The Minister of Treasury and Finance, Mehmet Şimşek, stated that they have reached the final stage of a new regulation that will be an important instrument in financing urban transformation and increasing the supply of housing. He noted, “With the regulation to be made by the Capital Markets Board (CMB), the investment of real estate investment funds in real estate projects will be facilitated.”
Şimşek provided information regarding the new initiative aimed at promoting urban transformation and increasing housing supply.
He announced that they have reached the final stage of the regulation concerning the establishment of the Project Real Estate Investment Fund (Project REIF), prepared by the CMB, stating, “With the regulation to be made by the board, real estate investment funds (REIF) will be enabled to invest in real estate projects. With this regulation, the portfolios of these funds will be adapted and their type changed. As housing supply increases, the upward market pressure on housing prices will decrease, thus making housing more accessible for everyone.”
Şimşek pointed out that prior to the new regulation, real estate investment funds were unable to invest in these projects and could not undertake the construction of real estate. He mentioned that these restrictions would be lifted with the CMB’s regulation.
He explained that real estate investment funds would now be able to invest in projects developed by themselves or by others. “Thus, project real estate investment funds will be able to include land and real estate projects for which a project will be developed in their portfolios. These investment funds, which will meet the conditions detailed in the regulation, will include the term ‘project’ in their titles and will be referred to as ‘project real estate investment funds.’ In this respect, project real estate investment funds will have a different structure from the existing real estate investment funds that cannot include projects in their portfolios,” he added.
INCOME FOR SOME, HOMES FOR OTHERS
Minister Şimşek noted that the project to be implemented by the CMB introduces a collateral mechanism aimed at reducing the project-related risks for investors, thereby securing the rights arising from the fund’s revenue-sharing contracts. He stated, “This regulation will also grant investors the right to exit the fund in case of changes that could affect investment decisions related to the fund activities, thus preventing investor grievances.”
He mentioned that investors could earn income from the sale or rental of real estate upon project completion and also have the option to become homeowners through in-kind exit. Şimşek shared the following information regarding real estate investment funds:
“There are 184 real estate investment funds that have been approved by the CMB. Currently, there are 149 funds with established portfolios, and the portfolio size of these funds is around 82.7 billion lira. It is expected that the number of these funds will increase with the new regulation. Thanks to the collateral-based solid structure of the funds, the production of real estate projects can be securely realized. Investors will be able to assess their small savings in a cooperative manner to become homeowners.”
“WILL CONTRIBUTING TO A DECLINE IN PRICES”
Şimşek highlighted that there is an expectation of an increase in the general tendency of savings in society with the regulation, and he added:
“This regulation will be an important instrument in financing urban transformation and increasing housing supply. These investment funds will increase the mobility of supply in the housing market, both through the projects they will develop and the housing-quality independent sections they can obtain from other projects, and thus make a significant contribution to the decline in prices.”
This revival will spread across the entire housing market. The regulation will provide a very valuable alternative for housing producers to obtain the financing they need from capital markets. Thus, savers will be able to evaluate their small savings in real estate projects.
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
