'Ankara needs legal safeguards to preserve foreign investments in malls'
Foreign investors of Turkey's shopping mall industry will pull their assets if Ankara doesn't offer legal protection through the promised judiciary reforms, an industry representative said. An industry with more than 150 billion dollars in investment, Turkey's shopping malls risk being seized by banks due to unpaid debts.
Duvar English
Ankara needs to implement legal safeguards for investors if they want to maintain foreign benefactors for shopping malls, who make up about 25 percent of the 150 billion dollar market, the Shopping Mall Managers and Investors Association (AYD) Chair Prof. Hüseyin Altaş said.
Foreign investors of shopping malls in Turkey have been thinking of leaving the market for a long time, but have decided to wait until President Recep Tayyip Erdoğan's promised judiciary reforms are put into effect, Altaş noted.
"They'll stay if the reforms go through. There could even be new investments, but legal safety is indispensable," Altaş said.
The shopping mall industry in Turkey has a total debt of 13 billion dollars, and could produce up to 25 billion dollars in revenue with 150 billion dollars in investment, Altaş added.
Shopping mall owners have been struggling to pay off their debts since a regulation banned their receipt of rent revenue for foreign currencies, further straining businesses amid rising exchange rates.
"At first, it looked like about 120 malls could be seized by banks," Altaş said. "Some investors think that the mall should go bankrupt if they can't cover liabilities with revenue. Those malls will probably end up shutting down."
Turkey is already a highly saturated market for shopping malls, so there's not really a large number of new investors in the business, so licensing more shopping mall investments is wasteful, the chairman added.
Turkey's construction industry grew under the ruling Justice and Development Party (AKP) with multitudes of pro-government companies flocking to the sector, although Ankara has been widely criticized for its excessive construction patterns.
President Erdoğan, who is a big fan of construction, recently bragged about turning the country into a construction site and is known for his passion for the extreme Kanal Istanbul project that seeks to build an artificial canal to connect the Black Sea and Marmara Sea.