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Vonovia SE

Annual Report • Nov 8, 2017

477_ip_2017-11-08_b50a8122-dfe2-45f6-9d7d-84ba3b6e8806.pdf

Annual Report

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9M 2017 Earnings CallNovember 8, 2017

Rolf Buch, CEODr. A. Stefan Kirsten, CFO

Highlights

l
d
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p
er
s
re
-
-

Intended to be proposed to the 2018 Annual General Meeting. 2 Based on current 485.1m shares outstanding.

Final Guidance 2017 - Confirmed towards Upper End

2
0
1
6
Ac
ls
tu
a		 2
0
1
7
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nc
(
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%
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%
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-		 %
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(
)
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%
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%
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i
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6
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Pr
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2

Intended to be proposed to the 2018 Annual General Meeting.

Built-in Organic FFO1 Growth Continues in 9M

  • The average portfolio size was of a broadly similar size y-o-y.
  • Organic rent growth, better average portfolio quality and increased contribution from Value-add Business drove Adj. EBITDA Operations growth to 10.8%.
  • 15.4% FFO1 per share growth despite slight dilution from conwert, scrip dividend and Gagfah merger.
9
M
2
0
1
7		 9
M
2
0
1
6		 l
De
ta
be
f r
de
l s
Av
i
t
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1,
6
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1
%
+
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Av
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er
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8
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+
Or
h
(
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ic
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9		 2.
8		 0
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(
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9
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(
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p		 % 2.
9		 2.
8		 1
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+
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4
9.
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1
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6.
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1
%
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+
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p
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+
Op
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3
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-1
7
7.		 %
7.
5
+
A
d
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B
I
T
D
A
Re
l
ta
n		 €m 8
6
5.
9		 7
9
4.
1		 9.
0
%
+		 €
7
1.
8m
+
d
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A
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Va
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a
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7		 1
4
5.		 6
8.
%
5
+
A
d
j.
E
B
I
T
D
A
Op
io
t
er
a
ns		 €m 9
2
2.
1		 8
3
2.
3		 1
0.
8
%
+		 €
8
9.
8m
+
O
F
F
in
te
t e
re
s
xp
en
se
s		 €m -2
6.
1
5		 -2
9.
4
1		 3.
%
-1
1
Cu
in
F
F
O
1
t
ta
rre
n
co
m
e
xe
s		 €m -1
5.
1		 -1
1.
6		 3
0.
2
%
+
O
F
F
1		 €m 6
9
0.
5		 6
5
7
1.		 2
0.
8
%
+		 €
8.
9m
1
1
+
F
F
O
1
ha
(
N
O
S
H
)
p
er
s
re
eo
p		 € 1.
4
2		 1.
2
3		 1
5.
4
%
+
F
F
O
1
ha
(
N
O
S
H
)
p
er
s
re
av
g.		 € 1.
4
6		 1.
2
3		 1
8.
7
%
+

Quarterly Analysis Reveals Organic Growth Momentum

  • Comparing this year's Q3 vs. Q1 emphasizes the organic growth momentum.
  • Adj. EBITDAs and FFO are growing due to operational improvements and an increasing contribution from Value-add Business, in spite of a declining portfolio as a result of non-core disposals.
Q
3
2
0
1
7		 Q
1
2
0
1
7		 l
De
ta
be
f r
de
l s
Av
i
t
ia
er
ag
e
nu
m
r o
es
n
q
m		 `0
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1,
9
5
0		 2
2,
2
7
6		 -1
5
%
be
f r
de
l u
Av
i
ia
i
t
ts
er
ag
e
nu
m
r o
es
n
n		 # 3
5
1,
1
4
5		 3
5
6,
4
1
1		 -1
5
%
Or
ic
h
(
)
t g
t
g
an
re
n
ro
w
y-
o-
y		 % 3.
9		 3.
4		 5
0
b
+
p
s
la
(
)
In
t
-p
ce
en
eo
p
r		 /
h
/
€
t
m
on
sq
m		 6.
1
9		 6.
0
6		 2.
1
%
+
(
)
Va
te
ca
nc
y
ra
eo
p		 % 2.
9		 2.
7		 b
2
0
+
p
s
l
Re
ta
in
n
co
m
e		 €m 4
1
6.
2		 4
1
7.
2		 -0
2
%		 -€
1.
0m
Ma
in
te
na
nc
e
ex
p
en
se
s		 €m -6
4.
9		 -6
3.
1		 2.
9
%
+
Op
in
t
er
a
g
ex
p
en
se
s		 €m 8.
9
-5		 -6
8.
5		 0
%
-1
4.
d
l
A
j.
E
B
I
T
D
A
Re
ta
n		 €m 2
9
2.
4		 2
8
5.
6		 2.
4
%
+		 €
6.
8m
+
A
d
j.
E
B
I
T
D
A
Va
lu
d
d
bu
in
e-
a
s
es
s		 €m 3
0.
4		 9.
8
1		 3.
%
5
5
+
d
A
j.
E
B
I
T
D
A
Op
io
t
er
a
ns		 €m 3
1
4.
5		 3
0
0.
1		 4.
8
%
+		 €
1
4.
4m
+
O
F
F
in
te
t e
re
s
xp
en
se
s		 €m 8.
-7
5		 8
-7
6.		 2.
2
%
+
Cu
in
F
F
O
1
t
ta
rre
n
co
m
e
xe
s		 €m -3
2		 -5
1		 -3
7.
3
%
O
F
F
1		 €m 2
3
2.
8		 2
8.
2
1		 6.
7
%
+		 €
1
4.
6m
+
ha
(
)
F
F
O
1
N
O
S
H
p
er
s
re
eo		 € 0.
4
6		 0.
4
7		 -2
1
%
p
F
F
O
1
ha
(
N
O
S
H
)
p
er
s
re
av
g.		 € 0.
8
4		 0.
4
7		 2.
%
1
+

Accelerating Rent Growth Momentum

i
iv
h
j
Po
t
t g
t
tra
to
s
e
re
n
ro
w
ec
ry
h
dr
iv
(
la
)
l
Re
1
2
M
9
M
2
0
1
7
9
M
2
0
1
6
De
t g
t
t
ta
n
ro
er
s
s
w
2
0
1
3		 2
0
14		 2
0
15		 2
0
1
6		 2
0
17
(
)
E		 2
0
1
8+
(
)
E
S
i
ing
t
t
te
ts
na
n
(
inc
l.
bs
i
d
ize
d
)
ts
su
re
n		 1.
2
%		 0.
9
%		 +3
0
bp
s		 Ma
ke
dr
ive
t
n
r		 1.
6
%		 1.
6
%		 1.7
%		 1.5
%
Ne
le
ing
t
t
w
s		 0.
5
%		 0.
7
%		 -2
0
bp
s		 de
Mo
iza
t
ion
rn		 0.
4
%		 0.
9
%		 1.
2
%		 1.
8
%
Su
b
l
to
ta
ke
dr
iv
h
t-
t g
t
m
ar
en
re
n
ro
w		 %
1.
7		 %
1.
5		 bp
+2
0
s		 Sp
t
ion
ac
e c
rea		 --- --- --- ---
de
Mo
iza
t
ion
rn		 2.
1
%		 1.
3
%		 +8
0
bp
s		 Or
ic
nt
g
an
re
h
wt
g
ro		 9
%
1.		 2.
%
5		 2.
9
%		 3.
3
%		 0
%
~4		 4.
6
%
-
4.
8
%
f-
Su
b
l
l-
l r
h
to
ta
t g
t
en
ro
w		 3.
8
%		 2.
8
%		 bp
+1
0
0
s
Sp
t
ion
ac
e
cr
ea		 0.
1
%		 0.
0
%		 +1
0
bp
s		 In
tm
t
tra
ve
en
s		 k
re
co
c		 d
(
)
€m
r		 1,
0
0
~
Su
b
l o
ic
h
to
ta
t g
t
rg
an
re
n
ro
w		 3.
9
%		 2.
8
%		 +1
1
0
bp
s		 ~ 7
5
0
Po
fo
l
io
t
t
r
ma
na
g
em
en
(
is
i
ion
/.
les
)
t
+
ac
q
u
s
sa		 0.
3
%		 1.
6
%		 3
0
bp
-1
s		 1
7
2		 3
5
6		 4
7
2
To
l r
h
ta
t g
t
en
ro
w		 4.
2
%		 4.
4
%		 -2
0
bp
s		 7
1
2
0
1
3		 2
0
1
4		 2
0
1
5		 2
0
1
6		 2
0		 1
7
(
E
)
2		 0
1
8+
(

9M 2017 Earnings Call

Continued EBITDA Expansion

  • 9.0% EBITDA Rental growth translates into an EBITDA Operations growth of 10.8% y-o-y because of the growing contribution from the Value-add Business.
  • EBITDA Operations margin expansion (excl. maintenance) continues with 200 bps ytd.
€m
(un
les
dic
d o
the
)
s in
ate
ise
rw		 9
M
2
0
1
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2
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1
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ta
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ing
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ns		 9
2
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3
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8
%
+

Mainly consolidation

LTV Well within Target RangeDebt/EBITDA Multiple of 10.9x

LTV down to 42.4% and well within target range of 40%-45%.

€m
(
les
in
d
ica
d o
he
ise
)
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3
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fo
Fa
ir
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0
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6
ha
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l e
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ie
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or		 3
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5
5
5		 3
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8
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2
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1		 2
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1
7
L
T
V		 2.
%
4
4		 3.
2
%
4		 %
4
4.
4		 6
%
4
1.

Debt/EBITDA multiple is adj. net debt as of Sep 30 over 9M EBITDA Operations annualized.

FFO1 per Share +15.4%

Driven by better operational performance and lower interest expenses, FFO1 per share was up 15.4% y-o-y for eop NOSH and up 18.7% for avg. NOSH1.

€m
(
les
d
d o
he
)
in
ica
te
t
ise
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s
rw		 9
M
2
0
1
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1
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De
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8
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%
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2
%
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9
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%
f w
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3
%
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rs		 3
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0		 -
f w
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b
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o
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s		 9.
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4		 8
3.
3
%
Ca
l
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ta
ize
in
te
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ma
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3		 -4
7.
3		 6.
3
%
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A
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2
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2.
%
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inc
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2
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s		 -2
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8.
%
1
A
d
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Sa
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F
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2		 8.
7
4
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0
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2
3.
%
F
F
O
1
€
/
ha
(
N
O
S
H
)
s
re
eo
p		 1.
4
2		 1.
2
3		 1
5.
4
%
O
€
/
ha
(
O
S
)
F
F
1
N
H
s
re
av
g.		 1.
4
6		 1.
2
3		 1
8.
7
%

Adj. NAV per Share Up 9.0% YTD

Adj. NAV per share is up 9.0% in the first nine months driven by the operating performance, the inclusion of conwert and the H1 valuation and in spite of the 4.1% increase in the number of shares outstanding1 following the Gagfah cross-border merger, scrip dividend and conwert squeeze out.

€
m
(
les
d
d o
he
)
in
ica
te
t
ise
un
s
rw		 3
0,
2
0
S
1
7
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p.		 3
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0
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1
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n.		 3
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a
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c.
Eq
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ty
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er
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De
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7.
4		 0.
3
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2
lu
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Fa
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e		 3
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€
/
h
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r
e		 3
3.
3
5		 3
3.
1
0		 3
1.
1
8		 3
0.
7
5

See page 59 for reconciliation of number of shares.2 Adjusted for effects from cross currency swaps.

€
m		 F
Y
2
0
1
6		 H
1
2
0
1
7		 H
2
2
0
1
7
E		 F
Y
2
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4
0
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1
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-
R
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t
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I
(
h
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t
t
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u		 4
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a		 3,
7
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-		 4,
0
0
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4,
5
0
0
-
  • Strong rental development in Vonovia's portfolio and the market
  • Investments with approximately 20% additional valuation uplift
  • Effect of Yield Compression more differentiated than in 2015:
  • Less momentum in prime locations (e.g. Berlin, Hamburg, Cologne)
  • Significant increase in secondary locations (e.g. Leipzig, Hanover, Bremen)
  • Considerable yield compression also in formerly weaker markets (e.g. Potsdam, Magdeburg)

Note: Based on recent forecast of Vonovia calculations. Valuation results are subject to change during the ongoing valuation process.

Investment Program on an Increasingly Broader Footing

Ne
ig
h
bo
ho
d
o
r
De
lop
t
ve
me
n		 l
l-s
le
h t
de
lop
Fu
ing
t
ire
in
ity
ca
ap
p
roa
c
o
ve
en
are
as
a
c
,
kin
ic
d s
ia
l c
rit
ia
int
ta
t.
g
ec
on
om
an
oc
er
o a
cco
un
n
o
ti
lu
o
v
E		 Sp
Cr
t
ion
ac
e
ea		 Ne
ion
be
xis
ing
bu
i
l
d
ing
d
tru
ct
tw
t
w
co
ns
s
ee
n e
s a
n
d
d
l
f
loo
bu
l
d
d o
lan
d t
ha
it
ion
i
ing
t w
on
n
n
e
a
a
rs
s a
lre
dy
a
a
ow
n.
m
a
r
g
o
r
P		 i
ia
ive
Ne
In
t
t
w
s		 ly
ba
hro
d
kit
he
de
d u
Pri
ri
t
ize
ma
om
s a
n
c
ns
mo
rn
p
on
' in
it
iat
ive
l
l a
lac
f o
l
d
he
ing
ten
ts
t o
at
an
s a
s w
e
s r
ep
em
en
h m
de
l
lat
ste
it
ins
ta
ion
sy
ms
w
o
rn
s.
t
n
e
m
t
s
e		 Up
de
g
ra
Bu
i
l
d
ing
(
U
B
)		 f
fic
de
f t
he
bu
l
d
he
l
l a
d
En
ien
t m
iza
t
ion
i
ing
erg
y-
e
o
rn
o
s
n
l a
(
he
ins
lat
ion
for
fac
de
d r
fs,
at
co
mm
un
a
rea
s
u
a
s a
n
oo
do
he
).
wi
at
ing
ste
n
ws
sy
ms
,
v
n
I		 Op
im
ize
t
Ap
tm
t
ar
en
(
O
A
)		 fur
b
hm
f t
(
ba
hro
Re
is
t o
art
nts
t
en
no
ve
r a
p
me
om
ur
,
f
fri
loo
rin
wi
rin
),
l
ly
nio
d
ly
de
iza
ion
t
g,
g
us
ua
se
r-
en
mo
rn

Investment Program Evolution

  • The investment program has not only grown in size but also in complexity.
  • While a yield-to-cost calculation is appropriate for investments that generate relatively quick pay-backperiods, such as OA or UB, the larger investments space creation and neighborhood development generate value only over a longer period of time.
  • For these types of projects, an IRR calculation is more adequate and after using it for internal reporting purposes already from the program inception, we will now use this metric in the external reporting as well.
  • The target IRR for the overall investment program is >8%.
  • OA and UB will continue to be measured against a 7%yield-to-cost target.

Multitude of Attractive Neighborhood Development Projects Identified and Underway

Growing Contribution from Value-add Business

Concept

  • Expansion of core business to extend the value chain by offering additional services and products that are directly linked to our customers and/or the properties and offer the same cash flow stability as the rental business.
  • Insourcing of services to ensure maximum process management and cost control.
  • Two types of Value-add Business
    1. External income (e.g. multimedia, smart metering)
    1. Internal savings (e.g. craftsmen, resi environment)
  • New initiatives always follow same low risk pattern of
  • Prototype development
  • Proof of concept in pilot phase
  • Roll-out across portfolio

Economics

  • NAV does not account for Vonovia's Value-add Business.
  • Applying the impairment test WACC1 to the 2017E Adj. EBITDA Value-add Business translates into an additional value of ~€5 per share (~15% on top of current Adj. NAV).
io
Pe
tr
t
ne
a
n
l
d
Mu
t
im
ia
e		 7
5
%
ca
Sm
t
te
in
ar
m
e
g
r		 1
5
%
ca
de
l e
Re
i
t
ia
iro
t
s
n
nv
nm
en		 2
%
5
ca
Cr
f
S
ts
V
T
a
m
en		 0
%
(
)
7
in
te
ca
m
a
na
nc
e
3
0
%
(
de
iza
io
)
t
ca
m
o
rn
n
is
d
0
%
l
low
for
tar
et
7
to
g
aro
un
a
h
f
lex
b
lity
he
lum
i
i
in
t
en
ou
g
vo
es
d t
b
le
inu
nt
an
o e
na
co
ou
s
be
hm
kin
ke
to
t p
ric
nc
ar
g
ma
r
es

Sales – Steady Cash Flow at Attractive Margins

  • Overall sales volume lower than in prior-year period mostly as a result of portfolio transaction with LEG including privatizations in 9M 2016.
  • Non-core / Non-strategic sales include a relatively large share of commercial properties from conwert portfolio.
P
R
I
V
A
T
I
Z
A
T
I
O
N		 /
N
O
N-
C
O
R
E
N
O
N-
S
T
R
A
T
E
G
I
C		 T
O
T
A
L
€m
(un
less
ind
icat
ed o
the
rwis
e)		 9
2
0
1
M
7		 9
2
0
1
6
M		 9
2
0
1
M
7		 9
2
0
1
6
M		 9
2
0
1
M
7		 9
2
0
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2018 Guidance Underlines Organic Growth Potential

2
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re		 €
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f
F
F
O
1
o

Intended to be proposed to the 2018 Annual General Meeting. 2 Based on current number of 485.1m shares outstanding.

Organic Growth Drives FFO 2018

~€55m FFO growth (+6.0%) from organic improvements in spite of €48m less FFO contribution as a result of non-core disposals.

Note: 2017E and 2018E FFO numbers reflect mid points of guidance ranges.

Housekeeping

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Proven 4+1 Strategy is Evolving into 4+2 Strategy to Include European Metropolitan Areas

io
&
Cu
is
fa
io
Re
ta
t
to
Sa
t
t
p
n
s
m
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f o
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ac
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t
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ts
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ar
an
on
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s		 6
Eu
Ac
t
iv
i
t
ie
ro
p
ea
n
s
l
d
Bu
i
ing
is
t
ing
o
n
ex
e
v
ti
a
v
o
n
n
I		 lu
d
d
in
4
Va
Bu
e-
a
s
es
s		 f c
bu
d
he
lue
Ex
ion
ine
to
te
t
p
an
s
o
or
e
s
ss
e
n
a
x
v
ha
by
f
fe
d
d
l s
d
in
ing
i
ion
ice
t
c
o
a
a
er
s a
n
r
v
du
ha
d
ly
l
ke
d
ire
in
ts
t
t a
t
to
p
ro
c
re
c
o
ur
d
/
he
ies
to
t
t
cu
s
me
rs
an
or
p
ro
p
er
f s
In
ing
ice
to
im
so
ur
c
o
er
v
s
e
ns
ur
e
ma
x
um
d
l
t a
t c
tro
p
ro
ce
ss
m
an
ag
em
en
n
co
s
on		 Ge
t
ion
rm
an
o
p
er
a
s
d
h
Me
as
ur
e
ap
p
ro
ac
l
len
fo
Ex
t p
tn
ce
ar
er
s
r
t
ion
co
op
er
a
Le
ing
kn
ho
ve
ra
g
ow
w,
ien
d
be
t
ex
p
er
ce
a
n
s
ice
t
p
ra
c
s
C O
S
t
i
t
i
t
t
i
p
p
o
r
u
n
s
c
r
a
e
g
e
s

9M 2017 Earnings Call

Wrap-up

2017 guidance confirmed towards upper end.

Built-in organic growth momentum continues in 9M 2017 and beyond.

First indication for full-year valuation shows positive fundamentals remain in place. €4.0bn - €4.5bn value uplift expected for the full year.

Investment Program on a broad footing supports organic growth potential.

Guidance for 2018 shows internal strength going forward.

C
t
t
o
n
a
c		 F
i
i
l
C
l
d
2
0
1
7
n
a
n
c
a
a
e
n
a
r
20
17
f
f
R
H
e
n
e
o
m
a
n
n		 v 8
No		 ult
Int
eri
s 9
M
20
17
m
res
d
l
H
I
R
i
t
t
e
o
n
e
o
e
o
n
a
v
s
r
a
s		 No
v 1
3-
16		 Ro
ad
sh
(
Eu
e)
ow
rop
f
V
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S
E
o
n
o
a
v		 No
v 1
7		 Ro
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(
Bru
ls)
*
ow
sse
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ß
P
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3
t
s
a
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r		 v 2
8
No		 S G
lob
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C
EO
/
CF
O C
fer
(
nd
)
UB
Re
Est
ate
Lo
on
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on
p
p
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4
4
8
0
3
B		 No
v 2
8		 Ro
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sh
(
Ge
)
*
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c
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m		 De
c 1		 ét
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én
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Th
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(
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So
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e P
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Re
vie
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w
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a
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Co
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(
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Eu
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2
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6
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4
4
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4
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f
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@
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m
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v		 20
18
d
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w
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v
v		 Ja
n 9
-10		 Co
ba
nk
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In
t S
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r (
NY
C)
stm
mm
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n 1
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nfe
(
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J.P
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n R
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an
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fer
(
nk
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Ke
rat
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eu
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20
17
lts
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3
y		 ult
Int
eri
3M
20
18
m
res
s
Ma
9
y		 An
al
Ge
ral
M
tin
nu
ne
ee
g
Ju
4-
5
ne		 Ca
ita
l M
ark
Da
ets
p
y
2
Au
g		 ult
6M
20
18
Int
eri
m
res
s
No
v 6		 Int
eri
ult
9M
20
18
m
res
s

Appendix

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Recent activities

  • 1 workshop with Vonovia and SNI representatives conducted in Montpellier.
  • 7 workshops planned in Paris and Bochum for the remainder of the year.
  • Preliminary findings to be presented to management at the end of January 2018.

Attractive Dividend Policy

1 Rental income + EBITDA Value-add Business and Other; excluding sales effects. 2 Midpoint guidance.

Track Record

Smooth Maturity Profile with Diverse Funding Mix

Average financing cost of debt maturing in the relevant year. 2 Weighted avg. financing costs excl. Equity Hybrid. Including Equity Hybrid avg. interest rate of debt maturing in 2021 is 3.6%. 3 Net Debt as of Sep 30 over 9M EBITDA Operations annualized.

Corporate Investment grade rating

f 20
15-0
9-3
0
as o
tin
Ra
g a
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nc
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g		 tlo
ok
Ou		 da
La
st
Up
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r's
Sta
&
Poo		 BB
B+		 ble
Sta		 06
Se
20
16
p

Bond ratings1 as of 2015-09-30

Na
me		 Te
r &
Co
no
up
on		 IS
IN		 Am
nt
ou		 ice
Iss
ue
pr		 Co
up
on		 Fin
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rit
Ma
tu
Da
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Ra
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nd
00
2 (
EU
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on		 6 y
3.1
25
%
ea
rs		 DE
00
0A
1H
NW
52		 €
60
0m		 99
.93
5%		 3.1
25
%		 25
Jul
20
19
y		 BB
B+
Bo
nd
00
4 (
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Bo
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5.
00
0%
ye
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25
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50
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4.5
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%		 02
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02
3		 BB
B+
Bo
nd
00
5 (
EM
TN
)		 8 y
3.6
25
%
ea
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00
0A
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RV
D5		 €
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0m		 99
.84
3%		 3.6
25
%		 08
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6 (
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4.
62
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10
28
95
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70
0m		 99
.78
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7 (
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TN
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2.1
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%
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00
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1Z
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N1		 €
50
0m		 99
.41
2%		 2.1
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%		 09
Jul
20
22
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%
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08
37
11
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75
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Bond 003 (USD-Bond) USD 750m repaid 02 Oct 2017 already considered

2EUR-equivalent Coupon

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Neighborhood Development Project Berlin Reinickendorf

  • 1,107 resi units built between 1953 and 1956
  • ∅in-place rent €5.96/sqm vs. market rent of ~€9.00/sqm
  • ∅apt. size 53 sqm
  • Excellent infrastructure especially for families and senior citizens
  • S-Bahn and subway station immediately adjacent on the west-end side of the property
  • High recreational value
  • Good supply of shopping and daily amenities

Current Situation

Adding 210 New Apartments through Floor Additions

∑ investments ~€100m @ IRR > 10%

Innovation Example: Residential Environment Services

  • Innovative approach to a traditional residential business: residential environment services (mowing lawns, trimming trees and bushes, etc.), which form part of the tenants' recoverable expenses.
  • Insourcing of capacities for improved quality control and better cost basis.
  • Digitization of entire process to achieve higher standardization and process control.

Improvements Across All KPIs

9
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2
0
1
7		 9
M
2
0
1
6		 De
l
ta
be
f r
de
l s
Av
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lac
(
)
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t
-p
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en
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p		 €
/m
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1
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%
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t g
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0,
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p.		 De
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2
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c.		 l
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ir v
lue
f r
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sta
te
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p		 €m 3
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8.
1		 27
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5.
6
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4.
1
%
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/s
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re		 3
9.5
7		 3
6.
8
5		 +8
2
%
d
A
j.
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V		 /s
ha
€
re		 3
3.
5
3		 3
0.
75		 +9
0
%
LT
V		 % 4
2.4		 41
6		 +8
0
bp
s

Pro-active Portfolio Management Clustering

  • As the investment program continues to evolve beyond the two original categories Optimize Apartments and Upgrade Buildings, an unambiguous allocation of properties into these two clusters becomes increasingly meaningless. Going forward, we will therefore distinguish only between Operate and Invest for the Strategic Portfolio.
  • Similarly, as the Non-strategic and Non-core portfolios continue to shrink, there is no longer a need to distinguish between the two. Going forward, we will merge and report them as one cluster under Non-core.
3
0,
2
0
Se
17		 de
l
Re
i
nt
ia
s		 lac
In
t
-p
e r
en		 Va
rat
ca
nc
y
e		 Fa
ir v
a		 lue
p. its
un		 (
/sq
/m
h
)
€
t
m
on		 (
)
%		 (
bn
)
€		 f t
l
%
ota
o
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te
era		 1
0
6,
1
2
6		 6.
3
2		 2.7 9.7 3
2
%
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5,
1		 6.
2
0		 2.
6		 8.
1
5		 6
0
%
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2		 9
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%
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0
4		 4.
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%
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2
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5		 9.
2		 0.
4		 1
%
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Ge
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9		 3
0.
2		 9
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%
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7		 6.
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6		 2
%
To
l R
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de
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fo
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3
4		 6.
1
9		 2.
9		 3
0.
8		 1
0
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%

Fair value of the developed land excluding €182.4 million for undeveloped land, inheritable building rights granted and other.

All Strategic Markets Show Upward Potential

Fai
r va		 lue pla
In-
t
ce
ren
l
ke
Re
ion
Ma
t
g
a
r		 (€m
)		 (€/
)
sqm		 ide
l uni
Res
ntia
ts		 Liv
ing
a ('00
are
0 s
)
qm		 Vac
anc
y (%
)		 al (p.a
Tot
., €
m)		 l (p.a
ide
Res
ntia
., €
m)		 ide
l
Res
ntia
(€/
/m
ont
h)
sqm		 Org
ani
nt gro
c re
wth (%
)		 le (in-
ltip
Mu
pla
t)
ce
ren		 Ave
nt gro
rag
e re
wth
for
st CB
eca
RE
(5 y
rs) (%
)		 Ave
nt
rag
e re
wth
(%
) fr
gro
om
Opt
imi
ze Apa
rtm
ent
s
rlin
Be		 4,
65
7		 1,
82
8		 38
67
8
,		 2,
45
0		 1.7 19
2		 18
1		 6.2
6		 3.3 24
.3		 3.3 48
.5
Rh
(
nkf
ine
M
ain
Ar
Fra
urt
ea
,
dt,
bad
)
Da
sta
W
ies
rm
en		 3,
20
6		 1,
76
5		 27
99
4
,		 1,
78
5		 1.7 166 160 7.6
0		 3.5 19
.4		 3.2 40
.5
Rh
lan
d (
log
ine
Co
ne
,
ldo
rf,
)
Dü
Bo
sse
nn		 3,
120		 1,
47
2		 30
72
0
,		 2,
06
0		 3.0 169 16
1		 6.7
1		 4.6 18
.5		 2.8 28
.0
sde
Dre
n		 2,
71
2		 1,
159		 38
60
3
,		 2,
196		 2.7 15
7		 14
7		 5.7
5		 6.1 17
.2		 3.6 35
.8
uth
hr
So
Ru
Are
ern
a
(
d,
chu
m)
Do
rtm
Ess
Bo
un
en
,		 2,
71
2		 97
5		 44
48
9
,		 2,
71
9		 3.7 18
1		 17
5		 5.5
7		 3.9 14
.9		 2.0 28
.9
mb
Ha
urg		 1,
79
6		 1,
65
9		 16
56
1
,		 1,
04
9		 2.1 88 84 6.7
5		 4.3 20
.3		 3.0 39
.7
h
Mu
nic		 1,
68
7		 2,
56
5		 9,
72
2		 64
0		 1.1 62 58 7.6
3		 2.8 27
.3		 4.5 48
.3
Stu
ttg
art		 1,
59
3		 1,
72
2		 14
21
2
,		 89
5		 1.8 83 79 7.4
6		 2.1 19
.3		 2.8 39
.1
rth
hr
a (
isb
No
Ru
Are
Du
ern
urg
,
Ge
lse
nk
he
n)
irc		 1,
33
9		 78
4		 27
18
1
,		 1,
68
6		 4.2 106 10
3		 5.3
1		 4.2 12
.6		 1.7 23
.0
Ha
nov
er		 1,
20
3		 1,
27
3		 14
61
0
,		 92
7		 3.0 69 66 6.1
2		 4.1 17
.5		 2.7 36
.5
l
Kie		 93
6		 1,
11
2		 13
98
2
,		 81
1		 1.7 57 54 5.6
5		 3.4 16
.4		 2.2 38
.1
Bre
me
n		 85
9		 1,
154		 11
92
2
,		 72
3		 3.3 47 45 5.3
8		 2.0 18
.2		 2.9 30
.4
Lei
ig
pz		 68
0		 1,
09
7		 9,
169		 58
7		 4.1 41 39 5.7
2		 1.9 16
.4		 2.4 24
.6
ha
lia
(
We
stp
Mü
nst
er,
Os
brü
ck)
na		 62
2		 98
1		 9,
66
9		 62
7		 2.3 41 40 5.5
0		 2.8 15
.0		 2.5 32
.1
ibu
Fre
rg		 51
2		 1,
82
9		 4,
05
1		 27
7		 1.7 23 22 6.8
7		 3.0 22
.1		 3.7 44
.0
he
Ot
r S
tra
teg
ic L
tio
oca
ns		 1,
97
4		 1,
26
8		 23
96
8
,		 1,
52
2		 2.9 116 11
2		 6.2
9		 4.9 17
.0		 3.1 36
.3
tal
ic
tio
To
St
rat
Lo
eg
ca
ns		 29
60
8
,		 1,
37
1		 33
5,
53
1		 20
95
3
,		 2.7 1,
59
9		 1,
52
4		 6.2
3		 3.9 18
.5		 2.9 35
.0

Note: Difference between number of resi units in strategic locations and number of resi units in strategic clusters is due to privatization units that are included in the strategic locations but not in the strategic clusters.

Substantial Reduction of Portfolio Locations

Vonovia location

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

Excluding locations for which the disposal is planned or has already been approved by the management board to be executed within 2017. The actual disposal will take place later than 2017 for some of these transactions.

192.2

184.1 4.4%

Capitalized maintenance

Expenses for maintenance

Maintenance

Expenses for maintenance

Reconciliation IFRS Profit to FFO

€m
(u
nle
ind
ica
ted
ot
he
ise
)
ss
rw		 9M
20
17		 9M
20
16		 De
lta
RS
OF
FO
OD
IF
PR
IT
R T
HE
PE
RI		 1,
2
0
5.
2		 27
8.
3		 >1
0
0
%
1
Fin
cia
l re
sul
t
an		 21
8.
2		 3
5
4.
1		 -3
8.
4
%
Inc
e t
om
axe
s		 6
6
3.
8		 17
7.
1		 0
0
%
>1
nd
De
cia
tio
ort
iza
tio
pre
n a
am
n		 2
3.
0		 1
6.
4		 +4
0.
2
%
Inc
e f
fa
ir v
alu
dju
of
inv
rtie
stm
ts
est
nt
om
rom
e a
en
me
pro
pe
s		 -1
1
6
4.7
,		 - -
S
= E
BI
TD
A I
FR		 94
5.
5		 8
25
9		 +1
4.
5
%
No
rrin
ite
n-r
ecu
g
ms		 75
9		 7
0.
3		 +8
0
%
To
tal
rio
d a
dju
fro
he
ld f
sal
stm
ts
ets
pe
en
m
ass
or
e		 0
-5		 2
11		 0
0
%
1
>-
e f
oth
l es
Inc
in
stm
ts
in
tat
nie
om
rom
ve
en
er
rea
e c
om
pa
s		 3.
0
-1		 -9
6		 +3
%
5.
4
= A
DJ
US
TE
D E
BI
TD
A		 0
0
3.
1,
4		 8
97
8		 8
%
+1
1.
Ad
ted
A S
ale
jus
EB
ITD
s		 -8
1.
3		 -6
5.
5		 +2
4.
1
%
= A
DJ
US
TE
D E
BI
TD
A O
PE
RA
TI
ON
S		 9
2
2.
1		 8
3
2.
3		 +1
0.
8
%
2
Int
s F
FO
st
ere
ex
pe
nse		 -2
6.
1
5		 -2
9.
4
1		 3.
%
-1
1
Cu
nt
inc
e t
s F
FO
1
rre
om
axe		 -1
5.
1		 -1
1.
6		 +3
0.
2
%
= F
FO
1		 6
9
0.
5		 5
71
6		 2
0.
8
%
+
Ca
lize
d m
ita
ain
ten
p
an
ce		 -5
0.
3		 -4
7.
3		 +6
3
%
= A
FF
O		 6
4
0.
2		 5
24
3		 2
2.
1
%
+
Cu
inc
s F
FO
2
nt
e t
rre
om
axe		 -2
3.
8		 -3
3.
1		 -2
8.
%
1
O2
(
O1
in
cl.
Ad
jus
ted
Sa
les
/
Cu
inc
les
)
FF
FF
EB
IT
DA
nt
e t
rre
om
ax
es
sa		 74
8.
0		 6
0
4.
0		 2
3.
8
%
+
FFO
1 p
sha
in €
(eo
NO
SH
)
er
re		 1.4
2		 1.
2
3		 +1
6.
0
%
p
AF
FO
ha
in €
(eo
NO
SH
)
pe
r s
re
p		 3
2
1.		 3
1.1		 3
%
+1
7.
Nu
mb
of
sha
(m
illio
n)
er
res
eo
p		 4
8
5.
1		 4
6
6.
0		 %
+4
.1

Excluding income from investments. 2 Including financial income from investments in other real estate companies.

IFRS P&L

€m
(
les
in
d
ica
d o
he
ise
)
te
t
un
s
rw		 9M
2
0
17		 9M
2
0
1
6		 l
De
ta
fro
let
Inc
ert
t
ing
om
e
m
p
rop
y		 1,
75
3.
9		 1,
6
4
0.
3		 +6
9
%
Ot
he
r in
fro
ert
t
co
me
m
p
rop
y
ma
na
g
em
en		 3
4.
0		 2
9.
1		 +1
6.
8
%
fro
In
ty
t
co
me
m
p
ro
p
er
m
an
ag
em
en		 8
9
1,
7
7.		 6
6
9.
1,
4		 +7
.1
%
fro
d
l o
f p
Inc
isp
ert
ies
om
e
m
os
a
rop		 95
2
1.		 9
8
8.
2		 -3
%
.7
Ca
ing
f p
ies
l
d
nt
ert
am
ou
o
rop
so
rry		 -9
0
5.
6		 -9
5
3.
9		 -5
.1
%
f a
for
Re
lua
ion
he
l
d
le
t
ts
va
o
sse
sa		 6
0.
5		 3
7.
9		 +5
9.
6
%
Pr
f
it
d
isp
l o
f p
ies
t
o
on
os
a
ro
p
er		 1
0
6.
1		 7
2.
2		 +4
7.
0
%
fro
fa
f
Ne
inc
ir
lue
d
j
inv
ies
t
tm
ts
tm
t p
t
om
e
m
va
a
us
en
o
es
en
ro
p
er		 1,
1
6
4.
7		 -
Ca
ita
lize
d
int
l e
p
er
na
xp
en
se
s		 3
2
6.
8		 2
27
.7		 +4
3.
5
%
f m
ls
Co
st
ate
ria
o		 -8
6
6.
8		 9
0.
6
-7		 +9
6
%
l e
Pe
rso
nn
e
xp
en
se
s		 -3
0
7.
1		 -2
6
7.
1		 +1
5.
0
%
De
iat
ion
d a
iza
ion
rt
t
p
rec
an
mo		 -2
3.
0		 -1
6.
4		 +4
0.
2
%
he
Ot
t
ing
in
r o
p
era
co
me		 75
8		 7
0.
5		 %
+7
.5
Ot
he
ing
t
r o
p
era
ex
p
en
se
s		 -1
9
6.
7		 -1
6
6.
7		 +1
8.
0
%
l in
Fin
ia
an
c
co
me		 6.
2
4		 2
2.4		 >1
0
0
%
l e
Fin
ia
an
c
xp
en
se
s		 -2
44
9		 -3
6
6.
0		 -3
3.
1
%
ing
be
fo
Ea
ta
rn
s
re
xe
s		 8
6
9.
0
1,		 45
5.
4		 0
0
%
>1
Inc
e t
om
ax
es		 -6
6
3.
8		 -1
77
.1		 0
0
%
>1
Pr
f
it
fo
he
io
d
r t
o
p
er		 1,
2
0
5.
2		 27
8.
3		 >1
0
0
%
At
i
bu
b
le
tr
ta
to
:
via
's
ha
ho
l
de
Vo
no
s
re
rs		 1,
11
7.
6		 1
8
2.7		 >1
0
0
%
's
hy
br
d c
l in
Vo
via
i
ita
sto
no
ap
ve
rs		 2
2.4		 2
2.4
l
lin
int
No
tro
sts
n-c
on
g
ere		 6
5.
2		 7
3.
2		 -1
0.
9
%
Ea
ing
ha
(
ba
ic
d
d
i
lut
d
)
in
€
rn
s p
er
s
re
s
an
e		 2.
3
6		 0.
3
9		 >1
0
0
%

IFRS Balance Sheet (1/2 – Total Assets)

€m
(
les
in
d
ica
d o
he
ise
)
te
t
un
s
rw		 Se
3
0,
2
0
17
p.		 De
3
1,
2
0
1
6
c.		 De
lta
As
ts
se
b
le
Int
i
ts
an
g
as
se		 2,
95
6.
5		 2,
74
3.
1		 8
%
+7
lan
d e
Pro
ert
t a
ip
nt
p
y,
p
n
q
u
me		 14
3
5.		 11
5.
7		 +2
5.
6
%
Inv
ies
tm
t p
ert
es
en
rop		 3
0,
7
6
0.
2		 2
6,
9
8
0.
3		 +1
4.
0
%
l a
Fin
ia
ts
an
c
sse		 6
6
5.
3		 5
8
5.
9		 +1
3.
6
%
Ot
he
ts
r a
sse		 21
9		 2
15		 +4
4.
1
%
fer
d t
De
ts
re
ax
as
se		 24
9		 1
9.
6		 +2
0
%
7.
To
l n
ta
nt
et
on
-c
ur
re
a
ss
s		 3
4,
5
74
.1		 3
0,
45
9.
8		 +1
3.
5
%
rie
Inv
to
en
s		 6.
0		 0
5.		 +2
0.
0
%
de
b
les
Tr
iva
a
re
ce		 2
21
0		 1
6
4.4		 +3
4.4
%
Fin
ia
l a
ts
an
c
sse		 0.
0		 3.
2
15		 -1
0
0.
0
%
Ot
he
ts
sse
r a		 14
8.
8		 1
0
2.7		 9
%
+4
4.
b
les
Inc
e t
iva
om
ax
re
ce		 3
0.
9		 3
4.
6		 -1
0.
7
%
Ca
h a
d c
h e
iva
len
ts
s
n
as
q
u		 3
3
9.
8		 1,
5
4
0.
8		 -7
7.
9
%
he
l
d
for
le
As
ts
se
sa		 95
8		 6
1.
6		 %
+5
5.
5
To
ta
l c
nt
et
ur
re
a
ss
s		 8
2.
3
4		 2,
0
6
2.
3		 -5
9.
2
%
To
l a
ta
et
ss
s		 3
5,
41
6.
4		 3
2,
5
2
2.
1		 +8
9
%

IFRS Balance Sheet (2/2 – Total Equity and Liabilities)

€m
(u
nle
ind
ted
he
)
ica
ot
ise
ss
rw		 Se
30
20
17
p.
,		 31
20
16
De
c.
,		 lta
De
Eq
uit
nd
lia
bil
itie
y a
s
Su
bsc
rib
ed
ita
l
cap		 4
8
5.
1		 4
6
6.
0		 %
+4
.1
l re
Ca
ita
p
ser
ve
s		 5,
9
6
5.
1		 5,
3
3
4.
9		 +1
1.
8
%
Re
tai
ned
rni
ea
ng
s		 7,
21
2.
8		 6,
6
6
5.
4		 +8
2
%
Ot
he
r re
ser
ve
s		 1
21
0		 1.5 >1
0
0
%
To
tal
uit
ibu
tab
le
Vo
via
's
sh
ho
lde
ttr
to
eq
y a
no
are
rs		 3,
8
0
1
7
4.		 2,
6
8
1
4
7.		 0.
6
%
+1
ibu
tab
le t
o h
bri
d c
l in
Eq
uit
ttr
ita
sto
y a
y
ap
ve
rs		 1,
0
3
1.5		 1,
0
0
1.
6		 +3
0
%
tal
uit
ibu
tab
le
via
's
sh
ho
lde
d h
bri
d c
ita
l in
To
ttr
to
Vo
sto
eq
y a
no
are
rs
an
ap
ve
rs
y		 14
8
15
.5
,		 1
3,
4
6
9.
4		 +1
0.
0
%
No
tro
llin
int
sts
n-c
on
g
ere		 6
6
0.
6		 9.
0
41		 +5
7.7
%
To
tal
uit
eq
y		 6.
15
47
1
,		 1
3,
8
8
8.
4		 %
+1
1.4
vis
ion
Pro
s		 6
0
9.
9		 6
0
7.
9		 +0
3
%
Tra
de
ab
les
pay		 0.
6		 1.
3		 -5
3.
8
%
No
n d
eri
ive
fin
cia
l lia
bili
tie
vat
an
s		 11
7
6
9.5
,		 11
6
4
3.
4
,		 +1
.1
%
De
riv
ati
ve
s		 14
.1		 9.
1
1		 -2
6.
2
%
bili
s f
fin
lea
Lia
tie
rom
an
ce
ses		 94
.4		 94
.7		 -0
3
%
bili
olli
Lia
tie
s t
ntr
int
sts
o n
on
-co
ng
ere		 2
6.
6		 9.
9		 >1
0
0
%
Ot
he
r li
ab
iliti
es		 7
0.
7		 8
3.
3		 -1
5.
1
%
De
fer
red
x l
iab
iliti
ta
es		 2
4,
5
5
7.		 3,
7
6
9.5		 +2
0.
9
%
tal
t l
iab
ilit
ies
To
no
n-c
ur
ren		 3.
0
17
14
,		 1
6,
2
2
9.
1		 +5
6
%
Pro
vis
ion
s		 3
4
3.
0		 3
7
0.
8		 -7
.5
%
Tra
de
ab
les
pay		 1
3
0.
9		 1
3
8.
8		 -5
.7
%
No
n d
eri
ive
fin
cia
l lia
bili
tie
vat
an
s		 2,
6
15
1.		 27
6
1,
7		 +2
4.
5
%
De
riv
ati
ve
s		 8.
2		 5
7.5		 -8
%
5.
7
bili
s f
fin
lea
Lia
tie
rom
an
ce
ses		 4.
9		 4.
5		 +8
9
%
Lia
bili
tie
s t
ntr
olli
int
sts
o n
on
-co
ng
ere		 4.
5		 2.7 +6
6.
7
%
Ot
he
r li
ab
iliti
es		 15
4.
2		 1
0
2.7		 +5
0.
1
%
To
tal
lia
bil
itie
nt
cu
rre
s		 2,
97
3
7		 2,
4
0
4.
6		 6.
3
%
+1
tal
lia
bil
itie
To
s		 1
9,
94
0.
3		 1
8,
6
3
3.
7		 +7
0
%
tal
uit
nd
lia
bil
itie
To
eq
y a
s		 3
5,
41
6.
4		 3
2,
5
2
2.
1		 +8
9
%
€
m		 9
2
0
M
1
7		 9
2
0
6
M
1		 l
D
t
e
a
h
f
lo
fr
C
t
in
t
iv
i
t
ie
a
s
w
o
m
o
p
er
a
g
a
c
s		 7
1
9.
0		 6
3
6.
7		 1
2.
9
%
h
f
lo
fr
C
in
in
iv
i
ie
t
t
t
a
s
w
o
m
ve
s
g
a
c
s		 6
2
-1
1
5.
,		 3
2
6.
5		 0
0
%
1
>-
C
h
f
lo
fr
f
in
in
t
iv
i
t
ie
o
m
nc
g
a
s
w
a
a
c
s		 -7
5
4.
8		 -2
9
5
3.
0
,		 -7
4.
4
%
h
in
h
d
h
iv
l
N
t
t
e
c
a
ng
e
s
c
a
s
a
n
c
a
s
e
q
u
a
e
n
s		 -1
2
0
1.
0
,		 -1
9
8
9.
8
,		 -3
9.
6
%
C
h
d
h
iv
le
he
b
in
in
f
he
io
d
t
t
t
t
a
s
a
n
c
a
s
e
q
u
a
n
s
a
e
g
n
g
o
p
er		 0.
8
1,
5
4		 3,
0
9
1
7.		 0.
%
-5
4
C
h
d
h
iv
l
h
d
f
h
i
d
t
t
t
t
a
s
a
n
c
a
s
e
q
a
e
n
s
a
e
e
n
o
e
p
e
o
u
r		 3
3
9.
8		 1,
1
1
8.
1		 -6
9.
6
%
€
m
(
les
in
d
ica
te
d o
t
he
ise
)
un
s
rw		 9
M
2
0
1
7		 9
M
2
0
1
6		 l
D
t
e
a
fo
Ex
in
t
p
e
ns
e
s
r m
a
e
na
nc
e		 1
9
2.
2		 1
8
4.
1		 4.
4
%
C
i
l
ize
d
in
t
t
a
p
a
m
a
e
na
nc
e		 5
2.
0		 4
8.
0		 8.
3
%
d
k
Mo
iza
t
io
er
n
n
w
or		 5
0
8.
6		 2
8
4.
6		 7
8.
7
%
1
in
d
d
iz
i
l
M
t
t
t
t
a
e
n
a
nc
e
a
n
m
o
e
rn
a
o
n
o
a		 7
5
2.
8		 5
1
6.
7		 4
5.
7
%

Incl. intra-Group profits for 9M 2017: €53.3m (thereof €1.7m capitalized maintenance and €16.8m modernization); 9M 2016: €36.1m (thereof €0.7m capitalized maintenance and €5.8m modernization); new construction in 9M 2017 €22.8m, new construction in 9M 2016: €11.8m (included in modernization measures).

Income fromProperty Management

€
m
(
les
in
d
ica
d o
he
ise
)
te
t
un
s
rw		 9
2
0
M
1
7		 9
2
0
6
M
1		 l
D
t
e
a
l
Re
in
t
n
a
c
o
m
e		 1,
2
2.
5
5		 1,
1
5
9.
3		 8.
0
%
l
la
An
i
t
c
ry
c
o
s		 0
5
1.
4		 8
0
4
1.		 2
%
4.
In
fr
Pr
L
in
ty
t
t
c
o
m
e
o
m
o
p
e
r
e
g		 1,
7
5
3.
9		 6
0.
3
1,
4		 6.
9
%
O
he
in
fr
t
ty
t
c
o
m
e
o
m
p
ro
p
er
m
a
na
g
e
m
e
n
r		 3
4.
0		 2
9.
1		 1
6.
8
%
fr
In
ty
t
c
o
m
e
o
m
p
o
p
e
m
a
n
a
g
e
m
e
n
r
r		 1,
7
8
7.
9		 1,
6
6
9.
4		 7.
1
%

Rental income under IFRS definition. Includes €3.1m of rental income attributable to Value-add Business.

Cost of Materials

€
m
(
les
in
d
ica
d o
he
ise
)
te
t
un
s
rw		 9
2
0
M
1
7		 9
2
0
6
M
1		 l
D
t
e
a
fo
i
l
la
Ex
t
p
e
ns
e
s
r a
nc
c
o
s
s
ry		 4
7
2.
0		 4
6
1.
8		 2.
2
%
+
Ex
fo
in
t
p
e
ns
e
s
r m
a
e
na
nc
e		 3
2
2.
0		 2
6
6.
4		 2
0.
9
%
+
he
f p
ha
d
d
d
O
t
t
ic
r c
o
s
o
ur
c
s
e
g
o
o
s
a
n
s
er
v
e
s		 7
2.
8		 6
2.
4		 1
6.
7
%
+
l c
f
i
ls
T
t
t
t
o
a
o
s
o
m
a
e
r
a		 8
6
6.
8		 7
9
0.
6		 9.
6
%
+

Conservative Valuation

In-place values are still less than half of replacement values, in spite of accelerating valuation growth in recent years.

Note: VNA 2010 – 2014 refers to Deutsche Annington Portfolio at the time; construction costs excluding land.

Acquisitions – Opportunistic but Disciplined

Historical Key Figures (1/2)

Fin
cia
l K
Fig
s (
€m
les
ed
oth
ise
)
tat
an
ey
ure
un
s s
erw
,		 9M
2
0
17		 2
0
1
6		 2
0
15		 2
0
14		 2
0
1
3
l in
Re
nta
co
me		 1,
24
9.4		 1,
5
3
8.
1		 1,
41
4.
6		 7
8
9.
3		 7
2
8.
0
A
d
j
d
EB
IT
DA
Op
ion
te
t
us
era
s		 9
2
2.
1		 0
94
0
1,		 95
6
7.		 0
3.
5
4		 2.4
44
d
d
l
A
j
te
EB
IT
DA
R
ta
us
en		 8
6
5.
9		 1,
0
4
6.
2		 9
24
.4		 4
8
2.
6		 4
3
3.
0
d
d
lue
d
d
A
j
te
EB
IT
DA
V
Bu
ine
us
a
-a
s
ss		 7
6.
0		 5
7.
0		 3
7.
6		 2
3.
6		 1
0.
5
d
j
d
Ot
he
A
te
EB
IT
DA
us
r		 8
-1
9.		 -9
2		 -4
.4		 8
-2		 -1
.1
fro
d
l o
f p
Inc
isp
ert
ies
om
e
m
os
a
rop		 95
1.
3		 1,
2
27
9		 7
2
6.
0		 2
8
7.
3		 3
5
3.
5
d
j
d
S
les
A
te
EB
IT
DA
us
a		 8
1.
3		 9
2,
5		 71
.1		 5
0.
1		 27
.7
d
d
A
j
te
EB
IT
DA
us		 1,
0
0
3.
4		 1,
1
8
6.
5		 1,
0
2
8.
7		 5
5
3.
5		 47
0.
1
EB
IT
DA
IF
RS		 94
5.
5		 0
8
3.
1,
7		 8
3
8.
4		 0
0.
3
5		 3
0
4
1.
FF
O
1		 6
9
0.
5		 7
6
0.
8		 6
0
8.
0		 2
8
6.
6		 2
2
3.
5
he
f a
i
bu
b
le
Vo
via
ha
ho
l
de
t
ttr
ta
to
reo
no
s
re
rs		 6
0.
6
5		 3.
71
4		 5
5
5.
5		 27
5.
1		 21
8.
4
he
f a
bu
b
le
hy
br
d c
l in
t
ttr
i
ta
to
Vo
via
i
ita
sto
reo
no
ap
ve
rs		 3
0.
0		 4
0.
0		 3
3.
0		 - -
he
f a
i
bu
b
le
No
l
lin
int
t
ttr
ta
to
tro
sts
reo
n-c
on
g
ere		 9.
9		 7.4 9.5
1		 11
.5		 5.
1
FF
O
2		 74
8.
0		 8
2
3.
8		 6
6
2.
1		 3
3
6.
7		 25
1.
2
AF
F
O		 6
0.
2
4		 6
8
9.
2		 2
0.
5
5		 25
8.
3		 2
0
3.
5
ha
FF
O
1 p
in
€
er
s
re		 1.4
2		 1.
6
3		 1.
3
0		 1.
0
0		 0.
95
Inc
fro
fa
ir v
lue
d
j
f in
ies
tm
ts
stm
t p
ert
om
e
m
a
a
us
en
o
ve
en
rop		 6
1,
1
4.7		 3,
2
3
6.
1		 3
2
3.
1,
5		 3
71
.1		 3.
5
5
7
EB
T		 1,
8
6
9.
0		 3,
8
5
9.
8		 1,
7
3
4.
5		 5
8
9.
1		 6
8
9.
6
fit
for
Pro
t
he
io
d
p
er		 1,
2
0
5.
2		 2,
5
1
2.
9		 9
94
.7		 4
0
9.7		 4
8
4.
2
Ca
h
f
low
fro
ing
ivi
ies
t
t
t
s
m
op
era
ac		 71
9.
0		 8
2
8.
9		 6
8
9.
8		 45
3.
2		 25
9.
6
h
f
low
fro
Ca
inv
t
ing
t
ivi
t
ies
s
m
es
ac		 -1
1
6
5.
2
,		 41
6.
4		 -3
2
3
9.
8
,		 -1
17
7.
9
,		 17
1.
3
Ca
h
f
low
fro
fin
ing
ivi
ies
t
t
s
m
an
c
ac		 -7
5
4.
8		 -2
8
1
2.4
,		 4,
0
9
3.
1		 1,
74
1.7		 -3
5
3.
2
d m
de
Ma
int
iza
t
ion
en
an
ce
a
n
o
rn		 75
2.
8		 7
9
2.4		 6
8
6.
3		 3
45
.5		 2
2
8.
4
he
f
for
int
d c
ita
lize
d m
int
t
reo
m
a
en
an
ce
ex
p
en
se
s a
n
ap
a
en
an
ce		 24
2
4.		 3
2
0.
1		 3
3
0.
7		 3.
8
17		 6
15
7.
he
f
for
de
t
iza
t
ion
reo
m
o
rn		 5
0
8.
6		 47
2.
3		 3
5
5.
6		 17
1.7		 7
0.
8

The key figures of prior years have been adjusted to match the definitions of the 2016 fiscal year. The key figures per share are based on the shares carrying dividend rights on the corresponding reporting date. Values for 2013 and 2014 are TERP-adjusted.

Historical Key Figures (2/2)

Ke
Ba
lan
Sh
Fig
s (
€m
les
ed
oth
ise
)
eet
tat
y
ce
ure
un
s s
erw
,		 Se
3
0,
2
0
17
p.		 De
3
1,
2
0
1
6
c.		 De
3
1,
2
0
15
c.		 De
3
1,
c
2
0
14		 De
3
1,
c
2
0
1
3
f r
fo
Fa
ir v
lue
l e
sta
te
ort
lio
a
o
ea
p		 3
0,
94
8.
1		 27
11
5.
6
,		 24
15
7.7
,		 1
2,
75
9.
1		 1
0,
3
2
6.
7
A
d
j
d
NA
V
te
us		 1
6,
2
6
3.
5		 14
3
2
8.
2
,		 11
27
3.
5
,		 6,
47
2.
0		 5,
1
2
3.
4
A
d
j
d
NA
V
ha
in
€
te
us
p
er
s
re		 3
3.
3
5		 3
0.
75		 24
9
.1		 2
2.
6
7		 21
.74
(
%
)
LT
V		 4
2.4		 41
6		 4
6.
9		 4
9.
3		 4
8.
1
al
No
n-F
ina
nci
Ke
Fig
ure
s
y		 9M
2
0
17		 2
0
1
6		 2
0
15		 2
0
14		 2
0
1
3
be
f u
d
Nu
nit
m
r o
s m
an
ag
e		 41
3,
7
0
3		 3
9
2,
3
5
0		 3
97
7
9
9
,		 2
3
2,
24
6		 2
0
1,
7
3
7
he
f o
t
art
nts
reo
wn
ap
me		 3
5
0,
1
3
4		 3
3
3,
3
8
1		 3
5
7,
11
7		 2
0
3,
0
2
8		 17
5,
25
8
he
f a
d
by
he
t
art
nts
ot
reo
p
me
ow
ne
rs		 6
3,
6
9
5		 8,
9
6
9
5		 0,
6
8
2
4		 2
9,
21
8		 2
6,
9
47
be
f u
bo
ht
Nu
nit
m
r o
s
ug		 24
8
47
,		 2,
8
15		 1
6
8,
6
3
2		 3
1,
8
5
8		 0
be
f u
l
d
Nu
nit
m
r o
s s
o		 8,
3
0
4		 2
6,
6
3
1		 15
17
4
,		 4,
0
8
1		 6,
7
2
0
he
f P
riv
ize
t
at
reo		 0
1,
7
4		 2,
0
7
1		 2,
97
9		 2,
2
3
8		 2,
6
5
7
he
f N
-C
t
reo
on
ore		 6,
6
0
0		 2
3,
9
3
0		 2,
95
1
1		 8
3
1,
4		 4,
14
4
(
in
%
)
Va
rat
ca
nc
e
y		 2.
9		 2.4 2.7 3.
4		 3.
5
h
ly
lac
/sq
Mo
nt
in-
t
in
€
p
e r
en
m		 6.
1
9		 6.
0
2		 5.
75		 5.
5
8		 5.
4
0
h
ly
lac
h
(
)
Mo
nt
in-
t o
ic
t
%
p
e r
en
rg
an
g
row		 3.
9		 3.
3		 - - -
f e
Nu
be
loy
m
r o
mp
ee
s		 8,
3
7
8		 7,
4
3
7		 6,
3
6
8		 3,
8
5
0		 2,
9
3
5
EP
RA
Ke
Fig
y
ure
s		 9M
2
0
17		 2
0
1
6		 2
0
15		 2
0
14		 2
0
1
3
EP
RA
N
AV		 1
9,
1
9
3.
3		 17
0
47
.1
,		 1
3,
9
8
8.
2		 6,
5
7
8.
0		 5,
1
2
3.
4
ha
**
EP
RA
N
AV
in
€
p
er
s
re		 3
9,
5
7		 3
6.
5
8		 3
0.
0
2		 2
3.
0
4		 21
.74
EP
RA
N
NN
AV		 --- 1
2,
0
3
4.4		 9,
7
3
9.
8		 - -
EP
RA
Ea
ing
rn
s		 --- 8.
44
5		 3
2
9.
2		 - -
EP
RA
N
In
it
ia
l Y
ie
l
d
in
%
et		 --- 4.
1		 4.
5		 - -
"to
d-
" N
l Y
l
d
EP
RA
et
In
it
ia
ie
in
%
p
p
e
up		 --- 4.
1		 4.
5		 - -
EP
RA
V
te
in
%
ac
an
cy
ra		 --- 2.
2		 2.5 3.
0		 3.
1
EP
RA
C
t R
io
(
inc
l.
d
ire
)
in
%
at
ct
sts
os
va
ca
nc
co
y		 --- 2
8.
4		 3
9
1.		 - -
C
io
(
l.
d
ire
)
in
%
EP
RA
t R
at
ct
sts
os
ex
c
va
ca
nc
co
y		 --- 27
0		 3
0.
2		 - -

The key figures of prior years have been adjusted to match the definitions of the 2016 fiscal year. The key figures per share are based on the shares carrying dividend rights on the corresponding reporting date. Values for 2013 and 2014 are TERP-adjusted.

Vacancy Rates – Quarterly Comparison

Q1 to Q4 development 2012 – 2017 4.4%4.5%4.4%3.9%4.0%3.9% 3.9%3.5%3.7% 3.8% 3.6%3.4%3.4%3.5%3.4%2.7%2.8% 2.8% 2.8%2.4%2.7%2.9% 2.9%2%3%4%5%Q1 Q2 Q3 Q4201220132014201520162017

If You Want to Know Where Germans Live - Follow the Light

Illustration of Germany at Night

Illustration of Germany at Night

Note: Vonovia Strategic Portfolio

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

Vonovia History

  • Seed portfolios of today's Vonovia have origin in public housing provided by government, large employers and similar landlords with a view towards offering affordable housing.
  • At beginning of last decade, private equity invested in German residential on a large scale including into what is Vonovia today (mainly Deutsche Annington and Gagfah then).
  • IPO in 2013.
  • Final exit of private equity in 2014.

Liquid Large-cap Stock

S
ha
In
fo
io
t
re
rm
a
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day
of
din
Fir
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g		 Jul
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De
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The number of outstanding shares is always available at http://investoren.vonovia.de/websites/vonovia/English/2010/key-share-information.html

German Residential – Safe Harbor and Low Risk

Rental regulation safeguards high degree of stability

  • Contrary to most other jurisdictions such as the USA, rental growth in Germany is regulated and not directly linked to CPI, GDP development etc.
  • Rents are regulated via "Mietspiegel" (city-specific rent indices), which look at the asking rents of the previous four years to determine a rent growth level for existing tenants for the next two years.

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.

German Residential – Landlords Benefit from Structural Imbalance between Supply and Demand

New supply falls short of demand

  • Consensus estimates see shortage of around 1 million apartments in urban areas. Three main constraints stand in the way of material changes in the short and even medium term:
  • Building permits take several years because city administrations lack qualified personnel.
  • Severe shortage of building capacity after years of downsizing.
  • Substantial gap between in-place values and market replacement cost render construction in affordable segment economically unfeasible

Sources: Federal Statistics Office, IW Köln, GdW (German Association of Professional Homeowners)

German Residential – Favorable Fundamentals

Low home ownership ratio – Germans prefer to rent Rental housing very affordable in Germany

  • With the exception of Switzerland, Germany has the lowest homeownership ratio in Europe.
  • Rental regulation, favorable tenant laws, the general perception that home buying is a life-time decision and comparatively stringent financing requirements are main drivers for low homeownership rate.

Home ownership rate 2015 in %

  • Affordability in Germany is higher than in the UK or France.
  • Whereas most other European countries saw an increase, the share of rent-related payments in relation to disposable income declined in Germany between 2005 and 2015.

Rent as % of disposable household income

Sources: Federal Statistics Office, Eurostat

German Residential – Favorable Fundamentals

Growing number of smaller households

  • While the overall population in Germany is expected to slightly decline, the number of households is forecast to grow until at least 2030 with a clear trend towardssmaller households.
  • The household growth is driven by various demographic and social trends including divorce rates, employment mobility etc.

Fragmented ownership structure

  • 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.

Distribution of household sizes (million)

Ownership structure (million units)

Sources: German Federal Statistics Office, GdW (German Association of Professional Homeowners). 2035(E) household numbers are based on trend scenario of the German Federal Statistics Office.

Valuation methodology for German residential properties is primarily based on market prices for assets – not on interest rates

  • While market prices are affected by the general interest levels there is no significant correlation.
  • Other factors such as supply/demand imbalance, rental regulation, market rent growth, location of assets etc. outweigh the impact of interest rates when it comes to pricing residential real estate.
  • The steep decline in interest rates (down by 7.4% since 1992) is not mirrored by asset yields (down by 1.1% since 1992).
  • Asset yields outperformed interest rates by 2.2% on average since 1992 and 5.4% in June 2015.

Yearly asset yields vs. rolling 200d average of 10y interest ratesSources: Thomson Reuters, bulwiengesa

Three Valuation Layers with Different Volatilities

High degree of stability and predictability of underlying business (layer 1) and portfolio valuation (layer 2) is not reflected in share price development (layer 3), as equity markets appear to apply valuation parameters that are substantially less material for Vonovia's operating performance.

Midpoint guidance.

Impressions

Dresden

Berlin

Leverkusen

Nuremberg

Impressions

Dortmund

Frankfurt

Bremen

Essen

9M 2017 Earnings Call

Impressions

Berlin

Berlin

Optimize Apartment

Optimize Apartment

Upgrade Building

Dortmund

Upgrade Building

Hamburg

Upgrade Building

9M 2017 Earnings Call

Floor Addition

Modular Construction

Modular Construction

Dortmund

Modular Construction

Dortmund

Neighborhood Development

VTS

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.

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