Vonovia SE

Investor Presentation • Oct 1, 2014

Deutsche Annington Immobilien SE

Societe Generale 9 th Pan-European Real Estate Conference London, 1st October 2014

Thomas Eisenlohr, Head of Investor Relations

Contents

German Market	3
Highlights & operating performance H1 2014	5
Group strategy	11
Property management strategy	13
Portfolio management strategy	19
Extension strategy	25
Acquisition strategy	28
Financing strategy	33
Capital Markets & governance	36
Appendix	38

We are well positioned in a favourable market environment

Source: Federal Statistical Office, Euroconstruct, ifo

Favourable household development in Germany (m)

Source: BBSR Raumordnungsprognose 2030. Projections based on 2009 numbers

Source: Schader Stiftung (Germany), Clameur (France), Association of Residential Letting Agents (UK)

84% of DA's portfolio in states with strongest rental growth

(as per 30.06.2014)

Deutsche Annington at a glance (data as per 30.06.2014)

• Top 5 European real estate company¹ and the largest German residential firm²
• 185k residential units well spread across Germany
• 97% of portfolio by fair value located in Western Germany and Berlin
• More than 3.200 employees incl. own craftsmen organization with 1600 FTE
• Standardized processes and industrialized platform
• Best-in-class financing structure in the German real estate sector
• Dedicated portfolio strategy and investment program focused on value creation

¹By market cap; ² In listed German residential sector

Highlights H1 2014

• Raised 2014 guidance due to continuing strong operating performance
• FFO1 target increased to € 275-285m
• Main work streams are fully on track, underlying our operational strength
• Modernization program well running, investment volume increased to € 160m
• Cost savings ahead of plan, target raised up by ~20%
• Integration and funding of acquisitions very well proceeding
  • Integration of DeWAG completed in half time
  • Unsecured funding strategy proofed strength, funding for acquisitions mostly captured at very competitive pricing

Full exit of private equity sponsor

• Boosted free float and liquidity of Deutsche Annington share after placement in May and announced MDAX inclusion on 22nd September
• Continuing strong corporate governance set-up through new supervisory board

11,369.2

939

Strong operating performance continuing

*Based on average number of units over the period

10,326.7

Fair value per sqm (€)

901

Fair value (€m)

Vacancy rate (in%)

Total Portfolio

31 Dec 2013 30 June 2014

3.9% 3.8%

30 June 2013 30 June 2014

Strong operating performance continuing

*Based on number of shares as of 30 June (200.0m) and 31 Dec 2013 (224.2m) and 30 June 2014 (240.2m)

FFO by all definitions significantly exceeding previous year

IDEUTSCHE
ANNINGTON

FFO evolution (€m)				FFO breakdown H1 2014 (€m)
(€m)	H1 2014	H1 2013
Adjusted EBITDA	258.4	241.7	258
(-) Interest expense FFO	-98.9	-114.7
(-) Current income taxes	-6.8	-4.0		(99)
(=) FFO 2	152.7	123.0				153
(-) Adjusted EBITDA Sales	-22.4	-19.6			(7)		(22)
(=) FFO 1	130.3	103.4
(-) Capitalised maintenance	-10.8	-11.6
(=) AFFO	119.5	91.8
(+) Capitalised maintenance	10.8	11.6
(+) Expenses for maintenance	69.1	71.5	Adjusted	Interest	Current
(=) FFO 1 (excl. maintenance)	199.4	174.9	EBITDA	expense FFO	income taxes

Comments

• All FFOs with significant positive development
• In addition to the DeWAG contribution, main driver is again significantly lower interest expenses from the new funding strategy being fully in place now
• Reduced sales volume at increased step-up lifting up the sales result slightly

NAV rising due to profitable growth and capital increase

Comments

• Total comprehensive income includes valuation impact and profit for the period
• Other changes include the costs for the capital increase

Note: Rounding errors may occur

		Guidance 2014
	(Feb. 2014)	(July 2014*)
Rental growth	2.3 – 2.6%	2.3 – 2.6%
Modernisation program 2014	€ 150m	€ 160m
Planned disposals (privatisation)	~1,800 units	2,000-2,100 units
Step-up on FMV (privatisation)	20%	30-35%
FFO 1	€ 250 – 265m	€ 275 – 285m
Dividend policy	~70% of FFO 1 ~70% of FFO 1

* Including pro-rata contribution of acquisitions

Our strategy: The engine and the turbo

German residential real estate

• Elements 1 & 2 ensure a decreasing cost basis and keep the organisation lean.
• Elements 3 & 4 create sustainable growth and power portfolio value generation. We are changing the product.
• Acquisitions do feed all elements, but are not necessary for growth generation.

We have a strategy that works without acquisitions, but acquisitions can be a turbo

Our portfolio provides a high value uplift potential from modernisation and privatisation

1) Note: Percentage figures denote share of total fair value, as of 31 March 2013 and 31 December 2013

© Deutsche Annington Immobilien SE 12 Societe Generale 9 th Pan-European Real Estate Conference - London, 1st October 2014

Our property management is based on best-in-class processes and an easily scalable platform

Property management strategy

Our operational business model ensures decreasing average cost per unit through standardization and scalability

We have increased our savings target for 2014, leading to a further improved cost per unit ratio

Property management strategy

• Cost savings well ahead of plan
• Therefore savings target of >€20m for 2014 increased by further ~20%
• Lifting savings up to € 140-150/unit (up from € 120/unit); pre acquisition effects

Property management strategy

Line	FY Target	Status H1/2014	Main drivers for cost savings
Headcount			 Elderly part time program
reduction	~€12m	Slightly behind	 Pay roll reduction
			 Original plan adjusted for transactions
IT cost	~€2m	Well ahead	 Lower process cost
			 Lower wide area network cost
			 Higher sales
TGS	~€5m	Well ahead	 Improved margin due to better business processes
Other operating cost	~€1m	Well ahead	 Overall lower SG&A and PTU cost
Total	>€20m	Well ahead	Savings estimated ~20%
			higher than initial target

The use of iPad-technology in property management reduces the time effort of administrative tasks …

Property management strategy

Tobias Reher a	Sicht - und Funktionskontrolle	Dienstleisterkontrolle
Hallo, Tobias	1212.4 Verkehrssicherungssschnitt
Eingang	G
Schreibtisch	Ausführung bis	00.00.0000
in Bearbeitung	$\bullet$ letzte Ausführung	19,07,2013
Vorlagen	Mangel	$\circ$
Standardformulare	Ø
Mieterwechsel	1101.1 Rasen mähen CD
Bau und Instandhaltung	Ausführung bis $\overline{a}$	00.00.0000
Ablage	letzte Ausführung	04.04.2014
Mietobjekte	Mangel
Gesendet	erbracht	0%
Papierkorb	Beschreibung	Rasenschnitt nicht durchgeführt
Extras Funktionen	Foto G 3	$\Theta$
Ċ Aktualisiert 07.07.14 13:31

Tobias Reher Ð		Eingang
Hallo, Tobias Eingang Schreibtisch	G	Heute 09:44 • Techn. Anfragen Wohnung Schimmel 07.07.2014 Eisenstr. 19, 44799 Bochum
in Bearbeitung Vorlagen	O	Heute 09:18 · Sicht- und Funktionskontrolle (SLA) 07.07.2014-12.07.2014 Schlägelstr. 25, 44799 Bochum
Standardformulare	$\left( 2\right)$	Heute 08:51 · Sicht- und Funktionskontrolle (SLA) 07.07.2014-12.07.2014
Mieterwechsel	(11)	Kampstr. 4, 44799 Bochum
Bau und Instandhaltung Ablage	$\sqrt{7}$	Heute 08:06 · Techn. Anfragen Wohnung Schimmel 07.07.2014
Mietobjekte		Kampstr. 4, 44799 Bochum 04.07.2014 14:54
Gesendet		· Sicht- und Funktionskontrolle (SLA) 30.06.2014-05.07.2014 Kampstr, 4, 44799 Bochum
Papierkorb
Extras
Funktionen	$\left( 5\right)$
С, Aktualisiert 07.07.14 13:33		Sortieren Karte Anzeigen

Tobias Reher		Eisenstr. 19,44799 Bochum Sicht - und Funktionskontrolle
lo, Tobias
gang	G	Schließanlagen
reibtisch		3.0 Kontrolle der Türen und Schlösser des Gebäudes
Bearbeitung	$\bullet$	i.O.
lagen
ndardformulare	$\bullet$	Wasser
eterwechsel	60	5.1 Kontrolle und Pflege der Frischwasserversorgungsleitungen
u und Instandhaltung	$\bullet$	i.O.
age		5.5 Kontrolle und Pflege der Wasserfilter
stobjekte		i.O.
sendet		5.6 Kontrolle und Pflege der Druckminderregler
bierkorb		LO.
ras Iktionen	6	5.8 Regelmäßige Kontrolle der Entwässerungseinrichtungen auf Funktionssicherheit
		LO.
		Gemeinschafträume
		7.0 Beleuchtung in Hauseingängen, Treppenhäusern, Kellern, Gemeinschaftsräumen
		LO.
Aktualisiert 07.07.14 13:31		7.1 Kontrolle und Dflege der Scheltschränke / Sichensonklisten

…allowing us to optimize field service productivity and reduce costs

Property management strategy

Current situation Future

• heavy IT equipment (notebook, camera, DigitalPen with printed form, securitytoken, … )
• plenty of complex IT processes necessary (e.g. photo export, etc.)
• no off-line solution, sometimes poor mobile broadband support
• cost-intensive IT equipment and licenses necessary

• replacement investment of IT equipment necessary

• only one device (iPad mini cellular) instead of a current minimum of four

• intuitive app for all business processes with high user friendliness
• 100% off-line processing possible
• integrated photo function to speed-up processes
• Significant cost reduction

Our continuously high maintenance level ensures a sustainable rental growth in our portfolio

Property management strategy

1 Including DeWAG

Our modernisation program is capitalising on mega-trends supported by German regulation

Portfolio management strategy

€ 500m investment opportunities identified € 300m investment opportunities identified¹

Attractive growth potential at ~7% unlevered yield, proven by our track-record

Source: European Commission, BBSR-Bevölkerungsprognose 2030

1) Including investments for senior living as well as investments in high demand markets

Modernisation is a highly industrialised & standardised process delivering steady attractive returns

Portfolio management strategy

• Through efficiency gains more potential in existing portfolio visible. Cost of modernisation is decreasing, i.e. modernisation of units with a lower rental growth potential and earning ~7% unlevered yield is possible
• Activities capped by availability of craftsmen and construction engineers only

Portfolio management strategy

Imbalanced market structure provides opportunities

Total Returns 2009-2012

Current return in %

• Total return is the sum of current return and expected value growth
• Imbalanced market structure provides opportunities
• Growth is most crucial component
• But analyses of history shows – rent forecasts by external data providers are not reliable

Expected value growth in %

Growth is derived from basic demographic data and own estimates

the housing market

• We will invest and acquire assets with above average returns and sell assets with low return
• We identified 10 cities with a priority for acquisitions

City Priority city for acquisitions

Current return in %

Vitus, DeWAG and Franconia perfectly enhance our portfolio

Current return in %

The new portfolios of Vitus, DeWAG and Franconia perfectly fit to our portfolio management strategy and shift our position into the right direction

Portfolio management strategy

We implemented an efficient process to acquire smaller portfolios fast and smoothly (tactical acquisitions)

Portfolio management strategy

• With tactical acquisitions (≤ 500 units), we enlarge our transaction toolkit

• Our target is to refill reductions from privatisation sales by tactical acquisitions

• Standardised and lean "fast track" process (2-4 weeks) for tactical acquisitions implemented

• Low complexity leads to acceptable administrative cost
• Best use of regional market knowledge
• Requirements for strategic fit:
• Asset deal
• Focus region in line with growth-return matrix
• Significant Dt. Annington portfolio close by

• Property strategy (rental only)

• Lean and tailored process to drive tactical acquisitions

• First acquisitions as testing balloon in 2014, steady deal flow from 2015 onwards

The target of our extension strategy is to enlarge our traditional business and increases customer satisfaction

Extension strategy

Key Objectives

• Example Increase in customer satisfaction resulting in higher customer loyalty
• Additional contribution and growth from extensions of the value chain
• Improvement of efficiency, costs and quality of DA core business process chain

Strategic advantages of the TGS joint venture:

• Higher quality (build-up of know how, efficient & closely coordinated processes)
• High reliability (direct access to craftsmen capacities)
• Cost reduction (managing total costs of process)
• Nationwide scalable operating platform

TGS serves the basis of our investments and offers a significant cost advantage

We will focus on the systematical development of new services and products along social megatrends

Extension strategy

New services will enlarge our product range and respond to todays social megatrends

© Deutsche Annington Immobilien SE

Our innovative bathroom concept evidences our standardised & innovative processes

Extension strategy

We see plenty of opportunities for acquisition and have the power to bring them home

Acquisition strategy

If it comes to an acquisition, we are a highly appreciated and reliable partner

• We offer transaction security. If we sign, we close as well in a relatively short timeframe.
• Best-in-class financing strategy with fast access to a comprehensive set of funding tools.
• Our German-wide presence is a competitive advantage ("You don't easily find portfolios of 5,000 units in one city")
• We have a dedicated and well experienced internal M&A team
• Our processes are standardised and fast
• Our deal criteria are transparent

However every potential acquisition is monitored by a dedicated process, keeping us strongly disciplined

Return matrix is a powerful model to make an early decision about the strategic fit of an offered portfolio

Acquisition strategy

The "cage" keeps us highly disciplined and prevents us from overpaying - a high risk in current markets

The acquisition of Vitus, DeWAG & Franconia in 2014 (46k units) perfectly fit to our portfolio

Acquisition strategy

Portfolio Comparison1
	vitus	DeWAG	Franconia	DAIG	Combined
Number of units	30,119	11,412	5,042	175,258	221,831
Vacancy	3.6%	4.3%	4.8%	3.5%	3.6%
Rent/sqm €	4.87	6.62	5.52	5.40	5.40
Multiple2	13.0x	15.1x	14.4x	14.2x	14.3x
Purchase Price	€ 1,420m	€ 944m

Portfolio Split

Top 3 cities (# residential units) By Age

• vitus
• 1. Bremen (9,758)
• 1. Kiel (9,246)
• 1. Moenchengladbach (5,741)

DeWAG

• 1. Augsburg (1,263)
• 1. Berlin (840)
• 1. Frankfurt am Main (778)

Franconia

• 1. Berlin (2,460)
• 1. Dresden/Erfurt/Jena/Leipzig (1,409)
• 1. Boizenburg (976)

DAIG

• 1. Dortmund (17,541)
• 1. Berlin (12,875)
• 1. Essen (9,491)

¹ Franconia figures as of 31.07.2014 - DAIG, DeWAG and vitus as of 31.12.2013 (used for comparison purposes) ² DeWAG, Vitus and Franconia: transaction multiple; DAIG: valuation multiple

Our new assets offer compelling upside potential: Modernisation +15,728 units, privatization +4,390 units

Acquisition strategy

Comments

• All 46,573 residential units have been analyzed on-site
• More than 70 parameters per property were collected (eg repair & maintenance need, new-letting rents, vacancy, fluctuation)

Additionally we assessed 8 individual initiatives per property

• Modernisation (energetic, add. Balconies, attic extensions)
• Apartments optimisation and senior living
• Privatisation, block sales, ground sales

The fast & smooth integration of DeWAG/Vitus is based on best-in-class processes and our scalable platform

	2014				2015
	Q1	Q2	Today Q3	Q4	Q1	Q2
DeWAG
1. Signing	1
2. Closing		2
3. Integration of Finance / Accounting			3
4. Integration of real estate administrative and technical processes			4 4
5. Finalisation and transfer of former periods PTU billing				5
Vitus
1. Signing	1
2. Closing			2
3. Integration of Finance / Accounting				3
4. Integration of real estate administrative and technical processes				4
5. Finalization and transfer of former periods PTU billing					5

Acquisition strategy

Funding for DeWAG and Vitus acquisitions mostly captured at very competitive pricing

Financing strategy

• mainly subsidised loans or low-interest bearing debt 1
• 11.8m shares in kind will be issued to Vitus shareholders at closing. Value consideration is DAIGs NAV at YE 2013 of € 21.33 2
• Raised € 304m primary capital under Deutsche Annington's authorised share capital at March 2013. 16m shares issued at € 19.00 3
• Issuance of hybrid bond in April 2014, allowing for 50% equity credit, thereby strengthening the combined capital ratios. For details see Q1 2014 presentation 4
• Cash / bond financing: EUR 500m EMTN issued in July, residual amount to be raised from current cash flow and/or debt capital market instrument in line with Deutsche Annington's strategy of evenly spreading its maturity profile and/or asset disposals 5

Our best-in-class funding strategy ensures a maximum level of flexibility

Financing strategy

Major KPIs as of June 30 , 2014
LTV (nominal)	51.2%	c. 50%
Unencumbered assets in %	50%	≥ 50%
Global ICR	2.6x	Ongoing optimisation
Financing cost	3.3%	with most economical funding

Financing strategy

Best in class financing strategy with comprehensive toolkit as a basis for operational excellence and qualifies us for several acquisition even in parallel, if they arise.

Significant increase of free float and liquidity after recent placements

© Deutsche Annington Immobilien SE

Continuing strong corporate governance set-up through new supervisory board structure

Independent Members

Dr Wulf H. Bernotat

Chairman of Board

• Since June 2013
• Former CEO of E.ON SE

Prof. Dr Edgar Ernst

Chairman of Audit Committee

• Since June 2013
• President of Deutsche Prüfstelle für Rechnungslegung DPR e.V.

Clara-Christina Streit

Chairwoman of Finance Committee

• Since June 2013
• Former Senior Partner with McKinsey & Company, Inc.

Hildegard Müller

• Since June 2013
• Chairwoman of the Executive Board of Bundesverband der Energie- und Wasserwirtschaft

Prof. Dr Klaus Rauscher

• Since August 2008
• Business Consultant

Non Independent Members (until August 20th, 2014)

Robert Nicolas Barr

Deputy Chairman of Board

• Since November 2009

• Operational Managing Director of Terra Firma Capital Partners Limited, London

• Since December 2010

• Financial Managing Director of Terra Firma Capital Partners Limited, London

Fraser Duncan

• Since February 2001
• Business Consultant

New Independent Members (appointed August 21st, 2014)

Manuela Better

• Former CEO of Hypo Real Estate
• Former member of the Executive Board of the HypoVereinsbank Group

Dr Florian Funck

Member of the Executive Board at Franz Haniel & Cie. GmbH

Christian Ulbrich

• CEO of Jones Lang LaSalle EMEA (Europe, Middle East

• Member of the Executive Board of Jones Lang LaSalle Inc.

• and Africa)

* By the local court, Dusseldorf * Lutz Basse was appointed as member of the supervisory board on August 21st, 2014, and resigned with effect as of September 15th, 2014.

Tim Pryce

• Since June 2013
• CEO of Terra Firma Capital Partners Limited, London

Appendix

H1 2014 key figures confirm positive development

Key Figures
in €m	H1 2014	H1 2013	Change in %
Residential Units k	184.7	179.4	3.0%
Rental income	376.7	364.0	3.5%
Vacancy rate %	3.8%	3.9%	-0.1pp
Monthly in-place rent €/sqm excl. DeWAG	5.49	5.38	2.0%
Adjusted EBITDA Rental	236.0	222.1	6.3%
Adj. EBITDA Rental / unit in €	1,317	1,230	7.1%
Income from disposal of properties	138.9	166.9	-16.8%
Adjusted EBITDA Sales	22.4	19.6	14.3%
Adjusted EBITDA	258.4	241.7	6.9%
FFO 1	130.3	103.4	26.0%
FFO 2	152.7	123.0	24.1%
FFO 1 before maintenance	199.4	174.9	14.0%
AFFO	119.5	91.8	30.2%
Fair value market properties3	11,369.2	10,326.7	10.1%
NAV3	5,038.2	4,782.2	5.4%
LTV, in %3	51.2%	50.2%	+1.0pp
FFO 1 / share in €1.3	0.54	0.52	4.9%
NAV / share in €1.2.3	20.97	21.33	-1.7%

1) Based on the shares qualifying for a dividend on the reporting date June 30, 2014: 240,242,425 and June 30, 2013: 200,000,000

2) NAV / share H1 2014 vs YE 2013, based on the shares qualifying for a dividend on the reporting date Jun 30, 2014: 240,242,425 and Dec 31, 2013: 224,242,425

3) H1 2014 vs YE 2013

Adjusted EBITDA Rental up driven by rental segment

Bridge to Adjusted EBITDA Rental segment

(€m)	H1 2014	H1 2013
Profit for the period	70.0	440.2
Interest expenses / income	142.6	121.5
Income taxes	30.6	185.3
Depreciation	3.4	2.8
Net income from fair value adjustments of investment properties	-20.8	-523.9
EBITDA IFRS	225.8	225.9
Non-recurring items	30.7	14.2
Period adjustments	1.9	1.6
Adjusted EBITDA	258.4	241.7
Adjusted EBITDA Rental	236.0	222.1
Adjusted EBITDA Sales	22.4	19.6

(€m) H1 2014 H1 2013 Average number of units over the period 179,198 180,562 Rental income 376.7 364.0 Maintenance -69.1 -71.5 Operating costs -71.6 -70.4 Adjusted EBITDA Rental 236.0 222.1

Sales segment

(€m)	H1 2014	H1 2013
Number of units sold	1,892	2,587
Income from disposal of properties	138.9	166.9
Carrying amount of properties sold	-120.9	-154.0
Revaluation of assets held for sale	11.3	11.1
Profit on disposal of properties (IFRS)	29.3	24.0
Operating costs	-8.8	-6.0
Period adjustments	1.9	1.6
Adjusted EBITDA Sales	22.4	19.6

Evolution of Adjusted EBITDA (€m)

• Adjusted EBITDA Rental increased by DeWAG contribution, slight rent increase of 2.0% on a like for like level.
• Adjusted EBITDA Rental per unit up by 7.1% due to DeWAG contribution
• Adjusted EBITDA Sales decreased due to reduced sales volumes, while step-ups improved significantly in the privatisation segment
• Non-recurring items reflect costs of closing and integrating DeWAG.

1) Based on average number of units over the period

© Deutsche Annington Immobilien SE

H1 2014 – P&L development

P&L					Comments
			Change
(€m)	H1 2014	H1 2013	(€m)	%
Income from property letting	542.3	523.2	19.1	3.7
Rental income	376.7	364.0	12.7	3.5	DeWAG rental income contribution EUR 15.4m 
Ancillary costs	165.6	159.2	6.4	4.0
Other income from property management	9.0	9.0	0.0	0.0
Income from property management	551.3	532.2	19.1	3.6
Income from sale of properties	138.9	166.9	-28.0	-16.8	Lower sales volume of 1.892 units (vs 2.587 units in 
Carrying amount of properties sold	-120.9	-154.0	33.1	-21.5	H1 2013)
Revaluation of assets held for sale	11.3	11.1	0.2	1.8	DeWAG sold 109 units @ EUR 19.4m 
Profit on disposal of properties	29.3	24.0	5.3	22.1
Net income from fair value adjustments of investment properties	20.8	523.9	-503.1	-96.0	Lower sales volume at significantly increased step  up in privatisation of 33.5% (vs 21.4% in H1 2013)
Capitalised internal modernisation expenses	34.2	8.7	25.5	293.1
Cost of materials	-246.4	-241.5	-4.9	2.0	Increasing contribution of TGS to capitalized 
Expenses for ancillary costs	-160.6	-159.4	-1.2	0.8	maintenance
Expenses for maintenance	-61.3	-54.7	-6.6	12.1
Other costs of purchased goods and services	-24.5	-27.4	2.9	-10.6
Personnel expenses	-87.9	-73.5	-14.4	33.7
Depreciation and amortisation	-3.4	-2.8	-0.6	21.4	Personnel expenses increased mainly due to 
Other operating income	19.8	19.2	0.6	3.1	increased staff level from the ramp-up of the TGS
Other operating expenses	-74.9	-43.4	-31.5	72.6	activities
Financial income	2.8	7.1	-4.3	-60.6
Financial expenses	-145.0	-128.4	-16.6	12.9
Profit before tax	100.6	625.5	-524.9	-83.9
Income tax	-30.6	-185.3	154.7	-83.5
Current income tax	4.9	2.4	2.5	104.2
Others (incl. deferred tax)	-35.5	-187.7	152.2	-81.1
Profit for the period	70.0	440.2	-370.2	-84.1

H1 2014 – P&L development (cont'd)

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P&L					Comments
			Change
(€m)	H1 2014	H1 2013	(€m)	%
Income from property letting	542.3	523.2	19.1	3.7
Rental income	376.7	364.0	12.7	3.5
Ancillary costs	165.6	159.2	6.4	4.0
Other income from property management	9.0	9.0	0.0	0.0
Income from property management	551.3	532.2	19.1	3.6
Income from sale of properties	138.9	166.9	-28.0	-16.8
Carrying amount of properties sold	-120.9	-154.0	33.1	-21.5
Revaluation of assets held for sale	11.3	11.1	0.2	1.8
Profit on disposal of properties	29.3	24.0	5.3	22.1
Net income from fair value adjustments of investment properties	20.8	523.9	-503.1	-96.0
Capitalised internal modernisation expenses	34.2	8.7	25.5	293.1
Cost of materials	-246.4	-241.5	-4.9	2.0
Expenses for ancillary costs	-160.6	-159.4	-1.2	0.8
Expenses for maintenance	-61.3	-54.7	-6.6	12.1
Other costs of purchased goods and services	-24.5	-27.4	2.9	-10.6
Personnel expenses	-87.9	-73.5	-14.4	33.7
Depreciation and amortisation	-3.4	-2.8	-0.6	21.4
Other operating income	19.8	19.2	0.6	3.1
Other operating expenses	-74.9	-43.4	-31.5	72.6
Financial income	2.8	7.1	-4.3	-60.6
Financial expenses	-145.0	-128.4	-16.6	12.9
Profit before tax	100.6	625.5	-524.9	-83.9
Income tax	-30.6	-185.3	154.7	-83.5
Current income tax	4.9	2.4	2.5	104.2
Others (incl. deferred tax)	-35.5	-187.7	152.2	-81.1
Profit for the period	70.0	440.2	-370.2	-84.1

Increase mainly driven by acquisition und integration costs for DeWAG shown as nonrecurring items in the management accounts

2013: EUR 5.1m income from S-Loan contribution

Increase in prepayment penalties (to reach 50% unencumberance) and commitment fees of EUR -24.1m (2013: EUR -15.2m)

Valuation effects from financial instruments of EUR -9.7m (2013: EUR +24.1m)

Deferred tax 2013 driven by valuation uplift of investment properties

© Deutsche Annington Immobilien SE

Societe Generale 9 42 th Pan-European Real Estate Conference - London, 1st October 2014

Overview of DA's modernisation and maintenance split

Maintenance and modernisation	H1 2014 (€m)		Comments
	H1 2014	H1 2013
Maintenance expenses	69.1	71.5
Capitalised maintenance	11.0	11.6	Clear increase reflects successful take-off of  investment programme: energy efficiency
Modernisation work	61.4	6.3	projects in 6800 units & senior living projects in 2000 units started
Total cost of modernisation and maintenance
work	141.5	89.4
Thereof sales of own craftmen's organisation	78.6	56.7	Revenues of in-house craftsmen organisation  increased due enlargement of TGS` services to more modernisation projects.
Thereof bought-in services	62.9	32.7	Increase mainly due to energetic modernisation 
Modernisation and maintenance / sqm [€]	12.36	7.76

H1 2014 – Balance sheet evolution

Overview
(€m)	June 30, 2014	Dec. 31, 2013
Investment properties	11,320.4	10,266.4
Other non-current assets	84.9	86.2
Total non-current assets	11,405.3	10,352.6
Cash and cash equivalents	329.2	547.8
Other current assets	138.1	192.4
Total current assets	467.3	740.2
Total assets	11,872.6	11,092.8
Total equity attributable to DA shareholders	3,975.9	3,805.5
Non-controlling interests	15.2	12.5
Total equity	3,991.1	3,818.0
Other financial liabilities	5,996.0	5,553.0
Deferred tax liabilities	995.3	925.0
Provisions for pensions and similar obligations	313.8	291.0
Other non-current liabilities	63.2	61.7
Total non-current liabilities	7,368.3	6,830.7
Other financial liabilities	267.8	212.1
Other current liabilities	245.4	232.0
Total current liabilities	513.2	444.1
Total liabilities	7,881.5	7,274.8
Total equity and liabilities	11,872.6	11,092.8

Rent increase on track, vacancy yoy slightly decreased

DA Residential Portfolio June 30, 2014
	Units		Area	Vacancy		In-Place Rent		Rent l-f-l*
Portfolio Segment	#	%	(´000 sqm)	%	Y-o-Y in %	€m (annualised)	€/sqm	Y-o-Y in %
Operate	72,769	39.4	4,618	3.0	(0.1)	301.4	5.61	+1.5
Upgrade	47,965	26.0	3,031	3.1	+0.1	194.5	5.52	+2.2
Optimise	33,479	18.1	2,129	3.3	+1.3	146.6	5.94	+3.2
RENTAL ONLY	154,213	83.5	9,778	3.1	+0.2	642.4	5.65	+2.1
Privatise	20,790	11.3	1,423	5.0	(0.2)	88.3	5.44	+1.7
Non-Core	9,679	5.2	608	11.9	+0.3	27.6	4.30	+0.9
TOTAL	184,682	100.0	11,809	3.8	(0.1)	758.3	5.56	+2.0

* excluding DeWAG

Note: Rounding errors may occur

Investment Process

	Year 1	Year 2	Year 3
	Investment Definition & Decision
Heat insulation		Construction of vintage year 2
			Rent increases of vintage year 2
	Investment Definition & Decision
Heating system		Construction of vintage year 2
		Rent	increases of vintage year 2
	Investment Definition & Decision
Apartments		Construction of vintage year 2
		Rent increases of vintage	year 2

Significant efficiency gains by thorough product standards from apartment modernization to new construction

Extension strategy

Buildings

New

construction

Product standardization is a cornerstone of the industrialization of DA's construction processes

Example: progressive standardization of bathrooms

• 1. Implementation of private brand for ceramics and armatures
• 1. Concept for DAIG standard bathroom types
• 1. Development and implementation of a fixed price complete bathroom solution for sitting tenants

Next steps: White label products for central heating systems and construction chemistry products

Example: Development of a supply chain optimization through standardization of windows

• Preproduction of standardized windows in eastern Europe
• Central delivery
• Installation by own craftsmen organization

Further potentials: doors and balconies

Example: Standardized attic conversions in Darmstadt

• Prefabricated modules allow for a on-site installation time reduction of up to 50%
• Significant cost reduction and thus enlargement of attic conversion potential
• Further potentials: doors, balconies and new construction

Alignment of product standards with:

• Local demand
• Demographic trends
• Internal letting processes

Exploitation of purchasing power by central procurement

Installation by own craftsmen organization TGS

Significant synergy potential with Deutsche Annington management and ownership

	Rents	 Catch-up to market rent and increase rental growth by improved letting effort (both)  Planed vacancy reduction of 0.5pp in vacancy rate – target reached after two years (DeWAG)	Vitus Year 1		DeWAG Year 1		Combined Year 1
Property Related Improvements	Costs	 Reduce Bad Debt to DAIG's target of 1% of NCR over the first two years (Vitus)  Reduce Non-Recoverable Vacancy Costs to DAIG's levels (DeWAG)	€1m Year 2	+	€6m Year 2	=	€7m Year 2
	Moderni sation	 Higher average rental growth and slightly lower Maintenance costs due to investment activities (both)  Identified investment opportunities of c. €65m through due diligence phase (both)	€10m Year 3	+	€9m Year 3	=	€19m Year 3
Administration Improvements	Property Management Costs	 DAIG's scalable management platform allows significant headcount and administration cost synergies (both)  Units managed at DAIG's low marginal costs (both)  No takeover of DeWAG personal	€15m	+	€10m	=	€25m
Financing Improvements	Lower Interest (assumption driven)	 Potential synergies due to DAIG's significant lower refinancing costs. (both)  BBB rating and unsecured financing allows refinancing at c. 1.0pp better than existing (both)			Up to €	8m

Rating: investment grade rating from S&P

Corporate investment grade rating

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB	Stable	18 June 2014

Bond ratings

	Amount	Issue Price	Coupon	Maturity Date	Rating
3 years 2.125% Euro Bond	€ 700m	99.793%	2.125%	25 July 2016	BBB
6 years 3.125% Euro Bond	€ 600m	99.935%	3.125%	25 July 2019	BBB
4 years 3.200% Yankee Bond	USD 750m	100.000%	3.200% (2.970%)*	2 Oct 2017	BBB
10 years 5.000% Yankee Bond	USD 250m	98.993%	5.000% (4.580%)*	2 Oct 2023	BBB
8 years 3.625% EMTN	€ 500m	99.843%	3.625%	8 Oct 2021	BBB
8 years 2.125% EMTN	€ 500m	99.412%	2.125%	9 July 2022	BBB
60 years 4,625% Hybrid	€ 700m	99.782%	4.625%	8 Apr 2074	BB+
*EUR-equivalent re-offer yield

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This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of DA ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from DA's current business plan or from public sources which have not been independently verified or assessed by DA 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 DA in respect of the achievement of such forward-looking statements and assumptions.

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IR Contact & Financial Calendar

Contact	Financial Calendar	H2 2014
Investor Relations	August 4-5	Management Roadshow, London
Deutsche Annington Immobilien SE	August 6	Management Roadshow, Brussels
Philippstraße 3	August 7	Management Roadshow, Amsterdam
44803 Bochum, Germany	Sep 9	Management Roadshow, Boston
Tel.: +49 234 314 1609 investorrelations@deutsche-annington.com	Sep 10-11	BAML Conference, New York
	Sept 17	DAIG Capital Markets Day
http://www.deutsche-annington.com	Sep 22	Berenberg/GS Conference, Munich
	Sep 23	Baader Bank Conference, Munich
	Sep 25	EPRA Conference, London
	Oct 1	SocGen Conference, London
	Oct 30	DAIG Interim Report Jan.-Sept. 2014
	Oct 31	Management Roadshow, location tbc
	Nov 4-5	Management Roadshow, London
	Nov 12	Management Roadshow, location tbc
	Dec 1	Berenberg Conference, Penny Hill (UK)