5 Surprising Insights from Alarko REIT’s Financial Report
Financial reports are often seen by investors as dense documents filled with complex numbers and tables. Yet behind those figures lie the real stories — revealing a company’s current position, strategy, and vision for the future.
In this analysis, we take a deep look into Alarko Real Estate Investment Company (ALGYO) and its financial statements as of September 30, 2025. The findings reveal a company at a strategic crossroads — one leveraging its existing assets to embark on a high-risk, high-reward growth drive.
1. A Billion-Lira Investment in Bodrum: A Bold Bet on the Future
The most striking detail in Alarko REIT’s report is the massive capital expenditure on its ongoing Bodrum Hotel Project. In just the first nine months of 2025, the company spent a staggering TL 2,888,881,148 on this single investment.
To put that number into perspective: the spending on this one project alone in nine months is more than six and a half times the company’s 2024 distributable net profit (TL 441 million). This investment has become the primary driver lifting the total value of “Investment Properties” on the balance sheet to TL 23.39 billion.
Once completed, the project promises a “long-term, stable rental income,” underscoring the company’s aggressive and forward-looking vision to strengthen its footprint in the tourism sector. This project is the catalyst behind nearly every other strategic decision we examine in this report.
However, such a colossal investment inevitably raises one critical question: how was it financed? A closer look at the balance sheet reveals just how dramatically Alarko has reshaped its financial structure to make this project possible.
2. Cash Reserves Depleted, Debt Surged: The Cost of Growth
The most dramatic change in the company’s balance sheet lies in the opposing movement of cash and borrowing figures — a vivid illustration of the financial cost of growth:
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Cash Position: From TL 436,071,731 on December 31, 2024, cash reserves plunged by over 73%, falling to TL 116,383,258 as of September 30, 2025.
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Short-Term Borrowings: During the same period, the company’s short-term bank debt skyrocketed from zero to TL 987,088,432.
This stark contrast reflects the price of the company’s ambitious growth strategy: liquidity has been sacrificed, and the balance sheet has been heavily leveraged. To fund the Bodrum project, Alarko REIT has effectively drained its cash reserves and turned to aggressive borrowing.
3. The Dividend Surprise: Why Was TL 441 Million in Profit Withheld?
In its corporate governance statement, Alarko REIT assures investors of a clear dividend policy:
“As a principle, our company distributes at least 5% of its annual distributable profit to shareholders, either in cash or as bonus shares by adding it to capital.”
However, despite this stated policy, at the General Assembly on April 9, 2025, the company decided not to distribute its 2024 distributable net profit of TL 441,062,104.
The official reasoning:
“To strengthen the company’s financial structure and create additional resources for investment financing.”
This shows management’s determination to channel every internal resource toward its massive investment program. Yet, a deeper look reveals that the decision goes beyond financing — retaining profits also serves as a small but crucial internal buffer against the rising debt load and the massive foreign exchange risk discussed in the next section.
4. TL 2 Billion Currency Risk: Alarko’s Biggest Gamble?
Perhaps the most alarming revelation in the report is the company’s drastic shift in foreign currency exposure.
In just nine months, Alarko moved from a net foreign currency surplus of TL 140 million, which provided protection against exchange rate volatility, to a staggering open position of TL 2.18 billion, leaving it fully exposed to currency shocks.
The numbers tell the story:
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Net FX Position (Dec 31, 2024): +TL 139,898,719 (Surplus)
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Net FX Position (Sept 30, 2025): –TL 2,182,333,217 (Deficit)
This exposure makes the company extremely vulnerable to exchange rate movements.
According to the sensitivity analysis in the financial report, a mere 10% increase in foreign exchange rates could reduce company profit by approximately TL 218 million.
This enormous FX deficit represents the riskiest and boldest bet in Alarko REIT’s aggressive growth strategy.
5. The Power of Assets: A TL 23 Billion Real Estate Empire
So what gives Alarko REIT the confidence to take on such heavy debt and currency exposure? The answer lies on the asset side of the balance sheet.
As of September 30, 2025, the total value of the company’s Investment Properties reached TL 23,390,509,854.
This TL 23.4 billion real estate portfolio not only provides balance sheet strength but also serves as top-tier collateral for new financing rounds. The portfolio includes high-value, income-generating properties such as the Hillside Beach Club Resort in Fethiye and the Mosalarko Office Building in Moscow.
This robust asset base explains why the company can afford to take on such aggressive borrowing and FX risk to fund the Bodrum project. It represents both a shield and a lever — a foundation of strength that enables flexibility amid financial turbulence.
Conclusion
Alarko REIT’s financial report as of September 30, 2025, highlights a company in the midst of a strategic transformation.
By leveraging its solid real estate assets, it has embarked on an ambitious growth journey — one that trades short-term liquidity and dividend payouts for long-term expansion.
In doing so, the company has taken on significant debt and foreign exchange risk, prioritizing future growth over immediate profit distribution.
This strategy prepares Alarko for a larger role in the tourism and real estate sectors, but it also leaves it exposed to potential financial turbulence.
The question now is clear:
Will Alarko REIT’s bold and risky growth strategy transform it into a dominant force in Turkish tourism — or could it become the company’s Achilles’ heel if economic volatility strikes?
Only time will tell.