Vonovia SE

Investor Presentation • Sep 20, 2021

Capital Markets Update

• Federal Elections Outlook
• Rights Issue Considerations
• Illustrative NTA & FFO Accretion Scenarios

September 20, 2021

German Federal Election: Polls Suggest A Tight Race

Based on most recent polls several combinations are possible and a clear winner combination with an obvious mandate to form the new government looks unlikely.

• As polls indicate a tight race it seems likely that the election results will not deliver a clear outcome and different coalitions will be possible.
• Any coalition will require substantial consensus, and it is impossible to predict what concessions will be made by which party and on which issue.
• The very strict hardline positions laid out in the various manifestos will most likely be diluted in coalition negotiations as parties are forced to find consensus and common ground.
• In light of (i) the consensual view across party lines to combat climate change and reduce CO² and (ii) the high ratio of retail landlords (65%) there seems to be a factual need for housing policy to remain sufficiently balanced in order to increase much needed CO² reduction efforts and also to leave enough "breathing room" for private owners.

Investments, Modernization, and Climate Protection

Consensus on Need to Reduce CO² but Different Ways to Get There

CDU/CSU	SPD	The Greens	FDP (Liberals)	The Left
• Climate neutrality until 2045 Tax incentives for • modernization investments • Strengthen landlord to-tenant electricity models • Support innovative research including electrolyzers, fuel cells, hydrogen technology, photovoltaics, and innovation centers	• Climate neutrality no later than 2045 Subsidies for • modernization investments and urban quarter developments • Achieve CO 2 neutrality in the real estate sector Use CO tax to • 2 incentivize energy efficient modernizations among home owners • Support landlord-to tenant electricity models • Expand renewable energy and increase energy efficiency Make Germany the • leader in hydrogen technology • Support innovative forms of renewable energy generation	• 100% renewable energy by 2035 Increase • modernization rate Reduce • modernization allowance (€1.50/sqm) • Refurbishments to be neutral to warm rents via "1/3 model" with equal burden sharing between tenant, landlord and tax payer • Subsidy programs and tax incentives for owners • Distribution along energy efficiency classes Increase CO tax to • 2 €60 by 2023 (instead of 2025) • Simplify and support landlord-to-tenant electricity models Include Paris Climate • Agreement Targets in Germany's Basic law	• Deregulation to accelerate energy turnaround Implement • environmental policies free from ideology • Support a lively and innovative start-up culture Comprehensive • reform of energy related taxes and fees	• Climate neutrality until 2035 Introduce climate • protection as a government target in Germany's Basic Law • Increase energy efficient modernization rate by a factor of 3x Refurbishments to be • neutral to warm rents Support landlord-to • tenant electricity models
Sources: Parties' manifestos and "First 100 Days Action Plans"

CDU/CSU	SPD	The Greens	FDP (Liberals)	The Left
Measures to increase • supply instead of additional regulation (sufficient new supply considered to be the best form of tenant protection)	Round table for • affordable housing with all relevant stakeholders • Rent increase in line with inflation • Temporary moratorium on rent increases in tight housing markets • Continue 10% rent cap on relettings (Mietpreisbremse) • Increase look-back period for Mietspiegel to 8 yeas	Limit regular rent • increases to 2% p.a. • Ensure wide use of qualified Mietspiegel as firm legal basis for rent increases • Continue and enforce 10% rent cap on relettings (Mietpreisbremse) • Allow for federal legislation to implement rent ceilings • Increase look-back period for Mietspiegel to 20 years End "share deal • abuse"	Abolish the 10% rent • cap on relettings (Mietpreisbremse) • Expropriation and regulation lead to less supply and are not a solution Increase supply • through deregulation	Enable rent freeze • legislation anywhere in Germany • Rent increase moratorium in tight housing markets • End "share deal abuse"

Rights Issue Considerations

• Vonovia remains committed to a conservative capital structure including an LTV target range of 40%-45%.
• Vonovia considers a rights issue to partly refinance the all-cash transaction with Deutsche Wohnen.
• A capital increase via a rights issue gives existing investors the right (on a pro-rata basis) to buy additional securities in the company at the subscription price thereby allowing them to avoid dilution of their shareholding.

Rights Issue Mechanics

• From a portfolio point of view, the level of discount is irrelevant because the rights issue is a 'zero‐sum game' to existing shareholders
• The theoretical ex-right price (TERP) is the weighted average price of old and new shares and the theoretical price at which the shares should trade, once the rights are detached.
• The relation between the share price before the rights issue and the weighted average share price after the rights issue is the TERP factor.
• This factor is used to adjust all per-share numbers prior to the rights issue to adequately reflect the weighted average number of shares.

TERP	(current no. of shares * share price) + (new no. of shares * subscription price)
	(old no. of shares + new no. of shares)

The discount to TERP impacts the ratio between value of shares vs. value of rights; but the total value is not affected

¹ Number of rights received per share owned; dependent on subscription ratio ² Number of rights needed to purchase one new share depending on subscription ratio

Value & Earnings Growth from DWNI Transaction Material NTA & FFO Accretion at All Acceptance Levels

Rights issue assumptions for illustrative example:

• €53.00 share price
• Subscription price 20% discount to TERP
• Including rough estimate for H2 valuation
• €2.4bn disposals to City of Berlin

If the target LTV after the rights issue is set at ~45% (upper end of target range) different acceptance levels would result in different rights issue volumes and lead to different levels of NTA and FFO p.s. growth

	50%	60%	70%	80%	90%
Rights issue volume (€bn)	0	2.1	4.2	6.3	8.5
LTV	~45%	~45%	~45%	~45%	~45%
NTA2 (€/share)	79.44	75.60	72.14	69.13	66.14
NTA (€/share) VNA stand alone H1 2021 (reported)	68.44	68.44	68.44	68.44	68.44
NTA (€/share) VNA stand alone H1 2021 (TERP adj.)	68.44	67.26	66.08	64.90	63.67
Growth	16%	12%	9%	7%	4%
Group FFO (€/share) pro forma (excl. Synergies)	3.57	3.28	3.02	2.79	2.58
Group FFO (€/share) VNA stand-alone 2021E (guidance midpoint)	2.59	2.59	2.59	2.59	2.59
Group FFO (€/share) VNA stand-alone 2021E (TERP-adj.)	2.59	2.55	2.50	2.46	2.41
Growth	38%	29%	21%	14%	7%
Group FFO (€/share) VNA stand-alone 2020A (reported)	2.38	2.38	2.38	2.38	2.38
Group FFO (€/share) VNA stand-alone 2020A (TERP-adj.)	2.38	2.34	2.30	2.26	2.21
Growth	50%	40%	31%	24%	17%

¹ All forward-looking numbers on this page are for illustrative purposes only and neither constitute a guidance nor do they preempt any decision with regards to the potential rights issue. ² Adding back only 50% of DWNI deferred taxes on investment properties, in line with EPRA BPR (3.2(v)(iii)).

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Tables and diagrams may include rounding effects.