The principles regarding the establishment and activities of these funds were regulated in detail with the ‘Communiqué on Principles Regarding Real Estate Investment Funds’ published by the Capital Markets Board (CMB) in 2014.

It may be established by portfolio management companies authorized by the Capital Markets Board.

There are two types of funds: "fixed-term" and "open-ended". Fixed-term funds are liquidated at the end of a specified period. Open-ended funds are perpetual; however, they may be terminated upon the joint request of investors.

Only qualified investors may invest in the fund.

Individuals and legal entities that hold Turkish and/or foreign currency and capital market instruments amounting to at least TRY 1 million meet these criteria.

The fund’s investments are managed by an “Investment Committee”, and each fund has its own Investment Committee.

According to the Communiqué, the investment committee must consist of at least three members: a board member of the portfolio management company who has experience in the real estate sector, the general manager, and a licensed real estate valuation expert.

This varies depending on the fund’s strategy. A specific limit may be set, or funds may be established without any restriction on the investment amount. Information regarding the investment amount is provided in the issuance document.

It invests in real estate projects where more than 50% of the total gross area of independent sections consists of residential units.

In addition to lands owned by the funds, real estate projects carried out on lands owned by other persons or public entities under revenue-sharing or construction-for-land-share agreements may also be included in the fund.

The assets in the fund may consist only of lands on which projects will be developed and real estate projects. Real estate assets in the invested project may continue to remain in the fund portfolio even after the project is completed.

There is no upper limit for the fund size. However, according to the Communiqué, a PREIF must reach a fund size of at least TRY 200,000,000 within one year from the first sale of participation units.

All construction works of real estate projects must be carried out by contractors holding a Group A or Group B contractor authorization certificate as defined in the ‘Regulation on the Classification and Registration of Building Contractors’.

At least 80% of the total fund value must consist of real estate investments.

The value of the assets in the fund portfolio is determined by valuation companies licensed by the CMB.

Each fund has its own investor admission periods. Investors may purchase units during the entry periods specified in the issuance document and the fund issuance agreement.

Investors may exit the fund during the exit periods specified in the issuance document and the fund issuance agreement. However, an investor may exit the fund at any time by transferring their participation units to a third party.

Yes. Investors may exit the fund at any time by transferring their participation units to a third party.

The real estate project in which the fund will invest must be secured by at least one of the following: building completion insurance, a bank letter of guarantee, a progress payment system, or other methods determined by the CMB.

Independent audit, risk management, and inspection are among the main units that form the fund’s audit mechanism.

The fund participation units held by investors are monitored by the Central Securities Depository of Türkiye. The fund’s assets are held by licensed custody service providers (banks) in accordance with CMB regulations.

The fund’s assets are held by custodian institutions, and transactions to be carried out at the land registry on behalf of the fund are conducted under the supervision of the custodian institution (bank). In addition, expenditures from the fund are made with the approval of the custodian institution.

Portfolio management companies may not hold client assets under their own custody or in their own accounts at other institutions. These transactions must be carried out by portfolio custody institutions licensed by the CMB and contracted by the portfolio management company (banks that meet the conditions set out in the Communiqué). Institutions providing this service are referred to as custodian institutions.

The fund assets are separate from the assets of the portfolio management company and the custodian institution. Even if the portfolio management company or the custodian institution goes bankrupt, or their management and supervision are transferred to public authorities, the fund assets cannot be seized, cannot be subject to injunctions, and cannot be included in the bankruptcy estate.