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Sunday, 10 July 2011 09:41

The Turkish Name of Real Estate Investment Trusts in Turkey is Gayrimenkul Yatirim Ortakligi. Turkey is a REIT leader, because Real Estate Investment Trusts in Turkey go back to 22nd July 1995, with the Capital Markets Law and Communique on Principles Regarding Real Estate Investment Companies. They are set up as corporations (Joint Stock Companies) listed on the Istanbul Stock Exchange. They are regulated primarily by the Capital Markets Board (CMB). The REIT in Turkey began trading in 1997. Existing corporations can convert to REIT status. This can be for a limited or unlimited time period. The beginning capital of a Real Estate Investment Trust in Turkey is decided by the CMB. The full name of the company must contain the words "Real Estate Investment Company." Registered shares must equal at least 25% of issued capital. A REIT must invest at least 50% of its capital into real estate, rights to real estate and real estate projects. It is to be concerned primarily with portfolio management. A REIT in Turkey may not be involved with construction, and may not be involved with managing any hotel, hospital, shopping center, business center, commercial parks, warehouses, residential sites, supermarkets, and similar types of real estate. They may invest in foreign real estate, but not more than 49% of their assets. Dividend distribution is made annually, by the end of the fifth month at the end of their fiscal year. Distribution must be at least 20% of distributable profit. REITs are exempt from corporate income taxes Corporate Tax Law. REITs in Turkey are required to publish tables of assets with fairly appraised values by certified appraisers. The government's intent here is to bring more transparency to the real estate market in general. Many private transactions are not recorded, to keep valuations low and to avoid paying taxes. There are a rapidly growing number of REITs in Turkey which have formed a Turkish REIT Association, and it is indicative of future growth, as in addition to 23 public REITs (with a market cap of about TRY7bn/USD$3.9bn & assets of approx TRY13.8bn/USD$7.7bn - 2011), there were about another half-dozen in the pipeline waiting for the right time to launch an IPO. By late-2010 some 8 of the public REITs: Atakule; Doğuş GE; EGS; İş; Pera; TSKB; Vakıf & Yapı Kredi Koray, were subsidiaries of financial conglomerates, whilst another 8 were or had been sponsored by other industrial / construction corporates including: Akmerkez; Alarko; Idealist; Nurol; Sağlam; Sinpaş; Yapı Kredi Koray & Y&Y. The State Planning Organisation / DPT & Turkish Statistical Institute / TUIK also foresee strong growth because the demographics indicate that the country needs about 3m new houses, and to replace the slums & shanty housing areas in the big cities (not helped by the frequent earthquakes).

Last Updated on Thursday, 18 April 2013 06:42