Turkey Retail Market Overview Avi Alkas Chariman Turkey March, 2014

Turkey Retail Market Overview Avi Alkas Chariman Turkey March, 2014

Location, Turkey and Istanbul Approximately 1.3 billion consumers within 4 hours flying time from Istanbul Flights to more than 400 international destinations 2 hours flight to 22 capitals 1

Population Population, (millions) *Estimates (Million) 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* 2016* Turkey 69.39 70.21 71.09 72.05 73.72 74.72 75.63 76.67 77.324 78.152 78.967 Russia 142.2 142 141.9 142.70 142.90 142.41 141.92 141.44 140.96 140.47 139.94 Poland 38.12 38.12 38.15 38.14 38.17 38.53 38.54 38.54 38.55 38.55 38.55 Czech Republic 10.25 10.28 10.38 10.47 10.51 10.49 10.51 10.53 10.55 10.56 10.58 Hungary 10.07 10.06 10.04 10.03 10.01 9.99 9.93 9.91 9.89 9.87 9.85 Germany 82.36 82.26 82.12 81.88 81.76 81.78 81.92 81.75 81.59 81.43 81.26 Romania 21.57 21.55 21.52 21.48 21.45 21.38 21.34 21.30 21.26 21.22 21.17 Source:IMF, World Economic Outlook October 2013 Turkey, with a population of more than 76 million as of end-2013, is the third most populated country in Europe after Russia and Germany. 33% of Turkey s population is aged below 20 and the median age is 30. IMF estimates that Turkey s population will increase to approximately 79 million by 2016, approaching Germany while Russia will experience population declines. Recent PWC report projects Turkey s population to reach 90 million in 2041 and more than half of the population to be under age 40. 2

Turkey Economic Outlook Turkey is the 6th largest economy in Europe and 16th in the world. Recent research by PWC envisages Turkey to become the 12th largest economy in the world by 2041. Impressive growth at 8.9% in 2010 and 8.5% in 2011, amongst top three fastest growing countries amongst OECD. IMF projections for GDP growth: 3.5% in 2014. 3

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015* 2016* Economic Outlook GDP per capita GDP per Capita Comparison by Country, (USD) GDP Per Capita 2009 2010 2011 2012 2013* 2014* 2015* 2016* Bulgaria 6,433 6,374 7,312 7,006 7,411 7,623 7,976 8,358 Croatia 14,056 13,322 14,021 12,829 13,312 13,921 14,728 15,683 Czech Republic 18,838 18,892 20,603 18,624 18,868 19,236 19,875 20,571 Hungary 12,626 12,778 13,916 12,652 13,172 13,872 14,703 15,600 Poland 11,314 12,309 13,384 12,709 13,334 14,112 14,993 15,888 Romania 7,649 7,684 8,540 7,939 8,630 8,944 9,460 10,058 Russia 8,568 10,671 13,335 14,302 14,973 15,717 16,951 18,345 Turkey 8,530 10,015 10,477 10,527 10,745 11,011 12,052 13,205 *Estimates Source: International Monetary Fund, World Economic Outlook Database, October 2013 GDP per Capita in Turkey, (USD) 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0 *Estimates 4.559 5.764 7.022 7.586 9.240 10.438 8.559 12.670 11.927 11.277 10.444 10.504 10.818 10.022 Source: TurkStat, Min. of Development, - Medium Term Programme (2014-2016) 25% increase in GDP per capita between 2009-2013 and more than 20% increase is envisaged for 2013-2016. Turkey s GDP per capita will remain above Romania and Bulgaria. 4

Retailer Demand International Brands That Entered the Turkish Market 2006-2013 2006 2007 2008 2009 2010 2011 2012 2013 Agent Provocateur Aldo C Louboutin Leroy Merlin H&M Scotch & Soda Gymboree Shake Shack Bally Sephora Corneliani Austin Reed Rossman Marc Jacobs Carluccio s Magrabi Optical BCBG Max Azria D&G Marni Forever New Godiva Carl's Jr. Promod Eataly Burberry Etro Sergio Rossi Mexx David's Bridal Payless Carter s Hard Rock Café Cesare Paciotti Fendi Chanel Brioni Prada Victoria's Secret PF Chang s Jamie's Italian Harvey Nichols Jimmy Choo Lancel Decathlon Kipling Bath & Body Works Sunglass Hut Industrie Denim Mandarina Duck Fred Perry Sal. Ferragamo Beeline Uterqüe Zilli Aéropostale Bvlgari Roberto Cavalli Just Cavalli Best Buy Krispy Kreme Kiehl's Hermes Paul Café Lanvin Thomas Pink Guiseppe Zanotti Polo Bijou Brigette La Durée Jacadi Zadig & Voltaire COS Valentino Foot Locker Ralph Lauren Media Saturn Oleg Cassini Zippy Shana Tom s Kitchen Haagen Dazs Media Markt Anne Klein Hummel Pinkberry Nathan s Fat Burger G-Star Raw GAP Jatomi Fitness G-Star Raw Conforoma Darty Banana Republic Michael Kors Porsche Design Superdry Electro World Coffee Shop Brunello Company Cucinelli Coffee Bean Brooks Brothers Tea Leaf Emilio Pucci Women s Secret Stella McCartney Riviera Maison Pomellato Golden Point Bobbi Brown Dean & Deluca Dunkin Donuts CCC Source: JLL, @ re-entry 5

Retailer Demand Disney Store Desigual Cortefiel Group California Pizza Kitchen International Brands Planning To Enter the Turkish Market 2014 2015 Kidzania* Madame Tussuads Galleries La Fayette Boggi Cheesecake Factory American Eagle Hamleys NatGeo Store Sushi Samba Life with Cacao Hollister Zaatar w Zeit Argo Tea Seven for All Mankind International Brands Left the Turkish Market Best Buy Virgin Bijou Brigette Orsay Ordning & Reda Austin Reed Next River Island Moe's Nando's Nordsee TGI Friday's Coach Paul Smith Etam Promod Conforama Source: JLL Dunkin Donuts Source: JLL International retailers demand remained strong even during the crisis. Kidzania, H&M, Bvlgari, Victoria s Secret, Lanvin, Brooks Brothers, and Eataly are few examples for international chains, which entered the Turkish market over the last few years. Expected to enter the market, new international brands such as Hollister, American Eagle, Disney Store and Madame Tussuads. 6

Existing Shopping Centre Stock and Pipeline H2 2013 Turkey Overall Summary Europe: 6.5 million sq m completed during 2013 Total completions in 2013 up 11% on 2012 7.2 million sq m scheduled for 2014 6.9 million sq m scheduled for 2015 44% scheduled in Russia, Turkey for 2014-2015 Source: JLL (January 2014) Note: Includes schemes >5,000m² GLA only; excludes Retail Warehousing and Factory Outlet Centre. Pipeline figures should be treated with caution. 7

Existing Shopping Centre Stock Per Capita H2 2013 Average Density: 191 sq m GLA / 1,000 inhabitants Region Average (GLA / 000 inhabitants): All Countries 191 m² East - Europe 255 m² West - Europe 124 m² Totla GLA m²/ 0000 inhabitants Source: JLL (January 2014) Note: Includes schemes >5,000m² GLA only; excludes Retail Warehousing and Factory Outlet Centre. Average density figures based on countries shown on the graph. 8

Shopping Centre Density across Turkey Source: Jones Lang LaSalle, Q4 2013 Istanbul (253 sq m) and Ankara (272 sq m) are the most dense markets. There are still some provinces in Turkey without any shopping centres. 9

Major Infrastructure Projects in Istanbul The Third Bridge, located towards the north of the FSM Bridge, will be connected to the Northern Marmara Motorway project connecting Adapazarı to Tekirdağ. The motorway project is utmost importance for trade and logistics. The motorway will be Habipler connected to Izmit-Bursa-Izmir motorway. Başakşehir TEM Highway Olympic Village Halkalı Ikitelli OIZ Kirazlı Bağcılar Esenler Şişhane Hacıosman Kabataş Aksaray Topkapı Üsküdar Eminönü 3 rd Bridge FSM Bridge Ümraniye 3rd Sancaktepe Sabiha Gökçen Airport Sabiha Gökçen Airport Airport (planned) Avrasya Project (Under Construction) Marmaray Project Şişhane-Hacıosman Metro Habibler Topkapı Tram Aksaray-Atatürk Airport Bağcılar-Kabataş Tram Kadıköy Kartal Metro Kirazlı-Olympic Village-Başakşehir (Under Construction) Esenler Otogar Bağcılar Metro (Under Construction) Üsküdar Sancaktepe Metro E-5 Highway Zeytinburnu Atatürk Airport Kadıköy Göztepe Sultanbeyli TEM Highway Marmaray project is the most crucial infrastructure project in Istanbul, which was completed in Q4 2013. The project connects the European side to the Asian side via a railway tunnel under the Bosphorus. This will be complemented by Avrasya project, which is expected to be completed in 2014, connecting the two sides of the city with a motorway tunnel under the Bosphorus Source: IBB, Jones Lang LaSalle Source: IBB, JLL E-5 Highway Kartal 10

Turkey Retail Market Overview Istanbul Spending Power EUR 11

Turkey Retail Market Overview 2 3 ZONE 4 Beylikdüzü Bahçeşehir ZONE 3 Yeşilköy - Bakirköy - Merter 12 13 5 25 17 ZONE 1 Levent - Şişli - Beyoğlu 27 26 28 18 24 19 29 21 23 22 20 ZONE 2 Suadiye - Ataşehir - Kadiköy ZONE 5 Maltepe - Çekmeköy - Kurtköy Active Pipeline 1 16 33 35 38 15 39 11 10 9 6 7 8 14 34 36 31 30 32 37 4 1 Marmara Park, 100,000 m2 2 Akbatı, 63,500 m2 3 Mall of İstanbul, 165,000 m2 4 Hill Town, 76,000 m2 5 Forum Istanbul, 175,000 m2 6 Capacity, 50,000 m2 7 Carousel, 24,500 m2 8 Marmara Forum, 135,000 m2 9 Galleria, 48,500 m2 10 Ataköy Plus, 25,000 m2 11 Aqua Florya, 39,000 m2 12 Vialand, 110,000 m2 13 Axis Kağıthane, 29,500 m2 14 Zeytinburnu Marina, 144,000 m2 15 M1 Meydan, 69,000 m2 16 Platform Merter, 27,500 m2 17 Cevahir, 111,000 m2 18 Kanyon, 39,000 m2 19 Metro City, 51,000 m2 20 İstinye Park, 87,000 m2 21 Akmerkez, 35,000 m2 22 Sapphire, 27,500 m2 23 Zorlu Center, 66,000 m2 24 Özdilek, 45,000 m2 25 Skyland, 70,000 m2 26 Profilo, 49,000 m2 27 Trump Towers, 43,500 m2 28 Maslak 42, 19,000 m2 29 Çiftçiler, 37,500 m2 30 Optimum, 46,000 m2 31 Palladium, 40,000 m2 32 Carrour İçerenköy, 45,000 m2 33 Capitol, 29,500 m2 34 Tepe Nautilius, 52,500 m2 35 Akasya, 80,000 m2 36 Emaar Square, 150,000 m2 37 Brandium, 60,000 m2 38 Bu Yaka, 43,000 m2 39 Metrogarden 32,000 m2 12

2014 Q1 Akasya 2014 Q3 Hilltown 2016 Q1 Vadi IST 2016 Q4 Emaar Square 2013 Q4 Zorlu 2014 Q3 Ozdilek 2016 Q1 Metropol Turkey Retail Market Overview Istanbul Major Shopping Centers Upcoming Malls Timeline Q1 2014 13

Turkey Retail Market Overview Major Shopping High Streets - Istanbul City Street Name Majority İstanbul İstiklal Street Primary İstanbul Bağdat Street Primary İstanbul Abdi İpekçi Street Primary İstanbul Teşvikiye Street Primary İstanbul Valikonağı Street Secondary İstanbul Rumeli Street Secondary İstanbul Bahariye Street Primary İstanbul Mühürdar Street Secondary City Street Name Majority İstanbul Avcılar Marmara Street Secondary İstanbul Gaziosmanpaşa Secondary İstanbul Pendik 19 Mayıs Secondary İstanbul Beşiktaş Köyiçi Street Primary İstanbul Halaskargazi Street Secondary İstanbul Kartal Kapalı Street Secondary İstanbul İstasyon Street Primary İstanbul Göktürk İstanbul Street Secondary İstanbul Alemdağ Street Primary 14

Turkey Retail Market Overview Major Shopping High Streets Rest of Istanbul City Street Name Majority Ankara Tunalı Hilmi Street Primary Ankara Kızılay Atatürk Street Primary Ankara Bahçelievler 7. Street Primary İzmir Karşıyaka Primary İzmir Alsancak Gül Street Primary City Street Name Majority Eskişehir Doktorlar Street Primary Bursa Atatürk Street Primary Antalya Gulluk Street Primary Antalya Isiklar Street Primary Adana Ziya Paşa Boulevard Primary İzmir Kıbrıs Şehitleri Street Primary İzmir Plevne Boulevard Primary 15

Recent Openings - Zorlu Center 16

Recent Openings - Zorlu Center 17

Recent Openings - Akasya 18

Recent Openings - Akasya 19

Upcoming Projects - Emaar Square * Expected Opening Date Q4 2016 20

Upcoming Projects - Emaar Square * Expected Opening Date Q4 2016 21

Upcoming Projects Özdilek * Expected Opening Date Q3 2014 22

Upcoming Projects Vadistanbul * Expected Opening Date Q1 2016 23

Avi Alkas Chairman Turkey İstanbul +9 (0)212 350 08 00 Avi.Alkas@eu.jll.com Thank you COPYRIGHT JONES LANG LASALLE IP, INC. 2014