Turkey: Turkish REITs: Key Points To Consider Before An Initial Public Offering

This article aims to provide insight into various key points to consider before launching an initial public offering ("IPO") for real estate investment trusts ("REIT") in Turkey.

1. Procurement of Necessary Business Premises, Equipment and Employees

A REIT must conduct its activities in suitable business premises with the necessary equipment. However, the Communiqué on Real Estate Investment Trusts (Communiqué No. III-48.1, dated May 28, 2013) does not provide in detail requirements as to the features of such "suitable business premises" and the content of the "necessary equipment" requirement. A REIT should also employ qualified employees who are suitable for its activities together with "specialized employees" (ihtisas personeli) who should be qualified to carry out the duties specified in the applicable capital markets legislation and should possess certain licenses in the capital markets field.

It should be noted that if a REIT is a tenant on its business premises, the lease agreement of the premises should be duly annotated and affixed to the title deed, as per Article 26 of the Communiqué on Real Estate Investment Trusts.

2. Establishment of an Appropriate Organization

A REIT should duly establish an appropriate and suitable internal organization to conduct its activities in an effective manner. According to Article 4(5) of the Corporate Governance Communiqué (Communiqué No. II-17.1, dated January 3, 2014), a REIT should also form an audit committee, an early detection of risk committee, a corporate governance committee, a nomination committee and a compensation committee, as may be necessary, and appoint skilled and capable members to those committees.

On the other hand, Article 23 of the Communiqué on Real Estate Investment Trusts sets forth the activities that a REIT is not allowed to engage in, which include real estate construction work, operating hotels, hospitals, shopping malls, supermarkets, commercial warehouses, etc., for commercial purposes, and providing project development services to third parties, among others. Therefore, a REIT must conduct its activities in accordance with these restrictions and limitations, and cease prohibited activities immediately, if any.

3. Appointment of a General Manager

As per Article 18 of the Communiqué on Real Estate Investment Trusts, the general manager employed by a REIT must possess a bachelor's degree from a four-year institution of higher education and at least 5 years of work experience in the fields of infrastructure, law, construction, banking, real estate or financing. Furthermore, in accordance with Article 7 of the Communiqué on Real Estate Investment Trusts, the general manager (i) should be honest and reputable, (ii) should not have any outstanding tax debts, (iii) should not have been convicted of certain crimes, (iv) should not have been banned from capital markets activities, and (v) should not be involved in bankruptcy or liquidation proceedings in an individual capacity or as a shareholder of any company.

4. Fulfillment of Certain Requirements Regarding the Assets in the REIT Portfolio

The Communiqué on Real Estate Investment Trusts stipulates certain requirements and limitations as to the types and features of assets that can be included in a REIT's portfolio. In this respect, REITs should always take into account and comply with such requirements and limitations when they are making investment decisions or disposing of assets in their portfolios. During the public offering process, details of the portfolio are determined through real estate value assessment reports for the Capital Market Board's ("CMB") review.

5. Application to the CMB and Borsa Istanbul

A REIT should apply to the CMB within three (3) months as of the date of its incorporation or conversion to a REIT from a joint-stock company. This application must be made by using the standard application form of the CMB and by providing all other required documentation and supporting documents (e.g., offering circular, real estate value assessment reports, trade registry gazettes, board of directors' resolutions and declarations/undertakings, etc.) for a public offering of at least 25% of its issued share capital. If a REIT fails to apply to the CMB within the prescribed time period, its application will be denied by the CMB and the "real estate investment trust" status of the entity and its related legal rights (i.e., tax exemptions, etc.) stemming from this status will be terminated. Furthermore, a REIT should also apply to the Borsa Istanbul simultaneously with its CMB application, and an independent lawyer's report and other required documents should be duly prepared for the listing of its shares by Borsa Istanbul.

Finally, a thorough and detailed legal due diligence of the REIT should be conducted for the preparation of the independent lawyer's report.

All information contained in the foregoing documents should be complete, true and accurate, and reflect the current status of the REIT to ensure the successful completion of the IPO.

This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in June 2018. A link to the full Legal Insight Quarterly may be found here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions