Frequently Asked Questions

What is Real Estate Investment Trust REIT

In Turkey, Real Estate Investment Trust is established in the form of joint-stock corporation and it has a legal personality. Their capital is registered and they issue shares. Their shares have to be issued in return for cash and quoted, traded and priced at a stock exchange. Their main business lines may include:

  •  Investing in high potential real estate;
  •  Investing in real-estate backed securities;
  •  Generating rental income from their portfolios;
  •  Real estate sales.

The companies granted with the status have to apply to CMB in order to offer their shares to public within three months.

The core business of Ziraat REIT is to invest in real estate, real asset backed rights and develop real estate projects to acquire real estate income or lease income.

REITs are subject to the “Principles Pertaining to Real Estate Investment Trusts” of the Capital Markets Board (CMB) No.III-48.1

Ziraat REIT was established on November 1st 2016.

Which

In Turkey, Real Estate Investment Trust is established in the form of joint-stock corporation and it has a legal personality. Their capital is registered and they issue shares. Their shares have to be issued in return for cash and quoted, traded and priced at a stock exchange. Their main business lines may include:

  •  Investing in high potential real estate;
  •  Investing in real-estate backed securities;
  •  Generating rental income from their portfolios;
  •  Real estate sales.

The companies granted with the status have to apply to CMB in order to offer their shares to public within three months.

At least 25% of REITs must be publicly held.

Can REITs invest in cash and capital market instruments?

REITs can invest in cash and capital market instruments. However, their total investment in cash and capital market instruments can not exceed 49% of their total asset value.

REITs can invest in foreign capital instruments, real estate and companies established abroad, which exclusively operate in the field of real estate, at a maximum ratio of 49% of its assets.

The ratio of plots and land in the portfolios of REITs, which are not used in any way for development of any projects, despite the fact that it has been more than five years since they have been purchased, to the total assets of the REITs cannot exceed 20%.

There is no obligation to diversify their portfolios on sector, region and real estate basis.

What is the borrowing limit for REITs?

REITs may obtain loans up to five times their non-consolidated equity stated in their year-end financial statements.

Are REITs obliged to distribute their profit?

There is no such obligation. According to Communiqué on Principles Regarding Real Estate Investment Companies, Capital Markets Board may place an obligation for REITs regarding distribution of cash dividends.

What is the corporation tax rate applicable on earnings of REITs?

As a Turkish joint stock company, a REIT is subject to Turkish income tax regulations. However, all profits of a REIT become exempt from Turkish corporate income tax under the Turkish Corporate Tax Law once it is recognized as REIT under Capital Markets Law and rules introduced by the Capital Markets Board and remain exempt as long as the REIT status is maintained. Pursuant to Article 5/1-d-4 of the Corporate Tax Law ("CTL"), revenues of REITs are exempted from the corporate tax. The withholding tax rate imposed pursuant to the CTL 15/3 on such revenues which are exempted from the corporate tax is 0%. The purchase and sale agreements of REITs exclusively for real estate portfolios and their real estate off-plan presales contracts are exempted from stamp duty. The original copies of all other written and signed contracts (including lease contracts) which are not exempted shall be subject to stamp duty. There is no general charge exemption for REITs. Therefore, they are subject to title deed and cadastral charges in particular

Which values are used by REITs when they are purchasing, selling or leasing real estate?

Purchases to be included in the portfolio and sales and leasing transactions from the portfolio carried out by REITs are realized by taking into consideration the appraisal values determined by CMB licensed real estate appraisal companies.

Can REITs transact at values which are under the appraisal value when selling or leasing real estate?

Although in principle REITs should take into account the appraisal value of the CMB licensed real estate appraisal companies appraisal value when selling or leasing real estate, they may also transact over values that are lower than the appraisal value in sales and leasing transactions. However, if the sales or leasing transactions are carried out over values lower than appraised values, such transactions must be publicly announced as material event disclosures and included in the agenda of the first general assembly meeting to inform the shareholders.

How many shares is the capital of Ziraat REIT divided into? Do the shares enjoy any privileges?

* Group A shares hold the privilege of nominating the board of directors. All members of the board of directors, with the exception of the independent members, are chosen from among the nominees determined by group A shareholders while the independent members of the board are selected by the General Assembly among the nominees determined by group A and group B shareholders. There are no privileges regarding voting rights.

Group A shares hold the privilege of nominating the board of directors. All members of the board of directors, with the exception of the independent members, are chosen from among the nominees determined by group A shareholders while the independent members of the board are selected by the General Assembly among the nominees determined by group A and group B shareholders. There are no privileges regarding voting rights.

 

What type of investments does Ziraat REIT’s portfolio comprise?

The portfolio of Ziraat REIT comprises real estate investments, as well as investments in money and capital markets instruments. Real estate investments of Ziraat REIT comprise of real estate projects and rent generating commercial assets such as office buildings.

Who is the majority shareholder of Ziraat REIT?

The sole, 100%, shareholder of Ziraat REIT is T.C. Ziraat Bankası A.Ş.

Ziraat REIT has a capital size of TL 1.300.000.000,00_

How many people does the Board of Directors of Ziraat REIT consist of? What is the number of independent members in the board of directors?

The board of directors of Ziraat REIT consists of 6 people, including 2 independent members

What is the core business of Ziraat REIT?

The core business of Ziraat REIT is to invest in real estate, real asset backed rights and develop real estate projects to acquire real estate income or lease income.

The income resources of Ziraat REIT are lease income from real estate portfolio, real estate sales and from financial assets.

What is the average term of lease contracts concluded with lessees?

The average term of lease contracts is 5 years, while this term may vary depending on the term of lease or type of investment model.

What constitutes the fiscal year of Ziraat REIT?

The fiscal year of Ziraat REIT is a 12-month calendar year. (January-December)

Ziraat REIT discloses its financial results at quarterly intervals.

When am I entitled to dividend?

The dividend distribution principles are stipulated in accordance with the communiqué for Dividend Distribution No II-19.1 published by the Capital Markets Boards on 23.01.2014. Shareholders who own the shares at least one day before the ex-dividend date are entitled to a dividend. The ex-dividend date is decided at Ordinary General Assembly Meeting.