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    Istanbul report Istanbul report Document Transcript

    • ISTANBUL CITY REVIEWEuromonitor InternationalFebruary 2013
    • ISTANBUL CITY REVIEW Passport ILIST OF CONTENTS AND TABLESIstanbul 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 ..................................................... 1Istanbul Highlights ........................................................................................................................ 2 History ...................................................................................................................................... 2 Delimitation of the Metropolitan Region .................................................................................... 2 Chart 2 Map Of Istanbul Metropolitan Area ............................................................... 3 Main Business Districts............................................................................................................. 3Economy 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 ............................................................ 7Consumer 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 ................................... 10Consumer 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 ..................... 14Definitions................................................................................................................................... 15Appendix .................................................................................................................................... 17 Summary 3 GDP Development, 2006, 2011, 2016, 2020.............................................. 17 Summary 4 GDP By Origin, Current Prices, TL, Million, 2006-2011.............................. 17© Euromonitor International
    • ISTANBUL CITY REVIEW Passport II 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© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 1ISTANBUL CITY REVIEWISTANBUL REVIEW AT A GLANCEUnderstanding Istanbul Review StructureChart 1 OverviewSource: Euromonitor InternationalKey Facts on IstanbulSummary 1 Key Facts On Istanbul 2006, 2011, 2020Indicator 2006 2011 2020Share of Services (% 62.2 65.8 -of total GDP)Total GDP (TL 208,554 362,465 962,822million, currentprices)Real GDP Growth 7.3 9.2 5.1(%)Unemployment Rate 11.3 11.8 -(%)Population: January 11,333 13,256 16,3881st (000)Source: Euromonitor International© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 2ISTANBUL HIGHLIGHTSEconomy 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 Istanbuls 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 citys labour force expanded by 0.7 million.Consumer profile: Over 2006-2011, Istanbuls total number of inhabitants expanded by 17%, due to a positive natural increase and internal migration; by 2020, the citys population should reach 16 million; The citys inhabitants are the youngest on average among Europes key cities; In 2011, thanks to Istanbuls 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 Istanbuls 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 Istanbuls key urban areas are located around the Bosphorus strait, in the lowlands of theregion. That is where the first inhabitants settled in the Ottoman era. The upper part of Istanbulis occupied by forests, water catchments and other natural assets that need to be preserved inorder to maintain the city. The population of the city has been increasing rapidly since the 1970s, due to active internalmigration in Turkey from east to west. The migration soon expanded the city into nearby villagesand forests, making it a truly global metropolitan region. In order to achieve further sustainable growth of the city, there are plans to decentralise theurban development of Istanbul and convert it into a polycentric metropolitan region. The citysauthorities are conducting a strategy of creating residential and employment sub-centres andredeveloping the citys transportation. This should keep the commuting flows away from thenatural sources in the citys north.Delimitation of the Metropolitan Region Due to conflicts between the Turkish army and the Kurdish Workers Party in the 1990s,refugees migrated towards the larger cities and urban centres of Turkey. Today, Turkey is highlyurbanised (76% of the population live in urban areas), and has a relatively low level of ruralpopulation.© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 3 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 andIzmir also serve as key urban centres. All three of these provinces are located in the westernhalf of the country, with Ankara being close to the centre. According to the Metropolitan Municipal Law, Istanbul Metropolitan Municipality has exactlythe same boundaries as Istanbul province, with an area of 5,343 sq km. The MetropolitanMunicipality consists of 32 districts, which form separate local authority areas. In 2011,Istanbuls population was 13 million people - 15% of the countrys total.Chart 2 Map Of Istanbul Metropolitan AreaSource: Euromonitor InternationalMain Business Districts Out of six million sq m of Class A office space in Istanbul, around 65% is clustered in theEuropean side of the city, while the remaining 35% of office space supply is scattered on theAsian side. The office market on the European side contains the Istanbul Central BusinessDistrict, as well as other important clusters of business activities around the citys airport. The© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 4East (Asia) side is generally cheaper than the European: rent per sq m in the Asian side totalsUS$25-30, and US$35-45 on the European (except for the airport). Recently, the Asian side hasbeen 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 citys government, and theemphasis on particular development projects depended on the citys mayors political party. Atthe moment, the two most important business districts in Istanbul are the Maslak and Leventfinancial 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 inskyscraper building. The highest skyscraper in Turkey at the moment - Sapphire Tower - wasbuilt in Levent district in 2010, and is 261m high. Teknopark Istanbul is a major development effort, initiated by the Ministry of Defence and theIstanbul Chamber of Commerce. The completion of the first buildings, with 62,000 sq m of officespace, 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 officespace.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 Istanbuls 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 citys labour force expanded by 0.7 million.Industrial Make-upChart 3 GDP By Economic Sector 2011As % of country totalSource: Euromonitor InternationalChart 4 Industrial Composition Of Istanbul 2011As % of total© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 5Source: Euromonitor International Istanbul, which positions itself as the economic centre of Turkey, accounted for around 30%of the countrys GDP in 2011. Istanbul boasts sizeable categories of commerce andmanufacturing, employing over 30% of the citys workforce each. Istanbul is home to most of the countrys high value-added activities. Business servicesactivities in the city accounted for 46% of Turkeys sectorial GDP. For comparison, Ankara, thesecond largest city in Turkey, created only 12% of the countrys GDP in business services. Istanbul is strengthening its position as a top business location for the offices of the worldslargest companies, as well as a convention destination. Istanbul is attractive due to its role as abridge between the West and the East. Turkeys rapid economic growth is another reason forrising global interest in the city.ProductivityChart 5 Productivity By Economic Sector 2011GDP produced per employee in TLSource: Euromonitor International In 2011, productivity (GDP per employee) - a measure of economic efficiency - reachedYTL76,000 (US$45,000) on average in Istanbul, and was 81% higher than elsewhere in Turkey.Business services push up the citys labour productivity particularly strongly, as GDP peremployee in business services in Istanbul is twice higher than in the rest of the country. Istanbuls geographic position and the accumulated investment in transport infrastructuredefinitely benefits the city, and reduces costs for those manufacturers focusing on exports. In2011, 46% of the countrys exports originated from Istanbul, and many exporters chose to locatein the city due to its convenient seaports - eg, Ambarli handled 2.7 million twenty-foot equivalentunits (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), upfrom YTL1.6 billion (US$1 billion) in 2010, and 36,000 people were registered as employed inR&D. Spending on R&D in Istanbul constituted 19% of total Turkeys expenditure (Bursa inDogu Marmara region and Ankara are two other centres for R&D in the country), and supportedthe development of high-value added service activities in the city.© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 6Manufacturing Manufacturing in Turkey is concentrated in Istanbul. The share of Istanbuls workforceemployed in the category (33%) is significantly higher than in the country overall (21%), or inother major cities in the world. The share of the workforce employed in manufacturing is onlycomparable to the largest cities in China (35-45%). In 2011, the citys manufacturing exportsreached US$59 billion. Istanbul is a frequent choice for multinational companies wishing to transfer part of theirmanufacturing to Turkey. The automotive industry is particularly well represented in Istanbul.Examples of subsidiaries of multinationals operating in the region include Ford Otosan, AnadoluIsuzu, MAN Otomotiv and Mercedes Benz Türk . The city has contributed to Turkeys becomingthe 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 thepharmaceutical and defence industries. Abdi Ibrahim, headquartered in the city, is a leadingpharmaceutical company in Turkey, and also one of the largest employers in the industry, withnearly 3,500 employees. The newly opened Teknopark Istanbul is expected to become one ofthe leading defence R&D centres in Europe, hosting more than 1,000 companies, with a totalworkforce 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 inthe city.Commerce In 2011, commerce GDP in Istanbul amounted to over YTL101 billion (US$60 billion). Thecategory employed more than 1.3 million (or 32%) of the citys workforce, similar to the 33%employed by manufacturing. The proportion of employment in commerce is slightly higher inIstanbul than in the capital city Ankara (28%), and the share is comparable with that in otherlargest cities in the world. In 2009, out of the 22 largest Turkeys entities in logistics and transportation in terms ofrevenues, 19 were located in Istanbul. Turkish Airlines topped the ranking with turnover ofYTL12.8 billion (US$8 billion) in 2012, up from YTL6 billion (US$3.8 billion) in 2009. The airlinecarried 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. IstanbulAtatürk 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 transportationcosts and allow larger vessels to pass through. Turkeys growing tourism industry is closely related to Istanbul: it is one of the most visitedcities in the country, as well as globally. Congress tourism is an important area: in 2011, Istanbulwas ranked ninth in the list of the worlds top convention cities, having hosted 113 internationalassociation meetings (compare with 76 meetings in 2006)., The city boasts a number ofconvention and exhibition centres located in three clusters: the Airport area, the ConferenceValley and the Golden Horn. In 2010, the total closed area of existing convention and exhibitioncentres was 335,000 sq m, providing auditorium capacity for up to 15,000 people.Business services Turkeys services category has emerged as one of the largest contributors to the countryseconomy, and Istanbul is leading the charge. The city accounted for 47% of GDP growth inTurkeys business services over 2006-2011.© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 7 In 2011, business services was still the smallest category in terms of employment in Istanbul.Only 12% of the citys workers were employed in business services, a relatively low percentageby world standards. The employment structure in the city is changing fast though: the totalIstanbul workforce expanded by 11% over 2006-2011, while the number of workers employed inbusiness services grew by 42%. Istanbul is home to the headquarters of several of Turkeys and the worlds 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 theBalkans. Istanbul aims to intensify its R&D activities in certain fields prioritised by the government, suchas defence or biomedicine. The city also houses a number of R&D centres of the worlds largestcompanies, such as Unilever and Huawei. R&D activities are supported by the growing share ofthe citys population with higher education. The share increased from less than 7% of thepopulation aged 15 and above in 2006 to 9% in 2011.Recent Developments and OutlookChart 6 Dynamics Of Real GDP In Turkey And Istanbul 2006-20202006 = 100Source: Euromonitor InternationalChart 7 Dynamics Of Real GDP And Population In Istanbul 2006-20202006 = 100Source: Euromonitor InternationalChart 8 Sources Of GDP Growth 2006-2011© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 8% contribution to total growthSource: Euromonitor International 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 citys labour force size expanded from nearly 4.3 million in 2006 to 4.8 million in 2011, inpart due to substantial migration to the city. Over 2006-2011, the city saw a net increase of 0.7million in the number of immigrants. Over the review period, Istanbul created 0.4 million new job places, which was too few toaccommodate the increasing labour force. Due to economic cycles, the unemployment ratefluctuated between a low of 10% in 2007 and a peak of 17% in 2009. In 2011, unemploymentfell 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 thereview period. Over the upcoming decade, the trend is likely to change, with Istanbulincreasingly outpacing the rest of the country. By 2020, Istanbuls real GDP is predicted to havegrown by nearly 66% compared to 2011, while the figure for the rest of the country will onlystand at 37%.CONSUMER PROFILE Over 2006-2011, Istanbuls total number of inhabitants expanded by 17%, due to a positive natural increase and internal migration; by 2020, the citys population should reach 16 million; The citys inhabitants are the youngest on average among Europes key cities; In 2011, thanks to Istanbuls 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 DemographicsChart 9 Population By Age 2011% of total© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 9Source: Euromonitor InternationalChart 10 Drivers Of Population Growth In Istanbul 2006-2011% contribution to total growthSource: Euromonitor InternationalChart 11 Working Age Population (15-64): Selected Cities 2011As % of totalSource: Euromonitor International Over the 2006-2011 period, the population of Istanbul increased by 17%, which was morethan three times faster than in the rest of Turkey. The citys population reached 13 million in2011. By 2020, the citys total number of inhabitants is projected to expand by a further 24% andamount to 16 million. Natural increase and net migration have both boosted Istanbuls population. Each yearbetween 2006 and 2011, the number of people born exceeded the death count at least fourfold.Partly, the reason was Istanbuls relatively good healthcare service: in 2011, the Istanbulmetropolitan region had the lowest infant mortality rate among other first level administrativeregions in Turkey. A demographic transition is clearly on the way in Istanbul. The crude birth rate fell from 18 per1,000 population in 2006 to 17 in 2011. Age at first marriage was the highest in Istanbul amongTurkish 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 24in 2006.© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 10 Internal migration to Istanbul is particularly significant. Between 2009 and 2011, Istanbul hadthe greatest net (im)migration rate among Turkish regions. The majority of new arrivals comefrom the Black Sea region, on the north coast of Turkey, mainly due to the regions geographicalproximity and the wage premium in Istanbul. Istanbuls inhabitants are the youngest among major cities in Europe. In 2011, the populationaged 0-14 represented 24% of the citys total number of inhabitants compared to an average of16% in the key European cities. The share of the elderly (aged 65+) constituted 6% of the totalin the metropolitan region, in comparison to 16% on average in Europes main cities.Household IncomeChart 12 Household Distribution By Income In Istanbul 2011 And 2020Number of householdsSource: Euromonitor InternationalChart 13 Household Distribution By Income In Istanbul 2011Number of Istanbul‟s households in respective Turkey income decileSource: Euromonitor InternationalNote: Country income decile 1 corresponds to 10% poorest country households by income, decile 2 – to second 10% poorest, etc.© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 11 In 2011, Istanbuls 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 Istanbulseconomy and favourable demographics lead to higher incomes in the city. The city is responsible for a large share of the countrys most value added activities, forexample, in 2011, 46% of GDP in business services in Turkey was produced in Istanbul. Thecitys relatively large economically active population (determined by large immigrant inflows)further boosts the citys employment rate and average income. Istanbul hosts a large share of the countrys most affluent population. In 2011, 20% of thecountrys total households resided in Istanbul; however, among those with incomes ofUS$100,000 and above, the share rose significantly, to 32% (or 128,000 households out of402,000 in Turkey). In comparison, Ankara hosted 7% of all Turkeys households and 8% ofthose with income above US$100,000.CONSUMER EXPENDITURE In 2011, as a result of Istanbuls 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 BudgetSummary 2 Istanbul Household Budget Structure By Consumer Expenditure Item, % of totalExpenditure Item 2006 2011 2020Food and Non- 18.0 17.5 16.8Alcoholic DrinksAlcoholic Drink, 3.1 3.5 3.9Tobacco etcClothing and 5.4 4.1 3.4FootwearHousing 20.6 25.5 25.4Household Goods 6.5 6.4 6.8and ServicesHealth 5.2 4.3 4.3Transport 15.5 12.6 13.4Communication 4.3 4.9 5.6Recreation and 4.6 4.6 4.1CultureEducation 1.5 1.9 2.0Restaurants and 8.7 7.7 7.1HotelsMiscellaneous Goods 6.6 7.0 7.2© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 12and ServicesSource: Euromonitor InternationalChart 14 Comparison Of Household Expenditure in Istanbul and TurkeyDifference in spending per household between Istanbul and the rest of Turkey, in %Source: Euromonitor International The gap in average disposable income per household between Istanbul and other regions inTurkey determines the key trends in consumer spending. Expenditure on necessities, such asfood and non-alcoholic drinks, accounts for a relatively small share of household spending in themetropolitan region. In 2011, food and non-alcoholic drinks constituted 18% of the averagehousehold budget in Istanbul and 23% in the rest of Turkey. This gap in average disposableincome 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 ofconsumer goods and services in Istanbul was 14% higher than in the rest of Turkey, whilecomparable housing services were 55% more expensive. Discretionary spending (or total expenditure less spending on housing and food) has aconsiderably higher share of the household budget in Istanbul than in the rest of Turkey. Forexample, measured per household, expenditure on recreation and culture was 55% higher inIstanbul than in the rest of the country in 2011. The corresponding difference in spending onrestaurants and hotels was 90%.City LifestyleIstanbul: A New Attraction For Arab Tourists The number of Arab tourists visiting Istanbul rises every year, with significant inflows duringRamadan. In 2011, the number of visitors to Istanbul from Arab countries during Ramadansurged by 20% compared to the previous year, to 62,000. The increasing popularity of Istanbulamong Arab tourists is partly a result of the Istanbul 2010 European Capital of Culture Agencyspromotional events. Istanbul is also becoming a popular destination for groups of Arab women© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 13who enjoy shopping on their own accompanied only by a male chaperone. Istanbul expects afurther increase in Arab tourists over the upcoming years. Istanbul is responding to increased tourist inflows from Arabic nations. For example, theTurkish Ministry of Tourism is providing more tourist information in Arabic. Several of the citysrestaurants have already translated their menus into Arabic. Meanwhile, a restaurant that islocated in one of the most popular shopping malls, Forum Istanbul, has removed all pork mealsfrom its menu. Istanbul is seeing overall growth in tourism. In the first half of 2012, the number of visitorshosted by Istanbul rose by 70% from the same period of 2011. The booming tourism industrycontributes positively to spending on hotels and restaurants. In 2011, average spending perhousehold 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 Istanbulpose a threat to millions of dwellers in 400 neighbourhoods. A large proportion of the citysneighbourhoods are characterised by old, poor quality apartment blocks. According to theJapanese International Co-operation Agency (JICA), more than a million homes must bedemolished or rebuilt over the upcoming 10-20 years. JICA has warned that any majorearthquake might cause around 90,000 deaths, 135,000 serious injuries and the devastation orserious 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 subsidiesfor rented housing, the resistance to neighbourhood regeneration is likely to be significant. The need for neighbourhood redevelopment opens business opportunities for propertydevelopers. According to PricewaterhouseCoopers property markets analysis in 2012, Istanbulis among the primary choices for real estate investors, as much of Western Europe continues tostruggle 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 oneof the worlds largest covered markets. Open since 1461, the Grand Bazaar is also renowned asthe oldest shopping mall in the world. Every day, the bazaar attracts between 250,000 and400,000 visitors. The historic complex is home to a wide range of speciality shops, includingantique 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 entertainmentopportunities. Visitors to the bazaar can enjoy a leisurely afternoon, sitting in cafés andrestaurants and watching people passing by. The complex hosts several fine restaurants,including the grill house Gaziantep Bure Ocakbasi and kebab restaurant Kara Mehmet KebapSalonu. Moreover, active bargaining for the best purchase prices is considered among the bestways to get experience the atmosphere of ancient Istanbul.City AffordabilityHousingChart 15 Household Expenditure On Housing: Selected Cities 2011As % of total© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 14Source: Euromonitor International Housing in Istanbul is considerably more expensive than elsewhere in Turkey. In 2011, theaverage Istanbul household spent YTL16,000 (US$9,500) on housing, while in the rest ofTurkey average housing costs were only YTL9,400 (US$5,600). Housing expenditure is forecastto increase in line with rising incomes: in 2020, housing is predicted to constitute 25% ofhousehold 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 pricesdictate 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, priorto the worldwide financial downturn in 2008, many of the high-end residential projects inIstanbuls central locations were sold out as capital investment and supplemented the rentalmarket of the city. Today, many professionals with high incomes aim to purchase theapartments 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 cityis changing fast. There are around 50 neighbourhoods in which various projects are planned totake place. For example, the Talarbasi renewal project includes demolishing almost 300buildings to build new homes, hotels and other facilities.TransportChart 16 Household Expenditure On Transport: Selected Cities 2011As % of totalSource: Euromonitor International The average household in Istanbul spends 12.6% of its total budget on transport. The sharewas as high as 15.5% in 2006, but the recent hike in unemployment in 2009 slashed thespending allocated to transport. By 2020, driven by rising incomes, the proportion of expenditureon 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 andproducer of global positioning systems) listed the city as the most congested in Europe. Facingthe population and car ownership growth, government officials say the answer is a thirdBosphorus bridge. Many residents and experts remain sceptical, saying that more roads havebeen shown simply to increase demand for cars. There are indications that, for example, an© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 15additional bridge would only increase congestion levels and cause even greater traffic inflows tothe city. Traffic conditions in this densely populated city are getting worse, while construction of amodern mass transit system is only progressing slowly. Infrastructure projects include theMarmaray undersea rail tunnel, which is part of a major planned upgrade of Istanbuls publictransport network. It will create a 13km long connection between the east and west of thecity.Currently, the citys rail system consists of four metro lines (75km network), and three tramlines (36km). With almost 2.9 million vehicles (of which 1.9 million are passenger cars), the city is strugglingto curb its pollution emissions. Since the 1990s, the industrial sulphur dioxide pollution hasdecreased nine-fold, while traffic has emerged as the main emitter of carbon monoxide andnitrogen oxides. PM10 pollution is primarily due to old-fashioned domestic heating. The citys pervasive pollution issues are evident in the key air quality indicators. In 2010, theannual mean concentration of large particulate matter (PM10) reached 50 micrograms per cubicmetre, 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, againsignificantly 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".© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 16 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 Classificationrevision 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.© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 17APPENDIXSummary 3 GDP Development, 2006, 2011, 2016, 2020 2006 2011 2016 2020Real GDP 7.3 9.2 6.8 5.1Growth (%)Real GDP per 4.5 6.4 4.4 2.8Capita Growth(%)Total GDP (TL 208,554 362,465 649,613 962,822million, currentprices)Annual 127,030 250,489 430,886 673,325DisposableIncome ofHouseholds (TLmillion, currentprices)Income per 41,040 66,594 97,626 135,361Household (TL,current prices)Source: Euromonitor InternationalSummary 4 GDP By Origin, Current Prices, TL, Million, 2006-2011 2006 2007 2008 2009 2010 2011GDP 208,554 234,902 262,824 265,336 304,845 362,465Taxes and 24,742 24,738 26,531 24,543 32,626 42,936SubsidiesTotal GVA 183,812 210,164 236,293 240,793 272,219 319,529(grossvalueadded)GVA in 552 508 492 704 834 969AgricultureGVA in 46,527 49,674 54,386 43,780 55,384 70,088ManufacturingGVA in 6,963 8,111 8,725 5,935 7,965 10,147ConstructionGVA in 64,763 66,694 77,219 76,194 87,242 101,981CommerceGVA in 48,950 67,435 75,622 91,106 95,169 106,716BusinessServicesGVA in 16,057 17,742 19,849 23,075 25,625 29,629PublicServices© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 18Source: Euromonitor InternationalSummary 5 Population And Labour Force, 2006-2011 2006 2007 2008 2009 2010 2011Total 11,333 11,954 12,574 12,697 12,915 13,256Population(000)Population 7,861 8,325 8,788 8,936 9,098 9,357Aged 15-64 (000)Labour 4,295 4,294 4,416 4,479 4,604 4,773Force(000)Labour 54.6 51.6 50.2 50.1 50.6 51.0ForceParticipation Rate (outof aged15-64) (%)Unemploy 487 447 493 753 657 562ed (000)Unemploy 11.3 10.4 11.2 16.8 14.3 11.8ment Rate(%)Source: Euromonitor InternationalSummary 6 Employed population by economic sector, % of total, 2006-2011 2006 2007 2008 2009 2010 2011Employed 3,808 3,847 3,923 3,726 3,947 4,211population(000)Employme 0.3 0.3 0.3 0.3 0.4 0.5nt inAgricultureEmployme 34.9 33.4 33.5 31.0 32.9 32.8nt inManufacturingEmployme 6.3 6.6 6.4 6.7 7.1 7.1nt inConstructionEmployme 33.8 34.6 33.8 33.0 30.8 32.0nt inCommerceEmployme 9.3 9.8 10.3 11.7 12.4 12.0nt inBusinessServices© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 19Employme 15.5 15.4 15.7 17.4 16.4 15.7nt in PublicServicesSource: Euromonitor InternationalSummary 7 Population By Sex And Broad Age Groups, „000, 2006-2011 2006 2007 2008 2009 2010 2011Total Male 5,684 5,988 6,292 6,387 6,499 6,655PopulationMales 1,496 1,532 1,568 1,595 1,607 1,631Aged 0-14Males 3,970 4,197 4,424 4,514 4,600 4,717Aged 15-64Males 218 259 300 279 292 307Aged 65+Total 5,649 5,966 6,282 6,310 6,416 6,601FemalePopulationFemales 1,452 1,464 1,477 1,501 1,515 1,536Aged 0-14Females 3,891 4,127 4,364 4,422 4,498 4,640Aged 15-64Females 307 374 441 387 403 425Aged 65+Source: Euromonitor InternationalSummary 8 Population Growth, 2006-2011 2006 2007 2008 2009 2010 2011Total 11,333 11,954 12,574 12,697 12,915 13,256Population(000)Average 3.7 3.6 3.6 3.6 3.6 3.5HouseholdSize(number ofpersons)Population 2,181 2,301 2,420 2,444 2,486 2,551Density(personsper sq km)Births 207 221 225 209 211 222(000)Birth Rate 18.3 18.5 17.9 16.5 16.3 16.8(per 1000)Deaths 50.4 50.8 50.4 53.7 52.7 57.4© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 20(000)Death 4.5 4.3 4.0 4.2 4.1 4.3Rate (per1000)Net 210 205 26.7 39.5 103 122Migration(000)Migration 18.5 17.1 2.1 3.1 7.9 9.2Rate (per1000)Source: Euromonitor InternationalSummary 9 Total Population, 2012-2016, 2020 2012 2013 2014 2015 2016 2020Total 13,588 13,931 14,278 14,629 14,975 16,388Population(000)Total 3,885 4,014 4,145 4,280 4,414 4,974Households (000)Average 3.5 3.5 3.4 3.4 3.4 3.3HouseholdSize(number ofpersons)Source: Euromonitor InternationalSummary 10 Population By Educational Attainment, 2006-2011 2006 2007 2008 2009 2010 2011Total 8,386 8,957 9,529 9,601 9,794 10,089Population15+No 446 462 474 461 446 372EducationPrimary 3,662 3,908 4,154 4,181 4,380 4,428EducationSecondary 2,652 2,872 3,100 3,163 3,224 3,468EducationTertiary 763 831 900 924 1,092 1,190EducationSource: Euromonitor InternationalSummary 11 Structure Of Consumer Expenditure By Main Category, 2006-2011 2006 2007 2008 2009 2010 2011Total 129,683 148,355 185,902 181,667 198,918 236,559Expenditur© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 21e (TLmillion,currentprices)Food and 18.0 18.0 18.1 18.6 18.5 17.5Non-AlcoholicDrinks (%)Alcoholic 3.1 3.4 3.0 3.0 3.6 3.5Drink,Tobaccoetc (%)Clothing 5.4 4.9 4.8 4.2 4.5 4.1andFootwear(%)Housing 20.6 22.0 23.0 26.1 24.8 25.5(%)Household 6.5 6.4 6.2 6.0 6.1 6.4Goods andServices(%)Health (%) 5.2 5.0 4.8 4.6 4.0 4.3Transport 15.5 14.2 14.2 11.8 12.8 12.6(%)Communic 4.3 4.6 4.2 4.4 4.9 4.9ation (%)Recreation 4.6 4.1 4.0 4.2 4.3 4.6andCulture(%)Education 1.5 1.5 1.7 1.8 1.8 1.9(%)Restaurant 8.7 8.6 8.4 8.5 8.0 7.7s andHotels (%)Miscellane 6.6 7.3 7.7 6.8 6.8 7.0ous GoodsandServices(%)Source: Euromonitor InternationalSummary 12 Consumer Expenditure By Main Category, Per Household, Constant (2011) Prices, TL, 2006, 2011, 2016, 2020 2006 2011 2016 2020Total 61,831 62,891 64,864 73,514ExpenditureFood and Non- 11,133 11,028 11,009 12,322Alcoholic Drinks© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 22Alcoholic Drink, 1,901 2,193 2,397 2,836Tobacco etcClothing and 3,328 2,566 2,405 2,499FootwearHousing 12,758 16,028 16,539 18,676Household 4,040 4,032 4,351 5,025Goods andServicesHealth 3,217 2,678 2,801 3,185Transport 9,557 7,929 8,487 9,820Communication 2,647 3,097 3,484 4,111Recreation and 2,874 2,874 2,813 3,044CultureEducation 898 1,196 1,258 1,446Restaurants and 5,389 4,845 4,679 5,232HotelsMiscellaneous 4,089 4,425 4,641 5,317Goods andServicesSource: Euromonitor InternationalSummary 13 Households By Income Band, % Of Total, Constant (2011) Prices 2006, 2011, 2016, 2020 2006 2011 2016 2020Over US$500 100 100 100 100Over US$750 100 100 100 100Over US$1,000 100 100 100 100Over US$1,750 100 100 100 100Over US$2,500 100 100 100 100Over US$5,000 99.3 100 100 100Over US$7,500 97.9 98.8 98.4 98.4Over US$10,000 95.3 97.0 96.4 96.0Over US$15,000 86.3 89.8 88.6 86.8Over US$25,000 59.6 64.3 63.1 57.4Over US$35,000 36.8 39.8 39.4 33.5Over US$45,000 22.9 24.5 24.4 20.2Over US$55,000 15.0 15.9 15.9 13.1Over US$65,000 10.5 11.0 11.0 9.1Over US$75,000 7.7 8.1 8.1 6.7Over 4.3 4.5 4.5 3.9US$100,000Over 2.9 3.1 3.1 2.7© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 23US$125,000Over 2.3 2.4 2.4 2.2US$150,000Over 1.6 1.7 1.7 1.5US$200,000Over 1.2 1.3 1.2 1.1US$250,000Over 1.0 1.0 1.0 0.9US$300,000Source: Euromonitor InternationalSummary 14 Households By Income Band, „000, Current Prices 2006-2011 2006 2007 2008 2009 2010 2011Over 3,095 3,293 3,490 3,550 3,635 3,761US$500Over 3,095 3,293 3,490 3,550 3,635 3,761US$750Over 3,095 3,293 3,490 3,549 3,635 3,761US$1,000Over 3,093 3,292 3,490 3,549 3,634 3,761US$1,750Over 3,090 3,291 3,489 3,547 3,633 3,760US$2,500Over 3,056 3,280 3,476 3,530 3,621 3,749US$5,000Over 2,971 3,245 3,443 3,479 3,587 3,717US$7,500Over 2,824 3,175 3,379 3,376 3,519 3,655US$10,000Over 2,366 2,903 3,140 2,988 3,255 3,408US$15,000Over 1,349 1,992 2,313 1,860 2,337 2,513US$25,000Over 735 1,191 1,486 1,045 1,465 1,611US$35,000Over 433 722 938 620 916 1,019US$45,000Over 197 323 426 280 420 469US$55,000Over 27.6 39.0 46.3 37.0 47.2 51.0US$65,000Over 148 237 311 209 309 345US$75,000Over 89.5 135 171 123 173 191US$100,000© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 24Over 66.0 94.0 115 88.8 117 128US$125,000Over 52.5 74.5 88.2 70.6 89.9 97.3US$150,000Over 36.6 51.7 61.3 49.1 62.6 67.6US$200,000Over 27.6 39.0 46.3 37.0 47.2 51.0US$250,000Over 22.0 30.9 36.7 29.4 37.5 40.5US$300,000Source: Euromonitor InternationalSummary 15 Inflation, 2006-2011 2006 2007 2008 2009 2010 2011Inflation 9.6 8.8 10.4 6.3 8.6 6.5Source: Euromonitor InternationalSummary 16 Transport indicators, 2006-2011 2006 2007 2008 2009 2010 2011Passenger 1,657 1,712 1,759 1,775 1,822 1,873Cars inUse (000)Commerci 641 701 747 756 774 809al Vehiclesin Use(000)Two- 110 130 152 164 175 192Wheelersin Use(000)National 186 186 186 186 186 186Highways(kilometres)Road 85.9 99.1 98.7 95.9 92.4 87.5InjuryAccidents(per100,000inhabitants)Source: Euromonitor International© Euromonitor International
    • ISTANBUL CITY REVIEW Passport 25Summary 17 Tourism 2006-2011 2006 2007 2008 2009 2010 2011Hotel Bed - - - - - -OccupancyRates (%of bedsoccupied)Internation 3,283 4,729 4,038 3,530 5,106 5,264al TouristArrivals(number)Number of - - - - - -Hotels(000nights)Tourist - - - - - -Nights(000)Source: Euromonitor InternationalSummary 18 Air Pollution, concentration in micrograms per cubic metre, 2006-2011 2006 2007 2008 2009 2010 2011SO2 - - 8.4 9.6 6.5 -AnnualmeanPM10 - - 58.4 53.4 50.4 -AnnualmeanSource: Euromonitor International© Euromonitor International