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Project Real Estate Investment Funds (PGYF) in Turkey

Developing a real estate project inside a fund brings the landowner, the contractor and investors together in one CMB-regulated structure. This guide explains how a PGYF works and who it suits.

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Short answer: A project real estate investment fund (proje gayrimenkul yatırım fonu, PGYF) is a Turkish real estate investment fund whose portfolio consists mainly of properties under development (residential, office, commercial or mixed-use). The fund develops the project with capital from qualified investors, then sells or leases the completed units. A CMB-licensed asset management company sets up and manages it.

How does a PGYF work?

Project and land: land can be contributed to the fund in kind or bought by the fund; land-for-units arrangements can be adapted to the fund structure.
The fund is set up: the asset manager drafts project-specific bylaws and an issuance document and obtains CMB approval.
Capital is raised: qualified investors and project partners buy units; payments can be called in line with the construction schedule.
Development: construction runs under a contract with the builder; progress and value are tracked through independent valuation reports.
Sale or lease: completed units are sold or leased; income is distributed or units are redeemed.

Who is it for?

Developers and contractors

A financing source alongside bank loans: bring co-investors into the project in a regulated structure.

Landowners

Contribute land to the fund and share in the project's value growth, taking fund units instead of finished units.

Investors

Own a share of a professionally managed project instead of a single apartment.

Foreign investors

USD 500,000 in fund units held for three years qualifies for Turkish citizenship.

REIF vs project REIF

	REIF (GYF)	Project REIF (PGYF)
Portfolio	Mainly completed, income-producing property	Mainly projects under development
Return	Rental income and capital growth	Development profit and sales income
Term	Long term, can be open-ended	Usually tied to the project timeline
Risk	Rental and market risk	Adds construction, cost and sales risk

General guide: What is a real estate investment fund?

Tax treatment

Fund income is exempt from corporate tax (Corporate Tax Law 5/1-d). Under Law No. 7524, from 1 January 2025 real estate funds must distribute at least 50% of their real estate income.
Gains on real estate fund units held for more than two years carry 0% withholding tax (Presidential Decree 11107).
Taxes on contributing land and on unit sales (VAT, title deed fees, transfer gains) depend on the structure and should be modelled with a tax adviser at the design stage.

What to prepare before setting up a PGYF

Title deed, zoning status and permits for the land
Feasibility: costs, sales price assumptions, timeline
Details of the contractor and project partners
Financing plan: fund capital, loans, pre-sales

FT Portföy structures, sets up and manages PGYFs for developers and contractors. Türkçe

Frequently asked questions

Who can invest in a PGYF?

Units are sold to qualified investors: companies, institutions and individuals who meet the wealth threshold.

Can a landowner contribute land to the fund?

Yes. Land can be contributed in kind in exchange for fund units; its value is set by a CMB-licensed valuation firm.

Can a PGYF borrow?

Borrowing limits are set by the regulations and the bylaws; the financing structure is decided at the design stage.

How long does set-up take?

Drafting the documents, valuation and the CMB application usually take a few months.

What happens when the project is finished?

The fund can be liquidated after units are sold and income distributed, or continue as a REIF holding leased units; this is set in the bylaws from the start.

Author
Serkan Topaktaş, Chairman of FT Gayrimenkul ve Girişim Sermayesi Portföy Yönetimi A.Ş., a portfolio management company licensed by the Capital Markets Board of Türkiye. He works on structuring real estate and venture capital funds and their tax planning.
Last updated: 12 October 2026

This page is general information, not an investment offer or investment, tax or legal advice. Tax law can change; please confirm your own position with a tax adviser. Fund units carry risk and their value may go up or down; past performance is not a guarantee of future results.

Sources: Capital Markets Board of Türkiye · Law No. 7524 commentary · Presidential Decree 11107.

Talk to the team that manages the funds

Tell us about your company, portfolio and goals. We will work out the right fund structure and its tax effect with you.

WhatsApp: +90 542 188 02 81 serkan@ftportfoy.com