Which are the factors that drove Sonae Sierra's decision to enter the Turkish market? Why now?
JFM: Sonae Sierra has been looking for partner in the strategic Turkish market for over a year. Several companies in Turkey were analysed along with Reval. Both Sonae Sierra and Reval shared common approach: both are specialists in shopping centers and have the same strategic view on Turkish market need for professional specialized services in this area. Thus, we found the right partner to enter the market sharing a common strategy and goals.
We believe we are entering in the right moment as 70% of the shopping centers are owned by important Turkish groups and as the market becomes more competitive and mature there is a strong need for specialized know-how in shopping centers.
Who is Reval and what are some of its main achievements in the Turkish market?
Currently, Sierra Reval has a portfolio of 10 shopping centers to which it provides development, property management and Leasing services in the country.
What values does Sonae Sierra share with Reval and what are the advantages you are hoping to get from this joint effort?
Sonae Sierra and Reval share the same strategic view on Turkish market need for professional specialized services in the shopping center business. This is why our advantage in the market comes from specialization with an integrated view of the shopping business from A to Z.
We are joining forces between an experienced and established local company and an international company with a proven track record, and we will be focused on supporting our clients in creating value in their existing shopping centers as well as supporting new developments with our knowledge and experience.
What are your immediate and medium-term plans in the Turkish market?
The Strategy is to establish Sierra Reval as a reference shopping center service provider in the areas of development, property management and leasing in Turkey.
It is our objective to multiply the current portfolio of Sierra Reval by three until 2018, including development services for third party projects.
We see potential for our services business as the market is still very fragmented in terms of professional services provision with around 34 companies operating but only a few managing more than five shopping centers.
What is your opinion of Turkey and the Turkish retail market? Where will growth be directed in the coming years?
Turkey’s secondary cities still have much space for new developments. As for Istanbul, it is already a very competitive city with only very selective opportunities for new developments when compared to the rest of the country. Still, Istanbul has a huge potential for our services provision business as the more competitive the market more important the skills and experience of the companies that manage the assets and take care of remodeling and permanently keeping up to date the existing shopping centers.
Nevertheless, the Turkish market still lacks many bridges for international retailers looking for reference centers and solid management support to enter into this market, while local retailers lack international management support for the internationalization of their brands. Due to this fact, we see a clear opportunity to establish a platform of exchange, providing to both sides the guarantees of proactive property management at international standards, offering transversal prospects to our retailers for business opportunities across borders.