: TSKB REAL ESTATE INVESTMENT TRUST. : Meclisi Mebusan Cad. Molla Bayırı Sk. No: Fındıklı İstanbul

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2 Company Name : TSKB REAL ESTATE INVESTMENT TRUST Date of Establishment : Share Capital Listing Ticker Symbol Address : TL : Istanbul Stock Exchange : TSGYO : Meclisi Mebusan Cad. Molla Bayırı Sk. No: Fındıklı İstanbul Web-site : gyo@tskb.com.tr Phone : +90 (212) Fax : +90 (212) Disclaimer: This presentation must be read with the disclaimer in the Appendix 2 2

3 Section I The Company Section II Real Estate Portfolio Section III Financial Data Section IV TSGYO Stock Performance Section V Appendix 3 3

4 Highlights Established in 2006 as a real estate investment and development company Developer of new projects, has demonstrated its ability to ensure profitable project development Asset size grew from TL12m (2006) to TL 341m (2011) Strong real estate portfolio with a commercial focus enabling reliable revenues derived from rental income Aims to achieve sustainable growth leasable area up from 3k sqm to 50k sqm in 5 years Income-sharing and joint-venture projects under evaluation TSKB REIT aims to be a leading player in the Turkish real estate sector 4 4

5 Vision & Mission VISION To be a reliable business partner with a pioneering role in its sector. MISSION To establish and maintain a growing and sustainable investment portfolio with high returns. 5 5

6 Shareholder Structure Experienced main shareholder, Turkey s oldest and largest investment and development bank TSKB, part of the Is Bank Group. Shareholder Stake (%) TSKB YF Securities 1.33 TSKB Employees Pension Fund 1.04 TSKB Real Estate Appraisal 0.30 Free Float on ISE* Total TSKB 59% Other 3% Free Float 38% * As of December 31, 2011, 7,763,100 of the listed shares were held by TSKB, thus, the total share of TSKB was 64.18% as of the date given. The Company is one of four subsidiaries established by TSKB in the real estate market, demonstrating the parent company s commitment to the sector: 1. TSKB Real Estate Investment Company 2. TSKB Real Estate Appraisal 3. TSKB Real Estate Consultancy Services 4. TSKB Real Estate Brokerage Services 6 6

7 Organization Management Board General Manager Executive Vice President Legal Consultant Tax Consultant Property Appraiser Investments Project Development Project Management Asset Management Finance and Investor Relations Investor Relations Compliance Finance Accounting and Administrative Affairs Accounting Budgeting and Planning Administrative Affairs 7 7

8 History TSKB REIT established in February. TSKB contributed the Tahir Han Building as capital in kind in March. TSKB acquired the construction permit for PSC in July. TSKB REIT laid the foundation for PSC in November. Paid in capital was increased to TL100m. Construction on the Adana hotel (Divan Hotel) project. PSC completed and opened to shoppers in December Land for Pendorya Shopping Center (PSC) purchased in July. Land for Adana hotel project purchased in 50% partnership in November. Paid in capital upped from TL10m to TL75m. TSKB REIT on the ISE in April. Paid in capital was increased to TL150m. Fındıklı Buildings added to the Company s portfolio in December. 8 8

9 Investment Strategy Industrial and Geographical Focus TSKB REIT's investment strategy is concentrated on commercial real estate due to the regular rent income and cash flow pattern which can be obtained from these kinds of assets. Business and shopping centers, tourism facilities, logistic warehouses and industrial plants are typical investment projects that the Company would like to add to its real estate portfolio. Residential investments can be another area of attraction as a part of a mixed use project or with respect to their potential profitability in stand-alone cases. The Goal of Growth by Project Development TSKB REIT adheres to an investment strategy which seeks to take a project from its initial conception and to develop it, to organize all project-essential activities in the developmental process, and to complete the project in such a way as to ensure its viability. By holding onto the investments which are added to its property portfolio on a long-term basis, the Company s aim is not only to achieve sustainable growth but also to take advantage of the likely appreciation in the properties value in the long run. Risk Calculation TSKB REIT engages in a painstaking planning process in order to minimize risk factors as much as possible by verifying a project s commercial viability before starting it, making sure that the financial resources required by the project will be available, and ensuring that the project is in compliance with existing laws and regulations. 9 9

10 Section I The Company Section II Real Estate Portfolio Section III Financial Data Section IV TSGYO Stock Performance Section V Appendix 10 10

11 Portfolio Breakdown Breakdown of Real Estate Portfolio* As of ( TL ) Project Adana Hotel Project Office Buildings Fındıklı Buildings Tahirhan Building Shopping Center Pendorya Shopping Center Total Real Estate Value Participations - Marketable Securities Total Portfolio Value Pendorya Shopping Center 66% *Proportion of Total Portfolio Value. Breakdown of Total Portfolio Marketable Securities 5% Office Buildings 29% Project 5% Real Estate 95% 11 11

12 Real Estate Portfolio Summary Value (TL 000)* Pendorya Shopping Center 203,845 Fındıklı Office Buildings 83,030 Tahirhan Office Building 7,360 Adana Hotel Project 15,600 Total 309,835 * Valuations carried out by independent real estate appraisal companies 12 12

13 Pendorya Shopping Center 13 13

14 Pendorya Shopping Center (contd.) Location Pendik - Istanbul TSKB REIT Stake 95% Operational Date December 2009 Land Area (sqm) 23,100 Construction Area (sqm) 80,648 Leasable Area (sqm) 30,250 Occupancy (sqm) (December 2011) 93% Number of Stores 100 Anchor Tenants Tesco Kipa (8,400 sqm), MediaMarkt (5,500 sqm), AFM (2,500 sqm) Appraisal Value (TLm) % of Pendorya is held by TSKB REIT and 5% by the development consultant, the Ataman Group. The center features a 1,000-person capacity food court and 1,000 vehicle parking lot. Annual expected footfall is 6 million. Center management expect a 96% occupancy rate to be achieved by end Main Tenants Food 8% Cinema 8% Other 2% Hypermarket 27% Stores 37% Electronics 18% 14 14

15 Pendorya Shopping Center (contd.) The Pendorya site was selected after careful evaluation of the surrounding region to ensure appropriate demographics and growth dynamics as well as unsaturated market conditions and potential. Pendorya is located at the crossroads of two of Istanbul s main highways, and is 8 km distant from the Sabiha Gokcen (SG) International Airport. The Pendik area on the Asian side of Istanbul has a rapidly growing catchment population of Grade B income consumers. Ongoing boutique residential projects, a marina and other nearby tourism investments increase the attraction of Pendorya s location. The construction of a 3,000-person Garanti Bank Operations Center in the neighbouring plot has started. Also located in the vicinity, Turkey s largest state teaching and research hospital (540 beds) was opened at January Recent Developments in Pendik Region Pendik Development Pipeline Pendik State Teaching and Research Hospital Turkey s 3rd-largest marina First international fair facility on Asian side 15 15

16 Fındıklı Office Buildings Fındıklı Buildings 16 16

17 Fındıklı Office Buildings (contd.) Fındıklı Building I Location Istanbul TSKB REIT Stake 100% Land Area (sqm) 1,696 Leasable Area (sqm) 7,102 Number of Floors 7 Tenant TSKB Appraisal Value (TLm) TSKB REIT is the 100% owner of the building. The building of some 7,102 sqm of covered space was purchased from TSKB in Currently, it is rented by TSKB and serves as the headquarters of the bank. The building was renovated in September 2007, and no major maintenance outlays are expected in the near future. Close proximity to Bosphorus foreshore and mass transit options also have positive effect on site s exclusivity. Galata Port operations will likely increase the site s future appraisal value

18 Fındıklı Office Buildings (contd.) Fındıklı Building II Location Istanbul TSKB REIT Stake 100% Land Area (sqm) 2,503 Leasable Area (sqm) 10,542 Number of Floors 10 Tenants TSKB, TSKB Foundation, TSKB RE Appraisal Appraisal Value (TLm) TSKB REIT is the 100% owner of the property. The building has 10,542 sqm of enclosed area and was purchased from TSKB in Currently rented by TSKB and other TSKB Group companies. The building was renovated in September 2007, and no major maintenance outlays are expected in the near future. Close proximity to Bosphorus foreshore and mass transit options also have positive effect on site s exclusivity. Galata Port operations will likely increase the site s future appraisal value

19 Tahir Han Office Building 19 19

20 Tahir Han Office Building (contd.) Location Istanbul TSKB REIT Stake 74% Land Area (sqm) 606 Leasable Area (sqm) Number of Floors 8 Tenants Various Appraisal Value (TLm) 7.36 TSKB REIT owns 74% of the building. Tahirhan is a sevenstory building on 600 sqm plot and has a built up area of 3,200 sqm. Building has full sea views from the third story and up. Tahir Han is located on the border of a major redevelopment project. It is suitable for conversion to more lucrative activities. The appraisal value of this site could appreciate considerably. At present, the offices are rented out to various companies and individuals

21 Adana Hotel Project (Divan Hotel) 21 21

22 Adana Hotel Project (contd.) Location Adana-City Center TSKB REIT Stake 50% Acquisition Date November 2007 Appraisal Value Land (TLm) 15.6 Land Area (sqm) 3,608 Planned Project Construction Start Date Planned Construction Completion Date City Hotel 3Q2011 1Q2013 Estimated Operational Date 1H 2013 Planned Investment (EURm) TSKB REIT acquired a 50% share of a 3,608 sqm plot located in a central area of Adana. Adana is one of Turkey s main industrial cities, with additional business growth potential due to investments in the energy and petrochemical sectors. A city hotel project of 200 rooms is under development. The hotel is to be operational in the first half of Total investment including the cost of the land is estimated at EUR30m-34m

23 Adana Hotel Project (contd.) Project fills need for a comfortable city hotel... Despite significant commercial and industrial progress in the past few years, no new high standard hotel has opened in Adana, while the occupancy rate of the existing 5-star hotels has increased remarkably. Adana also lacks alternative places for social activities such as conferences, wedding ceremonies, social occasions and MICE (Meetings, Incentives, Conferencing, Exhibitions) tourism. The land for the city hotel was acquired in 2007 with the intent to open a city hotel in accordance with local demand. The land is located in Seyhan, a central district of Adana. The project is located some 2.5 km from the airport and 5.5 km from the bus terminal. An architectural project was prepared for the site, which is already zoned. Operating Agreement (15-year maturity) was signed between TSKB REIT and Palmira Turizm (Divan Group) Construction Licence has been acquired and construction works has been started

24 Section I The Company Section II Real Estate Portfolio Section III Financial Data Section IV TSGYO Stock Performance Section V Appendix 24 24

25 Balance Sheet (TL 000) Current Assets 8,083 7,602 34,083 7,688 35,242 20,178 Cash and Banks 2,084 3,666 23,845 3,745 30,218 15,154 Financial Investments 5,979 3, ,450 1,888 Other Current Assets ,749 3,102 3,573 3,136 Non-Current Assets 3, , , , , ,386 Investment Property ,245 75, , , ,835 Fixed Assets 4 45,339 76, Other Non-Current Assets ,662 11,637 10,466 Total Assets 11, , , , , ,564 Short-term Liabilities 41 12,319 7,113 20,431 22,977 11,636 Bank Debts - 1,343 2,062 12,163 20,170 10,734 Trade Payables - 8, , Other 41 2,207 4,895 3,871 1, Long-term Liabilities - 29,143 70, ,788 93, ,832 Bank Debts - 29,139 70, ,700 93, ,685 Other Shareholders Equity 11,697 80, , , , ,096 Paid-in Capital 10,000 75, , , , ,000 Share Premium Reserves Retained Earnings - 1,666 5,681 8,634 63,980 70,188 Net Income (Loss) 1,697 4,026 3,063 55,346 6,208 (2,838) Total Liabilities and Shareholders Equity 11, , , , , ,

26 Income Statement (TL 000) Revenues ,048 4,723 14,381 14,734 Operating Costs (-) (375) (1,146) (3,149) (3,343) (12,230) (8,270) Net Operating Profit (350) (1,080) 2,899 1,380 2,151 6,464 Income from Other Operations 1, ,253 52,632 5,444 15,279 Expenses from Other Operations (-) (13 ) (177) (114) (41) (249) (70) Operating Profit 658 (471) 9,038 53,971 7,346 21,673 Financial Income 1,039 4, ,676 5,650 1,639 Financial Expenses (-) - - (6,778) (301) (6,787) (26,150) Profit Before Tax 1,697 4,026 3,063 55,346 6,208 (2,838) Tax Net Income 1,697 4,026 3,063 55,346 6,208 (2,838) 26 26

27 Key Parameters Total Assets Shareholders Equity TL m TL m Real Estate Portfolio Assets TL m

28 Section I The Company Section II Real Estate Portfolio Section III Financial Data Section IV TSGYO Stock Performance Section V Appendix 28 28

29 TSGYO Stock Performance Performance Performance ISE 100 Index ,3% 15,7% ISE REIT Index ,2% 13,1% TSGYO 0,94 0,60 0,64-36,2% 6,7% Performance Performance TSGYO Market Cap (TL mn) ,2% 6,7% TSGYO Market Cap (USD mn) ,8% 15,5% 29 29

30 TSGYO Stock Performance TSGYO, ISE REIT Index and ISE 100 Index Performance 1,40 1,30 1,20 1,10 1,00 0,90 0,80 0,70 0,60 0,50 TSGYO ISE REIT Index ISE-100 Index 30 30

31 TSGYO Stock Performance TSGYO - Relative Performance to ISE REIT Index ,9% TSGYO ISE REIT Index 31 31

32 Net Asset Value TSGYO Net Asset Value (NAV) ( TL ) Land Adana Land Office Buildings Fındıklı Buildings Tahirhan Building Shopping Center Pendorya Shopping Center Total Real Estate Value Participations - Marketable Securities Total Portfolio Value Cash and Banks - Receivables Other Assets Payables NAV* Market Cap** Discount to NAV 56% * as of December 31, ** as of February 10,

33 Section I The Company Section II Real Estate Portfolio Section III Financial Data Section IV TSGYO Stock Performance Section V Appendix 33 33

34 Regulation Highlights Capital markets institution, under the supervision of the CMB Corporate tax exemption Allowed to invest in real estate, real estate projects, rights and capital market instruments backed by real estate, and money and capital market instruments >50% of the the portfolio to be invested in real estate Not allowed to carry out construction Properties to be valued by independent and CMB licensed appraisal companies Obligation to go public in 3 months after the establishment of the company 1/3 of the board of directors must be independent 34 34

35 REITs in Turkey Public REITS 1. Akfen 2. Akmerkez 3. Alarko 4. Atakule 5. Avrasya 6. Doğuş 7. EGS 8. Emlak 9. İdealist 10. İş 11. Kiler 12. Martı 13. Nurol 14. Özderici 15. Pera 16. Reysaş 17. Saf 18. Sinpaş 19. Torunlar 20. TSKB 21. Vakıf 22. Yeşil 23. Yapı Kredi Koray Non-public REITs 1. Albayrak 2. Bayraktar 3. Büyükhanlı 4. Halk 5. Kuyaş 6. Özak 7. Tuna 8. Servet 35 35

36 Disclaimer This presentation does contain forward-looking statements that reflect the Company management s current views with respect to certain future events based on the base-case assumptions. Although it is believed that the expectations reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially. Neither TSKB REIT nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from the use of this presentation

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