Real Estate Asset Management Company 1
Index RE-PIE Asset Management Company Summary Top Management Real Estate Investment Fund Alternatives For Real Estates in Capital Markets Global REIF Market REIF vs. REIT REIF Definition How do REIFs work Benefits of REIFs Separation Of Estates REIF Types What kind of REIFs can be established? REIF portfolio REIF taxation Tax advantage table of REIFs Solution Partners 3 4 10 11 12 13 14 15 16 17 18 19 20 21 22 2
RE-PIE in Brief RE-PIE ASSET MANAGEMENT COMPANY Our company is a capital market regulated institution that was established as a joint stock company and its main activity is the foundation and management of real estate investment funds. In line with Turkish Capital Market Boards regulations, RE-PIE will issue REIFs that are minimum at TL 10 million and at least 80% of which will be invested to real estates. REIF shares might only be sold to qualified investors that are described as people having over TL 1 million cash and equivalents according to CMB. RE-PIE s shareholders are well experienced in real estate business and we aim to reflect our business model to REIFs that are regulated by CMB. RE-PIE REIFs are targeted to have a balanced risk-return profile combined with a well diversified portfolio. RE-PIE REIFs desire to benefit from qualified real estates that have rental income and trading profit opportunity. RE-PIE targets to deepen Turkish capital markets via this new investment tool. 3
Top Management Haluk SUR Chairman Haluk Sur was born in 1956 in Bandırma and completed his elementary and high school education there. After graduating from Bogazici University s civil engineering department in Istanbul in 1978, he had a master degree from same university s environmental engineering department. In 1981, Sur studied at the University of Washington s environmental engineering department and then returned to Turkey. Afterwards, he worked for Ministry of Defense s NATO construction department during his military service as a control engineer. Sur, completed over 40,000 housing and 5 million sqm real estate development project during his duty in Emlak Konut REIT. Please note that Emlak Konut is the biggest REIT in terms of Mcap in Turkey. In 2001, he was a founding partner in Bimeks (a technology retail company, also listed in Borsa Istanbul). During his career, he was involved in the development of real estate valued at $ 1.9 billion. Sur was GYODER s (Turkish REIT association) chairman for two periods and he is now the chairman of ULI Turkey. Currently, Sur is ULI and NAREIT s Turkish representative member and at the same time, he is the chairman of Cushman & Wakefied Turkey. Haluk Sur was also in an active role during Emlak REIT s IPO and SPO and he managed relationships with international institutional investors. 4
Top Management Mehmet Ali ERGİN Vice Chairman Mehmet Ali Ergin was born in 1985 in Kayseri. First, middle and high school education was completed in Şanlıurfa. Ergin graduated in 2008 from Boğaziçi University s Business Administration and Economy departments. He is currently conducting a master thesis at Istanbul Technical University s Real Estate Development department. His specialties are financial analysis and econometrics. Ergin carried out 220,000 sqm of commercial real estate, 600,000 sqm residential and 6 million sqm of land development projects since his involvement in the real estate sector in 2008. Ergin provides financial modeling for resource development, feasibility and financial analysis consultancy about real estate projects in various sub-segments such as housing, retail, accommodation and industrial use both in Turkey and abroad. Mehmet Ali Ergin is currently a member of GYODER (Turkish REIT association). At the same time, he provides consultancy for different purpose real estate investment projects to the developers who are members of KONUTDER (Housing Developers and Investors Organization) and GYODER. 5
Top Management Caner BİNGÖL Board Member Caner Bingöl, was born in 1982 in Ankara. First, middle and high school education was completed in the same city. Bingöl graduated from Yıldız Technical University s Department of Architecture in 2006 and then completed a double major in the Department of City and Regional Planning in the same university in 2011. Bingol established Ensar Construction, Architecture, Planning, Real Estate and Consulting Limited Company in 2007. He managed construction and real estate development projects in addtion to planning and architectural projects. He carried out 300,000 sqm of commercial real estate, 2 million sqm residential and 4.2 million sqm of land development projects since his involvement to the real estate sector in 2007. He engaged in many metropolitan planning studies in Turkey. Caner Bingöl provides consultancy for different purpose real estate investment projects to the developers who are members of KONUTDER (Housing Developers and Investors Organization) and GYODER (Turkish REIT association). 6
Top Management Mehmet Emre ÇAMLIBEL Board Member Emre Çamlıbel has more than 16 years of experience in project management and business development primarily focusing on the real estate sector. He currently serves as the Chief Executive Officer at the Soyak Holding and is also department head of the Real Estate Group. M. Emre Çamlıbel started his career in 1992 at STFA in Turkey as a civil engineer and continued at Kennedy & Rossi Inc. and Walsh Brothers Inc., in Boston as a project engineer and manager. In 1998, he joined Soyak Group where he initially served as Assistant General Manager at Soyak Construction and later as the Project Development Coordinator at Soyak Holding. In 2005, Soyak Yapı was classified in "Turkey's Superbrands" catalogue by the world famous "Superbrands" organization. In 2007, Soyak Yapı maintained its sector leadership as the first and only real estate company to receive the "National Quality Prize" awarded by KalDer (an EFQM partner). He is a member of the Turkish Quality Association, member of the Board of the Real Estate Investment Trusts Foundation (GYODER), Chairman of the Real Estate Development Committee and an Executive Committee member of the ULI Turkey. Çamlıbel holds a Master of Science degree in Civil Engineering from the Massachusetts Institute of Technology, Boston, USA, and a Bachelor of Science degree in Civil Engineering from Yıldız Technical University, Istanbul, Turkey. He also has a doctorate degree at the Boğaziçi University's Department of Civil Engineering in Istanbul, Turkey. Camlibel is an instructor at Bogazici and Bahcesehir Universities in Istanbul and visiting instructor at MIT, Columbia and UTSA. 7
Top Management Hasan BAYHAN Chief Executive Officer Hasan Bayhan was born in 1985 in Istanbul. He graduated from Cağaloğlu Anatolian High School. In 2007, he was at Washington College in Maryland US as an exchange student and then had an internship at American Chamber of Commerce. Bayhan graduated from Business Administration department of Boğaziçi University in 2008 and then started his career at PricewaterhouseCoopers Istanbul office. There, he worked as financial consultant for various listed companies in Borsa Istanbul from different sectors. Then, he worked as a financial analyst at Bunge Turkey office. Between the years of 2010-2015, he worked as Head of Non-financial stocks in Global Securities Research Department. Bayhan has CMB advance level, derivatives and housing valuation certificates. He is currently a visiting instructor at the Master of Science degree of Boğazici University s Financial Engineering department. Bayhan has various published articles in weekly magazines (Ekonomist, Fortune and Para). He also regularly attends TV programs in CNBC-e and Bloomberg HT. 8
REIF Sessions Attended By Our Board Members Emerging Trends In Real Estate Europe 2015 REIF as a new investment tool in Turkey was discussed in Emerging Trends in Real Estate Europe 2015. Our board members Haluk Sur and Mehmet Ali Ergin were there. MIPIM 2015 REIF as a new investment tool in Turkey was discussed in MIPIM 2015 in Cannes. Our board members Haluk Sur, Emre Çamlıbel and Mehmet Ali Ergin were there. 9
Capital Market Tools For Real Estate Market CAPITAL INVESTMENT REIT Real Estate Investment Trust I-REIT Infrastructure RE Investment Trust REIF Real Estate Investment Fund $907 Billion $8 Billion $150 Billion - $92 Billion - Sukuk Lease Certificate $107 Billion $3 Billion FINANCING Real Estate Certificate Other Debt Securities (Bills, Bonds) 10
Global REIT Market 11
Capital Market Tools Comparison Table 12
What is REIF? Turkish qualified investors : 86,177 people that have over TL 1 mn/person with TL 280 bn total assets as of June 2015. As of June 2015, Turkish Portfolio Management Companies AUM (Asset Under Management) stands at US $ 34 bn, 4% of which can be invested at maximum to REIFs according to CMB regulations. Real Estate Investment Funds (REIFs) have been introduced into Turkish law with the Capital Market Board ( CMB ) Communiqué on Principles Regarding Real Estate Investment Funds ( REIF Communiqué ), which was published in the Official Gazette dated 3 January 2014 (No. 28871). This Communiqué aims to provide the regulatory framework for the establishment and operation of Turkish REIFs, the sale of Turkish REIF Units to Qualified Investors (QIs), and related transparency and reporting requirements for REIFs. The Communiqué becomes effective on 1 July 2014. Thus, effective from July2014 it will be legally possible to establish REIFs in Turkey. Turkish REIFs are contractually formed open-end funds. They have no legal personality and are managed by Portfolio Management Companies (PMCs) or Real Estate Portfolio Management Companies (REPMCs) that have to be established in joint stock company form. One PMC and/or REPMC may manage several REIFs. A REIF is set up as a specialized fund which is accessible to only QIs. The Communiqué introduces a lightly regulated and flexible regulatory model, in line with the international market standards and customary practices for REIFs. Similar to the Alternative Investment Fund managers Directive (AIFMD) the Communiqué sets forth provisions on custodianship, transparency and reporting requirements for sponsors and/or managers. - Sale to Qualified Investors only - Performance based success fee - At least 10 million TL asset size per fund - Independent valuation by CMB licensed corp. - Assets maintained by an independent custodian - Fully exempt from corporate taxation 13
REIF Operation Diagram 14
Benefits of REIF 15
Seperation of Estates The fund assets are segregated from the assets of its founder, portfolio custodian and portfolio manager. The fund assets shall not be designated as collateral or pledged, for any purpose except for the fund s borrowing and for hedging. The fund assets can not be hypothecated. The debts and obligations of the founder and or portfolio manager to third parties and the receivables and claims of the fund from the same third parties can not be set off. 16
REIF Types 17
What Kind Of Reif Can Be Established? Residential House Fund Rent Yield Fund Land Fund Haute Couture Fund 18
REIF Portfolio Apart from Real Estate Investments, REIFs are only permitted to invest in the below (Other Allowable Investments): Shares of joint stock companies registered in Turkey, Public and/or private debt instruments, Foreign public and/or private debt instruments and shares of foreign companies as long as the requirements of the Foreign Exchange law are met, Bank deposits and participation bank account deposits, Investment fund participation units, Repo and reverse repo transactions, Warranties and certificates, Lease certificates and real estate certificates, Settlement and Custody Bank money market transactions, Cash collateral for derivative market instruments and premiums, Foreign special purpose investment instruments to be approved by the CMB, and Other investment instruments to be approved by the CMB. 19
Taxation Income Tax Corporate Tax Value Added Tax Stamp Tax Income earned by a Turkish REIF is fully exempt from corporate tax. Moreover, REIF income benefitting from corporate tax exemption is also subject to 0% withholding tax. There is no further withholding taxation upon dividend distributions/redemptions to/by QIs of REIFs. Both cash dividend receipts (e.g., periodic) from REIFs and cash proceeds from returning Units to the Founder (redemption) by QIs possess the same characteristics for Turkish tax purposes. Therefore, in our view, income generated by REIF investors by either means should be treated as dividend income. Individual QIs resident in Turkey and participating in REIF(s) benefit from an income tax exemption in respect of half of the gross dividend amounts received from REIFs. Declared income will be subject to income tax at the progressive rate between 15% and 35%. On the other hand, non-resident individual QIs participating in REIF(s) are not required to make any tax filing. Thus, 0% withholding is the ultimate Turkish tax burden. For resident corporate QIs (including non-resident corporate taxpayers that have a permanent establishment such as a branch office in Turkey), dividends from REIFs are subject to corporate tax at the rate of 20%. In other words, corporate QIs cannot benefit from the participation exemption with respect to their investment incomes from Turkish REIFs. On the other hand, for non-resident corporate QIs, 0% withholding tax on distributions from REIFs is the final taxation and the non-resident corporate QIs are not required to make any filing. 20
Tax Advantage Comparison Table 21
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