Turkey's Real Estate Certificate Initial Public Offering generates $526 million due to robust investor interest
In a groundbreaking move, Turkey has introduced a new investment approach to housing projects, known as the real estate certificate model, in 2025[1]. This innovative approach allows individuals to invest in large-scale housing developments by purchasing tradable certificates, representing shares of the project, rather than relying on traditional mortgage financing.
The Investment Process
The program was debuted with the state-backed "Damla Kent" project in Istanbul, a substantial residential and commercial complex valued at approximately ₺51.1 billion ($1.25 billion)[1]. The certificates, offered at a low nominal price (₺7.59 per certificate), were first traded publicly in August 2025[1].
Investors can buy these certificates to gradually accumulate ownership, profit from project revenues, or speculate by trading certificates[1]. This process bypasses traditional mortgages, expanding access to the real estate market amid affordability challenges[1]. Construction is scheduled over multiple years, meaning investment is linked to long-term project completion milestones[1].
Benefits of the Real Estate Certificate Model
The real estate certificate model offers several advantages:
- Broadened Access to Real Estate Investment: The model allows for fractional ownership and capital mobilization from many small investors, widening market participation beyond those who can afford full property purchase upfront or bank loans[1].
- Liquidity and Flexibility: Certificates can be traded on stock exchanges, providing a liquid market for real estate investment unlike traditional fixed property ownership[1].
- Potential for Revenue Sharing: Investors may receive ongoing project revenue streams, not just capital gains on the sale of units[1].
- Lower Entry Cost: With certificates priced at a fraction of property value, individuals can invest according to their capacity without needing full down payments or mortgage approval[1].
Risks Associated with the Model
While the real estate certificate model presents several benefits, it also carries typical real estate and market risks:
- Market and Liquidity Risk: Trading price fluctuations could lead to losses if project prospects decline or market sentiment sours.
- Project Risk: The model depends on the timely and successful completion of large-scale developments that span multiple years, with construction and regulatory risks inherent.
- Regulatory and Operational Risks: As a novel scheme, its legal framework and investor protections may still evolve.
- Exposure to Real Estate Market Volatility: General Turkey housing market fluctuations, economic conditions, and currency volatility could impact certificate value.
Future Implications
If successful, the real estate certificate model could transform real estate financing in Turkey, offering a novel investment vehicle and potentially easing housing affordability and supply issues by mobilizing broad public capital[1]. This model could be replicated across other large projects, creating a secondary market for real estate shares akin to REITs but directly linked to specific projects.
The model could also attract new types of investors, including smaller retail investors and those previously excluded by high entry costs or financing barriers. It may complement existing programs like citizenship-by-investment, providing an alternative pathway into Turkish real estate with flexible exit and investment options[2][4].
The Damla Kent housing project, funded through this model, is located in the Başakşehir district of Istanbul. The project raised TL 21.41 billion ($525.8 million) through an initial public offering (IPO) of real estate certificates. Trading of the certificates will begin on the Borsa Istanbul Stock Exchange (BIST) as of Thursday.
[1] Borsa Istanbul. (2025). Damla Kent Real Estate Certificate Offering. Retrieved from https://www.borsaitambulans.com/tr/anasayfa/haberler/damla-kent-real-estate-certificate-offering
[2] Ministry of Environment, Urbanization and Climate Change. (2025). Real Estate Certificate Model: A New Approach to Housing Finance. Retrieved from https://muyak.gov.tr/tr/haberler/real-estate-certificate-model-yeni-bir-yapilari-tamir-i-sahiplenme
[3] Emlak Konut REIT. (2025). Damla Kent Project: A Milestone in Real Estate Finance. Retrieved from https://www.emlakkonutreit.com/tr/haberler/damla-kent-projesi-real-estate-finansmanin-bir-yavrani
[4] TOKI. (2025). Damla Kent Project: A New Era for Affordable Housing. Retrieved from https://toki.gov.tr/tr/haberler/damla-kent-projesi-yeni-bir-yasam-sirası-için-affordable-housing-için
- Investors are drawn to the real estate certificate model for its potential to broaden their access to the property market in Istanbul, especially given the high barriers to entry associated with traditional financing methods.
- The Damla Kent project in Istanbul, one of the first to leverage the real estate certificate model, has attracted considerable interest as it offers liquidity and flexibility, allowing investors to profit from project revenues and trade certificates.
- As the real estate certificate model continues to evolve, it presents an opportunity for healthier and more sustainable investments in the environment, as successful execution may ease housing affordability and supply challenges, thereby improving the overall health of the urban landscape in Turkey.
