AKFEN GAYRIMENKUL YATIRIM ORTAKLIGI Akfen REIT
2019 Annual Report
www.akfengyo.com.tr
info@akfengyo.com.tr
Akfen REIT | |
Content | Annual Report 2019 |
Akfen REIT in brief .................................................................................................................................................... | 26 |
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Akfen REIT | |
Annual Report 2019 | |
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Compliance Co trol On Portfolio Limitations | |
Human Resources ...................................................................................................................................................... | 53 |
Attachments ...................................................................................................................................................................... | 75 |
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Akfen REIT Annual Report 2019 the highest rate. The rental income earned from hotels which are located in Turkey was TL 56
million with an increase of 24 per cent, compared to previous year.
Occupancy rate of Akfen Real Estate Investment Company 's 19 hotels which are located in Turkey and Russia is increased to 67 per cent which is the highest rate of all times.
Taking into consideration the actual trends, economic expectations and the UNWTO Confidence Index which shows that tourist numbers will increase 3-4% in the world, we do expect while we close the year 2019 with the records we achieved, that the rise in the sector will continue during the coming years.
However, we do believe that the Reuptake Program we initiated as Akfen Real Estate Investment Company will create additional value for our company and our shareholders.
ChairmanHamdi Akınof the Board of Directors
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CEO's Message
It's a huge pleasure to have achieved all our expectations and to share this achievement with ourshareholders, as a company in the year 2019 for which the sector was expected to endure a growth trend! Continuous improvement and income increase which we witness since the year 2017 in the hotels of our portfolio, resulted as new records for us in the
year 2019.
Our average occupancy rate which was 62% in 2017 in our 15 hotels which are located in Turkey, has increased to 66% in 2018 and to 69% in 2019. When we get into account all our hotels we do continue to increase our average occupancy rate each and every year. When the room rate increases based on Euro are added to the latter, our net profit exceeded TL 170 million. By the effect of the wholesale of our portfolio in Bulvar Loft, our incomes approached to TL 500
Now Akfen Real Estate Investment Company has risen to the league of giants as a company with its size of assets which reached TL 2,7 billion, its equities which are approximately TL 1 billion and its written down value which exceeds TL 1 billion. We have witnessed that these successes are responded back by our investors by the intense interest they have proved for our equity securities. Due to the interest which continued increasingly even after our Reuptake Program was ended at the end of August our equity securities rate has increased by 145% in 2019.
Our biggest guarantees for the future are being able to maintain these successes by signing long term contracts with the leading operators of the sector and the continuous support of our main financiers. The trust of our shareholders, the effort of our employees and the contribution of our other partners will ensure that we do set the bar high during the year 2020. I do wish a prosperous year for all of us.
Sertac F. Karaağaoğlu
General Manager
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Akfen REIT
Annual Report 2019
Board of Directors Biography
Hamdi Akın - Chairman ofHamdithe BoardAkın wasof Directorsborn in 1954. He graduated from Gazi University, Department of Mechanical Engineering. In 1976 he founded Akfen Holding, whose main activity area is to invest in, manage and coordinate partnerships and subsidiaries active in infrastructure and superstructure construction, port management, marine transportation, water distribution and waste water services, energy and real estate sectors. In addition to serving as the Chairman of the Board of Directors at Akfen Holding, he is also the Chairman of Board at MIP (Mersin International Port). In 1997, he founded the TAV brand to build and operate Turkey's first high capacity airport in the aviation sector, one of the hardest sectors of the world, and he managed the company as Chairman of Board until 2017.
In addition to his private entrepreneurship, Mr. Akın realized projects in infrastructure, energy and investment in scope of privatization efforts. He also carried his dynamism and hard work in business to volunteer efforts and non-governmental organizations as a Manager and founder of many societies, foundations, chambers of commerce. He has served as Vice President of Fenerbahçe Sports Club (2000-2002),MESS-Metal Industrialists' Union President of Ankara Regional Representatives Council (1992-2004), President of TÜGİAD-Turkish Young Businessmen's Association(1998-2000), Board Member of TİSK-Turkish Confederation of Employers' Associations (1995-2001), Board Member of TÜSİAD-Turkish Industrialists' and Businessmen's Association President of Information Society and New Technologies Commission (2008-2009) and Board Member of Clean Seas Association/TURMEPA (2011-2018).
Hamdi Akın is a founder of the Contemporary Turkey Studies Chair at the London School of Economics. He is also the Founding Member and Honorary President of the Turkey Human Resources Foundation (TİKAV), founded in 1999 to provide Turkey with well-trained human resources. He is also the Vice Chairman of the Board of Trustees at Abdullah Gül University Support Foundation.
- Süha Güçsav - Vice Chairman
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Graduating from the Economics Department of Istanbul
University in 1992, Güçsav subsequently completed his master's degree in the Gazi University Institute of Social Sciences Business Department. Beginning his career at insurance brokerage Alexander&Alexander Sigorta Brokerliği A.Ş. in 1992, Güçsav joined Akfen Holding in 1994 and took on roles in the Financing Department and the Executive Department.
He played important roles in the privatizations of Vehicle
Inspection Stations, Mersin International Port and İDO (Istanbul
Fast Ferries), the establishment and investment processes of
Akfen REIT, the public offerings of Akfen Holding and Akfen
REIT, and issues such as subsidiaries' stake sales and long-term
chairman of the DEIK Turkish-Singapore Business Council, also served as the Akfen Holding Management Board Deputy Chairman from 2003 until March 2010. A management board member of Akfen Holding between the years 2010-2012 and of TAV Airports Holding A.Ş. between 2000-2012, Güçsav has been the Akfen Holding CEO between March 2010 and 2019 and he serves as Advisor to the Chairman at Akfen Holding.
In addition to this role, he served as Chairman of Akfen REIT, Akfen Environment and Water, and Board Member of Mersin International Port and Akfen HES Yatırımları ve Enerji Üretim A.Ş. and Akfen's various subsidiaries. Akfen Holding Advisor to the Chairman Süha Güçsav was appointed in October 2014 as the Turkish Honorary Business Agent of the International Trade and Investment Agency (IE Singapore), which conducts activities under the auspices of the Singapore Industry and Trade Ministry.
Pelin Akın Özalp - BoardAfterMembergraduating from Surrey University, UK, in 2010, Pelin Akın Özalp started her career in the Deutsche Bank. Following her return to Turkey, she was attended to the MT program of TAV Airports Holdings. Pelin Akın Özalp started to serve as Board of Directors Member at Akfen Holding in 2012.
She is an active member of the Board of Trustees and the Board of
Directors at TİKAV (Turkish Human Resources Education and
Health Foundation) and Vice President of The Duke of Edinburgh's
International Award-Türkiye National Committee. She is also
Board of the Contemporary Turkish Studies Chair founded in London
School of Economics since 2010.
She participated in different working groups in DEİK Spanish Business Council, DEİK British Business Council, DEİK Irish Business Council and DEİK US Business Council. She is also a member of Turkish Tourism Investors Association (TTYD), Association of Family Businesses (TAİDER) and Turkey Union of Chambers and Commodity Exchanges (TOBB) Young Entrepreneurs Advisory Councils. Pelin Akin Ozalp is also a member of Turkey Business Women's Association (TIKAD), Association of Women in Board of Directors (YKKD) and the Marine Environment Protection Association (TURMEPA) Boards.
Currently serving as Vice Chairwoman of Akfen Infrastructure Holding, as Board Member and Corporate Governance Committee Member for Akfen Holding, and Board of Directors Member of IBS Insurance and Reinsurance Brokering, Akfen REIT, Istanbul Sea Buses (İDO) and Travelex.
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Akfen REIT
Annual Report 2019
Selim Akın, graduated from Surrey University, Business Administration Department in the United Kingdom, and after coming back to Turkey Mr. Akın started his professional career in the Akfen Holding Accounting Department and later served in the Project Development and Finance Departments.
The main projects in which he participated are the privatization and financing of Vehicle Inspection Stations, the privatization and financing of Mersin Port and Akfen Holding's public offering and bond issue. Besides his Chairman of the Board of Directors role at Akfen Altyapı Holding A.Ş., Akfen İnşaat ve Turizm A.Ş., Mr. Akın also serves as the Vice Chairman of the Board of Directors and
CEO at Akfen Holding and its various subsidiaries.
Mr. Akın has become a member of the Turkish Young Businessmen's Association. Mr. Akın is a member of TÜSİAD and Turkish Tourism Investors Association (TTYD). Also he is Vice Chairman of Young Businessmen Association of Turkey (TÜGİAD) and he has also been serving as DEİK representative since 2018.
Sıla Cılız İnanç - Board MemberSıla Cılız İnanç, graduated from Marmara University, Faculty of Law in 1995, joined Akfen Holding in 1997 upon having carried out law internship in 1996.
She took part in Public Private Partnership projects (PPP) in Turkey, mergers and acquisitions, worked in concern with infrastructure, construction, energy and competition law. She took an active role in secondary legislation of Public Tender Law. She worked at every stage of build-operate- transfer projects, transfer of rights/concession and all process of privatizations implementations including tenders and transfers in which Akfen and its subsidiaries participated, also dealt with establishment of financial structures, facility agreements and both share and bond issues laws and regulations. She conducted company
She is Board Member of Akfen Altyapı Holding A.Ş., Akfen Holding A.Ş. and also Board Member of various Akfen Holding subsidiaries and Akfen İnşaat Turizm ve Ticaret A.Ş.
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Annual Report 2019
İrfan Erciyas - Board Memberİrfan Erciyas, graduated from Economics and Finance Department of Gazi University in 1977, has started to work in Türkiye Vakıflar Bankası. After having worked as inspector and Branch manager in Türkiye Vakıflar Bankası, he continued to work as Vice General Manager between 1996 and 2002 and as General Manager between 2002- 2003.
Erciyas who joined Akfen Holding in 2003 as Vice Chairman of the Board of Administrators, had worked especially on privatization of Vehicle Inspection Stations, Mersin International Port and IDO and also during the foundation and investment processes of Akfen REIT and Akfen Enerji, for the public offering of Akfen Holding and Akfen REIT and on the subjects of the share sales of the shareholdings and
is working in Akfen Holding , as Executive Board Member since March 2010 and he is also Chairman of the Board of Administrators, Vice Chairman and Member of Board of Administrators of several subsidiaries and affiliates of Akfen Holding.
Ahmet Ertürk - - Independent Board Member
Mr. Ahmet Ertürk, who was born in Malatya in 1953, graduated from the Faculty of Political Sciences of Ankara in 1975. Mr Ertürk, who served duty as a Finance Inspector between the years of 1976- 1985, made a study for and on behalf of the Ministry of Finance between 1984-1985 in London on "British Experience on Privatization" After his service of duty as the Assistant Secretary General of TÜSİAD (Turkish Industrialists' and Businessmen's Association) between the years of 1986-1988, he took up the duties
as the Deputy General Director and Consultant of General Director at the Turkish Marine Enterprises between the years of 1988-1991. Mr. Ahmet Ertürk, who worked as the Deputy General Director at Albaraka Türk between 1992-2002, took up the duty as the President of the Saving Deposit Insurance Fund (TMSF) between 2004-2009 following his duty as the Member of the Capital market Committee (SPK) in 2003. Mr. Ertürk, who served duty as the Senior Advisor of the (Turkish) President on economical matters between 2010-2014, is married with two kids and in good command of English language. Currently, he serves duty as an Independent Member of the Board of Directors of Akfen REIT.
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Akfen REIT
Annual Report 2019
Halil Eroğlu - - Independent Board Member
Eroglu, who was born in Karşıyaka in 1952, studied tpe primary school in seven different schools as a result of his father's profession as a civil servant. After having studied at the Boarding School of İzmir Education College (BAL-Bornova Anatolian High School), he has graduated from the Ankara University Faculty of Political Sciences in 1974. After a service period of ten years as an inspector at the bank, Türkiye İş Bankası, where he started his banking work, he served various
duties at the General Directorate and branches, and worked as a General Director at Dışbank, which has been closed down for the current period and also at İş Leasing for a period of three years. Mr. Eroğlu became the General Director of the Industrial Investment Bank in 2001. After the merger of the bank in 2002 with the Industrial Development Bank of Turkey (TSKB), he served duty as the general director of the Bank for a period of ten years and retired in 2011. He served duty as the chairman or member of the board of directors at various companies either before or after his retirement. Currently, he serves duty as an Independent Member of the Board of Directors of Akfen REIT.
Adnan Aydoğan - - Independent Board Member
Mr. Adnan Aydoğan has graduated from the College of Education of Diyarbakır in 1980, and from the High School of Elazığ in 1983, and from the Public Management Department of the Faculty of Economics and Administrative Sciences of the Gazi University in 1987. He completed his master degree course at the Management Sciences of the Social Sciences Institute of the Gazi University. He served duty at the Turkish Iron-Steel Plants as the Plants Manager, and Researcher at the Sakarya University, and specialist (Project Coordinator) at the Undersectariat of State at
the Defence Industry, and subsequently, as the Project monitoring and Finance Branch and Head of Fund Management Division. Finally, Mr. Aydoğan, who was working as the Head of Financial Affairs and Subsidiaries within the structure of TAİ, quitted his duty in 2013, and currently serves duty as an Independent Member of the Board of Directors at Akfen REIT.
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Akfen REIT
Annual Report 2019
Top Management
F. Sertac Karaağaoğlu - General Manager
Mr. Sertac F. Karaağoğlu, has bachelor's degree from METU Political Science and Public Administration, and MBA from Maltepe University. During his banking career in 1996-2012 he worked in Corporate and SME banking divisions of commercial banks (Toprakbank, Kentbank, Dışbank, Fortis) as branch and region manager and as director of commercial and SME credits in Fortis and TEB BNP Paribas. He continued his Corporate Finance career in
exchange) as Group Director of Listing and Private Market between 2012 and 2016. Karaağaoğlu is General Manager of Akfen REIT since 2016, giving lectures on Corporate Governance and Finance in Maltepe University and member of Board in GYODER.
Cüneyt Baltaoğlu - RussiaCüneytCoordinatorBaltaoğlu, who graduated from the German High School of Istanbul and subsequently, Faculty of Architecture of the Istanbul Technical University, stepped in his working life (career) by taking up a duty at the Hotel project of Gama İnşaat Russia-Tyumen in 1994. Then, Mr. Baltaoğlu, who took up the duty at the Koray-Enka Partnership Moscow and Koray Construction Istanbul real estate development/investment projects between the years of 1995 and 1998, completed his MBA degree at the Rotterdam School of
University of Holland between 1999 and 2001, and subsequently, undertook the Lycos-Europe's founding general directorate duty within the structure of Bertelsmann AG in Moscow. Mr. Baltaoğlu conducts the duty of Coordinator of Russia Investment Projects of Akfen Gayrimenkul Yatırım Ortaklığı (Akfen Real Estate Investment partnership) since 2007.
Memduh Okyay TuranMr-. MemduhDep tyOkyayGeneralTuranMgraduatednagerfrom- Operationthe Department of Tourism and Hotel Management of Bilkent University in 1993. Mr. Turan started his professional career at Antalya Club Hotel Sera City & Resort and Antalya Dedeman Convention. Mr. Turan, who holds a Travel Agencies Information Certificate of the Ministry of Tourism, subsequently, has served duties as manager at the Mega Residence Hotel Front Office Management, Mega Residence Sales & Marketing departments. Mr. Turan, who served duties as the General Director and General Coordinator at St. Paul Tourism & Travel Agency and
MersGroup, conducted the General Coordinator duty in the following years at the City Residence, affiliated to the same group, and Kuşadası Mersin Beach Resort. Mr Turan, who joined the Akfen Family in 2005, serves duty as the Deputy General Director for Operations at Akfen REIT since 2008.
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Annual Report 2019
Yusuf Anıl - Deputy General Manager Financial and Administrative
Affairs1994 was graduated from the School of Economics of Anadolu University in 1994 and began his professional career in 1988. After completing his military duty in 1995, he worked as the Accounting and Financial Affairs Manager at Tam Group from 1996 until 2000. Between 2000 and 2004, he opened his own Independent Accounting and Financial Advising office. He worked as the Accounting Manager Borusan Telekom and other technology companies of Borusan Holding from 2004 until 2007. He had worked as the Accounting
Estate Investment Trust since February 2008 and Anıl has been working as Deputy General Manager since 2018. He received his independent accountant and financial advisor certificate in 2001 and Independent Auditor certificate of Public Oversight Authority.
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Akfen REIT | ||||
Annual Report 2019 | ||||
Board of Directors | Role | |||
Hamdi Akın | Chairman of the Board/Executive Director | |||
İbrahim Süha Güçsav | Vice Chairman of the Board | |||
Pelin Akın | Board Member | |||
Sıla Cılız İnanç | Board Member | |||
Selim Akın | Board Member | |||
İrfan Erciyas | Board Member | |||
Adnan Aydoğan | Independent Board Member | |||
Halil Eroğlu | Independent Board Member | |||
Ahmet Ertürk | Independent Board Member | |||
Top Management | Role | |||
Sertac F. Karaağaoğlu | General Manager | |||
Memduh Okyay Turan | Deputy General Manager - Operations | |||
Yusuf Anıl | AffairsDeputy General Manager - Financial and Administrative | |||
udit Committee | Role | |||
AhmetErtürk | Chairman of the Committee/ Independent Member | |||
Adnan Aydoğan | Member / Independent Member | |||
Halil Eroğlu | Member / Independent Member | |||
Chairman of the Committee/ Independent Member | ||||
Corporate | ||||
Role | ||||
Gove nance Committee | ||||
Chairman of the Committee/ Independent Member | ||||
Halil Eroğlu | ||||
Ahmet Ertürk | Member / Independent Member | |||
Adnan Aydoğan | Member / Independent Member | |||
Ayşegül Yılmaz | Member | |||
Early Detection of Risk | ||||
Role | ||||
Committee | ||||
Chairman of the Committee/ Independent Member | ||||
Halil Eroğlu | ||||
Pelin Akın | Member / Independent Member | |||
Selim Akın | Member / Independent Member |
The total amount of financial benefits such as honorarium, fees, premium, bonuses, dividends and so on, provided to the managers of the Company are presented herein.
Benefits, for Top Level Executives 2018 | 2019 | Change |
(TRY) | (%) |
Apart from this, no other material right, | allowance, representation expense, | material right in kind, | |||
Short-Term Benefits | 2.509 | 3.659 | 46 | ||
insurance and similar indemnity has | been given. The | total amount of short-term benefits, | |||
provided to the executive managers for Akfen REIT and its affiliates belonging to the year ending | |||||
on December 31, 2019 refers to an amount of TRY 3.659.349 (31 December 2018: 2.508.656.-TL) | |||||
and all explanations, made pursuant to the legislation are conformed thereto and necessary | |||||
process is conducted within the direction of the fee policy of the Company. |
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Organizational Chart
İHamdiPelin. SühaAkınGüçsavAkınÖzalp-Chairman-Vice- Chairmanof the Boardof theofBoardDirectorsof Directors
Selim Akın- Board Member
Board Member
Sıla Cılız İnanç- Board Member İrfan Erciyas- Board Member Adnan Aydoğan*- Board Member Halil Eroğlu*- Board Member Ahmet Ertürk*- Board Member
* Independent Members of the Board of Directors
Akfen REIT
Annual Report 2019
Board of
Directors
Chairman of the
Board of
Hamdi Akın
GeneralSertacManagerF.
Karaağaoğlu
Deputy General | Operations | Cüneyt Baltaoğlu | |||||||||
Affairs | |||||||||||
Manager Financial | Deputy General | Russia Coordinator | Legal Consultant | ||||||||
and Administrative | Manager- | ||||||||||
Yusuf Anıl | MemduhOkyay | Turan | 11 personnel | Şevin Nar | |||||||
Administrative | |||||||||||
Finance Speci | list | ||||||||||
Hülya Keser | |||||||||||
Aslı Canan Ocal | Officer for Investor | Affairs | |||||||||
Relations and | OğuzhanTuran | ||||||||||
Accounting Man ger | Fatih Akar | ||||||||||
Ayşegül Yılmaz |
As at December 31, 2019, the number of employees of the group is 21 (Including Cyprus Personnel).
Akfen REIT Affiliates
Trade Name | Akfen Gayrimenkul Ticaret ve İnşaat A.Ş. (Akfen | ||||||||
GT) | |||||||||
Activity | Creating real-estate portfolios | ||||||||
Issued Capital (*) | |||||||||
171.750.000,00 | |||||||||
Company's Share in Capital | |||||||||
200.000.000,00 | |||||||||
Currency | |||||||||
TRY | |||||||||
Company's Share in Capital (%) | |||||||||
100 | |||||||||
Company's Relationship | |||||||||
Subsidiary |
Trade Name | Russian Hotel Investment B.V. (RHI) | ||||
Activity | Developing Hotel projects in Russia | ||||
Issued Capital (*) | |||||
33.455.050,00 | |||||
Company's Share in Capital | |||||
32.690.666,00 | |||||
Currency | |||||
Euro | |||||
Company's Share in Capital (%) | |||||
97,72 | |||||
Company's Relationship | |||||
Subsidiary |
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Akfen REIT | |||||||
Trade Name | Russian Pr perty Inv tment | Annual Report 2019 | |||||
B.V. (RPI) | |||||||
Developingoffice and residence projects in Russia | |||||||
Issued Capital (*) | |||||||
Activity | 7.258.867,00 | ||||||
Company's Share in Capital | |||||||
6.906.859,00 | |||||||
Currency | |||||||
Euro | |||||||
Company's Share in Capital (%) | |||||||
95,15 | |||||||
Company's Relationship | |||||||
Subsidiary | |||||||
Trade Name | Hot Development Investment B.V. (HDI) | ||||||
Developing Hotel projects in Russia | |||||||
Issued Capital (*) | |||||||
Activity | 8.510.640,00 | ||||||
Company's Share in Capital | |||||||
8.510.640,00 | |||||||
Currency | |||||||
Euro | |||||||
Company's Share in Capital (%) | |||||||
100 | |||||||
Company's Relationship | |||||||
Subsidiary | |||||||
Trade Name | Akfen Karaköy Gayrimenkul Yatırımları ve | ||||||
İnş A.Ş.* (Akfen Karaköy) | |||||||
Creating real-estate investments | |||||||
Issued Capital (*) | |||||||
Activity | 121.000.000,00 | ||||||
Company's Share in Capital | |||||||
110.678.700,00 | |||||||
Currency | |||||||
TRY | |||||||
Company's Share in Capital (%) | |||||||
91,47 | |||||||
Company's Relationship | |||||||
Subsidiary | |||||||
(*)Akfen Karaköy Yatırımları ve İnşaat A.Ş.'s 19.90% capital belongs to Akfen REIT and 71.57% belongs to Akfen GT A.Ş. | |||||||
Trade Name | Akfen İnşaat Turizm ve Ticaret A.Ş. ve Akfen | ||||||
Gayrimenkul Yatırım Ortaklığı A.Ş. Adi Ortaklığı | |||||||
(Joint V nture) | |||||||
Land Sales Proportion Revenue Share Housing | |||||||
Activity | |||||||
Construction Work | |||||||
Issued Capital (*) | |||||||
10.000,00 | |||||||
Company's Share in Capital | |||||||
9.900,00 | |||||||
Currency | |||||||
TRY | |||||||
Company's Share in Capital (%) | |||||||
99 | |||||||
Company's Relationship | |||||||
Subsidiary |
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Akfen REIT
Annual Report 2019
MainAkfenactivityGa rimenkulfields of AkfenTicaGayrimenkuleti ve İnşTicaretiat Ave.ŞInsaat. (AkfenA.S., 100%GT) subsidiary of Akfen REIT, is developing, managing and have manage real estate investments. Akfen GT has fixed rental income from 5 stars Merit Park, located in TRNC since 2007.
Akfen GT owns 97.72% of the shares of Russian Hotel Investments B.V. (RHI) and Russian Property Investment, and 95.15% of the shares of Russian Property Investment B.V. (RPI) established in the Netherlands who launched Ibis Hotel Yaroslavl, Ibis Hotel Samara, Ibis Hotel Kaliningrad and Samara Office among Akfen REIT's investments in Russia.
All of the HDI shares, held by Akfen REIT, were sold to Akfen GT, one of the subsidiaries of the Company, on March 27, 2017
RHI,Iconsolidates firms established in Russia to realize Hotel projects in this country. Active firms under The company are presented in the table.
RPIPIconsolidates project-based firms realizing projects in Russia excluding Hotel management projects.
HDI,DIof which 100 % participation is held by Akfen GT, is established in order to develop Hotel project(s) in Russia. The Company having its centre of activity located in Netherlands has realized a Hotel project, put into operation in Moscow.
Planning,Akfen KaraköyconstructingGayrimenkuland subcontracting,Yatırenting,ımlarımanagingve İ şandat outsourcingA.Ş. (AkfenmanagementKaraköy)of tourism facilities, hotels and real estate investments are among the operations of the Company. The hotel building in Karaköy, Istanbul, which has been invested by the company, is currently operated by Tamaris Turizm (Accor) as a five-star Hotel under the name of Novotel Istanbul Bosphorus.
Akfen İnşaat Turizm ve Ticaret A.Ş. ve Akfen Gayrimenkul Yatırım
Ortaklığı A.Ş. Adi Ortaklığı (Joint Venture)
Akfen REIT and Akfen İnşaat Turizm ve Ticaret A.Ş. (Akfen Construction) established a joint venture (Akfen REIT 99% - Akfen Const. 1%) on November 9, 2017 to undertake the Bulvar Loft Project owned by İller Bankası A.Ş. (İller Bankası). The Project was been completed in December 2018, consists of 822 residences and app 7.000m² commercial zone.
The wholesale of the independent sections in the Bulvar Loft project belonging to İller Bankası, which is under Joint Venture, was realized on 10 January 2019. The temporary admission application for the Bulvar Loft Project was approved by İller Bankası on January 29, 2019.
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Akfen REIT
Annual Report 2019
Shareholders
December 31, 2019 Shareholders
Shareholders | Group | Shares | Number of | Capital | |||||||
(TRY) | Shares | Ratio (%) | |||||||||
Akfen Holding A.Ş. | B | 104.654.831 | 104.654.831 | 56,88 | |||||||
Hamdi Akın | A | 1000 | 1000 | 16,50 | |||||||
B | 30.349.089 | 30.349.089 | |||||||||
C | 999 | 999 | |||||||||
D | 1000 | 1000 | |||||||||
Other | B | 48.993.080 | 48.993.080 | 26.63 | |||||||
Total | C | 1 | 1 | 100,00 | |||||||
184.000.000 | 184.000.000 | ||||||||||
The share group of A, C, D has the privilege to select nominees for the board of directors member | |||||||||||
selection. Members of the Board are elected by the General Assembly among the nominees, where | |||||||||||
2 of them selected by Group A, 2 of them by Group C, and 2 of them by Group D shareholders. | |||||||||||
Regarding the company's own shares, there is no acquired share. |
Registered Each Share's | Total | Capital | Type of Privilege | Whether Traded or | |||
Group | / Bearer | Nominal | Nominal | Rate (%) | not | ||
Value (TRY) | Value (TRY) | Privilege to elect two | |||||
A | members of | board of | Not listed at BIST. | ||||
Registered | 1 | 1,000 | <0.001 | directors at theGeneral | |||
Assembly | |||||||
B | Bearer | 1 | 183,997,000 | 99.99 | No privilege is available | Listed in the main | |
Privilege to elect two | Market at BIST. | ||||||
C | members of | board of | Not listed | ||||
Registered | 1 | 1,000 | <0.001 | directors at theGeneral | |||
Assembly. | |||||||
Privilege to elect two | |||||||
Not listed | |||||||
D | Registered | 1 | 1,000 | <0.001 | members of | board of | |
directors at theGeneral | |||||||
184.000.000 | 100 | Assembly. | |||||
Total |
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Akfen REIT
Annual Report 2019
Hotels
Novotel ve Ibis Hotel İstanbul
The Istanbul lands of Novotel Istanbul and Hotel Ibis was allocated by the State Treasury bearinga construction right contract, dated as December 04, 2003, for a period of 49 years. The term of the allocation is extended to 2067 in 22.12.2018.
It is an accommodation point convenient for commercial and touristic-purpose trips with its close proximity to the historical regions and business centres of Istanbul. It's distance to various locations such as 0,5 kms to Veliefendi Hippodrome and Abdi İpekçi Sports Hall, 6 kms to the Olimpiyat Stadium, and 10 kms to the Sultanahmet and Beyazıt Districts give opportunity for Hotel visitors to reach the activities easily, desired by them.
Number of Novotel Rooms | 26.372 m | |
Surface of the Land | 2 | |
Surface of Construction Area | 11.720 m2 | |
Operator | March 2007 | |
Number of Hotel Ibis Rooms | 208 | |
Date of Opening | Tamaris Turizm (Accor) | |
228 |
Ibis Hotel İstanbul Esenyurt | ||
The Hotel Ibis Istanbul Esenyurt taking place at the District Esenyurt, which is one of the most | ||
rapidly developing regions of Istanbul through suburb projects and land of which is owned by | ||
Akfen REIT, was opened and put into operation on January 25, 2013. The Hotel is the E-5 | ||
Motorway-fronted and takes place within a close range of TÜYAP Exhibition and Congress Centre. | ||
Surface of Construction Area | 1.755,372 m | |
Number of Rooms | 7.331 m | 2 |
Surface of the Land | ||
Operator | January 2013 | |
Date of Opening | Tamaris Turizm (Accor) | |
156 |
Novotel İstanbul Bosphorus (Karaköy) | ||||
The land of Novotel Karaköy was obtained from the General Directorate of Foundations through | ||||
an allocation for 49 years. It is constructed on the land of old Kozluca Han (Inn), located on the | ||||
Rıhtım Caddesi (Avenue) and faces the Galataport. Bearing the characteristic of the first 5-star | ||||
Hotel was launched in February 2016. | 3.074,58 m2 | |||
Surface of Construction Area | ||||
Number of Rooms | 21.440 m | 2 | ||
Surface of the Land | ||||
Operator | February 2016 | |||
Date of Opening | Tamaris Turizm (Accor) | |||
200 |
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Akfen REIT
Annual Report 2019
Ibis Hotel Tuzla | ||||
The land of the Hotel Ibis Tuzla was purchased by Akfen REIT. It is located in the Anatolian Part | ||||
of Istanbul and situated over the E-5 Motorway and close vicinity of Shipyard, Metro | ||||
(Underground), Organized Industrial zones and Sabiha Gökçen Airport and launch of the Hotel | ||||
was made in April 2017. | 2 | |||
Number of Rooms | 9.480 m | |||
Surface of the Land | 4.688 m2 | |||
Surface of Construction Area | ||||
Operator | April 2017 | |||
Date of Opening | Tamaris Turizm (Accor) | |||
200 |
Ibis Hotel Bursa
The land of the Hotel Ibis Bursa was leased from the Bursa Uluslararası Tekstil Ticaret Merkeziİşletme Kooperatifi (Bursa International Textile Trade Centre Enterprise Cooperative) on May 09, 2008 providing advantage with its close location to the commercial centres in Bursa being one of the most important industrial and commercial regions of Turkey.
Surface of Construction Area | 7.961,792 m | |
Number of Rooms | 7.523 m | 2 |
Surface of the Land | ||
Operator | November 2010 | |
Date of Opening | Tamaris Turizm (Accor) | |
200 |
Ibis Hotel Alsancak
The land was leased on August 25, 2010from the General Directorate of Foundations of the PrimeMinistry of the Republic of Turkey for a period of 49 years. The Hotel Ibis İzmir Alsancak provides a comfortable and modern accommodation opportunity with its central location in İzmir that is one of the major cities making substantial contribution with its location and workforce to the Turkish economy. The Hotel taking place at the Alsancak District of the town Konak is located within the close vicinity of Alsancak Railway Station and Alsancak Port.
Number of Rooms | 5.555 m | ||
Surface of the Land | 2 | 2 | |
Surface of Construction Area | 629 m | ||
Operator | June 2013 | ||
Date of Opening | Tamaris Turizm (Accor) | ||
140 |
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Annual Report 2019 | ||||
Ibis Hotel Eskişehir | ||||
The building of the Hotel Ibis Eskişehir was leased from the Metropolitan Municipality of Eskişehir | ||||
and the grain elevator building was converted into the Hotel Ibis. The Hotel being located at a | ||||
walking distance to all important shopping, business and entertainment centres of Eskişehir is | ||||
also situated at a location considerably close to the campus of the Anatolian University that is one | ||||
of the most important focal points of the city. Furthermore, the proximity of the Hotel to the | ||||
railway station increases the number of transportation alternatives to the Hotel. | ||||
Number of Rooms | 5.868 m | |||
Surface of the Land | 2 | |||
Surface of Construction Area | 6.806 m2 | |||
Operator | April 2007 | |||
Date of Opening | Tamaris Turizm (Accor) | |||
108 |
Ibis Hotel Ankara Airport | ||
The land of the Hotel Ibis Ankara Airport was purchased by Akfen REIT on July 21, 2011. The Hotel | ||
Ibis Ankara Airport taking place at a distance of only 1 km to the Esenboğa Airport is 28 kms away | ||
from the city centre of Ankara province. | 9.506 m | |
Number of Rooms | ||
Surface of the Land | 2 | |
Surface of Construction Area | 7.134 m2 | |
Operator | September 2014 | |
Date of Opening | Tamaris Turizm (Accor) | |
147 |
The landof the Hotel Ibis Adana was purchased by Akfen REIT on August 03, 2010. The Hotel Ibis | ||||
Ibis H tel Adana | ||||
Adana is located at the city centre of Adana taking place among the important industrial, | ||||
commercial and agricultural centres of Anatolia. | 2 | |||
Number of Rooms | 9.047 m | |||
Surface of the Land | 2.213 m2 | |||
Surface of Construction Area | ||||
Operator | September 2014 | |||
Date of Opening | Tamaris Turizm (Accor) | |||
165 |
Novotel Trabzon
The land of the Novotel Trabzon that is located on the Black Sea shore was leased from the WorldTrade Centre of Trabzon for a period of 49 years. A permanent and independent construction right of it covering a period of 49 years was registered February 27, 2008 at the deed office in favour of Akfen REIT.
The Novotel Trabzon that offers a transportation advantage to its guests through its close proximity to the airport and city centre has an additional advantage since the fact that it is the first international Hotel chain of the city and region. The Hotel taking place just besides the World Trade Centre is one of the favourite Hotels of Trabzon through its central location and design.
18
Surface of the Land | Akfen REIT | |
Annual Report 2019 | ||
Number of Rooms | 2 | |
15.232 m | ||
Surface of Construction Area | 13.450 m2 | |
Operator | October 2008 | |
Date of Opening | Tamaris Turizm (Accor) | |
200 |
Novotel ve Ibis Hotel Gaziantep
A permanent and independent construction right was registered at the deed office (deed of the real estate) on July 17, 2007 in favour of Akfen REIT covering a period of 30 years over the land of Novotel and Hotel Ibis Gaziantep, leased from the Metropolitan Municipality of Gaziantep on May 31, 2007. The area where the Hotel is located is at a walking distance to the city centre where public institutions such as City's Governor's Office, Metropolitan Municipality, Revenue Administration and so on and historical places are located in.
Number of Novotel Rooms | 18.825 m | |
Surface of the Land | 2 | |
Surface of Construction Area | 6.750 m 2 | |
Operator | January 2010 | |
Number of Ibis Hotel Rooms | 92 | |
Date of Opening | Tamaris Turizm (Accor) | |
177 |
Novotel ve Ibis Hotel Kayseri | ||
The land of Novotel and Hotel Ibis Kayseri was leased from the Chamber of Commerce and | ||
Industry of Kayseri on November 04, 2006 for a term of 49 years. A permanent and independent | ||
construction right covering a period of 49 years was registered August 17, 2007 at the deed office | ||
with relation to this land in favour of Akfen REIT. The Hotels being located at the city centre are | ||
at a distance of 10 minutes to the airport. | 11.035,4 m2 | |
Surface of Construction Area | ||
Number of Novotel Rooms | 11.064 m | 2 |
Surface of the Land | ||
Operator | March 2010 | |
Number of Ibis Hotel Rooms | 96 | |
Date of Opening | Tamaris Turizm (Accor) | |
160 |
Merit Park Hotel Girne (TRNC)
The land where the Hotel Merit Park Kyrenia was allocated by the Ministry of Finance of the TRNCcovering a term of 49 years. The Hotel taking place at the portfolio of the company, Akfen Gayrimenkul Ticareti ve İnşaat A.Ş., which is an affiliate of Akfen REIT, was leased to the company, Voyager Cyprus Limited Company (Voyager Kıbrıs Limited Şirketi) together with its casino for a period of 20 years through the Lease Contract, executed on May 15, 2012.
Number of Rooms | 33.387 m | |
Surface of the Land | 2 | |
Surface of Construction Area | 37.000 m2 | |
Operator | April 2007 | |
Date of Opening | Voyager Kıbrıs Ltd. Şti. (Net Holding) | |
286 |
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Annual Report 2019
Ibis Hotel Samara ve Samara Office | |
Akfen REIT carried out two important projects in one of the major cities in Russia, Samara. The | |
Hotel Ibis Samara and Samara Office are located on the main arterial road where the airport road | |
is intersected, being situated 2 km away from the city centre of Samara having a population of 1.2 | |
millions. Samara also has one of the most important petrol refineries of Russia within its | |
boundaries. | |
Surface of the Land | 4.637 m |
Number of Rooms | |
Surface of Construction Area | 4.804 m2 2 |
Leasable Office | 11.749 m2 |
Operator (Hotel) | March 2012 |
Date of Opening | Russian Management Hotel Company (Accor) |
204 |
Ibis Hotel Kaliningrad | ||
The Hotel is located on the riverbank of Progolya River at a distance of 1.2 kms from the centre of | ||
the city, Kaliningrad that is an important transfer and tourism destination on the Baltic Sea shore. | ||
Its distance to the airport, however, is 20 kms. | ||
Number of Rooms | 6.322 m | |
Surface of the Land | 2 | |
Surface of Construction Area | 5.099 m2 | |
Operator | Ağustos 2013 | |
Date of Opening | Russian Management Hotel Company (Accor) | |
167 |
Ibis Hotel Yaroslavl
The 3-star Hotel Ibis Yaroslavl draws attention with its quality service, offered by it in the city ofYaroslavl, visited very often by domestic and foreign tourists. Yaroslavl taking place within the periphery of 250 kms to Moscow is a very active region both in terms of cruise tourism in the River Volga and cultural and business tourism, brought forth by international conferences.
Number of Rooms | 7.916 m | |
Surface of the Land | 2 | |
Surface of Construction Area | 4.432 m2 | |
Operator | September 2011 | |
Date of Opening | Russian Management Hotel Company (Accor) | |
177 |
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Akfen REIT | ||||
Annual Report 2019 | ||||
Ibis Hotel Moscow | ||||
The Hotel, located at the centre of Moscow, takes place just beside the sporting facilities in the | ||||
region Dynamo and at a walking distance of 15 minutes to the world-renowned Tretyakov Galery, | ||||
and 10 minutes to the Paveletsky Railway Station. The Hotel Ibis Moscow offers a comfortable | ||||
alternative to the business and tourism-focused trips through its modern architectural design and | ||||
well-illuminated rooms, equipped with a warm decoration. | ||||
Number of Rooms | 13.250 m | |||
Surface of the Land | 2 | |||
Surface of Construction Area | 2.010 m 2 | |||
Operator | July 2015 | |||
Date of Opening | Russian Management Hotel Company (Accor) | |||
317 |
Projects
The project, started within the structure of Akfen İnşaat, consists of 6 buildings, 822 residences | ||||
Bulvar Loft | ||||
and a commercial facility of 7 thousands of square meters. While the project was at a level of 35,20 | ||||
of the total foreseen cost, it was assigned to the company, Akfen İnş. Tur. Tic. A.Ş.-Akfen REIT A.Ş. | ||||
Joint Venture, of which 99 % share proportion is held by Akfen REIT: The residence sales made | ||||
through the Income Share Model on the land, owned by İller Bankası. All of the properties in the | ||||
Project has been sold in 2018 and 2019, except 4 residences. (By 31.12.2019, there were 14 | ||||
resindences left; 10 residences' bills of sales weren't issued and the rest 4 residences are in stock) | ||||
Net Sellable Area | 169.703 m2 | |||
Surface of Construction Area | 11.637 m | 2 | ||
Number of Residence | 94.453 m | 2 | ||
Commercial Area | 822 |
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Akfen REIT
Annual Report 2019
Overview of Akfen REIT
Financial Structure (Consolidated)
RY | 31 December 2018 | 31 December 2019 | ||||||||||
Total Assets | ||||||||||||
2.436.937.014 | 2.662.935.747 | |||||||||||
Equities | ||||||||||||
Paid-up Capital | 743.995.844 | 959.543.722 | ||||||||||
Turnover | 184.000.000 | 184.000.000 | ||||||||||
98.124.335 | 481.931.13 | |||||||||||
Cost of Sales | (13.836.974) | (321.016.259) | ||||||||||
Real Operating (Loss)/Profit* | ||||||||||||
Period (Loss)/Profit* | 490.626.116 | 342.414.920 | ||||||||||
102.663.405 | 171.314.242 | |||||||||||
Investments | 148.579.084 | 171.840.233 | ||||||||||
RY | 31 December 2018 | 30 September 019 | ||||||||
Turnover | 40.609.606 | 450.783.802 | ||||||||
Cost of Sales | (6.310.205) | (315.728.338) | ||||||||
Real Operating (Loss)/Profit* | 27.196.457 | 127.296.896 | ||||||||
Period (Loss)/Profit* | (137.278.805) | 51.416.791 | ||||||||
Investments | 91.243.818 | 171.031.925 |
Akfen REIT 31 December 2019 | Akfen REIT 31 December 2019 | ||||
Total Portfol o Value* | Net Assets Value* | ||||
1.805 (in million TRY) | 1.048 (in million TRY) | ||||
- Based on the fair value of Akfen GYO's subsidiaries as of the Company assessments dated 31.12. 2019
Turnover (in million TRY)
31 December 2018 | 31 December 2019 | Change (%) | ||||||||||
98,1 | 481,9 | 391 | ||||||||||
98,1 | 109,4 | 12 | ||||||||||
(*)Excluding Bulvar Loft Project | ||||||||||||
31 (in million TRY) | 31 December 2019 | Change (%) | ||||||||||
EBITDA | ||||||||||||
December 2018 | ||||||||||||
70,7 | 148,5 | 110 | ||||||||||
76,6 | 93,2 | 22 | ||||||||||
(*)Excluding Bulvar Loft Project | ||||||||||||
2019 Regional Turnover Distribution | ||||||||||||
Turkey | TRNC | Russia | ||||||||||
(%) | ||||||||||||
88,9 | 6,4 | 4,7 | ||||||||||
22
Akfen REIT | |||
2019 Regional EBİTDA Distribution (%) | Annual Report 2019 | ||
Turkey | TRNC | Russia | |
70,4 | 19,6 | 10 |
2019 3. Quarter Regional Real Estate Distribution (%)
Turkey | TRNC | Russia | ||||||
57 | 21 | 22 | ||||||
Portfolio
Hotels | Number | State of | Land Lease | Investment | ||||||||||||||||||
Hotel Openning | ||||||||||||||||||||||
of | Owned | Expiry | Starting Date | Date | ||||||||||||||||||
Rooms | Date | |||||||||||||||||||||
1 | ||||||||||||||||||||||
Ibis Hotel Zeytinburnu | 228 | 49 years | 2067 | 2005 | March 2007 | |||||||||||||||||
2 | ||||||||||||||||||||||
Novotel Zeytinburnu | 208 | 49 | years | 2067 | 2005 | March 2007 | ||||||||||||||||
3 | ||||||||||||||||||||||
Ibis Hotel Eskişehir | 108 | 22 | years | 2029 | 2005 | April 2007 | ||||||||||||||||
4 | ||||||||||||||||||||||
5 | Novotel Trabzon | 200 | 49 | years | 2058 | 2006 | September 2008 | |||||||||||||||
TRNC | 6 | Ibis Hotel Gaziantep | 177 | 30 | years | 2038 | 2008 | January 2010 | ||||||||||||||
Novotel Gaziantep | 92 | 30 | years | 2038 | 2008 | January 2010 | ||||||||||||||||
7 | ||||||||||||||||||||||
TURKEYand | Ibis Hotel Kayseri | 160 | 49 | years | 2058 | 2008 | March 2010 | |||||||||||||||
8 | ||||||||||||||||||||||
9 | Novotel Kayseri | 96 | 49 | years | 2058 | 2008 | March 2010 | |||||||||||||||
10 | Ibis Hotel Bursa | 200 | 30 | years | 2040 | 2009 | November 2010 | |||||||||||||||
11 | Ibis Hotel Adana | 165 | Owned | Owned | 2011 | September 2012 | ||||||||||||||||
Ibis Hotel Esenyurt | 156 | Owned | Owned | 2011 | January 2013 | |||||||||||||||||
12 | ||||||||||||||||||||||
Ibis Hotel İzmir Alsancak | 140 | 49 | years | 2059 | 2011 | September 2013 | ||||||||||||||||
13 | ||||||||||||||||||||||
Ibis Hotel Ankara Airport | 147 | Owned | Owned | 2013 | September 2014 | |||||||||||||||||
14 | ||||||||||||||||||||||
15 | Novotel İstanbul Bosphorus | 200 | 49 | years | 2058 | 2012 | February 2016 | |||||||||||||||
Ibis Hotel Tuzla | 200 | Owned | Owned | 2013 | April 2017 | |||||||||||||||||
16 | ||||||||||||||||||||||
17 | Merit Park Hotel | 286 | 49 | years | 2052 | 2004 | April 2007 | |||||||||||||||
Bulvar Loft | ||||||||||||||||||||||
Turkey & Cyprus Total | 2.763 | |||||||||||||||||||||
RUSSIA
Hotels | Number | State of | Land Lease | Investment | Hotel Opening | ||||||||||
of | Owned | Expiry | Starting Date | Date | |||||||||||
Rooms | Date | ||||||||||||||
1 | İbis Hotel Yaroslavl | 177 | Owned | Owned | April 2010 | September 2011 | |||||||||
2 | |||||||||||||||
3 | İbis Hotel + Ofice Samara (**) | 204 | Owned | Owned | July 2009 | March 2012 | |||||||||
İbis Hotel Kaliningrad | 167 | Owned | Owned | August 2011 | August 2013 | ||||||||||
4 | |||||||||||||||
İbis Hotel Moscow | 317 | 49 years | 2059 | September 2013 | July 2015 | ||||||||||
Russia Total | 865 |
- TheTOTALGroup has a Samara Office Project having3.628a leasable area of 4.637 square meters in Russia in addition to its. Hotel portfolio. The office as a wholehas been leased.
23
Akfen REIT | ||||||||||||
Annual Report 2019 | ||||||||||||
31.12.2019 | ||||||||||||
Operational | Operational Hotel | |||||||||||
Hotels | Number of Rooms | Residence | Commercial Area | |||||||||
20 | 3.628 | 4 | 4.637 | |||||||||
Akfen in Brief
Akfen Holding exhibits a rapid growth through its correct and precise investment decisions at thesectors that bear a growth potential, and adds vision to the sectors where the Holding conducts its operation with the qualified and eligible as well as genuine projects, realized by it.
Akfen that was established in 1976 demonstrated a stable growth and gained a Holding status in 1999. Akfen being one of the leading substructure investment holdings of Turkey conducts its operations in the fields of engagement of construction, health, marine port operation, marine transportation, water distribution and wastewater services, mining, energy and real property.
The Group that reflects its innovative and dynamic approach to the fields of business exhibits a rapid growth both in Turkey and international markets through its correct and precise investment decisions at the sectors that bear a growth potential, and adds vision to the sectors where the Holding conducts its operation with the qualified and eligible as well as genuine projects, realized by it.
TheLeadingGroup offersbrandsits servicesin theinworldthe field of port management through the firm, Mersin Uluslararası Liman İşletmeciliği A.Ş., established jointly with the Company, Port of Singapore Authority International (PSA).
It keeps on maintaining its activities in the field of energy within the scope of a partnership with European Bank for Reconstruction and Development (EBRD) ve Uluslararası Finans Kurumu (IFC) and International Finance Corporation (IFC).
The Holding that started the marine transportation activities in 2011 makes its name as one of the leading marine transportation establishments not only in Turkey but internationally as well through the company, IDO Istanbul Deniz Otobüsleri Sanayi ve Ticaret A.Ş.
IBS Insurance and Reinsurance Brokerage Inc. (UIB Turkey), received its license and began operating in 1997. It formed a partnership in 2002 with UIB (United Insurance Brokers), a leading and very experienced Lloyd's broker in London.
The Group also offers its services in the field of water and wastewater substructure investmentsthrough the company, Akfen Çevre ve Su Yatırım Yapım İşletme A.Ş. (hereinafter shall briefly be referred to as "Akfen Su"), established jointly with an international investment firm, established in Holland and titled as Kardan N.V. Furthermore, a copper mining investment project continues in Kastamonu.
24
Akfen REIT
Annual Report 2019
ThePioneerGroup establishmentstakes its rank at the realin theirestate sectorectorthrough high standard projects, realized in this respect.
The Group engages in the construction sector through its company, TAV İnşaat, an affiliate of TAV Yatırım, following the assignment of Akfen İnşaat to the firm, Akfen Altyapı Holding A.Ş., in October 2015. It comes closer from day to day to achieve its target of becoming a world-renowned brand at the airport construction sector with prestigious projects, undertaken by it.
Akfen Holding realizes important investments in order to make contribution to meeting energy demand of Turkey increasing from day to day. The Holding aims to take place actively in the wholesale field in addition to the production with the investment decisions, made up-to-date at the energy sector. The holding has gathered its entire investments at renewable energy sector in 2016 under a single roof, called as "Akfen Yenilenebilir Enerji (Renewable Energy)". In July 2016, a partnership contract was executed with EBRD and IFC in order to enable them to have a partnership proportion of 16,67 per cent each at the company. Akfen holding owns 80,01 % of Akfen Yenilenebilir Enerji as of December 31, 2017, and the rest of the shares are under the possession of EBRD and IFC at equal proportions.
The Group has been conducting its activities through its member company, Akfen Su, established in order to develop franchising projects at water and wastewater sector in Turkey since 2005 in the field of water distribution. The mission of Akfen Su is to regain substantial economical losses that occur at the available water and substructure sector of Turkey before all else, and ensure the people ain continuous, reliable and healthy water and substructure service. The Company aims to develop new technologies and ensure the sustainability of this circumstance and gain power at international markets through these technologies. Akfen Su that carries its expertise and experience available within the field of water and wastewater field into the disposal of solid wastes and environmental management services successfully continues to maintain the services, provided within the scope of a Waste and Environmental Management contract, signed up with IDO for the first time in 2012, by the addition of three public private sector partnership hospital projects and MIP into its portfolio in 2016.
IBS Insurance has four offices in İstanbul, Ankara, Mersin and İzmir. The third largest insurance broker in Turkey.
Akfen keeps on its rise through successful strategic partnerships, set up with the pioneer companies of the national and international sector since its establishment. Akfen Holding that has been one of the example groups of Turkey through its management structuring, human resources potential and transparent policy, maintained without any concession will continue to grow and increase the values of Turkey.
Akfen keeps on rising through successful strategic partnerships, made with the pioneer companies of the sector.
In August 2018, Akfen Altyapı Holding A.Ş. took over 99.36% of Akfen Holding's shares. Thus, Akfen Holding became a subsidiary of Akfen Altyapı Holding A.Ş., the shares of which are equally owned by Selim Akın and Pelin Akın Özalp.
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Akfen REIT
Annual Report 2019
Akfen Infrastructure Holding in brief
Akfen Altyapı Holding A.Ş. (Akfen Infrastructure Holding) was established in 2008 to provideinfrastructure investment services. With its operations in construction, energy and real estate, Akfen Infrastructure Holding is one of the leading companies in Turkey.
Following the transfer of Akfen Construction to Akfen Infrastructure Holding in 2015, the company had the opportunity to build on its experience in construction and infrastructure with large-scale real estate projects, public hospitals built under PPP projects, dormitories and Hotels. In addition to Akfen Construction, Akfen Infrastructure Holding boasts a number of other companies under its roof, some of which are Akfen Tourism, Akfen Merter, Akfen Consultancy and Project Development, Akfen Real Estate Portfolio Management, Masanda Tourism, Travelex and Tepe Akfen Reformer.
Akfen REIT in brief
Akfen REIT was established in 2006 through a change in trade registry name and a restructuringof Aksel Turizm Yatırımları ve İşletmecilik A.Ş., which was founded on June 25, 1997, into a real estate investment trust. Leveraging the deep-rootedexperience and know-howof Akfen Holding, Akfen REIT plays a pioneering role in the sector by utilizing its experience in the development and construction of middle-marketHotel projects for delivering distinguished budget urban Hotels. The company focuses mainly on investing in real estate-basedcapital market instruments and creating and developing a strong real estate portfolio.
Successful business model in collaboration with a leading European
AkfencompanyREIT delivers urban Hotel projects under Ibis Hotel and Novotel brands in Turkey and Russia through a strategic cooperation with Accor SA, Europe's largest international Hotel operator chain. Leasing its newly constructed Hotels to its strategic partner Accor through longterm contracts, the company generates steady and predictable lease income with its business model.
Aimingportfolioto achieveof 20worldHotels-class standardsin 10 yearsin its urban Hotels, Akfen REIT has reached a portfolio of 20 Hotels with three- and four-star venues in the 10 years since its inception. The company's portfolio includes Ibis and Novotel in Zeytinburnu, the five-star Novotel in Karaköy, Ibis in Ankara, Ibis in Eskişehir, Novotel in Trabzon, Ibis and Novotel in Kayseri, Ibis and Novotel in Gaziantep, Ibis in Bursa, Ibis in Adana, Ibis in Izmir, Ibis in Tuzla, Ibis in Yaroslavl, Russia, Ibis in Samara, Russia, Ibis in Kaliningrad, Russia, Ibis in Moscow, Russia, and the five-star Merit Park Hotel in the Turkish Republic of Northern Cyprus. The company also owns an office building in Samara with a functional area of 4,637 m2.
26
Akfen REIT Annual Report 2019 December 2019, the average occupancy rate of Akfen REIT's Hotels operated by Accor was 66,8
percent. The Company's rental income increased by 12 percent in 2019 compared to the previous year and reached 109.4 million TL. Achieving a significant year-over-year increase, the Hotel operations in TRNC and Russia accounted for 28 percent and 21 percent, respectively, of the Company's lease income in 2019.
Developing unique and modern examples of the urban Hotel concept, Akfen REIT considers the dynamics of the Turkish business world as well as the demand in the domestic tourism sector in its investment decisions. As one of the leading REITs in Turkey in terms of net asset value, Akfen REIT has consolidated its reputation with world-class real estate development projects. Akfen REIT was offered to the public and listed on the BIST stock exchange on May 11, 2011 and is traded under the ticker "AKFGY." As of December 31, 2019, Akfen REIT purchased 6,233,384 shares of Akfen REIT worth 3,39% of the company's total equity within the framework of the "Share Buyback Program" as decided during the Ordinary General Assembly Meeting of Akfen REIT on April 16, 2019
ToHostdate,dthemillionsHotels inofTurkeyguestsand Russia have welcomed approximately 9 million guests in total. As of December 2019, the average occupancy rate of all Hotels in Russia and Turkey was 66,8%. In 2019, The company's Turkey lease income 2019 year compared to the previous year by 24% increase to 56 million TL and 12% decrease to 22 million in Russia, the total rental income, including Samara Office and Merit Park Otel by 12% increase and reached to 109,4 million TL. In 2019, the total lease income derived from Turkey by 52%, Russia by 20% and TRNC by 28%.
In 2019, Turkey, Russia and TRNC accounted for 52%, 20% and 28% of company's total lease revenues from these three countries. Offering unique and modern urban Hotels, Akfen REIT considers the dynamics of the Turkish business world as well as the demand in the domestic tourism sector in its investment decisions. As one of the leading REITs in Turkey in terms of net asset value, Akfen REIT has consolidated its reputation with world-class real estate development projects. In addition, 372.5 million TL was collected from the Bulvar Loft project sales, and the total revenue of 2019 reached 481.9 million TL.
Akfen REIT is registered at the Istanbul Chamber of Commerce under the registration no. 372279 and conducts its operations at its head office, located at Levent Loft Büyükdere Cad. No: 201 C Blok Kat: 8 34394, Levent/Istanbul. For detailed information about the Company, visit Akfen REIT's official website at www.akfengyo.com.tr.
Milestones of Akfen REIT
Akfen REIT keeps on making its progress through firm steps since the date of its establishment through the investment decisions, made on the precise time and correct point.
2005 A cooperation was established between Akfen Holding and Accor S.A.
•
2006 | Aksel Turizm Yatırımları A.Ş. was converted into Akfen REIT upon approval of the |
• | |
Capital Market Committee. |
27
Akfen REIT | |
Annual Report 2019 | |
• Hotel Novotel Istanbul having a capacity of 208 rooms and Hotel Ibis Istanbul, however, | |
2007 | 228 rooms were put into operation. |
• | |
• | Hotel Ibis Eskişehir having a capacity of 108 rooms was put into operation. |
Hotel Merit Park having a capacity of 286 rooms was put into operation in Kyrenia of | |
TRNC. | |
2008 | Hotel Novotel Trabzon having a capacity of 200 rooms was put into operation. |
• | |
• |
• Hotel Novotel Gaziantep having a capacity of 92 rooms and Hotel Ibis Gaziantep with 177 | |
2010 | rooms were put into operation. |
• | |
Hotel Novotel Kayseri having a capacity of 96 rooms and Hotel Ibis Kayseri, however, | |
• | 160 rooms were put into operation. |
• | Hotel Ibis Bursa with a room capacity of 200 was put into operation. |
The capital of the Company was raised from TRY 72 millions up to TRY 138 millions. | |
2011 | The Company raised its paid-up capital from TRY 138.000.000 up to TRY 184.000.000 |
• | |
• | through the public offering, effectuated in May 2011. |
• | The Company raised its share at the joint ventures in Russia from 50 % up to 95 %. |
The Hotel Ibis in Yaroslavl bearing a room capacity of 177 was put into operation |
2012
•
•
•
Hotel Ibis Samara having a capacity of 204 rooms was put into operation. Hotel Ibis Adana having a capacity of 165 rooms was put into operation
The Hotel taking place at the portfolio of the company, Akfen Gayrimenkul Ticareti ve İnşaat A.Ş., which is an affiliate of Akfen REIT, was leased to the company, Voyager Cyprus Limited Company (Voyager Kıbrıs Limited Şirketi) together with its casino for a period of 20 years through the Lease Contract.
2013 | Hotel Ibis Esenyurt having a capacity of 156 rooms was put into operation. |
• | |
• | Hotel Ibis Alsancak having a capacity of 140 rooms was put into operation. |
• | Hotel Ibis Kaliningrad having a capacity of 167 rooms was put into operation |
• | Hotel Ibis Ankara Airport having a capacity of 147 rooms was put into operation |
2014 |
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Akfen REIT | |
Annual Report 2019 | |
2015 | Hotel Ibis Moscow having a capacity of 317 rooms was put into operation. |
• | |
2016 | Hotel Novotel Istanbul Bosphorus Karaköy having a capacity of 200 rooms was put into |
• | |
operation. | |
• | Hotel Ibis Tuzla having a capacity of 200 rooms was put into operation. |
2017 | Akfen İnşaat Turizm ve Ticaret A.Ş. and Akfen Gayrimenkul Yatırım Ortaklığı A.Ş. |
• | Ordinary Partnership (hereinafter shall briefly be referred to as "Ordinary Partnership") |
• | was established on November 10, 2017. |
A contract pertaining to the assignment of the Boulevard Soft Contract was signed up by | |
and between Akfen İnşaat Turizm ve Ticaret A.Ş. and Akfen Gayrimenkul Yatırım | |
Ortaklığı A.Ş. Ordinary Partnership as of November 10, 2017 as was agreed upon with | |
İller Bankası within the framework of the approval of İller Bankası. | |
2018 | The commitment of construction to İlbank is realized in December 2018 and sales of all |
• | |
• | of the divisions of the Project is completed in 17th of January. |
The Issuance of Bond Convertible into Share was realized on January 17, 2018 for the | |
first time in Turkey by a listed corporation referring to a value of TRY 170.000.000. | |
2019 | |
• | Bulvar Loft project's bulk sale is completed. |
• | Under the scope of the "Buy-back program, capital ratio of the total share purchase had |
reached the level of 3,39% |
Vision and Mission
Mission
To become the leading Hotel investor in Turkey and in the region having the Hotel projects that are built and managed according to world-class standards.
ToVisionachieve steady balance sheet growth through the development of projects that yield high profitability in the real estate sector and to reward shareholders with an uninterrupted stream of increased dividends and capital gains.
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Akfen REIT
Annual Report 2019
Strategy | ||
Akfen REIT has the best position for a sustainable growth in the city Hotel management field, | ||
and has•specialized in city Hotel investments meeting the world-class standards. | ||
Strategic partnership with «Accor», Europe's largest and among the world's | ||
• | leading Hotel groups | |
• | Investments in economical city Hotels, | |
• | Predictable and sustainable cash flow via long-term lease agreements, | |
• | Increasing rental income based on the performance of the Hotels, | |
• | Know-how acquired through specialization in a single concept, | |
Ability to work with minimal staff since Accor employs the Hotel personnel | ||
Akfen REIT | ||
• | Genuine business model | |
• | Minimum operation risk | |
• | Low-risk predictable cash flow | |
• | ||
• | Limitless and rapid growth opportunity | |
• | Know-how acquired through specialization in a single concept, | |
Ability to work with minimal staff since Accor employs the Hotel personnel |
Portfolio Location Map
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Akfen REIT
Annual Report 2019
Financial and Operational Indicators
Consolidated rental revenue | ||||||||||
(in million TRY) | ||||||||||
2018 | 2 19 | Change | ||||||||
98,1 | 109,4 | %12 | ||||||||
Akfen REIT consolidated rental revenues have reached TRL 109,4 million, by an increase of 12% in 2019.
RY | 2017 | 2018 | 201 | ||||||||
Total Assets | 1.757.758.114 | 2.436.937.014 | 2.662.935.747 | ||||||||
Equities | 607.819.213 | 743.995.844 | 959.543.722 | ||||||||
Issued Capital | 184.000.000 | 184.000.000 | 184.000.000 | ||||||||
Revenue | 63.539.265 | 98.124.335 | 481.931.135 | ||||||||
Sale Costs | (9.588.722) | (13.836.974) | (321.016.259) | ||||||||
Real Operating Profit/Loss* | 256.829.469 | 490.626.116 | 342.414.920 | ||||||||
Profit | 38.654.953 | 102.663.405 | 171.314.242 | ||||||||
* The fixed assets value increase | profits/losses are | included in the main operating profit. | |||||||||
Investments | 10.086.861 | 148.579.084 | 171.840.233 |
Operations
TheREITrealIndustryestate investment trust (REIT) sector in Turkey was put into practice in 1995 together with legal arrangements, completed by the Capital Market Committee. The real estate investmenttrusts started to be traded at the stock exchanged as of the year of 1997.
The real estate investment trust companies invest in the real properties bearing a high earning potential, projects that are based on real estate, rights pursuant to the real estate and capital market instruments within the scope of the Capital Market Law and aim to get a predictable and regular rental income and real estate purchase-sales earning out of the immovable properties that they may add in their portfolios through these investments.
The real estate investment trust companies provide the real estate projects where the companies may face difficulty in finding finance, with financial support along with their main fields of engagements. Thus, the finance problem, faced by the companies aiming to make investment, is relieved to a greater extent by the intervention of the REIT (real estate investment trust) in the matter.
Another circumstance at the real estate investments is the fact that the company comes face to face with an equity cost even if it has sufficient finance. Under such circumstances, however, the solution, proposed by REITs is the mode of use of the money due to be collected from the people in return to the shares of real estate investment trust in the finance of the said project.
31
Akfen REIT Annual Report 2019 While no serious changes have been witnessed during the period 2000-2004 in the sector in terms
of the number of companies, the entries into the sector started to increase after the year 2004 due to the recovery of construction sector by economic recoveries, changes in the legislation and intense capital entry. The number of companies which was 11 in the year 2009, increased to 21 in 2010, due to the changes made in the legislation, primarily by decreasing the rate of going public from 49% to 25%. The number of companies increased to 30 during the consequent 3 years.
Nowadays the portfolio of the Real Estate Investment Companies is mostly composed of real estates (houses, offices, shopping malls and hotels).There are 33 companies in the sector which reached to TL 82 billion in 2018 by an increase of assets by 19%. The Real Estate Investment Companies are operating in the market with considerable discounts since years and as per the end of the year 2018, their total market value was TL 18,4 billion which became TL 27,8 billion by the end of the year 2019.
Real Estate Sector
Real estate sector which is the dynamo of Turkey's economy has been affected by the economicfluctuations which are occurring in our country since last few years in terms of currencies and interests. Depending on this period, the continuous improvement trends which are witnessed in the macroeconomic data such as inflation and current account deficit have been reflecting positively on real estate sector. Latest interest steps taken by the Central Bank of the Republic of Turkey (CBRT) causing the policy interest to decrease the housing interests, resulted in an increase in the recovery both for the consumers and the manufacturers. In the year 2018, housing sales were 1 million 375 thousand 400. In the year 2019, housing sales had decreased by 1,95% and occurred as 1 million 348 thousand 729. While the authorities of the sector declare that the graphic of real estate will be high in the coming years, the index of the January 2020 proved these declarations. Housing sales throughout Turkey increased by 55,8% in January compared to the same month of the previous year and occurred as 113 thousand 615. House sales by mortgage, increasing by 546,1% January compared to the same month of the previous year throughout Turkey, occurred as 42 thousand 237 and showed obviously that the consumers are not more inclined to purchase on credit. Apart the sales for local market, Turkey proving a success on selling houses to the foreigners by an increase each year, reached to 45 thousand 483 following an increase of 14,7% in 2019, compared to previous year. Istanbul is placed on the first rank in terms of house sales to the foreigners in 2019, with 20 thousand 857 houses, followed by Antalya with 8 thousand 951 houses. Ankara followed Antalya with 2 thousand 539 houses sales and is followed by Bursa with 2 thousand 213 houses sales. Along with the expected economic recovery in Turkey, it is expected that a new record will be held in 2020 in this sector by the increase of house sales.
Hotel and Accommodation Sector
As it is the case all around the world, tourism industry maintains its position to be an industrywhich proves continuous development in Turkey too. When the data of the Ministry of Tourism are analyzed, it is observed which points Turkey reached in tourism sector during the last quarter- century.
While the number of visitors who were coming to the country, in the nineties when the tourism industry started was 4,4 million, this number exceeded 10 million in the years 2000. During the
32
Akfen REIT Annual Report 2019 years 2010's the country was occupying a considerable position in the world market and reached
a number of 30 million. Turkey became in 2019, by being a safe and a popular tourism country and by attracting 52 million tourists, the sixth most visited country of the world. The number of tourists who came to Turkey in 2019, increased by 13,7 per cent, compared to previous year and reached to 51 million 860 thousand 42 tourist. On the other hand, Turkey increasing its tourism incomes rapidly, earned a revenue of USD 34 billion, 520 million 332 thousand in 2019, with an increase of 17,0% compared to previous year. The revenue of this year is composed of personal expenses of USD 25 billion 355 million 577 thousand and of package tour expenses of USD 9 billion 164 million 755. Turkey which was known as sea-beach-sun destination since years, has started to attract considerable number of tourists by the studies that are conducted on its rich history.
While 2018 was announced to the year of Troy, 2019 was announced as the year of Göbeklitepe. By this application, a considerable tourist rush is witnessed in the relating regions and the number of visitors has considerably increased. Besides choosing Göbeklitepe which is covering a history of 12 thousand years, as the theme of the year 2019, studies performed one after another in Göbeklitepe contributed hugely in this tourism motion. Patara ancient city is chosen as the tourism theme of the year 2020. Tourism authorities expect that Turkey which has succeeded to re-create a popular and a safe country image will increase the number of visitors in the coming years and will increase considerably its tourism revenues. Tourism management of Turkey, on the other hand, is continuing its works by bringing to the fore the riches of our country to diversify the "Holiday afflux in Turkey".
Subsequent Events as of September 30, 2019
RegardingJanuary the17,Contract2019 -forSaleRevenueofBulvarSharingLoftin ReturnProjectfor Sale of the 36.947 m2 Land in Block 120573 Plot 1, Ankara Province, Gölbaşı District, Kızılcaşar Neighborhood ("Bulvar Loft Contract") belonging to Ilbank, which shall be carried out by the Ordinary Partnership between Akfen Construction and Akfen REIT (Akfen REIT 99% - Akfen Construction 1%),
- An application was filed with Ilbank for the Provisional Approval of the Project on 07.12.2018, - Owing to the problems associated with the recession in the real estate sector, the bulk sale of the independent sections that belong to Ilbank within the Bulvar Loft project managed by the Ordinary Partnership was approved on January 10, 2019.
As a result of the sale transaction approved by Ilbank, the Ordinary Partnership, where Akfen REIT holds a 99% share;
-was relieved of its obligation to make a payment to Ilbank from Minimum Bank Share Total Revenue in Return for Land Sale under the scope of Bulvar Loft Contract.
TheJanuaryprovisional30, 2019approval- Ratificapplicationnmentionedof BulvarinLoftour disclosureProject Provisionaldated 17.01.2019Approvalregarding the Bulvar Loft Project was ratified by Ilbank on 29.01.2019 (as of 07.12.2018).
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Akfen REIT
Annual Report 2019
According30 Januaryto Article2019 35- ofAboutthe CommuniquéValution Companyon PrinciplesSelRegardingction Real Estate Investment Trusts Series III-48.1 of the Capital Market Board dated 30.01.2019, the Board of Directors of Adım Gayrimenkul ve Değerleme A.Ş and also the portfolio will be taken in 2019 and the valuation service will be provided for the assets that will require valuation. Adım Gayrimenkul ve Değerleme A.Ş. and TSKB Gayrimenkul Değerleme A.Ş. as unanimous decision.
26 March 2019 - About 2018 Annual Ordinary General Assembly
Shareholders'Meeting CallOrdinary. General Meeting of Shareholders The meeting was held on Thursday, 16.04.2019 at 14:00 at Levent Loft Building, Büyükdere Street, No: 201 C Block Floor: 8 Levent İstanbul.
March 29, 2019 - 2018 Ordinary General Assembly Meeting Dividend
InDistributionaccordance with the Board of Directors resolution dated 13.03.2019 and numbered 2019/4 and in line with our Public Disclosure Platform announcement dated 26.03.2019, there was no distributable profit for the year 2018, and the right exercise procedures were regulated accordingly.
April 16, 2019 - Disclosure on General Assembly Procedures
AKFEN GAYRİMENKUL YATIRIM ORTAKLIĞI ANONİM ŞİRKETİ's (Akfen REIT) Ordinary General Assembly Meeting for the year 2018 was held on 16.04.2019 at 14:00 in the Headquarters at the address Levent Loft Binası, Büyükdere Caddesi, No: 201 C Blok Kat: 8 Levent İstanbul, under the supervision of Hatun Kostak, the Ministry Representative appointed by the official letter numbered 43545342 and dated 15.04.2019 from Istanbul Governor's Office Provincial Directorate of Commerce.
As per Turkish Commercial Code Article 414, the call for the said meeting, required to be organized in accordance with Turkish Commercial Code and the Company's Articles of Association, was published on Turkish Trade Registry Gazette dated March 21, 2019 and numbered 9792, the website of the Company, on the Public Disclosure Platform, as well as Central Registry Agency's Electronic General Assembly System, within the required deadline.
The analysis of the List of Attendants showed that, of the Company's total capital of TL 184.000.000.-, 1000 Class A shares corresponding to TL 1.000.- shares, 1000 Class C shares corresponding to TL 1.000.- shares and 1000 Class D shares corresponding to TL 1.000.- shares were represented at the meeting; while, of the 139.452.823 Class B shares corresponding to TL 139.452.823.-, 230.011 were represented in person and 139.222.812 were represented in proxy, and that the minimum meeting quora as required by the legislation and Articles of Association was thus met.
Sıla Cılız İnanç, Board Member of the Company, and Seda Akkuş Tecer representing Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Ernst and Young) were present at the meeting. The Ordinary General Assembly Meeting was inaugurated by Sıla Cılız İnanç, as Board Member authorized by the Chairman, simultaneously in the physical and electronic environments, and the agenda items were duly discussed.
34
Akfen REIT Annual Report 2019 The agenda items were read out loud by Board Member Sıla Cılız İnanç and since there was no
suggestion for revising the order of the agenda items, the discussion of these items continued in the order announced.
The resolutions of the Ordinary General Assembly Agenda were adopted unanimously, as stated in the attached meeting minutes.
SinceAprilthe16,Dividend2019 - DistributionisclosureStatementon DividendpresentedDistributionto our DistinguishedProceduresShareholders at the Company Headquarters, Company web site, Turkish Trade Registry Gazette, and CRA's Electronic General Assembly portal within the statutory period, and the financial statements for the accounting period 01.01.2018 - 31.12.2018 drafted as per Capital Markets Board's ("CMB") Communiqué II-14.1 in accordance with Turkish Accounting and Financial Reporting Standards issued by the Public Oversight, Accounting and Auditing Standards Agency, and audited by Güney Bağımsız Denetim ve SMMM A.Ş. show no distributable profit according to the legislation, it was proposed that no profit distribution be carried out, the matter was discussed, and the participants agreed unanimously that no dividend be distributed.
ItAprilhas been17, 2019decided- Authathoritythe Company'sto RepresentChairmanandandBindExecutive Director Hamdi AKIN and Vice Chairman İbrahim Süha GÜÇSAV will be appointed for a one (1) year term regardless of their previous periods in office,
that the Company's Class A authorized signatories will be designated as Chairman / Executive Director Hamdi Akın, Board Members Pelin Akın Özalp and Selim Akın, and that any two of them jointly will have the authority to represent and bind the Company on any issue and without any limitation.
TheMaydeed29thabout, 2019theZeytinburnu,extention of allocationPlot Allocationperiod for the public land which was allocated to our Company on which rises our Zeytinburnu Novotel and Ibis Hotels for 49 years has come into force. ItAugustis announced6, 2019that,Buybas approvedck Announcementin the General Assembly dated 16 April 2019, from 9th August 2019 until 31st December 2019 our Company is planning to implement the Buyback Program, according to the related CMB regulations, in which 14.182.000 shares will not be exceeded. By 30 September 2019, 2.015.384 number of shares were bought back.
Development after 2019
At the meeting of our January 23, 2020 Appraisal Company Board of Administrators resolvedunanimously during the meeting which was held on the date of 30.01.2020, pursuant to the article 35 of the Communiqué on the Principles concerning Real Estate Investment Companies with number 48.1, serial III of the Stock Exchange Board, that the appraisal company to be assigned for the appraisal service of our portfolio hotels is Adım Gayrimenkul ve Değerleme A.Ş. and
35
Akfen REIT Annual Report 2019 furthermore has resolved that Adım Gayrimenkul ve Değerleme A.Ş. and EVA Gayrimenkul
Değerleme Danışmanlık A.Ş. are to be assigned to provide appraisal services for the assets which will be purchased for our portfolio during the year 2020.
Evaluation of Activities in 2019
AkfenFinancialREIT thatAssessmentis managed byofaManagemeprofessional andt expert staff both in financial and operational field continued to protect its financial performance in 2019 as well, and grow or expand successful projects, realized by it. Completion of the Bulvar Loft project also contributed to the
• | |
profitability of the Company. | |
The consolidated rental income has risen by a proportion of 391% comparing to prior | |
year and realized in amount of TRY 481,9 millions. (Except the Bulvar Loft Projects, it | |
• | has been 109,4 million with 12% increase) |
The consolidated EBITDA has risen by a proportion of 110% comparing to prior year and | |
realized in amount of TRY 148,5 millions. (Except the Bulvar Loft Projects, it has been | |
• | 93,2 million with 22% increase) |
• | The consolidated debt was realized as TRY 1.338 millions. |
• | As of December 31, 2019, the net asset value was realized TRY 1.048,1 millions. |
• | Cost of consolidated sales is 321 million TL (Bulvar Loft project is not included) in 2019. |
Consolidated general and administrative expenses are realized as TRY 9,3 millions. Net | |
interest payments are realized as TRY 111 millions. |
Operational P rformance | |
• | For the hotels' in Company's portfolio, average occupancy rate of hotels operating in |
Turkey 69%, average occupancy rate of hotels operating in Russia 60% as of December | |
31, 2019. All hotels' average occupancy rate is 66,8%, increased by 1.4% compared to | |
• | the previous year. |
As of December 31, 2019, the average room rate is 36 Euro for hotels operating in | |
Turkey, the average room rate is 41 Euro for hotels operating in Russia. For all Hotels | |
• | average room rate is 37 Euro. |
Consolidated rental income increased by 12% compared to 2018 and reached 109.4 | |
million TL. |
Key Financial Indicators as of 31 December 2019
(million TRY) | Revenue | EBITDA | Net Debt | ||||||||
Turkey | 428,6 | 104,5 | 907,3 | ||||||||
TRNC | 30,8 | 29,2 | 85 | ||||||||
Russia | 22,5 | 14,8 | 345,5 | ||||||||
Consolidated | 481,9 | 148,5 | 1.337,8 | ||||||||
Number of Employees | 2018 | 2019 | Change (%) | ||||||||
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Akfen REIT | |||||||||||||||||||||
Annual Report 2019 | |||||||||||||||||||||
Turkey | 10 | 10 | - | ||||||||||||||||||
Russia | 11 | 11 | - | ||||||||||||||||||
Consolidated | |||||||||||||||||||||
21 | 21 | - | |||||||||||||||||||
Rental Revenue | 2018 | 2019 | Change (%) | ||||||||||||||||||
(million TRY) | |||||||||||||||||||||
Turkey | 115 | 142 | 24 | ||||||||||||||||||
TRNC | 18,3 | 23,1 | 26 | ||||||||||||||||||
Russia | 21,0 | 16,6 | -21 | ||||||||||||||||||
Consolidated | 74,1 | 450,8 | 509 | ||||||||||||||||||
otal Revenue Per Room (TRY) | 2018 | 2019 | Change (%) | ||||||||||||||||||
Turkey - Total Ibis | |||||||||||||||||||||
115 | 142 | 24 | |||||||||||||||||||
Turkey - Total Novotel | |||||||||||||||||||||
270 | 331 | 23 | |||||||||||||||||||
Turkey - Total Ibis&Novotel | 165 | 333 | 23 | ||||||||||||||||||
Russia - Total Ibis | 217 | 222 | 3 | ||||||||||||||||||
Turkey &Russia - Total Ibis&Novotel | 178 | 208 | 17 | ||||||||||||||||||
Average Room Rate | 2018 | 2019 | Change (%) | ||||||||||||||||||
(Excluding VAT) (TRY) | |||||||||||||||||||||
Turkey - Total Ibis | 142 | 167 | 17 | ||||||||||||||||||
Turkey - Total Novotel | 291 | 343 | 18 | ||||||||||||||||||
Turkey - Total Ibis&Novotel | 192 | 226 | 18 | ||||||||||||||||||
Russia - Total Ibis | 255 | 262 | 3 | ||||||||||||||||||
Turkey &Russia - Total Ibis&Novotel | 207 | 234 | 13 | ||||||||||||||||||
Occupany R te (%) | 65,1 | 67,5 | 2,4 | ||||||||||||||||||
Turkey - Total Ibis | |||||||||||||||||||||
20 8 | 2019 | Change (%) | |||||||||||||||||||
Turkey - Total Novotel | 69,0 | 71,9 | 2,9 | ||||||||||||||||||
4 | 8 9 | 6 | |||||||||||||||||||
Turkey - Total Ibis&Novotel | 62,8 | ||||||||||||||||||||
Russia - Total Ibis | 60,5 | 2,3 | |||||||||||||||||||
Turkey &Russia - Total Ibis&Novotel | 65,4 | 66,8 | 1,3 | ||||||||||||||||||
Rental Revenue (in million TRL) | 2018 | 2019 | Change (%) | ||||||||||||||||||
Turkey - Total Ibis | 18,3 | 23,1 | 26 | ||||||||||||||||||
Turkey - Total Novotel | 26,5 | 33 | 24 | ||||||||||||||||||
Turkey - Total Ibis&Novotel | 44,9 | 56,1 | 25 | ||||||||||||||||||
Russia - Total Ibis | 22,8 | 18,9 | -17 | ||||||||||||||||||
Turkey &Russia - Total Ibis&Novotel | 67,7 | 75,1 | 11 | ||||||||||||||||||
*InvestmentRental incomesPropertiesof TRNC | (inMeritmillionPark HotelTRY)and | Samara31 Dec.Office18 | are included31 Dec. 19 | Change (%) | |||||||||||||||||
Grand Total* | 98,1 | 109,4 | 12 | ||||||||||||||||||
Operational investment real estates | 2.046 | 2.364 | 16 | ||||||||||||||||||
Rentals Land | 50 | 51 | 0,02 | ||||||||||||||||||
Total | 2.096 | 2.415 | 16 | ||||||||||||||||||
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Akfen REIT
Annual Report 2019
On-going and operational investment | 31 Dec. 18 | 31 Dec. 19 | Change (%) | ||||||||||
real states (in million TRY) | |||||||||||||
Turkey | 1.139 | 1.360 | 19 | ||||||||||
TRNC | 404 | 491 | 22 | ||||||||||
Russia | 503 | 513 | 2 | ||||||||||
Consolidated | 2.046 | 2.364 | 16 | ||||||||||
Receivables and Debts from/to the Related Parties
Commercial receivables from related | 31 December 18 | 31 December 19 | |||||||||||||
parties | |||||||||||||||
Akfen Holding A.Ş. | - | 538.950 | |||||||||||||
Commercial Debts to the Related Parties | 31 December 18 | 31 December 19 | |||||||||||||
Akfen İnşaat | 45.031.689 | 19.484.334 | |||||||||||||
Total | |||||||||||||||
Other Debts to the Related Parties | 31 December 18 | 31December19 | |||||||||||||
Akfen Holding A.Ş. | 7.438.777 | - | |||||||||||||
Akfen İnşaat Turizm ve Ticaret A.Ş. | 490.683 | - | |||||||||||||
Total | 7.929.460 | - | |||||||||||||
Transaction with related parties | |||||||||||||||
Sal s d Marketing Expenses | 31 December 18 | 31 December 19 | |||||||||||||
Akfenİnsaat Turizm ve Ticaret A.Ş. | 5.227.821 | - | |||||||||||||
Incomplete housing payments | 31 December 18 | 31 December 19 | |||||||||||||
(Bulvar Loft) | |||||||||||||||
Akfen İnsaat Turizm ve Ticaret A.Ş. | 96.831.504 | - | |||||||||||||
Rental expense | 31 Aralık 2018 | 31 December 19 | |||||||||||||
Hamdi Akın | 202.052 | 263.445 | |||||||||||||
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Akfen REIT
Annual Report 2019
TheInvestmenttotal value ofPropertythe investment properties taking place in our portfolio was realized as TRY 1.05 billions in 2019.
Portfolio Table (in million TRY) | 2018 | 2019 | ||
Operational Hotels | ||||
Novotel Ibis Hotel Zeytinburnu | 221 | 268 | ||
Novotel Trabzon | 149 | 143 | ||
Novotel Ibis Hotel Gaziantep | 58 | 74 | ||
Ibis Hotel Esenyurt | 60 | 69 | ||
Novotel Ibis Hotel Kayseri | 51 | 65 | ||
Ibis Hotel Bursa | 45 | 48 | ||
Ibis Hotel İzmir | 52 | 63 | ||
Ibis Hotel Adana | 56 | 60 | ||
Ibis Hotel Ankara Airport | 61 | 81 | ||
Ibis Hotel Eskişehir | 13 | 13 | ||
Ibis Hotel Tuzla | 88 | 85 | ||
Project with ongoing investments | ||||
Bulvar Loft | 147 | 2 | ||
Subsidiaries | 607 | 809 | ||
Money & Capital Market Instruments | 1 | 25 | ||
Total Portfolio Value | 1.608 | 1.825 | ||
Other Assets & Receivables | 137 | 147 | ||
Debts | 929 | 904 | ||
Net Asset Value | 817 | 1048 |
Real Estate Valuation Report Result
CostNovotelin the operationIbis Hotelof theZeytinburnuaforementioned valuation approach and income approach to valuation was carried out using the method. Assessments made by foreign currency buying rate in TRY, TRY is in foreign currencies based on sales dry return. In building cost value cost approach, the technical characteristics, materials used in buildings in the same property constructed buildings on the market, construction costs and the costs calculated based on past experience in mind is taken into account.
In buildings-depreciation, valuation based on the experience of the building's physical condition was appreciated considering the visible. Hotel as a property immovable, revenue-generating skilled subject evaluated whether ownership of valuation uses the income approach. As for the data that is used in the income approach the region similar to real estate market research. According to the rental agreement ownership of income approach available revenues and potentially can get cash flow in the market, considering that easily accommodates two separate. The Hotel in question, are also available to hire for management and operation agreement with Accor Group has been hired. In this respect, the contract with guaranteed rental income with a lower risk premium for reduction of ownership by making value were calculated. Another way is,
39
Akfen REIT Annual Report 2019 according to the market research you can get according to the potential net cash flow of the Hotel
reviews. In this context, ownership of appreciated according to the income approach to value; According to the rental agreement which guaranteed rental income calculated according to the net cash flows of the business's potential demotion was appreciated by taking the average of the two values.
Topics in similar investigation in the market of real estates income-generating property is evaluated. In this regard the report as a result, the value of the income approach calculated marketvalue report was appreciated as the return value (268.400.000.-TRY/40.355.000.-€).
TheNovformationtel Trabzonof style of ownership, location, infrastructure and transportation facilities, the street and the front to the street, area and location of the building construction order, system, age, quality of workmanship and materials, installation status, air - light - the value of factors such as the status of the landscape taken into consideration and all the features that might be in the detailed market research. Cost in the operation of the aforementioned valuation approach and income approach method has reduced cash flow using the method of valuation. Assessments made by foreign currency buying rate in TRY, TRY is in foreign currencies from sales return rate. Depending on the value that was appreciated in the following manner.
Hotel as a property immovable, revenue-generating skilled subject evaluated whether wnership of valuation uses the income approach. As for the data that is used in the income approach the region similar to real estate market research. According to the rental agreement ownership of income approach available revenues and potentially can get cash flow in the market, considering that easily accommodates two separate.
The Hotel in question, are also available to hire for management and operation agreement with Accor Group has been hired. In this respect, the contract with guaranteed rental income with a lower risk premium for reduction of ownership by making value were calculated. Another way is, according to the market research you can get according to the potential net cash flow of the Hotel evaluations have been conducted.
In this context, ownership of appreciated according to the income approach to value; According to the rental agreement which guaranteed rental income calculated according to the net cash flows of the business's potential demotion was appreciated by taking the average of two values.
Topics in similar investigation in the market of real estates income-generating property is evaluated. In this regard the report as a result, the value of the income approach calculated market value report was appreciated as the return value (142.980.000.-TRY /21.500.000.-€).
InNovthisotelappraisalIbis Hotelstudy, theGaziantepvaluation method is used to determine the cost method and income approach method. In the evaluations made, the foreign exchange rate of return to TRY and the Exchange rate of TRY to foreign currencies are taken as basis.
The property valued in the market approach was compared with the sales of similar properties in the market. In the examinations made in the market, similar properties have been reached with the subject property and concrete data has been reached. In the cost approach, building cost value is evaluated with cost approach by considering the technical characteristics of the buildings, the
40
Akfen REIT Annual Report 2019 materials used in the buildings, the construction costs of the buildings constructed with the same
characteristics in the market and the costs calculated based on our past experiences. The depreciation rate of buildings was appreciated by taking into account the visible physical condition of the building based on the experience of the appraiser.
The Hotel subject property is evaluated as a property that brings income and the income approach is used in the appraisal of the property. For the data used in the revenue approach, market research for similar properties in the region was conducted. Revenue approach is made in two different ways by taking into consideration the income obtained according to the present lease and the cash flow that can be obtained in the market. The Hotel was leased to the Accor Group with the rental agreement to be operated. In this respect, the value of the real property has been calculated by discounting the rental income guaranteed by the contract with a lower risk premium. In another way, according to the market research, an assessment was made according to the potential net cash flows that the Hotel could obtain.
In this context, the appraised value of the real estate according to the income approach; The average of the two values calculated based on the rental income guaranteed by the lease and calculated by discounting the net cash flows of the entity has been appreciated. The value of real estate is based on performance and the value calculated according to the income approach from two different methods reflects the value of the real estate.
Accordingly, the market value calculated by the revenue approach is appreciated as the result of the Report (73.592.500.-TRY /11.065.000.-€)
TheNovformationtel IbisofHotelstyle ofKaysownership,i location, infrastructure and transportation facilities, the street and the front to the street, area and location of the building construction order, system, age, quality of workmanship and materials, installation status, air - light - the value of factors such as the status of the landscape taken into consideration and all the features that might be in the detailed market research. Depending on the value that was appreciated in the following manner. Market approach valuation of property made, compared with the market performed similar property sales. Similar precedent in the market interested in the subject in the investigation reached concrete data real estate edifice. If the building cost value cost approach in cost approach to buildings with the technical characteristics, materials used in buildings in the same property constructed buildings on the market, construction costs, and based on past experience with the calculated costs have been assessed taking into consideration. In buildings-depreciation, Akfen REIT Annual Report 2018 45 valuation based on the experience of the building's physical condition was appreciated considering the visible.
Hotel was considered a skilled real estate revenue is the issue of ownership of property valuation uses the income approach. As for the data that is used in the income approach the region similar to real estate market research. According to the rental agreement ownership of income approach available revenues and potentially you can get in the market considering two separate cash flow. The Hotel in question, are also available to hire for management and operation agreement with Accor Group has been hired. In this respect, the contract with guaranteed rental income with a lower risk premium for reduction of ownership by making value were calculated. Another way is, according to the market research you can get according to the potential net cash flow of the Hotel reviews.
41
Akfen REIT Annual Report 2019 In this context, ownership of appreciated according to the income approach to value; According
to the rental agreement which guaranteed rental income calculated according to the net cash flows of the business's potential demotion was appreciated by taking the average of the two values. The value of real estate performance in income-generating property, depending on whether you come from two different methods are used depending on the value of the calculated value of ownership approach better reflects the blood concluded. In this regard the report as a result, the value of the income approach calculated market value was appreciated (64.715.000.- TRY / 9.730.000.-€ )
TheIbisformationHotel Adanaof style of ownership, location, infrastructure and transportation facilities, the street and the front to the street, area and location of the building construction order, system, age, quality of workmanship and materials, installation status, air - light - the value of factors such as the status of the landscape taken into consideration and all the features that might be in the detailed market research. Cost in the operation of the aforementioned valuation approach and income approach method has reduced cash flow using the method of valuation. Assessments made by foreign currency buying rate in TRY, TRY is in foreign currencies from sales return rate. Depending on the value of in the following manner was appreciated.
Market approach valuation of property made, compared with the market performed similar property sales. Similar precedent in the market interested in the subject in the investigation reached concrete data the immovable, edifice. If the building cost value cost approach in cost approach to buildings with the technical characteristics, materials used in buildings in the same property constructed buildings on the market, construction costs, and based on past experience with the calculated costs have been assessed taking into consideration. In buildings-depreciation, valuation based on the experience of the building's physical condition was appreciated considering the visible.
The income approach is subject in no.lu independent part 1 of immovable property "" qualified due to the similar market research in the area of real estate revenues and 2 no.lu independent part can be detected annual rental income they are not transported, considering incomegenerating property.
Question 1 was considered a no.lu independent part of ownership of the property is income valuation uses the income approach. As for the data that is used in the income approach the region similar to real estate market research. According to the rental agreement ownership of income approach available revenues and potentially you can get in the market considering two separate cash flow. The Hotel in question, are also available to hire for management and operation agreement with Accor Group has been hired. In this respect, the contract with guaranteed rental income for the lower risk premium has been calculated with the reduction made to the property value. Another way is, according to the market research you can get according to the potential net cash flow of the Hotel reviews.
In this context, ownership of appreciated according to the income approach to value; According to the rental agreement which guaranteed rental income calculated according to the net cash flows of the business's potential demotion was appreciated by taking the average of the two values. The value of real estate performance in income-generating property, depending on whether you come from two different methods are used depending on the value of the calculated value of ownership approach better reflects the blood concluded. In this regard the report as a result, the value of the income approach calculated market value was appreciated (59.615.000.-TRY /8.965.000.-€).
42
Akfen REIT
Annual Report 2019
TheIbis locationHo el Eskişof thehirreal estate, the shape of the surrounding area, infrastructure and transportation facilities, street and street facade, area and location, building structure, system, age, workmanship and material quality, installation status, weather - light - can be a factor in the value of the landscape All properties were taken into consideration and detailed market research was conducted.
In this appraisal study, value determination was made by using discounted cash flow method which is an income approach method. In the evaluations made, the foreign exchange rate of return to TRY and the Exchange rate of TRY to foreign currencies are taken as basis. Hotel, restaurant subject properties are evaluated as a property that brings income and income is used in the appraisal of the property. For the data used in the revenue approach, market research for similar properties in the region was conducted. Revenue approach is made in two different ways by taking into consideration the income obtained according to the present lease and the cash flow that can be obtained in the market. The Hotel was leased to the Accor Group with the rental agreement for the restaurant to be operated. In this respect, the value of the real property has been calculated by discounting the rental income guaranteed by the contract with a lower risk premium. In another way, according to the market research, an assessment was made according to the potential net cash flows that the Hotel could obtain. In this context, the appraised value of the real estate according to the income approach; The average of the two values calculated based on the rental income guaranteed by the lease and calculated by discounting the net cash flows of the entity has been appreciated. The value of the real estate is dependent on the performance of the income generating properties and it is concluded that the value calculated according to the income approach for the Hotel reflects the value of the property better.
Accordingly, the market value calculated by the revenue approach is appreciated as the result of the report. Accordingly, its value is appreciated as follows (13.300.000.-TRY /2.000.000.-€)
TheIbisformationHotel Burof stylea of ownership, location, infrastructure and transportation facilities, the street and the front to the street, area and location of the building construction order, system, age, quality of workmanship and materials, installation status, air - light - the value of factors such as the status of the landscape taken into consideration and all the features that might be in the detailed market research. Accordingly, the value was appreciated in the following manner. Cost in the operation of the aforementioned valuation approach and income approach to valuation was carried out using the method. Assessments made by foreign currency buying rate in TRY, TRY is in foreign currencies based on sales dry return. In building cost value cost approach, the technical characteristics, materials used in buildings in the same property constructed buildings on the market, construction costs and the costs calculated based on past experience in mind is taken into account.
In buildings-depreciation, valuation based on the experience of the building's physical condition was appreciated considering the visible. Hotel as a property immovable, revenue-generating skilled subject evaluated whether ownership of valuation uses the income approach. As for the data that is used in the income approach the region similar to real estate market research. According to the rental agreement ownership of income approach available revenues and potentially you can get in the market considering two separate cash flow. The Hotel in question,
43
Akfen REIT Annual Report 2019 are also available to hire for management and operation agreement with Accor Group has been
hired.
In this respect, the contract with guaranteed rental income with a lower risk premium for reduction of ownership by making value were calculated. Another way is, according to the market research you can get according to the potential net cash flow of the Hotel reviews. In this context, ownership of appreciated according to the income approach to value; According to the rental agreement which guaranteed rental income calculated according to the net cash flows of the business's potential demotion was appreciated by taking the average of the two values. Real estate topics in similar investigation in the market of real estates income-generating property is evaluated. In this regard the report as a result, the value of the income approach calculated market value report was appreciated as the return value (47.625.000.-TRY /7.160.000.-€)
InbisthisHotelappraisalEsenyurtstudy, value determination was made by using cost approach and income approach method. In the evaluations made, the foreign exchange rate of return to TRY and the exchange rate of TRY to foreign currencies are taken as basis.
In the cost approach, the building cost value is evaluated by considering the technical characteristics of the buildings, the materials used in the buildings, the construction costs of the buildings constructed in the market with the same characteristics and the costs calculated based on our past experiences. The depreciation rate of buildings was appreciated by taking into account the visible physical condition of the building based on the experience of the appraiser. The subject property of the Hotel is evaluated as a revenue generating property and an income approach is used in the appraisal of the property. For the data used in the revenue approach, market research for similar properties in the region was conducted. Revenue approach is made in two different ways by taking into consideration the income obtained according to the present lease and the cash flow that can be obtained in the market.
The Hotel was leased to the Accor Group with the rental agreement to be operated. In this respect, the value of the real property has been calculated by discounting the rental income guaranteed by the contract with a lower risk premium. In another way, according to the market research, an assessment was made according to the potential net cash flows that the Hotel could obtain.
In this context, the appraised value of the real estate according to the income approach; The average of the two values calculated based on the rental income guaranteed by the lease and calculated by discounting the net cash flows of the entity has been appreciated. In the market surveys, it was observed that real estates of similar nature are considered as a revenuegenerating property. As a result, the market value calculated with the income approach is considered as the report value(69.285.000.-TRY /10.415.000.-€).
TheIbis locationHo el Tuzlaof theProjectreal estate, the shape of the surrounding area, infrastructure and transportation facilities, street and street facade, area and location, building structure, system, age, workmanship and material quality, installation status, weather - light - can be a factor in the value of the landscape All properties were taken into consideration and detailed market research was conducted. Accordingly, its value is appreciated as follows.
44
Akfen REIT Annual Report 2019 In this appraisal study, value determination was made by using cost approach and income
approach. In the evaluations made, the foreign exchange rate of return to TRY and the exchange rate of TRY to foreign currencies are taken as basis. In the cost approach, the building cost value is evaluated by considering the technical characteristics of the buildings, the materials used in the buildings, the construction costs of the buildings constructed in the market with the same characteristics and the costs calculated based on our past experiences. The depreciation rate of buildings was appreciated by taking into account the visible physical condition of the building based on the experience of the appraiser.
The subject property of the Hotel is evaluated as a revenue generating property and an income approach is used in the appraisal of the property. For the data used in the revenue approach, market research for similar properties in the region was conducted. Revenue approach is made in two different ways by taking into consideration the income obtained according to the present lease and the cash flow that can be obtained in the market.
The Hotel was leased to the Accor Group with the rental agreement to be operated. In this respect, the value of the real property has been calculated by discounting the rental income guaranteed by the contract with a lower risk premium. In another way, according to the market research, an assessment was made according to the potential net cash flows that the Hotel could obtain.
In this context, the appraised value of the real estate according to the income approach; The average of the two values calculated based on the rental income guaranteed by the lease and calculated by discounting the net cash flows of the entity has been appreciated. In the market surveys, it was observed that real estates of similar nature are considered as a revenuegeneratingproperty. As a result, the market value calculated with the income approach is considered as the report value (85.380.000.-TRY/12.835.000.-€)
CostIbisinHotelthe operationAnkaraof the aforementioned valuation approach and income approach method has reduced cash flow using the method of valuation. Assessments made by foreign currency buying rate in TRY, TRY is in foreign currencies from sales return rate.
The property valued in the market approach was compared with the sales of similar properties in the market. In the examinations made in the market, similar properties have been reached with the subject property and concrete data has been reached. In the cost approach, building cost value is evaluated with cost approach by considering the technical characteristics of the buildings, the materials used in the buildings, the construction costs of the buildings constructed with the same characteristics in the market and the costs calculated based on our past experiences. The depreciation rate of buildings was appreciated by taking into account the visible physical condition of the building based on the experience of the appraiser.
The Hotel subject property is evaluated as a property that brings income and the income approach is used in the appraisal of the property. For the data used in the revenue approach, market research for similar properties in the region was conducted. Revenue approach is made in two different ways by taking into consideration the income obtained according to the present lease and the cash flow that can be obtained in the market. The Hotel was leased to the Accor Group with the rental agreement to be operated.
45
Akfen REIT Annual Report 2019 In this respect, the value of the real property has been calculated by discounting the rental income
guaranteed by the contract with a lower risk premium. In another way, according to the market research, an assessment was made according to the potential net cash flows that the Hotel could obtain. In this context, the appraised value of the real estate according to the income approach; The average of the two values calculated based on the rental income guaranteed by the lease and calculated by discounting the net cash flows of the entity has been appreciated. The value of real estate is based on performance and the value calculated according to the income approach from two different methods reflects the value of the real estate.
Accordingly, the market value calculated by the revenue approach is appreciated as the result of the report(81.055.000.-TRY /12.185.000.-€)
TheIbisformationHotel İzmirof styleAlsancakof ownership, location, infrastructure and transportation facilities, the street and the front to the street, area and location of the building construction order, system, age, quality of workmanship and materials, installation status, air - light - the value of factors such as the status of the landscape taken into consideration and all the features that might be in the detailed market research. Accordingly, the value was appreciated in the following manner. -Hotels as a property immovable, revenue-generating skilled subject evaluated whether ownership of valuation uses the income approach. As for the data that is used in the income approach the region similar to real estate market research. According to the rental agreement ownership of income approach available revenues and potentially you can get in the market considering two separate cash flow. The Hotel in question, are also available to hire for management and operation agreement with Accor Group has been hired. In this respect, the contract with guaranteed rental income with a lower risk premium for reduction of ownership by making value were calculated. Another way is, according to the market research you can get according to the potential net cash flow of the Hotel reviews. In this context, ownership of appreciated according to the income approach to value; According to the rental agreement which guaranteed rental income calculated according to the net cash flows of the business's potential demotion was appreciated by taking the average of the two values. Real estatela topics in similar investigation in the market of real estates income-generating property is evaluated. In this regard the report as a result, the value of the income approach calculated market value report was appreciated as the return value (63.220.000.-TRY /9.505.000.-€).
46
Akfen REIT
Annual Report 2019
Subsidiary Valuation Report
Akfen Karaköy Gayrimenkul Yatırımları ve İnşaat A.Ş. [Akfen Karaköy] The main assets of the company are real estates and real estate projects and the "Equity Value" approach is used in the determination of the value of the Company.
The vaule calculated by using the Equity Value expensses the "fair market value" of the Company. However, the main factor in sale-purchase transactions regarding an asset is the "price" agreed as a result of the negotiations that have taken place between a motivated buyer and a seller. However, attention should be drawn to the fact taht the "price" whic constitutes the ground for such sale-purchase transaction might be realized at a level different than the "fair market value". "The Investment Properties and Investment Properties in Progress" item, started in the reated real estate appriasal report of Adım Gayrimenkul Değerleme A.Ş. and the balance sheet dated December 31, 2019 of Akfen Karaköy has been used for Equity Value calculations.
The Euity Value of the Company, based on the balance sheet dated December 31, 2019, has been valued as 246.404.000.-TRY /37.050.000.-€ .
(000 TRY) | December31, 2019 | ||||
Cash and cash equivalents | 51 | ||||
Trade Receivable (net) | 6.021 | ||||
Other Current Assets | 5.053 | ||||
Total Current Assets | 11.125 | ||||
Investment Properties (net) | 404.526 | ||||
Other Non-Current Assets | 10.216 | ||||
Total Non-Current Assets | 414.742 | ||||
TOTAL ASSETS | 425.867 | ||||
Current Portion of Long Term Financials | 15.449 | ||||
Liabilities | |||||
Trade Payables | 27.168 | ||||
Total Current Liabilities | 42.617 | ||||
Financial Payables | 85.817 | ||||
Other Non-Current Liabilities | 51.030 | ||||
136.847 | |||||
otal Non-Current Liabilities | |||||
Trading Capital | 121.000 | ||||
Profit Reserves | 45.003 | ||||
Profit/Loss | 80.401 | ||||
Equity Value | |||||
246.404 |
47
Akfen REIT
Annual Report 2019
TheAkfenmainGayrimenkulactivity scope ofTicaretithe Companyve İnşaatis real Aestates.Ş. [AkfenownedGT]by it and real estate projects undertaken by the Company ans this report has been by using the "Equity Value" method.
The vaule calculated by using the Equity Value expensses the "fair market value" of the Company. However, the main factor in sale-purchase transactions regarding an asset is the "price" agreed as a result of the negotiations that have taken place between a motivated buyer and a seller. However, attention should be drawn to the fact taht the "price" whic constitutes the ground for such sale-purchase transaction might be realized at a level different than the "fair market value". The Eqity Value of the Company based on the balance sheet dated December 31, 2018 has been valued as 759.897.000.-TRY /114.260.000.-€ olarak belirlenmiştir.
(000 TRY) | December31, 2019 | |||
Cash and cash equivalents | 8.563 | |||
Trade Receivable (net) | ||||
12.425 | ||||
Inventory | ||||
Total Current Assets | 10.349 | |||
Other Current Assets | 292 | |||
31.629 | ||||
Investment Property | 1.409.952 | |||
Other Plant, Property and Equipments (net) | ||||
Goodwill | 11 | |||
39.510 | ||||
Other Non-Current Intangible Assets (net) | ||||
Other Non-Current Assets | 37 | |||
Total Non-Current Assets | 148.263 | |||
1.597.773 | ||||
TOTAL ASSETS | 1.629.402 | |||
Current Portion of Long Term Financials Liabilities | 62.923 | |||
Trade Payables | ||||
71.373 | ||||
Provisions for Severence Payments | ||||
277 | ||||
Other Current Liabilities | ||||
143. | 18 | |||
Total Current Liabilities | 9.045 | |||
Financial Liabilities | 560.628 | |||
Other Long Term Liabilities | ||||
165.259 | ||||
Total Long Term Liabilities | ||||
725.887 | ||||
Total Liabilities | 869.505 | |||
Equity Value | 759.897 |
48
Akfen REIT | |||||||
Annual Report 2019 | |||||||
Akfen REIT Portfolio Table | |||||||
TL | December 31, 2018 | December 31, 2019 | |||||
Operational Hotels | |||||||
Novotel Ibis Hotel İstanbul | 221.000.000 | 268.400.000 | |||||
Novotel Trabzon | 148.950.000 | 142.980.000 | |||||
Novotel Ibis Hotel Gaziantep | 57.700.000 | 73.592.500 | |||||
Ibis Hotel Esenyurt | 59.625.000 | 69.285.000 | |||||
Novotel Ibis Hotel Kayseri | 50.862.500 | 64.715.000 | |||||
Ibis Hotel Bursa | 44.865.000 | 47.625.000 | |||||
Ibis Hotel Alsancak | 52.330.000 | 63.220.000 | |||||
Ibis Hotel Adana | 56.295.000 | 59.615.000 | |||||
Ibis Hotel Ankara Airport | 60.800.000 | 81.055.000 | |||||
Ibis Hotel Eskişehir | 13.250.000 | 13.300.000 | |||||
Ibis Hotel Tuzla | 87.940.000 | 85.380.000 | |||||
Ibis Hotel Yaroslavl | 67.743.638 | 66.762.628 | |||||
Ibis Hotel Samara | 78.239.201 | 80.193.196 | |||||
Ibis Hotel Kaliningrad | 94.159.344 | 84.896.664 | |||||
Ibis Hotel Moskova | 226.259.588 | 239.840.232 | |||||
Samara Oficce | 36.843.882 | 41.563.980 | |||||
Subsidiaries | |||||||
Akfen Gayrimenkul Ticaret ve İnşaat A.Ş. | 574.051.000 | 759.897.000 | |||||
Akfen Karaköy Gayrimenkul Yat. Tic. A.Ş. | 166.003.000 | 246.404.000 | |||||
As of December 31, 2019, the discount rates used in the valuation report prepared according to | |||||||
different versions in calculating the fair values of active investment properties are in the range of | |||||||
8-10% (December 31, 2018: 9%-11%). |
49
Akfen REIT
Annual Report 2019
Compliance Control On Portfolio Limitations
The Company's control of compliance of the portfolio limits according to the CMB Communiqué Serial: III,: No. 48.1 "Communiqué on Principles Regarding Real Estate Investment Trusts" is as follows
Unconsolidated (separate) | ||||||||||||
financial statement main | Related Regulation | December 31, | December 31, | |||||||||
accou t items | 2018 | 2019 | ||||||||||
Cash and capital market | III-48.1. S/N 24 / (b) | 678.494 | 24.601.022 | |||||||||
A | ||||||||||||
instruments | III-48.1. S/N 24 / (a) | 1.029.638.355 | 1.007.618.732 | |||||||||
B | ||||||||||||
investmentInvestment propertyproperties,-based | ||||||||||||
projects, investment property- | ||||||||||||
C | based rights | |||||||||||
Participations | III-48.1. S/N 24 / (b) | 145.079.312 | 195.829.312 | |||||||||
Due from related parties | III-48.1. S/N 23 / (f) | - | - | |||||||||
(non-trade) | ||||||||||||
Other assets | 107.873.943 | 111.298.238 | ||||||||||
D | Total assets | III-48.1. S/N 3 / (p) | 1.283.270.104 | 1.339.347.304 | ||||||||
E | Financial liabilities | III-48.1. S/N 31 | 799.673.599 | 844.612.026 | ||||||||
F | ||||||||||||
Other financial liabilities | III-48.1. S/N 31 | 29.278.438 | 36.401.445 | |||||||||
G | ||||||||||||
Finance lease liabilities | III-48.1. S/N 31 | - | - | |||||||||
H | ||||||||||||
I | trade)Due to related parties (non- | III-48.1. S/N 23 / (f) | - | - | ||||||||
Shareholders' equity (net asset | III-48.1. S/N 31 | 354.533.880 | 434.985.357 | |||||||||
value) | ||||||||||||
Other liabilities | ||||||||||||
D | 98.024.983 | 23.348.476 | ||||||||||
Total liabilities and equity | III-48.1. Md. 3 / (p) | 1.283.270.104 | 1.339.347.304 | |||||||||
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Akfen REIT
Annual Report 2019
Unconsolidated (separate) | Related Regulation | December | December | |||||||||||
other financial information | ||||||||||||||
31, 2018 | 31, 2019 | |||||||||||||
A1 | Cash and capital market | III-48.1. S/N 24 / (b) | - | - | ||||||||||
instruments held for payments of | ||||||||||||||
A2 | investment properties for 3 years | |||||||||||||
Time / demand TRY / foreign | III-48.1. S/N 24 / (b) | |||||||||||||
A3 | currency | 647.630 | 24.573.703 | |||||||||||
Foreign capital market | III-48.1. S/N 24 / (d) | - | - | |||||||||||
instruments | - | - | ||||||||||||
B1 | III-48.1. S/N 24 / (d) | |||||||||||||
Foreign investment property, | ||||||||||||||
investment property-based | ||||||||||||||
projects, investment property- | ||||||||||||||
B2 | based rights | - | - | |||||||||||
1 | Idle lands | III-48.1. S/N 24 / (c) | ||||||||||||
- | - | |||||||||||||
C2 | Foreign subsidiaries | III-48.1. S/N 24 / (d) | - | - | ||||||||||
Participation to the operator | III-48.1. S/N 28/1(a) | |||||||||||||
company | ||||||||||||||
J | 292.529.041 | 322.828.305 | ||||||||||||
K | Non-cash loans | III-48.1. S/N 31 | ||||||||||||
- | - | |||||||||||||
Pledges on land not owned by the | III-48.1. S/N 22 / (e) | |||||||||||||
Investment Trust which will be | ||||||||||||||
used for project developments | - | - | ||||||||||||
L | III-48.1. S/N 22 / (I) | |||||||||||||
Cash and capital market | ||||||||||||||
instrument Investments held on | ||||||||||||||
One Unique Company |
51
Akfen REIT | |||||||||||||||||
Portfolio | Annual Report 2019 | ||||||||||||||||
Constraints | |||||||||||||||||
1 | Portfolio Constraints Related | Related | Current | Previous | Minimum/Ma | ||||||||||||
R gulation | Regulation | Period | Year | ximum Ratio | |||||||||||||
Pledges on Land not Owned by the | III-48.1. S/N | ||||||||||||||||
%0,00 | %0,00 | <%10 | |||||||||||||||
Investment Trust which will be | 22 / (e) | ||||||||||||||||
2 | Used for Project Developments | ||||||||||||||||
Investment Property, Investment | %80,24 | %76,23 | >%51 | ||||||||||||||
Property Based Projects, | 24 / (a). (b) | ||||||||||||||||
3 | Investment Property Based Rights | ||||||||||||||||
InstrumentsCash and Capitaland MarketParticipations | %11,36 | %15,54 | <%50 | ||||||||||||||
4 | |||||||||||||||||
Foreign Investment Property, | %11,31 | %15,42 | <%50 | ||||||||||||||
Investment Property based | 24 / (d) | ||||||||||||||||
Projects, Investment Property | |||||||||||||||||
Based Rights, Participations, | |||||||||||||||||
5 | Capital Market Instruments | ||||||||||||||||
Idle Lands | %0,00 | %0,00 | <%20 | ||||||||||||||
6 | |||||||||||||||||
7 | CompanyParticipation to the Operator | %0,00 | %0,00 | <%10 | |||||||||||||
Borrowing Limit | %344,47 | %217,18 | <%500 | ||||||||||||||
8 | |||||||||||||||||
9 | CurrencyTime / Demand TRY / Foreign | %0,05 | %0,12 | <%10 | |||||||||||||
Cash and capital market | %0,00 | %0,00 | <%10 | ||||||||||||||
instrument Investments held on | 22 / (I) | ||||||||||||||||
One Unique Company | |||||||||||||||||
Presented information in the footnote | of "Compliance | Control on | Portfolio Li | mitations" as at | |||||||||||||
December 31, 2019, in accordance with Capital Markets Board's Communiqué Serial: II, No: 14.1 | |||||||||||||||||
"Financial Reporting in Capital Markets" Amendment No: 16 comprised condensed information | |||||||||||||||||
and prepared in accordance with Capital Markets Board's Communiqué Serial: III, No: 48.1"Real | |||||||||||||||||
Estate Investment Company" published in the Official Gazette dated May 28, 2013 numbered | |||||||||||||||||
28660. In addition since the information given "Restrictions on the Investment Portfolio of Real | |||||||||||||||||
Estate Investment" comprise unconsolidated data; such information may not match with the | |||||||||||||||||
information disclosed in the consolidated financial statements. | |||||||||||||||||
52
