Real Estate Investment Trusts in Turkey (GYO): Communiqué III-48.1 on Portfolio Limits, Related Parties, Borrowing, Appraisals, Disclosure, Asset Sales and Exit from REIT Status

Turkish real estate investment trusts (gayrimenkul yatırım ortaklıkları, GYO) are listed joint stock companies whose value rests largely on property appraisals. Communiqué III-48.1 requires them to invest at least 51% of total assets in real estate, real estate projects, real estate rights, real estate fund units and certain wholly owned subsidiaries (Art. 24(1)(a)). It bars them from lending to related parties other than wholly owned subsidiaries (Art. 23(1)(f)) and limits their borrowing to five times equity (Art. 31(1)). Every purchase, sale and lease must be based on an appraisal by a valuation firm listed by the Capital Markets Board (SPK) and independent of the company. The same firm may not be used for an asset for more than three consecutive years (Arts. 34 and 35). A purchase above the appraised value, or a sale or lease below 95% of it, must be disclosed on KAP and reported to the next general meeting (Art. 37(1)). Appraisal reports must be published on KAP within three business days (Art. 40(2)). Minority protections differ from ordinary listed companies. A REIT may sell up to 75% of its total assets in bulk without the general meeting approval and exit right that normally apply to significant asset sales (Capital Markets Law Art. 49(6); Communiqué Art. 21(3)). Leaving REIT status, however, requires a mandatory tender offer to the other shareholders (Art. 44(1)). This guide explains these rules for foreign institutions holding Turkish REIT shares. It reflects the legislation in force as at 26 October 2026.

Why REIT rules matter in the 2026 cases

A REIT’s share price depends on what it owns, what it pays for and receives from its properties, and how those values are established. Unlike an ordinary listed company, a REIT holds a portfolio defined and limited by regulation, buys and sells on the basis of appraisals, and must disclose its appraisal reports. These rules make REITs unusually transparent. They also make departures from the rules visible. A purchase from a related party above appraisal, a lease to a shareholder’s company below market rent, a loan to an affiliate or a change of appraiser can each be checked against the Communiqué’s requirements.

For a foreign institution holding REIT shares in a period of market scrutiny, the questions are practical. What must the REIT have disclosed? Which transactions should have triggered an announcement? What protections apply if the REIT sells most of its assets or leaves REIT status? And whose responsibility is each of these duties? This guide answers them from Capital Markets Law Arts. 48 and 49 and Communiqué III-48.1.

The legal framework

Investment trusts are joint stock companies with fixed or variable capital, established to issue shares and operate portfolios of capital market instruments, real estate, venture capital investments and other assets determined by the Board (Capital Markets Law Art. 48(1)). The Board sets the rules on their establishment, conversion and exit from status, minimum free float, activities, share transfers, valuation and custody of assets, portfolio limits, management principles, privileged shares, dividends, buy-backs and liquidation (Art. 48(2)). Changes to their articles require the Board’s favourable opinion (Art. 48(3)). They must be established as registered-capital joint stock companies, with shares paid in full in cash on establishment, “Yatırım Ortaklığı” in their trade names, and a portfolio custodian authorised by the Board (Art. 49(1)).

What a REIT may and may not do

A REIT is a capital markets institution established to issue shares in order to operate a portfolio of real estate, real estate projects, real estate rights, infrastructure investments and services, capital market instruments, deposits and other permitted assets (Communiqué III-48.1 Art. 4(1)). It may operate a general portfolio, an infrastructure-only portfolio, or a portfolio dedicated to a particular project, property or field. A dedicated REIT must have at least 75% of its total assets in that field and say so in its name (Art. 5).

Within the Communiqué’s limits, a REIT may buy, sell, lease and promise to buy or sell any kind of real estate, such as land, housing, offices, shopping centres, hotels, logistics centres, warehouses, parks and hospitals, to earn trading profit or rent (Art. 22(1)(a)). Buildings must have occupancy permits and condominium ownership established, with a relaxation for buildings held solely for rent (Art. 22(1)(b)). Only real estate free of mortgages or encumbrances that directly and materially affect value may be acquired, subject to the rules on security in Art. 30 (Art. 22(1)(c)). A REIT may develop projects on its own land or on land under revenue-sharing or flat-for-land arrangements (Art. 22(1)(ç)). The permits and documents for a project must first be confirmed by an independent valuation firm (Art. 22(1)(d)). It may invest in real estate and capital market instruments abroad if it acquires ownership (Art. 22(1)(ı)).

A REIT may not:

• ▸ Act as a bank or lender. It may not take deposits or participation funds, or grant credit (Art. 23(1)(a) and (e)).
• ▸ Build or operate. It may not undertake construction itself or acquire staff and equipment for it, or commercially operate hotels, hospitals, shopping centres and similar properties, with exceptions for permitted operating arrangements (Art. 23(1)(c)–(ç)).
• ▸ Trade short-term. It may not continuously buy and sell real estate on a short-term basis (Art. 23(1)(ğ)).
• ▸ Hold restricted assets. It may not invest in assets or rights whose transfer is restricted (Art. 22(1)(j)), or in gold, precious metals or commodities and related futures (Art. 22(1)(m)).
• ▸ Speculate in securities. It may not invest in unlisted capital market instruments other than fund units and derivatives, and must trade through the exchange (Art. 22(1)(n)). It may not short sell, trade on margin or borrow securities (Art. 22(1)(o)), or use derivatives beyond hedging (Art. 22(1)(ö)).
• ▸ Overpay intermediaries. It may not pay commissions or similar costs exceeding 3% of the asset value on acquisitions and disposals, excluding taxes and fees, except on sales to foreign nationals resident abroad (Art. 22(1)(p)).

Portfolio limits

At least 51% of total assets must be invested in real estate, real estate projects, real estate rights, real estate investment fund units and wholly owned subsidiaries set up to acquire specific real estate abroad. For infrastructure-only REITs the minimum is 75% (Art. 24(1)(a)). Capital market instruments, money market instruments and deposits, together with permitted affiliates other than wholly owned subsidiaries, may not exceed 49% of total assets (25% for infrastructure REITs). Within that, Turkish lira time deposits and foreign currency deposits held for investment may not exceed 10% (Art. 24(1)(b)).

Land held for five years after purchase without any step towards developing a project on it may not exceed 20% of total assets (Art. 24(1)(c)). A REIT may hold no more than 5% of the capital or voting rights of any company, and its money and capital market instruments from a single issuer may not exceed 10% of total assets (Art. 22(1)(l)). These two limits do not apply to its permitted affiliates (Art. 28(3)). Investments in operating companies may not exceed 10% of total assets (Art. 28(4)). Projects on mortgaged land not owned by the REIT require the mortgage to be no more than 50% of the land’s latest appraised value. The total mortgage amounts on such land may not exceed 10% of total assets in the last audited financial statements (Art. 22(1)(e)).

Compliance with the minimum is measured on the year-end financial statements. If the 51% minimum is not met, the Board may, on the REIT’s request, give it one year to restore it. If the ratio is still not met, the REIT must apply within three months to amend its articles so that it no longer operates as a REIT (Art. 24(1)(ç)). Its unconsolidated or individual financial statements must include a footnote on compliance with the portfolio limits in the format the Board sets (Art. 38(2)).

Free float, privileges and control

A newly established or converted REIT must, within three months of registration, set up premises, staff and organisation and apply to the Board for approval of a prospectus for a public offering of at least 25% of its issued capital (Art. 11(1)). After the offering, at least 25% of its issued capital must be in free float (Art. 11(2)). Within fifteen days after the sale period, it applies to the Board for listing documents, and within fifteen days after receiving them it applies to Borsa Istanbul (Art. 12). If it fails to apply on time or its application is rejected, it loses the right to operate as a REIT (Art. 11(3)).

A REIT may issue no privileged securities other than shares carrying the privilege to nominate board members. After it goes public, no privilege of any kind may be created (Art. 14(1)). Where a public REIT records losses in five consecutive years under its Board-compliant financial statements, nomination privileges lapse by Board decision, subject to exceptions and except where the privileged shares belong to public bodies (Art. 14(3)). Shareholders who hold management control must meet the founder qualifications in the Communiqué. If they cease to do so, they must dispose of their controlling shares within three months (Art. 15(2)). Transfers of privileged shares that confer control require the Board’s approval. Transfers in breach of these rules may not be entered in the share ledger, and entries made in breach are void (Art. 15(5)).

Related parties, fees and conflicts

Transactions between a REIT and its related parties are subject to the corporate governance principles set by the Board, subject to the Communiqué’s own rules (Art. 21(2)). These principles, including the role of independent directors and the requirements for significant related-party transactions, are explained in our corporate governance guide. The Communiqué adds specific prohibitions and controls:

1. 1. No loans to related parties. A REIT may not lend to its related parties, other than wholly owned subsidiaries, except in connection with a sale of goods or services (Art. 23(1)(f)).
2. 2. No unexplained payments. It may not make expenditures or commission payments that are not supported by documents and that clearly differ from market rates (Art. 23(1)(g)).
3. 3. Fees to related consultants. If it obtains consultancy from related parties, the Board may cap the fees and commissions, and the consultant and the operating company may not be the same person (Art. 25(2)).
4. 4. Directors’ conflicts. A board member who is not independent, under the corporate governance principles, of a party to a board decision must disclose this with reasons, and it must be recorded in the minutes; the Commercial Code’s prohibition on participating in deliberations also applies (Art. 20).
5. 5. Rent appraisals for related tenants. Where a building is valued for rent as a whole rather than unit by unit, any part let to a related party must still be appraised separately (Art. 34(3)).
6. 6. Outsourcing oversight. A REIT that outsources consultancy, operation, construction or portfolio management must set up an organisation to monitor that the services comply with the law and the contracts (Art. 25(4)).

Borrowing, mortgages and securities lending

To meet funding needs or portfolio costs, a REIT may borrow up to five times the equity in its year-end unconsolidated or individual financial statements. Leasing debts and non-cash credits count towards the limit (Art. 31(1)). It may issue debt instruments within the capital markets limits, but bank borrowing is deducted from the issue limit (Art. 31(2)). It may also issue asset-backed securities secured on receivables from property sales and on rental income (Art. 31(3)).

Mortgages, pledges and other limited real rights may be granted over portfolio assets only to secure financing for the REIT itself, or in favour of landowners in revenue-sharing and flat-for-land projects. For any other purpose, no such rights may be granted to third parties, and the articles must say so (Art. 30(1)). A REIT may grant security, guarantees and suretyships in favour of its wholly owned subsidiaries (Art. 30(2)). Contractual rights in its favour, such as options, pre-emption rights, promises to sell and flat-for-land contracts, and leases in which it is the tenant, must be annotated in the land registry. The board, or a managing director it has authorised, is responsible for this (Art. 26(1)).

A REIT may lend capital market instruments in its portfolio, up to 50% of their market value at any time, for no more than ninety business days. The loan must be covered by collateral of at least 100% in cash or government debt instruments blocked at Takasbank in the REIT’s name. The collateral must be topped up if it falls below 80% of the market value, and the REIT must be able to terminate unilaterally (Art. 22(1)(k)). Capital market instruments in its portfolio must be held in custody at Takasbank (Art. 25(5)).

Appraisals and the appraised value

A REIT must have the market value and market rent of the assets concerned established for the following (Art. 34(1)):

• ▸ Portfolio changes: adding real estate, rights, projects or infrastructure assets to the portfolio or removing them, or changing their nature (Art. 34(1)(a) and (ğ)).
• ▸ Leases: letting portfolio properties, leasing properties in order to sublet them, and renewing or extending leases (Art. 34(1)(b)–(ç)).
• ▸ Mortgages accepted in the REIT’s favour (Art. 34(1)(d)).
• ▸ Project start: confirming that the legal procedure has been followed and all documents are complete before construction begins (Art. 34(1)(e)).
• ▸ Year-end values of assets not appraised in the last three months of the financial year (Art. 34(1)(g)).
• ▸ In-kind capital contributed to the REIT (Art. 34(1)(h)).

Appraisals of assets to be acquired must be made by institutions meeting the Board’s criteria (Art. 34(4)). Year-end appraisals must be completed by the last day of the year (Art. 34(5)). No more than five business days may pass between the end of the work and the report date, and the report must reach the REIT within two business days (Art. 34(6)). The valuation firm must be on the Board’s list and independent under the Board’s rules on valuation firms (Art. 35(1)). Within one month after each year-end, the board must designate, by decision, one firm for each asset requiring appraisal and up to two firms for assets that may be acquired. The decision must be disclosed under the material events rules and sent to the Board, and a designated firm may be changed only with the Board’s approval (Art. 35(2)). The same firm may not appraise the same asset for more than three consecutive years, and two years must pass before it can do so again (Art. 35(3)). The board, or an authorised managing director, is responsible for breaches of Art. 35 (Art. 35(6)).

In-kind contributions on establishment are valued under the Commercial Code and also by an appraisal report under the Communiqué, and the lower of the two values is used (Art. 9(2)). In-kind capital increases may be decided only by the general meeting (Art. 9(4)).

Purchases, sales, leases and similar transactions are carried out by reference to the appraised values. If, given market or payment conditions, a purchase is made above the appraised value, or a sale or lease below 95% of it, this must be disclosed under the material events rules and placed on the agenda of the next general meeting to inform shareholders (Art. 37(1)). For properties with turnover-based rents, or several tenants, rent is compared with the appraised rent at year-end, adjusted for average occupancy. Properties earning less than the appraised rent must be disclosed by the end of the first month after the year-end and reported to the next general meeting (Art. 37(2)). For long leases, appraised rents are set every five years, and shortfalls below 95% are disclosed and reported in the same way (Art. 37(3)).

Disclosure to SPK, KAP and shareholders

A REIT must send the Board, within three business days, the appraisal reports on portfolio assets with their annexes, whether required or voluntary, and information on mortgaged land used for projects (Art. 40(1)). It must publish appraisal reports prepared under Art. 34, without annexes, on KAP within three business days of receiving them. Copies are kept at its head office for investors and sent to shareholders on request at their cost (Art. 40(2)).

In addition to the general material events rules, it must announce on KAP:

• ▸ Missed minimum ratio. Where the minimum portfolio ratio is not met, the reasons and its plan to correct this, within three business days after publishing the year-end financial statements (Art. 40(3)(b)).
• ▸ Departures from appraisal and large transactions. Transactions within Art. 37(1), and purchases, sales or leases exceeding 2% of total assets in the last published financial statements, by the next business day after the transaction (Art. 40(3)(ç)).
• ▸ Smaller transactions. Purchases, sales or leases below 2% of total assets, collectively, within ten business days after the year-end (Art. 40(3)(ç)).
• ▸ Long leases. Transactions within Art. 37(3), within three business days of the rent appraisal report (Art. 40(3)(d)).

A REIT may announce a valuation of the company itself only together with a report prepared under the Board’s rules, and may not announce any other company value (Art. 40(4)). Its financial statements follow the Board’s general financial reporting rules (Art. 38(1)).

Asset sales, exit from REIT status and dividends

For ordinary listed companies, selling all or a significant part of the company’s assets requires general meeting approval under the Commercial Code. It can also trigger the significant transaction rules and exit right under Capital Markets Law Art. 23, as explained in our guide on mergers and asset sales. For REITs, these rules do not apply to bulk sales of assets up to a maximum set by the Board (Capital Markets Law Art. 49(6)). The Communiqué sets that maximum at 75% of total assets (Art. 21(3)). This reflects the fact that buying and selling property is a REIT’s ordinary business, but it means minority shareholders do not have an exit right in such sales.

Leaving REIT status is treated differently. Before the Board will give a favourable opinion on the articles amendments, a person outside the company must make a tender offer to all shareholders other than those who voted for the amendments. The offer price must be the higher of the averages of daily weighted average prices over the thirty days and the six months before the board’s decision was announced (Art. 44(1)). The board must publish on KAP a report on the reasons for leaving REIT status, the company’s future activities, projections and the effects of the change, no later than the application to the Board (Art. 44(2)). For one year after registration, shareholders holding 10% or more, and those holding management control, may not sell on the exchange below the closing price on the registration date; buyers off the exchange are bound by the same restriction (Art. 44(3)).

A REIT also loses its status, and must amend its articles within three months, if a fixed term expires without extension or, for infrastructure REITs, if the purpose becomes impossible (Art. 44/A). It loses its status as well if it fails to restore the minimum portfolio ratio within the period granted (Art. 24(1)(ç)). The Board may require REITs to distribute cash dividends, and no cash dividend may be paid before the shares are offered to the public or sold to qualified investors (Art. 45).

Who answers when the rules are broken

The Communiqué assigns some duties expressly to the board, or to a managing director it has authorised. These include registering in-kind contributions in the land registry within ten business days (Art. 9(5)), annotating contracts in the land registry (Art. 26(1)) and complying with the valuer selection rules (Art. 35(6)). More generally, directors are liable under the Commercial Code and the Capital Markets Law for losses caused by breaches of their duties, as explained in our guide on directors’ and auditors’ liability. Valuation firms and the appraisers who sign reports are liable for losses caused by false, misleading or incomplete reports (Capital Markets Law Arts. 32 and 63; Communiqué III-62.3 Art. 15), as explained in our guide on fund valuation. Where disclosures are false or misleading, liability for public disclosure documents under Capital Markets Law Art. 32 applies. Value transferred to controlling shareholders through transactions on non-market terms may also amount to concealed profit transfer under Capital Markets Law Art. 21, which our related-party guide explains.

The Board may also act. It may require breaches to be corrected, restrict or suspend activities or take other measures against capital markets institutions (Capital Markets Law Art. 96), and it fines breaches of its regulations (Art. 103). A REIT that cannot comply with the Communiqué may ultimately lose its status (Arts. 24(1)(ç), 44/A).

Points for foreign institutional investors

1. 1. Read the appraisal reports. They are published on KAP within three business days (Art. 40(2)); compare transaction prices and rents with them.
2. 2. Watch for Art. 37 announcements. Purchases above appraisal and sales or leases below 95% of it must be disclosed and reported to the general meeting.
3. 3. Track valuer changes and rotation. Designations are disclosed each year; changes need the Board’s approval; the same firm may not exceed three years per asset (Art. 35).
4. 4. Check the portfolio limits footnote. The financial statements must show compliance (Art. 38(2)); a missed minimum must be explained with a plan (Art. 40(3)(b)).
5. 5. Look for related-party lending. Loans to related parties other than wholly owned subsidiaries are prohibited (Art. 23(1)(f)).
6. 6. Monitor leverage and security. Borrowing is capped at five times equity (Art. 31(1)), and mortgages may secure only the REIT’s own financing or permitted project arrangements (Art. 30).
7. 7. Know the asset sale exemption. Bulk sales up to 75% of total assets need neither general meeting approval nor an exit right (Capital Markets Law Art. 49(6); Art. 21(3)).
8. 8. Use the exit-from-status tender offer. If the REIT leaves its status, a tender offer at the higher of the thirty-day and six-month averages is mandatory (Art. 44(1)).
9. 9. Ask at the general meeting. Departures from appraisal must be on the agenda; use the right to information to ask about them.
10. 10. Preserve claims. Claims against directors, valuers and controlling shareholders run on their own limitation periods.

Time limits and thresholds

Frequently asked questions

How much of a Turkish REIT’s assets must be real estate?

At least 51% of total assets, or 75% for infrastructure REITs (Communiqué III-48.1 Art. 24(1)(a)).

Can a REIT lend money to its controlling shareholder’s companies?

No. It may not lend to related parties other than wholly owned subsidiaries, except in connection with a sale of goods or services (Art. 23(1)(f)).

How much can a REIT borrow?

Up to five times its equity, including leasing debts and non-cash credits (Art. 31(1)).

Must REIT transactions follow appraisals?

Yes. Purchases, sales and leases are based on appraised values; purchases above appraisal and sales or leases below 95% of it must be disclosed and reported to the general meeting (Art. 37(1)).

Who appraises REIT properties?

Valuation firms listed by the Board and independent of the REIT, designated by board decision each year, for no more than three consecutive years per asset (Art. 35).

Are REIT appraisal reports public?

Yes. They are published on KAP within three business days, without annexes, and copies are available at the head office (Art. 40(2)).

Which REIT transactions must be disclosed immediately?

Transactions departing from appraisal and purchases, sales or leases above 2% of total assets, by the next business day (Art. 40(3)(ç)).

Do REIT shareholders have an exit right when the REIT sells major assets?

Not for bulk sales up to 75% of total assets, to which the general meeting approval and exit right rules do not apply (Capital Markets Law Art. 49(6); Art. 21(3)).

What happens if a REIT leaves REIT status?

A person outside the company must make a tender offer to dissenting shareholders at the higher of the thirty-day and six-month average prices (Art. 44(1)).

Can a REIT issue privileged shares?

Only shares with nomination privileges before going public; no privileges may be created afterwards (Art. 14(1)).

What is the minimum free float?

At least 25% of issued capital after the public offering (Art. 11(2)).

Can a REIT short sell or borrow securities?

No. Short selling, margin trading and securities borrowing are prohibited; securities lending is allowed within limits (Art. 22(1)(k) and (o)).

Can the Board require REITs to pay cash dividends?

Yes, the Board may impose a cash dividend requirement (Art. 45(1)).

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