“THE RETURN SHOULD EXCEED THE INTEREST RATE”
Polat Gülman, CEO of Gülman Group, states that the benchmark for efficiency in the commercial real estate sector is the return on deposit interest. ‘If your return, after deducting general expenses and adjusting for tax and depreciation, remains above the deposit interest rate, then we can talk about efficient and effective rental management. We also base our assessment on this criterion,’ he says.
Gülman shares another approach for accurate comparison in the sector: ‘We expect government bonds in Turkey to be equal. In other words, to say that any commercial real estate operation is suitable in terms of profitability, the income you earn must be at the same level as the yield on 1-5 year government bonds or bills.’ If this is possible, profitability is a suitable investment. If it falls below that, it is not a sensible investment. If it exceeds that, it is a very successful operation." Polat Gülman aims to achieve a return above inflation for his own operations to capture efficiency.
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