Introduction: Is Buying Commercial Real Estate in Turkey Safe for Foreign Investors?

Turkey offers a broad commercial real estate market for international investors.

Foreign investors may be interested in purchasing:

• office buildings;
• retail units;
• shopping centres;
• hotels;
• warehouses;
• logistics facilities;
• factories;
• industrial land;
• healthcare properties;
• student accommodation;
• mixed-use developments;
• or income-producing properties occupied by commercial tenants.

The legal system permits foreign investment in Turkish real estate, but commercial property transactions should not be approached in the same way as purchasing an ordinary residential apartment.

Commercial property creates additional questions concerning:

ownership + zoning + licences + tenants + construction compliance + tax + environmental exposure + corporate acquisition restrictions + financing + exit.

The most dangerous assumption a foreign investor can make is:

“The property has a title deed, therefore everything is legally in order.”

A valid title deed establishes ownership.

It does not necessarily establish that:

• the seller has unrestricted authority to transfer the property;
• the building may legally be used for the investor’s intended commercial activity;
• all extensions were legally constructed;
• the property has the necessary occupancy permit;
• an existing tenant can easily be removed;
• there are no mortgages, attachments or easements;
• the purchaser itself is legally eligible to acquire the property;
• or the proposed investment model is tax efficient.

Turkey’s official investment guidance expressly recommends checking mortgages, liens and similar restrictions before commencing a property transfer and confirms that ownership itself is transferred through registration with the Land Registry Directorate. Preliminary contracts do not themselves transfer title.

For a serious commercial acquisition, the safest process is therefore:

legal due diligence first → purchase agreement second → title transfer last.

This guide explains the principal legal risks foreign investors should investigate before buying commercial real estate in Turkey in 2026.

1. First Determine Who Will Buy the Property

Before examining the property, the investor should determine the identity of the purchaser.

This is critically important because Turkish law distinguishes between:

1. foreign natural persons;
2. companies incorporated abroad;
3. Turkish companies with foreign shareholders.

These categories are subject to different acquisition rules.

A German individual buying a warehouse personally is legally different from a German GmbH attempting to buy the same warehouse directly.

Likewise, a Turkish A.Ş. owned 100% by a German parent company is still a Turkish legal entity but can fall within the special rules applicable to foreign-controlled Turkish companies.

The acquisition vehicle should therefore be decided as part of the transaction structure—not after the commercial terms have already been agreed.

2. Foreign Individuals Can Generally Buy Commercial Property, Subject to Restrictions

Foreign natural persons whose nationality is eligible under the applicable Turkish framework may acquire different types of privately owned real estate, including commercial property.

Current official investment guidance specifically identifies residential, commercial, land and agricultural property as potentially acquirable by qualifying foreign individuals. It also confirms a general nationwide limit of 30 hectares and a separate territorial concentration restriction.

Restrictions also apply in sensitive security areas.

Foreign natural persons cannot acquire property in prohibited military zones or military security zones, while acquisitions in certain special security zones can require permission from the relevant governor’s office.

For an ordinary office or retail acquisition in Istanbul, these limits may never become commercially relevant.

For:

• large industrial land;
• logistics sites;
• energy projects;
• agricultural land;
• or properties near sensitive facilities,

they may become critical.

3. A Foreign Company Incorporated Abroad Does Not Have the Same Broad Acquisition Right

This distinction is frequently misunderstood.

Suppose:

UK Investor Ltd.

wants to buy an Istanbul office directly in the name of the UK company.

Turkey does not generally treat a foreign legal entity incorporated abroad in the same way as a Turkish company with foreign shareholders.

Official investment guidance states that foreign commercial legal entities established under foreign law may acquire Turkish real estate only in exceptional circumstances where acquisition is permitted under international agreements or specific Turkish legislation.

Examples include special statutory frameworks concerning matters such as petroleum, tourism incentives and industrial zones.

Therefore, foreign institutional investors frequently use:

Foreign Parent → Turkish A.Ş./Ltd. Şti. → Turkish Property

rather than attempting direct ownership through the foreign parent.

The exact structure should nevertheless be reviewed for tax, financing and exit implications.

4. Foreign-Owned Turkish Companies Are Different From Foreign Companies

A company incorporated in Turkey is a Turkish legal entity even if all of its shareholders are foreign.

However, Article 36 of the Land Registry Law creates special rules where foreign control reaches specified levels.

Current official guidance states that the Article 36 regime applies where:

• foreign investors hold 50% or more of the shares; or
• foreign investors have the power to appoint or dismiss the majority of the board of directors.

The rule can also become relevant through indirect ownership structures.

This means that corporate control matters—not merely whether the Turkish company has the word “foreign” anywhere in its registration.

5. Why Article 36 Matters Before Signing the Purchase Agreement

A Turkish company falling within Article 36 may acquire real estate and limited rights in rem for activities included within its articles of association.

The company is generally required to apply through the relevant governor’s office process before completing the acquisition.

The investor should therefore ensure that:

• the company’s articles contain the relevant activity;
• the proposed commercial use is consistent with that activity;
• the company falls inside or outside Article 36;
• and any required administrative procedure has been completed before closing.

This should be investigated at the term sheet stage.

If the investor signs an unconditional agreement to buy a EUR 20 million property before confirming acquisition eligibility, the investor can create a contractual obligation it cannot easily perform.

6. Important Article 36 Exceptions Can Make Certain Investment Zones Attractive

The Article 36 permission procedure does not apply in the same manner to every acquisition.

Current official guidance states that the governor’s-office permission procedure is not required for qualifying acquisitions in:

• Organized Industrial Zones;
• Industrial Zones;
• Technology Development Zones;
• Free Zones.

The same official guidance identifies additional exceptions involving, among other things, mortgages and certain acquisitions connected with corporate restructuring or debt collection.

This is especially relevant to foreign investors acquiring:

• factories;
• industrial plots;
• logistics operations;
• or technology facilities.

An OIZ acquisition may therefore offer regulatory advantages beyond infrastructure and incentives.

7. The Title Deed Must Be Examined Before Any Deposit Becomes Non-Refundable

The first core due diligence document is the tapu kaydı — title deed record.

The investor should determine:

• who owns the property;
• whether ownership is full or shared;
• land and parcel information;
• independent section number;
• land share;
• type of property;
• and any registered burdens.

Turkey’s official investment guidance specifically recommends checking mortgages, liens and similar restrictions before proceeding with a transaction.

A property may look completely unencumbered physically while the title register contains a serious legal restriction.

The investor should therefore never rely on:

• a broker’s brochure;
• seller’s representation;
• old photocopy of the deed;
• or an appraisal report

as a substitute for a current title examination.

8. Mortgages Can Materially Change the Transaction

A mortgage does not necessarily mean the property cannot be purchased.

Commercial properties are frequently mortgaged to banks.

The issue is how the mortgage will be released.

Example

Purchase price:

EUR 10 million

Seller owes Turkish Bank:

EUR 4 million

Bank holds a first-ranking mortgage.

A properly structured closing may provide:

1. EUR 4 million paid directly to the bank;
2. bank issues release documentation;
3. mortgage is discharged;
4. balance goes to seller;
5. ownership transfers to investor.

The investor should not simply transfer EUR 10 million to the seller and accept:

“We will remove the mortgage next week.”

Closing mechanics should ensure simultaneous protection.

9. Attachments, Injunctions and Other Restrictions Can Prevent or Delay Closing

Due diligence should also investigate matters such as:

• enforcement attachments;
• court injunctions;
• usufruct rights;
• rights of residence where relevant;
• easements;
• rights of passage;
• utility easements;
• construction rights;
• and other annotations.

Some restrictions may directly prevent transfer.

Others may not prevent title transfer but can significantly reduce the economic value of the property.

For example, a logistics site may technically remain transferable while being burdened by an easement running through the middle of the land.

The question is not simply:

“Can we buy it?”

but:

“Can we use it in the way our investment model assumes?”

10. A Preliminary Sale Agreement Does Not Transfer Ownership

This is particularly important for foreign purchasers unfamiliar with Turkish land registration law.

A preliminary agreement, deposit agreement, reservation contract or notarised promise to sell does not itself mean the purchaser has become the legal owner.

Official Turkish investment guidance expressly confirms that preliminary real estate agreements create an obligation regarding future transfer but do not themselves transfer title. Ownership changes through the Land Registry registration process.

A foreign investor should therefore distinguish between:

contractual right to demand transfer

and

registered ownership.

Large deposits should only be paid under a professionally drafted agreement providing clear remedies if title cannot be transferred.

11. Zoning Is Often More Important Than Ownership

Commercial investors should obtain and analyse the applicable zoning position.

A property being described by a broker as:

“commercial property”

does not necessarily mean every commercial activity is legally permitted there.

The zoning plan may identify the area for:

• commercial use;
• tourism;
• industrial activity;
• storage;
• office use;
• mixed use;
• social facilities;
• public services;
• or another planning category.

Plan notes may impose additional limitations.

Example

Investor wants to buy a building for a private hospital.

Title deed:

commercial unit.

But planning/licensing rules may not allow the specific healthcare use.

The investor’s real question must therefore be:

“Can this exact activity operate legally in this exact property?”

not merely:

“Is the property commercial?”

12. Review Building Permits and Approved Architectural Plans

For developed commercial property, legal due diligence should compare the physical building with the authorised project.

The file should generally be reviewed for:

• building permit;
• approved architectural project;
• floor plans;
• additions;
• mezzanines;
• terraces;
• storage extensions;
• parking;
• common areas;
• lifts;
• fire systems;
• and changes in use.

A warehouse advertised as 12,000 m² may have only 9,500 m² legally approved.

An office building may contain an additional floor that does not appear in the approved project.

A retail unit may have annexed common areas without formal authorisation.

These are not merely technical defects.

They can affect:

• operating licences;
• financing;
• insurance;
• redevelopment;
• valuation;
• and future resale.

13. The Occupancy Permit Is a Critical Commercial Due Diligence Item

Foreign investors should verify the Yapı Kullanma İzin Belgesi — building use/occupancy permit.

Official guidance from the Ministry of Environment confirms that building permits and occupancy documents are issued by the competent administration—normally the relevant municipality or special provincial authority, subject to specific statutory mechanisms.

Government guidance also explains that an occupancy document is tied to whether the building has been completed consistently with the approved permit and associated technical requirements.

The absence of a proper occupancy permit can create difficulties concerning:

• business licences;
• utility arrangements;
• financing;
• insurance;
• redevelopment;
• and future purchaser due diligence.

Therefore:

“The building has been used for ten years without a problem”

is not a sufficient legal answer.

The investor should inspect the underlying permit file.

14. A Commercial Property May Also Require a Workplace Operating Licence

The fact that a building may legally exist does not necessarily mean a particular business may operate there.

Depending on the activity, an İşyeri Açma ve Çalışma Ruhsatı — Workplace Opening and Operating Licence may be required.

The competent authority normally examines matters such as:

• property use;
• safety;
• fire conditions;
• zoning;
• technical requirements;
• and sector-specific licensing conditions.

Ministry guidance links building-use documentation and workplace licensing processes to compliance with the approved physical condition of the building.

This is especially important where the investor intends to operate:

• restaurant;
• hotel;
• clinic;
• factory;
• warehouse;
• entertainment venue;
• school;
• private healthcare business;
• industrial facility;
• or other regulated operation.

The legal ability to own the building and the legal ability to conduct the business are separate issues.

15. Existing Tenants Can Be One of the Largest Hidden Risks

Commercial properties are often purchased because they produce rental income.

But the investor needs to examine every existing lease.

Under Article 310 of the Turkish Code of Obligations, when leased property changes ownership, the new owner becomes a party to the existing lease agreement.

This means:

Buying the property does not automatically cancel the lease.

A foreign investor cannot assume:

“We bought the office, so the tenant must leave.”

Existing tenants can remain legally protected depending on the lease structure and statutory rules.

This point is especially important when the investor wants the property for its own operations rather than purely as a rental investment.

16. Commercial Lease Due Diligence Should Be Treated Like Contract Due Diligence

For each tenant, the investor should review:

• lease term;
• commencement date;
• renewal mechanics;
• rent;
• rent currency;
• indexation;
• payment history;
• deposit;
• guarantees;
• bank guarantees;
• sublease rights;
• assignment rights;
• fit-out arrangements;
• service charges;
• maintenance obligations;
• insurance;
• early termination;
• rent-free periods;
• landlord incentives;
• side letters;
• and pending disputes.

The investor should also compare:

contract rent vs market rent.

A building can appear highly valuable because it is fully occupied, but long-term below-market leases can reduce investment performance for years.

Conversely, very high rent may be unsustainable and create tenant default risk.

17. Do Not Assume a Commercial Tenant Can Easily Be Evicted

Turkish law contains significant protections applicable to roofed workplace leases.

The new owner becomes the landlord, but acquiring title does not automatically produce immediate vacant possession.

If the investor requires the property vacant, that condition should be resolved before closing.

A purchase agreement can provide:

Vacant possession at closing as a condition precedent.

That is materially safer than:

“The buyer will purchase first and the seller will try to remove the tenant later.”

If vacant possession is commercially essential, the buyer should not inherit the eviction risk unintentionally.

18. Check Whether Lease Rights Are Reflected in the Land Registry

The due diligence process should also determine whether lease-related rights or other contractual rights have been annotated in the title register.

A registered annotation may affect the relationship between the purchaser and relevant third parties.

However, foreign investors should not make the opposite mistake either.

The absence of a lease annotation does not mean the lease can simply be ignored.

Article 310’s rule that the new owner becomes the landlord is itself highly important.

Therefore, both the title record and the underlying lease documents must be reviewed.

19. Shared Ownership Creates Special Commercial Risks

Some commercial property is owned through co-ownership rather than by a single owner.

An investor may therefore be buying:

25% undivided interest in land

rather than:

100% ownership of a physically separate unit.

These are very different investments.

Where the property is co-owned, the investor should analyse:

• whether physical use has been divided;
• whether there is a co-ownership agreement;
• decision-making requirements;
• management;
• expenses;
• development rights;
• sale rights;
• and statutory rights available to the other co-owners.

Buying an undivided share in industrial land based on a statement such as:

“This corner of the parcel belongs to you”

can be highly risky if that physical allocation has no legally enforceable foundation.

20. Condominium and Independent Section Status Must Be Verified

For office, retail and mixed-use properties, investors should determine whether the property is registered under:

• condominium ownership;
• construction servitude;
• or another title status.

Due diligence should also review:

• management plan;
• common areas;
• land share;
• common expenses;
• management decisions;
• exclusive-use areas;
• parking allocations;
• advertising rights;
• façade rights;
• and restrictions on permitted uses.

A foreign investor buying a large retail unit may later discover that the building management plan prohibits certain operations or imposes substantial common charges.

The management plan should therefore be treated as a material property document.

21. The Physical Boundaries Should Match the Cadastral and Title Information

Commercial land acquisitions require cadastral review.

The investor should verify:

• parcel area;
• cadastral boundaries;
• actual fencing;
• access road;
• neighbouring encroachments;
• utility infrastructure;
• and easements.

Turkey’s official investment guidance notes that basic parcel information can be checked through the official parcel inquiry infrastructure.

For a substantial acquisition, this online check should be supplemented with professional survey and legal review where boundaries are commercially important.

This is particularly important for:

• logistics yards;
• industrial land;
• development sites;
• and properties requiring truck access.

22. Road Access Can Determine Whether a Property Has Any Commercial Value

A warehouse with no legally secured heavy-vehicle access may be commercially useless.

An industrial site may physically use a neighbour’s road, but that access could depend only on informal tolerance.

The investor should establish:

Is access public, owned, or protected through a legally enforceable easement?

Similarly, utilities may cross neighbouring parcels.

The buyer should investigate:

• road access;
• electrical infrastructure;
• water;
• sewage;
• natural gas;
• fibre;
• drainage;
• and easements.

Commercial property due diligence should therefore examine the operational ecosystem, not only the building.

23. Environmental Risk Is Particularly Important for Industrial Properties

A purchaser buying an existing factory or industrial site should carry out environmental due diligence.

Potential issues can include:

• contaminated soil;
• groundwater pollution;
• hazardous waste;
• chemical storage;
• asbestos;
• underground fuel tanks;
• emission permits;
• wastewater violations;
• historic industrial use;
• or incomplete remediation.

The financial consequences can exceed the property purchase price in serious cases.

Example

A foreign investor purchases former chemical-industrial land for redevelopment.

After acquisition, soil contamination is discovered.

The investor may face:

• remediation cost;
• construction delay;
• environmental proceedings;
• financing issues;
• and resale difficulties.

Environmental representations from the seller should therefore complement—not replace—independent technical investigations.

24. Earthquake and Structural Risk Must Be Treated as an Investment Issue

Commercial property investment in Turkey also requires serious structural due diligence.

This is particularly important for:

• older office buildings;
• industrial plants;
• warehouses;
• hotels;
• shopping centres;
• and properties that have undergone major modifications.

Legal due diligence should be coordinated with technical advisers examining:

• structural system;
• building age;
• approved structural plans;
• subsequent alterations;
• ground conditions;
• visible defects;
• and applicable strengthening or redevelopment risks.

A property can have a clean title but still be a poor investment if the building requires significant structural intervention.

Foreign institutional investors should therefore conduct:

legal + technical + environmental due diligence

rather than relying exclusively on legal title review.

25. Acquisition Through a Turkish Company Can Create Better Operational Separation

A foreign investor may consider acquiring the property through a special purpose vehicle:

Foreign Parent
↓
Turkish Real Estate SPV
↓
Commercial Property

Potential reasons include:

• liability separation;
• financing;
• joint venture structuring;
• future share sale;
• corporate governance;
• accounting;
• and tax planning.

However, using a Turkish company can trigger the Article 36 analysis where the foreign-control thresholds are met.

The SPV’s articles should also properly reflect its intended property and commercial activities.

The acquisition vehicle should therefore be selected before due diligence is finalised.

26. Asset Deal vs Company Deal Can Produce Very Different Risks

Sometimes a foreign investor can acquire the investment in two ways:

Asset Deal

Purchase the building itself.

Share Deal

Purchase the shares of the Turkish company that already owns the building.

A share deal can avoid a direct change of property owner, but it also means acquiring the company together with its historical liabilities.

Those liabilities may include:

• tax;
• SGK;
• employees;
• litigation;
• loans;
• guarantees;
• regulatory liabilities;
• environmental liabilities;
• and commercial contracts.

An asset purchase may isolate historical corporate liabilities more effectively, although property-specific liabilities and restrictions remain.

The investor should therefore compare:

real estate due diligence

with

corporate due diligence

before deciding which route is safer.

27. Tax Should Be Modelled Before the Purchase Price Is Agreed

Commercial property transactions may involve multiple Turkish tax costs.

These may include:

• title deed fees;
• VAT depending on the transaction;
• corporate tax implications for the seller;
• annual real estate tax;
• rental income taxation;
• withholding considerations;
• and tax consequences on future disposal.

The VAT result is particularly transaction-specific.

Whether VAT applies can depend on matters such as:

• identity of seller;
• whether the transaction occurs within commercial activity;
• seller’s tax status;
• character of the property;
• and any available statutory exemption.

Official GİB guidance confirms the core principle that property sales occurring as part of commercial or industrial activity are within the VAT framework, while sales by persons outside such economic activity can produce a different VAT result.

Therefore, the purchase agreement should state clearly whether the negotiated price is:

VAT inclusive

or

VAT exclusive.

For a high-value property, ambiguity on this point can create a multimillion-lira dispute.

28. Title Deed Fee Should Be Included in the Acquisition Budget

Under the Turkish title deed fee framework, an arm’s-length property transfer generally attracts a title deed fee of 2% for the seller and 2% for the purchaser, calculated on the declared acquisition value subject to the statutory valuation floor.

GİB guidance confirms the separate 20 per thousand (2%) liability for transferor and transferee under the relevant tariff.

Commercial parties sometimes contractually agree that one party will bear a larger share of the economic cost.

However, the tax/legal liability structure and the commercial cost allocation should be distinguished.

For a TRY 500 million property, headline transfer costs are not trivial and should be included in acquisition modelling.

29. Under-Declaring the Purchase Price Is a Serious Risk

Foreign purchasers may occasionally be told:

“Everybody declares a lower price at the Land Registry to reduce fees.”

This should be rejected.

Turkish rules calculate title deed fees on the declared transfer value subject to the statutory floor, and GİB guidance specifically warns that where the declared amount does not reflect the real acquisition value, additional tax and penalties can be assessed.

For institutional investors, under-declaration creates further problems concerning:

• accounting;
• banking;
• source-of-funds documentation;
• future capital gains;
• financing;
• and compliance.

The purchase agreement, bank transfer and title declaration should be economically consistent.

30. Check Existing Real Estate Tax Debt

Commercial property is also subject to local real estate tax obligations.

GİB’s current 2026 guidance confirms that property tax is generally paid to the municipality where the property is located.

Importantly, except for specified statutory exceptions, a building or land with outstanding real estate tax debt cannot ordinarily be transferred through the Land Registry until the issue is resolved.

The buyer should therefore obtain confirmation concerning:

• real estate tax;
• municipal charges;
• and relevant local debts

before closing.

This should normally form part of the seller’s closing deliverables.

31. Service Charges and Building Management Debt Should Also Be Checked

For shopping centres, business towers and mixed-use developments, the buyer should investigate:

• unpaid common expenses;
• management fees;
• reserve funds;
• major planned renovations;
• litigation with building management;
• and special assessments.

A unit with an attractive purchase price may have a substantial pending obligation for:

• façade renovation;
• lift replacement;
• roof replacement;
• or seismic strengthening.

The building management’s recent meeting minutes and financial statements can therefore be commercially material due diligence documents.

32. Utility and Infrastructure Capacity Matters for Industrial and Logistics Properties

A property can be legally perfect but operationally inadequate.

An investor acquiring a factory or warehouse should verify:

• electricity capacity;
• transformer ownership;
• natural gas capacity;
• water;
• wastewater;
• internet;
• loading facilities;
• truck access;
• parking;
• and fire-water systems.

Suppose a cold-storage investor buys a warehouse that has only one-quarter of the required electrical capacity.

The building may technically qualify as a warehouse, but the investment model may still fail.

Commercial real estate due diligence should therefore answer:

Can the property support the tenant or business economically—not only legally?

33. Insurance History Should Be Reviewed

Large commercial acquisitions should investigate:

• current insurance;
• historical claims;
• earthquake coverage;
• fire;
• flooding;
• machinery;
• business interruption;
• tenant liability;
• and previous uninsured events.

A history of repeated water ingress, fire or structural claims may indicate hidden physical defects.

Where the property is mortgaged, lender insurance requirements should also be included in financing due diligence.

34. Seller Authority Must Be Verified

If the seller is a company, the investor should verify:

• legal existence;
• current representation authority;
• signature authority;
• corporate approvals;
• board/general assembly requirements;
• insolvency indicators;
• and whether the seller’s representatives can legally complete the transaction.

A title deed showing the company as owner does not mean every employee or director can sell the asset.

For material assets, the seller’s corporate documents should be reviewed as part of closing.

Where the seller acts through a power of attorney, the power should be carefully checked for scope and validity.

35. Payment Mechanics Should Protect the Buyer

Commercial property transactions can involve enormous sums.

The buyer should avoid paying the entire purchase price substantially before obtaining title unless adequate security exists.

Possible structures include:

• simultaneous payment and title transfer;
• blocked account;
• bank escrow-type arrangements;
• partial payment at signing;
• balance at title transfer;
• direct repayment of mortgage lender;
• or other secured closing mechanics.

The correct structure depends on:

• seller;
• mortgage position;
• transaction value;
• bank financing;
• and conditions precedent.

The purchase agreement should specify exactly when the seller becomes entitled to each payment.

36. Use Conditions Precedent in High-Value Transactions

A commercial purchase agreement should make closing conditional upon resolution of identified material risks.

Typical conditions may include:

• satisfactory title;
• mortgage release;
• removal of attachment;
• Article 36 approval where necessary;
• corporate approvals;
• occupancy documentation;
• specified permits;
• tenant termination where vacant possession is required;
• financing approval;
• regulatory approval;
• environmental confirmation;
• and delivery of closing documents.

This allows the investor to sign a binding commercial agreement without accepting unresolved legal risk.

37. Representations and Warranties Should Be Property-Specific

The seller should generally provide appropriate representations concerning matters such as:

• ownership;
• authority;
• title burdens;
• litigation;
• zoning;
• building permits;
• occupancy;
• leases;
• rent arrears;
• environmental matters;
• taxes;
• third-party claims;
• common expenses;
• and material notices from public authorities.

Where due diligence reveals a specific known risk, a general warranty may not be sufficient.

The buyer should consider:

specific indemnity.

Example

An environmental investigation identifies possible historical soil contamination.

Rather than relying only on:

“Seller warrants compliance with environmental law,”

the SPA could allocate remediation liability specifically.

38. Due Diligence Should Continue Up to Closing

Title status can change between signing and completion.

The seller could:

• grant a mortgage;
• become subject to an enforcement attachment;
• enter a new lease;
• or receive a court injunction.

Therefore, title and key public records should be refreshed immediately before closing.

A due diligence report prepared three months earlier should not be treated as current automatically.

The final closing process should verify that the factual assumptions supporting the original investment decision still remain true.

39. Practical Example: Foreign Investor Buying an Istanbul Office Building

Assume a European investment fund wants to acquire an office building for EUR 30 million.

The legal due diligence might reveal:

• seller owns 100%;
• bank mortgage of EUR 8 million;
• three commercial tenants;
• one tenant has eight years remaining;
• building has occupancy permit;
• rooftop extension was constructed outside the approved project;
• outstanding management debt exists.

A sensible closing structure could require:

1. bank mortgage release mechanism;
2. review and acceptance of all leases;
3. seller remediation/legalisation of the rooftop issue if possible;
4. payment of management debt;
5. confirmation of municipal property tax status;
6. refreshed title search;
7. title transfer against payment.

Without due diligence, the investor could acquire all five problems together with the building.

40. Practical Example: Foreign Manufacturer Buying Industrial Property

Assume a Japanese group establishes a Turkish subsidiary and wants to purchase a factory site.

Foreign ownership:

100%.

The Turkish company therefore needs an Article 36 analysis because foreign investors own at least 50%.

If the property is located in an OIZ, the acquisition may fall within the exception from the ordinary governor’s-office permission process.

Due diligence should then cover:

• OIZ allocation/title;
• permitted industry;
• building permits;
• occupancy;
• environmental approvals;
• power capacity;
• wastewater;
• mortgages;
• previous industrial contamination;
• machinery ownership;
• and workplace operating licences.

The fact that the site is already called a “factory” does not mean it is automatically suitable for the Japanese investor’s proposed production.

41. Practical Example: Foreign Investor Buying a Tenanted Retail Property

Assume:

Purchase price:

EUR 5 million

Tenant:

international retailer

Lease remaining:

7 years

Rent:

below current market.

The investor believes it can buy the property and increase the rent immediately.

That assumption may be wrong.

The purchaser becomes a party to the existing lease when ownership changes.

The investment valuation should therefore use the actual lease rights and rent-adjustment mechanism, not an assumed market rent that cannot immediately be imposed.

For income-producing property:

lease due diligence is valuation due diligence.

42. Commercial Real Estate Due Diligence Checklist for Foreign Investors

Before closing, the investor should review at least the following areas:

Frequently Asked Questions

Can a foreigner buy commercial real estate in Turkey?

Qualifying foreign natural persons may generally acquire commercial property subject to statutory nationality, area, location and security restrictions.

Can a foreign company incorporated abroad directly buy Turkish commercial real estate?

Only in more limited circumstances. Official investment guidance states that foreign commercial legal entities may acquire Turkish real estate where permitted by international agreements or special Turkish legislation.

Can a Turkish company owned 100% by foreigners buy real estate?

Yes, subject to the special Article 36 regime where foreign ownership/control reaches the statutory thresholds. Such a company may acquire property for activities identified in its articles, subject to the applicable procedure.

When does Article 36 generally apply?

Where foreign investors hold at least 50% or have the power to appoint or dismiss the majority of the board, including relevant indirect control structures.

Does an Article 36 company always need governor’s-office permission?

No. Current rules contain important exceptions, including qualifying acquisitions in Organized Industrial Zones, Industrial Zones, Technology Development Zones and Free Zones.

Does signing a notarised sale promise make the purchaser the owner?

No. Official guidance confirms that preliminary contracts do not themselves transfer ownership. Title transfer is completed through Land Registry registration.

Should mortgages and liens be checked before purchase?

Yes. Turkey’s official investment guidance expressly recommends examining mortgages, liens and similar restrictions before beginning the transfer process.

Does buying a property terminate the existing commercial lease?

No. Under Article 310 of the Turkish Code of Obligations, the new owner becomes a party to the existing lease.

Can the buyer immediately evict a tenant because it bought the property?

Not automatically. Commercial/roofed workplace leases are subject to Turkish lease-protection rules and the specific statutory termination framework.

Is an occupancy permit important?

Yes. Investors should confirm that the building has the appropriate use/occupancy documentation and that its existing physical condition is consistent with the approved project.

Is VAT always payable when commercial property is sold?

No. VAT treatment depends on the seller, transaction and statutory circumstances. Commercial sales made in the course of business fall within the VAT framework, while transactions outside commercial activity can be treated differently.

What is the ordinary title deed fee?

Under the ordinary tariff, buyer and seller are each generally subject to 2% title deed fee on the relevant declared acquisition value, subject to statutory rules.

Can the parties declare a lower purchase price to reduce the title deed fee?

They should not understate the real transaction value. GİB guidance confirms that additional fees and penalties may be assessed where the declared value does not reflect the actual purchase price.

Can property with unpaid real estate tax be sold?

As a general rule, Turkish Land Registry offices do not complete ordinary transfers of buildings or land with outstanding real estate tax debt, subject to statutory exceptions.

Conclusion: How Can Foreign Investors Reduce the Legal Risks of Buying Commercial Property in Turkey?

Commercial real estate can be an attractive investment in Turkey, but foreign investors should avoid treating the transaction as a simple exchange of money for a title deed.

The first legal question is:

Who is buying?

A foreign individual, foreign company incorporated abroad and Turkish company with foreign shareholders are not governed by exactly the same acquisition framework.

Foreign natural persons can generally acquire commercial property subject to the statutory nationality, area and security restrictions.

Foreign companies incorporated abroad have much narrower direct acquisition rights and generally need a special-law or treaty basis.

A Turkish company with foreign ownership is structurally different.

Where foreign investors hold at least 50% or can appoint or dismiss the board majority, Article 36 becomes relevant.

The second question is:

What exactly is being purchased?

A foreign investor should not rely on the seller’s title deed photocopy alone.

The current land registry position should be reviewed for:

mortgages + attachments + injunctions + easements + usufruct rights + shared ownership + other annotations.

Turkey’s own official investment guidance specifically recommends examining mortgages, liens and similar restrictions before proceeding with acquisition.

The third question is:

Can the property legally be used for the planned business?

This requires review of:

zoning + approved project + building permit + occupancy permit + workplace licence + sector-specific authorisations.

A title deed saying “office,” “shop,” “warehouse” or “factory” does not by itself guarantee that every intended commercial activity can operate legally.

The fourth question is:

Who already has contractual rights over the property?

This is crucial for leased commercial real estate.

Article 310 of the Turkish Code of Obligations means that when leased property changes hands, the purchaser becomes the new party to the existing lease.

Consequently, a property investor should not value a tenanted asset based solely on:

market rent.

The investor should value it based on:

existing enforceable rent + lease duration + indexation + tenant credit risk + termination rights.

If the investor needs vacant possession, that issue should ideally be resolved before acquisition rather than inherited as a post-closing litigation problem.

The fifth question is:

Does the physical building match its legal documentation?

Illegal extensions are especially common due diligence risks in commercial property.

Warehouses can contain unauthorised mezzanines.

Hotels can have additional rooms.

Factories can contain added production buildings.

Offices can occupy common areas.

The buyer should compare the physical building against:

approved architectural plans + building permit + occupancy permit.

The sixth question concerns tax.

The foreign investor should model:

purchase price + VAT status + title deed fee + annual property taxes + rental tax structure + financing cost + future exit taxation.

Ordinary title deed transfers generally create a 2% fee for each side under the applicable tariff.

Whether VAT applies requires separate transaction-specific analysis.

Investors should also resist any suggestion to understate the actual purchase value at the title office. Turkish tax guidance expressly provides for reassessment and penalties where the declared transfer price does not reflect the real acquisition amount.

The seventh question is:

What historical liability comes with the property?

For industrial property, environmental risk can be particularly serious.

For offices and retail, tenant and management liabilities may dominate.

For an older building, structural and earthquake risk may be the central issue.

For a hotel, licences and operating rights may be more valuable than the concrete structure itself.

Due diligence must therefore be tailored to the asset.

The eighth question is transaction structure.

The investor should compare:

direct asset purchase

with

purchase of the shares of the Turkish property-owning company.

An asset deal can offer cleaner separation from historical company liabilities.

A share deal may simplify certain continuity issues but means acquiring the legal entity with all of its historical risks.

For high-value investments, the choice should be made only after combined:

corporate + tax + real estate due diligence.

The ninth question is closing security.

The safest commercial real estate transaction normally follows:

sign purchase agreement → satisfy conditions precedent → clear mortgages/attachments → refresh title → transfer title and purchase price simultaneously → complete post-closing registrations.

An investor should avoid transferring the full purchase price weeks before receiving legal title unless the payment is properly secured.

Finally, the strongest foreign-investor acquisition process can be summarised as:

choose acquisition vehicle → confirm foreign ownership eligibility → verify Article 36 → review title → review zoning → inspect permits → inspect physical property → review leases → investigate environmental/structural condition → analyse taxes → negotiate SPA protections → clear title burdens → close against payment → update corporate/tax records.

A foreign investor should therefore ask five questions before paying a non-refundable deposit:

Can my chosen purchaser legally own this asset?

Does the seller have clean and transferable title?

Can the property legally be used for my intended commercial purpose?

Which tenants, mortgages or other third-party rights will survive the purchase?

What liabilities and taxes will I inherit or incur when I become owner?

If these questions are answered before closing, commercial real estate investment in Turkey can be structured in a legally predictable manner.

If they are ignored, a property that appears attractive from a valuation perspective can turn into an investment burden involving:

tenant litigation + zoning problems + illegal construction + mortgage disputes + environmental remediation + tax assessments + licensing failures + acquisition restrictions.

For this reason, commercial real estate due diligence in Turkey should not be treated as a formality conducted shortly before the title appointment.

For a foreign investor, it is one of the most important parts of the investment decision itself.

This article reflects Turkish real estate, foreign investment, lease and tax rules and publicly available official guidance as of August 2026. It is intended for general informational purposes only and does not constitute property-specific legal, tax, technical or investment advice. Commercial real estate risks vary according to the purchaser’s nationality and corporate structure, location, zoning status, building permits, tenants, title restrictions, environmental history, intended use and transaction structure.