1. Real Estate Certificates
Corporate Finance, Mergers and Acquisitions Division
Real Estate Certificates

2. Presentation Outline Description How It Works Example Timeline
Primary Obligation Process
Secondary Obligation Process
Advantages
Risks
Assurances

3. Real Estate Certificate - Description
A Real Estate Certificate is a security that is used to finance construction projects.
Each Real Estate Certificate represents a certain portion of a construction Project.
Real Estate Certificates enable investors to buy houses from a construction projects or just benefit from the increase in the value of a projects without having to own the property themselves.
Once issued, Real Estate Certificates will be listed on the Istanbul Stock Exchange and will have a secondary market.
Certificates issued by the Government Housing Development Administration (TOKI) will have a Project completion guarantee, which will remove the default risk of the certificate.

4. Real Estate Certificate – How It Works
A construction Project can only partially be financed with Real Estate Certificates; hence, a portion of the construction project is chosen to be the underlying.
Each housing unit within the chosen portion of the construction is represented with a certain amount of certificates. The number of certificates issued for each unit will depend on the value of those units relative to the value of the total chosen portion of the project.
The issue price of each certificate is determined by dividing the total value of the issue by the total 𝑑𝑚 2 represented by the certificates. 𝑑𝑚 2 is used instead of 𝑚 2 in order to reduce the price of each certificate and allow investors to invest with smaller amounts of capital.
In order to limit risk, the capital raised by the public offering of the certificates are held by an authorized institution; the capital is then incrementally transferred to the issuer depending on the progress of the construction*
After the public offering, the certificated are freely traded on the stock Exchange until their maturity
Important information regarding the construction project are published on the Public Disclosure Platform (KAP) website.
After obtaining the required amount of certificates, Investors can exchange their certificates for a desired underlying housing unit through a process called the Primary Obligation process (Asli Edim).
Following the Primary Obligation process, the housing units that are not exchanged will be auctioned off and the funds raised from the auction will be distributed to the remaining certificate holders in proportion to their certificates. This process is called a Secondary Obligation process(Tali Edim).
*Construction projects that are managed or are in collaboration with Government Housing Development Administration (TOKI) are exempt

5. Real Estate Certificate – Example
Details of the chosen portion of the project
The Project
Unit
Block
dm2
Price 1 A
10,000
200,000 2
15,000
250,000 3
20,000
300,000 4
30,000 5 B
400,000 6
500,000 7
150,000 8 9 C
5,000
100,000 10
8,000
140,000 11
13,000 12
350,000
Total
196,000
3,190,000
The dm2 and price of each housing unit is determined
A single certificate is issued for each dm2
The Issue price of the certificates are determined by dividing the total price of units by the total dm2 of the units
The amount of certificates that will be required for a housing unit is determined by taking the ratio of price per dm2 of the housing unit to the total price per dm2 (rounded to the nearest second decimal) and then multiplying the obtained ratio with the dm2 of the housing unit. This essentially means that as a housing unit’s price per dm2 increases, the amount of certificates required for each dm2 of the housing unit increases or vise versa*
Certificate prices are rounded to the nearest second decimal and the number of certificates required for each unit is rounded to the nearest integer A B C
A portion of a construction is chosen to be the underlying for the certificates
In this example 3 out of 9 blocks are chosen
Issue price of certificates= 3,190, ,000 =16.28
Number of certificates issued=3,190,000
Certificates required to purchase unit 1*= 200,000 10, ×10,000=12, 285
*In order to prevent rounding errors, price of certificates are used instead of the total price per dm2 when calculation the required number of certificates for each housing unit

6. Real Estate Certificate – Timeline
Maturity & Trading Period
Primary Obligation Application Period
Secondary Obligation Fulfilment Period* 25 2
Month 1** 13 12 39 11 8 7 6 3 5 4 10 9 24 17 16 15 14 23 22 21 20 19 18 28 27 26 31 30 29 34 33 32 38 37 36 35 40
Start of Construction
First Day of Trading
Completion of Construction
Primary Obligation Fulfilment Deadline
Secondary Obligation Fulfilment Deadline
Primary Obligation Fulfilment Period
* During the secondary obligation fulfilment period, an investor can request a primary obligation fulfilment. In this case, the issuer can fulfil the obligation given the condition that the desired housing unit by the investor hasn’t been sold or auctioned off.
** Time frame is given for representational purposes and is not required to be the same for every real estate certificate

7. Transfer of Application Obligation Fulfilment Exchange of Certificates
Real Estate Certificate – Primary Obligation Process
Applying
When an investor obtains sufficient number of certificates to buy their desired housing units, they are required to apply to their broker and state the specific housing units they would like to obtain.
The broker confirm that the investor has the required amount of certificates and subsequently transfer the investor’s application to the certificate issuer.
The issuer confirms that the desired housing unit has not been reserved by other investors and subsequently sends an invitation to the investor to sign a sales agreement.
In the event that the desired unit is reserved by other investors, the issuer rejects the application and sends a notification to the broker within the next 2 work days
If an investor fails to sign the sales agreement within 10 work days of receiving the invitation, the application is rejected by the issuer and the investor will be required to reapply in order to obtain their housing unit.
After the sales agreement is signed, the obligation is considered to be fulfilled and the certificates are transferred from the investor’s brokerage account to the issuer.
The issuer can either immediately make an announcement on the Public Disclosure Platform (KAP) or can wait until the end of the month to make a bulk announcement.
Transfer of Application
Obligation Fulfilment
Exchange of Certificates

8. Real Estate Certificate – Secondary Obligation Process
Eligibility
After the primary obligation application period, every certificate that has not been exchanged for a primary obligation fulfilment will be eligible for a secondary obligation fulfilment.
In order to fulfil the secondary obligation, the remaining underlying housing units are sold through auctions over the span of the secondary obligation fulfilment period. The auction starting prices are determined according to an expert report.
In the event that there are housing units left unsold at the end of the secondary obligation fulfilment period, the unsold units are bought by the issuer at the 30 day average market price. If the issuer believes the market price to be unrepresentative of the certificate’s real value, the issuer can request to use the expert report price instead.*
Raising Funds
Transfer of Funds
When all the remaining underlying units are sold, the funds generated from the sale are distributed to the certificate holders.
*Construction projects that are managed or are in collaboration with Government Housing Development Administration (TOKI) may be exempt

9. Real Estate Certificate – Advantages
Real Estate Certificates are a type of non-interest bearing security.
It enables investors to invest in real estate with relatively small amount of capital
It provides investors a method to invest in real estate without having to manage property
It Increases the liquidity of a historically illiquid asset
It Increases transparency and allows healthier pricing of real estate

10. Real Estate Certificate – Risks
Value of real estate certificates are highly related with the value of the underlying construction project. Any change in the value of the project would influence the price of the real estate certificate.
Real estate certificates do not guarantee the completion of the underlying construction project*.
Real estate certificates do not guarantee any return at the end of their maturity.
Primary obligations are fulfilled on a first come first serve basis; investors may not be able to get the housing units they desire out of the primary obligation fulfilment.
Any risk inherent in a construction project indirectly influences real estate certificate
*Construction projects that are managed or are in collaboration with Government Housing Development Administration (TOKI) are guaranteed to be finished

11. Real Estate Certificate – Assurances
The underlying construction project is protected against the bankruptcy of the construction company and cannot be used as collateral by the construction company
Housing units that are left unsold at maturity are required to be bought by the construction company at the 3 month average market price of the certificates or at a price determined by an expert report*
Capital raised by the certificates are not given to the issuer directly; instead, they are held by an independent authorized institution which will be responsible for monitoring the progress of the construction project and transferring the capital to the issuer accordingly.**
*Construction projects that are managed or are in collaboration with Government Housing Development Administration (TOKI) may be exempt
** Construction projects that are managed or are in collaboration with Government Housing Development Administration (TOKI) are exempt

12. Capital Markets, Mergers and Acquisitions Division
Park Mavera III

13. Presentation Outline Introduction to Park Mavera III
Importance of Basaksehir
Public Offering Details
Public Offering Important Dates
Public Offering Timeline
Housing Unit Pictures

14. Introduction to Park Mavera III
Park Mavera III is the third set of luxury condominiums located in Basaksehir district of İstanbul
It is in close proximity of:
A botanic park (Second largest park of Turkey)
The town square
A 5000 person mosque
Other luxury condominiums
Soon to be built buildings in the region include:
A hospital
A large scale mall
Municipal service buildings
Tourism area
Tram system
It is being built by the Makro Insaat A.S. in collaboration with Government Housing Development Administration (TOKI).
TOKI assures the completion of the construction.
Park Mavera III
Park Mavera II
Botanic Park
Hospital
Town Square
Mall
Municipal Buildings
Tourism Area
Park Mavera I

15. Importance of Basaksehir
Istanbul is one of the fastest growing cities in the World
Central Istanbul is too crowded and areas available for construction are extremely limited
The only option is for the city to expand outwards; however, most of the surrounding areas are protected by environmental laws (Highlighted in green, yellow, orange, and red)
This makes Basaksehir one of the closest areas the city can expand
Furthermore, Basaksehir can easily be reached due to being connected to the highway (orange lines)
Central Istanbul
Basaksehir

16. Public Offering Details
Total Project size:
Blocks: 11
Housing unit: 723
Commercial units: 31
Housing unit types
1 + 0 / / / / / 5 + 1
Areas Selected for Public Offering
Blocks: B2/C2/D2
Housing Units : 218
Certificates to be issued: 3,370,410
Value: 143,242,425 TL
Areas Selected for Green Shoe
Blocks: C1/D1
Housing Units: 135
Certificates to be issued: 2,258,736
Value: 95,996, 280 A2 A1 B1 B2 C1 C2 B3 D2 D1

17. Public Offering Details
Public Offering
Green Shoe Option
Total
Housing Units
218
135
353
3 Blocks, 218 Units
2 Blocks, 135 Units
5 Block, 353 Units
2+1:135, 3+1: 59, 4+1:24
2+1:55, 3+1: 56, 4+1:24
2+1:190 , 3+1: 115, 4+1:48
Total Square Meters
33,703 m2
22,587 m2
56,290 m2
B2:10,956 m2
D1:10,046 m2
C2:12,541 m2
C1:12,541 m2
D2:10,207 m2
Value
143,242,425 TL
95,996,280 TL
239,238,705 TL
Number of Certificates
3,370,410
2,258,736
5,629,146
Certificate Issue Price
42.50 TL

18. Capital Market Board Approval First Day of Public Trading
Public Offering Important Dates
Consortium Creation 22
Capital Market Board Approval 23
Tahmini
SPK İzni
IPO Period
First Day of Public Trading 05
April
March
Analyst Presentation 21

19. Public Offering Timeline
Maturity & Trading Period (36 Months)
Primary Obligation Application Period (30 Months)
Secondary Obligation Fulfilment Period* (6 Months)
2 Months 25 2
Month 1 13 12 39 11 8 7 6 3 5 4 10 9 24 17 16 15 14 23 22 21 20 19 18 28 27 26 31 30 29 34 33 32 38 37 36 35 40
Start of Construction
Jan 12
First Day of Trading
Apr 1
Completion of Construction
Dec 7
Primary Obligation Fulfilment Deadline
Feb 7
Secondary Obligation Fulfilment Deadline
Apr 7
Primary Obligation Fulfilment Period
*Dates may be subject to small variation

20. Housing Unit Pictures

21. Housing Unit Pictures

22. Housing Unit Pictures

23. Capital Markets, Mergers and Acquisitions Division
Contact Details
Capital Markets, Mergers and Acquisitions Division
Akatlar Mah. Ebulula Mardin Cad. No: 18 Park Maya Sitesi F-2/A Blok
Besiktas İstanbul
Tel: Fax: