(Bloomberg) -- A top developer of Turkish shopping malls is eying an expansion into the Gulf as its domestic business has faltered alongside the lira’s precipitous decline in recent years. 

Esas Properties, which owns seven shopping centers across Turkey, is now looking to make similar investments in the Gulf market, especially in Saudi Arabia and the United Arab Emirates, Chief Executive Officer Cem Eric said in an interview. The company has already signed a contract to manage a shopping mall in Duhok, a city in the northern region of Iraq.

“We are looking into strategic partnerships in asset management in Erbil in Iraq, Central Asian countries, where there is potential for growth,” Eric said. 

The move comes as the property developer has been weathering a yearslong decline in rental revenue tied to its domestic business. That drop was sparked by a 2018 law that annulled all foreign currency-based rental contracts for shopkeepers in the country’s 450 malls and turned them into lira-based contracts. 

The Turkish lira has lost about 90% of its value against the dollar since then, the second worst performer among emerging currencies tracked by Bloomberg. Since the vast majority of Esas’s borrowings are in dollars or euros, it’s created a mismatch that has proven painful for the developer’s local profits in recent years, Eric said.  

Esas isn’t alone: When local investors of the Dutch mall manager Multi Corp. secured bankruptcy protection from a Turkish court for 10 of the 13 malls that Multi operates in the country, they cited issues with a currency mismatch between revenue and expenses in their court documents. 

Unlike similar properties across North America and Europe, Turkish malls boast high occupancy rates and attract hoards of consumers to their halls. That’s spurred demand for the developments and just this month the Qatar Investment Authority sold its minority stake in a high-end Istanbul shopping mall for about $500 million. 

While Esas isn’t planning to make new mall investments in Turkey, it is planning to rehabilitate its existing properties, Eric said. Esas Properties, which is a unit of the buyout group Esas Holding AS that is owned by some members of the billionaire Sabanci family, expects total revenue to climb by 120% to 350 billion liras this year, he said.

“Most of these malls are 10 years old or older,” he said. “There is a need to renovate them and we are involved in a few projects like that.”

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