Turkey: The Communiqué Regarding The Amendments To The Communiqué On Principles Of Real Estate Investment Companies

Last Updated: 25 May 2017
Article by Bilge Binay Kanat and Ecem Bağlarlıoğlu

The Communiqué Regarding the Amendments to the Communiqué on Principles of Real Estate Investment Companies ("Communiqué") has been published in the Official Gazette dated 17.01.2017 and numbered 29951 and entered into force at the date of its publication("Amendment Communiqué"). According to the Amendment Communiqué:

  • Real Estate Investment Companies that will operate a portfolio composed of exclusively infrastructure investments and services ("REICs") shall carry out the below stated steps within 2 years following the registration of incorporation or amendment of articles of association:

    • To build an organization which provides the necessary site, equipment and staff members for carrying out the operations,
    • To ensure that the qualifications of the assets in the portfolio and the significance of these assets in the company are in line with the stated limitations and provide the documents that prove this issue to the Capital Markets Board.
  • In case the REICs only operate with the production license or similar prerogatives they have regarding infrastructure facilities, there is no obligation for REICs;

    • To make a statement in the articles of association that minimum 75% of the REICs' total assets will be composed of infrastructure investments and services,
    • To invest at least 51% rate of the REICs' total assets on real estates, real estate projects and rights based upon real estate.
  • The period provided in accordance with the Communiqué on Corporate Governance to legalize the deposits, pledges, mortgages and sureties that are unlawfully issued against the provisions regulating the deposits, pledges, mortgages and sureties; begins with the registration of the incorporation or the amendment of the articles of association of the REICs that are incorporated or transformed to operate a portfolio with infrastructure investments and services.
  • Only board of directors' members with four years of higher education can take part in the committees that are established before board of directors based on the Capital Markets Board's regulations. If a board of directors' member is a legal entity, the natural person who is assigned by this legal entity in line with the Turkish Commercial Code shall also have a four year higher education degree to take part in the abovementioned committees.
  • The decision regarding an assignment of a member to the board of directors shall be delivered to the Capital Markets Licensing and Training Agency ("CMLTA") (Sermaye Piyasası Lisanslama Sicil ve Eğitim Kuruluşu A.Ş.) within 10 (ten) business days at the latest, with the documents proving that the assigned person qualifies for the conditions. The natural person that is assigned by a legal entity member of the board of directors for the purpose of representing such legal entity in line with the Turkish Commercial Code, shall be reported to CMLTA with the documents proving the possession of the conditions stated in Article 17.2 of the Communiqué, within 10 (ten) business days at the latest following the announcement of the registration.
  • The real estates that will be included in the REICs' portfolio shall comply with each other in terms of; (i) their qualifications in the land title registry, (ii) their type of actual use and (iii) their inclusion qualification to the portfolio. Nevertheless, if there is a building which is non-profitable, abandoned or registered as risky on the land that is in the possession of REICs; after determination of such conditions by means of a valuation report, the foregoing requirement of compliance will not be necessary provided that it is notified to the Capital Markets Board that these buildings will be demolished or their status in the land title registry will be amended.
  • In addition to the transactions which REICs' are legally prohibited from; REICs shall not lend money to their related parties for a purpose other than the sale of goods or services.
  • REICs that will operate exclusively within the portfolio consisting of infrastructure investments and services are able to operate directly in the infrastructure facilities related to a generation license and/or infrastructural privileges; on the condition that these REICs possess the aforementioned license and/or infrastructural privileges.
  • With the purpose of financing real estate investments within the portfolio of a subsidiary, the REICs can; establish mortgages, pledges and limited real rights on the assets in its own portfolio, or also can issue securities, guarantees and sureties in favor of aforementioned subsidiary provided that the REIC holds %100 shares of the aforementioned subsidiary.
  • In case of the sale of the independent sections from the ongoing or completed real estate projects in the REICs' portfolio where the current price of the independent sections are determined within the last three months of the REICs' financial year; it is possible to use the determined price in the mentioned evaluation report in the following year, until the determination of the year-end prices of the assets of which the current price could not be determined within the last three months of the financial year of the REIC for any reason.
  • Instead of determining the lease rate of the premises for lease such as shopping mall, business place, commercial storehouse, office and branch which are included in the portfolio separately, it is possible to have the lease rate of the entire premise determined at once. In the event that the lessee is a related party of the REIC, it is obligatory to have the lease rate of the relevant independent section that is leased to such related party determined.
  • In case that the current lease rate of the abovementioned premise is determined within the last three months of the financial year, it is possible to use the determined price rate in the mentioned evaluation report in case of the change of lessee or renewal of the agreement in the following year until the determination of the year-end prices of the assets of which the current price could not be determined within the last three months of the financial year of the REICs for any reason.
  • The REICs are obliged to announce the purchasing transactions to the portfolio, leasing and selling transactions from the portfolio, the purchasing, selling and leasing transactions which exceeds 2% of the total assets stated in the latest financial tables of the REIC within 1 (one) business day following the completion of the transaction at the latest; the purchasing, selling and leasing transactions which does not exceed 2% of the total assets stated in the latest financial tables of the REIC within 10 (ten) business days following last day of the financial year through the Public Disclosure Platform.
  • Article 45 paragraph 2 of the Communique stating "REICs cannot perform the distribution of dividends in cash prior to the public offering of the shares or sale of these shares to a qualified investor" shall not be applicable until 31 December 2017 to the REICs that exclusively manage their portfolio which is composed of infrastructural investment and services.

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.

Authors
 
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
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must 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.

Disclaimer

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.

General

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