Turkey's REIT sector: an iceberg in Europe- Pricewaterhouse Coopers, Engin Cubukcu
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Turkey's REIT sector: an iceberg in Europe- Pricewaterhouse Coopers, Engin Cubukcu

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This presentation will explore the Turkish REITS sector strengths and weaknesses, including what investors should be looking for. It will also explore which segment represents the main engine of ...

This presentation will explore the Turkish REITS sector strengths and weaknesses, including what investors should be looking for. It will also explore which segment represents the main engine of growth of Turkish REITS.

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Turkey's REIT sector: an iceberg in Europe- Pricewaterhouse Coopers, Engin Cubukcu Turkey's REIT sector: an iceberg in Europe- Pricewaterhouse Coopers, Engin Cubukcu Presentation Transcript

  • www.pwc.comTURKEYReal Estate Sector andREIT StructureCannes, 6 March 2012
  • Questions ? What is expected in real estate market? Taxation? Any specific REIT What is a REIT? taxes? Accounting principles? Why investors/developers Regulatory background, consider REIT? How transparent is the REIT system? March 2012PwC 2
  • What is happening in the Market ?• Mortgage loan demand dropped starting from 3Q 2011 with rising interest rates• Foreign investment in RE in 2011 reduced to $2 billion• Strong consumption off-set by increase in GLA where turnover/m2 is stable for shoping centers• Office market keeps its momentum with strong supply and stagnating rental prices March 2012PwC 3
  • What is expected in the Market ? 2B- LAND NEW TURKISH CREATION COMMERCIAL CODE FOREIGN OWNERSHIP IN REAL ESTATE STRONG GDP URBAN GROWTH TO TRANSFORMATION CONTINUE March 2012PwC 4
  • Highlights of the REIT regulation• Regulated by the Capital Markets Board (CMB)• 24 REITs active, 5 in progress with Mcap of $7bn• At least 25% of the shares has to go public• One of the founders should be the leading investor and satisfy certain requirements• Either a new company as REIT or transform an existing one• Turkish REIT’s are exempt from Corporate tax and dividend distribution wht March 2012PwC 5
  • Highlights of the REIT regulation• Valuations are done by only CMB certified appraiser• Accounting standards are TFRS (identical with IFRS)• Clear segregation of developer and construction business• Specific rules by CMB on assets which can be included in portfolio• Subject to independent audit semi-annually• Sales/purchase/leasing transactions require independent appraisal March 2012PwC 6
  • REIT for Investors/Developers Investor Developer • International Standards on • Access to public funds Financial Reporting through IPO • Transparency • Alternative finance instruments • Strong regulatory control • (ABS,Cover Bonds etc) • Professional Real Estate • Tax advantage portfolio management • Corporate Governance • More Liquid/opportunity to capitalise on market fluctuations • The market is not mature and • High discounts observed in deep for fair value some IPOs in the past • Consistent application of • Regulated buisness valuation standards needs • Some assets may not qualify for improvement legal requirements of CMBTax and Legal aspects of RE Investments to Turkey March 2011PwC 7
  • Thank you...Engin CubukcuSenior Manager, Real EstatePwC Turkeyengin.cubukcu@tr.pwc.com+90 212 326 6180This publication has been prepared for general guidance on matters of interest only, and doesnot constitute professional advice. You should not act upon the information contained in thispublication without obtaining specific professional advice. No representation or warranty(express or implied) is given as to the accuracy or completeness of the information containedin this publication, and, to the extent permitted by law, Basaran Nas Yeminli Mali MüşavirlikA.Ş , its members, employees and agents do not accept or assume any liability, responsibilityor duty of care for any consequences of you or anyone else acting, or refraining to act, inreliance on the information contained in this publication or for any decision based on it.© 2011 Basaran Nas Yeminli Mali Müşavirlik A.Ş. All rights reserved. In this document, “PwC”refers to Basaran Nas Yeminli Mali Müşavirlik A.Ş which is a member firm ofPricewaterhouseCoopers International Limited, each member firm of which is a separate legalentity.