LEG Immobilien AG

Full Year Results 2013

27th March 2014

Disclaimer

While the company has taken all reasonable care to ensure that the facts stated in this presentation are accurate and that the opinions contained in it are fair and reasonable, this presentation is selective in nature and is intended to provide an introduction to, and an overview of the Company's business. Any opinions expressed in this presentation are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained in this presentation. Where this presentation quotes any information or statistics from any external sources, you should not interpret that the Company has adopted or endorsed such information or statistics as being accurate.

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

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

Agenda

I. Highlights FY-2013
II. Portfolio and Operating Performance
III. Financial Performance
IV. Business Update and Outlook
V. Appendix

I. Highlights FY-2013

Highlights FY-2013

Overall Company Development

Acquisition of approx. 6,700 units in six off-market transactions; Interim target for FY- 2013 exceeded
Well on track to acquire at least 10,000 units until end FY-2014
Preparation of launch of multimedia business; noticeable future earnings impact

Sound Underlying Operational Performance

In-place rent €4.96 /sqm (+2.3% like-for-like growth, +3.0 % for free-financed units)
Occupancy at 97.3% on L-F-L basis (+40bps YOY; 97.1% including acquisitions); Positive development across all segments
Slightly higher maintenance/turn costs in line with budget due to strong letting momentum
Total expenses for maintenance and capex of €14 /sqm
Capex ratio decreased to a normalised level of 51.1% (2012: 54%)

Financial Performance confirms FY Targets

Rental income €360.5m (+4.7% YOY from €344.3)
Adjusted EBITDA €231.7m (+3.9% YOY from €223.1); +5.0% adjusted for higher maintenance ratio
FFO I €141.2m (+3.5% YOY from €136.5m); +6.2% adjusted for extraordinary tax effect in FY-2012
AFFO €97.5m (+2.7% YOY from €95.0m)
NAV €2,571.9m / €48.56 per share (+ 8.4% YOY)
DPS proposal €1.73

II. Portfolio and Operating Performance

Portfolio Overview Rent and Occupancy Growth across all Submarkets

Total Portfolio

	31 Dec. 2013	∆ (YOY)
# of units	94,311	+3.7%
In-place rent (sqm)	€4.96 (€4.97)**	+2.1% (+2.3%)**
Occupancy	97.1% (97.3%)**	+20bps (+40bps)**	** like for like

High-Growth Markets
∆ 31 Dec. 2013 (YOY)
# of units	31,506	+0.1%
In-place rent (sqm)	€5.54 (€5.54)**	+3.0% (+3,0%)**
Occupancy	98.8% (98.8%)**	+20bps (+20bps)**

Stable Markets with Attractive Yields
∆ 31 Dec. 2013 (YOY)
# of units	34,631	+8.1%
In-place rent (sqm)	€4.67 (€4.66)**	+1.5% (+1.5%)**
Occupancy	96.5% (96.9%)**	+30bps (+70 bps)**

Higher-Yielding Markets
∆ 31 Dec. 2013 (YOY)
# of units	26,697	+2.6%
In-place rent (sqm)	€4.58 (€4.58)**	+1.4% (+1.6%)**
Occupancy	95.6% (95.9%)**	+10bps (+40bps)**

Sound Organic Growth – Accelerating Momentum in Q4

Organic rent growth of +2.7% YOY
L-f-l rent growth (per sqm) of +2.3%; l-f-l rent growth (per sqm) of +3.0% for free-financed units emphasizes underlying dynamics
Significant vacancy reduction in Green and Purple markets

Occupancy Development

Very Low Vacancy Provides Evidence for Quality of Portfolio

L-f-l vacancy rate of only 2.7% /-40bps YOY (top position among German residential peers)
LEG benefitting from favourable demand/supply environment
Positive development across all sub-markets with strong letting performance in Green and Purple markets:
Well-maintained asset base, good quality of micro locations, strong property management platform

Capex & Maintenance

Temporary Higher Maintenance/Capex due to Strong Letting Performance

III. Financial Performance

Financial Highlights FY-2013

Income Statement FY-2013

Condensed Income Statement (€ million)	2013	2012	 Higher rental income (+€16.2m/+4.7%); organic
Net rental and letting income	257.7	247.7	growth (+2.7%)  Higher maintenance expenses (-€6.4m)
Net income from the disposal of investment property	-1.8	-1.4	 Lower opex
Net income from the valuation of investment property	81.6	120.3	 Valuation uplift of +1.7% YOY
Net income from the disposal of real estate inventory	-3.1	-1.8	 €3.3m Long Term Incentive Plan – non-cash
Net income from Other services	2.3	3.0	pass-through item  C. €10.9m non-recurring
Administrative and Other expenses	-51.5	-59.4	items (incl. former development project)  Stable recurring admin.
Other income	0.2	1.7	costs of €35.2m
Operating earnings	285.5	310.1	 Slightly higher cash interest expenses (€91m vs. €90.1m)
Net finance costs	-126.9	-195.6	 Lower non-cash loan amortisation (mainly due
Earnings before income taxes	158.6	114.5	to refinancing effect in 2012)  2012 burdened by
Income tax expense	-21.7	-2.4	€37.8m prepayment penalties
Consolidated net profit	136.9	112.1	 Deferred taxes (thereof cash taxes: +€0.5m)

Adjusted EBITDA FY-2013

€ million	2013	2012	 +€6.4m higher
EBITDA	294.1	318.7	maintenance cost in FY-2013
Net income from the valuation of investment property	-81.6	-120.3	 Valuation uplift of +1.7% on back of operating
Long-term incentive program (LTIP)	3.3	-	performance
Non-recurring project costs	7.9	20.3	 IFRS implementation  Restructuring, refinancing, etc.
Extraordinary and prior-period expenses and income	3.2	1.2	 €4.1m risk provision for a former development project
Net income from the disposal of investment property	1.7	1.4
Net income from the disposal of real estate inventory	3.1	1.8	 Winding down of former development business  Disposals at €1.4m premium to book values
Adjusted EBITDA	231.7	223.1	of €7.6m  Inventories: €10.1m

FFO Calculation FY-2013

€ million	2013	2012
Adjusted EBITDA	231.7	223.1	 Higher financial debt due
Cash interest expenses and income	-91.0	-90.1	to acquisitions  Slightly lower interest costs (Ø 3,2%;-10bps)
Cash income taxes	0.5	3.5	 Tax reimbursement in FY-2012
FFO I (not including disposal of investment property)	141.2	136.5
Net income from the disposal of investment property	-1.7	-1.4	 Disposals of non-core assets slightly above book value
FFO II (including disposal of investment property)	139.5	135.1
Capex	-43.7	-41.5
Capex-Adjusted FFO I (AFFO)	97.5	95.0	 €8.6m higher capex & maintenance (YOY)

FFO Bridge FY-2013

Focus: Cash Effective Interest Expense FY-2013

€ million	2013	2012
Reported interest expense	131.4	195.0	 Major effect from refinancing in 2012
Interest expense related to loan amortisation	-30.2	-52.9	 Recurring expenses approx. €20m
Refinancing fees	-2.9	-0.6
Prepayment penalties	0.0	-37.8	 Refinancing completed
Interest on shareholder loans	-0.2	-1.4
Interest charges relating to valuation of assets/liabilities	-2.3	-3.5
Leasing related interest expense	-1.6	-1.6
Interest expenses related to changes in pension provisions	-3.6	-4.3
Other interest expenses	-0.2	-1.3
Bank charges	1,5	-
Interest income	-0.9	-1.5
Cash effective interest expense	91.0	90.1

EPRA-Net Asset Value FY-2013

Modification of NAV as Reconciliation with International Standards

€ million	2013	2012
Equity (excl. minority interests)	2,248.8	2,060.6	 €40.5m increase from
Note: Shareholder loans to be converted in to equity	0.0	40.5	shareholder debt-to equity swap in Q1-2013
Effect of exercising options, convertible loans and other rights	-	-
NAV	2,248.8	2,060.6	 Rising rates with positive impact on
Fair value of financial derivatives	52.0	89.7	valuation of interest hedges
Deferred taxes	271.1	221.5
EPRA-NAV	2,571.9	2,371.8	 Only deferred taxes related to investment properties and assets
Number of shares outstanding (m)	52,963	52,963	held for disposal are taken into account
EPRA-NAV per share in €	48.56	44.78*

* adjusted

Balance Sheet FY-2013

Strong Balance Sheet Secures Defensive Profile and Paves Way for Growth

€ million	2013	2012	 Purchases €128.5m  Capex €43.7m
Investment property	5,163.4	4,937.1	 Revaluation €81.6m
Prepayment for investment property	6.9		 Reclassification €28.4m
Other non-current assets	91.9	114.1
Non-current assets	5,262.2	5,051.2
Receivables and other assets	33.8	50.7	 For acquisitions
Cash and cash equivalents	110.7	133.7	consolidated as of H1-2014
Current assets	144.5	184.4
Assets held for disposal	16.4	2.2
Total Assets	5,423.1	5,237.8
Equity	2,276.1	2,085.5
Non-current financial liabilities	2,396.7	2,102.9	 Equity ratio of 42.0%
Other non-current liabilities	443.9	480.2
Non-current liabilities	2,840.6	2,583.1
Current financial liabilities	187.0	396.8
Other current liabilities	119.4	172.4
Current liabilities	306.4	569.2
Total Equity and Liabilities	5,423.1	5,237.8

LTV FY-2013

Liquidity for Acquisitions and Headroom to Enhance LTV (max. 55%)

€ million	2013	2012
Financial debt	2,583.7	2,499.7
Cash & cash equivalents	110.7	133.7
Net Debt	2,473.0	2,366.0
Investment properties	5,163.4	4,937.1	 Low LTV offers significant
Properties held for sale	16.4	2.2	headroom for external growth
Prepayment for investment properties	6.9	-
	5,186.7	4,939.3
Loan to Value (LTV) in %	47.68	47.90

Financing Structure FY-2013

LT Secured Debt, Well-Balanced Maturity Profile, Low Cost of Debt

IV. Business Update and Outlook

Business Update

Strong Prospects for Further External Growth

Acquisitions:

Successful signing of c. 6,700 units in core markets since IPO (off-market transactions)
Well on track to reach acquisition target of total of at least 10,000 units by end of FY-2014
Three smaller portfolios in due diligence process
Financial strengths and broad presence in core markets are key success factors

Launch of multimedia/cable business

Significantly improved package for LEG's tenants for TV, telephone, internet
Noticeable earnings contribution with full effect starting in FY-2015
Additional tenant services are currently under consideration

Cost rent adjustments of approx. 35,000 units in January

Rent increase of 2.1% for rent-restricted units triggers accelerating rent growth in FY-2014

Rising free float /Share overhang resolved

As a result of the secondary placement in January (15.2m shares) the free float climbed to 92.3%*
Rising index weightings in the MDAX and the EPRA indices

*according to definition of Deutsche Boerse; of the former owners only Perry Capital kept a 7.7% share

Details on Recent Transaction

Full Earnings Effect from Signed Acquisitions and Multimedia in FY-2015

2014	Guidance
L-F-L rent growth	upper end of 2-3% range
Maintenance/Capex:	approx. €13 /sqm (capex ratio c. 50%)
Acquisitions:	>10,000 units by end 2014
FFO I:	€155m - €159m/ €2.93 - 3.00 per share; excl. future acquisitions
Dividend	65% of FFO I

V. Appendix

Mietspiegel Overview

Expected New Mietspiegel in 2014

Release Date (expected)	High-Growth Market1	Market1 Stable	Higher-Yielding Market1	Total Portfolio1,2
2014 (Q1)	6,529 units (mainly Dusseldorf, Ratingen)	10,996 units (mainly Hamm, Bochum, Solingen)	2,103 units (mainly Hagen, Lunen)	19,737 units
2014 (Q2)		389 units		389 units
2014 (Q3)	209 units	310 units	5,374 units (mainly Gelsenkirchen, Unna)	5,893 units
2014 (Q4)	399 units	165 units	1,801 units (mainly Recklinghausen)	2,365 units
Total 1,2	7,137 units	11,860 units	9,278 units	28,384 units

Thereof: - Ahlen - Bochum		1,049 units 1,477 units
- Dusseldorf - Gelsenkirchen - Hamm - Ratingen	3,293 units 2,794 units	3,977 units	2,918 units 1,765 units
- Recklinghausen - Siegen - Solingen - Unna		1,027 units 1,451 units	1,211 units	1) Sub-portfolios also include restricted units 2) Total Portfolio also include 109 units Non NRW

LEG – Adj. EBITDA Margin

Leading Profitability in the Sector

Adj. EBITDA margin	2012		2013
	€m	Margin %	€m	Margin %
Reported	223.1	64.8	231.7	64.3
Gap restricted vs. unrestricted rents*	19.4	66.7	22.5	66.4
Positive effect from subsidized loans on interest result**	17.6	66.5	17.4	65.9

• *€4.48 per sqm vs. €5.13 in 2013, €4.49 vs. €5.27 in 2013

• **€Financing costs 1.4% (maturity 30 years) vs. Swap 2.6% +175 bps margin

Reported EBITDA distorted by restricted units (compensation for lower rents included in interest results)
Scenario analysis: Closing gap between restricted vs. unrestricted rents; quantifying the impact from subsidized loans
Adjusted EBITDA margin approx. 160-210 bps higher
Lower Margin in 2014 YOY due to higher maintenance

Stable Asset Values Driven by Property Fundamentals: Rental Growth and Occupancy

	Residential	GAV Residential	% of Total Residential	GAV/	In-Place	Market	GAV Commercial/ Other
Market	Units	Assets (€m)	GAV	sqm (€)	Rent Multiple	Rent Multiple	Assets (€m)	Total GAV
High- Growth Markets	31,506	2,205	45%	1,060	16.1x	13.9x	181	2,386
Stable Markets with Attractive Yields	34,631	1,545	32%	698	12.9x	11.9x	83	1,628
Higher-Yielding Markets	26,697	1,030	21%	625	11.9x	11.2x	42	1,072
Subtotal NRW	92,834	4,780	98%	804	13.9x	12.6x	306	5,086
Portfolio outside NRW	1,477	85	2%	872	14.3x	13.5x	12	97
Total Portfolio	94,311	4,865	100%	806	13.9x	12.6x	318	5,183
Other Assets								38
Total (Incl. Landbank	and DevCo)							5,222

LEG Share Information

Source: LEG

Financial Calendar

Date	Report
27.03.2014	Annual Report 2013
15.05.2014	Quarterly Report Q1 as of 31st March 2014
25.06.2014	Annual General Meeting
12.08.2014	Quarterly Report Q2 as of 30th June 2014
14.11.2014	Quarterly Report Q3 as of 30th September 2014

Contact

LEG Immobilien AG – Investor Relations

Burkhard Sawazki Head of Investor Relations Tel: +49 211 4568 204 [email protected]

Frank Hilbertz Manager Investor Relations Tel: +49 211 4568 284 [email protected]

Hans-Boeckler-Str. 38 40476 Dusseldorf Germany

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LEG Immobilien SE

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