Esteemed Stakeholders,

The economic conditions that our country underwent, the unfavorable operating environment, the spiral of high exchange rate and high inflation rate in 2018 created a repressing effect upon our sector. Our Company took the necessary actions in spite of the negative conjuncture and gave priority to delivery, sales and rental targets of the existing projects, securing increase in rental income and sales revenues. Ultimately, our Company ended the year with profitability.

İş REIC’s rental income grew by 10% to reach TL 217 million in 2018, while total sales revenues were up by 150% to TL 1,098 million, 99% of it generated on real estate. Net profit for the period was registered as TL 342 million at year-end, 90% higher than it was the year before. Our shareholders’ equity at 2018 year-end reached TL 3.5 billion, and the Company’s issued capital was raised to TL 958,750,000. Total assets of the Company were recorded as TL 5.2 billion, and the total portfolio value as TL 4.9 billion. As at 31 December 2018, İş REIC represented nearly 5.6% of the real estate investment company sector with a market capitalization of TL 1,035 million.

An overview of 2018 …

In 2018, İş REIC delivered the title deeds for the Manzara Adalar Project in Kartal, where settlement started. In İnistanbul project realized in Topkapı, İstanbul, title deed deliveries began for residential units delivered in Gala and Lokal phases. Residential unit deliveries for Hayat and Konsept that make up the 3rd and 4th phases of the project where 70% of construction has been finalized are targeted to occur during 2019. During the reporting period, Ankara İş Tower has been rented out to T.R. Ministry of Interior in its entirety.

During the year, there have been some developments regarding the projects that İş REIC is planning to realize in the future. The investment for nearly 1,000 housing units targeted to be developed in Tuzla, for which the building permit has been received, was postponed until suitable market and marketplace conditions materialize, whereas the process for obtaining a building permit went on in 2018 for the project planned to be developed on the property located in Üsküdar. On the other hand, project development continued for the project in Kadıköy covering hotel and commercial spaces, in which 45% stake is decided to be acquired.

İş REIC remains one of the leading actors in its sector.

Preserving its prestigious position in the sector with its well-balanced portfolio, healthy financial structure and credibility, İş REIC was rated to be within “investment category” by a rating agency during the reporting period, earned the “LEED” certificate, the world’s most prestigious green building certification, with its Manzara Adalar, Tuzla Technology and Operation Center and Tuzla Mixed-Use projects, thus endorsing that sustainability is reflected with all of its aspects in the Company’s projects.

“Inspiring Minds”, the corporate social responsibility initiative launched on the basis of the core values of İş REIC brand, its goals, and positive social influence the Company seeks to create in the public opinion, was put into life in 2018. Aimed at building on children’s creativity, knowledge and skills, the project was scientifically proven to be efficient, and as such, presents the potential to be referenced in the literature.

We are holding an optimistic outlook for the future…

İş REIC will keep implementing its strategies with a focus on creating value for its stakeholders, by effectively managing its portfolio and achieving its goals with respect to sustainable rental income, sales revenue and profitability. İş REIC will continue to make a difference in its sector drawing on its philosophy built upon its financial capabilities, deep-rooted culture and customer satisfaction, and will increase the value it contributes to its customers, stakeholders and the sector by keeping a close eye on the changes both across the world and in the sector.

I would like to extend my thanks first and foremost to our principal shareholder İşbank, to our Board of Directors, all our business partners, employees and investors, for their continued support and confidence in our Company.

Sincerely,

Hasan K. Bolat

CEO