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Under the Communiqué on the Principles Regarding Real Estate Investment Funds No. III-52.3 (the “Communiqué”), investments by REIFs and PREIFs in real estate projects are allowed within certain limits
Turkey
Real Estate and Construction
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With its resolution dated 29 April 2026 and numbered 28/815 (the “Resolution”), the Capital Markets Board of Türkiye (“CMB”) introduced significant flexibility in the investment procedures applicable to investments by real estate investment funds (“REIFs”) and project real estate investment funds (“PREIFs”) in certain projects undertaken by public institutions meeting specific conditions. Pursuant to the Resolution, preliminary real estate sale agreements pertaining to such projects may now be included in fund portfolios, even where condominium easement has not yet been established.
Under the Communiqué on the Principles Regarding Real Estate Investment Funds No. III-52.3 (the “Communiqué”), investments by REIFs and PREIFs in real estate projects are allowed within certain limits:
- For REIFs: As a rule, REIFs are prohibited from investing in real estate projects. However, this prohibition has an exception allowing REIFs to acquire independent sections from projects carried out by the Housing Administration, İller Bankası A.Ş. (a Turkish state-owned development and investment bank serving local administrations), municipalities, and their subsidiaries, affiliates and/or the companies in which they hold the privilege to nominate candidates to the board of directors.
- For PREIFs: PREIFs may acquire and include in their portfolios independent sections from ongoing projects.
However, for both types of funds, the term “independent section” used in the Communiqué had, in practice, required the condominium easement to have been established. This constituted an obstacle for investments in projects where condominium easement had not yet been established.
With the Resolution, preliminary real estate sale agreements executed in respect of projects for which construction permits have been obtained and which are developed by the Ministry of Environment, Urbanization and Climate Change, the Housing Administration, İller Bankası A.Ş., municipalities, or their subsidiaries, affiliates and/or companies in which they hold the privilege to nominate candidates to the board of directors may now be included in REIF and PREIF portfolios, even if condominium easement has not yet been established.
Through this amendment, both REIFs and PREIFs will be able to invest in public-sector-linked projects without waiting for condominium easement to be established. Nevertheless, the other conditions set forth under the Communiqué – particularly the requirement that a construction permit be obtained for the relevant project – will continue to apply. Accordingly, while funds are now granted the opportunity to invest in public-sector construction projects at an earlier stage, no change has been introduced to the existing regime applicable to private sector projects.
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