PATRIZIA AG

Interim / Quarterly Report • Sep 21, 2017

H1 JANUARY TO JUNE 2017 Half-year Report

KEY FIGURES

REVENUES AND EARNINGS

	1st half 2017	1st half 2016¹
in EUR k	01.01.—30.06.2017	01.01.—30.06.2016	Change
Revenues	105,903	110,712	−4.3%
Total operating performance	110,106	98,725	11.5%
EBITDA	37,012	17,138	116.0%
EBIT	34,243	13,845	147.3%
EBT	31,090	6,270	395.9%
Operating income ²	35,110	24,186	45.2%
Net profit for the period	24,346	4,160	485.2%

1 adjusted = without Harald

2 For the definition of operating income, please refer to page 7

FINANCIAL POSITION

in EUR k	30.06.2017	31.12.2016	Change
Non-current assets	255,695	258,813	−1.2%
Current assets	1,081,438	734,446	47.2%
Equity (excl. non-controlling shareholders)	773,250	749,342	3.2%
Equity ratio (excl. non-controlling shareholders)	57.8%	75.4%	−17.6 PP
Non-current liabilities	322,759	47,506	579.4%
Current liabilities	239,433	194,720	23.0%
Total assets	1,337,133	993,259	34.6%

SHARE INFORMATION

ISIN	DE000PAT1AG3
SIN (Security Identification Number)	PAT1AG
Code	P1Z
Share capital as of 30.06.2017	EUR 83,955,887
No. of shares outstanding as of 30.06.2017	83,955,887
First half 2017 high ³	EUR 18.72
First half 2017 low³	EUR 14.67
Closing price as of 30.06.2017³	EUR 16.53
Share price performance (first half 2017)³	+4.7%
Market capitalisation as of 30.06.2017³	EUR 1.4 billion
Average trading volume per day (first half 2017) 4	≈189,000 shares
Indices	SDAX, GEX, DIMAX

3 Closing price Xetra-trading

4 All German stock exchanges

CONTENTS

1. CONSOLIDATED INTERIM MANAGEMENT REPORT

• Business Performance
• Results of Operations
• Economic Position
• Supplementary Report
• Development of the Risks and Opportunities
• Report on Expected Developments

2. CONSOLIDATED INTERIM FINANCIAL STATEMENTS

• Consolidated Balance Sheet
• Consolidated Income Statement
• Consolidated Statement of Comprehensive Income
• Consolidated Cash Flow Statement
• Consolidated Statement of Comprehensive Income

3. NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

• General Disclosures
• Principles Applied in Preparing the Consolidated Financial Statements
• Scope of Consolidation
• Investment Property
• Participations in Associated Companies
• Participations
• Inventories
• Cash and Cash Equivalents
• Equity
• Non-controlling Shareholders
• Financial Liabilities
• Long-term Liabilities
• Revenues
• Other Operating Income
• Cost of Materials
• Other Operating Expenses
• Income from Participations
• Financial Result
• Earnings per Share
• Segment Reporting
• Transactions with Related Companies and Individuals
• Declaration by the Legal Representatives of PATRIZIA Immobilien AG

4. FINANCIAL CALENDAR AND CONTACT DETAILS

Financial Calendar and Contact Details

CONSOLIDATED INTERIM MANAGEMENT REPORT

for the period from 1 January 2017 to 30 June 2017

1 BUSINESS PERFORMANCE

1.1 Results of Operations

PATRIZIA has successfully continued on its growth path in the first half of the 2017 fiscal year.

PATRIZIA's earnings performance in the first half of 2017 has been strong. Operating income increased to EUR 35.1m, compared to an adjusted value of EUR 24.2m in the first half of 2016. Previous year's figures were adjusted for the effects from the sale of the Harald Portfolio.

As of 30 June 2017, Assets under management (AUM) amounted to EUR 19.2bn, a rise of EUR 0.6bn from EUR 18.6bn at the year-end 2016. As of 31 July 2017, AUM have further increased to EUR 19.8bn. In addition, acquisition contracts worth EUR 0.7bn and disposals worth EUR 0.2bn were outstanding as of 31 July 2017, and are mainly expected to be completed in the second half of 2017.

Total service fee income from investment management services grew by 13.1% to EUR 88.1m compared to EUR 77.8m in the prior year period. The increased assets under management almost completely compensated for the expected loss of management fees following the disposal of the property management business. As expected, transaction fees decreased to EUR 18.7m after exceptionally strong transaction volumes in 2016. Performance fees rose significantly to EUR 24.4m.

	1st half 2017	1st half 2016
in EUR m	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Management fees	45.0	47.0	−4.2%
Transaction fees	18.7	29.1	−35.9%
Performance fees	24.4	1.7	1,301.9%
Total service fee income	88.1	77.8	13.1%

Issuance of bonded loans

PATRIZIA issued bonded loans of EUR 300m on 22 May 2017. The issuance was very well received having been oversubscribed several times. The bonded loans are structured in three tranches of five, seven and ten years with an average coupon of 1.50% p.a., which is partly fixed and partly floating. The additional liquidity from the bonded loans helped to increase the already strong financial flexibility which will in turn support further growth. The volume and the very attractive terms of the bonded loans confirm the strong cash flow profile and robust capital structure of PATRIZIA. The cash available for further growth, including the funds from the bonded loans, increased to more than EUR 700m on 30 June 2017.

Full-year 2017 guidance confirmed

PATRIZIA confirms its 2017 guidance, including that AUM are expected to increase by EUR 2bn net to approximately EUR 20.6bn by year-end. Operating income is anticipated to reach between EUR 60m and EUR 75m. Upside to this operating income could result from higher transaction volumes, higher performance fees as well as potential income from the investment of more than EUR 700m of available cash.

Delivering on key performance indicators in the first half of 2017

ASSETS UNDER MANAGEMENT (IN EUR BN)

As of 30 June 2017, PATRIZIA was managing real estate assets of EUR 19.2bn, a total increase of EUR 0.6bn from EUR 18.6bn at the end of 2016. EUR 12.9bn of these assets were attributable to Germany and EUR 6.3bn to the rest of Europe.

Assets under management 30 June 2017

ASSETS UNDER MANAGEMENT – GEOGRAPHICAL DISTRIBUTION

In the first half of 2017, operating income increased by 45.2% to EUR 35.1m (first half of 2016: EUR 24.2m). The operating income in 2016 was adjusted to exclude the contribution from the disposal of the Harald Portfolio which totalled EUR 202.7m.

0 5 10 15 20 25 30 35 40 Operating income is a key performance indicator for PATRIZIA. It is calculated based on earnings before tax (EBT) in accordance with IFRS, adjusted by non-cash effects from the valuation of investment properties and unrealised currency exposure, the amortisation of fund management contracts and reorganisation expenses. It includes realised valuation gains from the sale of real estate assets held as investment property as well as realised currency changes.

Development of supplemental performance parameters:

INCOME FROM MANAGEMENT SERVICES (IN EUR M)

In the first half of 2017, total fee income from management services increased by 13.1% to EUR 88.1m, from EUR 77.8m in the first half of 2016. Income from increased assets under management almost fully compensated for the planned disposal of the property management business; hence management fees reached with EUR 45.1m approximately the same level as in the prior year period. As expected, transaction fees were down to EUR 18.7m, reflecting slower transaction volumes after a very strong first half 2016. Performance fees increased significantly to EUR 24.4m. 0 20 40 60 80 100

PATRIZIA collects contractual fees for the management of its real estate assets. The management fee relates to the asset, fund and portfolio management. PATRIZIA also generates transaction fees for acquisitions and sales and additional performance-based fees when defined target returns are exceeded.

In the first half of 2017 investment income increased by 10.6% to EUR 9.4m from EUR 8.5m in the prior year period, which was adjusted for the proceeds of the sale of the Harald Portfolio.

The Investments segment comprises principal investments – investments on PATRIZIA's own account – and co-investments. Income from principal investments includes sales profits as well as rental income from these investments. Income from co-investments is treated as income from participations. 0 2 4 6 8 10

In the first half of 2017 acquisitions of EUR 0.8bn and sales of EUR 0.4bn were completed. The same period in the prior year recorded transaction volumes of EUR 2.8bn, which was strongly influenced by the disposal of the Harald Portfolio.

0 200 400 600 800 1000 In the period under review, EUR 440.0m of equity for investments was raised with institutional and retail clients compared to EUR 924.3m in the same period of the previous year.

PATRIZIA'S BUSINESS MODEL

PATRIZIA's core business is the investment management of real estate assets and portfolios throughout Europe for institutional and retail clients. PATRIZIA generates management fees for its services and investment income from co-investments and principal investments. In accordance with this, the company's activities can be split into three categories:

1.1.1 Third-party business

Business for third parties involves the structuring, placement and management of special funds by the four different regulated Group investment management companies on behalf of private and institutional investors. PATRIZIA generates stable, recurring income from the management of assets. This third-party business does not involve any equity investment by PATRIZIA. Thirdparty business contributed EUR 12.3bn to the Group's total assets under management as of 30 June 2017.

Management of single asset mandates

As part of the third-party business PATRIZIA also manages single asset mandates with real estate assets totalling around EUR 1.0bn as of 30 June 2017. The acquisition of the Commerzbank Tower in Frankfurt on behalf of a Korean investor, which was signed in the fiscal year 2016, is not yet included in this number since completion of the deal only occurred on 31 July 2017. For the individual mandates, PATRIZIA acts as asset and investment manager on behalf of the investors and generates the full scope of service fee income.

	Assets	Equity	of which
	under	commit	already in	of which
in EUR m	management	ments	vested equity	outstanding

PATRIZIA THIRD-PARTY BUSINESS AS OF 30 JUNE 2017

Third-party business	12,288	8,738	7,256	1,483	51
PATRIZIA GrundInvest KVG mbH	350	175	175	0	6
Single asset mandates	1,007	460	460	0	10
PATRIZIA Real Estate Investment Management S.àr.l. (REIM)²	915	561	475	86	3
Label funds	2,288	1,314	1,312	1	2
Individual funds	1,361	1,434	997	437	10
Pool funds	4,735	3,123	2,780	342	10
PATRIZIA GewerbeInvest KVG mbH	8,384	5,870	5,089	781	22
Individual funds	474	460	285	175¹	4
Pool funds	1,158	1,213	773	440¹	6
PATRIZIA WohnInvest KVG mbH	1,632	1,673	1,057	615¹	10

Number of vehicles

1 Without project developments secured through purchase agreements

2 PATRIZIA Nordic Cities SCS SICAV-FIS

1.1.2 Co-investments

Through co-investments, PATRIZIA invests in real estate properties in collaboration with its clients. In addition to the commitment to the client and to the transaction, these investments also generate management fees in a similar way to the third-party business, as well as income for the participation of PATRIZIA. Shareholders therefore profit from the performance of an attractive and diversified pan-European real estate portfolio. Co-investments contributed EUR 6.7bn to the Group's total assets under management as of 30 June 2017. PATRIZIA invested EUR 0.2bn of equity in co-investments.

No significant changes in PATRIZIA's co-investments occurred in the first half of 2017. Further details can be found in PATRIZIA's 2016 Annual Report on p. 56.

1.1.3 Principal investments

In general, PATRIZIA is active as an investment manager for institutional and private clients and therefore seeks to avoid any conflicts of interests with its own investments. Principal investments, i.e. transactions on PATRIZIA's own account, are therefore either structured as an interim financing for closed-end mutual funds or early stage investments with the purpose of being included in institutional funds at a later point in time. In addition, PATRIZIA has a principal investment in a legacy portfolio of single residential unit sale assets. Equity invested in principal investments as of 30 June 2017 amounted to EUR 0.1bn.

In the period under review there were no changes in the principal investments compared to the 2016 year-end. Further details can be found in PATRIZIA's 2016 Annual Report on p. 57.

Please refer to the subsequent discussion of the economic position for how principal investments contribute to PATRIZIA's results.

1.2 Economic Position

1.2.1 Earnings performance of the PATRIZIA Group

For reasons of transparency and clarity the performance of PATRIZIA in the first half of 2016 is shown with and without the effects of the sale of the Harald Portfolio ('adjusted'). For the first six months of 2017, there were no such effects requiring an adjustment. The discussion and analysis of the Group's earnings performance is described as 'adjusted' only.

Operating income

Operating income is the Group's key performance indicator as it includes the total of all operating items within the income statement, adjusted by the below mentioned non-operating cash and non-cash items. In the first half of 2017, operating income increased strongly to EUR 35.1m, compared to EUR 24.2m in the same period during the prior year. The operating income and prior year comparison is shown in the following table:

RECONCILIATION OF OPERATING INCOME – 6 MONTHS
	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
EBITDA	37,012	17,138	116.0%	37,012	289,958	−87.2%
Amortisation of fund management contracts², depreciation of software and fixed assets	−2,769	−3,293	−15.9%	−2,769	−3,293	−15.9%
EBIT	34,243	13,845	147.3%	34,243	286,665	−88.1%
Financial result (interest result)	−1,309	−3,280	−60.1%	−1,309	−5,030	−74.0%
Gains/losses from currency translation	−1,844	−4,295	−57.1%	−1,844	−4,238	−56.5%
EBT	31,090	6,270	395.9%	31,090	277,397	−88.8%
Amortisation of fund management contracts ²	984	984	0.0%	984	984	0.0%
Harald – transaction-related taxes and minorities	0	0	–	0	−64,014	−100.0%
Net realised valuation gains from the sale of investment
property	304	1,183	−74.3%	304	1,183	−74.3%
Reorganisation expenses	915	11,313	−91.9%	915	11,313	−91.9%
Expenses/(income) from unrealised currency translation	1,817	4,436	−59.0%	1,817	4,911	−63.0%
Operating income	35,110	24,186	45.2%	35,110	231,774	−84.9%

1 adjusted = without Harald

2 Fund management contracts that have been attained with the acquisition of PATRIZIA GewerbeInvest KVG mbH.

The items leading to the operating income are shown below in accordance with their position in the consolidated income statement.

Consolidated income statement

Revenues

In the first half of 2017, consolidated revenues totalled EUR 105.9m, compared to EUR 110.7m in the prior year period, as a result of lower sales proceeds from principal investments and lower rental revenues.

	REVENUES – 6 MONTHS
	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Revenues from management services	83,360	73,138	14.0%	83,360	73,138	14.0%
Sales proceeds from principal investments	15,507	25,712	−39.7%	15,507	487,634	−96.8%
Rental revenues	5,277	6,932	−23.9%	5,277	13,274	−60.2%
Revenues from ancillary costs	1,269	2,534	−49.9%	1,269	2,792	−54.5%
Miscellaneous	490	2,396	−79.5%	490	2,397	−79.6%
Consolidated revenues	105,903	110,712	−4.3%	105,903	579,235	−81.7%

1 adjusted = without Harald

Consolidated revenues are of limited informative value, as items shown beneath the revenue line must also be taken into consideration to obtain a complete picture of the operational performance.

The continued growth of the investment management business is reflected in the increase of revenues from management services by 14.0%, from EUR 73.1m to EUR 83.4m between the first half of 2016 and the same period in 2017.

Including GBW, total service fee income increased by 13.1% to EUR 88.1m compared to EUR 77.8m in the prior year period. The increased assets under management almost completely compensated for the expected loss of management fees following the disposal of the property management. As expected, transaction fees decreased to EUR 18.7m after exceptionally strong transaction volumes in 2016 while performance fees rose significantly to EUR 24.4m.

1st half 2017	1st half 2016
01.01.— 30.06.2017	01.01.— 30.06.2016	Change
45.0	47.0	−4.2%
4.7	4.7	−0.5%
18.7	29.1	−35.9%
24.4	1.7	1,301.9%
88.1	77.8	13.1%

TOTAL FEE INCOME – 6 MONTHS

Sales proceeds from principal investments decreased in the first half 2017 by 39.7% to EUR 15.5m from EUR 25.7m in the prior year period. This is in line with the stronger strategic focus on investment management services and further decreasing volumes of principal investments. The 2016 figures include the proceeds from the sale of a principal investment in Manchester.

Rental revenues decreased from EUR 6.9m in the prior year to EUR 5.3m in the first half of 2017, as the stock of principal investments decreased due to disposals.

Revenues from ancillary costs decreased in line with rental income to EUR 1.3m and include revenues from the allocation of recoverable ancillary rental costs.

Miscellaneous items include transaction expenses which are charged to the corresponding investment vehicles. In the first half of 2017, such costs decreased to EUR 0.5m from EUR 2.4m year-on-year.

Total operating performance

Total operating performance reflects PATRIZIA's performance more comprehensively than revenues. Total operating performance increased in the first half of 2017 by 11.5% to EUR 110.1m, from EUR 98.7m in the prior year period.

	TOTAL OPERATING PERFORMANCE – 6 MONTHS
	1st half 2017	1st half 20161		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Revenues	105,903	110,712	−4.3%	105,903	579,235	−81.7%
Income from the sale of investment property	227	901	−74.8%	227	901	−74.8%
Changes in inventories	−7,367	−19,606	−62.4%	−7,367	−387,117	−98.1%
Other operating income	11,343	3,027	274.7%	11,343	6,379	77.8%
Income from the deconsolidation of subsidiaries	0	3,691	−100.0%	0	196,930	−100.0%
Total operating performance	110,106	98,725	11.5%	110,106	396,328	−72.2%

1 adjusted = without Harald

Income from the sale of investment property

Income from the sale of investment property, including properties that had been held by PATRIZIA for a longer period of time, contributed a net income of EUR 0.2m in the first six months of 2017 compared to EUR 0.9m in the prior year period.

Changes in inventories

In the first half of 2017, changes in inventories of EUR −7.4m (six months of 2016: EUR −19.6m; −62.4%) were recognised. Prior year changes include the disposal of the principal investment in Plot 5 in Manchester to a joint venture with the Greater Manchester Pension Fund. Capitalisations of EUR 4.3m in the first half of 2017 (six months of 2016: EUR 1.7m) increased inventories and are mainly attributable to maintenance measures and development projects in the UK.

Other operating income

Other operating income increased to EUR 11.3m in the first half 2017 (first half 2016: EUR 3.0m) and mainly include income from expired obligations (EUR 8.9m).

Income from the deconsolidation of subsidiaries

The income from the deconsolidation relates to assets held temporarily on PATRIZIA's balance sheet before placement with PATRIZIA GrundInvest KVG retail funds.

EBITDA

RECONCILATION OF EBITDA – 6 MONTHS

	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Total operating performance	110,106	98,725	11.5%	110,106	396,328	−72.2%
Cost of materials	−7,478	−6,741	10.9%	−7,478	−10,828	−30.9%
Costs for purchased services	−6,249	−10,353	−39.6%	−6,249	−10,353	−39.6%
Staff costs	−39,916	−42,622	−6.3%	−39,916	−56,249	−29.0%
Other operating expenses	−28,582	−20,650	38.4%	−28,582	−27,719	3.1%
Income from participations	9,376	6,839	37.1%	9,376	6,839	37.1%
Earnings from companies accounted for using the equity method	670	3,253	−79.4%	670	3,253	−79.4%
EBITDAR	37,927	28,451	33.3%	37,927	301,271	−87.4%
Reorganisation expenses	−915	−11,313	−91.9%	−915	−11,313	−91.9%
EBITDA	37,012	17,138	116.0%	37,012	289,958	−87.2%

1 adjusted = without Harald

Cost of materials

Cost of materials include construction and maintenance measures for owned assets, which are usually capitalised. Year-on-year, the cost of materials increased by 10.9% from EUR 6.7m to EUR 7.5m in the first half of 2017.

Costs of purchased services largely include expenditure related to the white labelled funds of PATRIZIA GewerbeInvest, for which PATRIZIA only acts as a service provider. The costs for purchased services decreased during the period due to lower transaction activity, to EUR 6.2m in the first half of 2017, compared to EUR 10.4m in the previous year. Management income from white labelled funds decreased by 21.6% to EUR 6.8m in the first half of 2017 (six months of 2016: EUR 8.6m) whereas respective costs decreased by 19.5% to EUR 5.8m (six months of 2016: EUR 7.2m).

Staff costs

As of 30 June 2017 PATRIZIA employed 694 permanent employees (30 June 2016: 815 employees). Staff costs are as follows:

	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Fixed salaries	23,408	25,562	−8.4%	23,408	25,567	−8.4%
Variable salaries	9,171	9,811	−6.5%	9,171	23,432	−60.9%
Social security contributions	4,550	5,245	−13.3%	4,550	5,246	−13.3%
Sales commissions	1,128	1,823	−38.1%	1,128	1,823	−38.1%
Effect on long-term variable compensation²	374	−977	–	374	−977	–
Miscellaneous	1,285	1,158	11.0%	1,285	1,158	11.0%
Total	39,916	42,622	−6.3%	39,916	56,249	−29.0%

STAFF COSTS – 6 MONTHS

1 adjusted = without Harald

2 Valuation changes of the long-term variable remuneration due to change in the share price.

Staff costs decreased by 6.3% to EUR 39.9m during the first half of 2017 (first half of 2016: EUR 42.6m). Fixed salaries declined by 8.4% to EUR 23.4m from EUR 25.6m in the prior year period due to a decrease in the number of employees. Variable salaries decreased correspondingly by 6.5%, from EUR 9.8m in the prior year period to EUR 9.2m in the first six months of 2017. Sales and distribution commissions decreased from EUR 1.8m in the prior year period to EUR 1.1m in the first half of 2017. Due to a positive share price performance, the long-term variable compensation costs amounted to EUR 0.4m, after a positive contribution of EUR 1.0m in the prior year period. Any miscellaneous items mainly refer to payments in kind.

Other operating expenses

Other operating expenses increased from EUR 20.7m in the prior year period to EUR 28.6m in the first six months of 2017. The specific composition is shown below:

OTHER OPERATING EXPENSES – 6 MONTHS
	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Advisory and audit fees	10,515	4,437	137.0%	10,515	4,709	123.3%
Rent, cleaning and ancillary costs	3,622	3,435	5.4%	3,622	3,726	−2.8%
IT costs, communication costs and office supplies	3,616	3,405	6.2%	3,616	4,056	−10.8%
Advertising costs	2,485	1,684	47.6%	2,485	1,736	43.1%
Vehicle and travel costs	2,396	2,553	−6.1%	2,396	2,553	−6.1%
Contributions, charges and insurance costs	1,042	1,777	−41.4%	1,042	1,784	−41.6%
Commissions and other sales costs	997	1,435	−30.5%	997	1,435	−30.5%
Recruitment costs, training costs and costs for tem porary work	987	683	44.5%	987	683	44.5%
Cost of Management Services	577	−184	–	577	2,801	−79.4%
Other taxes	499	101	394.1%	499	101	394.1%
Miscellaneous	1,846	1,324	39.4%	1,846	4,135	−55.4%
Total	28,582	20,650	38.4%	28,582	27,719	3.1%

1 adjusted = without Harald

Advisory and audit fees totalling EUR 10.5m (six months of 2016: EUR 4.4m) include transaction costs of EUR 6.0m (six months of 2016: EUR 0.8m).

Income from participations and earnings from companies accounted for using the equity method The income from participations remained stable at EUR 10.0m in the first half of 2017 compared with EUR 10.1m in prior year period. The results include a positive contribution from the disposal proceeds of a participation in PATRIZIA Projekt 150 GmbH. The co-investment in GBW generated EUR 6.3m, in line with the prior year period. The co-investment in WohnModul I generated income of EUR 0.7m compared with EUR 3.3m in the first half of 2016, which is recognised as earnings from companies accounted for using the equity method. Income from participations and earnings from companies accounted for using the equity method include the investment income from co-investments, which is generated in addition to management fees.

	1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
GBW	6,317	6,343	−0.4%
PATRIZIA Projekt 150 GmbH	2,453	0	–
HARALD	430	418	2.9%
UK	174	0	–
SENECA	0	78	−100.0%
Miscellaneous	2	0	–
Income from participations	9,376	6,839	37.1%
Earnings from companies accounted for using the equity method	670	3,253	−79.4%
Total	10,046	10,092	−0.5%

INCOME FROM PARTICIPATIONS – 6 MONTHS

Reorganisation expenses

As a result of an internal reorganisation initiated in 2016, expenses of EUR 0.9m were recognised in the first six months of 2017.

Net profit for the period

PATRIZIA's adjusted net profit for the period increased strongly to EUR 24.3m, after EUR 4.2m in the first half of 2016.

NET PROFIT FOR THE PERIOD – 6 MONTHS
	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
EBITDA	37,012	17,138	116.0%	37,012	289,958	−87.2%
Amortisation of fund management contracts, depreciation of software
and fixed assets	−2,769	−3,293	−15.9%	−2,769	−3,293	−15.9%
EBIT	34,243	13,845	147.3%	34,243	286,665	−88.1%
Financial income	531	796	−33.3%	531	1,155	−54.0%
Financial expenses	−1,840	−4,076	−54.9%	−1,840	−6,185	−70.3%
Loss from currency translation	−1,844	−4,295	−57.1%	−1,844	−4,238	−56.5%
Financial result	−3,153	−7,575	−58.4%	−3,153	−9,268	−66.0%
EBT	31,090	6,270	395.9%	31,090	277,397	−88.8%
Income taxes	−6,744	−2,110	219.6%	−6,744	−46,839	−85.6%
Net profit for the period	24,346	4,160	485.2%	24,346	230,558	−89.4%

1 adjusted = without Harald

Amortisation of fund management contracts, depreciation of software and fixed assets Amortisation of fund management contracts, the depreciation of software and fixed assets decreased to EUR 2.8m (six months of 2016: EUR 3.3m; −15.9%).

Financial result

The negative financial result improved by 58.4% to EUR −3.2m, compared with EUR -7.6m in the prior year period. Financial income declined to EUR 0.5m from EUR 0.8m year-on-year and includes interest income on delayed purchase price receipts as well as interest income from shareholder loans to co-investments. Financial expenses decreased to EUR 1.8m (six months of 2016: EUR 4.1m; −54.9%) and losses from currency translation declined to EUR 1.8m from EUR 4.3m year-on-year.

Income tax

Income taxes increased to EUR 6.7m in the first half of 2017 compared with EUR 2.1m year-onyear which is in line with the respective increase in EBT.

1.2.2 Group's net asset and financial situation

PATRIZIA'S KEY FINANCIAL AND ASSET FIGURES

in EUR k	30.06.2017	31.12.2016	Change
Total assets	1,337,133	993,259	34.6%
Equity (excl. non-controlling shareholders)	773,250	749,342	3.2%
Equity ratio	57.8%	75.4%	−17,6 PP
+ Bank Loans	107,000	53,200	101.1%
+ Bonded Loans	322,000	27,000	1,092.6%
– Cash and cash equivalents	689,554	440,219	56.6%
– Investment term deposits	85,000	0	-
– Securities	11,000	0	-
= Net cash (-)/net debt (+)	−356,554	−360,019	−1.0%
Net equity ratio ¹	85.1%	82.1%	3,0 PP

1 Shareholders' equity (excl. minorities) divided by net assets (total assets less total debt covered by incremental cash)

PP = percentage points

Total assets

The Group's total assets in the period under review increased to EUR 1.3bn, compared with 1.0bn at year end 2016, mainly due to the issuance of bonded loans totalling EUR 300m.

Investment property and inventories

In the consolidated financial statement, PATRIZIA's real estate assets amounted to EUR 243.1m (31 December 2016: EUR 195.2m; 24.6%):

in EUR k	30.06.2017	31.12.2016	Change
Inventories	233,035	182,931	27.4%
Investment property	10,062	12,226	−17.7%
Principal investments	243,097	195,157	24.6%

Of the principal investments, EUR 10.1m was attributable to investment property. Such assets are held for long-term sale and in the meantime generate rental income. EUR 233.0m are inventories and include properties which are held for sale in the current business cycle, as well as properties held temporarily for subsequent placement in a retail fund. The increase in inventories by 27.4% compared to the end of 2016 results from the temporary consolidation of an object for a later placement in a closed retail fund.

The capital allocation table provides an overview of all participations, assets under management as well as PATRIZIA's invested capital.

PATRIZIA CAPITAL ALLOCATION AS OF 30 JUNE 2017

in EUR m	Assets under Management	PATRIZIA invest ment capital	Participation in %
Third-party business	12,288.4
Co-investments	6,716.8	179.0
Residential	5,212.4	140.4
GBW GmbH	3,519.7	53.7	5.1
WohnModul I SICAV-FIS	1,692.7	86.7	10.1
Other	0.0	0.1	0.0
Commercial Germany	457.6	17.8
PATRoffice	186.8	5.4	6.3
Seneca	201.8	4.9	5.1
sono west	69.0	7.5	30.0
Commercial International	1,046.8	20.7
Aviemore Topco (UK)	498.4	12.7	10.0
Citruz Holdings LP (UK)	90.7	3.2	10.0
Plymouth Sound Holdings LP (UK)	59.7	1.8	10.0
Winnersh Holdings LP (UK)	398.0	2.9	5.0
Principal investments	147.9	141.9
Harald	0.0	22.4	5.3
Other	147.9	119.5	100.0
Operating companies	0.0	36.0	100.0
Investment capital employed	19,153.1	356.8
Available bank balances and cash	–	737.5	–
Total investment capital	19,153.1	1,094.3
Of which external capital (bonded loans)	–	322.0	–

Capital structure

Financial liabilities

The Group's total financial liabilities increased to EUR 429.0m at 30 June 2017, compared with EUR 80.2m at year end 2016. The increase was driven by the issuance of bonded loans and by short-term bank loans, which more than doubled to EUR 107.0m as of 30 June 2017 (31 December 2016: EUR 53.2m). The loans are fully attributable to an entity of PATRIZIA GrundInvest KVG which required bridge financing to acquire assets that are expected to be placed in retail funds within the next 12 to18 months.

Bonded loans

Bonded loans, issued in 2013 and due in June 2018, amounted to EUR 22.0m as of 30 June 2017 and are considered as a short-term liability. Since then, on 22 May 2017, PATRIZIA issued bonded loans totalling EUR 300m. The issuance was very well received and was oversubscribed several times. The bonded loans are structured in three tranches of five, seven and ten years with an average coupon of 1.50% p.a., which is partly fixed and partly floating.

The development of the financial liabilities is shown in the following table:

in EUR k	30.06.2017	31.12.2016	Change
Long-term bonded loans	300,000	22,000	1,263.6%
Short-term bonded loans	22,000	5,000	340.0%
Short-term bank loans	107,000	53,200	101.1%
Total financial liabilities	429,000	80,200	434.9%

For a detailed schedule of maturities please refer to item 11 of the Notes.

Liquidity

As of 30 June 2017, PATRIZIA held available cash worth EUR 737.5m.

in EUR k	30.06.2017	31.12.2016
Bank balances and cash	689,554	440,219
Investment term deposits	85,000	0
Securities	11,000	0
Short-term liquidity	785,554	440,219
– Transaction-based liabilities Harald	−35,280	−36,021
– Regulatory reserve KVGs	−6,900	−6,900
– Cash in PGK object companies	−5,887	−3,026
– Shares of non-controlling shareholders	0	−84
= Available cash	737,487	394,188

Total short-term liquidity amounts to EUR 785.6m. However, this amount is not freely available to PATRIZIA in its entirety. EUR 96.0m is invested in securities and deposits with a short-term notice period. Through the sale of the Harald Portfolio, remaining transaction-based liabilities of EUR 35.3m have been made, but were not yet due at the reporting date. In addition, a cash reserve of EUR 12.8m has to be permanently held available due to regulatory requirements for the regulated investment management companies (KVGs) and the retail fund entities. In light of the above factors, the free cash balance available to PATRIZIA amounts to EUR 737.5m.

2 SUPPLEMENTARY REPORT

There were no subsequent events.

3 DEVELOPMENT OF THE RISKS AND OPPORTUNITIES

PATRIZIA is exposed to both opportunities as well as risks in the course of its business activities. The Group has the necessary measures and processes in place to identify negative influences and risks in a timely manner in order to be able to respond accordingly. No significant new opportunities or risks have been identified by the Group since the annual statements for the 2016 financial year. The assessment of probabilities and the potential extent of damage has also not led to any significant changes in the assessment of risks and opportunities.

The statements in the risk report of the 2016 Annual Report still apply. Please refer to the risk report starting on page 82 of the 2016 Annual Report of PATRIZIA Immobilien AG. No other risks are currently known to the Managing Board of PATRIZIA Immobilien AG.

4 REPORT ON EXPECTED DEVELOPMENTS

4.1 Guidance for 2017 Confirmed

PATRIZIA confirms the 2017 guidance after a promising first half of 2017. AUM are anticipated to increase by EUR 2bn net to approximately EUR 20.6bn by year-end while operating income is anticipated to reach between EUR 60m and EUR 75m. Upside to this operating income could result from higher transaction volumes, higher performance fees as well as potential income from the investment of more than EUR 700m of cash.

Augsburg, 8 August 2017

WOLFGANG EGGER KARIM BOHN ANNE KAVANAGH KLAUS SCHMITT CEO CFO CIO COO

This report contains specific forward-looking statements that relate in particular to the business development of PATRIZIA and the general economic and regulatory environment and other factors to which PATRIZIA is exposed. These forward-looking statements are based on current estimates and assumptions by the Company made in good faith, and are subject to various risks and uncertainties that could render a forward-looking estimate or statement inaccurate or cause actual results to differ from the results currently expected.

CONTENTS

2. CONSOLIDATED INTERIM FINANCIAL STATEMENTS

• 28 Consolidated Balance Sheet
• 30 Consolidated Income Statement
• 31 Consolidated Statement of Comprehensive Income
• 32 Consolidated Cash Flow Statement
• 34 Consolidated Statement of Comprehensive Income

CONSOLIDATED BALANCE SHEET

as of 30 June 2017

ASSETS
in EUR k	30.06.2017	31.12.2016
A. Non-current assets
Goodwill	610	610
Other intangible assets	34,420	35,416
Software	10,940	10,772
Investment property	10,062	12,226
Equipment	4,357	4,460
Participations in associated companies	86,803	85,923
Participations	101,182	102,033
Loans	7,028	7,015
Long-term tax assets	35	35
Deferred taxes	258	323
Total non-current assets	255,695	258,813
B. Current assets
Inventories	233,035	182,931
Securities	11,010	44
Short-term tax assets	7,451	11,941
Current receivables and other current assets	140,388	99,311
Bank balances and cash	689,554	440,219
Total current assets	1,081,438	734,446

Total assets	1,337,133	993,259

EQUITY AND LIABILITIES

in EUR k	30.06.2017	31.12.2016
A. Equity
Share capital	83,956	83,956
Capital reserve	184,005	184,005
Retained earnings
Legal reserves	505	505
Non-controlling shareholders	1,691	1,691
Currency translation differences	−11,241	−10,803
Consolidated unappropriated profit	516,025	491,679
Total equity	774,941	751,033
B. Liabilities
NON-CURRENT LIABILITIES
Deferred tax liabilities	17,088	17,992
Retirement benefit obligations	693	648
Bonded loans	300,000	22,000
Non-current liabilities	4,978	6,866
Total non-current liabilities	322,759	47,506
CURRENT LIABILITIES
Short-term bank loans	107,000	53,200
Bonded loans	22,000	5,000
Short-term financial derivatives	0	0
Other accruals	16,041	27,627
Current liabilities	66,965	75,343
Tax liabilities	27,427	33,550
Total current liabilities	239,433	194,720
Total equity and liabilities	1,337,133	993,259

CONSOLIDATED INCOME STATEMENT

	1st half 2017	1st half 2016
in EUR k	01.01.−30.06.2017	01.01.−30.06.2016
Revenues	105,903	579,235
Income from the sale of investment property	227	901
Changes in inventories	−7,367	−387,117
Other operating income	11,343	6,379
Income from the deconsolidation of subsidiaries	0	196,930
Total operating performance	110,106	396,328
Cost of materials	−7,478	−10,828
Cost of purchased services	−6,249	−10,353
Staff costs	−39,916	−56,249
Other operating expenses	−28,582	−27,719
Income from participations	9,376	6,839
Earnings from companies accounted for using the equity method	670	3,253
EBITDAR	37,927	301,271
Reorganisation expenses	−915	−11,313
EBITDA	37,012	289,958
Amortisation of fund management contracts, depreciation of software and fixed assets	−2,769	−3,293
Earnings before finance income and income taxes (EBIT)	34,243	286,665
Finance income	531	1,155
Finance costs	−1,840	−6,185
Currency result	−1,844	−4,238
Earnings before income taxes (EBT)	31,090	277,397
Income tax	−6,744	−46,839
Net profit/loss for the period	24,346	230,558
Earnings per share (undiluted) in EUR	0.29	2.52
The net profit/loss for the period is allocated to:
Shareholders of the parent company	24,346	211,273
Non-controlling shareholders	0	19,285
	24,346	230,558

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	1st half 2017	1st half 2016
in EUR k	01.01.−30.06.2017	01.01.−30.06.2016
Net profit/loss for the period	24,346	230,558
Items of other comprehensive income with reclassification to net profit/loss for the period
Profit/loss from the translation of financial statements of international business units	−438	−7,178
Total result for the reporting period	23,908	223,380
The total result is allocated to:
Shareholders of the parent company	23,908	204,095
Non-controlling shareholders	0	19,285
	23,908	223,380

CONSOLIDATED CASH FLOW STATEMENT

	1st half 2017	1st half 2016
in EUR k	01.01.−30.06.2017	01.01.−30.06.2016
Net profit/loss for the period	24,346	230,558
Income taxes recognised through profit or loss	6,744	46,839
Financial costs through profit or loss	1,840	6,185
Financial income through profit or loss	−531	−1,155
Income from divestments of participations, recognised through profit or loss	−2,453	0
Amortisation of fund management contracts, software and equipment	2,769	3,293
Income from the sale of investment property	−227	−901
Costs from the deconsolidation of subsidiaries	65	0
Income from the deconsolidation of subsidiaries	0	−196,930
Other non-cash items	−5,076	8,760
Changes in inventories, receivables and other assets that are not attributable to investment activities	−44,573	373,145
Changes in liabilities that are not attributable to financing activities	−23,137	−18,075
Interest paid	−1,838	−6,098
Interest received	242	899
Income tax payments	−6,559	−10,430
Cash outflow/inflow from operating activities	−48,388	436,090
Capital investments software and equipment	−2,035	−974
Payments received from the sale of investment property	2,483	6,443
Payments for the development of investment property	−94	−61
Payments for the acquisition of securities	−95,966	0
Payments received from the sale of securities	0	10
Payments for the acquisition of participations	−270	−1,030

	1st half 2017	1st half 2016
in EUR k	01.01.−30.06.2017	01.01.−30.06.2016
Payments received from the equity reduction of participations	735	0
Payments received from the sale of participations	2,455	0
Payments for investments in companies accounted for using the equity method	−5,163	0
Payment received through distributions of companies account ed for using the equity method	0	5,147
Payments received from the repayment of shares of companies accounted for using the equity method	4,955	6,565
Payments for loans to companies in which participating inter ests are held	−201	−181
Payments received from the disposal of consolidated com panies and other business units	0	333,695
Payments for the disposal of consolidated companies and other business units	−2,684	0
Payments for the acquisition of consolidated companies and other business units	0	−42,366
Cash outflow/inflow from investment/divestment activities	−95,785	307,248
Borrowing of loans	404,500	96,675
Repayment of loans	−10,985	−645,761
Cash inflow/outflow from financing activities	393,515	−549,086
Changes in cash	249,342	194,252
Cash 01.01	440,219	179,141
Effect of changes in exchange rates on cash	−7	−1,942
Cash 30.06.	689,554	371,451

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

in EUR k	Share capital	Capital reserve	Retained earnings (legal reserve)
Balance 01.01.2016	76,324	191,637	505
Net amount recognised directly in equity, where applicable less income taxes	0	0	0
Net profit /loss for the period	0	0	0
Balance 30.06.2016	76,324	191,637	505
Balance 01.01.2017	83,956	184,005	505
Net amount recognised directly in equity, where applicable less income taxes	0	0	0
Net profit/loss for the period	0	0	0
Balance 30.06.2017	83,956	184,005	505

Total	Equity of non controlling shareholders	Equity of the shareholders of the parent ompany	Consolidated unappropriated profit	Currency translation difference
539,791	18,190 0	518,099	254,004	−869
−7,178		−7,178	0	−7,178
230,558	19,285	211,273	211,273	0
763,171	37,475	722,194	465,277	−8,047
751,033	1,691	749,342	491,679	−10,803
−438	0	−438	0	−438
24,346	0	24,346	24,346	0
774,941	1,691	773,250	516,025	−11,241

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS as of 30 June 2017 (first half of 2017)

1 GENERAL DISCLOSURES

PATRIZIA Immobilien AG ('PATRIZIA', 'Company' or 'Group') is a listed German stock corporation. The Company's headquarters are located at Fuggerstraße 26 in 86150 Augsburg, Germany. PATRIZIA has been active as an investor and investment manager in the real estate market for more than 30 years and operates in 15 countries across Europe. As an investment manager, PATRIZIA's services include asset and portfolio management, acquisitions and sales, and fund management mainly through its own regulated investment platforms and non-regulated investment structures. As one of the leading real estate investment companies in Europe, the Company operates Europe-wide for large institutional as well as retail clients. Currently, the Company manages assets with a value of EUR 19.2bn, mainly for insurance companies, pension fund institutions, sovereign wealth funds and savings banks.

2 PRINCIPLES APPLIED IN PREPARING THE CONSOLIDATED FINANCIAL STATEMENTS

The interim consolidated financial statements of PATRIZIA Immobilien AG for the first half of 2017 (1 January 2017 to 30 June 2017) were prepared in accordance with Article 37 (3) of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act) in conjunction with Article 37w (2) WpHG in line with IFRS and in compliance with the provisions of German commercial law additionally applicable as per Article 315a (1) of the Handelsgesetzbuch (HGB – German Commercial Code). All compulsory official announcements of the International Accounting Standards Board (IASB) that have been adopted by the EU in the context of the endorsement process (i.e. published in the Official Journal of the EU) have been applied.

From the perspective of the Company's Management Board, the unaudited interim consolidated financial statements for the period ended 30 June 2017 contain all of the information necessary to provide a true and fair view of the course of business and the earnings situation in the period under review. Earnings generated in the first six months of 2017 are not necessarily an indication of future earnings or of the expected total earnings for the fiscal year 2017.

When preparing the consolidated financial statements for the interim report in line with IAS 34 'Interim Financial Reporting', the Managing Board of PATRIZIA Immobilien AG must make assessments and estimates as well as assumptions that affect the application of accounting standards in the Group and the reporting of assets and liabilities as well as income and expenses. Actual amounts may differ from these estimates.

These interim consolidated financial statements have been prepared in accordance with the same accounting and assessment policies as the consolidated financial statements for the fiscal year 2016. For a detailed description of the principles applied in preparing the interim consolidated financial statements and the accounting methods used, please refer to the notes to the IFRS consolidated financial statements for the year ending 31 December 2016, which are contained in the Company's 2016 Annual Report.

The term 'Harald' used in these interim consolidated financial statements relates to a principal investment acquired in 2015. All related real estate assets were sold in the 2016 reporting period.

The interim consolidated financial statements are prepared in euros. The amounts, including the previous year's figures, are stated in EUR thousands unless stated otherwise. Please note that small differences can arise in rounded amounts and percentages due to commercial rounding of figures.

3 SCOPE OF CONSOLIDATION

All of the Company's subsidiaries are included in the consolidated financial statements of PATRIZIA Immobilien AG. The subsidiaries include all companies controlled by PATRIZIA Immobilien AG. In addition to the parent company, the scope of consolidation comprises 93 subsidiaries. They are included in the consolidated financial statements in line with the rules of full consolidation.

In addition to this, two participating interests are accounted for at-equity in the consolidated financial statements. These are a participation in a SICAV (a stock corporation with variable equity in accordance with the laws of Luxembourg) and a participation in a joint venture.

Furthermore, 28.3% of the limited liability capital is held in one project development company (in the form of a GmbH&Co. KG), while 30% is held in the associated general partner. A significant influence cannot be executed due to provisions in the partnership agreement meaning that management can neither be exercised, nor can a significant influence be exerted on the management and that there is no entitlement to appoint members of the managing boards. Shares in this development company are accounted for at acquisition cost.

On the balance sheet date, three companies were not included in the scope of consolidation as they have only small or no ongoing business operations and are of subordinate importance for the Group and for the presentation of a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.

The number of consolidated companies, which are included in the consolidated financial statements within the scope of full consolidation, has developed as follows during the reporting period:

As of 01.01.2017	93
Acquisitions	–
Foundations	1
Mergers	–
Deconsolidations	−1
As of 30.06.2017	93

Significant transactions for the Group are explained below under company acquisitions, sales and restructuring within the Group. Due to materiality aspects this passage lapses for the reporting period.

4 INVESTMENT PROPERTY

Investment properties are those that are held for the purpose of earning rental income or for capital appreciation, or both. They are not owner-occupied or held for sale in the ordinary course of business and investment properties are initially measured at cost. Following initial recognition, investment properties are measured at fair value. Any change herein is recognised as affecting net income in the income statement.

For a detailed description of the accounting methods used, please refer to the notes to the IFRS consolidated financial statements for the year ending at 31 December 2016, which are contained in the Company's 2016 Annual Report.

5 PARTICIPATIONS IN ASSOCIATED COMPANIES

Participations in Associated Companies include a 10.1% share in PATRIZIA WohnModul I SICAV-FIS with headquarters in Luxembourg.

The strategy of PATRIZIA WohnModul I is the purchase of different types of real estate assets, including project developments and revitalisation assets. As an exit strategy, the sales of blocks as well as single units are planned.

Through its participation in PATRIZIA WohnModul I SICAV-FIS, PATRIZIA is subject to the usual real estate specific risks such as market development in the event of single unit sales and project developments, but also to fluctuations in interest rates.

The Group's share in the profit of PATRIZIA WohnModul I SICAV-FIS for the first six months of 2017 is EUR 670k (30 June 2016: EUR 3,253k).

In the period under review, WohnModul I SICAV-FIS distributed profits totalling EUR 4,955k to PATRIZIA Immobilien AG, which were fully reinvested against the issue of new shares. This distribution was credited against Participations in Associated Companies not affecting the income statement.

In the second quarter of 2017 the subsidiary PATRIZIA GQ Limited of PATRIZIA Immobilien AG acquired a 50% participation in Ask PATRIZIA (GQ) LLP (joint venture Gateshead), which is also reported under Participations in Associated Companies.

6 PARTICIPATIONS

Participations include the following main holdings:

• PATRoffice Real Estate GmbH&Co. KG 6.25% (31 December 2016: 6.25%)
• sono west Projektentwicklung GmbH&Co. KG 28.3% (31 December 2016: 28.3%)
• Projekt Feuerbachstraße Verwaltung GmbH 30% (31 December 2016: 30%)
• Plymouth Sound Holdings LP 10% (31 December 2016: 10%)
• Winnersh Holdings LP 5% (31 December 2016: 5%)
• Seneca Holdco S.à r.l. 5.1% (31 December 2016: 5.1%)
• GBW GmbH 5.1% (31 December 2016: 5.1%)
• Aviemore Topco 10% (31 December 2016: 10%)
• Citruz Holdings LP 10% (31 December 2016: 10%)
• Scan Deutsche Real Estate Holding GmbH 6% (31 December 2016: 6%)
• Draaipunt Holding B.V. 5.1% (31 December 2016: 5.1%)
• Promontoria Holding V B.V. 5.1% (31 December 2016: 5.1%)
• Promontoria Holding X B.V. 5.1% (31 December 2016: 5.1%)

In the period under review PATRIZIA sold off its participation in PATRIZIA Projekt 150 GmbH. Please also refer to item 17, Income from Participations.

7 INVENTORIES

Inventories include real estate assets that have been acquired with the purpose of re-sale within the ordinary business cycle. Assessment and qualification of an inventory is carried out at acquisition.

PATRIZIA has defined the operating business cycle as three years as the majority of the units to be disposed of are usually sold during this time period. However, inventories remain classified as intended for sale even if the sale is not realised within three years.

Inventories are valued at acquisition or production costs. Acquisition costs comprise directly attributable purchase and commitment costs. Production costs include the costs directly attributable to the real estate development process.

The EUR 50,104k increase in inventories is primarily due to the addition of assets from PGK-Object PATRIZIA GrundInvest Objekt Mainz Rheinufer GmbH&Co. KG which totalled EUR 100,121k and from the disposal and deconsolidation of PGK-Object PATRIZIA GrundInvest München Leopoldstraße GmbH&Co. geschlossene Investment-KG which totalled EUR 42,443k, as well as sales from the privatisation portfolio.

8 CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents cover cash and short-term bank deposits that are held by the Group. The net asset value of these assets corresponds to their fair value.

Through the issuance of EUR 300,000k bonded loans on 22 May 2017, the Company has increased its options and flexibility for further strategic growth.

Through its active liquidity management approach, liquid assets were invested in short-term, near-money market financial assets. EUR 11,000k was invested in short-term securities and these investments are reflected separately in the balance sheet. Furthermore, EUR 85,000k was invested in short-term investment term deposits with a duration of more than 90 days. These are shown in the balance sheet under current receivables and other current assets.

in EUR k	30.06.2017	31.12.2016
Bank balances and cash	689,554	440,219
Investment term deposits	85,000	–
Securities	11,000	–
short-term liquidity	785,554	440,219
– Transaction-based liabilities Harald	−35,280	−36,021
– Regulatory reserve KVGs	−6,900	−6,900
– Cash in PGK object companies	−5,887	−3,026
– Shares of non-controlling shareholders	0	−84

9 EQUITY

The Company's share capital at the balance sheet date was EUR 83,955,887 (31 December 2016: EUR 83,955,887) and was divided into 83,955,887 (31 December 2016: 83,955,887) no-par value shares (shares with no nominal value). The development of equity is shown in the consolidated statement of changes in equity.

= Available cash 737,487 394,188

10 NON-CONTROLLING SHAREHOLDERS

As of 30 June 2017, shares of non-controlling shareholders amounted to EUR 1,691k (31 December 2016: EUR 1,691k).

These shares of non-controlling shareholders are classified as insignificant by PATRIZIA.

11 FINANCIAL LIABILITIES

Financial Liabilities have the following maturity profile:

in EUR k 30.06.2017	2018	2022	2024	2026	2027	Total
Bank loans	53,925	0	0	0	0	53,925
Mortgage loans	0	0	0	53,075	0	53,075
Bonded loans	22,000	91,500	124,000	0	84,500	322,000
Total financial liabilities	75,925	91,500	124,000	53,075	84,500	429,000
in EUR k
31.12.2016	2017	2018		2019−2025	2026	Total
Bank loans	0	32,450		0	0	32,450
Mortgage loans	0	0		0	20,750	20,750
Bonded loans	5,000	22,000		0	0	27,000

Bank loans are accounted for at amortised cost and with floating interest rates, the Group is exposed to interest rate risk. All loans are valued in EUR. Bank loans and mortgage loans totalling EUR 107,000k relate to temporarily held properties, which will leave the Group in the course of the scheduled placement of the shares in investment funds by PATRIZIA GrundInvest Kapitalverwaltungsgesellschaft mbH. These loans also include an equity bridge loan of PATRIZIA Immobilien AG, which relates to PATRIZIA GrundInvest Den Haag Wohnen GmbH&Co. geschlossene Investment-KG, which was sold in 2016. Maturities are shown in accordance with the contractually agreed terms of the loan agreements.

As of the balance sheet date, two bonded loans are shown in the consolidated financial statement. The bonded loans totalling EUR 22,000k (maturity: 30 June 2018) are reported under current liabilities. The bonded loans of EUR 300,000k, which were issued in the second quarter of 2017, consist of three tranches with terms of five, seven and ten years. These bonded loans are shown in the consolidated financial statement under non-current liabilities.

12 LONG-TERM LIABILITIES

Long-term Liabilities amount to EUR 4,978k (31 December 2016: EUR 6,866k) and essentially consist of long-term components of the management participation plan, which is described in detail under item 9.2 in the 2016 Annual Report.

13 REVENUES

Revenues are composed as follows:

	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Revenues from management services	83,360	73,138	14.0%	83,360	73,138	14.0%
Sales proceeds of principal investments	15,507	25,712	−39.7%	15,507	487,634	−96.8%
Rental revenues	5,277	6,932	−23.9%	5,277	13,274	−60.2%
Revenues from ancillary costs	1,269	2,534	−49.9%	1,269	2,792	−54.5%
Miscellaneous	490	2,396	−79.5%	490	2,397	−79.6%
Consolidated revenues	105,903	110,712	−4.3%	105,903	579,235	−81.7%

1 adjusted = without Harald

The revenues from management services include transaction-related commission income, income from asset and fund management including performance-related fees and manager remuneration.

14 OTHER OPERATING INCOME

Other Operating Income contains:

in EUR k	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Income from expired obligations	8,934	1,948	358.6%	8,934	1,948	358.6%
Income from payments in kind	399	475	−16.0%	399	475	−16.0%
Income from reimburse ment of lawyers' fees, court costs and transac tion costs and payments of damages	60	192	−68.8%	60	192	−68.8%
Insurance compensations	3	26	−88.5%	3	26	−88.5%
Income from the decrease in the general provision	0	81	−100.0%	0	81	−100.0%
Other	1,947	305	538.4%	1,947	3,657	−46.8%
Total	11,343	3,027	274.7%	11,343	6,379	77.8%

1 adjusted = without Harald

Income from expired obligations mainly results from the final settlement of bonuses, litigation costs/risks after court settlement and from reduction of an indemnification obligation.

15 COST OF MATERIALS

Cost of Materials consists of:

in EUR k	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Renovation and construction costs	4,932	3,116	58.3%	4,932	3,603	36.9%
Ancillary rental costs	2,311	3,088	−25.2%	2,311	6,688	−65.4%
Maintenance costs	235	537	−56.2%	235	537	−56.2%
Total	7,478	6,741	10.9%	7,478	10,828	−30.9%

1 adjusted = without Harald

16 OTHER OPERATING EXPENSES

Other Operating Expenses consist of:

	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Advisory and audit fees	10,515	4,437	137.0%	10,515	4,709	123.3%
Rent, cleaning and ancillary costs	3,622	3,435	5.4%	3,622	3,726	−2.8%
IT costs, communication costs and office supplies	3,616	3,405	6.2%	3,616	4,056	−10.8%
Advertising costs	2,485	1,684	47.6%	2,485	1,736	43.1%
Vehicle and travel costs	2,396	2,553	−6.1%	2,396	2,553	−6.1%
Contributions, charges and insurance costs	1,042	1,777	−41.4%	1,042	1,784	−41.6%
Commissions and other sales costs	997	1,435	−30.5%	997	1,435	−30.5%
Recruitment costs, training costs and costs for temporary work	987	683	44.5%	987	683	44.5%
Cost of Management Services	577	−184	−413.6%	577	2,801	−79.4%
Other taxes	499	101	394.1%	499	101	394.1%
Miscellaneous	1,846	1,324	39.4%	1,846	4,135	−55.4%
Total	28,582	20,650	38.4%	28,582	27,719	3.1%

1 adjusted = without Harald

Advisory and audit fees totalling EUR 10,515k (30 June 2016: EUR 4,437k) include transaction costs of EUR 6,032k (30 June 2016: EUR 815k). Of these transaction costs EUR 5,134k (30 June 2016: EUR 0,00) relate to deals that did not materialise.

17 INCOME FROM PARTICIPATIONS

For the first six months of 2017, Income from Participations totalled EUR 9,376k (30 June 2016: EUR 6,839k) and contains the income from co-investments in GBW, UK and Harald (30 June 2016: GBW, Harald and Seneca) and from the proceeds from the sale of participation in PATRIZIA Projekt 150 GmbH.

In addition, PATRIZIA earned a return on equity employed totalling EUR 2,453k from the sale of the participation in the PATRIZIA Projekt 150 GmbH.

Income from participations is composed as follows:

	1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Services provided as shareholder contributions	4,706	4,732	−0.5%
Return on equity employed	4,670	2,107	121.6%
Total	9,376	6,839	37.1%

18 FINANCIAL RESULT

	1st half 2017	1st half 2016¹		1st half 2017	1st half 2016
in EUR k	01.01.— 30.06.2017	01.01.— 30.06.2016	Change	01.01.— 30.06.2017	01.01.— 30.06.2016	Change
Interest on bank deposits	110	−70	−257.1%	110	−44	−350.0%
Other interest	421	866	−51.4%	421	1,199	−64.9%
Financial income	531	796	−33.3%	531	1,155	−54.0%
Interest on revolving credit facilities and bank loans	−582	−1,611	−63.9%	−582	−5,566	−89.5%
Other financial expenses	−1,258	−2,465	−49.0%	−1,258	−619	103.2%
Financial expenses	−1,840	−4,076	−54.9%	−1,840	−6,185	−70.3%
Currency result	−1,844	−4,295	−57.1%	−1,844	−4,238	−56.5%
Financial result	−3,153	−7,575	−58.4%	−3,153	−9,268	−66.0%

1 adjusted = without Harald

In the first six months of 2017, the currency result in the profit and loss statement amounted to EUR −1,844k (30 June 2016: EUR −4,238k). This includes realised currency translation losses amounting to EUR −28k (30 June 2016: realised currency translation gains in the amount of EUR 672k).

19 EARNINGS PER SHARE

in EUR k	1st half 2017¹	1st half 2016²	1st half 2017	1st half 2016
	01.01.— 30.06.2017	01.01.— 30.06.2016	01.01.— 30.06.2017	01.01.— 30.06.2016
Profit attributable to Group's shareholders	25,063	11,666	24,346	211,273
Number of shares issued	83,955,887	76,323,533	83,955,887	76,323,533
Weighted number of shares	83,955,887	83,955,887	83,955,887	83,955,887
Total	0.30	0.14	0.29	2.52

1 adjusted = without reorganisation expenses after tax

2 adjusted = without Harald and reorganisation expenses after tax

Applying IAS 33.64, the weighted number of shares for the same period of the previous year (76,323,533) was adjusted, assuming that the weighted number of shares throughout the year of 2016 corresponds to that of 2017.

20 SEGMENT REPORTING

Segment Reporting categorises the business segments according to whether PATRIZIA acts as investor or as service provider. In line with the Group's reporting for management purposes and in accordance with IFRS 8 'Operating segments', two segments have been identified based on functional criteria: Investments and Management Services. In addition, the operating segments are split into German and International, based on the location of the related property asset. International subsidiaries continue to be reported as a total for the time being, due to the relatively low contribution of the respective national businesses to total revenues and results.

In addition, PATRIZIA Immobilien AG (corporate administration) includes the management of international subsidiaries as Corporate. Corporate does not constitute an operating segment with an obligation to report, but is presented separately due to its activity as an internal and transnational service provider. In previous years, services provided as 'Corporate' were offset internally on a monthly basis by the segments 'Management Services' and 'Investments' by a so-called 'Shared service fee', as the utilisation was an internal key performance indicator for the Group Management. PATRIZIA has agreed that for the 2017 financial year this 'Shared service fee' is no longer relevant as key performance indicator. The services provided will be internally allocated in accordance with tax regulations. In order to facilitate comparability between the segment reporting of 2016 and 2017, the figures for 2016 were adjusted by the 'Shared service fees' in the profit and loss account. From the financial year 2017 inter-company interest expenses and income between the Harald structure (investments) and PATRIZIA Immobilen AG (corporate), which occurred on the basis of the internal financing structures from the sale of the Harald Portfolio, are no longer taken into account in the course of internal control. Therefore, related income and expenses are not shown in the individual segments. In order to facilitate comparability between the years 2017 and 2016, the previous year's figures have also been adjusted.

The elimination of inter-company revenues and interest charges, as well as interim results, is conducted via the 'Consolidation' column. The 'Corporate' column thus consolidates all internal services between the Investments and Management Services segments and the Company within a country. It represents the external service provided by the Group in the region. Transnational consolidation is performed in the row 'Consolidation'.

The Investments segment primarily combines principal investments and participations.

The Management Services segment covers a broad spectrum of real estate services, in particular the acquisition and sales of residential and commercial properties or portfolios (Acquisition and Sales), value-oriented management of real estate portfolios (Asset Management) as well as strategic consulting with regard to investment strategy, portfolio planning and allocation (Portfolio Management) and the execution of complex, non-standard investments (Alternative Investments). Special funds are also established and managed including separate accounts via the Group's own investment management companies. Commission revenues generated by services, both from co-investments and from third parties, are reported in the Management Services segment. These also include income from participating interests that are granted as interim profits for asset management of the co-investment GBW.

The range of services provided by the Management Services segment is increasingly provided to third parties in line with PATRIZIA's AUM growth.

PATRIZIA's internal control and reporting measures are primarily based on the principles of accounting under IFRS. The Group measures the success of its segments using segment earnings parameters which, for the purposes of internal control and reporting, are referred to as EBT and operating EBT (operating income).

EBT, the measure of segment earnings, comprises: total revenues, income from the sale of investment property, changes in inventories, income from the deconsolidation of subsidiaries, cost of materials and staff costs, other operating income and expenses, reorganisation expenses, changes in the value of investment property, amortisation, as well as earnings from investments, (including investments valued at equity) and the financial result and gains/losses from currency translation.

Certain adjustments are made in the course of determining operating EBT (operating income). Adjustments are made for non-cash effects such as amortisation of other intangible assets (i.e. fund management contracts), unrealised changes in the value of the investment property, gains/losses from currency translation and reorganisation expenses. Cash-effective realised valuation changes from the sale of investment property and realised currency translation effects are added.

Segments generate inter-company revenues and these services are settled at market prices.

Due to the capital intensity of the segment, assets and liabilities in the investment segment account for the majority of the Group's total assets and liabilities. For this reason, no breakdown of assets and liabilities by individual segments is provided.

The individual segments are set out as follows. The reporting of amounts in EUR thousands can result in rounding differences. However, individual items are calculated on the basis of nonrounded figures.

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
Germany
Revenues from principal investments	476,472	0	0	0	476,472
Rental revenues	10,813	0	0	−40	10,773
Revenues from management services	0	79,440	0	−18,310	61,130
Other	1,480	251	0	−18	1,713
Revenues	488,765	79,691	0	−18,368	550,088
International 1
Revenues from principal investments	11,162	0	0	0	11,162
Rental revenues	2,500	0	0	0	2,500
Revenues from management services	0	19,243	0	−1,078	18,165
Other	3,452	55	0	0	3,507
Revenues	17,114	19,298	0	−1,078	35,334
Corporate
Revenues	0	0	2,191	0	2,191
Consolidation
Revenues	0	−6,485	0	−1,893	−8,378
Group
Revenues from principal investments	487,634	0	0	0	487,634
Rental revenues	13,313	0	0	−40	13,273
Revenues from management services	0	92,226	2,073	−21,161	73,138
Other	4,932	278	118	−138	5,190
Revenues	505,879	92,504	2,191	−21,339	579,235
Details
Total operating performance
Germany	306,702	84,750	0	−18,368	373,084
International¹	10,057	19,704	0	−1,090	28,671
Corporate	0	0	3,055	0	3,055
Consolidation	0	−6,485	0	−1,997	−8,482
Group	316,759	97,969	3,055	−21,455	396,328

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
Cost of materials and cost of purchased services
Germany	−9,500	−13,006	0	253	−22,253
International¹	−1,573	−5,443	0	0	−7,016
Corporate	0	0	0	0	0
Consolidation	0	6,427	0	1,661	8,088
Group	−11,073	−12,022	0	1,914	−21,181
Change in value of investment properties
Germany	0	0	0	0	0
Group	0	0	0	0	0
Staff costs
Germany	0	−35,357	0	0	−35,357
International¹	0	−9,405	0	0	−9,405
Corporate	0	0	−11,487	0	−11,487
Consolidation	0	0	0	0	0
Group	0	−44,762	−11,487	0	−56,249
Other operating expenses
Germany	−27,672	−7,541	0	18,272	−16,941
International¹	−1,543	−3,186	0	1,090	−3,639
Corporate	0	0	−7,264	−196	−7,460
Consolidation	0	59	0	262	321
Group	−29,215	−10,668	−7,264	19,428	−27,719
Income from participations and earnings from companies account ed for using the equity method
Germany	1,537	4,733	0	0	6,270
International¹	3,822	0	0	0	3,822
Corporate	0	0	0	0	0
Consolidation	0	0	0	0	0
Group	5,359	4,733	0	0	10,092

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
Reorganisation expenses
Germany	0	−10,072	0	0	−10,072
International¹	0	0	0	0	0
Corporate	0	0	−1,241	0	−1,241
Consolidation	0	0	0	0	0
Group	0	−10,072	−1,241	0	−11,313
Amortisation of fund manage ment contracts, software and equipment
Germany	−4	−1,002	0	0	−1,006
International¹	0	−73	0	0	−73
Corporate	0	0	−2,214	0	−2,214
Consolidation	0	0	0	0	0
Group	−4	−1,075	−2,214	0	−3,293
Financial Result
Germany	−3,337	−544	0	0	−3,881
International¹	−68	128	0	0	60
Corporate	0	0	−1,209	0	−1,209
Consolidation	0	0	0	0	0
Group	−3,405	−416	−1,209	0	−5,030
Gains/losses from currency translation
Germany	57	−71	0	0	−14
International¹	−1,977	78	0	0	−1,899
Corporate	0	0	−2,325	0	−2,325
Consolidation	0	0	0	0	0
Group	−1,920	7	−2,325	0	−4,238
EBT (IFRS)
Germany	267,783	21,890	0	157	289,830
International¹	8,718	1,803	0	0	10,521
Corporate	0	0	−22,685	−196	−22,881
Consolidation	0	1	0	−74	−73
Group	276,501	23,694	−22,685	−113	277,397

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
Adjustments
Germany	1,659	11,200	1,241	0	14,100
Significant non-operating earnings	−475	−11,200	−1,241	0	−12,916
Market valuation income derivatives	0	0	0	0	0
Market valuation expenditures derivatives	0	0	0	0	0
Fund agreement amortisation	0	−984	0	0	−984
Reorganisation expenses	0	−10,072	−1,241	0	−11,313
Unrealised currency changes	−475	−144	0	0	−619
Realised fair value	1,184	0	0	0	1,184
International¹	1,982	−14	0	0	1,967
Significant non-operating earnings	−1,982	14	0	0	−1,967
Fund agreement amortisation	0	0	0	0	0
Unrealised currency changes	−1,982	14	0	0	−1,967
Corporate	0	0	2,324	0	2,324
Significant non-operating earnings	0	0	−2,324	0	−2,324
Unrealised currency changes	0	0	−2,324	0	−2,324
Group	3,640	11,186	3,565	0	18,391
Operating result (adjusted EBT)²
Germany ³	269,442	33,090	1,241	157	303,930
International¹	10,700	1,789	0	0	12,488
Corporate	0	0	−20,361	−196	−20,558
Consolidation	0	1	0	−74	−73
Group	280,141	34,880	−19,120	−113	295,788

1 France, Great Britain, Luxembourg, Netherlands, Scandinavia, Spain

2 EUR 231.8m excluding Harald related taxes and minorities

3 EUR 208.0m excluding Harald related taxes of EUR 44.7m and minorities of EUR 19.3

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
Germany
Revenues from principal investments	15,507				15,507
Rental revenues	4,019	65		−28	4,056
Revenues from management services		73,149		−2,061	71,087
Other	558	151		−2	707
Revenues	20,084	73,365		−2,091	91,358
International¹
Revenues from principal investments
Rental revenues	1,167				1,167
Revenues from management services		43,090		−605	42,485
Other	931	98			1,029
Revenues	2,098	43,189		−605	44,682
Corporate
Revenues			330		330
Consolidation
Revenues		−30,431		−35	−30,467
Group
Revenues from principal investments	15,507				15,507
Rental revenues	5,186	65	54	−28	5,277
Revenues from management services		85,820	211	−2,671	83,360
Other	1,489	236	66	−32	1,759
Revenues	22,182	86,122	330	−2,731	105,903

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
Details
Total operating performance
Germany	12,294	75,931		−2,091	86,134
International¹	4,154	45,258		−605	48,807
Corporate			6,069		6,069
Consolidation		−30,855		−48	−30,903
Group	16,447	90,333	6,069	−2,744	110,106
Cost of materials and cost of purchased services
Germany	−4,185	−9,478			−13,663
International¹	−3,292	−27,161			−30,452
Corporate
Consolidation		30,389			30,389
Group	−7,477	−6,249			−13,727
Change in value of investment properties
Germany
Group
Staff costs
Germany		−18,688			−18,688
International¹		−9,633			−9,633
Corporate			−11,595		−11,595
Consolidation
Group		−28,322	−11,595		−39,916
Other operating expenses
Germany	−4,319	−12,219		2,287	−14,251
International¹	−852	−4,921		605	−5,169
Corporate			−9,726		−9,726
Consolidation		466		98	564
Group	−5,171	−16,674	−9,726	2,989	−28,582

earnings from companies account 4,407 931 5,338	4,708 4,708			9,115 931 10,046
				−639
	−57			−57
		−220		−220
	−695	−220		−915
	−999			−1,000
	−118			−118
		−1,652		−1,652
	−1,117	−1,652		−2,769
−238	−599			−837
209	64			273
		−744		−744
−29	−535	−744		−1,309
−141	−5			−146
−1,885	121			−1,764
		67		67
−2,026	116	67		−1,844
			−639

in EUR k	Investments	Management Services	Corporate	Consoli dation	Group
EBT (IFRS)
Germany	7,817	38,011		196	46,025
International¹	−735	3,553			2,818
Corporate			−17,802		−17,802
Consolidation				49	49
Group	7,082	41,565	−17,802	245	31,090
Adjustments
Germany	445	1,680	220		2,345
Significant non-operating earnings	−141	−1,680	−220		−2,041
Changes in the value of investment property
Fund agreement amortisation		−984			−984
Reorganisation expenses		−695	−220		−915
Unrealised currency changes	−141				−141
Realised fair value	304				304
International¹	1,876	−142			1,733
Significant non-operating earnings	−1,876	142			−1,733
Fund agreement amortisation
Unrealised currency changes	−1,876	142			−1,733
Corporate			−59		−59
Significant non-operating earnings			59		59
Unrealised currency changes			59		59
Group	2,321	1,537	162		4,020
Operating result (adjusted EBT)
Germany	8,262	39,691	220	196	48,369
International¹	1,140	3,411			4,551
Corporate			−17,860		−17,860
Consolidation				49	49
Group	9,402	43,102	−17,640	245	35,110

21 TRANSACTIONS WITH RELATED COMPANIES AND INDIVIDUALS

At the reporting date, the Management Board of PATRIZIA Immobilien AG was not aware of any dealings, contracts or legal transactions with associated or related parties and/or companies for which the Company does not receive appropriate compensation at an arm's length consideration. All such transactions are conducted at arm's length and do not differ substantially from transactions with third parties.

The disclosures on related party transactions in section 9.3 of the notes to the consolidated financial statements in the 2016 Annual Report remain valid.

22 RESPONSIBILITY STATEMENT BY THE LEGAL REP-RESENTATIVES OF PATRIZIA IMMOBILIEN AG PUR-SUANT TO ARTICLE 37 OF THE WERTPAPIERHAN-DELSGESETZ (WPHG – GERMAN SECURITIES ACT) IN CONJUNCTION WITH ARTICLE 37W (2) NO. 3 OF THE WPHG

To the best of their knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the legal representatives of PATRIZIA Immobilien AG affirm that the interim consolidated financial statements give a true and fair view of the assets, liabilities and financial position and profit or loss of the Group. The interim management report of the Group includes a fair review of the development and course of business and the positioning of the Group, as well as a description of the principal opportunities and risks associated with the expected corporate development of the Group for the remaining financial year.

WOLFGANG EGGER KARIM BOHN ANNE KAVANAGH KLAUS SCHMITT CEO CFO CIO COO

FINANCIAL CALENDAR AND CONTACT DETAILS

FINANCIAL CALENDAR 2017

Date
9 August 2017	Interim report for the first half of 2017 with investor and analyst conference call
14 November 2017	Interim report for the first nine months of 2017 with investor and analyst conference call

Investor Relations Press Martin Praum Andreas Menke T +49 821 50910−402 T +49 821 50910−655 F +49 821 50910−399 F +49 821 50910−695 investor.relations@patrizia.ag presse@patrizia.ag

This interim report for the first half of 2017 was published in the evening of 8 August 2017. It is a translation of the respective German report. In case of doubt, the German version shall apply. Both versions are available on our website:

www.patrizia.ag/en/investor-relations/financial-reports/quarterly-reports/

Concept, Design, Editing IR-ONE, Hamburg www.ir-one.de