2016 was a difficult year for both the foreign and domestic markets. Despite the slowdown in the national economy and fluctuations worldwide, Akiş REIT still had a successful year. We continue our existing projects, whilst maintaining our healthy growth.
The most significant development of 2016 for our Company was our decision to merge with SAF REIT. With this move, which will enhance our competitive edge in the real estate sector, and contribute towards attaining our sustainable growth target, Akiş REIT reinforced its position among Turkey’s largest Real Estate Investment Trusts in terms of equity size. Moreover, along with the economic and operational efficiency achieved by our Company with the merger, which was completed in early 2017, it became one of the key players of the sector in terms of brand recognition and competitive strength.
At Akiş REIT, we follow sectoral trends closely and maintain focus on our strategic positioning. Accordingly, we will boost our weighting in investments in the retail sector, along with the Akasya Shopping Mall, which will be subsumed into our structure upon the merger with SAF REIT, and we aim to significantly raise the potential of the subsequent regular rental income. Rental incomes from the Bağdat Street projects, which are currently under construction, will also help the Company to accomplish this vision. Furthermore, as part of our portfolio structuring, all the real estate parcels located in Bozüyük and Çerkezköy were sold, and our new project development engagements continue. In the coming period, we plan to develop a housing + commercial project in Beykoz, one the most upmarket districts in Istanbul, seizing the opportunity of supply deficit in the region.
Offering shoppers a comfortable retail experience since 2011, Akbatı Shopping Mall had a successful year. Growth of almost 15% in total shop turnovers is considerably higher than the Shopping Mall Investments Association index reflecting the sector average. Visitor numbers to Akbatı Shopping Mall continued to climb, even in the face of falling retail visitor numbers across Turkey in 2016. We envisage that the sizeable rise in house sales in the region over the past two years will positively reflect on Akbatı Shopping Mall, and that the resulting annual turnover growth will continue in the near future. We have maintained our environment friendly and sustainability engagements in Akbatı Shopping Mall. After evaluating criteria such as proper usage of resources, and emphasis on internal environment and health, Akbatı Shopping Mall once again asserted its sustainable practices, and received “Excellent” level certification within the scope of BREEAM In Use – International in 2016. It is the largest building in Turkey to receive this certification.
While construction continues on four of our projects in the Erenköy, Caddebostan and Suadiye districts along Bağdat Street, we aim to complete the majority of the projects in 2017. Our street projects, which mainly involve retail units, will be modern in design in line with sector needs, and will enhance Bağdat Street’s prestige. In addition, limited numbers of houses and home-offices will be offered for sale. We initiated our first cooperation in street retail with Beymen for the Uşaklıgil Building. With the leasing agreement already signed, once the shop opens in 2017, this will be the culmination of our first project on Bağdat Street.
We emphasize the success and corporate culture of the Akkök Group. Maintaining this tradition, we raised our Corporate Governance Rating from 9.28 in 2015 to 9.44 in 2016. Our Company managed to retain its position as the company with the highest Corporate Governance Rating among real estate investment trusts and construction companies with this score. Thanks to this achievement, Akiş REIT stands out once again in terms of corporate structure and transparency.
Akiş REIT provides regular dividends to investors with its robust portfolio, and rental potential from its investments, and aims to add value to its shareholders’ savings. Accordingly, the Company distributed dividends to its investors in 2016 as well.
I would like to extend my sincerest gratitude to our employees and shareholders, the architects of our success in 2016
İ. Gökşin Durusoy
Board Member and General Manager