The number of shopping malls built by Turkish entrepreneurs in Europe, Central Asia and Africa is approaching 100, and Turkish construction firms are raising the standards of malls abroad, according to the head of Turkey’s businessmen’s confederation. Turkish investors are changing their strategy by turning the tables in exporting more “made in Turkey” brands, and preferring to build their own malls.
“The increase in the number of shopping malls [abroad] also encourages the process of Turkish firms’ branding,” said Ahmet Coşkun, the chairman of Turkey’s Confederation of Businessmen and Industrialists, or TUSKON, in a recent interview.
Turkish investors have withdrawn from the logic of subcontracting manufacturing and have instead established their own brands in Turkey and internationally, he said. “Europe sells products manufactured in China for $10 at prices of $150. Meanwhile, Turkey can sell the same good only at $30, as its branding is not as strong.”
Turkey has gained priceless experience through constructing shopping malls, according to Coşkun. “The standards of shopping centers built by Turkish firms have started to surpass European [standards].” Turkish construction firms, such as Rönesans, Türkmenler and the Özyeğin Group have constructed modern shopping malls abroad, he added.
Investments are not made according to the distribution of Turkish people abroad, but rather according to relevant markets, the chairman said. Turkish entrepreneurs look at where ever there is market, not where Turks live like in the past, he said.
Turkey ranks third in the world regarding the construction sector, following China and the United States, said Çoşkun. “These two [latter] countries own 40 percent of the world’s economy. If we use our own scale, we rank first in the world.”
Fixed foreign exchange rate
Many retailers pay rent for their stores in shopping malls in a foreign currency, Coşkun said, adding that this could increase the burden on retailers in times of high economic fluctuations. “Retailers are like partners of shopping malls. However, as rents in these malls are paid in foreign currencies, retailers’ costs may increase up to 20 percent during economic fluctuations.”
A rise in rental prices due to volatility in foreign exchange rates, along with a parallel rise in raw material and other input costs, changes all balances, Coşkun said, adding that some shopping malls have agreed with retailers to fix the exchange rates and assure them of a stable rent. “This practice must be expanded.”
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Source : hurriyetdailynews.com
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