUL HIGHLIGHTS

Economy of the city:

Istanbul is one of the most manufacturing-orientated cities in the world: the share of the

workforce employed in manufacturing is comparable only to major cities in China;

Business services are emerging as the main driver of economic growth, even though the

category employed only 12% of Istanbul's workforce in 2011;

Healthy economic growth in Istanbul over 2006-2011 did not offer jobs to all those willing to

work: the number of workplaces increased by 0.4 million over the review period, while at the

same time the city's labour force expanded by 0.7 million.

Consumer profile:

Over 2006-2011, Istanbul's total number of inhabitants expanded by 17%, due to a positive

natural increase and internal migration; by 2020, the city's population should reach 16 million;

The city's inhabitants are the youngest on average among Europe's key cities;

In 2011, thanks to Istanbul's higher labour productivity and favourable demographics (larger

share of working age population), average disposable income per household was 50% higher

than in the remaining parts of Turkey.

Consumer expenditure:

In 2011, as a result of Istanbul's typically higher incomes, the proportion of household

expenditure on food and non-alcoholic drinks was lower in the city (18% of the average

household budget) compared to the rest of the country (23%);

Housing constitutes the single largest expenditure item in the city, with prices being 55% more

expensive in Istanbul than in the rest of the country;

Tourists and affluent households in the city drive consumer expenditure on restaurants and

hotels in Istanbul: measured per household, in 2011 it was 90% higher than in the rest of

Turkey.

History

Istanbul's key urban areas are located around the Bosphorus strait, in the lowlands of the

region. That is where the first inhabitants settled in the Ottoman era. The upper part of Istanbul

is occupied by forests, water catchments and other natural assets that need to be preserved in

order to maintain the city.

The population of the city has been increasing rapidly since the 1970s, due to active internal

migration in Turkey from east to west. The migration soon expanded the city into nearby villages

and forests, making it a truly global metropolitan region.

In order to achieve further sustainable growth of the city, there are plans to decentralise the

urban development of Istanbul and convert it into a polycentric metropolitan region. The city's

authorities are conducting a strategy of creating residential and employment sub-centres and

redeveloping the city's transportation. This should keep the commuting flows away from the

natural sources in the city's north.

Delimitation of the Metropolitan Region

Due to conflicts between the Turkish army and the Kurdish Worker's Party in the 1990s,

refugees migrated towards the larger cities and urban centres of Turkey. Today, Turkey is highly

urbanised (76% of the population live in urban areas), and has a relatively low level of rural

population.



The urban population is not distributed evenly in Turkey. Turkey consists of 81 provinces,

Istanbul being the most populous among them. Apart from Istanbul, the provinces of Ankara and

Izmir also serve as key urban centres. All three of these provinces are located in the western

half of the country, with Ankara being close to the centre.

According to the Metropolitan Municipal Law, Istanbul Metropolitan Municipality has exactly

the same boundaries as Istanbul province, with an area of 5,343 sq km. The Metropolitan

Municipality consists of 32 districts, which form separate local authority areas. In 2011,

Istanbul's population was 13 million people - 15% of the country's total.

Chart 2 Map Of Istanbul Metropolitan Area


Main Business Districts

Out of six million sq m of Class A office space in Istanbul, around 65% is clustered in the

European side of the city, while the remaining 35% of office space supply is scattered on the

Asian side. The office market on the European side contains the Istanbul Central Business

District, as well as other important clusters of business activities around the city's airport. The



East (Asia) side is generally cheaper than the European: rent per sq m in the Asian side totals

US$25-30, and US$35-45 on the European (except for the airport). Recently, the Asian side has

been expanding rapidly, and many new projects have been completed in the Umraniye district.

At least up until 2009, Istanbul was prone to political swings in the city's government, and the

emphasis on particular development projects depended on the city's mayor's political party. At

the moment, the two most important business districts in Istanbul are the Maslak and Levent

financial districts (on the European side of the city). The two districts are close geographically,

but being in different municipalities (local authority areas) they often rival each other in

skyscraper building. The highest skyscraper in Turkey at the moment - Sapphire Tower - was

built in Levent district in 2010, and is 261m high.

Teknopark Istanbul is a major development effort, initiated by the Ministry of Defence and the

Istanbul Chamber of Commerce. The completion of the first buildings, with 62,000 sq m of office

space, is scheduled for the beginning of 2013. By 2020, Teknopark should create YTL10 billion

(US$6.3 billion) in annual GDP, host 30,000 employees and provide of 950,000 sq m of office

space.

ECONOMY OF THE CITY Istanbul is one of the most manufacturing-orientated cities in the world: the share of the

workforce employed in manufacturing is comparable only to major cities in China;

Business services are emerging as the main driver of economic growth, even though the

category employed only 12% of Istanbul's workforce in 2011;

Healthy economic growth in Istanbul over 2006-2011 did not offer jobs to all those willing to

work: the number of workplaces increased by 0.4 million over the review period, while at the

same time the city's labour force expanded by 0.7 million.

Industrial Make-up

Chart 3 GDP By Economic Sector 2011

As % of country total


Chart 4 Industrial Composition Of Istanbul 2011

As % of total




Istanbul, which positions itself as the economic centre of Turkey, accounted for around 30%

of the country's GDP in 2011. Istanbul boasts sizeable categories of commerce and

manufacturing, employing over 30% of the city's workforce each.

Istanbul is home to most of the country's high value-added activities. Business services

activities in the city accounted for 46% of Turkey's sectorial GDP. For comparison, Ankara, the

second largest city in Turkey, created only 12% of the country's GDP in business services.

Istanbul is strengthening its position as a top business location for the offices of the world's

largest companies, as well as a convention destination. Istanbul is attractive due to its role as a

bridge between the West and the East. Turkey's rapid economic growth is another reason for

rising global interest in the city.

Productivity

Chart 5 Productivity By Economic Sector 2011

GDP produced per employee in TL


In 2011, productivity (GDP per employee) - a measure of economic efficiency - reached

YTL76,000 (US$45,000) on average in Istanbul, and was 81% higher than elsewhere in Turkey.

Business services push up the city's labour productivity particularly strongly, as GDP per

employee in business services in Istanbul is twice higher than in the rest of the country.

Istanbul's geographic position and the accumulated investment in transport infrastructure

definitely benefits the city, and reduces costs for those manufacturers focusing on exports. In

2011, 46% of the country's exports originated from Istanbul, and many exporters chose to locate

in the city due to its convenient seaports - eg, Ambarli handled 2.7 million twenty-foot equivalent

units (TEUs) in 2011 and ranked 48th worldwide by cargo volume.

In 2011, Istanbul recorded investment in R&D activities of YTL2 billion (US$1.3 billion), up

from YTL1.6 billion (US$1 billion) in 2010, and 36,000 people were registered as employed in

R&D. Spending on R&D in Istanbul constituted 19% of total Turkey's expenditure (Bursa in

Dogu Marmara region and Ankara are two other centres for R&D in the country), and supported

the development of high-value added service activities in the city.



Manufacturing

Manufacturing in Turkey is concentrated in Istanbul. The share of Istanbul's workforce

employed in the category (33%) is significantly higher than in the country overall (21%), or in

other major cities in the world. The share of the workforce employed in manufacturing is only

comparable to the largest cities in China (35-45%). In 2011, the city's manufacturing exports

reached US$59 billion.

Istanbul is a frequent choice for multinational companies wishing to transfer part of their

manufacturing to Turkey. The automotive industry is particularly well represented in Istanbul.

Examples of subsidiaries of multinationals operating in the region include Ford Otosan, Anadolu

Isuzu, MAN Otomotiv and Mercedes Benz Türk . The city has contributed to Turkey's becoming

the largest commercial vehicle manufacturer in Europe (560,000 units were produced in 2012).

Istanbul benefits from the growing importance of high value-added production by the

pharmaceutical and defence industries. Abdi Ibrahim, headquartered in the city, is a leading

pharmaceutical company in Turkey, and also one of the largest employers in the industry, with

nearly 3,500 employees. The newly opened Teknopark Istanbul is expected to become one of

the leading defence R&D centres in Europe, hosting more than 1,000 companies, with a total

workforce of 30,000.

The traditional textile and food processing industries remain important in the city as well. Ulker

(chocolate producer) and Marsan (margarine and other food producer) operate major plants in

the city.

Commerce

In 2011, commerce GDP in Istanbul amounted to over YTL101 billion (US$60 billion). The

category employed more than 1.3 million (or 32%) of the city's workforce, similar to the 33%

employed by manufacturing. The proportion of employment in commerce is slightly higher in

Istanbul than in the capital city Ankara (28%), and the share is comparable with that in other

largest cities in the world.

In 2009, out of the 22 largest Turkey's entities in logistics and transportation in terms of

revenues, 19 were located in Istanbul. Turkish Airlines topped the ranking with turnover of

YTL12.8 billion (US$8 billion) in 2012, up from YTL6 billion (US$3.8 billion) in 2009. The airline

carried nearly 33 million passengers and over 375,000 tonnes of cargo in 2011.

The transportation industry is facilitated by the key infrastructure assets of the city. Istanbul

Atatürk Airport, one of the busiest airports globally, handled over 37 million passengers in 2011.

As for sea transport, the Turkish Straits constitute one of the busiest waterways worldwide

(50,000 vessels per year), and suffer from chronic overload. An Istanbul Canal project,

introduced in 2011, could contribute to improving traffic in the Bosphorus, reduce transportation

costs and allow larger vessels to pass through.

Turkey's growing tourism industry is closely related to Istanbul: it is one of the most visited

cities in the country, as well as globally. Congress tourism is an important area: in 2011, Istanbul

was ranked ninth in the list of the world's top convention cities, having hosted 113 international

association meetings (compare with 76 meetings in 2006)., The city boasts a number of

convention and exhibition centres located in three clusters: the Airport area, the Conference

Valley and the Golden Horn. In 2010, the total closed area of existing convention and exhibition

centres was 335,000 sq m, providing auditorium capacity for up to 15,000 people.

Business services

Turkey's services category has emerged as one of the largest contributors to the country's

economy, and Istanbul is leading the charge. The city accounted for 47% of GDP growth in

Turkey's business services over 2006-2011.



In 2011, business services was still the smallest category in terms of employment in Istanbul.

Only 12% of the city's workers were employed in business services, a relatively low percentage

by world standards. The employment structure in the city is changing fast though: the total

Istanbul workforce expanded by 11% over 2006-2011, while the number of workers employed in

business services grew by 42%.

Istanbul is home to the headquarters of several of Turkey's and the world's largest banks,

such as Garanti Bank and Isbank, as well as a stock exchange. According to the city authorities,

Istanbul aspires to become the financial hub of the region spanning the Middle East and the

Balkans.

Istanbul aims to intensify its R&D activities in certain fields prioritised by the government, such

as defence or biomedicine. The city also houses a number of R&D centres of the world's largest

companies, such as Unilever and Huawei. R&D activities are supported by the growing share of

the city's population with higher education. The share increased from less than 7% of the

population aged 15 and above in 2006 to 9% in 2011.

Recent Developments and Outlook

Chart 6 Dynamics Of Real GDP In Turkey And Istanbul 2006-2020

2006 = 100


Chart 7 Dynamics Of Real GDP And Population In Istanbul 2006-2020

2006 = 100


Chart 8 Sources Of GDP Growth 2006-2011



% contribution to total growth


Both Istanbul and the rest of the country saw their real GDP growth slowing down in 2007,

and in 2009 growth turned into a contraction of 4-5%. The situation improved in 2010, with 9%

growth in the city as well as elsewhere in Turkey.

The city's labour force size expanded from nearly 4.3 million in 2006 to 4.8 million in 2011, in

part due to substantial migration to the city. Over 2006-2011, the city saw a net increase of 0.7

million in the number of immigrants.

Over the review period, Istanbul created 0.4 million new job places, which was too few to

accommodate the increasing labour force. Due to economic cycles, the unemployment rate

fluctuated between a low of 10% in 2007 and a peak of 17% in 2009. In 2011, unemployment

fell to 12% in the city; however, the rate remained higher than elsewhere in Turkey (9%).

Business services and public services provided most of the new jobs in the city.

GDP growth levels remained comparable in Istanbul and elsewhere in Turkey during the

review period. Over the upcoming decade, the trend is likely to change, with Istanbul

increasingly outpacing the rest of the country. By 2020, Istanbul's real GDP is predicted to have

grown by nearly 66% compared to 2011, while the figure for the rest of the country will only

stand at 37%.

CONSUMER PROFILE Over 2006-2011, Istanbul's total number of inhabitants expanded by 17%, due to a positive

natural increase and internal migration; by 2020, the city's population should reach 16 million;

The city's inhabitants are the youngest on average among Europe's key cities;

In 2011, thanks to Istanbul's higher labour productivity and favourable demographics (larger

share of working age population), average disposable income per household was 50% higher

than in the remaining parts of Turkey.

City Demographics

Chart 9 Population By Age 2011

% of total




Chart 10 Drivers Of Population Growth In Istanbul 2006-2011

% contribution to total growth


Chart 11 Working Age Population (15-64): Selected Cities 2011

As % of total


Over the 2006-2011 period, the population of Istanbul increased by 17%, which was more

than three times faster than in the rest of Turkey. The city's population reached 13 million in

2011. By 2020, the city's total number of inhabitants is projected to expand by a further 24% and

amount to 16 million.

Natural increase and net migration have both boosted Istanbul's population. Each year

between 2006 and 2011, the number of people born exceeded the death count at least fourfold.

Partly, the reason was Istanbul's relatively good healthcare service: in 2011, the Istanbul

metropolitan region had the lowest infant mortality rate among other first level administrative

regions in Turkey.

A demographic transition is clearly on the way in Istanbul. The crude birth rate fell from 18 per

1,000 population in 2006 to 17 in 2011. Age at first marriage was the highest in Istanbul among

Turkish regions, and a trend to delay marriage was increasingly evident in the city. In 2011,

males married aged 28 on average, compared to 27 in 2006, and females at 25, compared to 24

in 2006.



Internal migration to Istanbul is particularly significant. Between 2009 and 2011, Istanbul had

the greatest net (im)migration rate among Turkish regions. The majority of new arrivals come

from the Black Sea region, on the north coast of Turkey, mainly due to the region's geographical

proximity and the wage premium in Istanbul.

Istanbul's inhabitants are the youngest among major cities in Europe. In 2011, the population

aged 0-14 represented 24% of the city's total number of inhabitants compared to an average of

16% in the key European cities. The share of the elderly (aged 65+) constituted 6% of the total

in the metropolitan region, in comparison to 16% on average in Europe's main cities.

Household Income

Chart 12 Household Distribution By Income In Istanbul 2011 And 2020

Number of households


Chart 13 Household Distribution By Income In Istanbul 2011

Number of Istanbul‟s households in respective Turkey income decile

Source: Euromonitor International Note: Country income decile 1 corresponds to 10% poorest country households by income, decile 2 – to

second 10% poorest, etc.



In 2011, Istanbul's average disposable income per household reached YTL67,000,

(US$40,000) or 50% above the average in the rest of the country. The structure of Istanbul's

economy and favourable demographics lead to higher incomes in the city.

The city is responsible for a large share of the country's most value added activities, for

example, in 2011, 46% of GDP in business services in Turkey was produced in Istanbul. The

city's relatively large economically active population (determined by large immigrant inflows)

further boosts the city's employment rate and average income.

Istanbul hosts a large share of the country's most affluent population. In 2011, 20% of the

country's total households resided in Istanbul; however, among those with incomes of

US$100,000 and above, the share rose significantly, to 32% (or 128,000 households out of

402,000 in Turkey). In comparison, Ankara hosted 7% of all Turkey's households and 8% of

those with income above US$100,000.

CONSUMER EXPENDITURE In 2011, as a result of Istanbul's typically higher incomes, the proportion of household

expenditure on food and non-alcoholic drinks was lower in the city (18% of the average

household budget) compared to the rest of the country (23%);

Housing constitutes the single largest expenditure item in the city, with prices being 55% more

expensive in Istanbul than in the rest of the country;

Tourists and affluent households in the city drive consumer expenditure on restaurants and

hotels in Istanbul: measured per household, in 2011 it was 90% higher than in the rest of

Turkey.

Structure of Household Budget

Summary 2 Istanbul Household Budget Structure By Consumer Expenditure Item, % of total

Expenditure Item 2006 2011 2020

Food and Non-Alcoholic Drinks

18.0 17.5 16.8

Alcoholic Drink, Tobacco etc

3.1 3.5 3.9

Clothing and Footwear

5.4 4.1 3.4

Housing 20.6 25.5 25.4

Household Goods and Services

6.5 6.4 6.8

Health 5.2 4.3 4.3

Transport 15.5 12.6 13.4

Communication 4.3 4.9 5.6

Recreation and Culture

4.6 4.6 4.1

Education 1.5 1.9 2.0

Restaurants and Hotels

8.7 7.7 7.1

Miscellaneous Goods 6.6 7.0 7.2



and Services


Chart 14 Comparison Of Household Expenditure in Istanbul and Turkey

Difference in spending per household between Istanbul and the rest of Turkey, in %


The gap in average disposable income per household between Istanbul and other regions in

Turkey determines the key trends in consumer spending. Expenditure on necessities, such as

food and non-alcoholic drinks, accounts for a relatively small share of household spending in the

metropolitan region. In 2011, food and non-alcoholic drinks constituted 18% of the average

household budget in Istanbul and 23% in the rest of Turkey. This gap in average disposable

income per household is expected to expand further.

Higher incomes in Istanbul do not wholly compensate for high prices of real estate in the city.

In 2011, expenditure on housing accounted for 26% of consumer spending in Istanbul and 20%

in other regions of the country. According to the latest survey in 2008, the average price of

consumer goods and services in Istanbul was 14% higher than in the rest of Turkey, while

comparable housing services were 55% more expensive.

Discretionary spending (or total expenditure less spending on housing and food) has a

considerably higher share of the household budget in Istanbul than in the rest of Turkey. For

example, measured per household, expenditure on recreation and culture was 55% higher in

Istanbul than in the rest of the country in 2011. The corresponding difference in spending on

restaurants and hotels was 90%.

City Lifestyle

Istanbul: A New Attraction For Arab Tourists

The number of Arab tourists visiting Istanbul rises every year, with significant inflows during

Ramadan. In 2011, the number of visitors to Istanbul from Arab countries during Ramadan

surged by 20% compared to the previous year, to 62,000. The increasing popularity of Istanbul

among Arab tourists is partly a result of the Istanbul 2010 European Capital of Culture Agency's

promotional events. Istanbul is also becoming a popular destination for groups of Arab women



who enjoy shopping on their own accompanied only by a male chaperone. Istanbul expects a

further increase in Arab tourists over the upcoming years.

Istanbul is responding to increased tourist inflows from Arabic nations. For example, the

Turkish Ministry of Tourism is providing more tourist information in Arabic. Several of the city's

restaurants have already translated their menus into Arabic. Meanwhile, a restaurant that is

located in one of the most popular shopping malls, Forum Istanbul, has removed all pork meals

from its menu.

Istanbul is seeing overall growth in tourism. In the first half of 2012, the number of visitors

hosted by Istanbul rose by 70% from the same period of 2011. The booming tourism industry

contributes positively to spending on hotels and restaurants. In 2011, average spending per

household on hotels and restaurants in Istanbul was double that in the rest of Turkey.

Istanbul In Great Need Of Neighbourhood Regeneration

In the case of a strong earthquake, the numerous obsolete and unsafe apartments in Istanbul

pose a threat to millions of dwellers in 400 neighbourhoods. A large proportion of the city's

neighbourhoods are characterised by old, poor quality apartment blocks. According to the

Japanese International Co-operation Agency (JICA), more than a million homes must be

demolished or rebuilt over the upcoming 10-20 years. JICA has warned that any major

earthquake might cause around 90,000 deaths, 135,000 serious injuries and the devastation or

serious damage of 170,000 buildings.

The required reconstruction estimated by the JICA would displace nearly five million people,

the majority of these being poor tenants. Unless the Turkish government introduces subsidies

for rented housing, the resistance to neighbourhood regeneration is likely to be significant.

The need for neighbourhood redevelopment opens business opportunities for property

developers. According to PricewaterhouseCoopers' property markets analysis in 2012, Istanbul

is among the primary choices for real estate investors, as much of Western Europe continues to

struggle with the sovereign debt crisis.

Grand Bazaar - The Ancestor Of Shopping Malls

With 5,000 stores scattered over 60 streets, the Grand Bazaar (Kapalicarsi) in Istanbul is one

of the world's largest covered markets. Open since 1461, the Grand Bazaar is also renowned as

the oldest shopping mall in the world. Every day, the bazaar attracts between 250,000 and

400,000 visitors. The historic complex is home to a wide range of speciality shops, including

antique stores and jewellery boutiques which are said to be among the best in the city.

The bazaar offers not only a unique place to shop, but also provides numerous entertainment

opportunities. Visitors to the bazaar can enjoy a leisurely afternoon, sitting in cafés and

restaurants and watching people passing by. The complex hosts several fine restaurants,

including the grill house Gaziantep Bure Ocakbasi and kebab restaurant Kara Mehmet Kebap

Salonu. Moreover, active bargaining for the best purchase prices is considered among the best

ways to get experience the atmosphere of ancient Istanbul.

City Affordability

Housing

Chart 15 Household Expenditure On Housing: Selected Cities 2011

As % of total




Housing in Istanbul is considerably more expensive than elsewhere in Turkey. In 2011, the

average Istanbul household spent YTL16,000 (US$9,500) on housing, while in the rest of

Turkey average housing costs were only YTL9,400 (US$5,600). Housing expenditure is forecast

to increase in line with rising incomes: in 2020, housing is predicted to constitute 25% of

household expenditure, just as in 2011, despite a 23% increase in incomes.

The large share of young immigrants, the hectic pace of life and the high real estate prices

dictate household housing preferences. Only 58% of dwellings are owner-occupied in Istanbul,

compared to 68% in the rest of Turkey. According to a Colliers International report in 2012, prior

to the worldwide financial downturn in 2008, many of the high-end residential projects in

Istanbul's central locations were sold out as capital investment and supplemented the rental

market of the city. Today, many professionals with high incomes aim to purchase the

apartments for their own use, and demand for high-end residence development remains high.

The urban development of Istanbul is in its most intense phase, and the landscape of the city

is changing fast. There are around 50 neighbourhoods in which various projects are planned to

take place. For example, the Talarbasi renewal project includes demolishing almost 300

buildings to build new homes, hotels and other facilities.

Transport

Chart 16 Household Expenditure On Transport: Selected Cities 2011

As % of total


The average household in Istanbul spends 12.6% of its total budget on transport. The share

was as high as 15.5% in 2006, but the recent hike in unemployment in 2009 slashed the

spending allocated to transport. By 2020, driven by rising incomes, the proportion of expenditure

on transport should inch up to 13.4%.

The ancient city was not planned for cars, but it was truly meant for pedestrians. In 2011,

Istanbul suffered from major traffic congestion: research by TomTom (the Dutch developer and

producer of global positioning systems) listed the city as the most congested in Europe. Facing

the population and car ownership growth, government officials say the answer is a third

Bosphorus bridge. Many residents and experts remain sceptical, saying that more roads have

been shown simply to increase demand for cars. There are indications that, for example, an



additional bridge would only increase congestion levels and cause even greater traffic inflows to

the city.

Traffic conditions in this densely populated city are getting worse, while construction of a

modern mass transit system is only progressing slowly. Infrastructure projects include the

Marmaray undersea rail tunnel, which is part of a major planned upgrade of Istanbul's public

transport network. It will create a 13km long connection between the east and west of the

city.Currently, the city's rail system consists of four metro lines (75km network), and three tram

lines (36km).

With almost 2.9 million vehicles (of which 1.9 million are passenger cars), the city is struggling

to curb its pollution emissions. Since the 1990s, the industrial sulphur dioxide pollution has

decreased nine-fold, while traffic has emerged as the main emitter of carbon monoxide and

nitrogen oxides. PM10 pollution is primarily due to old-fashioned domestic heating.

The city's pervasive pollution issues are evident in the key air quality indicators. In 2010, the

annual mean concentration of large particulate matter (PM10) reached 50 micrograms per cubic

metre, well above the World Health Organization (WHO) recommendations (20 micrograms).

The 24-hour mean of PM10 (or the peak values of PM10) reached 266 micrograms, again

significantly above the WHO recommended 50 micrograms.

DEFINITIONS The definitions given are meant to disambiguate the references in the City Review reports.

The definitions are shortened versions and are more widely discussed in the Passport database.

Territorial Definitions:

Metropolitan region (or metropolitan area) – the terms refer to an urban agglomeration (the

contiguous, built-up area) with zones not necessarily urban in character, but closely bound to

the centre by employment. The metropolitan region is referred to as “the city” written in lower

case in the City Review reports (ie New York city, London city). By default, all statistical data

in the report are provided for the whole metropolitan region (unless specified otherwise).

Core city (or core urban area/central city) – refers to territory that emerged historically as the

most prominent in the urban area. Almost without exception, the name of the core city is also

shared with the urban area and the metropolitan area. In most cases, core city is a separate

municipality or local authority area. If the statistical data or discussion in the report apply only

to core city area, the text specifically indicates the territorial scope of the data discussed.

When the core city is referred to in the text, the term is always capitalised (ie “New York City”,

as opposed to “New York city”)

Employment:

Working age population – population aged 15-64 years.

Labour force (or Economically Active population) – all persons who furnish the supply of

labour for the production of economic goods and services (the total number of people

employed plus unemployed).

Labour force participation rate - all persons in labour force as a percentage of working age

population.

Employed population – the "employed" comprise all persons above a specific age who during

a specified period, were either in: (A) "paid employment"; (B) "self-employment".

Unemployed population – the ILO international standard definition of unemployment is based

on the following three criteria which should be satisfied simultaneously: "without work";

"currently available for work"; and "seeking work".



Unemployment rate – represents unemployed population as a percentage of the total labour

force.

Economic growth:

Real GDP – refers to inflation-adjusted measures that reflect the value of all goods and

services produced in a given year, expressed in base-year prices. The base year is 2011.

Sectors of economy:

Euromonitor International City reviews divide economic sectors into six broad aggregations,

which, in turn, are based on United Nations International Standards of Industrial Classification

revision 3.1 ISIC rev. 3.1). Aggregation of industries by ISIC rev. 3.1 is implemented as follows:

Agriculture includes sectors A (agriculture) and B (fishing);

Manufacturing includes sectors C (mining and quarrying), D (manufacturing) and E (electricity,

gas and water supply);

Construction includes sector F (construction);

Commerce includes sectors G (wholesale and retail trade; repair of motor vehicles,

motorcycles and personal and household goods), H (hotels and restaurants) and I (transport,

storage and communications);

Business services include sectors J (financial intermediation) and K (real estate, renting and

business activities);

Public services include sectors L (public administration and defence; compulsory social

security), M (education), N (health and social work), O (other community, social and personal

service activities), P (activities of private households as employers and undifferentiated

production activities of private households) and Q (extraterritorial organisations and bodies).

Consumer spending:

Real disposable income per household - refers to inflation-adjusted household income,

expressed in base-year prices. The base year is 2011.

Disposable income – gross income (including earnings from employment, investments,

benefits and other sources such as remittances) minus social security contributions and

income taxes.

Necessity spending (or non-discretionary spending) – the proportion of household budget

used to purchase basic necessities: housing and food. Housing includes shelter and utilities,

while food excludes restaurant expenditure.

Discretionary spending (or discretionary income) – the amount of household income that is

left for spending, investing or saving after taxes and necessity spending (such as food and

housing) have been paid.

Gini coefficient – a standard economic measure of income inequality, based on a Lorenz

curve. A society that scores 0 on the Gini index has perfect equality, where every inhabitant

has the same income. The higher the number over 0, the higher the inequality, and a score of

100 indicates total inequality, where only one person receives all the income. In reality, cities

and countries tend to fall between 25 and 60.

City affordability – burden of expenditure on housing and transport in household budget.

Density and building constraints often result in inflated housing prices in cities. Similarly,

inefficient infrastructure and urban sprawl may boost expenditure on transport. The combined

share of housing and transport expenditure corresponds to a measure of city affordability –

the lower the share, the more affordable the metropolitan area.



APPENDIX

Summary 3 GDP Development, 2006, 2011, 2016, 2020

2006 2011 2016 2020

Real GDP Growth (%)

7.3 9.2 6.8 5.1

Real GDP per Capita Growth (%)

4.5 6.4 4.4 2.8

Total GDP (TL million, current prices)

208,554 362,465 649,613 962,822

Annual Disposable Income of Households (TL million, current prices)

127,030 250,489 430,886 673,325

Income per Household (TL, current prices)

41,040 66,594 97,626 135,361


Summary 4 GDP By Origin, Current Prices, TL, Million, 2006-2011

2006 2007 2008 2009 2010 2011

GDP 208,554 234,902 262,824 265,336 304,845 362,465

Taxes and Subsidies

24,742 24,738 26,531 24,543 32,626 42,936

Total GVA (gross value added)

183,812 210,164 236,293 240,793 272,219 319,529

GVA in Agriculture

552 508 492 704 834 969

GVA in Manufacturing

46,527 49,674 54,386 43,780 55,384 70,088

GVA in Construction

6,963 8,111 8,725 5,935 7,965 10,147

GVA in Commerce

64,763 66,694 77,219 76,194 87,242 101,981

GVA in Business Services

48,950 67,435 75,622 91,106 95,169 106,716

GVA in Public Services

16,057 17,742 19,849 23,075 25,625 29,629




Summary 5 Population And Labour Force, 2006-2011

2006 2007 2008 2009 2010 2011

Total Population ('000)

11,333 11,954 12,574 12,697 12,915 13,256

Population Aged 15-64 ('000)

7,861 8,325 8,788 8,936 9,098 9,357

Labour Force ('000)

4,295 4,294 4,416 4,479 4,604 4,773

Labour Force Participation Rate (out of aged 15-64) (%)

54.6 51.6 50.2 50.1 50.6 51.0

Unemployed ('000)

487 447 493 753 657 562

Unemployment Rate (%)

11.3 10.4 11.2 16.8 14.3 11.8


Summary 6 Employed population by economic sector, % of total, 2006-2011

2006 2007 2008 2009 2010 2011

Employed population ('000)

3,808 3,847 3,923 3,726 3,947 4,211

Employment in Agriculture

0.3 0.3 0.3 0.3 0.4 0.5

Employment in Manufacturing

34.9 33.4 33.5 31.0 32.9 32.8

Employment in Construction

6.3 6.6 6.4 6.7 7.1 7.1

Employment in Commerce

33.8 34.6 33.8 33.0 30.8 32.0

Employment in Business Services

9.3 9.8 10.3 11.7 12.4 12.0



Employment in Public Services

15.5 15.4 15.7 17.4 16.4 15.7


Summary 7 Population By Sex And Broad Age Groups, „000, 2006-2011

2006 2007 2008 2009 2010 2011

Total Male Population

5,684 5,988 6,292 6,387 6,499 6,655

Males Aged 0-14

1,496 1,532 1,568 1,595 1,607 1,631

Males Aged 15-64

3,970 4,197 4,424 4,514 4,600 4,717

Males Aged 65+

218 259 300 279 292 307

Total Female Population

5,649 5,966 6,282 6,310 6,416 6,601

Females Aged 0-14

1,452 1,464 1,477 1,501 1,515 1,536

Females Aged 15-64

3,891 4,127 4,364 4,422 4,498 4,640

Females Aged 65+

307 374 441 387 403 425


Summary 8 Population Growth, 2006-2011

2006 2007 2008 2009 2010 2011


11,333 11,954 12,574 12,697 12,915 13,256

Average Household Size (number of persons)

3.7 3.6 3.6 3.6 3.6 3.5

Population Density (persons per sq km)

2,181 2,301 2,420 2,444 2,486 2,551

Births ('000)

207 221 225 209 211 222

Birth Rate (per 1000)

18.3 18.5 17.9 16.5 16.3 16.8

Deaths 50.4 50.8 50.4 53.7 52.7 57.4



('000)

Death Rate (per 1000)

4.5 4.3 4.0 4.2 4.1 4.3

Net Migration ('000)

210 205 26.7 39.5 103 122

Migration Rate (per 1000)

18.5 17.1 2.1 3.1 7.9 9.2


Summary 9 Total Population, 2012-2016, 2020

2012 2013 2014 2015 2016 2020


13,588 13,931 14,278 14,629 14,975 16,388

Total Households ('000)

3,885 4,014 4,145 4,280 4,414 4,974

Average Household Size (number of persons)

3.5 3.5 3.4 3.4 3.4 3.3


Summary 10 Population By Educational Attainment, 2006-2011

2006 2007 2008 2009 2010 2011

Total Population 15+

8,386 8,957 9,529 9,601 9,794 10,089

No Education

446 462 474 461 446 372

Primary Education

3,662 3,908 4,154 4,181 4,380 4,428

Secondary Education

2,652 2,872 3,100 3,163 3,224 3,468

Tertiary Education

763 831 900 924 1,092 1,190


Summary 11 Structure Of Consumer Expenditure By Main Category, 2006-2011

2006 2007 2008 2009 2010 2011

Total Expenditur

129,683 148,355 185,902 181,667 198,918 236,559



e (TL million, current prices)

Food and Non-Alcoholic Drinks (%)

18.0 18.0 18.1 18.6 18.5 17.5

Alcoholic Drink, Tobacco etc (%)

3.1 3.4 3.0 3.0 3.6 3.5

Clothing and Footwear (%)

5.4 4.9 4.8 4.2 4.5 4.1

Housing (%)

20.6 22.0 23.0 26.1 24.8 25.5

Household Goods and Services (%)

6.5 6.4 6.2 6.0 6.1 6.4

Health (%) 5.2 5.0 4.8 4.6 4.0 4.3

Transport (%)

15.5 14.2 14.2 11.8 12.8 12.6

Communication (%)

4.3 4.6 4.2 4.4 4.9 4.9

Recreation and Culture (%)

4.6 4.1 4.0 4.2 4.3 4.6

Education (%)

1.5 1.5 1.7 1.8 1.8 1.9

Restaurants and Hotels (%)

8.7 8.6 8.4 8.5 8.0 7.7

Miscellaneous Goods and Services (%)

6.6 7.3 7.7 6.8 6.8 7.0


Summary 12 Consumer Expenditure By Main Category, Per Household, Constant (2011) Prices, TL, 2006, 2011, 2016, 2020

2006 2011 2016 2020

Total Expenditure

61,831 62,891 64,864 73,514

Food and Non-Alcoholic Drinks

11,133 11,028 11,009 12,322



Alcoholic Drink, Tobacco etc

1,901 2,193 2,397 2,836

Clothing and Footwear

3,328 2,566 2,405 2,499

Housing 12,758 16,028 16,539 18,676

Household Goods and Services

4,040 4,032 4,351 5,025

Health 3,217 2,678 2,801 3,185

Transport 9,557 7,929 8,487 9,820

Communication 2,647 3,097 3,484 4,111

Recreation and Culture

2,874 2,874 2,813 3,044

Education 898 1,196 1,258 1,446

Restaurants and Hotels

5,389 4,845 4,679 5,232

Miscellaneous Goods and Services

4,089 4,425 4,641 5,317


Summary 13 Households By Income Band, % Of Total, Constant (2011) Prices 2006, 2011, 2016, 2020

2006 2011 2016 2020

Over US$500 100 100 100 100

Over US$750 100 100 100 100

Over US$1,000 100 100 100 100

Over US$1,750 100 100 100 100

Over US$2,500 100 100 100 100

Over US$5,000 99.3 100 100 100

Over US$7,500 97.9 98.8 98.4 98.4

Over US$10,000 95.3 97.0 96.4 96.0

Over US$15,000 86.3 89.8 88.6 86.8

Over US$25,000 59.6 64.3 63.1 57.4

Over US$35,000 36.8 39.8 39.4 33.5

Over US$45,000 22.9 24.5 24.4 20.2

Over US$55,000 15.0 15.9 15.9 13.1

Over US$65,000 10.5 11.0 11.0 9.1

Over US$75,000 7.7 8.1 8.1 6.7

Over US$100,000

4.3 4.5 4.5 3.9

Over 2.9 3.1 3.1 2.7



US$125,000

Over US$150,000

2.3 2.4 2.4 2.2

Over US$200,000

1.6 1.7 1.7 1.5

Over US$250,000

1.2 1.3 1.2 1.1

Over US$300,000

1.0 1.0 1.0 0.9


Summary 14 Households By Income Band, „000, Current Prices 2006-2011

2006 2007 2008 2009 2010 2011

Over US$500

3,095 3,293 3,490 3,550 3,635 3,761

Over US$750

3,095 3,293 3,490 3,550 3,635 3,761

Over US$1,000

3,095 3,293 3,490 3,549 3,635 3,761

Over US$1,750

3,093 3,292 3,490 3,549 3,634 3,761

Over US$2,500

3,090 3,291 3,489 3,547 3,633 3,760

Over US$5,000

3,056 3,280 3,476 3,530 3,621 3,749

Over US$7,500

2,971 3,245 3,443 3,479 3,587 3,717

Over US$10,000

2,824 3,175 3,379 3,376 3,519 3,655

Over US$15,000

2,366 2,903 3,140 2,988 3,255 3,408

Over US$25,000

1,349 1,992 2,313 1,860 2,337 2,513

Over US$35,000

735 1,191 1,486 1,045 1,465 1,611

Over US$45,000

433 722 938 620 916 1,019

Over US$55,000

197 323 426 280 420 469

Over US$65,000

27.6 39.0 46.3 37.0 47.2 51.0

Over US$75,000

148 237 311 209 309 345

Over US$100,000

89.5 135 171 123 173 191



Over US$125,000

66.0 94.0 115 88.8 117 128

Over US$150,000

52.5 74.5 88.2 70.6 89.9 97.3

Over US$200,000

36.6 51.7 61.3 49.1 62.6 67.6

Over US$250,000

27.6 39.0 46.3 37.0 47.2 51.0

Over US$300,000

22.0 30.9 36.7 29.4 37.5 40.5


Summary 15 Inflation, 2006-2011

2006 2007 2008 2009 2010 2011

Inflation 9.6 8.8 10.4 6.3 8.6 6.5


Summary 16 Transport indicators, 2006-2011

2006 2007 2008 2009 2010 2011

Passenger Cars in Use ('000)

1,657 1,712 1,759 1,775 1,822 1,873

Commercial Vehicles in Use ('000)

641 701 747 756 774 809

Two-Wheelers in Use ('000)

110 130 152 164 175 192

National Highways (kilometres)

186 186 186 186 186 186

Road Injury Accidents (per 100,000 inhabitants)

85.9 99.1 98.7 95.9 92.4 87.5




Summary 17 Tourism 2006-2011

2006 2007 2008 2009 2010 2011

Hotel Bed Occupancy Rates (% of beds occupied)

- - - - - -

International Tourist Arrivals (number)

3,283 4,729 4,038 3,530 5,106 5,264

Number of Hotels ('000 nights)

- - - - - -

Tourist Nights ('000)

- - - - - -


Summary 18 Air Pollution, concentration in micrograms per cubic metre, 2006-2011

2006 2007 2008 2009 2010 2011

SO2 Annual mean

- - 8.4 9.6 6.5 -

PM10 Annual mean

- - 58.4 53.4 50.4 -


istanbul report

Documents

istanbul highlights

household income

household distribution

structure of household

city demographics

city lifestyle

city affordability

employed population