A real estate investment fund (RIF) is a financial instrument that brings together investors who want to invest in real estate using an investment fund structure. RTFs generally include investments in land, apartments and agricultural land. However, they can also include investments in various commercial and institutional properties. REIFs are non-corporate assets established by portfolio management companies (founders) for a limited or indefinite period of time, with the aim of operating a portfolio consisting of assets and transactions determined by the Capital Markets Board in accordance with the principles of fiduciary ownership, using the money collected from qualified investors in return for participation shares. In order to invest in REIFs, it is required to be a “qualified investor”.
You will soon be able to access the returns of real estate investment funds for which we have sales and distribution authority via the Fonmap mobile application.
Real estate investment funds offer many advantages for investors. Some of them are as follows: • GYFs spread the risk because they invest in a portfolio of various properties, not just one property. • You can participate in GYFs with prices lower than the price of a property or even lower than the down payment. • GYFs are exempt from corporate tax and do not pay corporate tax on the rental and/or sales profit they earn. • An annual income tax return is not filed for GYFs. In addition to these advantages, GYFs also have the following features: • When GYFs sell properties they purchase without VAT, they only apply VAT to the increase in value. GYFs can distribute profits to their share owners and no tax is withheld from the dividends to be distributed. • New investments can be made by using GYF shares as collateral. • Your GYF participation shares are monitored by the Central Registry Agency Inc. (MKK) on a member and beneficiary investor basis within the framework of the Capital Markets Law. Your information cannot be accessed by any person or institution other than the Central Registry Agency, judicial bodies, the Capital Markets Board and the Treasury. • GYFs have limited credit usage. The credit amount that can be used is a maximum of 50 percent of the total fund value. • You can use credit by pledging your GYF participation shares. • Real estates within the GYF cannot be seized, precautionary measures cannot be taken on them and they cannot be included in the bankruptcy estate. Note: Real estate investment funds are not exempt from title deed fees and property taxes. These fees are paid by the fund, and you as an investor do not have to make any additional payments.
One of the most important advantages of REIFs is that the savings of the saver are managed by professional and reliable managers within a pool of assets. Thanks to the 'risk distribution principle', which is one of the basic principles that prevails in investment funds, it is possible for individuals to distribute the risk to an extent that they cannot provide with their own means. Similarly, the transactions that the investor needs to do in acquiring a real estate (title deed, fees, taxes, insurance, etc.) are carried out by the fund and the fund's assets are managed by professional fund managers. Real estate investment funds provide liquidity to large-scale real estate and enable the securitization of real estate. Regulated by the Capital Markets Board and subject to independent audit, REIFs provide investors with the opportunity to earn real estate income from rental and sales revenues of assets in the portfolio. According to capital market legislation, investment cannot be made in a developing project. However, investment can be made in land or real estate that will yield rental income or rights based on real estate. Since an unfinished project cannot be included in the real estate investment fund portfolio, it is not exposed to risks related to real estate in the project phase. There is no issue of shares/stocks in real estate investment funds. Therefore, price movements on stock exchanges do not have a direct effect on REIFs; they are only subject to an indirect effect within the framework of general economic conditions. Participation certificates, which show how many shares they have participated in the fund and are in the nature of negotiable instruments, are given to investors. The profits of REIFs and the increase in the value of the assets in their portfolios are reflected in the portfolio value and the investor who returns the participation certificate to the fund receives his/her receivables based on the portfolio value. For foreign investors, it is more reliable to invest in a fund regulated and supervised by the Capital Markets Board. Foreign investors are generally taxed in their own countries on their earnings from their REIF investments. Legal restrictions on real estate acquisition by foreign investors do not apply to investors investing in REIFs. The presence of banks and broadly authorized brokerage firms as portfolio custodians is another reassuring factor for investors.
One of the most important advantages of REIFs is that the savings of the saver are managed by professional and reliable managers within a pool of assets. Thanks to the 'risk distribution principle', which is one of the basic principles that prevails in investment funds, it is possible for individuals to distribute the risk to an extent that they cannot provide with their own means. Similarly, the transactions that the investor needs to do in acquiring a real estate (title deed, fees, taxes, insurance, etc.) are carried out by the fund and the fund's assets are managed by professional fund managers. Real estate investment funds provide liquidity to large-scale real estate and enable the securitization of real estate. Regulated by the Capital Markets Board and subject to independent audit, REIFs provide investors with the opportunity to earn real estate income from rental and sales revenues of assets in the portfolio. According to capital market legislation, investment cannot be made in a developing project. However, investment can be made in land or real estate that will yield rental income or rights based on real estate. Since an unfinished project cannot be included in the real estate investment fund portfolio, it is not exposed to risks related to real estate in the project phase. There is no issue of shares/stocks in real estate investment funds. Therefore, price movements on stock exchanges do not have a direct effect on REIFs; they are only subject to an indirect effect within the framework of general economic conditions. Participation certificates, which show how many shares they have participated in the fund and are in the nature of negotiable instruments, are given to investors. The profits of REIFs and the increase in the value of the assets in their portfolios are reflected in the portfolio value and the investor who returns the participation certificate to the fund receives his/her receivables based on the portfolio value. For foreign investors, it is more reliable to invest in a fund regulated and supervised by the Capital Markets Board. Foreign investors are generally taxed in their own countries on their earnings from their REIF investments. Legal restrictions on real estate acquisition by foreign investors do not apply to investors investing in REIFs. The presence of banks and broadly authorized brokerage firms as portfolio custodians is another reassuring factor for investors.
In REIFs, it is essential that the fund unit share value is calculated at least once a year and reported to qualified investors. Therefore, the assets in the fund portfolio must be evaluated at least once a year. However, if the fund management is going to announce the purchase and sale price during the period, at least one more valuation must be made and this valuation is usually made in the 30/06 period. The valuation of real estate and real estate-based rights constituting at least 80 percent of the total fund value is carried out by independent real estate valuation companies listed by the CMB. In practice, all REIFs announce daily reference prices. However, participation shares may not be bought or sold at the price in question, and are reported to Takasbank as a price announcement for informational purposes only. Therefore, although daily valuations are made in REIFs in order to determine the price, since the value of most of the assets in the fund portfolio does not fluctuate like stocks or bonds, daily reference prices are less volatile than other investment instruments.
GYF participation shares are recorded in separate accounts opened in the name of investors within the Central Registry Agency Inc. (MKK). Therefore, even if they are not called "title deeds", the records showing the participation shares you own are kept securely in accounts opened in your name at the central institution authorized by the Capital Markets Law. On the other hand, the real estates in the GYF portfolio and the rights based on them are also registered in the name of the GYF at the land registry office. Therefore, these records, which are proof that you own the shares of the GYF that holds the real estates in its portfolio, are also the guarantee of your rights regarding the real estates in the relevant GYF portfolio.