The Capital Markets Board of Turkey (“CMB”) has recently published a new Communiqué On The Principles Regarding Real Estate Investment Companies (III-48.01) (“Communiqué”). The main changes it brings to the old communiqué which was in effect since 1998 can be summarized as follows:
• Real estate investment companies are required to invest a minimum 51% of their portfolio value in real estates, real estate projects and rights supported by real estates.
• Requirement to have a leader entrepreneur (partner or partners having a minimum of 25% of the company’s capital) has been abolished. Therefore, establishment and transformation of real estate investment companies are much easier.
• For share transfers after the public offering, permission by the CMB is only required for transfers that result in a change in the control of the company. Thus, procedural obligations of the Real Estate Investment Companies are reduced.
• Special decisions (i.e., board of directors resolutions that must be disclosed to the public pursuant to the old Communiqué) now extend to all decisions by and between the related parties stated under Article 21 of the Communiqué and board of directors resolutions related to all transactions. Increased transparency is aimed at by broadening the scope of decisions that must be disclosed to the public.
• Real estate investment companies can now issue real estate certificates as an extra means of finance instrument.
• Liabilities of the board of directors and CEOs have been re-regulated.