ABSOLUTE VALUE 2011 Annual Report 3.8 Portfolio value of TL 3.8 billion 221GLA (mall) of 221 thousand m2 Corporate Profile 2 • Milestones 3 • Vision, Mission and Targets 4 • Summary of Torunlar REIC’s Strategy 5 • Our Strengths 6 • An Assessment of Torunlar REIC’s Performance in 2011 8 • Chairman’s Evaluation on the Company’s Activities in 2011 12 • Board of Directors 18 • Senior Management 20 • Auditors 21 • Macroeconomic Outlook and Assessment of the Sector 22 • REICs in Turkey 26 • Outlook for the Construction and Real Estate Sectors in Turkey 27 • Developments in the Housing Segment 29 • Developments in the Retail Segment 31 • Developments in the Office Segment 33 • Torunlar REIC’s Assets 34 • Torunlar REIC’s Real Estate Portfolio Composition 36 • Together with the Community 64 • Our Awards 67 • Future Expectations… 70 • Corporate Governance Compliance Report 72 • Agenda of Torunlar GYO A.Ş. Ordinary General Assembly Meeting Dated 28 May 2012 85 • Proposal and Decision for Dividend Distribution 86 • 2011 Dividend Distribution Table 87 • Independent Auditor’s Report 88 • Consolidated Financial Statements at 31 December 2011 89 Torunlar REIC 2011 Annual Report P / 1 2.5 Net asset value of TL 2.5 billion Housing, office, mall and mixed-use projects designed and developed with Torunlar REIC’s vision and experience in various cities of Turkey stand for “absolute value” for its investors, with their location, architecture, quality of construction and their comfort of living... For today and for the future... Torunlar REIC 2011 Annual Report P / 2 Corporate Profile One of the sector’s leading participants A company that carries its experience into Turkey’s largest investor in domestic Operating in the Turkish real estate market the future with its vision shopping centers since 1977, Torunlar Group established Our Company’s experience and know- how The fundamental area where Torunlar REIC Toray Construction in 1996 as the is based on a clear understanding of - Turkey’s largest investor in domestic predecessor company of Torunlar REIC, urban development, demographic trends shopping centers - focuses on is the in order to expand its activities in the real and potential customer profiles in our development, implementation and asset estate market to retail, housing, and office target markets. This understanding is management of wide scope and top-notch and hotel development projects. The main accompanied by a wide network which shopping centers in urban areas such as function of Torunlar REIC, which became a provides us with the means to purchase İstanbul, Bursa, Antalya and Ankara. real estate investment company in 2008, land suitable for development at favorable is to invest into real estate development prices. We have priority access to a wide As of December 31st, 2011, Torunlar REIC projects for retail, housing, entertainment range of benefits thanks to our deeply had 11 properties, 3 real estate venues and office spaces. rooted relations with municipalities, local development projects, 3 plots of land and 4 suppliers, contractors, vendors and many subsidiaries in its portfolio, as well as five Going public in 2010 and quoted on the ISE other players in the sector. shopping centers currently in operation National 100 index, 25.16% of the shares and a total of 221,176 m2 of GLA (Gross in Torunlar REIC are publicly held. Torunlar Torunlar REIC optimizes a wide network Leasable Area). The projects under REIC ranks as the second largest REIC in consisting of national and international development include two shopping centers terms of portfolio size among ISE-listed retail brands creating a rich mix of tenants in Samsun and İstanbul (the project in REICs. at its shopping centers. Likewise, Torunlar İstanbul is entitled “Mall of İstanbul”, REIC boasts a wide customer base for its which is estimated to have a total of nearly Torunlar REIC is involved in all stages of housing development projects. Also taking 150,000 m2 of GLA), as well as mid-scale project development and management advantage of the established reputation investments made in regions not yet including the sourcing, land acquisition, of the Torun family in the Turkish market, saturated in terms of commercial real project financing, the permit process, Torunlar REIC continues to create value estate. In 2012, Torunlar REIC is expected design, the supervision of construction with the concept of quality and confidence, to add a project to be developed on the work, and sales and marketing. In addition, which its tenants, customers and other land of the former Ali Sami Yen stadium, the Company also manages completed participants of the Turkish real estate once necessary building permits are projects. Our services include managing market associate with the Torunlar name. received. As of December 31st, 2011, the the tenant mix, renovation and expansion Company’s total consolidated assets work within our shopping centers. We are amounted to TL 3.9 billion, 71.5% of which also in charge of other operations that is constituted of property and real estate aim to increase the number of visitors, projects, while 56.1% of the Company’s real raise occupancy rates and maximize rental estate portfolio comprises shopping income at the shopping centers. centers. The Company’s asset portfolio also includes land on which development projects with high growth potential can be performed, such as homes, offices, shopping centers and hotels. Torunlar REIC 2011 Annual Report P / 3 Milestones 1977 2007 • The Company becomes active in the • Korupark Shopping Mall, one of the Turkish construction and real estate largest shopping centers in Turkey, is markets, beginning to carry out small- opened. scale housing projects. • The Company begins project development efforts for Mall of İstanbul, 1996 one of the largest mixed-use projects in • Toray Construction is established. Turkey and Europe in terms of GLA, and which is expected to be completed in the 1997 second half of 2013. • The Company becomes a shareholder of Yeni Gimat A.Ş., the owner of ANKAmall 2008 2011 and Crowne Plaza Hotel in Ankara (the • The Company becomes Torunlar REIC • The Company begins Company currently holds 14.83% of Yeni (real estate investment company status). Gimat). • The Company completes the 1st and 2nd construction work and phases of the Korupark Residences, pre-sales for the Mall of 1999 Bursa’s first modern housing compound, İstanbul project. • Zafer Plaza, Torunlar’s first shopping and begins to sell the homes there. • The Company begins center project and Bursa’s first shopping construction work and center, is opened. 2010 pre-sales for the Korupark III • The Company opens the ANKAmall, • The Company carries out a public which was Turkey’s largest shopping offering on October 21st, 2010 as one Terrace Residences project. center at its opening date. of the largest ISE-listed real estate • The Company begins companies. construction work for the Torun 2004 • The Company begins construction work Tower project. • The Company opens Deepo Outlet on the Bulvar Samsun Shopping Mall. Center, the largest outlet in Antalya. • The Company delivers the houses and offices in the Nishİstanbul. 2005 • The Company opens the Torium • The Company receives a 44.6% stake Shopping Mall, İstanbul’s 4th largest in Netsel Turizm Yatırımları A.Ş. (Netsel shopping center and the 5th largest Marina) in Marmaris. shopping center in Turkey. • The Company purchases the land for • The Company participates in the Ali Sami Torun Tower. Yen stadium land project as the leading partner. Torunlar REIC 2011 Annual Report P / 4 Vision, Mission and Targets Our Vision Our Mission Strategic targets To transform the Torunlar REIC brand • To be the most trustworthy brand in The Company aims to gain a competitive into the most preferred brand both on a developing living spaces such as homes, edge by pursuing the following strategies: global and national scale in the area of offices, hotels and shopping centers and • To produce retail-based mixed-use investment, development and management to become the name synonymous with projects and keep focusing on shopping of mixed-use life-style centers consisting concept of high-quality living centers of units such as shopping centers, homes, • To develop projects in which we build • To manage shopping centers actively and offices and hotels, as well as logistical residences, hotels, entertainment dynamically centers, commercial and industrial and business centers that cover the • To make use of opportunities in various buildings. To undertake investments with needs, preferences and interests of our regions and various types of real estate a high return and to ensure steady growth customers to the maximum extent while with high growth and development by prioritizing transparency and integrity at maximizing their benefits potential all times. • To attract and keep the best employees • To develop methods for crisis by offering them a rewarding and management and thus to turn crises into satisfying working environment opportunities • To lead the sector and to produce model projects • To create living spaces that help make life easier by making use of the technological developments in the real estate sector and other industries • To carry the sector to the future through the application of technology • To build the projects of the future by combining our international consultancy know-how with our local expertise • To keep a close view of value enhancing opportunities which offer the highest return to our shareholders • To