Learn Turkish: Şu bir kitap.

Turkish has three words for pointing things out based on distance: bu (this, very close), şu (that, a bit further away or when actively pointing something out to someone), and o (that, far away or out of sight). By using Şu, the speaker is likely pointing right at the book to draw your attention to it.

Where is the word for 'is' in this sentence?

In Turkish, the present tense 'is' is often completely invisible for the third person (he, she, it, or that). This is sometimes called the 'zero-copula'. You do not need an extra verb at the end here; the words Şu bir kitap naturally form the complete sentence 'That is a book' all on their own.

Could I just say Şu kitap instead?

Dropping bir changes the meaning! Şu kitap means the phrase 'That book' (as in, 'That book is heavy'). Keeping bir (a/an) in the middle separates the words and turns it into the full sentence 'That is a book.'