Team size: Two

Major legal advisors: Ti Legal Law Firm, Esin Attorney Partnership, Hergüner-Bilgen-Özeke Law Office.

Which recent political, economic, or regulatory changes have impacted the company and the team the most?

The government’s recent implementation of a new economic model is bringing new challenges and volatility into Türkiye’s economy. Whie economic challenges have been brought into the commercial real estate sector, our organisation successfully accomplished to dissolve İstanbul Kartal land at a price contributing significantly to company’s profitability.

Relations between shopping centre investors and tenants in the retail business are regulated by the Turkish Code of Obligations (“TCO”). As TCO was updated in 2012, it was decided that some articles of TCO to enter into force in July 2020. The introduction of these articles is expected to cause difficulties in commercial real estate. These postponed articles of the TCO are imperative and related to public order, therefore, they had to be applied to all effective workplace lease agreements starting from July 1, 2020. Such regulation caused considerable changes in our company’s lease agreements. I ran through all the existing lease agreements considering the subject articles and conducted a risk assessment accordingly.

What do you think are the biggest risks facing your industry at the moment and how are you preparing your company and team to face these risks?

The pandemic devastated the commercial real estate business for over a year. Besides that, the introduction of a new economic model in Türkiye caused a sudden and high increase in exchange rate and daily fluctuation. As a result, many investments have been postponed or cancelled. Investors received rental income with a considerable decrease due to the recent decree and the communiques. For the lease contracts drafted to make payments in foreign currency, the lessees were allowed to pay the contract amount in Turkish Lira under the announcement by the government. This protected the lessees who pay rent in foreign currencies from the constant fluctuation of Turkish Lira. Over the last two years, there have been several amendments in the land development legislation, and it is now unavoidable for the investors either to suspend their planned investments or to create new project with development strategies or to adapt the current framework to the new legislation. Our company focuses on optimising our existing assets, bringing our idle assets back to profit, and creating new methods to resolve challenging assets in line with the current market conditions. Metro Properties is not planning to make any new investment in 2022 due to the uncertain economic and political climate of Türkiye, however, we will be working on the future development strategies and legal models.