Over the past five years, Istanbul's premier shopping avenues and areas: Istiklal Avenue, Bagdat Avenue, and Nisantasi, have seen a clear decline in both the square meterage of retail spaces rented and the number of shops being occupied. This trend signals a decreasing desirability and rentability of traditional point-of-sale outlets in the city.
This shift is not unique to Istanbul. Major cities like London and New York have experienced similar transitions over the past decade, where high streets once bustling with retail activity have seen numerous closures, with many spaces repurposed for residential use. The primary cause is the rapid rise of e-commerce and online shopping, which has transformed consumer shopping habits.
Why Istanbul’s High Street retail is in decline
Istanbul’s most iconic retail streets have seen a significant fall in commercial rental activity. Bagdat Avenue, for example, experienced a dramatic drop, with rental volumes plummeting from 24,553m2 in 2021 to just under 5,000m2 from 2022 onwards. Nisantasi and Istiklal Avenue have seen similar declines, with rental volumes and rental transactions falling sharply. This reflects weakening footfall, retailer interest, and a broader shift in Istanbul's retail landscape.
Data from the Istanbul Chamber of Commerce (ITO) and the Turkish Statistical Institute (TurkStat) shows that high street retail vacancies increased by more than 25% between 2020 and 2024 in Istanbul, with secondary streets suffering the most severe impacts.
In 2025, analysts from PwC Turkey forecast that retail leasing demand in traditional avenues will continue to decline, particularly for smaller units under 200m2, which are less adaptable for experience-led or hybrid retail formats.
The global rise of E-Commerce
In Turkey, e-commerce has grown exponentially. In 2015, online sales accounted for approximately 1.7% of total retail sales. By 2022, this figure had already surpassed 10%, and by 2025, it is projected to reach 19.1%, according to data from the Turkish Ministry of Commerce and the United Nations Conference on Trade and Development (UNCTAD). This sharp rise has been driven by increased internet availability, smartphone use, and the growth of online marketplaces such as Trendyol, Hepsiburada, and N11.
The United Kingdom has undergone an even more significant transformation. In 2015, e-commerce constituted approximately 12.5% of total retail sales. By 2021, this figure reached 29.7%, and projections for 2025 indicate it will grow to 38.1%, valued at over £152 billion GBP. The pandemic played a major role in accelerating digital adoption, with older people now regularly purchasing online.
In the United States, e-commerce has grown from 7.3% of total retail sales in 2015 to 16.4% in 2024, according to the U.S. Census Bureau. Major companies like Amazon, Walmart, and Target continue to dominate, with larger retail shops adapting through hybrid models such as click-and-collect.
These shifts illustrate a global pivot in consumer behaviour. Turkey, while a few years behind the UK and US, is heading down the same path. The traditional retail model, based on foot traffic and physical presence, is being replaced by a digital-first approach.
Case Study: London’s High Street transformation
In the early 2000s, high streets across London were bustling. But over the past 15 years, more than 40% of ground-level retail units in secondary high streets have closed or have been repurposed into residential units or service-based businesses.
This is not due to population decline or lack of demand, but a shift in consumer habits and the rapid growth of e-commerce. According to the UK Office for National Statistics (ONS), online retail accounted for just 2.8% of total sales in 2006. By 2025, it surged past 35%.
Major British retailers such as Debenhams, House of Fraser, and Topshop have collapsed or reduced their high street presence. Local councils have responded by reclassifying vacant commercial units into residential use. In boroughs such as Croydon, Walthamstow, and Hammersmith, high streets have undergone regeneration to move from retail dependency and towards mixed-use models.
Commercial Property in Traditional Markets
Commercial property may still make sense in emerging markets like India, Pakistan, or South Africa, where retail habits remain traditional, foot traffic is strong, and e-commerce usage is lower. In India, e-commerce accounted for just 7% of retail sales as of 2023, while in Pakistan it stood at under 3%, according to Statista and UNCTAD. These figures contrast with double-digit e-commerce usage seen in more developed markets.
Turkey's business landscape aligns much more closely with Western models. Turkey's e-commerce adoption, infrastructure modernisation, and consumer behaviour trends mirror those that have been observed in London, Paris, and New York rather than Mumbai, Karachi, or Johannesburg.
These patterns – rising e-commerce dominance and high street decline – are increasingly evident in the metropolis Istanbul. Investors that are interested in smaller commercial units in Turkey need to understand that the risk-reward ratio no longer justifies such investments.
Is Commercial Real Estate in Istanbul worth it?
For investors considering spending $500,000 to $1 million USD, Istanbul's traditional street-level retail spaces present growing challenges:
- Too small to support experience-led retail, such as flagship brand stores or high-end concept spaces.
- Unsuitable for logistics or warehouse use due to size constraints, lack of transport access, and limited ceiling heights.
- Increasingly vacant or underutilised as consumers shift their spending to online platforms.
Instead, real returns lie in sectors that support and enable the growth of the digital economy and logistical ecosystems:
- Logistics Warehousing: With soaring demand for fast deliveries, logistics facilities near highways, airports, and seaports are outperforming traditional retail.
- Peripheral Storage Units: The explosion of e-commerce has created demand for adaptable regional distribution centres and hubs with loading infrastructure.
- Large-Format Retail Distribution: Spaces designed for inventory management and customer fulfilment are crucial for retail brands shifting to online models.
In Istanbul, prime logistics yields are currently around 7.5%, outperforming traditional street retail yields, which have dropped to below 5%. However, accessing these high-potential sectors typically requires multi-million-dollar investments, market knowledge, and long-term planning.
Long-term investment strategies – contact us
In today’s rapidly evolving Turkish real estate landscape, it is essential to invest with foresight rather than nostalgia. If you are seeking high ROI and strong capital growth, traditional point-of-sale commercial units in Istanbul, especially in the $500,000 USD range, are increasingly outdated and unable to meet the demands of a digital-first economy. As online e-commerce increases, the key to successful investment lies in forward-thinking strategies.
"The future belongs to those who not only recognise the early patterns of change, but also act decisively to position themselves ahead of the curve. In Turkey’s dynamic real estate market, timing, insight, and planning are crucial to maximising returns. Property Turkey specialises in helping investors identify emerging opportunities with tailored guidance. If you are serious about securing your financial future and capitalising on Turkey’s evolving landscape, contact us for a personalised strategy."
Cameron Deggin, CEO at Property Turkey
Fethiye 
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