REIT
What is a Real Estate Investment Trust?
Real Estate Investment Trusts are publicly traded capital market institutions that can invest in the following areas, act within the framework of the Capital Markets Law and are subject to the Capital Markets Board.
- Real Estate
- Real estate projects
- Rights based on real estate
- Capital market instruments
- Demand and time deposits and participation accounts
- Subsidiaries
real estate investment trusts
What Do Real Estate Investment Trusts Do?
Real estate investment trusts are established to invest in real estate and real estate projects with high return potential and to generate rental income and real estate trading income from the real estate in their portfolio.
Real estate investment trusts that make a profit from the purchase and sale of real estate in their portfolio can distribute this profit to their shareholders as dividends at the end of the year.
Thus, an investor who becomes a shareholder by purchasing the shares of a real estate investment trust can indirectly benefit from the income of high-yielding real estate, as well as from the possible price increases of the shares of these partnerships in the stock market.
In the real estate investment trust system, the purchase of shares of a company investing in real estate eliminates the problem of liquidating the real estate investment.
Real estate investment trusts may only operate within the scope of operating a real estate portfolio and may provide financing for projects whose construction is carried out by other companies.
As a natural consequence, real estate investment trusts cannot hold machinery and equipment in their assets, undertake construction works themselves or carry out projects.
The main points that REITs can do are listed below;
Buying, selling, leasing, renting real estate.
Real estate project development, construction.
Real estate project development in return for revenue sharing or flat for land.
Furnishing for the purpose of renting out.
Establishing overriding right, usufruct right and timeshare easement.
Build-Operate-Transfer projects.
Real estate investments abroad
Yurtiçi-dışı vadeli mevduat ve sermaye piyasası araçları alım/satımı (aktifin %10’unu geçmemek kaydıyla).
Subsidiary Acquisition.
To be able to use credit (provided that it does not exceed 5 times the shareholders' equity).
Issuing Real Estate Certificates
Issuing Asset-Backed Securities
Ability to Provide Collateral.
Establishing an ordinary partnership (not considered as a participation).
Undertaking the management of real estate properties with rental income.
Which Companies Can Real Estate Investment Trusts Participate in?
Operating companies,
Other real estate investment trusts,
Companies established under build-operate-transfer projects,
Companies incorporated abroad whose sole activity is real estate, limited to the acquisition of certain real estate properties or real estate based rights,
İktisap tarihinde gayrimenkullerin ya da gayrimenkule dayalı hakların ekspertiz değerinin, iştirak edilecek şirketin bilanço aktifinin en az %75’ini oluşturduğu Türkiye’de kurulu şirketlere,
In the event that the infrastructure services related to the real estate, real estate based rights or real estate projects included and/or planned to be included in their portfolios are required to be provided by the companies established or to be established for the sole purpose of providing these services as per the legal obligations stipulated in the relevant legislation, they may participate in these companies. However, the participation to be made by the partnerships in the operating companies cannot exceed % 10 of the total assets of the partnerships in the financial statements prepared and disclosed to the public at the end of the accounting period.
REIT
What Can Real Estate Investment Trusts Not Do?
- He can't build.
- Cannot engage in commercial, industrial or agricultural activities.
- It cannot collect deposits or participation funds.
- It cannot operate real estates for commercial purposes.
- It cannot provide project services.
- It cannot lend.
- It cannot lend money that is not based on the sale of goods or services.
- They cannot pay commission fees exceeding %3 of the asset value.
- Cannot engage in short-term real estate trading on an ongoing basis.
- Cannot invest in assets with restricted transferability.
- They cannot invest in precious metals and other commodities.
- They cannot invest in capital market instruments that are not traded in the markets.
What are the Rights Provided to Investors by Becoming a Partner in a Real Estate Investment Trust?
An investor who invests in the shares of a real estate investment trust has the following rights arising from the Turkish Commercial Code;
- In the event that the corporation distributes dividends, the right to receive its share.
- Right to liquidation share in case of liquidation of the partnership.
- The right to receive the shares to be issued by the Incorporation due to the capital increase to be made from its own resources as bonus shares.
- Priority (pre-emptive) right to acquire new shares in the capital increase of the corporation.
- The right to attend, vote, speak and make proposals at general assembly meetings.
- The right to receive information about the activities and accounts of the Incorporation, and the right to inspect and audit them.
How is the Company Value of Real Estate Investment Trusts Determined?
The company value of real estate investment trusts is determined in the price determination report to be prepared by the intermediary institution intermediating the public offering prior to the public offering. After the initial public offering, the value of the company's shares changes in a free market environment in a supply and demand relationship, as in other companies traded on the stock exchange.
What are the Types of Real Estate Investment Trusts?
Real estate investment trusts may be established to invest in a specific project or real estate or to operate in a specific field, or they may be established without any such limitation in their purpose, provided that they do not go beyond the purpose of operating a portfolio of specified assets and rights. They operate in two main types: related to real estate activities or infrastructure investment services.
real estate valuation service
What Does Real Estate Appraisal Service Cover?
For the transactions listed below, real estate investment trusts are obliged to have the values and fair rental values of the assets and rights subject to the transaction determined by an independent real estate appraisal company authorized by the CMB.
Purchase or sale of real estates, real estate based rights and real estate based projects included in the portfolio.
Renting out the real estates in the portfolio.
Leasing of real estate to be rented out.
Renewal or extension of the lease agreements of the leased properties in the portfolio.
Acceptance of real estate mortgages.
Determining that the legal procedures are complied with and the necessary documents are available in full and accurately in order to start the construction of real estate based projects.
Inclusion and exclusion of other assets deemed appropriate by the CMB.
Determination of the year-end values of the assets in the Incorporation's portfolio whose fair value has not been determined for any reason within the last three months of the accounting period of the Incorporation.
Changing the nature or type of the real estates, real estate based rights and real estate based projects in the portfolio.
Contribution of capital in kind to the partnership.
How are Real Estate Investment Trusts Established?
Real estate investment trusts can be established in two ways. REITs can be established as a new joint stock company within the framework of the Turkish Commercial Code, or they can be "transformed" into real estate investment trusts by amending the articles of association of joint stock companies previously established for other purposes in accordance with the CMB regulations.
Either way, the establishment or conversion of real estate investment trusts must be approved by the CMB. After the approval of the CMB, an application is made to the Ministry of Customs and Trade for permission to establish/amend the articles of association. Following the permission of the Ministry and the registration of the general assembly resolution regarding the transaction, real estate investment trusts create the company portfolio by using the partnership capital.
What is the Minimum Capital of Real Estate Investment Trusts?
2025 yılında kurulacak veya dönüşecek bir gayrimenkul yatırım ortaklığının, kuruluş ve dönüşüm işlemleri öncesinde aranan asgari sermaye şartı 1 milyar liradır. Bu sermaye 2 milyar liradan az ise en az %10’u, sermaye 2 milyar liradan çok ise en az 200 milyon liralık kısmı nakdi olmalıdır.
How is the Public Offering of Shares of Real Estate Investment Trusts Conducted?
Gayrimenkul yatırım ortaklığı olarak kurulan veya esas sözleşme tadili yoluyla gayrimenkul yatırım ortaklığına dönüşen ortaklıkların, paylarını halka arz yoluyla satabilmek için kuruluşlarının veya esas sözleşme değişikliklerinin ticaret siciline tescilini takip eden 3 ay içinde faaliyetlerin yürütülebilmesi için gerekli olan mekan, donanım ve personeli temin etmeleri ve organizasyonu kurmaları, gayrimenkul yatırım ortaklığı olarak kurulan ortaklıkların genel müdürün atanmasına ve portföye dahil edilecek varlıklara ilişkin taahhütlerini yerine getirmeleri, şekli ve esasları Kurulca belirlenecek halka arz başvuru formunu ve formda belirtilen belgeleri tamamlayarak çıkarılmış sermayelerinin asgari %25’ini temsil eden payların halka arzına ilişkin izahnamenin onaylanması talebiyle Kurula başvurmaları zorunludur.
REIT
Are Real Estate Investment Trusts within the Scope of Independent Audit?
A real estate investment trust is subject to continuous independent audit as of the accounting period in which its shares are offered to the public. As a result, the financial statements of the company as of the end of the 6th and 12th months are audited by an independent audit firm listed by the Board.
In addition, real estate investment trusts shall prepare quarterly activity reports of the board of directors. These reports include, as a minimum, the summary of the valuation reports prepared for the assets in the portfolio, summary of the developments in the last quarter, additional explanations such as the current status, completion rate and duration of the projects, realization status of the projections, problems, detailed information on the leased assets in the portfolio, comparative financial statements of the partnership for the relevant accounting period and information on the control of portfolio limitations.
The annual reports of the board of directors are disclosed to the public within the periods specified in the Board's regulations on financial reporting. The said report is also made available for the review of investors at the Company's headquarters and on the corporate website. It is also sent to the shareholders upon their request, at the expense of the shareholders. The annual reports of the board of directors are kept by the corporation for at least ten years.
What are the Restrictions on Investments of Real Estate Investment Trusts?
Hiçbir şirkette sermaye veya oy haklarının %5’inden fazlasına sahip olamazlar. Ayrıca bu kapsamdaki yatırımlarının toplamı aktif toplamının %10’unu aşamaz.
They cannot invest in gold, precious metals and other commodities and futures contracts based on them.
Except for the shares of mutual funds, they cannot invest in capital market instruments that are not traded on the Stock Exchange or in organized markets outside the Stock Exchange, and the trading of capital market instruments must be made through the Stock Exchange.
They cannot short sell capital market instruments, make securities transactions on credit and borrow capital market instruments.
They cannot make transactions that exceed the purpose of hedging by using derivative instruments.
Except for taxes, fees and other similar expenses that they are legally obliged to pay, they cannot make commission fees and similar expenses exceeding % 3 of the asset value during the purchase and sale of assets to and from the portfolio.
They may not invest in assets and rights that are subject to a restriction on their transferability in any way.
What are the Portfolio Limitations for Real Estate Investment Trusts?
They are obliged to invest in real estate, rights based on real estate and real estate projects at a ratio of at least % 51 of their total assets.
They can invest in capital market instruments, reverse repurchase agreements, Takasbank money market transactions and all of their subsidiaries at a maximum rate of % 49 of their total assets, and in Turkish Lira or foreign currency deposits/participation accounts for investment purposes within these assets at a maximum rate of % 10 of their total assets.
They may invest in foreign real estate, real estate based capital market instruments and companies incorporated abroad whose field of activity is exclusively real estate, up to a maximum of % 49 of their total assets.
Portföyünde bulunan ve alımından itibaren beş yıl geçmesine rağmen üzerlerinde proje geliştirilmesine yönelik herhangi bir tasarrufta bulunulmayan arsa ve arazilerin oranı aktif toplamının %20’sini aşamaz.
Belirli alanlarda faaliyet göstermek veya belirli projelere yatırım yapmak üzere kurulan ortaklıkların aktif toplamlarının en az %75’inin, unvanlarında ve/veya esas sözleşmelerinde belirtilen varlıklardan oluşması zorunludur.
It is essential that general purpose real estate investment trusts diversify their portfolios by sector, region and real estate and manage them for the long term.
How are Real Estate Investment Trusts Taxed?
Gayrimenkul yatırım ortaklıkları için kurumlar vergisi istisnası uygulanmaktadır. Dağıtılabilir kârın en az %50’sini temettü olarak dağıtmak kaydıyla kurumlar vergisi %10 uygulanmaktadır.
How to Contribute Capital in Kind to a Real Estate Investment Trust?
Real estates on which there are no mortgages or encumbrances may be contributed to REITs as capital in kind. In case of capital in kind at the time of establishment, the lowest valuation between the valuation of the expert appointed by the Commercial Court in accordance with Article 343 of the TCC and the valuation of a valuation company holding a CMB license is accepted as the amount of capital in kind.
qualities
What are the Qualifications of REIT Partners?
- They should not be bankrupt, should not have a history of concordat, postponement of bankruptcy.
- Must not have a finalized conviction for offenses specified in the Capital Markets Law, and must not be banned from trading.
- Must not have been sentenced to imprisonment for 5 years or more for a crime committed deliberately or convicted of crimes against the security of the state, crimes against the constitutional order and the functioning of this order, embezzlement, embezzlement, bribery, theft, fraud, forgery, abuse of trust, etc.
- Must not have been convicted of offenses regulated in the Law on the Prevention of Terrorist Financing.
- Must have the integrity and reputation that the job requires.
- There should be no outstanding tax debt.
What are the Qualifications of the REIT Board of Directors and Members?
The minimum number of REIT board members is 5. At least two of these members must be independent members (1/3 of the number of members) and the majority of the board of directors must be 4-year university graduates. In addition to the qualifications required for REIT shareholders, board members should have at least 3 years of experience in areas such as real estate, infrastructure, law, construction, banking and finance that are relevant to the REIT's field of activity.
What are the Qualifications of the General Manager in Real Estate Investment Trusts?
REITs appoint a general manager upon their registration. The general manager must work full-time, but may serve as a non-executive member of the Board of Directors in other organizations, provided that this does not interfere with his/her duties in the REIT. In addition to the qualifications of the REIT shareholders, the general manager must be a graduate of a 4-year university and have at least 5 years of experience in areas such as real estate, infrastructure, law, construction, banking and finance that are related to the REIT's field of activity.
REIT
Who Has Management Dominance in Real Estate Investment Trusts?
Privileged shares can be created in the establishment or transformation of REITs, but new privileged shares cannot be created in capital increases. These shares have the privilege to nominate candidates for the election of the board of directors. In general assembly voting, they have only one voting right, just like non-privileged shares. The transfer of privileged shares is subject to CMB authorization. In the event of a loss for 5 consecutive years, the privileged shares are abolished.
What are the Calendar and Mandatory Deadlines for Public Offerings of Real Estate Investment Trusts?
Application is made to the CMB for REIT establishment/transformation. Within 30 days following the CMB approval, the permission of the Ministry of Trade is obtained and a general assembly is organized. The general assembly must be registered within 15 days. Within 3 months following the registration, an application must be made to the CMB for public offering.
What Should be the Public Offering Ratio of Real Estate Investment Trusts?
Gayrimenkul Yatırım Ortaklıkları en az %25 oranında halka açık olmalıdırlar.
Is it possible to sell shareholders in the public offering of real estate investment trusts?
In REIT public offerings, only shareholder sales or only capital increases can be made, or both shareholder sales and capital increases can be made at the same time.
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