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REAL ESTATE APPRAISAL REPORT

TRE-T INVESTMENT V İNŞAAT TAAHHÜT

PROJE VE DANIŞMANLIK TURİZM SANAYİ TİCARET A.Ş

SHOPPING CENTER + OFFICE + TRADE + CONVENTION

CENTER PROJECT IN HALKAPINAR QUARTER

KONAK / İZMİR

Date: 07.04.2010 R. No: 2010C25

ISO9001:2008 FS 5O9685

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OPEN ADDRESS: Halkapınar Mahallesi, 2782 Ada 151 Parsel, Konak-İZMİR

PREPARED BY: TSKB Gayrimenkul Değerleme A.Ş.

APPRAISERS: Özge ŞENER BOZKURT

Değerleme Uzmanı Selda ULAŞIR

Değerleme Uzmanı Bilge BELLER ÖZÇAM Lisanslı

Değerleme Uzmanı-400512

REQUESTED BY: TRE-T Investment V İnşaat Taahhüt Proje ve Danışmanlık Turizm Sanayi Ticaret A.Ş.

INTENDED USE OF REAL ESTATE: 1 vacant land with a surface area of 25,714.50 sqm on which a shopping center, office, trade, and convention center project will be developed

ENCLOSURE OF PROJECT Shopping center, office, trade, and convention center project to be developed on the land with a surface area of 25,714.50 sqm

TITLE DEED INFORMATION: Immovable property qualified as “Prina Factory with Garden” in the title deed registry, which is located on section 291, block 2782, and parcel no 151 in the Halkapınar Quarter, 1st Region of the administrative district of Konak in the province of Izmir.

ZONING STATUS: Presented on section 4.3 of this report

TODAY’S NET VALUE OF THE PLOT WHICH FAIR MARKET VALUE AS OF 07 APRIL 2010(VAT not included)

25.714.500- TL (Twentyfivemillionsevenhundredfortythousandfivehundred -Turkish Liras)

17.143.000-USD

(Seventymilliononehundredfortythreethousand-Amerıcan Dollars)

NET PRESENT VALUE OF THE OFFICE + TRADE + CONVENTION CENTER PROJECT TO BE DEVELOPED AS OF 07 APRIL 2010

58.145.000-TL (Fiftyeightmilliononehundredfortyfivethousand- Türkish Liras)

38.765.000-USD (Thirtyeightmillionsevenhundredsixtyfivethousand-American Dollars)

We herewith declare that:; The findings presented in the report are correct to the best of the knowledge of the appraiser; The analyses and the results are only limited to the specified assumptions and conditions; The appraiser has no interest whatsoever related to the property which is subject to the valuation; The appraiser’s remuneration does not depend on any section of the report; The appraiser was realized in accordance with the ethic rules and the performance standards; The appraiser possesses the professional education requirements; The appraiser has previous experience in the subject of the location and type of the property which is being valuated; The Appraiser has personally inspected the property; with the exclusion of the persons mentioned in the report no other person has contributed professionally to the preparation of this report. We herewith declare that:; The findings presented in the report are correct to the best of the knowledge of the appraiser; This appraisal is prepared due to the statements of Capital Market Legislation We herewith declare that:; The findings presented in the report are correct to the best of the knowledge of the appraiser;

Özge ŞENER BOZKURT/ Appraiser

Selda ULAŞIR/ Appraiser

Bilge BELLER ÖZÇAM / Licensed Appraiser

SUMMARY CHART REPORT NO:

REPORT DATE:

2010C25 07.04.2010

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CONTENTS SECTION 1 .............................................................................................................................................................. 5 REPORT INFORMATION ...................................................................................................................................... 5

1.1 Report Date and Number .................................................................................................................................... 5 1.2 Report Type .......................................................................................................................................................... 5 1.3 Persons Issuing the Report ................................................................................................................................ 5 1.4 Appraisal Date ..................................................................................................................................................... 5 1.5 Base Contract ...................................................................................................................................................... 5 1.6 Factors Affecting the Appraisal Process Negatively ......................................................................................... 5 1.7 The Scope of the Client Demands and Delimitations ....................................................................................... 5

SECTION 2 .............................................................................................................................................................. 6 COMPANY – CUSTOMER INFORMATION, DEFINITION AND SCOPE OF THE APPRAISAL ..................... 6

2.1 Company’s Information ....................................................................................................................................... 6 2.2 Client Information ................................................................................................................................................ 6 2.3 The Value Definitions .......................................................................................................................................... 6

2.3.1 Fair Market Value (Market Value) ............................................................................................................... 6 2.3.2 Orderly Liquidation Value............................................................................................................................. 6 2.3.3 Forced Liquidation Value ............................................................................................................................. 6

2.4 Project Appraisal .................................................................................................................................................. 6 2.4.1 Definition, Purpose and Scope of Project Appraisal .................................................................................. 7

SECTION 3 .............................................................................................................................................................. 7 GENERAL AND SPECIAL DATA ......................................................................................................................... 7

3.1 General Data – Social and Economic Data ........................................................................................................ 7 3.1.1 Demographic Data ....................................................................................................................................... 7 3.1.2 Economic Data ............................................................................................................................................ 8

3.2 Special Data - Analysis of the Area Where the Property is Located................................................................ 9 3.2.1 İzmir Province ............................................................................................................................................... 9 3.2.2 Konak District.............................................................................................................................................. 10

SECTION 4 ............................................................................................................................................................ 10 TITLE DEED AND ZONING INFORMATION OF THE REAL ESTATE ........................................................... 10

4.1 Title Deed Information of the Real Estate......................................................................................................... 10 4.2 The information of Encumbrances on the Real Estate .................................................................................... 11 4.4 Civil Liability ........................................................................................................................................................ 12 4.5 Environmental and Ground Contamination ...................................................................................................... 12

SECTION 5 ............................................................................................................................................................ 12 PHYSICAL INFORMATION OF THE REAL ESTATE ....................................................................................... 12

5.1 The Location, Position and Environmental Characteristics of the Property ................................................... 12 5.2 Current Condition of the Project Area ............................................................................................................... 13

SECTION 6 ............................................................................................................................................................ 14 GENERAL INFORMATION ON THE PROJECT SUBJECT TO APPRAISAL ................................................ 14 6.3 Shopping Mall Sector Report ........................................................................................................................ 23

STATUS OF SHOPPING CENTRES IN USDPE ................................................................................................... 27 1. PRESENT SHOPPING MALLS IN IZMIR ...................................................................................................... 30 Shopping Centers in Konak District .................................................................................................................... 43 2. SHOPPING MALLS UNDER CONSTRUCTION ........................................................................................... 50 4. RENTABLE AREAS OF PRESENT SHOPPING CENTERS ....................................................................... 51 5. ANALYSIS........................................................................................................................................................ 52

6.3 Close Surroundings of the Project Area in terms of the Convention Center ..................................... 54 SECTION 7 ............................................................................................................................................................ 67 THE HIGHEST AND THE BEST USE ANALYSIS............................................................................................. 67 SECTION 8 ............................................................................................................................................................ 68

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ANALYSIS AND EVALUATION OF THE REAL ESTATE ................................................................................ 68 8.1 Factors Affecting to the Value of the Property ................................................................................................. 68

SECTION 9 ............................................................................................................................................................ 68 THE METHODS USED IN THE APPRAISAL..................................................................................................... 68

9.1 The Methods Used in the Appraisal .................................................................................................................. 68 9.1.1 Sales Comparison Method ............................................................................................................................. 69 9.1.2 Income Capitalization Method ........................................................................................................................ 69 9.1.3 Cost Analysis Method ..................................................................................................................................... 69

9.1.4 Suggestions for Development ................................................................................................................... 69 9.2.Definitions and Model of the Calculation Methodology .................................................................................... 70

9.2.1. Risk Free Rate ........................................................................................................................................... 70 9.2.2. Market Risk Premium- Market Index ........................................................................................................ 71 9.2.3. Discount Rate (Risk Free Rate+ Market Risk Premium = Discount Rate) ........................................... 71 9.2.4. Overall Capitalization Rate ....................................................................................................................... 71 9.2.5. Other point of view: The Capital Asset Pricing Model (CAPM) ............................................................ 71

9.3 Analysis Of The Methods Used In The Appraisal ............................................................................................ 72 9.3.2 Approach for Development ........................................................................................................................ 73 9.3.3 Appraisal of Analysis Results .................................................................................................................... 92

SECTION 10 CONCLUSION ............................................................................................................................... 93 ANNEX .................................................................................................................................................................. 94

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SECTION 1

REPORT INFORMATION 1.1 Report Date and Number This report was issued by our company on April 7, 2010 and number 2010C25 with reference to the request dated March 13, 2010 and made by the firm, titled as TRE-T Investment V İnşaat Taahhüt Proje ve Danışmanlık Turizm Sanayi Ticaret A.Ş. 1.2 Report Type This is the valuation report prepared to determine, on the basis of Turkish Liras, the net present value effective on 07 April 2010, of the shopping center, office project that is planned to be developed on the land of the immovable property qualified as “Prina Factory with Garden” in the title deed registry, which is located on section 291, block 2782, parcel no 151 in the Halkapınar Quarter, 1st Region of the administrative district of Konak in the province of Izmir. The report has not been prepared according to the provisions of the declaration of the Board of Capital Markets. 1.3 Persons Issuing the Report This appraisal report has been prepared at the end of necessary examinations carried out at the location of the real property and upon the information procured from the relevant individuals – institutions – establishments Özge ŞENER BOZKURT and Selda ULAŞIR real estate appraiser and Bilge BELLER ÖZÇAM, real estate appraiser in licence of our Company, issued this report. 1.4 Appraisal Date This appraisal report is prepared with reference to the studies started on April 1, 2010 and finished on April 7, 2010. Not only examinations conducted at real estate location, municipality and land registry but also office work is done during appraisal study. 1.5 Base Contract This appraisal report was issued in accordance with the provisions of the base contract that was executed by and between TRE-T Investment V İnşaat Taahhüt Proje ve Danışmanlık Turizm Sanayi Ticaret A.Ş. and our Company on March 16, 2010 and has determined the rights and obligations of the contractual parties. 1.6 Factors Affecting the Appraisal Process Negatively There is not any negative factor that affects and limits the appraisal process in general aspect. 1.7 The Scope of the Client Demands and Delimitations This valuation report of immovable is prepeared for TRE-T Investment V İnşaat Taahhüt Proje ve Danışmanlık Turizm Sanayi Ticaret A.Ş. for the request dated March 13 ,2010. There are not any limitations brought on the appraisal study by the customer. 1. alternative (shopping center - office) in accordance with the assumption of customer demand, our customers have been presented by the knowledge that the project was arranged.

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SECTION 2

COMPANY – CUSTOMER INFORMATION, DEFINITION AND SCOPE OF THE APPRAISAL 2.1 Company’s Information Our Company was established with a capital amount of TRL 300.000 in order to engage in providing works and services described as Expertise and Appraisal according to the Articles of Association of the Company published in the Trade Registration Journal dated September 13, 2002 and issue no. 5676. Our Company is taken on the lists of companies, which will offer appraisal services, within the framework of the Capital Market Board (SPK) legislation by the letter of SPK dated February 03, 2003. 2.2 Client Information This appraisal report has been prepared for TRE-T Investment V İnşaat Taahhüt Proje ve Danışmanlık Turizm Sanayi Ticaret A.Ş. located at the address of 1476/1 street, No:12, Katipoğlu Apartment., Floor:2, No:2, Alsancak/İzmir 2.3 The Value Definitions 2.3.1 Fair Market Value (Market Value) In the case of an real property changing hands between the buLocation and the seller, at a specific date; it is the most plausible, cash exchange value of the property on the condition that the market conditions required for the sale are provided , the parties being willing and both parties are knowledgeable about the conditions related to the property. In this valuation study the validity of the following points are assumed:

- The buLocation and seller are acting in a reasonable and sensible manner. - The parties are knowledgeable concerning every matter related to the real estate and are acting in a

manner to obtain the utmost benefit for themselves. - A reasonable timeframe has been allowed for the sale of the real estate. - The payment is being effected in cash or by similar instruments. - The financing which may be required for the purchasing transaction of the real estate is being realized

with the prevailing interest rates in the market. 2.3.2 Orderly Liquidation Value It is the most likely sales value in cash for an interval of approximately 3 -6 months which is determined regarding the assets as a result of interviews and negotiations between the parties. In the orderly liquidation, the best value is tried to be obtained for each of the assets. If, within the determined timeframe, following the negotiations between the parties an agreement can not be reached regarding the price, it is advised to sell the assets by public auction. 2.3.3 Forced Liquidation Value

In an auction open to the public, it is the most probable cash value when the economic trends and the obligatory sales conditions are taken into consideration. In the obligatory liquidation, assets are sold as fast as possible. The acceptable time interval is in general less than 3 months. 2.4 Project Appraisal

The purpose of an investment is to produce goods or services, to put them into the market and make profit consequently. The commercial profitability of the investment depends on sufficient demand for the goods or services to be produced and their sales with the prices that would provide possibility to obtain the expected profitability. The examination of the project for the entrepreneur covers the examination and evaluation of the industry where the subject product of the project is positioned and the anticipations regarding the future. The

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evaluation of the market where the subject goods or services of the project are positioned can be examined as the current situation and the expectations for the future. 2.4.1 Definition, Purpose and Scope of Project Appraisal

This project evaluation study aims at shedding insight into the following issues in general:

- The overview of the industry to which the goods and services, which are considered to be produced in consequence of the considered investment, are pertaining,

- Domestic and/or offshore marketing possibilities for the subject goods or services of the project, - Whether the technology to be used within the planned investment possesses the required quality and

technical norms, - The investment cost of the foreseen project, - The acceptable costs of the goods or services, which are considered for investment within the project,

under the market conditions, and whether the sales prices would provide an acceptable investment for this investment.

SECTION 3 GENERAL AND SPECIAL DATA

Data research begins with searching the market level international, regional or locational-peripheral trends of the subject property of the study. This research helps the appraisal expert to better understand the relations of the principles, dynamics and factors which affect to the values of the properties in their authentic market area. The research also provides the appraisal expert with the numerical data, the information and clues on the market trends. The general data consist of social, economic, public and environmental data that influence the value of the property in the market region. Meanwhile, the special data include the information on the attributes of the property to be evaluated and of other equivalent properties. 3.1 General Data – Social and Economic Data 3.1.1 Demographic Data According to the 2007 Census through Address-Based Population Registry System, the population of Turkey was 70,586,256 and the population increased to 71,517,100 on 31 December 2008. In 2000-2007 periods, the annual population increase was 0.59%; while the annual population increase of Turkey in 2008 appeared as 1.31%. In 2008 among the 81 provinces, the population of 55 populations increased and that of 26 populations decreased. The three provinces with lowest population increase rate are Bilecik (-5.35%), Kütahya (-3.14%) and Isparta (-2.99). Among the 81 provinces, the first three with the highest population increase are Yalova (8.26%), Tekirdağ (5.66%) and Hakkari (4.8%). In Turkey, the urban population increases at a much higher speed than the rural population. The proportion of urban population of Turkey increased sharply in the last 17 years from 59% in 1990 to 64.9% in 2000 and 75% in 2008. Urban population (the population in the centers of provinces and districts) is 53,611,723 while the rural population (population at subdistricts and villages) is 17,905,377. The province with highest urban population proportion is Istanbul with 99%, while that with the lowest is Bartın with 32.2%. 17.8% of the country’s population lives in Istanbul. 6.4% of the total population lives in Ankara, 5.3% in Izmir, 3.5% in Bursa and 2.8 in Adana. The five provinces with the lowest population are Bayburt, Tunceli, Ardahan, Kilis and Gümüşhane, respectively. The population of Bayburt, which has the lowest population, is 75.675. Half of the population is younger than 28.5 years old. The median age in Turkey is 28.5. The median age for males is 28 and that for females is 29. The median age of the urban population is 28.4 and that of rural population is 28.6. The population in 15-64 age group accounts for 66.9% of the total population. 26.3% of the country’s population is in 0-14 age group and 6.8% is in the 65 and higher group. The number of people per square kilometer, which is indicated as the density of population is 93 in overall Turkey, while it varies between 12 and 2.444 people among provinces. Istanbul has the highest population density with

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2,444 people. It is respectively followed by Kocaeli with 413 people, Izmir with 316 people, Hatay with 242 people and Bursa with 241 people. The province with lowest population density is Tunceli with 12 people. In Konya -the province with the largest area- the population density is 51 people per sq km and the population density in Yalova –the province with the smallest area- is 233 people per sq km. 3.1.2 Economic Data 1 The economic growth, which particularly started after 2005 as well as the advances experienced in the real estate sector, the start of establishing political stability, the drop of the inflation to single digit figures, and the developments related to the mortgage law caused the real estate prices to move upwards and investments to explode. During this period, in which the real estate sector reached the highest level, the way for foreign investments was paved and entries from abroad were observed in terms of not only hot money but also foreign resources through fixed investments. The acceleration that displayed an upward trend continued until the last quarter of 2006. Since 2007 was the year of elections, domestic and foreign investors waited for the elections for investment decisions and investments were continued with the realization of the fact that the political stability would continue after the elections. Even though it was thought that the stability would continue as a result of the increase in confidence within the country, foreign economic developments were predominant rather than domestic politics during the beginning of 2008, the developments that were experienced affected the economy directly causing a deceleration to be observed in the investments from April 2008, and the foreign investment rate of the past years started to drop. When the investments of 2008 are considered, it can be seen that the saturation point was reached in certain regions of the Shopping Center sector, however that the investments in the office and logistics sectors continued. The most important event of 2008, that is, the economic crisis, which initially started in the USA as the subprime mortgage crisis in the world and which was then assumed to have been caused by liquidity shortage, however, where the real problem was in time understood to have been the lack of confidence, showed itself with the bankruptcy of the important investment banks and insurance firms of the USA in the month of March and spread to USDpe in a short time. Even though countries announced packages to prevent the crisis one after the other, they could not stop what was happening and the growth estimations of the world displayed negative values. When we look at Turkey within this process; even though the small share of housing credits in the banking system of our country alleviated the impacts of the crisis to a certain extent, Turkey also started to be affected by all these developments taking place in the world starting with the 3rd quarter of 2008. The increase in the foreign exchange rates and the decrease in sales started to become apparent in the real estate sector as well. The stagnation experienced in housing prices and demands gave way to a downward trend parallel with the general perspective. The real estate market entered a stagnation period during this process with the rising of credit interests, postponement of investments, and difficulty in estimating future prospects. The economic crisis started to be felt in the real sector as well in Turkey during the end of 2008 and the beginning of 2009. Drops were experienced in industrial production and employment within 2009 along with the economic contraction. It is known that the real estate sector lived through the year 2009 by contracting, the prices continued their downward movement, and the demand was low. However, with the positive outlook of the country’s economy and the foreign markets in the beginning of 2010, it is now considered that a sustainable development 1 TSKB Gayrimenkul Değerleme A.Ş.

Province Population Population (Centrum)

Istanbul 12,697,164 12,569,041

Ankara 4,548,939 4,395,888

İzmir 3,795,978 3,450,537

Bursa 2,507,963 2,204,874

Adana 2,026,319 1,763,351

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will start again and the impacts of the crisis will first decrease and then end. We believe, parallel with the foresights for 2010 and the coming years, that the real estate sector, which is the locomotive of the country’s economy, will enable the continuity of the interest of domestic and foreign investors in Turkey along with the developing economic demand and price stability. 3.2 Special Data - Analysis of the Area Where the Property is Located 3.2.1 İzmir Province İzmir which is a typical example of the Aegean shores is surrounded by Madra Mountains in the north, Kuşadası in the south, Teke cape of the Çeşme peninsula in the west and Aydın-Manisa border in the east on

approximately 11.973 km² area. İzmir is the biggest city of the Aegean region and the 3rd big city of Turkey. İzmir province is one of the richest cities of Turkey with its natural location and has a quality and plenty of raw materials, modern sea, air and land transportation, educated labor and important capital developed by agricultural activities and increased by industrial production. These properties are the main driving power of the industrialism in the city. Most important organized industry zones in the city are Atatürk Organized Industry Zone, Aegean Organized Industry Zone and Kemalpaşa Organized Industry Zone. While İzmir’s share in the total population of Turkey was approximately 4.97% in 2000 this ratio has reached to 5.19% (According to the 2008 Census Record on Address, Turkey’s population is 71,517,100 and İzmir’s population is 3,795,978). Between 2000 and 2008, population rise has been

425,112. The population of the villages of İzmir has decreased by %84,7 in 2000-2008 years.

İZMİR Total City Village 2000 3.370.866 2.732.669 638.197 2008 3.795.978 3.450.537 345.441 Annual population growth ratio (%)

1.6 3,28 -5,73

İzmir province is one of the richest cities of Turkey with its natural location and has a quality and plenty of raw materials, modern sea, air and land transportation, educated labor and important capital developed by agricultural activities and increased by industrial production. These properties are the main driving power of the industrialism in the city. In İzmir with all the traditional industry like food, textile, tobacco, dried vegetable-fruit industries all branches of manufacturing industry is also developed and reached important levels. İzmir has lived the advantages of being a city of trade and seaport during the history. Alsancak port is an important exportation and importation center with a capacity of 20.000.000 tons. Exportation of İzmir is close to 40% of our general exportation. Alsancak port is really important for Turkish exportation. After the foundation of republic, İzmir became a modern city and it’s developing since then. İzmir alongside being a tourism center is also an important cultural crossroad with its universities, museums, concert halls, culture and art associations, national and international fests and rich media.

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There are 30 districts of İzmir. Of these, Konak, Bornova, Karşıyaka, Çiğli, Balçova, Buca, Narlıdere, Güzelbahçe, Gaziemir, Foça, Aliağa, Menemen, Kemalpaşa, Bayındır, Torbalı, Selçuk, Seferihisar, Menderes, Karaburun, Bayraklı, Karabağlar and Urla are within the borders of metropolis. Others are: Bergama, Kınık, Dikili, Ödemiş, Beydağ, Kiraz, Tire, and Çeşme. Shopping centers are located in Centrum and both sides of bay. Especially in recent years there is an important increase in the shopping centre projects. Forum Bornova, Agora and Ege Park are just important ones. For office sector, especially Çankaya, partially Alsancak and partially Konak regions are the city’s office central business areas. Building accepted as A class office building in İzmir are accepted as B class office buildings in İstanbul and Ankara. According to other provinces of the country, İzmir has an advanced transportation network. City has both domestic and foreign land, sea, air and railway connections. 3.2.2 Konak District

Konak district is the biggest district in the borders of İzmir Metropolitan city. It is surrounded by İzmir Bay and Karşıyaka on the north, Bornova on the east, Buca and Gaziemir on the south and Balçova district on the west. It is the second biggest district of the Turkey. According to 2008 Census Record on Address has a total population of 411.112. Has a surface area of 69 km². District has 168 quarters, 6611 avenues-squares-boulevards-streets and 2 villages. Has no town. Konak district is the administrative, artistic, cultural and commercial center of İzmir. With the flag on it flagpole in 9th September 1922 Government Office is a symbol of liberation of not only Izmir but also the whole country. Government Office was built in 1868-1872. Clock tower which is a meeting point since it was built is

in Konak Square. Tower is 25 m high and it was ordered by Grand Vizier Mehmet Said Paşa in 1901 to the architecture of the German Consulate building for the 25th anniversary of the throne of Abdülhamit II. Clock of the tower is a gift from German Emperor Wilhelm II. It has many artifacts from antic ages, from Ottoman age but mostly it is characterized by Republic age artifacts. Since Konak is the culture, art and entertainment center of İzmir it is a meeting point for both native and foreign tourists. Especially Kemeraltı Bazaar has important contributions to economy of district and advertisement of İzmir. Agora ruins left from Romans are close to Konak and it is open for tourists. Besides Konak is also famous of Konak port which connects to Karşıyaka by sea and Konak square. Konak seashore and walking courses are filled by people especially weekends.

SECTION 4 TITLE DEED AND ZONING INFORMATION OF THE REAL ESTATE

4.1 Title Deed Information of the Real Estate Province : İzmir Administrative District

: Konak

Subdistrict : -

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Quarter : Halkapınar Village : - Street : - Locality : - Plot No. : 291 Section No. : 2782 Parcel No. : 151 Area : 25.714,50 Quality : Prina Factory with Garden Share : Tam Owner : TRE-T Investment V İnşaat Taahhüt Proje ve Danışmanlık Turizm Sanayi

Ticaret Anonim Şirketi 4.2 The information of Encumbrances on the Real Estate The appraisal expert carries out deed registry inspections in order to identify the rights that create the ownership on the property, and the limitations imposed on these rights. According to the information obtained from the 1st Regional Title Deed Registry Directorate of the Administrative District of Konak in the Province of İzmir on 01 April 2010 as of 15:30 hours; In the Statements Section;

• The details document for 1,694,410.28 Liras consisting of 50 pieces is within its carton. An annotation was given as required by article 85 of the Regulation. Dated 05 August 1965, with journal no 3177. (*)

• There is a regulation annotation dated 01 February 2007 with journal no 1603 pursuant to article 18 of the Zoning Law no 3194.

In the Annotations Section;

• An annotation dated 21 June 1961 was given with journal no 1457 pursuant to article 11 of the Zoning Law no 6785. (*)

• An annotation dated 07 December 1962 was given with journal no 3837 pursuant to article 11 of the Zoning Law no 6785. (*)

• An annotation dated 21 July 1969 was given with journal no 3808 pursuant to article 11 of the Zoning Law no 6785. (*)

• The immovable property under appraisal is registered on the new record page with Halkapınar Volume: 10, Page: 927. (*)

• (*) Subject of commentaries on the property previously belonged to the buildings and machinery and the absence of any provision in the current situation is considered.

4.3 Zoning Information of the Real Estate

The zoning regulations organize the concentration of land use and development. During the inspection on zoning and building regulations, the appraisal expert should take into account both all existing up-to-date regulations and the potential modifications for the future on the specifications. The zoning plans define the general uses such as housing, commerce and industry, and identify the building concentration that might be realized further to such uses. According to verbal information obtained from the Zoning Directorate of the Municipality of Konak on 01 April 2010; Zoning Status: § Pursuant to the decision no 2009/1900, dated 09 December 2009, which was rendered during the case

filed with the request for the annulment of the 1/5,000 scaled New City Center Master Zoning Plan

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Revision, which was approved with the decision no 01.649 of the Metropolitan Municipal Council of İzmir dated 15 June 2007, and the 1/1,000 scaled Implementation Zoning Plan Revision for the Section Behind the Alsancak Port and the Salhane Region, which was approved with the municipal council decision 01.2381 dated 28 November 2007 and for the stay of execution, the procedures that constitute the subject matter of the case were decided to be annulled.

§ The annulment of the subject plan was decided on grounds that geological and geotechnical investigation reports concerning the area did not exist and in line with this, the preparation of the geological and geotechnical investigation reports, which would constitute the basis for the 1/5,000 scaled master zoning plan prepared for an area of approximately 471 hectares in the Section Behind the Alsancak Port of the Konak District and the Turan and Salhane Quarters of the Bayraklı District of the Province of İzmir was given out by contract by the Metropolitan Municipality of İzmir.

§ After the firm awarded with the contract prepares the geological and geotechnical investigation reports and gets them approved by the Directorate of Public Works and Settlement, the 1/5,000 and 1/1000 scaled plans process concerning the area will be urgently finalized by municipality in line with the contents of these investigation reports. And then, current zoning status will be granted.

ü Licenses and Permits:

§ Valuation does not have any structure on the subject property.

ü Supervision of the Constructed Work:

§ Valuation does not have any structure on the subject property.

4.4 Civil Liability The appraisal was made on the assumption that there weren't any encumbrances and/or legal problems about the real estates subject to appraisal; and these problems would be solved in case there were problems. Therefore, valuation of the real estate was done by neglecting such kind of problems at the stage of appraisal account analysis. 4.5 Environmental and Ground Contamination Ground research and ground contamination work at the real estate are in the professional limits of the field of "Environmental Geophysics". A detailed research in this field was not done as our company does not have expertise in this field. However, the real estate was observed to have no negative impacts on the environment during the on-site observations. Thus, the appraisal was done assuming that there was no negative impact on the environment.

SECTION 5

PHYSICAL INFORMATION OF THE REAL ESTATE 5.1 The Location, Position and Environmental Characteristics of the Property Full address of the immovable property: Haklapınar Mahallesi, 2782 Ada 151 Parsel, Konak-İZMİR The immovable property under appraisal is in the Halkapınar Quarter and it can be reached as follows: If we turn right before reaching the Atatürk Stadium while moving in the direction of Gıda Çarşısı from Konak, we will see the BP fuel oil station on the left hand side. The first street on the right when we turn to the 1204/6 Street in the direction of Gıda Çarşısı after passing BP is the 1201 Street. The subject immovable property is located on the intersection of the 1204/6 and 1201 Streets. İzmirgaz, the Halkapınar Subway Station, Gıda Çarşısı, the BP Fuel oil Station, Oto Plaza and Halkapınar TCDD (Turkish State Railways) Maintenance workshops are located in the close surroundings of the property. The immovable property is located in quite a busy point in a region with a dominant commercial characteristic. The immovable property under appraisal can be easily accessed since it is in

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a central location close to the main arterial roads. The property is at a 7.5 km distance from the Bornova district center, 2 km. distance from the Alsancak port, and 5.5 km. distance from Konak. Gıda Çarşısı, which is located in close vicinity to the property, is a trade zone consisting of many business centers owing to its regional characteristic. The distances of the subject properties to various major points in Izmir are stated in the following table:

Locacity Distance (km) Bornova İlçe Merkezi 7,5 Alsancak Port 2 Konak 5,5

5.2 Current Condition of the Project Area The surface area of Block 2782, Parcel No 151, which constitutes the project area, is 25,714.50 sqm. Since the parcel is located at the corner, it faces the 1201 and 1204/6 Streets and its boundaries with the TCDD Maintenance Workshop located on the neighboring parcel is determined with a garden wall and a wire fence. There are no buildings on the parcel and it is suitable for construction in geometric and topographic terms. The said parcel is topographically flat and its geometrical shape is close to a rectangle. Since the subject parcel is located at the corner, it has an approximately 250 m side facing the 1204/6 Street, which is particularly busy in terms of vehicle traffic. The parcel is surrounded by a masonry wall covering a part of the parcel on the 1204/6 Street side and it is encircled with a wire fence determining its boundaries. Taking into account the continuity of the commercial activity in the region, where the immovable property is located, it is considered that it could catch acceleration for development with the projects to be developed on the few remaining lands. The ground of the parcel was covered with stone chips as of the date of valuation and there are no buildings or vegetation on it.

Atatürk Stadyum

u

İzmir Limanı umu

İzmirgaz

Gıda Çarşısı

Tekel

Proje Alanı

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SECTION 6 GENERAL INFORMATION ON THE PROJECT SUBJECT TO APPRAISAL

6.1. Evaluation of Real Estate Sector and Purpose of the Project

In our country, especially the crisis period that began in 2001 has resulted in a significant shrinkage in real estate market as well as other sectors in parallel with other crises. The possible earthquake expectation added to present situation has limited the mobility especially in real estate sector in 2001 and 2002. In this period, serious downfalls were experienced in real estate prices when compared to past and trading transactions decreased little if any. With positive developments in the second half of 2003, in 2004 real estate market has woke up and market prices has raised. Economic and political stability, decrease in inflation to one digit numbers, developments about Mortgage law and since the progress in EU membership has been as expected, real estate and construction sector has positive developments. As the private sector investments and big projects in 2004 continues in 2005, prices has risen in real estate market especially in second half of 2005.Accerelation to the upwards has continued to the last quarter of 2006. Since 2007 was an election year, foreign investors had waited the elections for their investments and after the elections they continued their investments with the foresight of political stability. During the first quarter of 2008 foreign economic developments has more weight on agenda than domestic issues, and these developments have affected the economy directly and as a result investments have slowed down by the April 2008 and ratio of foreign investments has declined according to previous years. When examining the investments in 2008, although investments in residence and shopping mall sectors have reached a saturation point in some regions, investments in office and logistic sectors still continues. However global economic crisis in the third quarter of 2008 has affected the market economies of many countries including United States, USDpean countries and other developing countries. Many investment and deposit banks are nearly broke, sold or tried to be saved by governments with public aid. Real estate market has gone in to a dull period because of the increase in the rates of credit loans, delaying of investments and lack of foresight. It has been observed that bay investors chose to buy real estate because of the decreases in stock market, decrease of the interest rates and also decrease of prices of real estates. Foreign global investment resources have stated that Turkey is one of the less affected countries from global economic crisis and is one of the best countries to invest. Considering the recent social structure of Turkey, part of population with a certain income prefers residences addressing to a kind of luxury or striking appearance. Result of recent researches showed that an important feature used in the advertisement of the modern sites is that customers are not purchasing only a residence but also a "living style". In these sites, people purchased a flat are not only purchasing a residence but only a series of values coming with social opportunities. Studies showed that this kind of projects are demanded and has a good income if the marketing of the project is well executed. In these days a specific part wants to live in "new generation sites” where different needs are easily met in their environment. Projects offering a secure and comfortable life, designed to remove all negative effects of urban life are highly demanded. Another part of people wants to go far from downtown. There were developments in other subgroups along with housing when real estate sector gradually adopts a real estate understanding at international norms. There were also significant developments concerning the retail and shopping malls, offices, industry, logistics areas and hotels will be experienced in the market where the housing sector preserves its priority. Konak district has always preserved its prestige and importance as being the Centrum of İzmir. Konak District is a privileged preferred as residence and trade area since it is the Centrum of İzmir province. New investments and development progress are still going on in the region. However, there are some hesitations in new investment plans since applications on parcels planned as New Downtown did still not start. Konak District has a broad concept of consisting mostly trade areas, shopping malls, congress halls, residences, 5 star Hotels and boutique hotels and touristical facilities. Hotels are concentrated in Konak because of İzmir International Fair, residences are concentrated to live more evidently the image, luxury residence concept and presence silhouette of the city, shopping malls are concentrated because Konak is the focus point of the city and congress halls are concentrated because Konak is the most intense trade area of the city. Parallel to developments of İzmir as being a congress center, hotels in surrounding districts are also preferred for congress, seminars and meetings.

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Residence concept which we have been stranger to until a few years before, rapidly and progressively began to take a place in our lives in line with the development in the real estate sector. Residences have come into fashion so rapidly that some companies needed to add residence sections to their projects afterwards. Furthermore, by adding “residence” name to their projects regardless of including this characteristic, most of them wanted to create an impression as if it was a prestigious project. This process firstly began within the body of Swissotel and afterwards continued with Akmerkez and other projects; finally as a result of the burst in the real estate sector that we experienced n recent years, they started to take place in all big projects. Such that, before the last crisis we been through residence flats were sold before construction started. As regards İzmir, developed Residence projects are very successful and these projects are grouped in downtown. As a result of migrations İzmir downtown becomes more crowded and there are not enough streets and parking lots. Privatization of İzmir harbor, and related developing tourism potential and aliveness in trade, has increased necessity of luxury residences near downtown, banks, commercial and social areas for metropolitan İzmir habitants. To meet these requirements Residence projects has speed up in last five years. Parallel to this, since there is not enough area for, multiple storey, qualified offices and residences especially in downtown, necessity for new areas in Çankaya-Pasaport-Alsancak-Bayraklı-Karşıyaka center line raised. It is expected that this new downtown business area will meet these necessity. The project area is located within the boundaries of the Konak district in the city center, to the south of the Izmir Port and to the east of the Izmir International Fair. The region, in which the immovable property under appraisal is located, is a region with an outstanding commercial characteristic where development is continuing. It is projected that the subject office, trade, and convention center project to be developed based on the size of the land as well as the construction right belonging to the immovable property would conform to the location and the social environmental characteristics of the land as of today. Therefore, it is considered that the project with the office, trade, and convention center concept to be developed in the region would be successful.

6.2. Market Research (Office Sector)

6.2.1. Izmir Region in Terms of Office Sector

İzmir is the third biggest metropolis of Turkey and is center of fairs and congresses and also a contemporary seaport integrated with trade and industry. To understand the formation of current İzmir downtown it is necessary to investigate the roots and historical development of city. In its historical development, fire in 1922 and urban plans after this fire has played important role in the shaping urban structure of İzmir and location choices of urban functions. 1922 İzmir fire has caused major changes in city’s physical, cultural and social topography. Destructed regions by fire has created a great potential for the application of new plans, and with the ‘national’ acceleration of the newly established Turkish Republic allowed to create the urban identity of Republic. Rene and Raymond Danger brothers prepared a geometric designed urban plan with different symmetric boulevards and squares which these boulevards meet and this plan completed in September 1924 and approved in 1925. According to this plan, first Gazi Boulevard was formed and Cumhuriyet square formation was started. In 1932 with the opening of Gazi Statue and organization of its environment Cumhuriyet square took the ceremony area role of the Konak Square on itself and Konak Square which was the administrative center since 19th century partially lost this role. With the planning works after the fire till today İzmir downtown has shaped and located as this. According to this, area between historical Kemeraltı bazaar and İzmir fair, MIA function is still valid on main axis. In this region, there are bazaars, business quarters, many office buildings and few plazas and residences. In office sector research; Alsancak port region, Konak and Bornova and Karşıyaka district which are strong sub centers are also investigated with İzmir downtown. According to this, office types and price information are given below:

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6.2.1.1 Kemeraltı-Konak Region: In the scope of Kemeraltı-Konak region office sector research, Kemeraltı historical bazaar and Konak Square regions are investigated. According to this, mostly flats of office blocks are used as office. Especially in Kemeraltı bazaar office sizes are 15-40 m². In Konak Square and close regions of İzmir Metropolitan Municipality, office sizes in office blocks are generally 25-60 m². In this region there is a general parking lot problem. Multi floored parking lots and/or open parking lots close to office bocks are definitely fail to meet need.

Office sizes vary 15-90 m² and sale prices differ according to size and partly the location. Office size interval values are grouped: while creating the interval values personal usage and institutional usage needs are considered. According to gathered m² values, 3 interval values were created: These are;

• Offices vary 0-30 m², • Offices vary 31-60 m², • Offices bigger than 61 m².

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In Konak region offices in 0-30 m² interval average m² unit sale value is 1.509 TL (1.013 USD), 31-60 m² interval average m² unit sale value is 1.363 TL (915 USD), and in over 60 m² offices average m² unit sale price is 1.465 TL (983 USD). According to this, highest m² sale value is seen in 0-30 m² interval offices. 6.2.1.2 Çankaya Region: In the scope of Çankaya office sector research, region between Fevzi Paşa Boulevard, DR. Refik Saydam Boulevard, Şair Nevres Boulevard and Cumhuriyet Boulevard is investigated. According to this; there are commonly business quarters and office blocks and fever plazas in the region. Since there is no sector polarization through main axis, it is seen that textile on Gazi Osman Paşa Boulevard, tourism and accounting on Hilton hotel line, informatics, law offices, accounting on Gazi Boulevard; finance bodies, education institutions and law offices on Şair Eşref Boulevard are more in number. It is seen that most important problem in this region is parking lot. Current Multi floored parking lots and/or open parking lots close to office bocks are definitely fail to meet need. .

Office sizes vary 17-1600 m² and sale prices differ according to size and partly the location. Office size interval values are grouped: While creating the interval values personal usage and institutional usage needs are considered. When firstly sub divisions are investigated; ü On Fevzi Paşa Boulevard m² sale prices vary 1,200-1600 TL according to location, size and inner

features. On Fevzi Paşa Boulevard in the Basmane Train Station and Şifa Hospital vicinity m² sale prices vary 2,100-2,600 TL and it is seen that inner features of office and business quarters became more comfortable in this region.

ü In 9 Eylül Square where Konak municipality and many tourism offices are located m² sale prices of offices vary 1050-1,700 TL.

ü In prestigious region where Swiss Grand Efes Hotel, Hilton Hotel, Mövenpick Hotel are located (Region of Gazi OsmanPaşa Boulevard and Vali Kazım Dirik Avenue) m² sale price of office usage immovable vary 2.100-2.900 TL. In business quarter of Hilton hotel, values vary 3.500-4.500 TL/m² according to floor of the office.

ü On Hürriyet Boulevard, m² sale price of the offices vary 1.650-1.900 TL. ü Office m² sale prices on Şair Eşref Boulevard which is one of the main axes in the region vary 1.700-

3.000 TL. It is seen that values increase while going through Alsancak direction on subject Boulevard.

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ü On upper region of Cumhuriyet Boulevard as known as Gümrük-Pasaport where formerly Orkide Shopping mall was located m² sale prices vary 1.200-1.800 TL.

ü Office m² sale prices on and near Mimar Kemalettin Avenue specialized in textile sector which was re organized recently, vary 1.150-1.400 TL.

According to gathered m² values, 5 interval values were created: These are;

• Offices vary 0-50 m², • Offices vary 51-150 m², • Offices vary 151-300 m², • Offices vary 301-500 m², • Offices bigger than 500 m².

In Çankaya region offices in 0-50 m² interval, average unit m² sale prices are 2.056 TL (1.380 USD), in 51-150 m² interval average unit m² sale prices are 1.960 TL (1.315 USD), in 151-300 m² interval average unit m² sale prices are 1.958 TL (1.314 USD), in 301-500 m² interval average unit m² sale prices are 1.319 TL (885 USD), and in over 500 m² interval average unit m² sale prices are 2,546 TL (1.708 USD). According to this, highest m² sale value is seen in offices in 0-50 m² and over 500 m² intervals. 6.2.1.3 Alsancak Region: In the scope of Alsancak office sector research, region limited by Cumhuriyet Square, Alsancak Port and Mimar Sinan Avenue is investigated. It has been observed that there are 2 types of office usage in the region. First type is office flats transformed from apartment flats, and second type is office block offices. On Talatpaşa Boulevard, Kıbrıs Şehitleri Avenue, Kahramanlar Region and Ali Çetinkaya Boulevard it seen that office flat usage is common. In sector perspective office flats are dominantly preferred by doctor offices, health services, educational services, chambers and associations, and law offices. In Alsancak there is a general parking space problem. Multi floored parking lots and/or open parking lots close to office bocks are definitely fail to meet need. Office sizes vary 40-250 m² and sale prices differ according to size and partly the location. Office size interval values are grouped: While creating the interval values personal usage and institutional usage needs are considered.

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When firstly sub divisions are investigated; ü On Kıbrıs Şehitleri Avenue it has seen that office m² sale values vary 1.200-1.800 TL. demand and

accordingly m² sale values decreases while going to port. ü On Talatpaşa Boulevard which is one of the main axes in Alsancak region m² sale values of the

apartment flats used as office vary approximately 2.000-3.200 TL. Region between Sevinç Bakery and Alsancak Train Station is less preferred then region through Cumhuriyet Square.

ü On Cumhuriyet Boulevard m² sale values of immovable used as office vary 2.100-2.700 TL. Part of the Cumhuriyet Boulevard between Alsancak Train Station and Ali Çetinkaya Boulevard is the least preferred area in the region.

ü In the region of higher income groups, where Cumhuriyet and Gündoğdu Squares are located m² sale values of the offices vary generally 2.100-2.600 TL. In some cases, location, size and according to demand this value increases to 3.000-3.200 TL.

ü Especially Atatürk Sport Center and TRT Region Directorate neighborhood known as Kahramanlar is the highest preferred area for office use. Especially concentration of hospitals in this region makes it preferable for doctor offices and health services. It has been observed that office m² sale values vary 1.650-1.950 TL in this region.

ü Harbor neighborhood and Alsancak Train station surroundings are preferred by custom and logistic companies. Office m² sale values vary 2.000-2500 TL in this region. However, m² sale values of offices in back streets between harbor and Kıbrıs Şehitleri Avenue, vary 900-1.300 TL.

According to gathered m² values, 5 interval values were created: These are;

• Offices vary 0-50 m², • Offices vary 51-150 m², • Offices vary 151-300 m², • Offices vary 301-500 m², • Offices bigger than 500 m²..

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In Alsancak region offices in 0-50 m² interval, average unit m² sale prices are 3.436 TL (2.306 USD), in 51-150 m² interval average unit m² sale prices are 2.014 TL (1.352 USD), in 151-300 m² interval average unit m² sale prices are 3.072 TL (1.281 USD), in 301-500 m² interval average unit m² sale prices are 1.909 TL (1.281 USD), and in over 500 m² interval average unit m² sale prices are 2.547 TL (1.709 USD). According to this 0-50 m² interval has the highest m² sale value while 301-500 m² interval has the least m² sale value. 6.2.1.4 Bornova-Bayraklı Region: In the scope of Bornova-Bayraklı region office sector research, Bornova district Centrum and surrounding of New Courthouse are investigated. In Bornova region 25% of the business quarters have parking lots but this do not cover the need. Office sizes vary 20-120 m² and rent prices differ according to size and partly the location. Office size interval values are grouped: While creating the interval values personal usage and institutional usage needs are considered. When district Centrum was investigated it has seen that office usage is concentrated in M.Kemal Avenue, Gediz Avenue and Kazım Karabekir Avenues. These axes are also regions of trade where public bodies and finance bodies are concentrated.

In the surrounding of new Courthouse known as the extension of the new downtown; office flats are mostly used as law offices. With the new Courthouse, constructions in this region increased with the number of high quality business quarters. Parking space problem is solved compared to Centrum. All parking space needs are met. Office sizes vary 30-400 m² and rent prices differ according to size and partly the location.

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We tried to group offices in Bornova-Bayraklı region however since there is not enough data for every interval we created only 3 interval value according to obtained m² information. These intervals are 0-50 m², 51-100 m² and over 100 m².

• 0-50 m² offices…………2,009TL/m² • 51-100 m² offices…………2,184TL/m² • Over 101 m² offices…….2.906 TL/m²

6.2.1.5 Karşıyaka Region: In the scope of Karşıyaka office sector research, Karşıyaka downtown and part of Bahriye Üçok Boulevard were investigated. It has been observed that there are 2 types of office usage in the region. First type is office flats transformed from apartment flats, and second type is office block offices. It is seen that both type of usage is common in Karşıyaka downtown and Bahriye Üçok Boulevard. In sector perspective, office block offices and office flats are dominantly used as doctor office, health services and law offices.

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In Karşıyaka region office sizes vary 20-140 m² and rental values also increases according to size. Office size intervals are grouped as fallows. According to gathered m² values, 3 interval values were created: These intervals are 0-50 m², 51-100 m² and over 100 m².

In Karşıyaka region, demand for downtown Avenue is high due to intense pedestrian traffic and commercial activities. However since Karşıyaka Municipality Building, Government Office and many finance bodies are located on Bahriye Üçok Boulevard, this axis is also preferred. Especially underground parking lot owned by municipality on Bahriye Üçok Boulevard is an important advantage for region.

6.2.2 General Evaluation of İzmir Office Sector

In the study, it is seen that office usage in Izmir is concentrated Çankaya, Alsancak, Konak, Karşıyaka and Bornova regions in addition to this offices transformed from apartment flats are considerably preferred in Alsancak and Karşıyaka. Office usage in İzmir has differences based on regions, sectors, usage type, size and price. Since personal usage (doctor office, law office, dentist, accountant, and finance) is dominant in Karşıyaka,

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Bornova-Bayraklı region there is no office usage over 150 m². In dominant central regions such as Çankaya, Konak and Alsancak since sector structure is mixed, and attraction is high different office usages can be seen. In general below graph is prepared for the comparison of m² unit sale prices depending on office sizes based on regions.

In general, it seen that especially Bayraklı Region vicinity of new Courthouse and Alsancak Region will have new investments of with intense office usages. Some of these investments are under construction while others are still in project level however they can be attractive. 6.3 Shopping Mall Sector Report DEFINITION FOR SHOPPING MALL Shopping malls have a past dating back to 500 BC, and they have evolved into the present as one of the most important social living areas currently. The first examples of the shopping malls were the agora’s in the 500 BC, and they continued to developed in USDpe, and after the industrial revolution, the first modern shopping malls started appearing in the United States. Historically, the period when the modern shopping malls and stores first appeared was the nineteenth century. A small convenience store called the Bon Marche opened in 1852 in Paris; then it was converted into a large store where several products with the same brand were sold, and they were then expanded to USDpe and the United States. Since the beginning of the twentieth century, the increase in motor vehicles, the difficulties encountered in transportation within the cities, the urban Centers losing their attraction, and the accommodation and employment shifting outside the city gave lead to the first modern shopping malls. In 1922, the ‘Country Club Plaza’ that was opened in de Kansas City was the first example of a modern shopping mall, and they are fast developing in the present day, continuing to attractive for investors. Currently, in the shopping center projects throughout the world, it is observed that the regional Centers and super regional centers are losing their old attraction. New shopping mall projects are being considered with alternatives instead of static malls consisting of large masses of buildings, of only stores and food and beverage areas. He main objective here is to ensure that the person that arrives at the shopping center spends more time at the area, and to ensure that the shopping center becomes a part of the social life of the individual.

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SHOPPING CENTER (SCs) SITE SELECTION 3 factors are highly important in shopping center site selections. These factors are place, SCs concept and the retailer. These 3 factors are interrelated. Building a shopping center would not be a correct investment when one of the factors is missing. SITE: Site selection is of great importance for shopping center investment. Being at a central location and on transportation routes may increase the potential of the shopping center, but it is not sufficient on its own. SCs CONCEPT: The concept determined for the shopping center, should be in accordance with the feasibility study performed on the general human profile in the area. SCs should be supported by minimum one and preferably two or three main lessees who have high preferability by the customers, and it should be based on a theme if possible. RETAILER: Retail mixture, which is to be formed in the shopping center, must be determined by the retail sector so as to address the human population in the region. In this regard, in which physical places shopping centers are founded can be observed. Today shopping in cities is done:

• At roadside commercial axles, • Pedestrian commercial axles, • Open market places, • In-and out-city shopping centers.

The phenomenon of SCs, which spreads over the world in the last 20 years, is now done under the leadership of global retail groups and local partners of the globalizing market. Especially, SCs in Ankara metropolitan area can be divided into three main groups according to their relation with the urban texture:

1. SCs taking place in the settled urban texture. 2. SCs developing based on hypermarkets in the vicinity of the settled urban texture, on highways. 3. Large single hypermarkets in and/or in the vicinity of the urban texture and which does not comprise

stores. SCs TAKING PLACE IN THE SETTLED URBAN TEXTURE In Turkey, the quantity of suitable lands to construct shopping centers in the settled urban pattern is unfortunately low. The development of the existing areas with the correct projects brings the correct investment concept into question. The shopping centers located within the settled urban texture of Turkey both cover the functions such as restaurants, cinemas and cafes, and two or more big department stores varying according to their sizes. They are targeting to become centers of appeal thanks to these stores. The first requisite in choosing the place for these centers is, being located in the settled pattern of the city with high income level and wide market area. Atakule, Karum, Galleria, Ankuva, Bilkent Center, Panora, Arcadium, Mina&Sera, Antares, and KC Göksu are among the examples of such markets in Ankara. Antares and KC Göksu are the two of the examples for shopping centers developed in the urban pattern with low income level, basing on the lower level of competition and the big size of the market. Another common point of this type of centers is; the land on which such centers are developed belongs to the company or people who develop the project, or the landlord is not a direct investor but shareholder of the shopping center. In this example, a study of not the construction of the scheme on a correct place, but the construction of the correct scheme on the place is outlined. However, it is suitable to search places suitable for the targeted schemes, and the pattern of the city should be examined and a project suitable for that pattern should be developed. When the construction of the shopping

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centers are completed and they are opened; their impacts on the city’s technical, social infrastructure, traffic, noise, visibility, and local commercial operations should be considered and their developments should be foreseen by taking the necessary precautions. In general, without taking into account the entire of the entrepreneur market in such projects, and without taking into consideration the market variants, there is not a drawback in making a special application to the property held in hand. Today, when we look at the shopping centers that have been successful in Ankara, we see that they are developed with the concept of the correct project to the correct place This is the reason behind the success of the foreign-origin investors in this industry. SCs DEVELOPING BASED ON HYPERMARKETS IN THE VICINITY OF THE SETTLED URBAN TEXTURE, ON HIGHWAYS The basic characteristic of this kind of projects in the urban pattern is that they are developed as based on a hypermarket and developed under the leadership of a retail group. At this point, the retail industry and the shopping center industry should act together. At the mentioned type of shopping centers, the most important criterion of the retail group in question is its development strategy in the market of Turkey and Ankara. The following criteria are being located on the major transportation axes such as Eskişehir, Konya and Istanbul Roads, easy access to the highways and connection roads, the procurement of sufficient land size and the construction permit. The examples of this kind of shopping centers in Ankara are Cepa, Mesa Plaza, Ankamall, CarrefourSA, Armada, Millenyum, and Optimum. The investments supported by retail groups with shopping floors and DIY market areas both increase the number of clients to visit them, and reduce the risks of the investment with the synergy created. Therefore, taking into account the great size of their capital and their global positioning, it is possible to forecast that this type of shipping center investments will continue in the future, major retail groups or joint ventures will continue to be on the first ranks of shopping center development. LARGE SINGLE HYPERMARKETS IN AND/OR IN THE VICINITY OF THE URBAN TEXTURE AND WHICH DOES NOT COMPRISE STORES The third type, which is the stand alone markets in metropolitan areas covering wide lands, as specialized on a certain subject (wholesale, DIY) in general. There are not many establishments of this type in Ankara. Bauhaus Söğütözü, Praktiker Bilkent, Praktiker Etlik, Koçtaş Ankamall, Tekzen Optimum, Tesco-Kipa Panora, Metro, and Real Bilkent can be shown as the examples to this type in Ankara. THE TYPES OF SHOPPING CENTERS WITH THE DEFINITIONS ON THE WORLD International Shopping Centers Council (ICSC), have been classified shopping centers under 2 main headings and 8 types. Closed Shopping Centers ( Malls ) Super Regional Center: Shopping centers which have at least 80,000 sqm closed area, at least three anchor stores, and have 8-40 km zone of influence. Regional Center: Shopping centers which have 40,000-80,000 sqm closed area, have two or more anchor stores inside and have 8-24 km zone of influence. Super Regional Centers have more product diversity than Regional Centers. Open-Air Shopping Centers Power Center: Shopping centers which have three or more anchor stores, have 25,000-60,000 sqm closed area, and have 8-16 km zone of influence.

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Community Center: Shopping centers which have two or more anchor stores, have 10,000-35,000 sqm closed area, and have 5-10 km zone of influence. Neighbourhood Center: Neighbourhood Centers have designed in order to provide easy shopping opportunity for the costomer’s demand. According to ICSC, the anchor store is supermarkets in half of the shopping centers; the anchor store is drug store one-third of the shopping centers. In this sort of shopping centers there is no closed walking area; doors of the stores directly open to outside. Outlet Center: Shopping centers which have 5,000-40,000 sqm closed area, and have discount stores of producer firms instead of the anchor store. These centers have 40-120 m zone of influence. Theme/Festival Center: In these centers, the stores are rather united on a theme, in terms of architectural structure or the products they sell. In these centers, the common and main component is generally entertainment. Restaurants and entertainment facilities constitute the main stores. Lifestyle Center: They are generally located in high income residential areas, and they are shaped based on the commercial requirements and the life styles of the customers in their focus area. They use a commercial area of at least 15,000 sqm, with a target client of high income level, with specialty stores. The basic characteristic that distinguishes the shopping centers in this group from the others is that the drive for visiting the shopping center is “shopping” rather than “buying”. Table 5. Shopping Center Types

SCs TYPE CONCEPT SQM

ANCHOR STORES ANCHOR STORE RATIO

ZONE OF INFLUENCE

(KM) NUMBER TYPE CLOSED SHOPPING CENTERS ( MALLS)

Regional Center General goods, fashion

40.000 - 80.000 2 and +

Multiple-storey stores, discount multiple-storey stores, clothing stores 50 - 70% 8-24

Super Regional Center

Similar to regional center, but more diversity of product 80.000 < 3 and +

Multiple-storey stores, clothing stores 50 - 70% 8-40

OPEN AIR SHOPPING CENTERS ( MALLS)

Neighbourhood Center Daily need

3.000 - 15.000

1 and +

Supermarket 30 - 50% 5

Community Center

General goods, daily need

10.000 - 35.000 2 and +

Discount multiple-storey stores, supermarket, drugstore,D.I.Y., anchor clothing stores 40 - 60% 5-10

Lifestyle Center National lux speciality store

15.000 - 50.000 0 - 2

Bookstores, speciality stores, 0 - 50% 13-20

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chains, restaurant and entertainment

(can be less or more)

cinema with multiple palaces, multiple-storey stores

Power Center

Dominant anchor stores, limited butiques

25.000 - 60.000 3 and +

Category killer, D.I.Y., discount multiple-storey stores, warehouse club, off-price 75 - 90% 8-16

Theme/Festival Center

Leisure activities; with the aim of tourist, trade and service

8.000 - 25.000 N/A

Restaurants and entertainment N/A N/A

Outlet Center Outlet stores 5.000 - 40.000 N/A Outlet stores N/A 40-120

Anchor Store Ratıo = Anchor Store area / SHC area Source: ICSC At the shopping centers, the leasable area is more important than the number of total shopping centers and their total area. Because, in addition to the social facilities they provide, the shopping centers are also very important in terms of the employment they create. In the US 10 million people are employed in this industry, whereas, the number in Turkey is only 1 million. According to ICS standards, the distribution of shopping center types as per their leasable areas is as follows: Table 6. Types of Shopping Centers According to ICSC Standards

FORMAT SIZE LEASABLE AREA

CLASSICAL

Enormous 80.000 sqm and + Large 40.000-79.999 sqm Medium 20.000-39.999 sqm Small Comparative 5.000-19.999 sqm

Need Unifocal 5.000-19.999 sqm

SPECIALIZED

Retail Park

Large 20.000 sqm and + Medium 10.000-19.999 sqm

Small 5.000-9.999 sqm Outlet Center 5.000 sqm and + Tematik Centre of

entertainment 5.000 sqm and +

Not centre of entertainment

5.000 sqm and +

Source: July-August, 2006 Arasta Arasta-Shopping Centers and Retail Industry Magazine STATUS OF SHOPPING CENTRES IN USDPE The shopping centre boom in USDpe continues, with over 5 million sqm of new space completed across USDpe in 2006. Russia was by far the most active market, with 1.4 million sqm opened in 36 schemes. Italy (0.61 million sqm) and Spain (0.57 million sqm) were the second and third most active markets, followed by Germany, Turkey and Poland. As expected, emerging and maturing markets dominate new development; the exception being Germany. Although a mature market in terms of evolution, Germany’s shopping centre stock is relatively old and stock per head is still low. The current development program will increase the level of high quality retail provision in city centre locations with the focus on small and medium sized schemes.

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A Record Supply of New Space is due in 2007-2008. Russia has the largest development pipeline in USDpe by some distance, with approximately 4 million sqm due for completion in 2007-2008 (See Figure 4). Turkey is in second place with 2.2 million sqm, just ahead of Italy (also 2.2 million sqm) and Poland (1.9 million sqm). Figure 4. Dispersion Rentable Areas in USDpe Countries of Per 1.000 People (sqm)

Source: Cushman & Wakefield As predicted by Jones Lang LaSalle last summer, Eastern USDpe has become the main development hotspot, although activity levels also remain high in the south. Figure 5. Existing Shopping Centre Stock and Pipeline 2007-2008

Source: Cushman & Wakefield

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Table 7. Annual Avarage Rental Income Value (USD) and Net Profit Ratios (%) in Rentable 100-200 sqm Units in Some USDpean Countries

COUNTRY RENT (USD/SQM/YIL) NET PROFIT (%)

Belgium 1.000-1.300 4,75-5,25 Czech Republic 600-900 5,00-5,50 Denmark 450-550 4,50-4,75 Finland 900-1.100 4,75-5,75 France 1.500-2.000 4,75-5,25 Germany 1.500-1.800 5,50-6,00 Hungary 600-1.450 5,50-6,00 Ireland 1.700-2.000 4,25-4,75 Italy 700-800 5,25-5,75 Netherland 650-875 4,75-5,50 Poland 600-1.100 5,25-5,75 Portugal 900-1.000 5,25-5,75 Russia 2.000-3.000 9,50-10,50 Spain 700-1.000 5,00-6,75 Sweden 600-800 5,00-5,50 Turkey 600-800 7,00-8,00 United Kingdom 2.000-2.500 5,25-6,00 Source: Cushman & Wakefield SITUATION OF SHOPPING CENTERS IN TURKEY “Shopping Center Projects” have become one of the brightest investments in Turkey in the last few years. Their story in this county began 17 years ago, when Galleria was opened in Ataköy Tourism Complex. Galleria was followed by Karum (1991), Akmerkez (1993), Capitol (1993), Carousel (1995), CarrefourSA (1996), Grandhouse (1997), Migros (1998), Profilo (1998) and Mayadrom (1997) Shopping Centers. Today the total rentable area of the shopping center projects in Turkey is 3,000,000 sqm, and new projects are coming on stream rapidly. The shopping centers sector in Turkey showed a continuously increasing acceleration in Turkey in the last five years, and has become one the most important locomotive industries of Turkey. The appeal of the shopping centers, whose number increases rapidly in Turkey and especially in Istanbul, is closely related with the improvement of economy. Being also an attractive alternative for foreign real estate investors; the internationally-invested ‘Shopping Center Projects’ has also showed favorable developments together with the talks held with USDpe on the political arena. The positive developments such as economic improvement, the process of accession to USDpean Union, and the political stability are the major factors that have led attracted the interest of foreign investors on Turkey. Since the opening of the first shopping center in 1988, the number of shopping centers increased day by day and the number of shopping centers, which was 3 in 1980s, while it increased to 32 in 1990s, and 189 on May 2008. It is thought that the primary regions for shopping center investments in the future will be Mediterranean and Central Anatolia. Similarly, the investments are also to continue in Istanbul, which is the commercial center of Turkey with its population and share in expenditure.

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Figure 6. Distribution of Shopping Centers as per Provinces (%)

İstanbul38%

Ankara11%

İzmir8%

Konya5%

Muğla5%

Antalya5%

Bursa5%

İzmit3%

Tekirdağ3%

Adana3%

Diğer İller14%

SHC DISPERSION IN CITIES

İstanbulAnkaraİzmirKonyaMuğlaAntalyaBursaİzmitTekirdağAdanaDiğer İller

Currently, when the overall Turkey is examined in terms of shopping center investments, it is

noted that the investments are mostly concentrated in Marmara Region, where the purchasing power, level of education and percentage of literacy are higher than the other

regions. It is followed by the Aegean and Mediterranean Regions.

In Ankara, there are 18 shopping mall which are in project stage or under construction. In terms of investments, Ankara rank after İstanbul.

On the other hand, development will continue in Anatolia and Mediterranean Regions. Ana attractive investments are expected in Eskişehir, Kayseri, İzmir, Antalya, Trabzon.

6.3.1. STATUS IN SHOPPING MALLS IN İZMİR At present, there are 17 shopping center and 4 other shopping centers 2 of which are under construction and the remaining ones in project stage. Total closed area of present shopping centersthat were built between 1994-2009 years in Izmir is approximately 593.200 sqm and approximately 295,033 sqm of this area is rentable area.

1. PRESENT SHOPPING MALLS IN IZMIR • tHE average rental values of the stores in the shopping malls in Izmir vary between 20 $/sqm/month

and 110 $/sqm/month, the average sqm prices in the catering areas vary between 15 and 100 $/sqm/month with a large range.

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Table 8. Present Shopping Malls in İzmir

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Shopping Centers in Bornova District

Name: PARK BORNOVA OUTLET CENTER Location: Ankara Asfaltı-Bornova/İZMİR Investor: Mat İnşaat Sanayi ve Tic. A.Ş. Developer: Mat İnşaat Sanayi ve Tic. A.Ş. Architectural Design: İnaş İnşaat Management Consultancy: MLM Yönetim ve Organizasyon Tic. Ltd. Şti. Development value: 3.000.000-$ Construction Begin Date: 2005 (Opened after the renovation) Completion Date: 2004 Opening Date: 13.11.2004 Land Area: 33.000 sqm Enclosed Area: 17.000 sqm Leasable Area: 11.000 sqm Number of Floors: 1 Parking capacity: Opened 16.500 sqm; 1500 cars Number of stores: 50 Store Areas: 10 sqm- 952 sqm, Big Stores: LC Waikiki (952 sqm), Sarar (652 sqm), Fabrika Altınyıldız (582 sqm), Aydınlı (576 sqm)

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Name: FORUM BORNOVA Location: Bornova/İZMİR Investor: Multi Turkmall Gayrimenkul Yatırım İnşaat ve Tic. A.Ş/ Commerz Grundbesitz-Investmentgesellschaft GmbH Developer: Multi Turkmall Gayrimenkul Yatırım İnşaat ve Tic. A.Ş Architectural Design: : T-T Design, Gouda, Hollanda Management Consultancy: Multi Turkmall Gayrimenkul Yatırım İnşaat ve Tic. A.Ş Development value: 120.000.000-€ Construction Begin Date: 31.08.2005 Completion Date: 2006 Opening Date: 12.10.2006 Land Area: 200.000 sqm Enclosed Area: 72.000 sqm Leasable Area: 62.000 sqm Number of Floors: 1-2 Parking capacity: Opened, 82.000 sqm, 3.000 cars Number of stores: 130 Store Areas: 15 sqm-1.697 sqm Big Stores: Zara (1.697 sqm), EP Center (1.280 sqm ), D&R (855 sqm ), Conbipel (790 sqm), Park Bravo (732 sqm), Pull&Bear (639 sqm), Massimo Dutti (558 sqm ), Bershka (539 sqm ), River Island (510 sqm)

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Name: TESCO KİPA -BORNOVA SHOPPİNG CENTER Location: Ankara Karayolu-Bornova/İZMİR Investor: Tesco Kipa Kitle Pazarlama Tic. Ve Gıda San. A.Ş. Developer: Tesco Kipa Kitle Pazarlama Tic. Ve Gıda San. A.Ş. Architectural Design: Umo Mimarlık Management Consultancy: (Provided within the company) Development value: N/A Construction Begin Date: 17.08.1992 Completion Date: 1994 Opening Date: 18.10.1994 Land Area: 48.800 sqm Enclosed Area: N/A Leasable Area: 9.131 sqm Number of Floors: 1 Parking capacity: Opened 675 cars Number of stores: : 20 Store Areas: 10-150 sqm Big Stores: N/A

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Shopping Centers ın Karşıyaka District

Name: EGE PARK MAVİŞEHİR MODA VE SHOPPİNG CENTER Location: Mavişehir-Karşıyaka/İZMİR Investor: Ege Varlık Yönetim A.Ş. Developer: Provided within the company Architectural Design: Art Mimarlık Management Consultancy: Ege Varlık Yönetim A.Ş. Development value: 37.000.000-YTL Construction Begin Date: N/A Completion Date: 1999 Opening Date: 20.11.1999 Land Area: 17.230 sqm Enclosed Area: 40.000 sqm Leasable Area: 22.000 sqm Number of Floors: 3 Parking capacity: 6.000 sqm, Opened 700, closed 100 cars Number of stores: 120 Store Areas: 50-600 sqm Big Stores: Mario Plaza, Mudo City, Sport’s Life

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Name: CARREFOURSA SHOPPİNG CENTER Location: Mavişehir-Karşıyaka/İZMİR Investor: Carrefour Sabancı Tic. Merkezi A.Ş. Developer: Sayman Danışmanlı ve Tic. Ltd. Şti. Architectural Design: Era Şehircilik Mimarlık Müşavirlik Ltd. Şti. Management Consultancy: Sayman Danışmanlı ve Tic. Ltd. Şti. Development value: N/A Construction Begin Date: N/A Completion Date: 2000 Opening Date: 10.09.2000 Land Area: 99.000 sqm Enclosed Area: 46.000 sqm Leasable Area: 35.100 sqm Number of Floors: 2 Parking capacity: 53.000 sqm, Opened 2.100 sqm Number of stores: 77 Store Areas: 50-1500 sqm Big Stores: MarksαSpencer , Monopeto , Toys’R’Us

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Shopping Centers İn Balçova District

Name: PALMİYE SHOPPİNG CENTER Location: Balçova/İZMİR Investor: Başarı Yatırımlar Sanayi ve Tic. A.Ş. Developer: Provided within the company Architectural Design: Tektonika Mimarlık-Semra Teber Management Consultancy: Pamaş Palmiye AVM Yönetim ve Tic. A.Ş. Development value: N/A Construction Begin Date: N/A Completion Date: 2003 Opening Date: 04.10.2003 Land Area: 15.000 sqm Enclosed Area: 23.500 sqm Leasable Area: 10.053 sqm Number of Floors: 3 Parking capacity: 10.000 sqm, Opened 100, closed 300 cars Number of stores: 108 Store Areas: 35-520 sqm Big Stores: Tahsin, Koton , Pissy

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Name: AGORA SHOPPİNG CENTER Location: Balçova/İZMİR Investor: Odak İnşaat Mühendislik Madencilik San. Ve Tic. A.Ş. Developer: Odak İnşaat Mühendislik Madencilik San. Ve Tic. A.Ş. Architectural Design: Prodek Mimarlık Management Consultancy: Odak İnşaat Mühendislik Madencilik San. Ve Tic. A.Ş. Development value: N/A Construction Begin Date: N/A Completion Date: 2003 Opening Date: 14.03.2003; the additional building openning date is 10.09.2008 Land Area: 20.000 sqm Enclosed Area: 89.000 sqm Leasable Area: 29.400 sqm Number of Floors: 2 Parking capacity: 2.100 closed Number of stores: 178 Store Areas: 50-1373 sqm Big Stores: Mudo City, Mar&Spencer , LC Waikiki, Paşabahçe

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Name: ÖZDİLEK SHOPPİNG CENTER Location: İnciraltı-BalçovaİZMİR Investor: Özdilek Grup Developer: Özdilek Grup Architectural Design:N/A Management Consultancy: Provided within the company Development value: N/A Construction Begin Date: N/A Completion Date: 2001 Opening Date: 15.11.2001 Land Area: N/A Enclosed Area: 20.000 sqm (Total Shopping Center) Leasable Area:N/A Number of Floors: 2 Parking capacity: 1000 cars Number of stores:There is one store provided within the company Store Areas: N/A Big Stores: Özdilek AVM

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Name: TESCO KİPA -BALÇOVA SHOPPİNG CENTER Location: BalçovaİZMİR Investor: Tesco Kipa Kipa Kitle Pazarlama Tic.ve Gıda San.A.Ş. Developer: Tesco Kipa Kipa Kitle Pazarlama Tic.ve Gıda San.A.Ş. Architectural Design: Y. Mimar Semra Teber Yener (Tektonika Ltd) Management Consultancy: Provided within the company Development value: 20.000.000-YTL Construction Begin Date: N/A Completion Date: 2007 Opening Date: : 05.04.2007 Land Area: 42.700 sqm Enclosed Area: 80.000 sqm Leasable Area: 29.384 sqm Number of Floors: 4 Parking capacity: 1250 cars Number of stores: 70 Store Areas: Max 4.556 sqm Big Stores: Boyner , Tepe Home , Sports Park

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Name: SELWAY OUTLET PARK-BALÇOVA Location: Balçova İZMİR Investor: Nejat Gıda Tur. Tic. A.Ş. Developer: Sel Group Architectural Design: N/A Management Consultancy: Provided within the company Development value: 5.000.000-$ Construction Begin Date: 2005 Completion Date: 2006 Opening Date: 17.11.2006 Land Area: 7.200 sqm Enclosed Area: 7.200 sqm Leasable Area: 7.200 sqm Number of Floors: 1 Parking capacity: 10.000 sqm, opened 300 cars kapasiteli Number of stores: 44 Store Areas: 50-900 sqm Big Stores: Mudo Outlet

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Name: EGEPARK BALÇOVA Location: Balçova İZMİR Investor: Ege Varlık Yönetim A.Ş. Developer Neşet Elbirlik Architectural Design: Gözde Gündüzalp Ertekin Management Consultancy: - Development value: Ege Varlık existing building, $ 31,500,000 'a bought. Construction Begin Date: 1998 Completion Date: 2009 Opening Date: March,2009 Land Area: 55.000 sqm Enclosed Area: 45.000 sqm (Shopppingmall:16.000sqm) Leasable Area: 16.000 sqm Number of Floors: 23 (Shopping mall:3) Parking capacity: 1.000 cars Number of stores: 110 Store Areas: 50-4.000 sqm Big Stores: Best Buy

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Shopping Centers in Konak District

Name: PASSTEL SHOPPİNG CENTER Location: Pasaport-Konak/İZMİR Investor: Zorlu Group Developer: Zorlu Group Architectural Design: N/A Management Consultancy: N/A Development value: 34.000.000-$ Construction Begin Date: 2007 Completion Date: 2008 Opening Date: 2008 Land Area: 15.000 sqm Enclosed Area: 15.000 sqm Leasable Area: 10.000 sqm Number of Floors: 6 Parking capacity: Opened 300, closed 150 cars Number of stores: 18 Store Areas: 50-500 sqm Big Stores: It closed but Migros is still on active duty

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Name: KONAK PİER SHOPPİNG CENTER Location: Konak/İZMİR Investor: Ege Varlık Yönetim A.Ş. Developer: Ege Varlık Yönetim A.Ş. Architectural Design: N/A Management Consultancy: N/A Development value: 60.000.000-$ Construction Begin Date: 03.1997 Completion Date: 2003 Opening Date: 2003 Land Area: 8.000 sqm Enclosed Area: 13.500 sqm Leasable Area:N/A Number of Floors: 1-2 Parking capacity: opened (3-5 cars) Number of stores: 56 Store Areas: 50-80 sqm Big Stores: Beymen, Home Store, Live’s, Sevil

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Name: Gürel SHOPPING CENTER Location: Alsancak/İZMİR Investor: Gürel Gayrimenkul Anonim Şirket Developer: Gürel Gayrimenkul Anonim Şirket Architectural Design: N/A Management Consultancy: N/A Development value: 5.000.000-$ Construction Begin Date: 2007 Completion Date: 2008 Opening Date: September 2008 Land Area: 400 sqm Enclosed Area: 1.500 sqm Leasable Area: N/A Number of Floors: 5 Other Features: Marks & Spencer

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Shopping Centers in Gaziemir District

Name: TESCO KİPA -GAZİEMİR SHOPPİNG CENTER Location: Gaziemir / İZMİR Investor: Tesco Kipa Kipa Kitle Pazarlama Tic.ve Gıda San.A.Ş. Developer: Tesco Kipa Kipa Kitle Pazarlama Tic.ve Gıda San.A.Ş. Architectural Design: N/A Management Consultancy: Provided within the company Development value: N/A Construction Begin Date: 1999 Completion Date: 2000 Opening Date: 01.07.2000 Land Area: 15.000 sqm Enclosed Area: 15.000 sqm Leasable Area: 7.734 sqm Number of Floors: 3 Parking capacity: Opened 88 cars, closed 274 cars. Number of stores: 18 Store Areas: N/A Big Stores: N/A

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Shopping Centers in Çiğli District

Name: TESCO KİPA- ÇİĞLİ SHOPPİNG CENTER Location: Çiğli/İZMİR Investor: Tesco Kipa Kitle Pazarlama Tic. Ve Gıda San. A.Ş. Developer: Tesco Kipa Kitle Pazarlama Tic. Ve Gıda San. A.Ş. Architectural Design: Umo Mimarlık Management Consultancy: Provided within the company Development value: N/A Construction Begin Date: 1997 Completion Date: 1999 Opening Date: 18.11.1999 Land Area: 58.000 sqm Enclosed Area: 85.500 sqm Leasable Area: 29.531 sqm Number of Floors: 3 Parking capacity: Opened 700, closed 1100 cars Number of stores: 91 Store Areas: 100-5.626 sqm Big Stores: Boyner , Joker Maxitoys, Paşabahçe

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Adı: ÇİĞLİ ALIŞVERİŞ ve KÜLTÜR MERKEZİ (SILLION AVM) Location: Çğli Investor: İl Özel İdaresi İhalesi: Katal İnşaat, M.Ç.K. Tekstil, Özdemirkol İnşaat, Rodi-Yars-Graniser, Kerem Özcan İnşaat ve Erişen İnşaat Developer: İl Özel İdaresi Architectural Design: Eser Şahin Management Consultancy: İl Özel İdaresi Development Value: 13.000.000 $ Construction Begin Date: 2007 Completion Date: 2009 Opening Date: 2009 Land Area: 4.473 Enclosed Area: 23.000 sqm Leasable Area: 3.516sqm (AVM), 2.703 sqm (OTEL) Number of Floors: 12 Parking capacity: 1.700 Number of stores:44 Store Areas: 25-1500 sqm Big Stores: Kipa Express, Barçın Sport Parking capacity: Opened 700, closed 1100 cars

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Figure 7 Areal Development of Shopping Centersin Izmir (1994-2008)

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1994

1999

2001

2004

2007

1999

2001

2003

2005

2007

Kiralanabilir Alan

Toplam Alan

Fıgure 8. Location of the Shopping Centers in Izmir

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Figure 9.Dispersion of Leasable Areas of Shopping Centers in İzmir by Counties

2. SHOPPING MALLS UNDER CONSTRUCTION Shopping center investments which are under construction with ongoing marketing studies have gained speed with the positive developments in economy and most of them are located in Istanbul with cities Ankara, Kayseri, Izmir, Antalya following. There are 1 shopping center projects under construction in Izmir. Most of these shopping center is planned to be completed in the last quarter of 2008 and remaining ones will be completed between 2010-2011 years. Adı: Aksoy Residence+İzmir Galleria

Yer: Alsancak Limanı-Konak/İZMİR Yatırımcı: Aksoy Ailesi Geliştirici: Aksoy Ailesi Mimari Tasarım: Orhan Erdil Yönetim Danışmanlığı: - Yatırım Değeri: - İnşaat Başlangıcı: 2007 Tamamlanma Tarihi: 2010 Açılış Tarihi: - Arsa Alanı: - Toplam İnşaat Alanı: 40.000 sqm (SHC Square:16.000 sqm) Toplam Kiralanabilir Alan: 16.000 sqm Kat Sayısı: 20 kat (SHC, 4 floors) Diğer Özellikler: Aksoy Residence is the first residence of Izmir with a shopping mall.

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3. SHOPPING CENTERSIN PROJECT STAGE In accordance with the development and rapid acceleration in the shopping center sector, new shopping center projects are being prepared primarily in Istanbul and then in Ankara, Eskişehir, Kayseri, Izmir, Antalya, Trabzon throughout Turkey. Some of the shopping centersin project stage have prepared projects and some of them are just in thinking stage. For this reason, there is brief information about some shopping centersin project stage with their names in the table below. Varyap İnşaat Limanarkası Shopping Center Project: Varyap Varlıbaşlar which is known for its Uphill Court projects and is an aspirant for Izmir Büyük Efes Hotel’s privatization which’s bid was won by Tahincioğlu Nida MV Joint Venture plans a project in Izmir that has a shopping mall, trade office and 5 star hotel in it with an investment of 400 million dollars. It is planned to build the biggest shopping center of Izmir in the project with an area of 145,000 sqm that is planned to commence on an area of 50 dunams located behind the Izmir Port. It is planned to build the 90,000 sqm of this project as shopping mall, approximately 200-250 stores on total of 45,000 sqm of rentable area. World Trade Center – Basmane Project: Construction of the Dünya Trade Center on an area of approximately 30,000 sqm which is known to be Basmane Çukuru, in Konak district, Basmane location has commenced in 1997. It has not been able to complete the project which is designed as two towers with 35 and 25 floors for legal issues. Construction has been stopped. 4. RENTABLE AREAS OF PRESENT SHOPPING CENTERS The average rental values of the stores in the shopping centersin Izmir vary between 10 and 100 $/sqm/month, the average sqm prices in the catering areas vary between 15 and 100 $/sqm/month with a large range. In Izmir, for hypermarket rentals in shopping centers, the rental contracts are mainly based on turnover commission agreements. Table 9. Rental Information of Present Shopping Centers

No SHOPPING MALL FOOD COURT

RENTAL (USD/sqm/MONTH)

STORE RENTAL KİRA (USD/sqm/MONTH)

1 Agora Shopping Center 40-50 40-75

2 CarrefourSa Karşıyaka SHC 15-20 25-30

3 Ege Park Mavişehir SHC 60-80 40-60

4 Passtell Shopping Center Only Migros is still on active duty

5 Forum Bornova 80-100 65-75 (120 USD/sqm for small store)

6 Tesco-Kipa SC 50-70 30-50

7 Tesco-Kipa SHC 40-50 30-50

8 Tesco-Kipa Shopping Center 35-50 35-50

9 Tesco-Kipa Shopping Center 30-40 20-25

10 Palmiye Shopping Center 10-40 20-50

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11 Park Bornova Outlet Center 25-40 10-40

12 Özdilek Shopping Center Not rent

13 Konak Pier Shopping Center 30-35 55-70

15 Sillion SHC 30 30

16 Ege Park Balçova Only Best Buy is openned.

Marks&Spencer - -

17 Selway Outlet Park 20 15 5. ANALYSIS Analysis of Existing Shopping Centers in Izmir Province: In Izmir, there are currently 18 shopping centers (17 are active) in total, and 2 shopping centers currently under construction. The shopping centers with currently ongoing construction are planned to be completed in the end of 2010. The shopping centers that are currently being constructed selected their locations in Alsancak-Konak district. There are currently 6 shopping centers in total in Balçova district. In Balçova District, total SHC area is 142,800 sqm, and the leasable area is 95,037 sqm. Ege Park Balçova Shopping Center (Ege Varlık Yönetim A.Ş.) in Balçova district is to be opened in early 2010 and its anchor store Best Buy has begun to operate. There are currently 3 shopping center in total in Bornova district. Total leasable area in Bornova District is 82,131 sqm. Forum Bornova is among the most favorite shopping centers in overall province. There are currently 2 shopping center in total in Karşıyaka district. Total leasable area in Karşıyaka District is 57,100 sqm. There are currently 3 shopping center in total in Konak district. Total leasable area in Konak District is 25,000 sqm. The stores in Pastell SHC in Konak district have been evacuated due to the decision for the demolishment of the shopping center. However, Migros on the ground floor is currently active. There is one shopping center which is currently being constructed in Konak district, and the existing+under construction total leasable area is 31,000 sqm. There are currently 3 shopping center at the design stage in Konak district. There is currently one shopping center and one Outlet Park in Gaziemir district. Total leasable area in Gaziemir District is 7,734 sqm. There are currently 2 shopping centers in total in Çiğli district. Total leasable area in Çiğli District is 45,531 sqm. Sillion SHC was opened in 2009, and 2,703 sqm area other than the shopping center area in it has been rented by Anemon Hotel. According to the population data, 4% population increase is estimated from the year 2008 Address-Based Census to 2009 census. At the shopping centers without leasable area information, 35% of the construction area is considered as the leasable area and thus an average leasable area value is calculated.

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In terms of population, SHC rental rate in Balçova, Bornova and Çiğli Districts is higher than the average of Izmir; meanwhile the rental rate in Konak, Gaziemir and Karşıyaka Districts is lower than the average of Izmir.

• Upon the examination of the locations of shopping centers in Izmir province terms of their general characteristics and layout, it is noted that most of these areas are concentrated in Balçova, Bornova, Karşıyaka, Çiğli districts. The issues taken into consideration when selecting the location for shopping centers are proximity to the market, means of access, sufficiency of labor and cost, infrastructural works, public policies and social and cultural services.

• In Izmir province, there are currently 17 active shopping centers and other 2 shopping centers are

under construction. With the completion of the shopping centers which are currently being constructed, the number of active shopping centers is expected to reach 17 in 2010. (It is considered that Pastel SHC will be demolished).

• One shopping center, which is currently being constructed in İzmir, is foreseen to be completed in 2010.

• In addition, together with the completion of two other shopping centers which are currently being

designed, the number of shopping centers in the city is expected to reach 20 in the next 5 years.

• When the location distribution of the shopping centers which are currently under construction and at project stage are examined, it is noted that the concentration is in Çankaya, Alsancak and Port regions, which is contrary to the current situation.

• Foreign investors, who have been observing the dense demand for shopping centers, entered in

the market recently and they are trying to increase their shares. Among the foreign investment companies, Megatürk, Redevco and Multi Turkmall have investments in the city.

• When the per capita leasable area sizes in USDpe and in Turkey are compared, Turkey still

remains at the lower ranks. With a very high young population and rapidly changing consumption habits, in Turkey and especially in Ankara, the numbers of shopping centers, leasable areas, and the store numbers are also expected to increase in the forthcoming years.

• In terms of population, SHC rental rate in Balçova and Çiğli Districts is higher than the average of Izmir; meanwhile the rental rate in Konak, Gaziemir and Karşıyaka Districts is lower than the average of Izmir.

• Besides, according to the data obtained as a result of researches and interviews, a shrinkage has been identified in the SHC sector in terms of rentals. We have been informed that agreements on new rentals have become difficult, and that anchor stores contract via their turnovers. In addition, USD and dollar exchange rates are being fixed at a certain rate when the rentals of the stores in the shopping centers are being determined in the beginning of the year. This shrinkage and decrease in rents are expected to continue in 2010.

• We have been informed that the property is not registered as a preserved cultural or natural asset

in the current zoning plan, but the required modification plan is being made according to the decision of Izmir No. 1 Board of Preservation of Cultural and Natural Assets. The modification plan in question is currently being approved by Izmir No. 1 Board of Preservation of Cultural and Natural Assets.

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• According to the information obtained from the client, it is stated that the approved architectural design will be revised according to the following information and currently the following information is to be valid; and the projection calculations have been made according to these values in accordance with the client’s request.

However, the global financial crisis which broke out in the third quarter of 2008, has influenced the market economies of mainly the United States, USDpean countries and many developing countries. Many investment and deposit banks came to the threshold of bankruptcy, they have been either sold or acquired by the state and tried to be rescued with public aid. Real estate market has entered a stable period due to the increasing loan interests, postponement of investments and future forecasts. Table 10 Intensity of Present Shopping CentersAccording to Their Rentable Area

TOTAL RENTABLE AREA AT PRESENT (SQM)

ACCORDING TO 2009 CENSUS (PEOPLE)

INTENSITY (SQM/1,000

PEOPLE Bornova District 82.131 408.336 201 Karşıyaka District 57.100 307.573 186 Balçova District 95.037 79.628 1194 Konak District 25.000 427.556 58 Gaziemir District 7.734 116.635 66 Çiğli District 45.531 159.648 285 İzmir Province 312.533 1.499.376 208 According to population, AVM rental ratio in Balçova, Bornova and Çiğli districts is higher than Izmir average; and lower in Konak, Gaziemir and Karşıyaka districts. 6.3 Close Surroundings of the Project Area in terms of the Convention Center “Congress Tourism”, which is defined as the touristic activities created by speakers and audience participating in such events as congresses, seminars, and conventions organized on various subjects during certain times by international organizations, gained acceleration in Turkey with the Habitat 2 summit, which was organized in 1996. Congress and convention tourism, even though not frequently brought into the agenda, is considered as a sector by itself today all around the world. Experts say that the convention and congress sector continues to develop and grow despite the increase in oil prices, foreign exchange rate fluctuations, security concerns, and increasing pressures imposed in the direction of getting maximum results from meetings. Bright days are thought to be awaiting Turkey with this respect because researches show that Turkey is ranked 13th among the most preferred 50 destinations. The largest share in this franking of Turkey belongs to Istanbul, which is increasingly included in the agendas of convention and congress organizers every year. Today Istanbul is among the important destinations within the international convention and congress market and has reached a level, where she can compete with such significant congress cities as Barcelona, Vienna, Paris, Roma, and Hong Kong. The countries getting the largest share from the world’s congress tourism are the USA, the United Kingdom, the Netherlands, Japan, and Spain, respectively. Congress tourism, the indirect revenues of which are calculated as 250 billion dollars all around the world, constitutes thirty percent of the world’s tourism pie. Turkey, on the other hand, earns much less from this pie compared to her revenues from tourism. While Turkey has succeeded to attract a total of 83 thousand people to 95 congresses on the basis of congress participants, Portugal could only manage to attract 70

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thousand people to 153 congresses. This constitutes one of the data that indicates the potential of Istanbul and Turkey of being preferred as a destination and it also shows the serious development process Turkey is going through. In addition, while the number of congresses organized in Turkey was 1,150 during the 1994-1998 period, this figure displayed a 330 percent increase and reached 4,128 between 2003 and 2007 and 1,300 congresses were organized in 2008. It is stated based on the 2008 data that the world tourism market is worth 8 trillion dollars. According to the statistics of the ICCA (International Congress and Convention Association); Turkey ranks 25th with 95 conventions among the countries that organize congresses and Istanbul shares the 19th rank with Kuala Lumpur and Brussels. The first 3 places, on the other hand, are occupied by the USA with 467 congresses, Germany with 430 congresses, and Spain with 307 congresses, respectively. On the other hand, ICCA gives these figures as an estimate because it is very difficult to reach sound data with regard to revenues and number of participants in congress tourism. The numbers of congresses and participants may sometimes be much higher or lower than planned. This plays a significant role in the inability to reach actual figures. According to the foreign visitor surveys of the State Statistics Institute around 300-350 foreign visitors come to Turkey every year to participate in congresses and conventions. While Istanbul is continuing to get her name heard in the world in congress tourism, Antalya, Izmir, and Ankara stand out as the cities continuing their efforts in this field. Being the 19th in the congress tourism ranking, Istanbul currently hosts 90 percent of the congresses organized in Turkey. However, the most important problem of all provinces is the scarcity of large congress halls with extensive capacities. Turkey has taken major steps particularly as a result of new hotels placing importance on this issue. Among the gradually developing popular congress tourism centers of Turkey are Istanbul with her geopolitical and economic position, Ankara with her political position, İzmir, Muğla, and Antalya with their geological positions, and Cappadocia with her geological position. Efforts are continuing in such regions as Antalya, Kuşadası, Bursa, Denizli, Konya, Trabzon, Kayseri, Gaziantep, Manisa, and Cappadocia in order to spread congress tourism throughout Turkey. According to the data of the International Congress and Convention Association (ICCA), a total of 6,681 congresses were organized in the world in 2007. When we examine the congresses organized based on their subjects, medical sciences ranks the 1st with a share of 19 percent. It is followed by science with 14 percent and industry with 13 percent. When they are evaluated on sectoral basis in terms of tourism, our country mostly hosts the medicine and informatics sectors. There are new investments of congress tourism in Anatolia. The most important place is occupied by Antalya in congress tourism of Turkey after Istanbul. Antalya receives a serious share from the congress pie within the domestic market. While efforts concerning congress tourism are continuing in Ankara and İzmir, the new congress center, the construction of which has recently started in Kuşadası is hoped to transform the region into a center of attraction. According to the research conducted by the Right Solution, 64 percent of congress organizers state that they would be affected from economic contraction and budgetary restraints. Therefore, congress organizers will place even more importance on costs in 2009 and they will have to head for easily accessible destinations. Having hosted 46 and 55 exhibitions, conventions, and symposiums in 2006 and 2007, respectively, İzmir doubled her revenues in this field with her dynamism in 2008. 58 international exhibitions, conventions, and symposiums were held in 2008. İzmir is taking firm steps towards reaching her objective of being the city of conventions and exhibitions, which she has dreamt for years, in 2009 as well. Having organized the 1st International Symposium with the participation of 101 guests from 55 countries that are members of the Bureau of International Exhibitions (BIE) between 15 and 18 October within the

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framework of EXPO 2015 candidacy activities, İzmir also hosted the 66th Plenary Meeting of the International Cotton Advisory Committee in 22-26 October with the participation of 400 foreign guests from 50 countries. The Çeşme Sheraton and Altınyunus Hotels took priority in congresses and symposiums to be organized in İzmir in 2008. The Çeşme Sheraton Hotel hosted 10 national and international organizations. 4 organizations, on the other hand, were held at the Altınyunus Hotel. The İnciraltı Crowne Plaza Hotel and the Tepekule Congress and Business Center also contributed to the objective of Izmir of becoming the center of exhibitions and conventions by hosting 4 organizations each. 2007 and 2008 were quite productive years in the sector and Turkey hosted many congresses during the first quarter of 2009. New congress centers continuing to open in Istanbul, which has gained a place in congress tourism with her rising acceleration across the world, will enable her to stand out in the world’s congress tourism market. Panorama of the Sector World’s tourism revenues : US$ 856 billion Revenues obtained from the world’s congress tourism : US$ 250 billion Share of congress tourism within the world’s tourism : 30 % Turkey’s tourism revenues : US$ 22 billion Turkey’s congress tourism revenues : US$ 400 billion Share of congress tourism within Turkey’s tourism : 1.5 % Share of Turkey’s congress tourism within the world’s congress tourism : 0.2 % Congress capacity of Istanbul : 45,000 persons PROVINCE OF İZMİR The cities where most congresses are organized in Turkey are Istanbul, Antalya, İzmir, Ankara, Muğla, and Aydın, respectively. 70% of the international congresses organized in Turkey in 2004 were held in Istanbul. When we look at the numbers of total congresses organized within the past five years, Istanbul ranks 25th with 38 international conventions. 5 universities located in İzmir allow the organization of scientific congresses and conventions. Hosting the first international industrial exhibition in the country, Izmir is a candidate to become a city of business, conventions, and exhibitions. Our city of İzmir is capable of hosting congresses all the year round owing to her suitable climatic conditions. Congress Tourism in İzmir will, above all, create a capacity of spreading seasonal concentration to the entire year. Since congresses are generally organized in April, May, June, September, October, and November, this will also constitute a starting point for İzmir to draw away from the classic tourism understanding with Congress Tourism. A Convention Center, which will also contribute to the urbanization process of İzmir, is urgently needed. This will increase the occupancy rates of hotels during dead seasons and enable new types of tourism to originate along with congress tourism. With her gradually increasing accommodation capacity, intercity and local transportation facilities, climatic advantages, rich historical legacy, and geographical beauties coupled with the facilities of convention and exhibition centers, İzmir is among the cities preferred for conventions, symposiums, exhibitions, shows, theater performances, concerts, and conventions of all sizes. İzmir will host an important congress in 2009. The BALKANMINE, Balkan Mining Congress will be organized in İzmir. This congress, which will be held together with the Minex-Mining, Natural Resources, and Technologies Fair organized biennially by İZFAŞ with the support of the TMMOB (Union of Chambers of Turkish Engineers and Architects) Chamber of Mining Engineers of Turkey, will be organized between 1 and

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3 October 2009. Close to 1,000 delegates from Turkey, Greece, Albania, Macedonia, Bulgaria, Romania, Serbia, Montenegro, Bosnia and Herzegovina, and Slovenia are expected to participate in the congress. Preparation works for the TMMOB Geographical Information Systems Congress, which will be organized at the İzmir Tepekule Convention and Exhibition Center between 2 and 6 November 2009 with the livable future slogan are continuing. The development displayed by the province of Izmir every passing day in terms of both exhibitions and organizations increases the requirement for convention and exhibition centers.

New Investment: Being open to new developments, İzmir is continuing to come to the forefront in sector investments with increasing importance being placed on congress tourism. The Ahmet Adnan Saygun Art Center, which is an equipped art center of Turkey in terms of technical infrastructure, was put into service in December 2008 with a large concert hall with special acoustic and air-conditioning system and a capacity of 1153 persons and a small hall with a capacity of 243 persons. The Shopping and Cultural Center of the Special Provincial Administration of İzmir and the Municipality of Çiğli, which is under construction on an area of 4 thousand 600 square meters, is expected to cost 13 million Euros. This center, which will also include a hotel with a capacity of 150 beds, is planned to be opened to service within this year. The Cultural Center is planned to include a conference hall with a capacity of 500 persons, a Wedding Hall with a capacity of 500 persons, 4 pocket cinemas, a hotel with a capacity of 152 beds, an open parking area for 250 vehicles, and 45 places for business. A new exhibition and convention center is planned to be constructed in Gaziemir on an area of 337 hectares. The largest share among the partners of the new company established with this aim belongs to TOBB (Union of Chambers and Commodity Exchanges of Turkey) with thirty five percent and the company will include the İzmir Union of Chambers of Tradesmen and Artisans and the Aegean Exporters’ Unions along with the Metropolitan Municipality of İzmir as well as the leading industrialists-businessmen of the city. Groundbreaking is planned in the next days for the area, the expropriation works of which have been completed. The founding capital of the exhibition company for the New Exhibition and Convention Center to be constructed on the area between the İzmir ring road and ESBAŞ in Gaziemir, has been projected as TL 120 million and 100 shares. The convention center is planned to have a size of 25 thousand sqm with a capacity of 5,000 persons and 25 thousand sqm are planned to be used as a social facility area in the exhibition section. The total area allocated for exhibition buildings has been projected as 170 thousand sqm and exhibition buildings of 70 thousand sqm are planned to be constructed at the first stage. It is projected that İzmir will become a city that organizes exhibitions and hosts international conventions throughout the 365 days of the year with the construction of the new exhibition area and convention center. Existing Convention and Conference Halls in İzmir and their Capacities:

CONVENTION and CONFERENCE CENTERS in İZMİR

HOTELS Room / Bed Hall Capacity / Area Technical Equipment

Tepekule Convention and Exhibition Center - 14/Largest hall: 1,000 persons

Fax, telephone, computer, internet connection, air-conditioning

Atatürk Cultural Center - 3/Largest hall: 654 persons - D.E.Ü Sabancı Cultural Center - 2/Largest hall: 538 persons -

Adnan Saygun Art Center - 1153- 243 persons

4 fully-equipped simultaneous interpretation rooms, earpieces for listeners, cinema screen, conference, seminar and sound, lighting, and

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video system

Efes Sürmeli Hotel ***** 436 / 892

8 / 700 - 80 - 80 - 40 - 40 - 600 - 250 - 250 / 840 - 96 - 96 - 48 - 48 - 720 - 300 – 300 sqm -

Swiss Hotel ***** 531/670

13 Conference Halls Total cap: 1,000, Maximum (sqm/cap):1,495/1,000, Minimum (sqm/cap):37.6/10.

Wireless Network Connection, Lapel Microphone, Wireless Microphone, Desk Microphone, Sound recording System, Lighting System, DVD Player, VCD Player, Video, Stage, Platform, Music Broadcasting, Simultaneous Interpretation System, Slide Player, Computer Projector, Video Recording, Projector Screen, BARCO Vision, Overhead Projector, Flipchart, TV, White Board, Fax, Air-Conditioning, Laser Pointer

İzmir Hilton Hotel ***** 381 / 771

11 / 1000 - 400 - 100 - 50 - 50 - 40 - 40 - 40 - 40 - 40 - 15 / 617 - 484 - 117 - 62 - 61 - 43 - 42 - 39 - 36 - 34 - 15 sqm

Microphone, Film - Slide - Video - Overhead Projector and Cinevision

Sheraton Çeşme ***** 373 / 950 22/Largest hall: 1,535 sqm -

Babylon Hotel **** 111 / 222 1 / 80 / 60 sqm

Slide, Photocopy, Overhead Projector and Cinevision, Projector, Sound System

Kaya Prestige Hotel **** 142 / 263 5 / 350 - 166 - 110 - 50 - 27 sqm

Overhead Projector and Cinevision, Projector, Blackboard, Sound System

Marla Hotel **** 68 / 135 1 / 180 Sound System

Aksan Hotel **** 87 / 186 2 / 70 - 80 / 84 - 108 sqm Sound System, Video, Blackboard

Erythrai Hotel **** 129 / 301 1 / 140 / 150 sqm

Sound System, Screen, Platform, Projector, Overhead Projector and Cinevision,

Sun Club Biltur Hotel **** 243 / 510 1 / 300 Slide - Video - Overhead Projector

Richmond Ephesus **** 240 / 568

4 / 80 - 30 - 40 - 315 / 96 - 36 - 48 - 378 sqm Slide - Video - Overhead Projector

Altınyunus Holiday Resort HVI

515 / 1030

9 / 650 - 350 - 200 - 150 - 100 - 40 - 24 - 24 - 20 / 398 - 217 - 137 - 61 - 61 - 44 - 32 - 32 - 20 sqm

Microphone, Film, Slide, Video, BARCO Vision, Overhead Projector, Flipchart

Crowne Plaza Hotel - 15/Largest hall 412 sqm -

Anemon Hotels 118 4/Largest hall 290 sqm

Wireless connection, BARCO Vision, Screen, Lapel Microphone, Wired Microphone, Microphone Stand, Sound System, Platform, White Board, Laser Pointer

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Some of the conventions organized in İzmir within 2009 are as follows:

• 9-11 January, 4th National Phlebology Congress, Venue: Swiss Hotel Grand Efes • 18-22 February, 3rd International Sterilization Conference, Venue: Süzer Sun Dreams &Spa • 5-6 March, 10th Pediatrics Days, Venue: Sabancı Cultural Center • 17-18 March, 4th Drilling Symposium, Venue: İzmir Atatürk Cultural Center • 19-22 March, 1st National Primary Care Medicine Congress, Venue: Çeşme Sheraton Hotel • 1-4 April, 1st National Pediatrics Days, Venue: Swiss Hotel Grand Efes • 1-4 April, Aegean University Pediatrics Days, Venue: Swiss Hotel Gran Efes • 7-11 April, 3. Gynecologic Endoscopy Congress, Venue: Sheraton Hotel Çeşme • 10-12 April, 3. Neurologic Intensive Care Symposium, Venue: Ilıca Hotel Çeşme • 23-26 April, European Teacher Education Network Annual Conference 2009 Venue: Aegean

University • 27-30 April, 17th National Neonatology Congress, Venue: Sheraton Çeşme • 6-9 May, 9th National Plant Engineering Congress and Exhibition, Venue: Tepekule Convention and

Exhibition Center • 7-8 May, 2nd Exercise Physiology Symposium, Venue: 9 Eylül University • 14-16 May, 2nd National Physiotherapy and Rehabilitation Congress, Venue: Aegean University

Atatürk Cultural Center • 21-24 May, 16th Turkish Pedodontics Society Congress, Venue: Çeşme Altınyunus Hotel • 23 May, Authorized Specialized Engineering Concept and Practices Convention, Venue: Tepekule

Convention and Exhibition Center • 20-24 May, 14th National Biomedical Engineering Meeting Biyomut, Venue: 9 Eylül University • 20-24 May, 28th Turkish Accounting Education Symposium, Venue: Süzer sun Dreams Hotels &

Spa Alaçatı • 01-04 July 8th National Veterinary Internal Diseases Congress, Venue: Sürmeli Efes • 10-14 June, 7th National Hepatology Congress, Venue: Swiss Hotel Grand Efes • 26-28 June, Turkish Ophthalmology Society, 22nd Summer Symposium Venue: Aegean University

Atatürk Cultural Center

TEPEKULE CONVENTION AND EXHIBITION CENTER

Tepekule Convention and Exhibition Center was established in Tepekule, which is considered to be the place where İzmir was initially established. The city is established around it and it has a view of the gulf. It takes its name from the place, where this antique city was established. Being at a 3 km. distance from the city center and a 23 km. distance from the Airport, Tepekule is located in close vicinity to all

important centers of the city and to tourism resorts. The Tepekule Convention and Exhibition Center contains 14 halls with a total capacity of 2,000 persons, which enables it to respond to many requirements from trainings for 10 persons to congresses and concerts for 1,000 persons. The exhibition areas and conference halls of the Tepekule Convention and Exhibition Center have facilities that are shown as reference with regard to all the electronic equipment required for

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these types of events. Conference halls are equipped with today’s technology in terms lighting, sound, and data imaging. The Tepekule Convention Center offers such ample facilities as foyers, visual communication / equipment, business center, fax, telephone, computer, internet connection, air-conditioning, food-drink service, and car parking. The capacity of the largest conference hall in the Tepekule Convention and Exhibition Center is 1,000 persons and that of the smallest conference hall is 30 persons. Halls: There are 5 halls called Anatolia, Mediterranean, Aegean, Black Sea, and Marmara in the Tepekule Convention and Exhibition Center. The Anatolian Hall is equipped with multi-purpose professional equipment in terms of acoustics, display, lighting, stage mechanics, and projection systems. The lower hall has a capacity of 555 persons whereas the capacity of the balcony section is 177 persons. The Mediterranean has a capacity of 219 persons and provides services for panels, discourses, and theater performances. The foyer of the hall can be used for receptions, cocktail parties, and banquets before and after the events. The Aegean Hall has a capacity of 228 persons and it is arranged for seminars, symposiums, vendor and product publicity meetings. The Black Sea and the Marmara Halls have a capacity of 100 persons each and it serves with the warm communication environment it provides particularly in firm trainings and information meetings. Anadolu Salonu Akdeniz Salonu The Anatolian Hall The Mediterranean Hall

The Aegean, Black Sea, and Marmara Halls Tepekule Exhibition Areas: The Tepekule Convention and Exhibition Center contains 2 exhibition halls, foyers, and 14 conference halls of different sizes within a total of 7,500 sqm indoor area on 4 floors. The areas, which respond to different expectations along with the basic requirements of exhibition organizations, are equipped with wireless internet, communication, and automation systems. The power requirement of the Tepekule Convention and Exhibition Center is backed up with a generator. The foyers have the technical infrastructure and architectural means that also allow installation works as well as painting and sculpture exhibitions. There is no parking problem in Tepekule thanks to the two-story car parking area. Food and catering services are provided with the restaurants located on the roof.

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Ground Floor Exhibition Area: The ground floor exhibition area, which allows painting and sculpture exhibitions along with such organizations as fairs, exhibitions, and cocktail parties, is 1,700 sqm and has a ceiling height of 5.30 m. All exhibition areas are air-conditioned with computer controlled central heating, cooling, and fresh air systems. Floor K1 Exhibition Area: The Floor K1 Exhibition Area has a view of the Izmir Gulf and a total area of 1,450 sqm. Its 1,000 sqm section is 5,75 m high,

whereas the height of the 450 sqm foyer section is 2,50 m. The foyer area is suitable for the opening ceremonies of congresses, concerts, painting and sculpture exhibitions and it can also be used for coffee breaks and receptions during the events. İZMİR KÜLTÜRPARK FAIR AREA:

Indoor Area Dimensions: The fair area contains 14 indoor exhibition areas. The sizes of these exhibition centers range from 13.55x7.70 m to 14x40 m. Their heights are between: 5 and 9.30 m. The total indoor area footage is 28,000 sqm. The open exhibition area of the Izmir Fair is also 28,000 sqm.

The new exhibition buildings have been planned with a flexible approach in a way to allow the organization of all sorts of exhibitions. They consist of 4 buildings, which will enable a large exhibition in all these buildings at the same time. Two halls have 60 meters and the other two halls have 40 meters clearance. These clearances allow flexible

arrangements. SABANCI CULTURAL CENTER

Located at the most comfortable point in terms of access from both the land and the sea, the Cultural Center is equipped with the facilities that will enable it to host all sorts of cultural events that can be organized in İzmir. This Cultural Center with 5 floors, which was established on an area of 3,500 sqm at the center of Konak, contains

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two halls that can be used in multi-purpose events. The Small Hall with a capacity of 128 persons has 75 sqm stage area and an acoustic stage arrangement. The Grand Hall, on the other hand, has a foldaway orchestra pit, 250 sqm stage area, and 12x16 m. stage dimensions with a capacity of 518 persons. It offers all the facilities necessary for the presentation of musicals and shows performed by extensive cast with its service elevator connected to the stage and 6x8 m. cinevision screen. The 3rd, 4th, and 5th floor foyers as well as the entrance foyer are used for exhibitions in the Sabancı Cultural Center.

AEGEAN UNIVERSITY ATATÜRK CULTURAL CENTER

The Atatürk Cultural Center, which is in Konak, was commissioned in 1981. The Cultural Center contains two large halls with capacities of 654 and 628 persons, a theater hall with a capacity of 340 persons, 4 seminar rooms with capacities ranging between 35-40 persons, and an exhibition hall with a capacity of 800 persons. The Cultural Center has 6 halls with different capacities and for different uses, namely the A. Adnan Saygun Hall, the Yunus Emre Hall, the Theater Hall, Seminar Rooms, the Art Gallery, and the Aegean Art Hall.

The A. Adnan Saygun Hall: This hall with a capacity of 624 permanent chairs can host company meetings, conferences, panels, and discourses, as well as symphonic orchestra performances and is equipped with sound and lighting system. The Yunus Emre Hall: The capacity of the Yunus Emre Hall, which is 652 persons can be increased to 700 persons if needed.

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Seminar Rooms: The Atatürk Cultural Center contains a total of 4 seminar rooms, the capacities of which range between 35-40 persons, on the 1st floor. The seminar rooms provide services for trainings, association group meetings and working groups. HİLTON İZMİR

This hotel, which is located in the city center with a view of the İzmir Gulf, has a total capacity of 380 rooms from which 9 are Suit, 63 are Executive, and 64 are Deluxe rooms. Hilton İzmir has a total of 18 meeting rooms, 8 of them conforming to the "Hilton Meetings" standards. The Hotel also includes a Business Center, which meets all sorts of requirements of businessmen and conference organizers as well as restaurant and café facilities. In addition, there is an indoor swimming pool, a tennis and a squash court, sauna and steam bath, solarium and massage rooms. The meeting and conference rooms of Hilton contain foyers, visual communication/equipment, fax, telephone, computer, internet connection, air-conditioning, food/drink service. The Hilton Hotel offers car parking and 5-star accommodation facilities. Meeting Rooms Tariff:

There are 22 meeting halls at the Hilton Hotel and some of the largest of these halls are the Turgutreis Main Hall, the Ball Room, the Ball Room A-B, he Ball Room B-C, and the Turgutreis 1-2 halls. The sizes of the halls range between 21-626 sqm. These meeting rooms contain foyers, visual communication/equipment, fax, telephone, air-conditioning, and car parking facilities. CROWNE PLAZA İZMİR

The Crowne Plaza İzmir is one of the important hotels in İzmir, which is preferred for parties, conferences, and company meetings with a total of 11 meeting and banquet halls and 4 workshops, which are designed for multi purposes with capacities ranging between 10 and 400 persons as well as restaurants offering different tastes from the world cuisine. Technical equipment is provided free of charge in all organizations. This equipment includes; the slide

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machine, BARCO vision, screen, flipchart, white board, platform, lapel microphone, wireless microphone, sound system, DVD, VHS Video, and stage. In addition, wireless internet access is provided in the lobby and foyer areas. The simultaneous interpretation system is outsourced and this service is subject to a fee. The video conference service is designed to transmit real time voice and image. With a high quality video conference system, the participants will have the chance to connect to conferences by turning a single number with the IP or ISDN technology and even to meet participants from several cities or countries.

The Konak hall is 412 sqm with a capacity of 400 persons in theater hall arrangement. The Konak I, Konak II, and Konak III halls have an area of 137 sqm and a capacity of 100 persons each in theater hall arrangement. The capacity of the Karşıyaka hall, which is 266 sqm, is 200 persons in theater hall arrangement. The size of the Foça hall is 63 sqm, it has a capacity of 48 persons in theater hall arrangement. Foça I and II halls are 20 and 40 sqm and their capacities are 16 and 32 persons respectively in theater hall arrangement. The Executive Boardroom, on the other

hand is 67 sqm with a capacity of 18 persons arranged in classroom style. The Urla and Dikili halls have a capacity of 9 persons each in classroom arrangement with an area of 22 sqm. The Torbalı hall is 30 sqm with a capacity of 16 persons in theater arrangement. The Çeşme hall is 80 sqm with a capacity of 45 persons. The Güzelbahçe hall is 542 sqm with a capacity of 120 persons in theater hall arrangement and 150 persons in banquet arrangement. The Buca hall is 35 sqm with a capacity of 34 persons in theater hall arrangement. The Crowne Plaza also contains two 9 sqm Workshop rooms and a foyer area of 542 sqm. ALTINYUNUS HOLIDAY RESORT It is located at the Boyalık Locality on the Kalem Cape in the district of Çeşme, which is connected to the province of İzmir in the Aegean Region at the farthest point of Anatolia, with a 90 km distance from the Adnan Menderes Airport, 80 km. from Izmir, 150 km. from Ephesus and Virgin Mary, 3.5 km. from Çeşme, and 4 km. from Alaçatı. It is a 5-star holiday resort offering quality services to its guests with its clean sea and magnificent view. It has 8 suit, 15 marina, 39 studio, 5 apart, 29 marina apart, 42 beach apart, 300 standard and 46 superior rooms. It has 9 fully equipped meeting halls with a capacity of minimum 2,000 persons and the meeting halls contain overhead projectors, screens, white boards, slide projectors, flipcharts, projection, BARCO vision, sound system, microphones, video players, televisions, and simultaneous interpretation system.

SHERATON ÇEŞME

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The Sheraton Çeşme Hotel Resort & SPA is located on the seaside in Çeşme, at a 90 km. distance

from the Adnan Menderes Airport. It has a total capacity of 377 rooms and 750 beds including 1 king suit, 7 linked rooms, 10 suit rooms, 3 penthouse suits, 19 junior suits 268 standard rooms, 70 family rooms, and 1 room for the disabled.

2 main halls with areas of 1,535 and 875 sqm, which can be divided into 3 sections, a 1,250 sqm stand hall, 4 meeting halls with areas of 150,160,185, and 215 sqm, 4 special VIP halls for high level meetings, and 12 40-50 sqm functional study rooms equipped with the latest technology provide services in the new Convention Center with 4 floors.

The characteristics of all halls included in Sheraton Çeşme are given in the below table. Co

nference Halls

Capacity

(Person)

Area (sqm)

Hall Arrangement

Height (m)

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ANEMON FUAR İZMİR

It is located in the city center of Izmir, at a 50 m. distance from the İzmir International Fair, 15 km. from the Adnan Menderes Airport, and 10 km. from the bus terminal. The hotel contains a total of 118 rooms consisting of 106 standard hotel rooms, 8 junior suits, 3 executive suits, and 1 king suit. ANEMON EGE İZMİR

The Hotel Ege, which is the only hotel of Bornova is at a 10 minutes distance from the city center and 15 km. from the Adnan Menderes Airport. It has a total capacity of 96 rooms consisting of 4 suit and 92 twin rooms. A ball room with a capacity of 400 persons, the Kıvanç hall for 200 persons, the Bardacık hall for 100 persons, and the Pool Restaurant with a capacity of 750 persons meet the requirements. Technical equipment services are offered in the meeting halls.

Price Tariffs of some of the Conference Halls in İzmir:

Name of Hotel Name of Hall Capacity Rent (for 1 day)

Rent (for 1/2 day)

İzmir International Fair The Atlas Pavilion

3,250 sqm/ 1,500 persons

Sabancı Cultural Center

The Grand Hall 250 sqm / 518 persons The Small Hall 175 sqm /128 persons

Tepekule Convention and Exhibition Center

The Anatolian Hall 555 +177 (balcony) persons

The Mediterranean Hall 210 persons The Aegean Hall 200 persons

The Marmara and Black Sea Halls 100 persons The East Hall 20 persons

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Aegean University Atatürk Cultural Center

The Yunus Emre Hall 652 persons The A. Adnan Saygun Hall 624 persons The Theater Hall 340 persons The Seminar Hall 35-40 persons(4 salon)

Anemon Fuar Hotel The Alsancak Hall 231 sqm The Montreux Hall 297 sqm The Kordon Hall 35 sqm

SECTION 7

THE HIGHEST AND THE BEST USE ANALYSIS It is the use, which is physically the most appropriate to the building, permitted by the laws, financially executable and providing the highest revenue is the most efficient use. The factors defining the highest and best use contain the answer to the following questions.

• Is the use reasonable and probable? • Is the use legal and is there a possibility to obtain a legal right for the use? • Is the property physically fit for use or can it be made fit? • Is the proposed use financially executable? • The efficient, highest and best use chosen from the use forms passing the initial four questions is

indeed the most productive use of the land. The zoning plans, which are the most defining factors of the real estate sector legally and technically have not, in our country, shown a development parallel to the economic development and due to this lack of revision have a static appearance. As a natural result of the negative structure unwanted cases such as failure to bring into execution phase the optimum alternative which could provide financially and technically the highest efficiency and in addition to that which had obtained financing can occur quit often in our sector. In other words, in the conditions prevailing in our country the best project is not only the option providing the highest return and the most perfect technical results, but also the project which can meet the requirements of the laws and regulations. When features such as the immovable property being positioned in the district of Yenişehir where people of the middle and upper middle income groups are residing, the demand in the region for shopping centers, the population number which is expected to increase with the newly constructed housings which shall be completed is taken into consideration it is foreseen that its current use as a 'OFFICE+TRADE+CONVENTION CENTRE' is the highest and best use. It has been taught that most effective and productive usage of the subject immovable will be the application of a project in the concept of 'OFFICE+TRADE+CONVENTION CENTRE'.

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SECTION 8 ANALYSIS AND EVALUATION OF THE REAL ESTATE

8.1 Factors Affecting to the Value of the Property Ø STRONG POINTS: Ø It is located in a region, which is commercially preferable and the infrastructure of which has been

completed, Ø Transportation to the project area is easy, Ø It is located in close vicinity to the city center and social facilities, Ø There are various transportation alternatives, Ø It is close to the main arterial roads and located on the corner, Ø When it is assumed that the planning studies are completed in the region where the immovable

property is located, it has multi-storey zoning compared to the lands in its locality and there is no land with similar qualities in its close vicinity that could constitute an equivalent,

Ø The subject parcel has become attractive in the city center, where the land reserve has become scarce.

Ø WEAK POINTS: Ø Transportation difficulty caused by intense traffic in the region, Ø Uncertainties concerning the New City Center of İzmir due to the legal process regarding zoning

plans. Ø OPPORTUNITIES: Ø The revenues and added value that could be created by the project with its careful planning,

construction, and selling, Ø The region will gain value with the idle and single-storey buildings in the region being renovated and

with construction being started on the lands, where problems were experienced during the construction stage or which are waiting for construction permits (the World Trade Center, etc.),

Ø There are no alternative lands at the same locality with the existing building conditions, Ø Uncertainties concerning the areas where high-rise buildings can be constructed in the New City

Center of İzmir due to the legal process regarding zoning plans İzmir increase the attraction of the project area.

Ø THREATS: × Negative effects of uncertainty and fluctuations in the economy to real estate market.

SECTION 9 THE METHODS USED IN THE APPRAISAL

9.1 The Methods Used in the Appraisal There are three different valuation methods, which can be utilized in our country. These are respectively, ‘Sales Comparison Method’, ‘Income Capitalization Method’ and the ‘Cost Analysis Method’ methods. The expected prices and offers made can be considered.

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9.1.1 Sales Comparison Method This sales comparison approach takes into account the sales of similar or substitute properties and the related market datas and realizes the appraisal based on a comparative transaction. In general the property, which is being evaluated, is compared with the sales of similar properties in the open market. 9.1.2 Income Capitalization Method This comparative approach takes into account the income and expense datas related to the property being evaluated and makes the appraisal with the reduction method. The reduction is related to the income converting the income amount to value appraisal and to the type of value. This transaction, takes into account product or discount rates or both. In general the principle of substitution with the income flow providing the highest investment income with a defined risk level is proportionate with the most probable value figure. 9.1.3 Cost Analysis Method In this method, the reconstruction cost of an existing building in the framework of the current economic conditions is considered as basis for a property valuation. In this respect, the main principle of the cost approach can be explained with the use value. The use value is described as ‘Even if no one wants it and no one knows its price an asset has a real value’. In this method, it is accepted that the real property has an important remaining economical life expectancy. For this reason, it is assumed that the property’s value will decrease in time due to physical wear, as it becomes outmoded economically and functionally. In other words, it is accepted that the value of the building of an existing property will never be more than its reconstruction cost. The building cost values of the property have been appraised by taking into account the Ministry of Public Works Construction unit costs, the technical specifications of the buildings, the materials used in the buildings, the construction costs of the buildings with same specifications constructed in the market, interviews with the contracting companies and costs calculated by us based on previous experiences. The rate of depreciation in the buildings has been calculated by taking into account the table published in the Official Gazette indicating the depreciation in the buildings according to years and the visible state of the building. It is accepted that the value of the property is consisting of two separate physical facts being the land and the buildings. 9.1.4 Suggestions for Development Purpose of investment is to make profit through products or services. İnvestment is dependent on the price at which product or service is to be sold in order to justify satisfactory profit. Project needs to be evaluated from the perspective of entrepreneurship, project theme, state of the proposed product in proposed location and its expectations in the future. Project theme could be assessed by evaluating the current state and future expectations of the product or service in location of consideration. In case the project is followed through, expenses could be predicted through evaluation of marketing strategy and general feasibility principles of the company. As the project is being developed, income status can be estimated by making some assumptions. These assumptions could be refined by assessing the state of the sector and statistics of similar businesses in the project area. Subsequently, project performance could be evaulated and the project net present worth could be estimated. Certain assumptions associated with said project are outlined. However, detais can be obtained from the appraiser.

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9.2.Definitions and Model of the Calculation Methodology 9.2.1. Risk Free Rate The foreign exchange bonds secured by the state treasury and sold on offshore markets, also covering the risk of country are named as “USDbond”. They are issued with various maturities, while they can be purchased or sold on a daily basis on the market. These bonds are used as an indicator of the risk free rate, which is used as the basis for financial calculations in Turkey. The most liquid USDbond on the markets is the USDbond with maturity in 2030, and it has the attributes required to be an indicator bond.

Variant on the risk-free rate2 There have been 3 different approaches for calculating risk-free rate. Variant 1: A short term government security rate is used as the risk free rate, and the historical premium earned by a broad equity market index over and above this security rate is used to estimate the expected return on the market. The cost of equity, thus obtained, is then used as the discount rate for each year’s cash flows. Variant 2: The current short term government security rate and the market’s historical premium are used to calculate the cost of the equity for the first period (year). The forward rates built in to future time periods, which are used to calculate the cost of equity for future years. Variant 3 : The current long term government-bond rate (with the duration of the bond matched up to the duration of the asset) is used as the risk-free rate, and the historical premium earned by a broad market index above this long term government security rate is used to estimate the expected return on the market. The cost of equity, calculated using these inputs, is used as the discount rates each year’s cash flows. USDbond does not include the market risk for the performed work, although it includes the country and political risk.

Variant 3 has been selected as the method in the assumptions our company has made by using all these data. However, especially when assessing the value of the real estates with long-term commercial lifetime, an asset appropriate for the commercial lifetime of the real estate does not exist. Therefore, our country foresees that using USDbond with maturity in 2030, the longest maturity for the bond, is suitable for risk-free rate assumptions. This rate also covers the country risk. In addition to hat, the rates suggested by Damodaran for use in accordance with its Financial Market Characteristics are as follows:

Financial Market Characteristics3 Premium Cover Govt.Bond Rate Emerging markets with political risk (South America, Eastern USDpe) 8.5 % over govt. bond Rate Developed Markets with limited listings (Western USDpe, minus Germany and Switzerland) 4.5 - 5.5% over govt. bond rate Developed Markets with limited listings and stable economies (Germany and Switzerland) 3.5 - 4% over govt. bond rate

2 Damodaran on Valuation ,Security Analysis for Investment and Corporate Finance, Section 3 : Estimation of Discount Rates p.25 3 Damodaran on Valuation ,Security Analysis for Investment and Corporate Finance, Section 3 : Estimation of Discount Rates p.23

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9.2.2. Market Risk Premium- Market Index The market index shall be constituted from data and risks such as the conditions of the market and competition in which the real estate, the place, commercial status of the real estate, and its comparison with similar other ones in the industry. Consequently, the market risk of a real estate with a lower performance will be higher. The figures used in our studies consist of the data, which has been obtained as a result of criticizing our experiences arising from the shopping center appraisal studies we have performed so far in various cities of Turkey. 9.2.3. Discount Rate (Risk Free Rate+ Market Risk Premium = Discount Rate) A rate of return used to convert a monetary sum, payable or receivable in the future, into present value. Theoretically it should reflect the opportunity cost of capital, i.e., the rate of return the capital can earn if put to other uses having similar risk. Also called yield value.4 Discount rates contain all risk premiums. (Country risk, market risk…) Discount rate is the sum of risk free rate and the market risk premium. IAS 36 para. 48, states that “ the discount rate (or rates) should be a pre-tax rate (or rates) that reflect (s) current market assessments of the time value of money and the risks specific to the asset. The discount rate (s) should not reflect risks for which future cash flow estimates have been adjusted.” It is also true that other measures of income or cash flow may be used so long as the discount rate(s) are appropriately matched with the income flow(s). 9.2.4. Overall Capitalization Rate Income rate for a total real property interest that reflects the relationship between single year’s net operating income and the total property price or value; used to convert net operating income into an indication of overall property value.5

9.2.5. Other point of view: The Capital Asset Pricing Model (CAPM) 6 CAPM model measures risk in terms of on diversifiable variance and relates expected returns to this risk measure. It is based upon several assumptions, that investors have homogeneous expectations about asset returns and variances, that they can borrow and lend at a risk-free rate, that all assets are marketable and perfectly divisible, that there are no transactions costs, and there are no restrictions on short sales. With these assumptions the non-diversifiable risk for any asset can be measured by the covariance of its returns with returns on a market index, which is defined to be asset’s beta. If the beta for the equity in the company can be estimated, the cost of the equity will be the required return, Cost of equity = R f + Equity beta (E(Rm)-Rf) Where R f = Risk Free rate E(Rm) Expected Return on the market index

4 International Valuation Standarts, Sixth Edition , 2003 , p.323 5 The Appraisal of Real Estate , 12th Edition , Chapter 20, The Income Capitalization Approach, p. 489 6 Damodaran on Valuation ,Security Analysis for Investment and Corporate Finance, Section 3 : Estimation of Discount Rates p.21

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9.3 Analysis Of The Methods Used In The Appraisal In this appraisal study, income capitalization method is used. Also the similar sales comparison approach is used in order to determine the value of the land; meanwhile, the cost approach is used to determine the value of the building. 9.3.1 Sales Comparison Analysis The similar real estate values obtained as a result of the inspections made in the vicinity of the real estate are stated hereafter.

• It was learned based on verbal information obtained that a land having similar zoning characteristics with the immovable property under appraisal close to the Hürriyet Newspaper building behind the Alsancak Port was sold at a price of US$ 1,000 /sqm. (TL 1.500 /sqm)

• It was learned that a land with an area of 125 sqm in the region behind the Alsancak Port, close to the Şehitler Avenue, with commercial zoning and no applications was for sale at a price of TL 350,000. (TL 2,800 /sqm)

• It was learned that the sqm unit prices for lands with no applications close to the region behind the Alsancak Port were around TL 1,000 /sqm on average and prices ranging between TL 1,000 and 2,000 /sqm could be talked about for the lands located in the same region with the immovable properties under appraisal depending on their locations.

• It was stated that a parcel with an area of 80,000 sqm, which remains in the special planning zone in the region behind the Alsancak Port, with no applications was for sale at a price of TL 110,000,000. (TL 1,375 /sqm)

• It was stated that an unused depot with an indoor area of 4,500 sqm located on a 2,000 sqm land in the region behind the Alsancak Port was for sale at a price of TL 1,500,000. It was also stated that the parcel could not have been sold for a long time since half of it remains in green area. (TL 333 /sqm)

• It was learned that a land with an area of 4,370 sqm in the region behind the Alsancak Port, which remains between the Liman Avenue and the Şehitler Avenue in the position of the 3rd parcel with residential + commercial zoning and no applications was for sale at a price of US$ 7,500,000. (TL 2,574 /sqm)

• It was learned that a land with an area of 10,170 sqm in the region behind the Alsancak Port, which faces the Liman Avenue and the Şehitler Avenue with commercial zoning and no applications was for sale at a price of US$ 10,170,000. (TL 2,229 /sqm)

• It was learned that a land with an area of 4,800 sqm in the region behind the Alsancak Port, which is currently used for TIR parking and which faces the Şehitler Avenue in the position of the 2nd parcel with tourism + commercial zoning and no applications was for sale at a price of US$ 7,500,000. (TL 2,344 /sqm)

• It was learned that a land with an area of 5,534 sqm in the region behind the Alsancak Port, close to the Yaşar University with tourism + commercial zoning and no applications was for sale at a price of US$ 12,000,000. (TL 3,253 /sqm)

• It was learned that a land with an area of 18,000 sqm in the region behind the Alsancak Port, which faces the Şehitler Avenue with tourism + commercial zoning and no applications was given out by contract based on a sqm unit price of TL 2,000 /sqm. (TL 2,000 /sqm)

• It was learned that a land with an area of 8,500 sqm in the region behind the Alsancak Port, which faces the Liman Avenue and the Şehitler Avenue with tourism + commercial zoning and no applications was for sale at a price of US$ 12,750,000, however its sale could not have been realized even though this price was dropped down until US$ 11,050,000. (TL 1,950 /sqm)

• It was stated that US$ 5,000,000 was asked for a building with an indoor area of 2,800 sqm, the construction of which has been recently completed on a 1,000 sqm land with commercial zoning

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close to the Gazi Hospital however, its sale could only be possible at US$ 3,000,000. (TL 1,607 /sqm)

• It was learned based on verbal information obtained that 100 sqm offices were sold at TL 140,000 and 120 sqm 3-floor stores were sold at TL 250,000 – 350,000 depending on their locations within a plaza, which has been recently constructed in the region, where the immovable property under appraisal is located. (TL 140 /sqm), (TL 2,083-2,913 /sqm)

• It was learned based on verbal information obtained that the land value of the immovable property under appraisal was around TL 1,000-1,500 /sqm. (TL 1,000-1,500 /sqm)

• It was learned based on verbal information obtained that the land value of the immovable property under appraisal would be around TL 2,250 /sqm when its project is completed taking into consideration the building as well as the project cost. (TL 2,250 /sqm)

• It was learned during the inspections conducted in the region that most of the lands located in the region behind the Alsancak Port were not subjected to any applications and that their sales prices were determined based on their gross land sizes under current market conditions.

• It was learned during the inspections conducted in the region that the zoning plans being still indefinite as a result of the objections placed by property owners frequently prevented the realization of sales.

9.3.2 Approach for Development

A residence project is recommended based on previously mentioned marketing research, associated analysis, regional information, and consumer expectations. Since construction and project permits were not obtained as per customer request, parcel area, salable area, and enclosed area information provided by the customer has been utilized. Assumtions were based on these information.

General Project Assumptions for Alternatives; § The area of the project under appraisal is gross 25,714.50 sqm and it was assumed that a net land

area of 15,640 sqm will be formed following implementation by projecting that DOP would be approximately 39%.

SPATIAL DISTRIBUTION

ACCORDING TO THE APPROVED ZONING PLAN

Net Area (sqm) KAKS

(Floor Area Coefficient)

Total Construction Area (sqm)

TAKS (Base Area Coefficient)

Max. Base Area

Utilization (sqm)

CENTRAL BUSINESS AREA 15.640 3,5 54.740 0,39 6.256 § All statutory and legal procedures with regard to the development of the project were assumed to

have been completed. § It was assumed that the building permit would be obtained by September 2010. § It was assumed that the constructions would start in September 2010 and completed by the

beginning of April 2013. § It was assumed that the costs of common area decoration and fine works, ground improvement as

well as electrical, mechanical, and automation costs would be included within the total cost calculation.

§ The infrastructure cost calculation includes the costs of the electrical infrastructure, the waste water infrastructure, the telecom infrastructure, and the demolition of existing buildings, etc.

§ The costs related to environmental arrangement and landscaping include the environmental arrangement costs, the landscaping costs, open area illumination costs, drainage costs, etc.

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§ General project expenses include costs of getting all sorts of projects and details drawn such as preliminary, architectural, electricity, sanitary installation, and static projects, costs of the building inspection company, and costs of the project management firm, etc.

§ The capitalization rate was assumed as 11%. § US$ was used during the studies. It was assumed that 1 US$: 1.50 TL. § Tax was not included in the studies pursuant to the IVSC (International Valuation Standards). § 6.92%, which is the EURO based Eurobond rate for the past 2 years for 2019, was accepted as the

“Risk Free Rate of Return” in the studies. § It was assumed that the reduction rate would be 12%. § 5.1% was accepted as the “Risk Premium Rate” in the project evaluation study. § It was assumed that all payments would be made in advance. § VAT was not included in the calculations. § The costs in the project include turn-key delivery costs. § The costs were estimated in line with the generally accepted principles of the market and by taking

into consideration the constructions standards as well.

Project Assumptions for the 1st Alternative (Shopping Center + Office):

• It was assumed, in line with the request of the client, that there will be a total construction area of 54,726 sqm on a 25,714.50 sqm parcel area.

• It was assumed, in line with the request of the client, that 26,500 sqm of this area would be allocated for the shopping center and 28,226 sqm would be allocated for the office area.

SPATIAL DISTRIBUTION ACCORDING TO FUNCTIONS OFFICE 26500 SHOPPING CENTER 28226 TOTAL 54.726,00

• It was assumed, in line with the project information received from the client, that 10,000 sqm would

be used for technical units, 4,300 sqm as the shelter area, and 25,100 sqm for car parking. The car parking area was assumed to have a capacity of 640 vehicles on basement floors (16,000 sqm) and 364 vehicles on 14 normal floors (9,100 sqm). Pursuant to the Car Parking Regulation of the Metropolitan Municipality of İzmir, 12,521 sqm of the total car parking area would be used by the shopping center.

• It was assumed, in line with the information received from the client, that the Project would include 172 offices consisting of 122 offices with an area of 136 sqm each, 25 offices with an area of 182 sqm, 14 offices with an area of 261 sqm, and 11 offices with an area of 312 sqm between the 3rd and 27th office floors.

• It was projected that the license would be obtained based on the construction size of the planned constructions and by completing the legal procedure before the start of the construction, the constructions would start in September 2010 and they would be completed at the end of April 2013.

• Sales of offices were assumed to start based on the project in September 2010 by examining equivalent examples in the market and they would be completed within 2013.

• It was assumed that all floor spaces would be included in the marketable gross area in office areas. • It was assumed, in line with the information received from the client, that the shopping center, which

would be located on the basement, ground, 1st, and 2nd floors would be rented and all of the offices in the section to be used for offices between the 3rd and 28th floors would be sold.

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• It was assumed that the unit rental value of the shopping center would start with US$ 24.36 / month / sqm in 2013 and the annual rental increase would be 3%.

• It was assumed that 7% of the office areas would be sold in 2010, 35% would be sold in 2011, 40% would be sold in 2012, and 18% would be sold in 2013.

• It was assumed in line with the generally accepted practices in the market that the shopping center would be rented, however the car parking area would not be rented and it would be allocated for common use.

• It was assumed that the Shopping Center project would be designed for a good operating firm, a qualified mix of tenants and with a theme suitable for the requirements of the region.

§ It was assumed according to the proposed project that the approximate space to be allocated for the hypermarket area would be 1,855 sqm, whereas 1,669.50 sqm would be allocated for the electronic market area, 3,710 sqm for anchor stores, 10,017 sqm for stores, 371 sqm for the entertainment area, and 927.5 sqm for the food court.

§ It was assumed in the proposed project that 18,550 sqm of the Shopping Center, which has a gross area of 26,500 sqm; would be rentable with an approximate loss of 30%.

§ It was assumed according to the proposed project that 10% from the 18,550 sqm rentable area of the Shopping Center would be used for the hypermarket, 9% for the electronic market, 54% for stores, 20% for anchor stores, 2% for entertainment, and 5% for the food court.

§ It was assumed in line with the generally accepted practices in the market that the shopping center would be rented, however the car parking area would not be rented and it would be allocated for common use.

§ It was assumed that the Shopping Center project would be designed for a good operating firm, a qualified mix of tenants and with a theme suitable for the requirements of the region.

§ It was assumed by taking into consideration the data obtained from the Shopping Center sector research conducted in the region and İzmir that the average monthly unit rental values of the Shopping Center would start from the level of US$ 24.36 in 2013, rise up to the level of US$ 29.08 in 2018 and continue as fixed until 2022.

§ It was assumed by taking into consideration the data obtained from the Shopping Center sector research conducted in the region and İzmir that the average monthly unit building management income of the Shopping Center would start from the level of US$ 9.02 in 2013 and rise up to the level of $ 10.77 in 2022 with an increase rate of 3%.

§ It was projected that the occupancy rates of the Shopping Center would take place as 85% in 2013, 87% in 2014, 89% in 2015, 90% in 2016, 91% in 2017, 92% in 2018, and 93% in 2019 and that they would not change in the following years.

• It was assumed that the entire building would be constructed with class A construction quality. • It was projected that the operating costs would consist of such expenses as the building

management expense, the commission fee, and advertisement costs prior to opening, etc. as well as the insurance of the building, the real estate tax, and the replacement fund.

TOTAL CONSTRUCTION COST ACCOUNT TABLE:

Dispersion by Area Area (sqm) Cost(USD/sqm) Cost (USD) Dispersion by

Ratio (%) SHC 26.500,00 700 18.550.000 48,42% OFFICE 28.226,00 450 12.701.700 51,58% Technical units (Non-precedent) 10.000,00 200 2.000.000 Shelter space(Non-precedent) 4.300,00 200 860.000 Parking Area (Non-precedent) 25.100,00 200 5.020.000 Total 94.126,00 39.131.700 100%

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INFRASTRUCTURE COST Indoor Areas Total Building Cost (USD) Ratio Cost (USD)

39.131.700 11% 4.304.487

• Infrastructure cost accounting consists: natural gas infrastructure, electricity infrastructure, drinking and waste water infrastructure, telecomm nation infrastructure, ground improvement and etc.

ENVIRONMENT ORGANIZATION AND LANDSCAPE COSTS Indoor Areas Total Building Cost (USD) Ratio Cost (USD)

39.131.700 8% 3.130.536

• Environment organization and landscape costs consist: asphalting costs, environment organization costs, landscape costs, outdoor areas illumination costs, drainage costs and etc.

SUB TOTAL COST (USD) Construction Cost (USD) 39.131.700 Infrastructure Cost (USD) 4.304.487 Environment Organization and Landscape Costs (USD) 3.130.536 TOTAL (USD) 46.566.723

• It has been assumed that total cost accounts will include, building turn key apartment cost, common

areas, electricity and mechanic and automation costs. GENERAL PROJECT COSTS Total Cost (USD) Ratio Cost (USD)

46.566.723 11% 5.122.340

• In the general project expenditure costs; the preliminary project, architecture, electricity, drain, electricity and static and etc designs for the project, building control firm charges, project management firm fees have been included.

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GROUND IMPROVEMENT COST Total Ground Area 6.256 Unit Area by Each Bored Pile (m²) 3,0 Number of Bored Piles 2.085 Bored Pile Unit Price (USD) 2.975 Total Cost (USD) 6.203.896 SHORING COST TABLE Number of Basement Floors 3 Shoring Surface Depth (m/number of floors) 3 Total Depth (m) 10 Base-Shoring System Frame (m) 450 Shoring Surface Area 4.320 Shoring Cost (USD/sqm) 350 Total Cost (USD) 1.512.000

TOTAL COST (USD) Construction Cost ($) 39.131.700 Infrastructure Cost ($) 4.304.487 Environment Organization and Landscape Costs ($) 3.130.536 General Project Costs ($) 5.122.340 Ground Improvement Cost ($) 6.203.896 Shoring Cost Amount ($) 1.512.000 TOTAL ($) 59.404.958

DISPERSION OF COSTS BY YEAR YEARS 2010(4 months) 2011 2012 2013(3 months) TOTAL RATIO 5% 40% 40% 15% 100% COST (USD) 2.970.248 23.761.983 23.761.983 8.910.744 59.404.958 SALEABLE OFFICE AREA

SALEABLE OFFICE AREA (SQM) 28.226 SALE INCREASE RATIO 5,00%

sqm Number Dispersion by Area (%) Area (sqm)

136,00 122 70,93% 16.592 182,00 25 14,53% 4.550 261 14 8,14% 3.652 312,00 11 6,40% 3.432 TOTAL 172 100,00% 28.226

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OFFICE SALE INCOMES 2010 2011 2012 2013 TOPLAM OFFICE SALE RATIO (%) 7% 35% 40% 18% 100% SOLD OFFICE AREA (SQM) 1.976 9.879 11.290 5.081 28.226,00 OFFICE UNIT SALE INCOME (USD/SQM)

2.468 2.592 2.721 2.857

TOTAL SALE INCOME (USD) 4.876.621 25.602.261 30.722.713 14.516.482 75.718.078

AVM RENTABLE AREA CALCULATION TOTAL AVM AREA (Except parking lot) 26.500 RENTABLE AVM AREA (sqm) 18.550 RENTABLE AREA LOSS RATIO (%) 30% RENT RISE RATIO 3,00% CAPITALISATION RATIO (%) 11,0% INFLATION RATIO 3,00%

Land Property Tax Account:

Block No Plot Total Area Fair Value (sqm TL) Total Value (TL) Total Value ($) 2782 151 7.573,40 900,00 6.816.061 4.544.041

ACCOUNT FOR THE YEAR 2010 INSURANCE-PUBLIC WORKS BUILDING

CONSTRUCTION COSTS sqm Unit Value ($/sqm) Total Value ($)

PARKİNG 12.521 299 3.739.680 SHC 26.500 630 16.695.000

TOTAL 20.434.680

Land Value Tax ($) Building Cost ($) Total ($) 4.544.041 20.434.680 24.978.721

AVM DISTRIBUTION FUNCTION RATIO (%) AREA (SQM)

HYPERMARKET 10% 1.855,00 ELEKTROMARKET 9% 1.669,50 STORE 54% 10.017,00 ANCHOR STORE 20% 3.710,00 ENTERTAINMENT 2% 371,00 FOOD COURT 5% 927,50 TOTAL AREA RENTABLE AVM 100% 18.550,00

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1. Alternative / "OFFICE + SHC" Project Demonstrating Value Projection Table dated 07/03/2010

Appraisal Table Safe Income Ratio 6,92% 6,92% 6,92% Risc Premium 4,1% 5,1% 6,1% REDUCTION RATIO 11,00% 12,00% 13,00% NET ACTUAL VALUE (USD) 33.546.597 30.767.075 28.258.933

With 12% reduction ratio 1 Alternative "Office + SHC" project value of approximately $ 30.768,000.

Land Owner Ratio 40%

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REDUCTION RATE 12,00% Net Current Value 30.512.630

Land Value 1.186,59 USD/m2 1.779,89 TL/M2

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Project Assumptions for the 2nd Alternative (Trade + Office + Convention Center):

• It was projected according to the proposed project that commercial uses (stores) would be on lower floors whereas higher floors would be allocated for mixed use consisting of offices, the convention center, a roof restaurant, and a social facility.

• It was assumed that the construction conditions and legend in the zoning plan were revised in line with the request of the client and that the legal process with this regard was completed.

• It was assumed that the total indoor area within the project would be 54,740 sqm and 33,340 sqm

from this area would be allocated for offices, 12,500 sqm for the commercial area, 6,000 sqm for the convention center, 1,200 sqm for the roof restaurant, and 1,700 sqm for the social facility and from the areas that remain outside the building coefficient, 10,000 sqm would be allocated for technical units, 4,300 sqm for the shelter area, and 25,100 sqm for the car parking area.

• It was assumed, according to the proposed project, that there would be 210 offices consisting of 10 offices with an area of 40 sqm each, 80 offices with an area of 80 sqm, 70 offices with an area of 134 sqm, 25 offices with an area of 184 sqm, 15 offices with an area of 250 sqm, and 10 offices with an area of 321 sqm.

• It was projected that the license would be obtained based on the construction size of the planned constructions and by completing the legal procedure before the start of the construction, the constructions would start in September 2010 and they would be completed at the end of April 2013.

• Sales of offices and stores were assumed to start based on the project in September 2010 by examining equivalent examples in the market and they would be completed within 2014.

• It was assumed that all floor spaces would be included in the marketable gross area in office and store areas.

• It was assumed, according to the proposed project, that the convention center, the social facility, and the restaurant would be rented and the offices and stores would be sold.

• It was assumed by taking the sales figures of the office projects in the surroundings as basis that the unit office sales value would start with US$ 1,906 /sqm in 2010 and rise to US$ 2,001 /sqm in 2011 with a 5% increase, to US$ 2,101 /sqm in 2012 with a 5% increase, to US$ 2,206 /sqm in 2013 with a 5% increase, and be completed at to US$ 2,317 /sqm in 2014 with a 5% increase.

• It was assumed that 10% of the office areas would be sold in 2010, 30% would be sold in 2011, 30% would be sold in 2012, 20% would be sold in 2013, and 10% would be sold in 2014.

• It was assumed by taking the sales figures of the office projects in the surroundings as basis that the unit store sales value would start with US$ 2,405 /sqm in 2010 and rise to US$ 2,525 /sqm in 2011 with a 5% increase, to US$ 2,652 /sqm in 2012 with a 5% increase, to US$ 2,784 /sqm in 2013 with a 5% increase, and be completed at to US$ 2,923 /sqm in 2014 with a 5% increase.

• It was assumed that 10% of the store areas would be sold in 2010, 30% would be sold in 2011, 30% would be sold in 2012, 25% would be sold in 2013, and 5% would be sold in 2014.

• It was projected that the Convention and Cultural Center would have a capacity of 4,000 persons. • It was projected that the Convention and Cultural Center would be operational during 365 days of

the year. • It was assumed that the average occupancy rates of the Convention and Cultural Center would

start with 25% in 2012, rise to 36% in 2019, and remain fixed in the following years. • The prices in the Convention and Cultural Center are based on the daily system and they were

projected excluding catering services. • It was assumed as a result of the investigations conducted in the congress tourism sector and the

region that the sqm unit price of congress halls would be US$ 1.9 /day/sqm with the commissioning, rise to US$ 2.27 /day/sqm 2019 with a 2% increase, and remain fixed in the following years.

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• Lunches, catering services, etc. which are considered as extra spending throughout the convention and cultural center, were added to other revenues. It was projected that the ratio of other revenues would be at the level of 30%.

• It was assumed that the GOP (Gross Operating Profit) ratio in the Convention and Cultural Center would start with 20% in 2012, rise to 30% in 2019, and remain fixed in the following years.

• It was projected that the replacement cost fixed asset investment would be around 1.5% in the convention center and that it would start in 2015.

• It was projected that the sqm unit price of the restaurant, which was assumed to be 1,200 sqm in total, would be US$ 11 / sqm/month with the commissioning, rise to US$ 14.35 / sqm/month 2019 with a 3% increase, and remain fixed in the following years.

• It was projected that the replacement cost fixed asset investment would be around 1.5% in the restaurant and that it would start in 2014.

• It was assumed that the sqm unit price of the social facility would be US$ 8.53 /sqm/month with the commissioning, rise to US$ 10 /day/sqm 2019 with a 2% increase, and remain fixed in the following years.

• It was projected that the replacement cost fixed asset investment would be around 1.5% in the social facility and that it would start in 2015.

• It was assumed that the entire building would be constructed with class A construction quality.

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TOTAL CONSTRUCTION COST ACCOUNT TABLE:

DISTRIBUTION OF SPACE ACCORDING TO FUNCTIONS OFFICE 33.340 TRADE 12.500 CONVENTION CENTER 6.000 ROOF RESTAURANT 1.200 SOCIAL FACILITY 1.700 TOTAL 54.740

Dispersion by Area Area (sqm) Cost(USD/sqm) Cost (USD) Dispersion by Ratio

(%) OFFICE 33.340,26 450 15.003.115 60,91% TRADE 12.500,00 450 5.625.000 22,84% CONVENTION CENTER 6.000,00 800 4.800.000 10,96% ROOF RESTAURANT 1.200,00 500 600.000 2,19% SOCIAL FACILITY 1.700,00 650 1.105.000 3,11% Technical units (Non-precedent) 10.000,00 200 2.000.000 Shelter space(Non-precedent) 4.300,00 200 860.000 Parking Area (Non-precedent) 32.000,00 200 6.400.000 Total 101.040,26 36.393.115 100%

INFRASTRUCTURE COST Indoor Areas Total Building Cost (USD) Ratio Cost (USD)

36.393.115 11% 4.003.243

• Infrastructure cost accounting consists: natural gas infrastructure, electricity infrastructure, drinking and waste water infrastructure, telecomm nation infrastructure, ground improvement and etc.

ENVIRONMENT ORGANIZATION AND LANDSCAPE COSTS Indoor Areas Total Building Cost (USD) Ratio Cost (USD)

36.393.115 8% 2.911.449

• Environment organization and landscape costs consist: asphalting costs, environment organization costs, landscape costs, outdoor areas illumination costs, drainage costs and etc.

SUB TOTAL COST (USD) Construction Cost (USD) 36.393.115 Infrastructure Cost (USD) 4.003.243 Environment Organization and Landscape Costs (USD) 2.911.449 TOTAL (USD) 43.307.807

• It has been assumed that total cost accounts will include, building turn key apartment cost, common

areas, electricity and mechanic and automation costs.

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GENERAL PROJECT COSTS Total Cost (USD) Ratio Cost (USD)

41.665.607 11% 4.583.217

• In the general project expenditure costs; the preliminary project, architecture, electricity, drain, electricity and static and etc designs for the project, building control firm charges, project management firm fees have been included.

GROUND IMPROVEMENT COST Total Ground Area 6.256 Unit Area by Each Bored Pile (m²) 3,0 Number of Bored Piles 2.085 Bored Pile Unit Price (USD) 2.975 Total Cost (USD) 6.203.896

SHORING COST TABLE Number of Basement Floors 3 Shoring Surface Depth (m/number of floors) 3 Total Depth (m) 10 Base-Shoring System Frame (m) 450 Shoring Surface Area 4.320 Shoring Cost (USD/sqm) 350 Total Cost (USD) 1.512.000

TOTAL COST (USD) Construction Cost ($) 36.393.115 Infrastructure Cost ($) 4.003.243 Environment Organization and Landscape Costs ($) 2.911.449 General Project Costs ($) 4.763.859 Ground Improvement Cost ($) 6.203.896 Shoring Cost Amount ($) 1.512.000 TOTAL ($) 55.787.562

DISPERSION OF COSTS BY YEAR YEARS 2010(4 months) 2011 2012 2013(3 months) TOTAL RATIO 5% 40% 40% 15% 100% COST (USD) 2.789.378 22.315.025 22.315.025 8.368.134 55.787.562 SALEABLE OFFICE AREA

SALEABLE OFFICE AREA (SQM) 33.340 SALE INCREASE RATIO 5,00%

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sqm Number Dispersion by Area (%)

Area (sqm)

40,00 10 4,76% 400 80,00 80 38,10% 6.400 134,00 70 33,33% 9.380 184,00 25 11,90% 4.600 250 15 7,14% 3.750 321,00 10 4,76% 3.210 TOTAL 210 100,00% 27.740

OFFICE SALE INCOMES 2010(4 Ay) 2011 2012 2013 2014 TOPLAM OFFICE SALE RATIO (%)

10% 30% 30% 20% 10% 100%

SOLD OFFICE AREA (SQM)

3.334 10.002 10.002 6.668 3.334 33.340

OFFICE UNIT SALE INCOME (USD/SQM)

1.906 2.001 2.101 2.206 2.317

TOTAL SALE INCOME (USD) 6.354.480 20.016.611 21.017.442 14.712.209 7.723.910 62.100.742

SALEABLE TRADE AREA SALEABLE TRADE AREA (M2) 12.500 SALE INCREASE RATIO 5,00%

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•

sqm Number Dispersion by Area (%) Area (sqm)

40,00 13 28,89% 520 249,00 20 44,44% 4.980 500,00 11 24,44% 5.500 1.500,00 1 2,22% 1.500 TOTAL 45 100,00% 12.500

• TRADE SALE INCOMES 2010 2011 2012 2013 2014 TOPLAM TRADE SALE RATIO (%) 10% 30% 30% 25% 5% 100% SOLD TRADE AREA (SQM) 1.250 3.750 3.750 3.125 625 12.500 TRADE UNIT SALE INCOME (USD/SQM)

2.405 2.525 2.652 2.784 2.923

TOTAL SALE INCOME (USD) 3.006.400 9.470.160 9.943.668 8.700.710 1.827.149 32.948.086 CONVENTION CENTER PROJECTOR FOR RENT TOTAL CONVENTION CENTER AREA (Except parking lot) 6.000 RENTABLE CONVENTION CENTER AREA (sqm) 6.000 RENTABLE AREA LOSS RATIO (%) 2,02 RENT RISE RATIO 2% CAPITALISATION RATIO (%) 30% INFLATION RATIO 11,00%

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RESTAURANT PROJECTOR FOR RENT Restourant Size Indoor Area (sqm) 1.200 Fields can be rented Size (sqm) 1.200 Rental Unit Value ($/ay/sqm) 12,02 Rent growth rate 3% Capitalization rate 11,00%

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SOCIAL FACILITIES Projector for RENT Social Facility Size Indoor Area (sqm) 1.700,00 Fields can be rented Size (sqm) 1.700,00 Rental Unit Value ($/ay/sqm) 7,4 Rent growth rate 2% Renewal Cost Ratio 1,5%

Capitalization rate 11,00%

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Projection Chart of the Value of 2nd Alternative / “Offıce+Trade+Conventıon Centre” Project at 07.03.2010

Appraisal Table Safe Income Ratio 6,92% 6,92% 6,92% Risc Premium 4,1% 5,1% 6,1% REDUCTION RATIO 11,00% 12,00% 13,00% NET ACTUAL VALUE (USD) 40.100.133 38.763.802 37.508.639

With the 12% reduction ratio, estimated value of 2nd Alternative “Trade+Office+Conventıon Centre” project is 38.765.000 USD. Land Owner Ratio 40%

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Reduction Ratio 12,00% Net Current Value 32.602.700

Land Value 1.267,87 USD/sqm 1.901,81 TL/SQM

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9.3.3 Appraisal of Analysis Results

In this appraisal land value is calculated with development method. In this study enough data has been collected for approaches. Consequently, application of a quality project on current parcel with accepted projections, if the project is completed and sold by a big brand, it has been assessed that it will be a suitable approach to account the 40% of total project revenues as land owner’s share under given circumstances. According to sales comparison approach current value of land is assessed as approximately 25.714.500-TL (Twentyfivemillionsevenhundredtfortyhousandfivehundred TR).

PLOT NO PARCEL NO (SQM) SQM/TL TOTAL(TL)

2782 151 25.714,50 1.000,00 25.714.500,00 According to development approach current value of land is assessed as approximately 48.904.049-TL (Fortyeightmillionninehundredtfourhousandfortynine TR).

PLOT NO PARCEL NO (SQM) SQM/TL TOTAL(TL)

2782 151 25.714,50 1.901,81 48.904.049,89 In these studies net current values of 2 proposal projects are given below. Net present values of the 2 alternatives studied in the Most Efficient and Productive Use Analysis have been provided below.

Function Project NPV; (USD) Project NPV; (TL) Project

IRR (%) 1. Alternative “SHOPPING CENTER + OFFICE” 30.768.000 46.150.000 19,23

2. Alternative “OFFICE+TRADE+CONVENTION CENTRE” 38.765.000

58.145.000 47,44

It was projected that the best and most efficient use would be the 2rd Alternative (OFFICE+TRADE+CONVENTION CENTRE), which has the highest present value among the alternatives developed according to the best and most efficient use method, and approximately 38.765.000 USD (58.145.000-TL) was appraised as the final value.

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SECTION 10 CONCLUSION

,

Özge ŞENER BOZKURT/ Appraiser

Selda ULAŞIR/ Appraiser

Bilge BELLER ÖZÇAM / Licensed Appraiser

All characteristics which might have an influence on the value of the property such as the location, the style of its environment, infrastructure and means of access, its facade to the road and the street, the construction system of the building, its age, the workmanship and the quality of the products, situation of the plumbing have been taken into account and detailed market research has been undertaken on location. Taking into consideration the economic conditions experienced in the recent period the value of the immovable has been estimated as follows by TSKB Gayrimenkul Değerleme A.Ş.

VAT not included.

NOT: 1 The value above is the fair market value for a cash sale.

2

3 Exchange rate has been taken as 1 USD = 1,50- TL - The value in USD is given only for information purpose.

Immovable property qualified as “Prina Factory with Garden” in the title deed registry, which is located on section 291, block 2782, and parcel no 151 in the Halkapınar Quarter, 1st Region of the administrative district of Konak in the province of Izmir. NET PRESENT VALUE OF THE OFFICE + TRADE + CONVENTION CENTER PROJECT TO BE DEVELOPED AS OF 07 APRIL 2010

58.145.000-TL

(Fiftyeightmilliononehundredfortyfivethousand- Türkish Liras)

38.765.000-USD

(Thirtyeightmillionsevenhundredsixtyfivethousand-American Dollars)

Immovable property qualified as “Prina Factory with Garden” in the title deed registry, which is located on section 291, block 2782, and parcel no 151 in the Halkapınar Quarter, 1st Region of the administrative district of Konak in the province of Izmir. TODAY’S NET VALUE OF THE BUILDING PLOT WHICH FAIR MARKET VALUE AS OF 07 APRIL 2010(VAT not included)

25.714.500- TL (Twentyfivemillionsevenhundredfortythousandfivehundred -

Turkish Liras)

17.143.000-USD (Seventymilliononehundredfortythreethousand-Amerıcan

Dollars)

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ANNEX

1 Copy of Title Deed 2 Photographs 3 Copy of zoning status 4 Resumes

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