The positioning of SİNPAŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. in the sector

Introduction
In recent years the real estate market in Turkey has been rapidly changing.  The development of the legal basis for Real Estate Investment Partner (GYO) firms towards the end of 1990s and the entry of GYO firms to the stock exchange has created a substantial financial resource for the sector as well as giving the investors an opportunity to become partners in big real estate projects. Due to the change in customer expectations and demands along with the economic growth and increased variety in the market, many of players have re-organized their growth and competition strategies under the GYO concept and completed their institutionalization. Companies that have vast experience and technical expertise, maintain strong financial structure, satisfy customer expectations with integrated service approach using projects developed utilizing individualized/unique concepts, work in a strong collaboration with their business partners, and keep institutionalization a priority have an important advantage.  Under this light shouldering a major role in the development of the market since the ending of the 90s, completing its project successfully despite the economic fluctuations and continuing to grow steadily, gaining more experience with projects that are sensitive to city's fabric and human life, and are high quality and innovative, and earning the trust of its customers, and with its 33 year history in the home/commercial construction/real estate development field Sinpaş Group is among the most respected, pioneering, and leading companies in the sector.        

Sinpaş Group is aiming to consolidate newly formed Sinpaş Gayrimenkul Yatırım Ortaklığı A.Ş. (Sinpaş GYO) and Sinapş Group's home building real estate activities under one roof through the Real Estate Investment Partnership conversion project that has been put into effect.  With the next stage of this project, which is the public offering of 49% of the shares of Sinpaş GYO, the financial structure will reinforced, new plots will be purchased for housing project development, financing of current housing projects, and in addition to Istanbul new housing projects will be developed in developed markets such Bursa, Ankara, İzmir and Adana. The public offering of shares will make Sİnpaş GYO more competitive in Turkey's developing real estate market as well as will develop its company profile with inclusion of respected foreign companies as share holders and will merge its brand power with the institution.

Overview of Sinpaş Group
The foundation of Sinpaş group was laid with the formation of Sinpaş Yapı Endüstrisi ve Ticaret A.Ş. ("Sinpaş Yapı") by civil engineer Avni Çelik in 1974 and since the 1990s Sinpaş Group have been one of the leading developers in the housing market of the Turkish real estate sector.

While Sinpaş group was increasing its activities in the construction sector, within the group several affiliates were formed that would also operate in the industrial and service sectors in a synergetic manner with the construction activities. The affiliates related to the construction/real estate sector are summarized below:  

Seranit Granit Seramik San. A.Ş ("Seranit"):
Seranit, which is the first granite ceramic producer of Turkey, continues production with Europe's largest integrated plant. The sales network of Seranit, which has a production capacity of 8,5 million m2, consists of 258 (50 of which are showrooms)  sales point in Turkey and a total of 82 vendors in 21 countries. The countries to which products are exported include France, Germany, Belgium, Switzerland, Russia and Israel. 

Mikron's Mikronize Mineral End. ve Tic. A.Ş. ("Mikron's")
In 2004 Mikron's began micronized calcite production in Niğde, where the world's  purest and whitest calcite reserve are found.  Its current yearly production capacity is 250,000 tons. The reserve in the mine owned by Mikron'S covering an area approximately 350 acres will supply raw material that will allow continuous production for years to come. Mikron's products are marketed, both domestically and internationally, under the brand name of "Türkcarb".

Prodek Yapı Dekorasyonu San. Tic. A.Ş.("Prodek")
Prodek, manufactures furniture for kitchen/bathroom under the brand name Vanucci. Until 2004, Prodek's was manufacturing solely for Sinpaş, however since 2005 its products have been marketed domestically.   

Dekor's Mekan Tasarımı ve Dekorasyon  A.Ş. ("Dekor's")
Dekor's, an interior design company, primarily targets the customers of Sinpaş Construction. It is a affiliated company that supports construction activities.  Dekor's offers interior design services to individual and corporate clients. It also offers technical support and maintenance services. 

Kentsel Hizmetler Yapı ve İşl. San. Tic. A.Ş.("Kentsel")
Kentsel provides professional housing complex management including security, landscaping and maintenance to Sinpaş Construction projects. Kentsel also offers real estate sales and rentals solely to Sinpaş customers.

Yapımek Yapı Mekanik ve Oto. End. Tic. A.Ş. ("Yapımek")
Yapımek was formed in 2000 and manufactures and assembles elevators and escalators, and provides maintenance services for them. Yapımek's products are targeted for homes, hospitals, hotels and shopping centers. Yapımek is the holder of ISO 9001:2000 certificate given by TÜV.

Çelik&Çelik Yapısal Çelik A.Ş.

Çelik&Çelik, was formed in 2005 and manufactures thin-thick sheet metal and profiling materials under one roof. The products of Çelik&Çelik can be used in apartments and other housing projects, shopping centers and industrial plants.
Sinpaş Group with its vast experience in property and housing project development has also built business plazas. Currently, including contractors, the group has approximately 3200 employees.

Sinpaş Yapı
Sinpaş Yapı, the construction company of Sinpaş Group was formed in 1974 in Ankara. In 1985 the headquarters was moved to Istanbul to expand the company's activities. Not only does Sinpaş Yapı undertake the construction of the projects developed by the Group but provides construction services, property development services, and sales and marketing of non-housing projects for third parties. Until Sinpaş GYO was formed, Sinpaş Yapı was also responsible for the sales and marketing activities related to the development of housing projects.    

Usually during construction Sinpaş Yapı subcontracts specific activities such as excavation, infrastructure, electrical and mechanical or elevator works to expert companies. Contractors are evaluated before a tender is carried out for competitive bidding. The evaluation consists of assessment of specific criteria including the number and qualifications of employees, adequacy of the materials, maintenance of the materials, the compliance of equipment and materials with the technical specification, health condition and security conditions. 
Sinpaş Yapı property management team that asses factors such as project management activities of Sinpaş Yapı, cost control, scheduling, quality assurance and quality control;  effectively inspects the contractors, finds advantageous prices during procurement and does so right at the construction site.  

In its projects, Sinpaş Yapı combines high quality production technology and materials with unique designs and when necessary employs technical consultants to modify and develop technologies at the construction site.

Since its formation in 1974, Sinpaş Yapı has gained vast experience and know-how with its projects. The projects, which revolutionized the sector with their strong architectural lines and different lifestyle concepts, were met with great demand. In addition to providing price advantage and knowledge base, offering an integrated service by being actively involved in every link of the property development, project development, construction, sales and marketing services and after sales services chain  and responding to client demands quickly and therefore increasing customer satisfaction to another level has brought Sinpaş Yapı substantial competitive advantage. Sinpaş Yapı has contirubuted its 33 year property and project development experience and the associated human resources to Sinpaş GYO and in the future will focus on the fields of construction and commercial real estate projects.     

Sinpaş GYO

Sinpaş GYO in accordance with Turkish Laws was incorporated on December 27, 2006 under "Sinpaş İnşaat A.Ş." and on December 29, 2006 was submitted to SPK to be registered as a Real Estate Investment Partnership (GYO) through conversion method. The aim of Sinpaş GYO, which was formed by SPK on 02 May 2007 by the commercial record registration of its main agreement, is to develop real estate housing projects in accordance with the SPK's decrees.     

Competition Elements

The elements that are the basis of our company's competitive strength can be summarized as follows:

The Experience of Sinpaş Group

• 33 year experience of the Sinpas Group which was formed in 1974, in the sector along with the strong Sinpaş brand it has developed over time.
• The 11 housing projects completed to date consisting of 1.2 million m2 property area and total of 740,756 m2 construction area

GYO Portfolio Consisting of Large and Diversified Housing Projects

• Initial portfolio includes 3 housing projects at different stages of development at different parts of Istanbul and 2 properties, which are considered for project development

• Ümaniye-Çakmak Plot: Property development stage
• Küçükçekmece-Halkalı Plot: Project development stage
• Kartal-Samandıra-Sinpaş Lagün: Project approved, initial sales and construction started
• Sarıyer-Zekeriyaköy-Sinpaş Rumeli Mansions: Project approved, initial sales almost completed, construction started
• Ümraniye-A.Dudullu-Avangarden: Project approved, initial sales almost completed, construction partially completed

Focus on Housing Sector

• The only GYO planning to focus only on housing projects in Turkey/Istanbul real estate market
• Vast experience with the local regulatory agency due to previous projects.
• Continuous assessment of new properties to add to our portfolio

Integrated Business Model

• The necessary expert personnel (architects, engineers, sales force and management - approximately 40 people) for project development is employed by the company
• Concepts behind the projects are created within the GYO and architectural firms are used for their application
• Companies for the construction of the projects will be chosen based on price. The fact that the group embodies a construction company as well as companies that can provide other product and services gives an edge.

Strong Financial Structure

• The tendency in finance policies is the procurement of the property with own resources or through income distribution agreements.
• Construction costs are planned to be covered through pre-sales

Strong Board of Directors and Experienced Executives

• The chairman of the board Avni Çelik, has a 33 year experience in the sector
• In addition to the members experienced in real estate and project development, the board includes members with finance and associated legislation background and experience. .
• The management consists of executives experienced in procurement, property development, project development, finance, marketing and sales 

Project Development Process
Company's project development process can be examined under five headings: locating and purchasing of property, property development, concept and project development, sales and marketing, construction, and after construction.

Locating and Purchasing of Property

• Procurement of properties with legal issues that needs to be sorted, at a low price and developing these properties provides an opportunity for high profit. Sinpas Grubu has an competitive edge due to the fact that it can developed those properties passed over by its inexperienced competitors due to various ownership or zoning problems. In recent years income distribution agreements have become popular in the Turkish real estate market. At this point property owners prefer Sinpaş Group in light of its track record in completing previous project on time, and sales and marketing capacity.  
• Due to Sinpaş Group/Sinpaş GYO's vast and long experience in the market, Sinpaş receive project offers. Local consumer group associated with housing real estate market are continuously followed, potential development areas are located either directly through the land owners, real estate agencies or other private organizations operating in the field.   
• During the decision making process for procurement legal documents are scrutinized and zoning and other matters are discussed with the regulatory agencies. For potential projects feasibility analysis is performed and location and size of property, project scheduling, project cost, targeted customer base and project sales projections are evaluated in detail. 
• During procurement appraising companies listed in Capital Market Commission are utilized to determine the value of the property.  
• In-house analyses as well as the report received from the appraising company are submitted to the Board of Directors and upon approval the property is purchased. If a property owned by Sinpaş Group is to be procured, in order to reach a decision the independent board of directors can consult with outside experts and the consultation fees are paid by our company.

Concept and Project Development

• Following procurement, legal issues concerning development on the property are resolved
• If necessary a new zoning application is submitted
• A unique concept and design is developed
• General business plan is prepared

Sales and Marketing

• Sinpaş Group has a very strong image in the market. The successes of previous projects and the continuous demand for the development of new projects create an advantage in sales and marketing.
• The rapid growth in housing market and the increase in per capita income are reflected in the increased demand for our projects.
• Most of the units are sold before the start of construction and we offer our customers the opportunity for installment payments. 

Construction

• The three projects (Avangarden, Sinpaş Rumeli Mansions and Sinpaş Lagün) being constructed by Sinpaş Yapı will be completed by Sinpaş Yapı in accordance with the contract.
• In future projects companies in addition to Sinpas Yapı will have an opportunity to make an offer.
• The offers will be submitted to the board of directors and the board will make the final selection.
• The constructions will be inspected for both cost control and quality control. Services of independent companies may be used and Company personnel may be assigned to construction sites.
• Decision associated with progress payment and temporary and final delivery will be based on these inspections. 

After Construction

• Units are delivered to their owners.
• Customers may employ Sinpas Group Companies for their interior decoration needs.