LEG Immobilien SE

Environmental & Social Information • Jun 11, 2021

LEG Immobilien SE ESG Agenda 2024

A Joint Journey ²⁰²¹

11th June 2021

ESG Agenda 2024 Agenda

• • 1 Executive Summary
• 2 Contextual Background & Framework
• 3 ESG house of LEG
• E nvironment
• S ocial
• G overnance
• 4 Appendix

ESG Agenda 2024 3

Farknot Architect – stock.adobe.com

Executive Summary – A joint journey

1

Executive Summary

ESG Agenda 2024 – A joint journey

Key takeaways

E

S

G

• We are committed to climate targets
• 10% CO2 reduction by 2024
• Committed to Climate Act 2030 and to climate neutrality by 2045
• We intend to invest up to €500m into energetic modernisation until 2024
• Key driver for our energetic transition until 2045 are:
  • Tenants engagement needed to contribute up to 5% to the overall improvement
  • Energy transition to shift towards green district heating and green electricity, driving 65% 70% of the overall improvement
  • Refurbishments to achieve >30% of energy reduction, contributing 25% 30% to the overall improvement
• Affordable living segment and responsibility for our client base remains core to our DNA
• We aim to reduce tenants' iteration calls by 15% in 2021, from 2022 onwards to be replaced by a customer satisfaction index (CSI) with a target level of >70% by 2025
• Further building on the strong partnership with local communities, leading to a preferred partner status
• Our colleagues make the difference, and we want to remain a highly attractive employer with a Trust Index of at least 66% in 2024
• In 2021 we aim to defend our strong Sustainalytics rating of 10.4
• Our target is to have one-third of our fully independent supervisory board to be represented by women after the AGM 2022
• Compliance management system certified by the Institute for Corporate Governance in the German Real Estate Industry

Our ESG mission statement

ESG providing the framework to our overall strategy ESG framework

LEG's strategy needs to balance ESG and commercial objectives

We are committed to the 2030 and 2045 climate targets

Core to our business with focus on affordable living segment overall and 24% social housing

General principles for our corporate being

ESG Agenda 2024

LEG-specific ESG targets

Measurable and auditable targets lay the foundation for our ESG roadmap

1 Units as at 12/19.

Romolo Tavani – stock.adobe.com

Acting in a global context and a framework of increasing standards & guidelines

Paris Climate Accord 2015

Limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to preindustrial levels

European Green Deal 2019

• Reduction of Greenhouse Gas emissions of 55% by 2030 (vs. 1990)
• Climate neutrality by 2050

Fuel Emissions Trading Act 2019

Introduction of carbon tax

Europe EU Taxonomy 2020

Direct investments in order to achieve European Green Deal targets

German Climate Change Act 2020/ 2021

(implementation of EU Green deal into federal law)

• GHG reduction by 55%/65% until 2030
• GHG reduction in real estate of 68% until 2030
• Climate Protection Plan for 2045 as "roadmap to climate-neutral real estate stock"
• Introduction of carbon tax in 2021

Source: European Commission, Emissions Database for Global Atmospheric Research, Bundesumweltamt, LEG, EU28 incl. UK

LEG

Contextual Background & Framework

Carbon emissions in global context

Global CO2 emission by country 2019 Total 38Gt

German and sector CO2 emission in global context

German reduction path by sectors

Further enforcement of Germany's targets and climate neutrality targeted by 2045

Germany CO2 emission in sector context

• Real estate sector represents 16% of Germany's emissions (2020)
• New climate change act enforces carbon reduction to 65% when compared to 1990 (vs. previously 55%) by 2030 and climate neutrality by 2045
• Significant reduction for real estate sector required:
• 44% by 2030 vs. 2020
• 83% by 2040 vs. 2020
• Uniform and consistent EU ETS (European Trading System) required to allow for uniform prices and standards across the EU and to allow for a holistic carbon reduction framework

Real estate sector Germany 2020

Two thirds of sector driven by residential

Real estate: Breakdown by type based on sqm (Energy consumption %) Residential 65% (66%) Other 35% (34%)

(Commercial, public)

Residential Real Estate: Type of building in million (%)

Real estate: Energy sources

Real estate: Energy usage by application

Heating	59.0%
Warm water	12.0%
Industrial heating	7.0%
Mechanical energy	7.0%
Lightning	5.8%
IT & communications	4.6%
Cooling	4.6%

Share of green energy and breakdown in Germany 2020 Biomass with a significant contribution

Share of renewable/ green energy in Germany

Split of green energy to electricity generation

Split of green energy to heating and cooling

Different frameworks regulate different industries

Power sector, manufacturer and airlines regulated under EU-ETS via CO2-certificates

EU-ETS1 (since 2005) Comprises 27 EU countries, UK, Iceland, Liechtenstein, Norway Million t CO2-Equivalent

• Covers the power sector, manufacturing industry as well as airlines
• Covers emissions from c. 10,000 installations
• Minimum thresholds for installations apply (installations above 20MW)
• Captures c. 40% of EU's carbon emissions
• Cap and trade principle

Germany	25.0%
Poland	11.5%
Italy	8.9%
United Kingdom	7.8%
Spain	7.8%
France	6.1%
Netherlands	5.2%
Czech Republic	3.8%
Other	24.0%

EU-ETS in Germany

CO2 certificate price (€/t)

Million t CO2-Equivalent

Electricity generation	298
Iron and Steel	38
Oil refineries	24
Cement	20
Chemical industry	18
Other oil processing industry	9
Construction lime	7
Paper	5
Non ferrous metals industry	3
Other	1

German carbon tax based on Fuel Emissions Trading Act

Heat energy and traffic covered by nETS via carbon tax

National ETS (nETS) Germany

• Since 2021
• Covers the sectors heat energy and traffic
• Carbon tax per ton, based on Fuel Emissions Trading Act (BEHG)
• Via heat energy effect on real estate
• Fixed price path until 2025, full market price from 2027 onwards
• Expected tax income for German state of €7-8 bn in 2021
• LEG factored in €2m negative effect on FFOI for 2021 financial guidance (assuming 50/50 split)
• Also reflected already in our 2020 valuation with a €420m negative effect (assuming a 50/50 split)

Carbon tax price path in Germany based on national ETS

It's a marathon and not a sprint – just crossed the starting line

No quick fix available – investments required, but also innovation

Global CO2 emission development & key innovations/ events

Source: European Commission for Global CO2 Emissions

ESG house of LEG – nvironment 3.1 E

Our new headquarter (2022) Fulfilling high environmental standards

• 2 new office buildings of which one externally rented out to commercial clients (c.4% of LEG's total commercial space)
• C. 7,600 sqm own office space
• New office for >400 colleagues
• Green rooftop
• High efficiency standards
• LED lightning
• Efficient systems for heating, ventilation and warm water
• E-charging stations for EV's and E-bikes

ESG house of LEG

Environment Overview

LEG Carbon Balance Sheet 2020

36.7kg CO2e/sqm as the starting point for our transformational journey

Opening carbon balance sheet

• Bottom-up approach
• BAFA factors in line with GHG protocol
• Scope 1 and scope 2
• 36.7kg CO2e/sqm based on heating energy
• 311k t CO2 in total
• C. 2/3 coming from gas

Heat energy by source

• Based on actual consumption 2019 (81% actuals, 19% certificates)
• Extrapolated for 2020
• Limited assurance by PWC
• 100% of portfolio covered

Reflecting our roots

Energy efficiency of our portfolio of 157.5 kWh/sqm is a function of corporate DNA & history:

Providing affordable housing in post-war Germany

LEG portfolio by construction years vs. LEG market

Distribution by energy efficiency classes LEG

LEG's biomass plant

Providing us with an competitive advantage – not reflected due to current framework

2020 LEG starting point for its portfolio: 36.7kg CO2e/sqm

• LEG bottom-up approach based on actual consumption
• Not reflecting the bio mass plant
• Scope 1 and scope 2
• 311kt CO2 in total
• 157.5 kWh/sqm

Potential offset from biomass plant

Potential 18% off-set from own biomass plant

LEG Biomass power plant

Started 2005

• Own carbon neutral power plant, c. 100km from LEG hubs
• Green energy from waste wood
• Recognised as carbon neutral energy
• Production of district heat and electricity for local commercial area
• Due to distance to LEG buildings, energy not provided to own buildings
• Annual production of 105,000 MWh of electricity (represents annual production of onshore wind farm with 20 large wind turbines)
• Not reflected in our 36.7kgCO2 e/sqm footprint

This represents savings of 57.5kt CO2 and potentially carbon neutral electricity for 45,000 LEG units, i.e. around 1/3 of our portfolio

Our transformational corridor until 2045

LEG is fully committed to the new German Climate Change Act

• LEG fully committed to new German Climate Change Act to achieve climate neutrality by 2045
• LEG targets a CO2 reduction of 10% by 20241
• Regular internal and external GHG audits as well as verification of GHG target retention

• 3% of units to be refurbished in 20211

• Key driver will be the general transition of Germany towards green energy

• Refurbishments will require a more standardised and industrialised process and innovation around materials
• Tenants will also need to contribute to the transformation on the back of technology and digitisation
• The journey will therefore be rather within a

Transition roadmap towards climate neutrality

Energy transition and energetic refurbishment are the main drivers to reach the targets

1 Estimate based on current price levels for materials and services and taking no innovation and efficiency improvements into account. Based on portfolio as of 12/2020. In 2021 LEG aims to spend c. €110m for energetic improvements.

Tenant engagement

Contribution of up to 5% from the tenant to our overall reduction necessary

Consumption data

Consumption data from heating and warm water visualised for tenant in order to encourage customers rethinking their consumption behaviour. Tenants might then change consumption individually or automatically. Change in tenant behaviour is expected.

Presence control

Due to an automatic registration of the buildings' use (e.g. registration of the actual geolocation of the tenant) or even the use of a single room heating will be adapted accordingly.

Heating system

• Adaption of flow temperature to local weather conditions Provisioning of heating depending on actual space heating demand; measurement possible via actual value adjustment or via metrological registration of the temperature of the effective heating surface
• Hydraulic adjustment ensures that the system provides each room with the precise heating required.

1 Source: BMWi 2020

Energy transition – LEG with a good starting point

Key driver will be the shift towards green electricity and green district heating

Target heat energy mix LEG

• Gradual shift from fossil energy towards green mix
• Increase in electricity along the planned transformation of the German energy mix towards green energy assumed
• Increase in green district heating from already high levels, benefitting from location of assets in bigger cities
• Assuming a remaining gas share of 10% as a conservative assumption. A complete shift towards green energy would reduce footprint to full climate neutrality
• CO2 reduction from energy transition by 65% – 70%

Transformation path energy mix

Shift towards green electricity and green district heating

Energy consumption in kWh/m² towards 2045 targets

Total energy mix shift towards 2045 targets

Gas

• Shift towards green district heating and green electricity based on transformation path of climate change act
• Assuming climate neutrality for electricity and district heating by 2045 according to energy sector targets of climate change act
• Requirements:
• Energetic modernisation of buildings
• Change of heating systems to heat pumps
• Connection to green district heating systems

Source: Federal Statistical Office; New construction volume calculation of DIW Berlin; Model calculation DIW Berlin, GdW Source: Federal Ministry of Economics, GdW

ESG house of LEG – Environment

The investment paradox for Germany

No progress for the market in energy efficiency since 2010 despite significant investments and new construction activity

>€340bn invested in energetic refurbishments since 2010… …leading to no efficiency gains

Investments into energetic refurbishments of residential households

300k demolished units since 2010

Should have improved efficiency by 15% (GdW)

Energy-efficient refurbishment

Shift towards a more holistic approach and aiming for at least 30% efficiency improvment

Estimated refurbishment costs

• 10% CO2 reduction by 2024

• Targeting 3% of units to be refurbished in 2021

• Shift towards a more holistic approach with lower share of individual measures and higher share of full comprehensive refurbishment measures

• At least 30% of efficiency improvement
• Latest Federal Court of Justice ruling constrains rent increase potential, whereas new BEG1 is more generous with regards to KfW grants
• CO2 reduction from refurbishment of 25% – 30%

Strong track record for energetic refurbishments A review of our 2017 – 2020 programmes: >30% energy reduction

What we achieved so far

• Programme started 2017, ramped up over time
• Achieved energy reduction of >30% through these projects1

• 450 modernisation projects completed since 2017

• 76 locations
• ~17,000 units
• Total refurbishment costs of €275m for the completed projects2

• Approx. 50% of total project volume for full modernisations

• Exterior Walls / Facade Windows / Front Doors

• Roofs
• Interior (Electrics, Heating, Doors)
• Capitalised internal contribution Other

Efficiency class distribution 2017 vs. today1

Drivers for improvement

1 Based on analysis of renewed energy passports only. 2 Energetic share only, total modernisation costs are usually higher as they also include non-energetic incurred costs.

Average savings from energetic refurbishment per component

Biggest effects from facade and heating systems

Implications

• LEG portfolio typically comprises different levels of refurbishment
• Ranging from original status, to one component being renewed to full refurbishment
• Overall heterogeneous status quo across the portfolio
• Biggest effect from facade insulation and new heating system

Energiesprong Real World Laboratory

Standardising energetic modernisation to bring down costs and speed up process

Promoter Powered by Targets

• Similar buildings with similar technology and energy efficiency
• In-house experience in modernising buildings
• Own network of craftsmen

• €10m investment volume

Serial modernisation/ Prefabrication

• Prefabrication of facade modules and roof elements
• Serial production
• Scalable to bring down costs per unit
• Easy installation of modules at the building

Net zero-standard

• Balanced result from energy consumption and production
• Includes entire energy consumption (heating, warm water, cooling, electricity)
• Application of PV/ heat pump systems

Ensure affordability

Energiesprong Real World Laboratory Location Mönchengladbach

• 4 similar complexes of 2-floor buildings
• Total of 22 buildings
• Modernised by different contractors in parallel to test different approaches/technologies
• Original construction year 1956 Number of units 111 Energy efficiency class H KWh/sqm 190 CO2ekg/sqm 55
• Planned project period 2020 2023e

Target NetZero Standard

New buildings: Not the solution from an 'E' nor 'S' perspective

Debate often starts at the wrong starting point – comparing apples with oranges

Total costs of ownership perspective required

Demolish old building and

• rebuild Closes the supply gap but not helpful under 'E'-perspective
• Concrete, steal, glass, hydrocarbon products, land consumption as key driver
• Wooden/ hybrid multi-tenant buildings not available for affordable mass market (c. 3% share for new multi-tenant buildings)

Energetically modernise

• Improve existing stock
• Significantly smaller footprint than new construction

Comparison (Illustrative)

Different product

Minimum replacement cost		€3,000/sqm2
LEG	€1,503/sqm	4.7% Gross residential yield

At ~€3,000 minimum replacement cost without land for a comparable new product, the company's in-place yield of 4.7% would imply a rent/sqm requirement of c. €12/sqm1 , which is not feasible to achieve in the affordable living segment

New planing process kicked-off – update in Q3

Balancing capex yield vs. carbon yield

Investments

• 2021 c.€110m for energetic measures planned
• Budget process for 2022 investments started
• Shift towards a more holistic approach, i.e less individual measures, more full modernisation projects
• BEG-framework considered

Capex yield vs carbon yield

• Shift of paradigm from pure rental yield focus to balance rental and carbon yield
• At least 30% efficiency improvement
• BEG grants to support measures and yield on investments

1 Capex + Maintenance

BEG programmes Energy-efficient construction and refurbishment

Programme	BEG Energy-efficient buildings (existing buildings and new construction)	BEG individual measures
Eligible measures	New Construction: Existing Building  Efficiency House 40+  Efficiency House 40, 40 EE  Efficiency House 40, 40 EE, 40 NH  Efficiency House 55, 55 EE  Efficiency House 55, 55 EE, 55 NH  Efficiency House 70, 70 EE  Planning  Efficiency House 85, 85 EE  Efficiency House 100, 100 EE  Efficiency House Listed, Listed EE  Planning	 Insulation  New windows and/or front doors  Heating system  Renewable energy  Digital systems (efficiency smart home)  Planning
Max. amount1	€120,000 - €150,000 Planning: €4,000 (max. €40,000 for each building)	€60,000 Planning: €2,000 (max. €20,000 for each building)
Repayment bonus1 2	25% - 40%, +5% for EE Planning: 50%	20%-40%, +10% for changing oil heating Planning: 50%
Type of financing	Subsidized loan with repayment bonus or grant only	Subsidized loan with repayment bonus or grant only
Use at LEG

Energy-efficient refurbishment

Simplified calculation with and without BEG

Illustrative examples

Valuation impact Up to 25% valuation uplift through higher modernisation standards in combination with the direct grants / repayment bonus

1 Assumptions: Apportionment of modernisation costs: 60%, in example new rent capped at €7.0; KfW-eligible modernisation costs: 75%; NOI-Margin: 75%; Rent growth p.a.: 1.0%; Discount rate: 3.0%

Our Sustainable Financing Framework

Part of our sustainable business strategy

• LEG has established its Sustainable Financing Framework to finance or refinance social and green assets that contribute to its ESG agenda
• The Framework is developed to be in line with the ICMA, LMA and APLMA principles for sustainable financing and contributes towards the United Nations Sustainable Development Goals
• Sustainable asset pool: around €3.3bn

	Sustainable Financing Framework
Use of Proceeds	Process for Asset Evaluation and Selection
 Affordable and Social Housing  Community Engagement  Green Buildings & Energy Efficiency  Renewable Energy  Clean Transportation	 Dedicated Sustainable Financing Committee responsible for evaluation and selection of eligible assets
 Proceeds managed using a portfolio approach  Unallocated proceeds may be used in line with company's investment strategy	 Allocation and impact reporting provided annually until full allocation of net outstanding Sustainable Bond proceeds
Management of Proceeds	Reporting
Framework reviewed by Second-Party Opinion ("SPO") provider Sustainalytics stating that it is credible and impactful

Eligible Asset Categories (1/2) Assets related to social

Affordable and Social Housing

Expenditures related to the construction, acquisition, modernization and renovation of affordable and social housing assets or single units that are qualified under existing statutory social subsidiary schemes in Germany

Additionally, expenditures relating to improving access to housing for people with disabilities are eligible as well. Beneficiaries of the Affordable and Social Housing category include low-income groups and people disadvantaged by disabilities

Eligible affordable and social housing assets should meet at least one of the below criteria:

• Assets / units that are under the statutory subsidy scheme in accordance with § 2 (2) of the German law on Social Subsidized Housing (Gesetz über die soziale Wohnraumförderung (Wohnraumförderungsgesetz – WoFG) in Germany for social housing ("Soziale Wohnraumförderung") and are only accessible for tenants with a permit for subsidised housing ("Wohnberechtigungsschein") in accordance with § 27 (1) of the German law on Social Subsidized Housing (Gesetz über die soziale Wohnraumförderung (Wohnraumförderungsgesetz – WoFG), as amended or replaced by successor legislation from time to time; or
• Assets / units that LEG rents to tenants with a permit for subsidized housing or to tenants where part of the rent is paid directly by local public authorities

Expenditures to actively support and positively impact local communities through LEG's foundations:

• LEG NRW Tenant Foundation: Provide financial relief for tenants in hardship, care service for tenants in need as well as integration of immigrant communities, or
• Your Home Helps Foundation (Stiftung Dein Zuhause hilft): Create more liveable and more stable neighbourhoods and a nurturing environment, identify social problems at an early stage and provide support for tenants in need

Social contribution to the Sustainable Development Goals

Eligible Asset Categories (2/2) Assets related to environmental

Green Buildings & Energy Efficiency

Expenditures related to the construction of new buildings, operation of existing buildings or renovation of existing buildings (with a minimum energy efficiency upgrade) in the commercial or residential real estate sector that meet or will meet at least one of the below criteria:

• Recognised certification schemes, such as:
• Modernisation of existing buildings that lead to a decreased primary energy demand of at least 30% compared with the energy demand (in case of residential property) or energy demand or energy consumption (in case of non-residential properties) prior to the investment, as evidenced by an energy performance certificate ("Energieausweis" in accordance with the German Energy Savings Regulation (Energieeinsparverordnung - EnEV), or where already available in accordance with successor legislation Gebäudeenergiegesetz as amended or replaced by successor legislation from time to time; or
• Individual renovation measures that improve energy efficiency; or
• Research & Development expenses that aim at finding measures to reduce the energy demand of the real estate sector

Renewable Energy

Expenditures related to installation of new or operation of existing renewable energy production facilities. Eligible Assets can be assigned to one of the below categories:

• Onsite photovoltaic panels
• Offsite solar and wind energy production facilities
• Bio-mass power production facilities, only if resources do not compete with food production

Clean Transportation

Expenditures related to the installation of charging infrastructure for electric vehicles and support infrastructure for zeroemissions personal mobility devices, as well as electric vehicles of own fleet

Green contribution to the Sustainable Development Goals

ESG house of LEG – ocial 3.2 S

Social The core of our daily business

Affordable living is at the core of our corporate DNA

Attractive rents overall – especially for tenants in our rent-restricted units

Providing an affordable home

• Social responsibility for our 400,000 customers
• Providing a home at affordable prices
• 145,000 units at €6.02/sqm
• On average rent of c. €380 per month per unit
• Rent increases for rentrestricted units only every 3 years by inflation factor

24% of our units are rent-restricted

Preconditions for tenants of rent-restricted units

• Rent-restricted rents c. 20% below freefinanced rents
• Entitlement from local municipal office
• Personal income <25k€ p.a. for family with 2 children (North-Rhine Westphalia)

Attractive rent levels in market context (YE 2020)1

1. Peers Vonovia and Deutsche Wohnen with respective market clusters, Market numbers from CBRE for resective LEG market clusters. 2. As at 31 March 2021

Customer – Colleagues – Communities Social

S

01 Customer Satisfaction 02 Colleagues Attractive Employer 03 Colleagues Diversity 04 Communities District Management & Foundations 05 Communities New development

Customer types Voice of the Customer (VoC): A very diverse range of customer demands

Drivers of customer needs

Service, product, image and cost-effectiveness as main drivers of customer satisfaction

VoC evaluation based on more than 20,000 customer comments

Building a solutions-driven organisation

Every request needs a customer feedback to be finalised

* Changing the perspective

A substantial cultural transformation process takes currently place in LEG bringing customer perspective into all our decisions and actions.

Digitalisation helps to speed up processes

Each customer

demand ends with a feedback

Employees reach out to customers

Establishing a committed service experience

different needs and drive sentiment

ESG house of LEG – Social

All teams steered towards higher frequency of customer interaction

Improving the reliability of our product

Strong investments into heating systems and elevators started

Sharpening our focus on the social needs of our customers

Strong neighbourhoods support customer satisfaction

District Management

LEG as a reliable local partner for communities to holistically develop and implement district concepts taking socio-economic and demographic situations into account

LEG´s "NRW Tenant foundation" helps tenants on an individual level who require help because of their mental or physical condition or need financial support

LEG´s "Dein Zuhause hilft" foundation helps on individual and project level to maintain stable and liveable districts

Organisation of tenant events on local quarter level to enhance neighbourhood relations

Image Cost effectiveness

Maintaining our reasonable approach regarding rent increases following energetic modernisations

Advancement of our hardship management approach for rent adjustments after modernisation projects in order to secure the affordability of our product for long-term tenants with unfavourable socio-economic background

Refining our pricing strategy taking into account specifics of each apartment, building and immediate neighbourhood area, as well as local community pricing trends, using our in-house expertise and extensive research data

Improved customer satisfaction to also support our strong EPRA cost ratio in the medium-term

S

01

20% 20%

Further improving our customer focus

A high customer satisfaction level will be a key differentiation factor

S

01

Trust Index 66% – Among the best employers in NRW1

Target is to keep our strong employee recognition

1 North Rhine-Westphalia. NRW represents c.21% of the German GDP in 2020. Within Europe, NRW would rank as the 9th biggest economy if it were an independent state

Attractive offerings as an employer

Attractive working conditions and offerings

Attractive working conditions S

• 37.75 working hours weekly
• 30 days of paid vacation, additional holidays on 24/31 December and Carnival Monday
• Two extra monthly salaries in June and December
• Close co-operation with workers council
• Collective agreements for 65% of the employees

Health and well-being

• Flu shots
• Ophthalmological examinations (eye exams)
• A variety of fresh fruits every week in every office "Fruitful Office"
• Water dispenser

• Company runs (e.g. B2Run) in different cities in NRW

• Anniversary payments for 10, 25, 40 and 50 years of company affiliation

• Death benefit for our employees in case of death of close relatives
• Extra time off for different cases, e.g. moving, marriage, birth of a child
• Extraordinary protection against dismissal and long periods of notice (both above legal requirements)
• Preventive healthcare (e.g. colon cancer prevention, skin cancer prevention, smoking cessation)
• Stress prevention
• Transparency on accident rate and derived prevention measures and training
• Professional family services ("pme")

Engagement – Employee retention and satisfaction Colleagues

• Surveys on a regular basis (e.g. by Germany's leading survey provider "Great Place to Work"-Institute)
• Participation in strategic management audit focussed on work/life-balance topics (Seal "Job & Family")
• Annual dialogue between employee and executive & annual target agreements
• Internal conflict advisor
• Mentoring programme for women/diverse colleagues
• Onboarding programme and coaching
• Team development activities
• Professional training strategy and respective budgets; right on educational leave in GER (5 days p.a.)
• Open door policy and feedback culture
• Competition for best improvement ideas
• Sponsorship programme

Average period of employment¹

12.0 LEG Group Operations Services Group functions

Fluctuation rate as of December 31¹

S

02

Diversity and equal opportunities Colleagues

S

02

03

Working time

• Possibility to work in between 6am 10pm
• Overtime compensation: choice between pay-out or extra free time (both with an addition of 25%)
• Flexible working time account from -25 hours up to +50 overtime hours
• Possibility of working on Saturdays for specific reasons
• Full-time and part-time options
• Surcharge from 25% up to 100% for working on Sundays and public holidays and at night (if extraordinary reasons apply)

Mobile working conditions

Possibility to work from any place up to 100% by using mobile IT equipment and mobile devices

Targeted offers for certain age groups

• Partial retirement programme with 55+
• Award-winning apprenticeship programme to secure young talent

We support communities by holistically redeveloping entire districts

Communities

District concept

• Comprehensive modernisation to revitalise whole districts
• Promotion of local communities/ neighbourhood concepts
• Cooperation with our foundations and partner offerings of more than 60 social welfare organisations
• Tenant committee & advisory council
• Support for tenants in need
• Tenant festivals
• Tenant meetings with CEO
• Concepts for multi-generational housing
• Homework assistance for children
• Playgrounds renewals with sustainable materials and environmental certificate
• Comprehensive elevator and heating system renewal programme

Circus for children Tenant festival

Food truck offering

Santa Claus for tenants

S

04

LEG as biggest landlord serves as a strong local partner Communities – 1,963 modernised units in Monheim

S 04

BEFORE

AFTER

"Here in Monheim, LEG has invested many millions of euros to modernise the Berlin district over the past few years. We are of course delighted that the company is realising its largest project so far here. We have been working well together for many years on the step-wise development of this particular district – with great success."

Mayor of Monheim Daniel Zimmermann

Market High-growth # of units 1,963 Total sqm 134,022 Year(s) of construction 1967 – 1971 Mod. start/completion1 2014 – 2021 Total investment2 €60.3m

Modernisation and maintenance measures

Average reduction of energy demand p.a. after modernisation3 –40%

E.g. thermal insulation composite system, windows, roof renewal with insulation, balconies renovation, cellar ceiling insulation, staircase paint

1 With the exception of the Herne project, all modernisation projects include several residential properties with staggered start and end dates over the specified period. 2 Including investments for modernisation, maintenance and repair. 3 Calculated values.

Strong partner to local communities

Acquisition of a 6% stake in GEWAG municipal housing company in Remscheid

S 04

Profile

• Locations: Remscheid (86%)
• 1,036 buildings
• 6,208 units
• Total sqm 430k
• Average rent/sqm €5.29
• Acquisition price €6m
• Implied acquisition price per sqm c. €600
• LEG with 1,088 units in Remscheid

Shareholder

• City of Remscheid 50.3%
• Public utility company Remscheid 34.0%
• Other 9.5%

LEG 6.2%

Strong partner to the city of Remscheid

In 2020, foundation of a district meeting location together with the city of

• Remscheid and local charities, including LEG's "Dein Zuhause hilft"-foundation
• Targeting offerings for entire age range, i.e. kids, families to elderly tenants
• Offerings range from language classes, cooking classes, parents' cafe, presentations on various topics, etc.

Comprehensive support from our foundations

10,000 tenants and family members supported

Key milestones 2020

• Founding capital €16m
• Over 30 projects supported/ implemented
• Focus is on community support, not tenants only
• Collaborations with local partners from welfare organisations, communities, food banks, schools, homework assistance, kids clubs, sport initiatives, hospitals

Around 50 partner organisations

Tafeln NRW, Deutscher Kinderschutzbund Landesverband NRW, Die Arche Herne, local welfare organisations like AWO Köln, Caritas Gelsenkirchen, CJD, Diakoniewerke, Sozialdienst Katholischer Frauen Köln, Sozialdienst Katholischer Männer Köln, Jumpers and many others

• • Founding capital of €5m
• Focus on LEG tenants
• Support of tenants in need
• Financial support for tenants in financial hardship
• Financial and non-cash benefits to support home care assistance for relatives
• Support for cross-cultural offerings and projects

LEG new building programme

Communities – Social contribution with high environmental standards

Contribution to closing the supply gap in the affordable housing segment

• 500 units p.a. from 2023 onwards
• C. 250 units built by LEG
• C. 250 units acquired as turnkey projects from external developer
• Own units mainly via redensification
• Annual investment volume of >€100m p.a.
• Pipeline currently ramped up

Criteria for all our new development projects

• Lifecycle assessments
• Focus on redensification on own land or use of already developed residential areas – no additional land usage
• Comprehensive environmental measures, e.g. at least 1-by-1 compensation of felled trees/ compensation of green areas according to municipal guidelines
• 100% of new buildings built by LEG and 90% of external turnkey projects to achieve energy efficiency class A/ Efficiency building 55
• Funding according to Efficiency building 55 standard
• Environmentally friendly heat supply, favourable thermal insulation, energy-saving windows and, if possible, roof greening
• Strive for barrier-free units
• Comprehensive construction waste concept

New development – redensification projects Communities – Examples

Köln Höhenhaus

Year of completion 2029 2020 2018 No. of units / of which subsidised 400/ 120 38/ 0 50/ 0 Energy class A B B

Specifics

Hilden

• Flagship project
• Mobility concepts with e-charging stations/ car and bike sharing
• Apartments for senior citizens with direct access to local traffic, 100% low-barrier, elevators in all buildings
• Balconies or terraces for all units

• Climate-resistant green areas, heavy rain equipment

• Heat supply through an environmentallyfriendly combined heat and power plant

• Green roof areas (buffer storage for rainwater)
• Modern drain system for rainwater
• Special NoX-absorbing pavement
• Green areas incl. a meadow for bees

Münster

• Car-free quarter /modern mobility concept with e-charging stations for cars/ car sharing and cargo bikes
• Obligation for tenants not to own a vehicle
• Allocation of apartments with the involvement of a non-profit association

ESG house of LEG

Governance Overview

Among best-in-class in corporate governance

Target is to maintain a high Sustainalytics score in the 2021 review

A highly effective governance The 4 pillars of governance

G

01 Compliance 02 Internal audit 03 Internal control system 04 Risk management

A highly effective governance that ensures day-to-day compliance with our values, the law and the ethical standards that form the basis of our reputation

Compliance management system The 4 pillars of governance

Toolbox

• Compliance management system certified by the Institute for Corporate Governance in the German Real Estate Industry
• Declaration of basic values
• Human Rights Guideline
• Code of Conduct
• Guidelines in particular data protection, anti-corruption, capital market compliance, taxes - and strict rules for behavior towards politics
• Strictly German regulation on equality issues, incl. comprehensive diversity policy and respective training for all new employees

• Supplier compliance checks

• Work agreement on business environment conduct

• Business partner code
• Compliance manual regulates procedures
• Internet-based whistleblower system with 24/7 availability from mid 2021
• External data protection officer to live up to highest possible standards
• Anti-corruption officer
• Business processes with a focus on non-compliance prevention (four-eyes principle)
• Fully independent supervisory board
• Rules of procedure for the management board, supervisory board, audit committee

Communication

G 01

• Compliance intranet page
• Compliance training for all new employees (4 times a year)
• Refresher courses and training for employees in particularly sensitive areas
• From mid-2021 annual refresher courses for all employees via an e-learning tool
• Compliance advice from compliance officers and the compliance and data protection teams

Internal audit & Internal control system (ICS)

The 4 pillars of governance

Internal audit

• Regular external quality assessments
• Current audit manuals as well as own organisational instructions (including the DIIR code of ethics)
• Regular exchange of information with internal departments and functions
• Subject-specific consultations
• Regular report to supervisory board
• Reporting line directly to CEO

Internal control system (ICS)

• Integrated recording of an ICS as part of process management
• Regular updates as part of process audits
• Implementation of the Governance Risk and Compliance System (GRC system) for holistic monitoring of risks and controls as a result of our powerful monitoring
• Auditing of ICS by external auditor once a year

G 03 02

Risk management The 4 pillars of governance

• Identification of sustainability risks and disclosure in risk reporting
• Annual review of the risk management system by the auditors in accordance with IDW PS 340
• Intranet page for risk management system
• Anonymous risk reporting tool for all LEG employees
• Regular training for all risk assistants and risk owners
• Direct reporting line to CFO
• Financial and non-financial risks included
• Regular reporting to audit and risk committee of supervisory board
• Detailed manual defining risk tolerance and limits for LEG Group

LEG
Video des Gesamtvorstandes zum Thema Risikomanagement Weiterlesen	Ziel und Intention des Risikomanagements "Risikomanagement umfasst ein systematisches Vorgehen zur Identifikation, Analyse, Bewertung, Steuerung, Dokumentation und Kommunikation von unternehmerischen Risiken sowie deren Überwachung". Weiterlesen	Was sind typische Risiken der großen Wohnungsgesellschaften? "Risiko ist die aus der Unvorhersehbarkeit der Zukunft resultierende, durch "zufällige" Störungen verursachte Möglichkeit, von geplanten Zielen abzuweichen." Weiterlesen
Hat die LEG	Werkann Risiken innerhalb der LEG	Zu welchem Zeitpunkt müssen LEG Risiken
existenzgefährdende Risiken?	melden?	gemeldet werden?

G

04

Our ESG governance structure

		SUPERVISORY BOARD Martin Wiesmann Member of the Supervisory Board			SPONSOR
E N LI	Lars von Lackum CEO	MANAGING BOARD Susanne Schröter-Crossan CFO		Dr. Volker Wiegel COO	OVERALL RESPONSIBILITY
G N TI R		SUSTAINABILITY COMITTEE Chairman Lars von Lackum FUNCTION HEADS
O P E R	ACCOUNTING	COMMUNICATION/CR	CONTROLLING/ RISK MANAGEMENT	ENERGY/ENERGY SERVICE PROVIDER (ESP)	STEERING,
T C E R	LEGAL/COMPLIANCE/HR	TECHNICAL OPERATIONS	STRATEGY/IR		REPORTING AND COORDINATION
DI
		CORPORATE FUNCTION Communication /Corporate Responsibility
	Team ENVIRONMENT	Team SOCIAL		Team GOVERNANCE
		C R RESPONSIBLES In all relevant functions, subsidiaries and regions			IMPLEMENTATION

finance and regulation

Objectives for the composition of the Supervisory Board

Supervisory board – 100% independent members Aiming for 1/3 of female members by 2022

Michael Zimmer

Chairman since 2013

47,763 shares in LEG1 - - - 1,051 shares in LEG1 - - - 3,000 shares in LEG1 300 shares in LEG1 - - -

Entrepreneurial career in the real estate sector (e.g. founder of Corpus Sireo Immobilien, later sold to Swiss Life) since 1990

Stefan Jütte

Deputy Chairman since 2013

From 1980 – 2012, different roles in the

DSL Bank)

Dr. Johannes

Ludewig Member since 2013

From 1997 – 2011 various roles in the real estate and railway sector (e.g. CEO of Deutsche Bahn) as well as in different political roles in Germany from 1975 - 1997 banking sector (e.g. CEO of Deutsche Postbank,

Dr. Claus Nolting

Member since 2016

Professional background as a lawyer. Different positions in the banking and private equity sector (e.g. CEO of Hypovereinsbank, Cerberus, Lone Star)

Dr. Jochen Scharpe

Member since 2013

Professional experience in Corporate Finance (KPMG) and the real estate sector, e.g. precursor of CA Immo and Siemens Real Estate

Member since 2020

Professional background in investment banking with Deutsche Bank and J.P. Morgan, amongst various roles Vice-Chairman IB Europe with JPM

CEO of Gothaer Health Insurance and previously in different roles with AXA and ERGO insurance

Dr. Sylvia Eichelberg To be elected at AGM 2021

Age-related terms end with AGM 2022 To be replaced by one female member Back to 6 seats with 1/3 female members

1 LEG shares held as at 31 August 2021

Management Team

Lars von Lackum CEO

• Strategy, M&A, Organisation, Processes and Digitisation
• Legal and Human Resources
• Management & Supervisory Board Office
• Legal, Compliance and Internal Audit
• Human Resources
• Corporate Communications & Corporate Responsibility
• Acquisition
• New Construction

IT

With LEG since 2019 With LEG since 2020 With LEG since 2013

Susanne Schröter-Crossan CFO

• Investor Relations
• Finance & Treasury
• Controlling & Risk Management
• Portfolio Management
• Accounting & Taxes

Dr. Volker Wiegel COO

4,129 shares in LEG1 227 shares in LEG1 1,039 shares in LEG2

• Asset and Property-Management
• Commercial Management
• Neighbourhood Management
• Property Management
• Modernisation
• Central Procurement
• Receivables Management
• Rent Management
• Operating Expenses Management
• TechnikServicePlus GmbH
• EnergieServicePlus GmbH

1 LEG shares held as at 31 August 2021 2 LEG shares held as at 14 September 2021

ESG Agenda 2024 71

ESG targets within management's remuneration system

Approved by AGM 2020 – Management Remuneration System

Purchase of LEG shares equivalent to a gross basic salary within 4 years

Outlook

2021 guidance

All financial targets confirmed and ESG targets integrated

	2021
FFO I	420m1 €410m –
l-f-l rent growth	~3.0%
EBITDA margin	~75%
Investments	42€/m2 ~40 –
LTV	max. 43%
Dividend	70% of FFO I
Acquisition ambition	Not reflected in guidance ~7,000 units

Environment	2021 – 2024 2021	1 2	Reduction of CO2 emissions by 10% in 4 years2 Energetic refurbishment of 3% of units2
Social	2021 – 2024 2021 2021 – 2025	3 4 5	Maintain high employee satisfaction level (66% Trust Index) Reduction of iteration calls from tenants by 15% Best in class in customer recognition by 2025 with a Customer Satisfaction Index of >70%
Governance	2021	6	Maintain Sustainalytics rating at score of 10.4

1 Including a~ €2m impact from the 2020 carbon tax, assuming a 50/50 split between LEG and tenants. 2 Units as at 12/19.

LEG Principles of CO2 Accounting

Based on "limited" cause balance of GHG principles

Relevance to BEHG No relevance to BEHG; negligible at LEG due to conversion to green electricity via ESP

Scope 3 / Out of scope no consideration

Scope 3

Upstream chain e.g.:

Manufacture of building materials and buildings

Downstream chain e.g.:

External service providers, e.g. their car emissions

Out of Scope

• Self-consumption by tenants, e.g. household electricity
• LEG administration buildings

Carbon Balance Sheet 2020

Our approach: Based on actual consumption

LEG's real world approach in line with major frameworks

Several options within CO2 accounting available

LEG footprint based on different approaches

KfW subsidies via programmes 261/262/263/264 Overview

Individual measures	Subsidies		Energy efficiency classes/ KfW
Individual measures building shell	20%
Installation engineering except heating system	20%	300
Heating system	20 – 50%	280	H	g n di
		260		uil
New building		240		B d
Efficiency house 55	15 – 17.5%	220	G	e t s
Efficiency house 40	22.5% 20 –	200		Li - W
Efficiency house 40 Plus – residential building only	25%	180	F	Kf
		160	E
Modernisation		140		115
Efficiency house/ Listed building	25 – 30%	120	D	100
Efficiency house 100	32.5% 27.5 –	100	C	85
Efficiency house 85 – residential building only	30 – 35%	80	B	70
Efficiency house 70	35 – 40%	60		55
Efficiency house 55	40 – 45%	40	A
Efficiency house 40	50% 45 –	20	A+	40
		0	EnEV	KfW

Estimated costs for energetic refurbishment

Costs for energetic refurbishment

(€/sqm)

Coronavirus crisis: LEG's voluntary 10-point paper (21 March 2020)

Customer – Our social commitment at work – Sustainability

Support and protection for tenants Protection of employees

• Temporary suspension of rent increases in line with Mietspiegel
• No termination of rental agreements, no evictions

• Supporting of small business/ commercial tenants

• Special offers for system-relevant professionals

• €1m for corona aid measures through foundation ("Your home helps")
• Organisation of neighbourhood assistance

• Commitment to homeless people

• Work from home to provide safety and flexibility for employees and their families

• Protective gear for employees
• Benefits for employees during times of closed schools and nursery schools

Social initiatives Legal amendment on federal level

• Tenants cannot be evicted if they are not able to pay their rents for April-June 2020 due to the coronavirus crisis
• Deferral until June 2022 at the latest; interests (4%) can be charged

$LEG$ gewohnt gut. Press Information
Düsseldorf, 21 March 2020
Overcoming the Corona crisis together: LEG's 10-point paper to protect
and safeguard customers and employees
LEG presents 10-point paper to support and protect tenants and employees during the Corona crisis
In addition to various measures and initiatives, rent increases to local $\bullet$
reference rent under BGB Section 558 are temporarily suspended
• Currently no adjustment of the FFO quidance of $6,370$ to 380 million for the 2020 financial year
"In times of Corona, our home is the most important retreat we have. We want to offer our
customers a home worth living in and a safe environment, especially in this serious crisis, while
also offering our employees a secure job," said Lars von Lackum, CEO of LEG Immobilien AG,
To this end, the company has adopted the following ten measures:
1. Safety first - Services switched to digital where possible
Our number one priority is the protection of our customers and our employees. At the same time,
we want to maintain business operations and offer a decent standard of service to our
customers even during this crisis. We are currently doing this mainly online and by telephone.
Where physical contact cannot be completely avoided, strict protection measures apply. 2. LEG suspends rent increases on a wide scale
Until further notice, we will not increase rents to the local reference rents as provided for in
section 558 of the German Civil Code (BGB), which means that from now on we will not be
sending out rent change letters for the time being. In this way we want to send a signal of
solidarity and social responsibility in times of the Corona pandemic and lessen the burden on our
customers.
3. Tenants to stay in their homes - No termination of rental agreements, no evictions,
termination notices can be withdrawn

Foundation "Dein Zuhause hilft" Overview projects 2020 (1/4)

Distribution of 100 activity boxes in LEG quarters Jumpers Kids Club (online activities) Support offerings in Gelsenkirchen together with Caritas for c. 6,500 LEG-house holds Easter greetings with 150 boxes for tenants with reading material and sweets Foundation of a €50k Corona-Emergency Relief fund for the NRW food banks Distribution of 100 Thank-you boxes in NRW for hospital staff ⁴ Extension of offerings for Jumpers-Prospects workshop in Duesseldorf-Hassels ³ No. Description Target group Corona support 2020-03 (several) Corona support 2020-03 (several) Corona support 2020-04 Corona support 2020-04 (several) Corona support 2020-04 (several) Corona support 2020-04 (several) Extension of project 2020-04 Top 15- Project type Implementation locations

ESG Agenda 2024 80

Foundation "Dein Zuhause hilft" Overview projects 2020 (2/4)

Support in Essen: CSE-studying support for kids and tenager, food donations and daily life support Support for kids, teenagers and families with SKF Köln Kids, teenager and family support in Dortmund and Herten with CJD Senior citizen support together with AWO in Köln-Mülheim to support in daily life activities Support of two pupil teams within "Digi-LOTSEN" programme of the Stifter Association Sustainable learning support for one year in Dortmund and Recklinghausen with the Deutschen Kinderschutzbund NRW Establishment of a "Meeting venue Klausen" in Remscheid with several local organisations ¹⁰ Corona support 2020-05 Corona support 2020-05 Corona support 2020-07 Corona support 2020-07 Corona support 2020-07 Corona support 2020-06 Initiation of project 2020-06 No. Description Target group Top 15- Project type Implementation locations

Foundation "Dein Zuhause hilft" Overview projects 2020 (3/4)

Kids holiday pack for "Die Arche" in Herne Support of 20 Digital Scholarships and two Digital Guides of JOBLINGE Ruhr Sport programmes for 120 kids in 12 preschools in Dortmund with Association Kinderglück RheinFlanke "Peace & Power Sports" pedagogical boxing project for young adults in Köln Promoting academic careers for potential students with non-academic family backgrounds with "Arbeiterkind" organisation 16 20 Support of the Caritas Projects "District Shop NeST" in Gelsenkirchen-Neustadt ¹⁸ Anti-Racism-workshops for kids and parents together with the "Arche" in Herne ¹⁷ Corona support 2020-07 Corona support 2020-08 Corona support 2020-11 Corona support 2020-12 Corona support 2020-12 Extension of project 2020-10 Corona support 2020-11 No. Description Target group Top 15- Project type Implementation locations

ESG Agenda 2024 82

Foundation "Dein Zuhause hilft" Overview projects 2020 (4/4)

Initiation of a weekly boxing group for 6 months for teenagers at the Diakonie-Gütersloh Ordered c. 1,400 meals from a local caterer for families in need & food boxes with CSE in Essen Christmas boxes: Toys and activity material for kids, families and elderly tenants 12 courtyard concerts in 12 LEG quarters to entertain tenants and support local artists Books project for 4 preschools: Picture books about friendship in times of Corona 22 23 26 28 "Digital classroom" (Equipment & lessons) for a vocational college in Hagen together with Talent Metropole Ruhr 25 E-Bike to increase the mobility of residents of a social psychiatric institution at the Diakoniewerk Duisburg 24 Initiation of project 2020-12 Corona support 2020-12 Corona support 2020-12 Corona support 2020-12 Corona support 2020-12 Corona support 2020-12 Corona support 2020-12 No. Description Target group Top 15- Project type Implementation locations

Financial calendar

For our detailed financial calendar, please visit our IR web page

IR Contact

Investor Relations Team

Frank Kopfinger, CFA Head of Investor Relations & Strategy

Tel: +49 (0) 211 4568-550 E-Mail: frank.kopfinger@leg-se.com Elke Franzmeier Assistant Investor Relations & Strategy

Tel: +49 (0) 211 4568-159 E-Mail: elke.franzmeier@leg-se.com

Karin Widenmann Senior Manager Investor Relations

Tel: +49 (0) 211 4568-458 E-Mail: karin.widenmann@leg-se.com Gordon Schönell, CIIA Senior Manager Investor Relations

Tel: +49 (0) 211 4568-286 E-Mail: gordon.schoenell@leg-se.com

LEG Immobilien SE ǀ Hans-Böckler-Str. 38 ǀ 40476 Düsseldorf, Germany Phone: +49 (0) 211 4568-400 ǀ Fax: +49 (0) 211 4568-22 204 ǀ E-Mail: ir@leg-se.com ǀ Internet: www.leg-se.com While the company has taken all reasonable care to ensure that the facts stated in this presentation are accurate and that the opinions contained in it are fair and reasonable, this presentation is selective in nature and is intended to provide an introduction to, and an overview of the Company's business. Any opinions expressed in this presentation are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained in this presentation. Where this presentation quotes any information or statistics from any external sources, you should not interpret that the Company has adopted or endorsed such information or statistics as being accurate.

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realised from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation, and supply and demand. The Company has based these forwardlooking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and the Company does not undertake any duty to update the information and forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

This presentation does not constitute an offer or invitation to purchase or sell any shares in the Company and neither this presentation or anything in it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.