ECONOMY er-national

Corio shifts strategy, will invest in big cities

ISTANBUL - Hürriyet Daily News | 10/28/2010 12:00:00 AM | DANIEL LANYON

Retail-focused Dutch property giant Corio announces its new investment, 'the Tarsu’ shopping center in southern Turkey, at a press conference in Istanbul on Wednesday. Speaking to reporters, Francine Zijlstra, whose previous comments on Turkey sparked harsh reactions, says the company is changing its strategy and will focus on big cities such as Istanbul and İzmir

Corio, the Dutch property giant, is launching a new shopping center in the southern Anatolian city of Tarsus, signaling a change in the company’s strategy. The new endeavor was announced at a press conference Wednesday.

The company raised eyebrows when, in late August, its Chief Operations Officer Francine Zijlstra told the Wall Street Journal that Turkish customers have to “get used to shopping at shopping centers” while tenants “have to be educated.” The comments prompted harsh reactions from representatives of small Turkish traders, as was reflected in a Sept. 1 story in the Hürriyet Daily News & Economic Review. Speaking to the Daily News, Bendevi Palandöken, chairman of the Turkish Tradesmen’s and Artisans' Confederation, had said what lies behind Zijlstra’s perspective is “being money-focused, not customer-focused.”

Zijlstra was in Istanbul for the press conference and gave positive messages on the Turkish market this time. “Turkey has become one of our core markets, it is a country we want to stay in,” she said.

The company’s new shopping center, to be called Tarsu, will contain 27,700 square meters of rentable space, a six-screen cinema and parking space for 1,000 cars. Corio expects the center to have approximately 100 shops, with both Turkish and international brands represented. The first day of construction on the shopping center coincided with Wednesday's press conference. The mall is scheduled to be completed toward the end of 2012.

The historic city of Tarsus, strategically located between the cities of Adana and Mersin, is the center of the wider Adana-Mersin metropolitan area, the fourth-largest in Turkey with a total population of 2.75 million people.

Zijlstra noted the benefits of the Tarsu shopping center, saying that it would create 1,500 jobs. “It will organize retail work as a driving force for the economy and increase consumer trust, which promotes growth,” she said.

[HH] Defending foreign investors

“Foreign investors are looking for a profit. To create employment, we have to encourage and support them,” said Avi Alkaş, the Turkey country chairman for Jones Lang LaSalle, the financial and professional services company acting as a local partner with Corio in Turkey. Turkey's official unemployment rate stands at 10.6 percent.

Focusing on retail, Corio maintains a portfolio worth 7 billion euros, 95 percent of which consists of shopping centers in the Netherlands, France, Spain, Turkey, Italy and Germany.

The Wall Street Journal report that quoted Zijlstra said Corio has “bumped up against cultural hurdles” in Turkey since entering the market in 2005.

“It hoped to make that country a showcase for its strategy to expand in emerging markets,” the newspaper had said. But the plan has yielded “disappointing results,” partly due to “the difficulties of exporting Western shopping concepts to a country steeped in a tradition of crowded bazaars, small shopkeepers and haggling customers.”

Speaking of a change of strategy Wednesday, Zijlstra said Corio initially aimed to invest largely in Anatolian cities without modern shopping centers. But now, future projects will focus on investing substantially in Istanbul and İzmir.

“Turkey was not a specific target in itself. We prefer to go where there is opportunity. We chose Turkey because of its potential,” said Zijlstra.

Corio entered Turkey in 2005, buying a 47 percent share in the Akmerkez shopping center in Istanbul for $190 million. It has expanded rapidly, managing a total of eight projects including the Tarsu. It has invested a total of 600 million euros in Turkey since 2005.



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