Turkish property yields appear to have peaked having stabilised for three consecutive quarters at 9.2%, according to Capital Economics.

Turkish all-property yields are some of the highest in Europe, with only Romania and Russia ahead of them and, according to Jones Lang LaSalle (JLL), property owners and developers in Turkey are relatively un-leveraged compared to elsewhere in Europe, which has helped to limit the volume of distressed sales and to prevent capital values from falling as far as elsewhere in the region.

James Purvis, Capital Economics’ property economist, said: ‘As market conditions begin to improve this year and foreign investors regain interest in the country, commercial property investment volumes could recover and we think it is likely that all-property yields could fall by around 20bps during 2010.’

Rental values have started to grow and have increased by +4.5% since their low in Q1 2009.

Gross domestic product (GDP) is predicted to grow by an average of 4%pa between 2010 and 2012 which is above the 1-3% average growth predicted in other Emerging Europe countries.