Vonovia SE

Investor Presentation • Oct 17, 2019

Investor Presentation October 2019

Agenda

Equity Story Business

Update

Additional Information

Investor Presentation – October 2019 page 2

¹Dividend yield plus l-f-l organic asset value growth from operating performance and investments (excluding yield compression). ² Incl. 27k apartments in other strategic locations plus 7k in non-strategic locations that are not shown on the map.

A Long-term Business Built around Megatrends

Sources: United Nations, Prognos AG

Demographic change

2015 2050

Germany

65 or older younger than 65

2015 2050 Europe

additional apartments for elderly people will be needed by 2030.

Attractive Market Fundamentals

% of disposable household income spent on housing (Germany)

Structural supply/demand imbalance ('000 units; Germany)

Vonovia Germany – fair value €/sqm evolution vs. conventional construction costs²

Share of disposable household income spent on housing, water, electricity, gas and other fuels. ² VNA 2010 – 2014 refers to Deutsche Annington Portfolio at the time; construction costs excluding land. The land value refers to the share of total fair value allocated to land.

Sources: Federal Statistics Office, OECD, Eurostat, GdW (German Association of Professional Homeowners)

Investor Presentation – October 2019

Equity Story Business Update Additional Information

Business Drivers

Equity Story Business Update Additional Information

Robust business model with downside protection plus additional upside

potential from acquisition opportunities

Subscription-based B-to-C business on the back of multifamily housing for medium and smaller incomes with ca. 13 years average tenant tenure

Resilient and predictable top and bottom line growth in a regulated market

Sustainably growing cash generation plus value creation across the entire real estate life cycle

Full service provider with insourcing strategy for best-in-class service levels and maximum control and efficiency

Unparalleled track record of optimization, standardization and industrialization of a highly homogeneous and scalable asset class

Impeccable Trajectory

Growing recurring cash earnings per share and DPS

Dividend policy: ~70% of recurring cash earnings are distributed as dividends

Sustainable total shareholder value creation⁴

¹ German poertfolio. ² LTV = Net debt over fair market value of real estate portfolio. ³2013-2018 FFO is "FFO1" and 2019 FFO is "Group FFO." ⁴Dividend yield plus l-f-l organic asset value growth from operating performance and investments (excluding yield compression).

Investor Presentation – October 2019

4+2 Strategy

Investor Presentation – October 2019

Vonovia Operates and Manages Four Segments

Equity Story Business Update Additional Information

Efficient management of own portfolio

• Average duration of a rental contract is 13 years
• No cluster risk because of B-to-C business granularity
• High degree of insourcing and standardization along our value chain

Ancillary service business for internal savings and external income

• Leveraging long-term customer relations to generate additional cash flows from internal savings and external income
• Customer benefit through better service and/or lower cost

Construction of apartments for (i) own portfolio and (ii) disposal to third parties

• Vonovia is one of the largest builders of new homes in Germany
• Size, efficiencies and innovation lead to building costs below fair market values

Disposal of individual apartments to retail buyers

• Steady sales volume of ca. 2k apartments p.a.
• Sales prices of 20-30% above fair market value capture the spread between book value and retail value

Full-scale Owner and Operator

Property Management

Technical Service

Residential Environment

Service Center

• Ca. 1,500 letting agents and caretakers across our local markets
• Face to the customer and ears and eyes on the ground
• Ca. 5,000 employees in wholly owned craftsmen subsidiary ("VTS")
• Pooling of entire purchasing power within VTS
• Large share of maintenance and modernization done by own staff
• More than 700 employees primarily for maintenance of gray and green areas and snow/ice removal in the winter
• Almost 1,000 employees responsible for centralized property management services such as inbound calls and e-mails, ancillary cost billing, contract management, maintenance dispatch and rent growth management

High degree of standardization

Efficient process management

Residential real estate is a granular operating business. Vonovia has built a scalable platform to efficiently manage large portfolios and to provide the full range of services largely in-house.

Solid Capital Structure with Smooth go Profile and Diverse Funding Mix

•		Unwavering commitment to BBB+
	rating

• Maintain diverse funding mix to preserve best possible optionality
• LTV target range of 40%-45%

Equity Story	Business Update	Additional Information
	KPI / criteria	Jun. 30, 2019	Dec. 31, 2018
	Corporate rating (S&P)	BBB+	BBB+
	LTV	40.4%	42.8%
	Net debt/EBITDA multiple1	11.2x	11.4x
	ICR	4.7x	4.7x
	ratio2 Fixed/hedged debt	97%	96%
	debt2 Average cost of	1.7%	1.8%
	Weighted average maturity (years)2	8.1	7.8
	Unencumbered assets	54%	56%

¹Adj. net debt quarterly average over Total EBITDA (LTM); adj. for IFRS 16 effect. ²Excl. equity hybrid.

Shareholders Benefit from Sustainable Cash Flow Generation & Value Growth of Underlying Real Estate

Equity Story Business Update Additional Information Trajectory Rental income Growing. Maintenance expenses Broadly stable. Scalable relative to portfolio size and broadly stable Operating expenses Broadly stable. Overhead scalable, local cost variable with portfolio size = EBITDA Rental Growing. EBITDA Valueadd Growing. Further roll out of proven businesses and implementation of new initiatives. EBITDA Development Stable/slightly growing. Increasing completion volume. EBITDA Recurring Sales Broadly stable. Stable volume of ca. 2,000 apartments p.a.; EBITDA depends on sales mix and locations. ⁼ Total EBITDA Growing. Yardstick for cash generation and value creation performance. Interest expenses Robust top-line growth combined with staggered and smooth maturity profile largely buffers potentially rising interest cost. Current income taxes Comparatively low cash taxes as deferred tax loss carryforwards can be used to mitigate tax burden. Consolidation effects Elimination of intragroup profits and noncash effects. Adj. EPS ("Group FFO") Growing. 70% 30% Other² Cash growth Fair market value Fair market value Fair market value Fair market value Sales proceeds +15-20%³ +4.4%⁴ +20-30%³ Development costs Construction cost below (DCF-based) fair market value Operating performance and investments lead to value appreciation of the asset base Retail sales price above (DCF-based) fair market value Sustainable cash flow growth Value growth 3 sources of sustainable value growth 1 2 3

¹ Historic acceptance level of scrip dividend has been between ca. 40% and 50%, so the actual cash out for dividends is usually substantially less than 70% of Group FFO. ² Mainly for one-offs, capitalized maintenance and equity portion of investment program. ³Historic range. ⁴CAGR since 2013 fair value uplift through performance and investments (excluding yield compression).

Dividend¹

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-

+

+

+

-

-

-

=

Sustainability

Providing a place where people feel at home while honoring our commitments in terms of environmental, social and governance-related standards and expectations vis-à-vis all stakeholders is our key responsibility.

Why Vonovia?

Equity Story Business Update Additional Information

Attractive market fundamentals supported by long-term megatrends

Clearly defined strategy successfully and consistently executed since IPO

Resilient business model with shareholder returns in the form of sustainable cash flow growth and organic asset value appreciation

Strong track record of acquisitions, integrations and efficiency

Uniquely positioned in Germany with ability and ambition to expand into selected European metropolitan areas

Agenda

We are Vonovia Business update

Additional information

Investor Presentation – October 2019 page 16

Highlights	18
Segment results	19
NAV & valuation	29
LTV	33
European activities	34
Guidance	35
Appendix	37

Highlights H1 2019

	Equity Story	Business Update	Additional Information
Performance	Y-o-y increase across all four segments Adj. EBITDA Total €872.8m (+22.2%)	Group FFO €609.1m (+12.9%) and €1.12 per share (+7.7%; eop	shares)
NAV & Valuation		Adj. NAV per share €48.51 (+8.0% since YE2018) H1 2019 valuation of ca. 2/3 of portfolio resulted in 7.9% total value growth of the revalued portfolio
Capital Structure	LTV 40.4% (-240bps since YE2018) Net debt/EBITDA multiple 11.2x
Regulation	decision will take time	The rent freeze draft legislation in Berlin is scheduled for later this year with the final law expected to go into effect in January 2020 in spite of fundamental constitutional concerns We expect the Federal Constitutional Court to rule the Berlin legislation as unconstitutional but a We continue to see the spillover risk for our business outside of Berlin as extremely limited

We are continuing our solid performance and remain confident in our upward trajectory and ability to deliver sustainable growth for the remainder of the year and beyond.

Substantial Growth in All Four Segments from Larger Portfolio Volume and Performance Improvements

Equity Story Business Update Additional Information

• 22.2% Adj. EBITDA Total growth and 12.9% Group FFO growth on the back of a 3.8% larger portfolio and performance improvements.
• While the operating business with the rental and value-add segments remains the primary performance driver, recurring sales and development made an increasing contribution in H1 2019.

¹ Consolidation in H1 2019 (H1 2018) comprised intragroup profits of €23.9m (€16.1m), valuation result of development to hold of €17.7m (€2.7m), and IFRS 16 effects of €13.8m (€0.0m).

Adj. EBITDA Rental Up from Acquisitions and Organic Growth

• Rental income growth in H1 2019 was driven by the acquisition of Buwog and Victoria Park plus organic rental growth, both of which more than outweighed the rental income dilution from disposals.
• The increase in maintenance expenses is volume driven; persquare-meter levels are in line with last year.

Rental Segment

The increase in operating expenses is mainly attributable to the inclusion of ~€20m (pass-through) ancillary expenses for Victoria Park due to the all-inclusive rent levels in Sweden.

Rental income by geography

EBITDA Operations margin Germany²

¹ Prior-year adjusted to include transaction corporate costs.

² EBITDA Operations margin (Adj. EBITDA Rental + Adj. EBITDA Value-add – intragroup profits). 2019 margin includes positive impact from IFRS 16.

Investor Presentation – October 2019

Operating KPIs Rental Segment

Equity Story Business Update Additional Information

• Organic rent growth of 4.0% in line with expectations and on track to achieve guidance of ca. ~4.4% for year end.
• Average in-place rent of €6.64 per sqm (+4.4% not like-for-like and including impacts from acquisitions and disposals).
• Vacancy rate of 2.9%, largely investment related.
• Maintenance expenses and capitalized maintenance stable on a per-square-meter basis.

Expensed and capitalized maintenance (€/sqm)

Vacancy rate (%)

Comprehensive Investment Program Well on Track

Equity Story Business Update Additional Information Portfolio Cluster Ca. 60% of German portfolio earmarked for investment strategy, safeguarding long-term sustainability of optimize apartment and upgrade building investment strategy. Non-core: 754 units sold in H1 2019 with a fair Operate; 20% Invest; 60% Recurring Sales; 8% Non-core; 1% Austria; 6% Sweden; 5%

Rental Segment

			Residential	In-place rent
June 30, 2019	(€bn)	% of total	(€/sqm)	units	(€/sqm/month)
Operate	9.2	20%	1,784	75,046	6.92
Invest	27.5	60%	1,791	248,445	6.56
Strategic	36.8	80%	1,789	323,491	6.65
Recurring Sales	3.8	8%	1,920	28,686	6.79
Non-core	0.6	1%	1,231	5,263	6.11
Vonovia Germany	41.1	89%	1,789	357,440	6.65
Vonovia Austria	2.6	6%	1,394	22,661	4.59
Vonovia Sweden	2.3	5%	1,738	16,638	9.20
Vonovia Total	45.9	100%	1,759	396,739	6.64

Note: In-place rents in Austria and Sweden are not fully comparable to Germany, as Sweden includes ancillary costs and Austria includes maintenance and property improvement contributions from tenants. The table above shows the rental level unadjusted to the German definition.

¹ Fair value of the developed land excluding €1,817.1m, of which €405.6m for undeveloped land and inheritable building rights granted, €414.0m for assets under construction, €495.5m for development, €272.1m IFRS 16 effect, and €230.5m for other.

value step-up of 20.4%.

Rental Segment

Regional Cluster

Equity Story			Business Update				Additional Information
	Fair value1						In-place rent
Regional Market	(€m)	(€/sqm)	Residential units	Vacancy (%)	Total (p.a., €m)	Residential (p.a., €m)	Residential (€/sqm/ month)	Organic rent growth (LTM, %)	Multiple (in-place rent)	Purchase power index (market data)2	Market rent increase forecast Valuation (% p.a.)	Average rent growth (LTM, %) from Optimize Apartment
Berlin	7,171	2,594	42,042	1.6	224	212	6.73	4.1	32.1	80.4	1.8	49.6
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	4,191	2,346	27,530	1.6	175	169	8.17	4.5	24.0	105.0	1.8	38.5
Rhineland (Cologne, Düsseldorf, Bonn)	3,610	1,839	28,803	2.6	167	159	7.11	3.6	21.7	102.0	1.7	29.9
Southern Ruhr Area (Dortmund, Essen, Bochum)	3,579	1,326	43,382	3.5	191	185	6.04	5.1	18.8	88.5	1.5	31.8
Dresden	3,432	1,499	38,485	3.8	163	154	6.09	3.5	21.1	81.8	1.7	30.1
Hamburg	2,567	2,003	19,829	2.0	108	104	7.03	3.6	23.7	98.4	1.6	39.9
Munich	2,170	3,322	9,661	1.2	65	61	8.12	3.2	33.4	121.8	1.8	51.3
Kiel	2,051	1,473	23,373	2.3	104	99	6.25	4.3	19.8	74.8	1.7	38.2
Stuttgart	2,008	2,254	13,797	1.9	84	80	7.89	3.1	24.0	104.5	1.8	37.8
Hanover	1,773	1,694	16,310	3.3	82	79	6.59	4.7	21.7	90.1	1.7	36.9
Northern Ruhr Area (Duisburg, Gelsenkirchen)	1,580	974	26,009	3.6	109	106	5.70	3.9	14.5	81.7	1.2	25.1
Bremen	1,134	1,533	11,862	3.9	50	47	5.74	3.8	22.7	84.2	1.8	28.0
Leipzig	910	1,465	9,188	4.3	43	41	6.00	2.6	21.1	74.5	1.7	22.9
Westphalia (Münster, Osnabrück)	861	1,381	9,494	3.6	44	43	6.04	5.1	19.5	92.4	1.5	38.9
Freiburg	630	2,263	4,033	2.0	25	24	7.37	3.5	25.7	85.4	1.7	45.9
Other Strategic Locations	2,673	1,536	26,808	3.2	136	131	6.64	4.1	19.6	-	1.5	37.3
Total Strategic Locations Germany	40,342	1,802	350,606	2.8	1,769	1,694	6.66	4.0	22.8	-	1.7	35.6
Non-Strategic Locations	739	1,295	6,834	6.5	39	34	6.22	1.0	18.8	-	1.6	22.3
Germany total	41,080	1,789	357,440	2.9	1,808	1,727	6.65	4.0	22.7	100.0	1.7	35.5
Austria	2,563	1,394	22,661	4.8	106	89	4.59	1.8	24.1	-	1.2	-
Sweden	2,260	1,738	16,638	1.6	141	130	9.20	5.4	16.0	-	2.0	-
Total Vonovia	45,903	1,759	396,739	2.9	2,056	1,946	6.64	4.0	22.3	-	1.7	n/a

Note: In-place rents in Austria and Sweden are not fully comparable to Germany, as Sweden includes ancillary costs and Austria includes maintenance and property improvement contributions from tenants. The table above shows the rental level unadjusted to the German definition.

¹ Fair value of the developed land excluding €1,817.1m, of which €405.6m for undeveloped land and inheritable building rights granted, €414.0m for assets under construction, €495.5m for development, €272.1m IFRS 16 effect, and €230.5m for other. ² Source: GfK (2018). Data refers to the specific cities indicated in the tables, weighted by the number of households where applicable.

Continued Dynamic Growth in Adj. EBITDA Value-add

Equity Story Business Update Additional Information

• Two types of value-add business: (i) internal savings mainly via craftsmen organization and (ii) additional revenue through external income by offering services at market prices but on a lower cost basis due to efficiencies and size.
• Insourcing of services to ensure maximum process management and cost control.
• Expansion of core business to generate additional revenues by walking back the value chain and offering services that were previously provided by third parties (internalization of margin).
• Cash flows from Adj. EBITDA Value-add are not included in the portfolio valuation, and as a consequence largely ignored in NAV.
• Applying the impairment test discount rate¹ to the 2019E Adj. EBITDA Value-add suggests an additional value of ~€4.50 per share (~9% of top of H1 2019 Adj. NAV).

¹ Pre-tax WACC in impairment test of 5.1%. ² Distribution based on FY2019 expectations

Strong Adj. EBITDA Contribution from Recurring Sales

• Stable sales volume but higher proceeds and fair value step-up y-o-y.
• Ca. three quarters of the gross proceeds are attributable to Germany and the remaining one quarter to Austria.
• FV step-up improvement driven by disposals in Austria.
• Avg. sales prices up 9% y-o-y.

Recurring Sales Segment (€m)	H1 2019	H1 2018	Delta
Units sold	1,234	1,200	+2.8%
Gross proceeds	174.9	156.3	+11.9%
Fair value	-124.5	-114.5	+8.7%
Adjusted earnings	50.4	41.8	+20.6%
Fair-value step-up	40.5%	36.5%	+400bps
Selling costs1	-8.0	-6.9	+15.9%
Adj. EBITDA Recurring Sales	42.4	34.9	+21.5%

Ramp-up of Development Business Continues

Development Segment

• This segment includes the contribution of to-sell and to-hold constructions of new buildings. Not included is the construction of new apartments by adding floors on top of existing buildings because this happens in the context of and is accounted for under modernization.
• Ca. three quarters of development-to-hold volume in H1 2019 was in Germany and the rest in Austria.
• Slightly more than half of H1 2019 development-to-sell volume in Austria and the rest in Germany.

Development Segment (€m)	H1 2019	H1 2018	Delta
Income from disposal of "to sell" properties	124.9	73.5	+69.9%
Cost of Development to sell	-95.2	-60.6	+57.1%
Gross profit Development to sell	29.7	12.9	>100%
Fair value Development to hold	103.8	25.5	>100%
Cost of Development to hold	-86.1	-22.8	>100%
Gross profit Development to hold	17.7	2.7	>100%
Operating expenses Development segment	-16.7	-7.7	>100%
Adj. EBITDA Development	30.7	7.9	>100%

Vonovia's Contribution towards Reducing the Housing Shortage

Development Segment

New rental apartments for our own portfolio ("to hold")

• Pipeline with ca. 29,000 apartments 433 units completed in H1 2019 (including new units through floor additions that are built in the context of and are accounted for under modernization investments and that are not included in the Development Segment).
• Total pipeline of ca. 29,000 units, of which more than 80% in Germany and the remainder in Austria and Sweden.
• Average apartment size between 60-70 sqm and broadly in line with overall portfolio average.
• The development to-hold investment volume is part of the overall investment program.

2019 target: 1,500 – 2,000 completions

New apartments for retail disposal ("to sell")

• Total Pipeline volume of ca. €2.2bn (ca. 6,700 apartments), of which ca. 55% in Germany and ca. 45% in Austria.
• Investment capital for Development to sell is not part of investment program.
• Average apartment size between 70-80 sqm.
• Average investment volume of €4-4.5k per sqm.
• Expected gross margin between 20-25% on average.

Pipeline with ca. 6,700 apartments 379 units completed in H1 2019.

Valuation KPIs	Vonovia					H1 2019
June 30, 2019	Total	Germany	Sweden	Austria	Value growth drivers	€m	%
In-place rent multiple	22.3x	22.7x	16.0x1	24.1x1	Performance3	754	2.4%
Fair value	1,759		1,789 1,738	1,394	Investments	279	0.9%
€/sqm					Yield compression	1,480	4.7%
Fair value €bn	47.72	41.1	2.3	2.6	Total4	2,513	7.9%

¹ In-place rents in Austria and Sweden are not fully comparable to Germany, as Sweden includes ancillary costs and Austria includes maintenance and property improvement contributions from tenants. The data above shows the rental level unadjusted to the German definition. ² Including €1.8bn for undeveloped land, inheritable building rights granted, assets under construction, development, IFRS16 and other. ³ Includes currency impact from value changes in Swedish Krona (-€56m) and IFRS16 (+€4m) impacts. ⁴ excl. €136m capitalized investments outside of revalued portfolio.

Investor Presentation – October 2019

Broad-based Value Growth across All German Regional Markets

Investor Presentation – October 2019

Goodwill Impairment as a Result of Ongoing Value Growth

Equity Story Business Update Additional Information

• The H1 2019 valuation led to a substantial increase of the investment properties.
• The valuation was classified as a triggering event and resulted in an impairment of €1.901m because the IAS 40 value growth increased the book value of the cash generating units (CGUs), thus decreasing the headroom to the earnings value of these cash generating units.
• The organizational restructuring of the rental segment from six to four regions as of July 1, 2019, brings with it an adjustment of the goodwill allocation, which in turn leads to an additional impairment of ca. €200m. This will be accounted for in the 9M financial accounts. Including this impact the remaining goodwill in the Rental Germany CGUs will be ca. €160m with the remaining goodwill of ca. €575m in the CGUs Sweden, Value-add and Development.

Evolution of adj. NAV and goodwill 12/2018 to 06/2019 (€bn)

Adj. NAV Growth of +8.0% per share

Equity Story Business Update Additional Information

• Adj. NAV increased by 13.1% to €26.3bn
• Adj. NAV per share increased by 8.0% on a 4.7% higher number of shares
• June 30, 2019, pro forma² EPRA NAV of ca. €49.9

€m (unless indicated otherwise)	Jun 30, 2019	Dec 31, 2018
Equity attributable to Vonovia's shareholders	18,264.2	17,880.2
Deferred taxes on investment properties	8,900.5	8,161.1
Fair value of derivative financial instruments1	103.2	87.2
Deferred taxes on derivative financial instruments	-27.3	-23.5
EPRA NAV	27,240.6	26,105.0
Goodwill	-935.6	-2,842.4
Adj. NAV	26,305.0	23,262.6

EPRA NAV €/share	50.23	50.39
Adj. NAV €/share	48.51	44.90	+8.0%
Number of shares (eop)	542.3	518.1

¹ Adjusted for effects from cross currency swaps. ² Adjusted for expected impairment due to organizational restructuring.

Note: Per-share numbers are based on outstanding shares as of the reporting dates Jun. 30, 2019 (542.3m) and Dec. 31, 2018 (518.1m).

Equity Story Business Update Additional Information LTV at Lower End of Target Range

• LTV as of June 30, 2019, was 40.4%; Net debt/EBITDA multiple¹ was 11.2x.
• Against the background of the stable cash flows and the strong long-term fundamentals in our portfolio locations we see continued upside potential for our property values and do not see material long-term downside risks for our portfolio.

€m (unless indicated otherwise)	Jun 30, 2019	Dec 31, 2018
Non-derivative financial liabilities	20,526.4	20,136.0
Foreign exchange rate effects	-34.9	-33.5
Cash and cash equivalents	-1,280.6	-547.7
Net debt	19,210.9	19,554.8
Sales receivables	15.0	-256.7
Adj. net debt	19,225.9	19,298.1
Fair value of real estate portfolio	47,449.0	44,239.9
Shares in other real estate companies	127.4	800.3
Adj. fair value of real estate portfolio	47,576.4	45,040.2
LTV	40.4%	42.8%
LTV (incl. perpetual hybrid)	42.5%	45.1%
Net debt/EBITDA multiple1	11.2x	11.4x

¹ Adj. net debt quarterly average over Total EBITDA (LTM); adj. for IFRS 16 effect.

First (minor) exposure to non-German resi portfolio

Rolf Buch is appointed to

Tender offer for Victoria

Signing of MoU with CDC

German vs. non-German exposure but highly opportunistic approach as is the case for our German M&A activities.

Cautious step-by-step approach to minimize risk. Currently ca. 10% of the portfolio are located outside Germany. We will continue to monitor the German market and our defined European target markets in accordance with our acquisition criteria. Germany is expected to remain the dominant market also in the foreseeable future. No specific target rate or ratios in terms of

	Austria (run a scalable business)	Sweden (main focus)	France (biggest long-term potential)	The Netherlands (open for opportunities)
% of total portfolio	~6%	~5%	Not meaningful	0%
Next steps	• Gradual asset rotation via recurring sales of mature assets and development of new assets in a similar magnitude • Run scalable operating business • Follow accretive acquisition opportunities on an opportunistic basis	• Pursue accretive acquisition opportunities on an opportunistic basis • Add Vonovia experience and skill set and use Victoria Park as a platform to further grow in the Swedish residential market • Demonstrate success and sustainability of Vonovia business model to show it also works outside of Germany	• Utilize 10% stake in SNCF portfolio to gain more profound understanding of the market • Safeguard pole position and first-mover advantage for potential opening of social housing to commercial ownership • Continue to actively engage with relevant French players to seek opportunities for taking the next steps	• Continue market research • Be prepared for accretive acquisition opportunities on an opportunistic basis

European Activities

Equity Story Business Update Additional Information

Squeezed out Buwog

Acquisition of 10% stake in a 4,000 unit

2019 Guidance Confirmed

Equity Story	Business Update	Additional Information

	2019 Guidance
Organic rent growth (eop)	~4.4%
Rental Income (€m)	2,020 – 2,070
Recurring Sales (# of units)	~2,500
FV step-up Recurring Sales	~30%
Adj. EBITDA Total (€m)	1,700 – 1,750
Group FFO (€m)	1,165 – 1,215
Group FFO (€/share)	2.15 – 2.24
Dividend	~70% of Group FFO
Modernization & New Construction (€m)	1,300 - 1,600
Underlying number of shares (million)	542.3

IR Contact & Financial Calendar

Equity Story Business Update Additional Information

Contact		Financial Calendar 2019
	Oct 15 – 18	Roadshow Asia in Tokyo, Seoul, Hongkong, Singapore (BAML)
	Nov 5	Interim results 9M 2019
	Nov 6	Roadshow Paris
	Nov 7	Roadshow Amsterdam
	Nov 8	Roadshow Frankfurt
	Nov 11 & 12	Roadshow London
	Nov 13	Conference in London (UBS)
	Nov 21	Roadshow in Zurich
	Dec 3	Conference in London (UBS)
	Dec 5	Conference Pennyhill (Berenberg)
	Dec 12 & 13	HSBC Real Estate Conference 2019 Cape Town

+49 234 314 1629 rene.hoffmann@vonovia.de investorrelations@vonovia.de

Head of Investor Relations

Universitätsstraße 133

Rene Hoffmann

44803 Bochum

Vonovia SE

Germany

https://investors.vonovia.de

The most up-to-date financial calendar is always available online.

We are
Vonovia

Business update

Additional information

Investor Presentation – October 2019 page 37

Appendix

Strategy	39
Portfolio Evolution	41
Acquisition Track Record	42
Bond data	44
Residential Market Data	46
VNA Shares	51
Management Compensation	53
Disclaimer	56

4+1 Strategy Has Evolved into 4+2 Strategy

Investor Presentation – October 2019

1 Historic range. 2 CAGR since 2013 fair value uplift through performance and investments (excluding yield compression).

Vonovia location

High-influx cities ("Schwarmstädte"). For more information: http://investoren.vonovia.de/websites/vonovia/English/4050/financial-reports-_-presentations.html

Equity Story Business Update Additional Information Acquisition pipeline ('000 units) 41.5 69 35 12 Examined Analyzed in more detail Due Diligence, partly ongoing Bids Signed 2014 2015 2016 2017 2018 H1 2019 2017: Buwog (~48 k) ¹ 2015: Gagfah (~140 k) ¹ 2015: Südewo (~20 k) ¹ 2013: Dewag+ Vitus (~41 k)¹ 2016: conwert (~24 k) ¹ 2018: Victoria Park (~14 k) ¹

Acquisitions – Opportunistic but Disciplined

Acquisitions are shown for all categories in the year the acquisition process started.

Acquisition Track Record

Equity Story Business Update Additional Information

					Fair Value (€/sqm)			In-place rent (€/sqm)
Year	Deal	Residential units #	TOP Locations	@ Acquisition	Jun 30, 2019	∆	@ Acquisition	Jun 30, 2019	∆
2014	DEWAG	11,300	Berlin, Hamburg, Cologne, Frankfurt/Main	1,344	2,341	74%	6.76	8.00	18%
	VITUS	20,500	Bremen, Kiel	807	1,470	82%	5.06	5.91	17%
	GAGFAH	144,600	Dresden, Berlin, Hamburg	889	1,729	95%	5.40	6.43	19%
2015	FRANCONIA	4,100	Berlin, Dresden	1,044	2,009	92%	5.82	6.78	17%
	SÜDEWO	19,400	Stuttgart, Karlsruhe, Mannheim, Ulm	1,380	2,062	49%	6.83	7.55	11%
2016	GRAINGER	2,400	Munich, Mannheim	1,501	2,309	54%	7.09	8.01	13%
	CONWERT (Germany & Austria)	23,400	Berlin, Leipzig, Potsdam, Vienna	1,353	1,926	42%	5.88	6.43	9%
	thereof Germany	21,200	Berlin, Leipzig, Potsdam	1,218	1,820	49%	5.86	6.38	9%
2017	thereof Austria	2,200	Vienna	1,986	2,484	25%	6.11	6.84	12%
	PROIMMO	1,000	Hanover	1,617	1,791	11%	6.63	6.88	4%
	BUWOG (Germany & Austria)	48,300	Berlin, Lübeck, Vienna, Villach	1,244	1,434	15%	5.10	5.33	4%
2018	thereof Germany	27,000	Berlin, Lübeck, Kiel	1,330	1,645	24%	5.96	6.32	6%
	thereof Austria	21,300	Vienna, Villach, Graz	1,157	1,234	7%	4.21	4.38	4%
	VICTORIA PARK (Sweden)	14,000	Stockholm, Malmö, Gothenburg	1,462	1,738	19%	8.83	9.20	4%
	Total	289,000

Note: Excluding smaller tactical acquisitions.

Covenants and KPIs (June 30, 2019)

Bond KPIs	Covenant	Level	June 30, 2019
	LTV		40%
	Total Debt / Total Assets	<60%
	Secured LTV	<45%	13%
	Secured Debt / Total Assets
	ICR	>1.80x	4.7x
	Last 12M EBITDA / Last 12M Interest Expense
	Unencumbered Assets >125%		205%
	Unencumbered Assets / Unsecured Debt

Rating KPIs	Covenant	Level (BBB+)
	Debt to Capital Total Debt / (Total Equity + Total Debt)	<60%
	ICR Last 12M EBITDA / Last 12M Interest Expense	>1.80x

Bonds / Rating

Equity Story Business Update Additional Information

Corporate investment grade rating

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB+	Stable	08 May 2019

Bond ratings

Name	Tenor & Coupon	ISIN	Amount	Issue price	Coupon	Final Maturity Date	Rating
Bond 002 (EUR-Bond)	6 years 3.125%	DE000A1HNW52	€ 600m	99.935%	3.125%	repaid on 25 July 2019	BBB+
Bond 004 (USD-Bond)	10 years 5.000%	US25155FAB22	USD 250m	98.993%	4.580%1	02 Oct 2023	BBB+
Bond 005 (EMTN)	8 years 3.625%	DE000A1HRVD5	€ 500m	99.843%	3.625%	08 Oct 2021	BBB+
Bond 007 (EMTN)	8 years 2.125%	DE000A1ZLUN1	€ 500m	99.412%	2.125%	09 July 2022	BBB+
Bond 008 (Hybrid)	perpetual 4%	XS1117300837	€ 1,000m	100.000%	4.000%	perpetual	BBB
Bond 009A (EMTN)	5 years 0.875%	DE000A1ZY971	€ 500m	99.263%	0.875%	30 Mar 2020	BBB+
Bond 009B (EMTN)	10 years 1.500%	DE000A1ZY989	€ 500m	98.455%	1.5000%	31 Mar 2025	BBB+
Bond 010B (EMTN)	5 years 1.625%	DE000A18V138	€ 1,250m	99.852%	1.625%	15 Dec 2020	BBB+
Bond 010C (EMTN)	8 years 2.250%	DE000A18V146	€ 1,000m	99.085%	2.2500%	15 Dec 2023	BBB+
Bond 011A (EMTN)	6 years 0.875%	DE000A182VS4	€ 500m	99.530%	0.875%	10 Jun 2022	BBB+
Bond 011B (EMTN)	10 years 1.500%	DE000A182VT2	€ 500m	99.165%	1.5000%	10 Jun 2026	BBB+
Bond 013 (EMTN)	8 years 1.250%	DE000A189ZX0	€ 1,000m	99.037%	1.250%	06 Dec 2024	BBB+
Bond 014A (EMTN)	5 years 0.750%	DE000A19B8D4	€ 500m	99.863%	0.750%	25 Jan 2022	BBB+
Bond 014B (EMTN)	10 years 1.750%	DE000A19B8E2	€ 500m	99.266%	1.750%	25 Jan 2027	BBB+
Bond 015 (EMTN)	8 years 1.125%	DE000A19NS93	€ 500m	99.386%	1.125%	08 Sep 2025	BBB+
Bond 016 (EMTN)	2 years 3M EURIBOR+0.350%	DE000A19SE11	€ 500m	100.448%	3M EURIBOR+0.350%	20 Nov 2019	BBB+
Bond 017A (EMTN)	6 years 0.750%	DE000A19UR61	€ 500m	99.330%	0.750%	15 Jan 2024	BBB+
Bond 017B (EMTN)	10 years 1.500%	DE000A19UR79	€ 500m	99.439%	1.500%	14 Jan 2028	BBB+
Bond 018A (EMTN)	4.75 years 3M EURIBOR+0.450%	DE000A19X793	€ 600m	100.000%	0.793% hedged	22 Dec 2022	BBB+
Bond 018B (EMTN)	8 years 1.500%	DE000A19X8A4	€ 500m	99.188%	1.500%	22 Mar 2026	BBB+
Bond 018C (EMTN)	12 years 2.125%	DE000A19X8B2	€ 500m	98.967%	2.125%	22 Mar 2030	BBB+
Bond 018D (EMTN)	20 years 2.750%	DE000A19X8C0	€ 500m	97.896%	2.750%	22 Mar 2038	BBB+
Bond 019 (EMTN)	5 years 0.875%	DE000A192ZH7	€ 500m	99.437%	0.875%	03 Jul 2023	BBB+
Bond 020 (EMTN)	6.5 years 1.800%	DE000A2RWZZ6	€ 500m	99.836%	1.800%	29 Jun 2025	BBB+

¹ EUR-equivalent Coupon

Residential Market Fundamentals Robust Rent Growth in Regulated Environments

-6

-4

-2

%

Sources: Federal Statistics Office, GdW (German Association of Professional Homeowners), REIS, BofA Merrill Lynch Global Research, OECD. Note: Due to lack of q-o-q US rent growth data, the annual rent growth for a year is assumed to also be the q-o-q rent growth of that year.

GDP developments

In unregulated markets like the USA, rents go up and down broadly in line with the GDP development GDP, quarterly development y-o-y Rent growth; quarterly development y-o-y Germany: regulated market ensures sustainable rent growth USA: lack of regulation results in highly volatile rent growth % -6 -4 -2

Equity Story Business Update Additional Information

In regulated markets like Germany, rent growth is on a sustainable upward trajectory and largely independent from

Residential Market Fundamentals

Completions Substantially below Required Volumes

Average annual residential completions of the last five

years fall short of estimated required volumes:

• Germany: only 75% of required volumes completed
• Sweden: only 49% of required volumes completed
• France: only 77% of required volumes completed

Equity Story Business Update Additional Information

Sources: German Federal Statistics Office, GdW (German Association of Professional Homeowners). Swedish National Board of Housing, Building and Planning, Statistics Sweden, Le service de la donnée et des études statistiques (SDES), Abbé Pierre Foundation

Investor Presentation – October 2019

Residential Market Fundamentals

Large Gap between In-place Values and Replacement Costs

Note: VNA 2010 – 2014 refers to Deutsche Annington Portfolio at the time; construction costs excluding land. The land value refers to the share of total fair value allocated to land. Allocation between building and land in Sweden assumed to be similar to Germany.

Investor Presentation – October 2019

Residential Market Fundamentals Housing Affordability and Urbanization

Equity Story Business Update Additional Information Housing affordability¹ (%) 21.9 24.2 24.0 26.2 20.8 20.4 25.7 23.7 23.5 26.2 26.1 22.6 24.1 26.7 Euro Area Germany France Sweden Austria Netherlands UK 2007 2017

Population living in urban areas (%)

¹ Share of disposable household income spent on housing, water, electricity, gas and other fuels

Sources: Eurostat, United Nations

Residential Market Fundamentals (Germany) Household Sizes and Ownership Structure

Equity Story Business Update Additional Information

Growing number of smaller households Fragmented ownership structure

• While the overall population in Germany is expected to slightly decline, the number of households is forecast to grow until at least 2035 with a clear trend towards smaller households.
• The household growth is driven by various demographic and social trends including divorce rates, employment mobility etc.

Distribution of household sizes (million)

• Germany is the largest housing market in Europe with ~42m housing units, of which ~23m are rental units.
• Ownership structure is highly fragmented and majority of owners are non-professional landlords.
• Listed sector represents ~4% of total rental market.

Ownership structure (million units)

Investor Presentation – October 2019

Shareholder Structure and Share Price Performance

Reconciliation of Shares Outstanding

Equity Story		Business Update Additional Information
Date	NOSH (million)	Comment
December 31, 2016	466.0
March 31, 2017	468.8	conwert acquisition
June 30, 2017	476.5	Scrip dividend
September 30, 2017	485.1	Gagfah cross-border merger
December 31, 2017	485.1
March 31, 2018	485.1
June 30, 2018	518.1	€1bn ABB in 05/2018; scrip dividend
September 30, 2018	518.1
December 31, 2018	518.1
March 31, 2019	518.1
June 30, 2019	542.3	€744m ABB in 05/2019; scrip dividend
September 30, 2019	542.3

The number of outstanding shares is always available at https://investoren.vonovia.de/websites/vonovia/English/2010/basic-information.html

Management Board Remuneration - Overview

Fixed Remuneration (incl. Pension)

• Monthly fixed compensation paid in 12 equal installments
• Annual pension contribution (alternative: cash payout)

Bonus / STIP LTIP

• Criteria/Targets: Group FFO, adj. NAV/share, adj. EBITDA Total, personal targets agreed with SVB
• Bonus Cap at predetermined amount

• Payout: Cash

• Annually granted remuneration component in the form of virtual shares

• Criteria/Targets: relative TSR, adj. NAV/share, Group FFO/share, Customer Satisfaction Index (CSI)
• Performance Period: 4 years
• Payout: Cash
• Cap: 250% of grant value

Management Board remuneration is based on three pillars

Share Holding Provision

• Mandatory share ownership
• 100% of annual fixed remuneration (excl. pension) (accumulation on a pro rata basis during first 4 years)

Management Board Remuneration – Bonus / STIP

• Bonus cap at predetermined amount
• Cash payout
• Group FFO is the key figure for managing the sustained operational earnings power of our business.
• Adj. NAV/share as standard figure for the value of our property assets (calculation according to EPRA best practice standards, after corrections for goodwill).
• Adj. EBITDA Total: aggregate EBITDA across the four segments, reflecting the sustainable earnings strength of the business before interest, taxes, depreciation and amortization.
• Personal targets related to individual department responsibilities or overlapping targets (e.g. integration projects).

Management Board Remuneration – LTIP

Equity Story Business Update Additional Information LTIP Annually granted long-term remuneration component in the form of virtual shares ("performance shares") Contractually defined target amount granted for each year ("grant value") Initial number of perf. shares = grant value / initial share price Target achievement level between 50% (min) and 200% (max) 4 years performance period targets set by SVB (equally weighted) Relative TSR Adj. NAV/share Group FFO/share Customer Satisfaction Index Final number of perf. shares = initial number of perf. shares * overall target achievement level Cash payout = final number of perf. shares * final share price + dividends (Cap: 250% of grant value)

• LTIP aims to ensure that remuneration structure focuses on sustainable corporate development.
• Relative TSR is from an investor perspective a well-established and accepted performance measure, focusing on share return, relative to a selected peer group. Hence, it is adequate for comparison with relevant competitors.
• Customer Satisfaction Index (CSI): Based on customer surveys and reflects how our services are perceived and accepted by our customers.
• Shareholder alignment safeguarded by (i) relative performance targets (Group FFO/share and Adj. NAV/share) as well as (ii) calculation method which takes actual share price performance into account.

Disclaimer

This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, "Vonovia") for internal use. Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it.

This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by the recipient to any other person. Receipt of this presentation constitutes an express agreement to be bound by such confidentiality and the other terms set out herein.

This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of Vonovia ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from Vonovia's current business plan or from public sources which have not been independently verified or assessed by Vonovia and which may or may not prove to be correct. Any forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date the presentation is provided to the recipient. It is up to the recipient of this presentation to make its own assessment of the validity of any forward-looking statements and assumptions and no liability is accepted by Vonovia in respect of the achievement of such forward-looking statements and assumptions.

Vonovia accepts no liability whatsoever to the extent permitted by applicable law for any direct, indirect or consequential loss or penalty arising from any use of this presentation, its contents or preparation or otherwise in connection with it.

No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the recipient's purposes. The delivery of this presentation does not imply that the information herein is correct as at any time subsequent to the date hereof.

Vonovia has no obligation whatsoever to update or revise any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof.

This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of the Company nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever.

This presentation is neither an advertisement nor a prospectus and is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by the attendees/recipients in connection with, the purchase of or investment in any securities of the Company. This presentation is selective in nature and does not purport to contain all information that may be required to evaluate the Company and/or its securities. No reliance may or should be placed for any purpose whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.

This presentation is not directed to or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

Neither this presentation nor the information contained in it may be taken, transmitted or distributed directly or indirectly into or within the United States, its territories or possessions. This presentation is not an offer of securities for sale in the United States. The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States. Consequently, the securities of the Company may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States unless registered under the Securities Act.

Tables and diagrams may include rounding effects.

For Your Notes

Equity Story Business Update Additional Information

For Your Notes

Equity Story Business Update Additional Information