LEG Immobilien SE

Earnings Release • May 28, 2013

LEG Immobilien AG

Q1 Results - 2013

28-May-2013

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 realized 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 Q1-2013
• II. Portfolio and Operating Performance
• III. Financial Performance
• IV. Business Update and Outlook
• V. Appendix

I. Highlights Q1-2013

Highlights Q1-2013

Overall Company Development

• IPO Completed successful listing on the Frankfurt stock exchange (1st February 2013)
• Largest European real estate IPO to date
• Successful integration of Bocholt portfolio
• Buildup of acquisition pipeline

Strong Operational Performance

• In-place rent €4.91/sqm/month (+2.1% from €4.81 in Q1-2012)
• Occupancy up to 96.8% (+90bps from 95.9% in Q1-2012)
• Maintenance & capex at €3.20/sqm (annualized approx. 12.80 €/sqm)
• Significantly lower rate of (capitalized) capex over (expensed) maintenance (36.4% in Q1- 2013 vs. 56.8% in Q1-2012); no larger modernisation projects
• FY-2013 capex/maintenance ratio expected to revert to historic average of approx. 50/50

Financial Performance Firmly on Track – Temporary Effect from Higher Maintenance Expense

• Rental income €89.2m (+4.3% from €85.6m; +3.0% excl. Bocholt transaction)
• Adjusted EBITDA €54.2m (-3.1% from €56.0m); +€5.1m higher maintenance YOY
• FFOI €33.8m (-4.8% from €35.5m); higher maintenance YOY
• AFFO €26.8m (+2.3% from €26.2m); €2.8m higher capex & maintenance YOY
• EPRA NAV €2,423m / €45.74 per share (up from 2,368 in Q4-2012)

II. Portfolio and Operating Performance

Portfolio Overview

Rent and Occupancy Growth Across All Submarkets

Total Portfolio
∆ (YOY)
# of units	90,921	+1.2%
In place rent (sqm)	€4.91	+2.1%
Occupancy	96.8%	+90bps

Note: Light blue areas indicate areas where LEG does not own properties.

High Growth Markets
∆ (YOY)
# of units	31,488	+3.9%
In place rent (sqm)	€5.46	+3.1%
Occupancy	98.5%	+50bps

Stable Markets with Attractive Yields
∆ (YOY)
# of units	32,039	0%
In place rent (sqm)	€4.62	+0.9%
Occupancy	96.0%	+110bps

Higher Yielding Markets
∆ (YOY)
# of units	26,005	0%
In place rent (sqm)	€4.54	+1.2%
Occupancy	95.5%	+90bps

Rent Development

Stable Organic Growth – Accelerating Momentum Ahead

Total Rental Income (€m) Residential Rent (€/sqm/month)

• Growth accelerating again in 2013
• Q4-2012 rental growth impacted by one-off effect from refinancing of subsidized loans
• New Mietspiegel in Munster in Q1-2013 (+6.5% avg. increases in the city; LEG rent adjustments as of 1st July)

Occupancy Development

Rising Occupancy due to Strong Tenant Demand and Improving Efficiency

• LEG benefitting from favourable demand/supply environment
• Positive development across all sub-markets
• Reorganisation of the management platform also reflected in increasing productivity of letting activities

Capex & Maintenance Spend as Planned – Temporary Higher Maintenance Ratio

• Capex & maintenance at sustainable solid levels (approx. €12.80/sqm annualised)
• Q1-2013 total capex & maintenance in-line with expected annual spend of €77-80m
• Significantly lower capitalization rate vs. Q1- 2012 (36.4% vs. 56.8%)
• Capex/Maintenance ratio expected to revert back to historic long-term average of approx. 50/50 in FY-2013

III. Financial Performance

AFFO 30.6 30.0 Higher capex

/see above

Financial Highlights

Q1-2012 Q1-2013

Q1-2012 Q1-2013

Income Statement

Condensed Income Statement (€ million) Net rental and letting income	Q1-2013 59.5	Q1-2012 58.3	• Rental income +€3.6m/+4.3% − +3.0% excl. acquisition − Occupancy +90bps
Net income from the disposal of investment property Net income from the valuation of investment property	-0.2 0.0	-0.6 0.0	• Temporary higher maintenance ratio (€5.1m ); FY budget remains unchanged)
Net income from the disposal of real estate inventory Net income from other services Administrative and other expenses	-0.9 0.8 -11.4	-1.0 0.7 -7.7	• Release of €2.3m provisions in Q1-2012 • €1.0m Long Term Incentive Plan Q1- 2013- non-cash pass through item
Other income Operating earnings Net finance costs Earnings before income taxes	0.6 48.4 -36.5 11.9	0.7 50.4 -34.5 15.9	• Lower cash interest (€20.6m vs. €22.0m) • Non-cash loan amortization €10.2m
Income tax expense	0.6	1.2	• Cash taxes:
Consolidated net profit	11.3	17.1	reimbursement of €0.2m

Adjusted EBITDA

€ million	Q1-2013	Q1-2012
EBITDA	50.5	52.6	 Rising rental income offset by
Net income from the valuation of investment property	0.0	0.0	temporary effect from higher maintenance (€5.1m)
Long term incentive programm (LTIP)	1.0	0.0
Non-recurring project costs	1.8	2.0	 Project costs:  Restructuring & refinancing
Extraordinary and prior-period expenses and income	-0.2	-0.2	(€1.4m)  Others (€0.4m)
Net income from the disposal of investment property	0.2	0.6	 Minimal disposals of non-core assets  37 units
Net income from the disposal of real estate inventory	0.9	1.0
Adjusted EBITDA	54.2	56.0

FFO I

€ million	Q1-2013	Q1-2012
Adjusted EBITDA	54.2	56.0
Cash interest expenses and income	-20.6	-22.0	• Lower cost of debt post refinancing • Higher interest
Cash income taxes	0.2	1.5	charges in Q2 + Q4 due to accruals
FFO I (not including disposal of investment property)	33.8	35.5	• Tax reimbursement in
Net income from the disposal of investment property	-0.2	-0.6	Q1-2012 (€1.5m)
FFOII (including disposal of investment property)	33.6	34.9
Capex	-7.0	-9.3	• €2.8m higher capex & maintenance
Capex-Adjusted FFO I (AFFO)	26.8	26.2	(YOY)

FFO Bridge

Focus: Cash Effective Interest Expense

€ million	Q1-2013	Q1-2012
Reported Interest Expense	35.1	36.1
Interest Expense Related to Loan Amortization	-10.2	-10.8
Refinancing Fees	-1.9	0.0
Prepayment Penalties	0.0	-1.1
Interest on Shareholder Loans	-0.1	-0.3
Interest Charges Relating To Valuation of Assets/Liabilities	-0.6	-0.1
Leasing Related Interest Expense	-0.4	-0.4
Interest Expenses related to Changes in Pension Provisions	-1.0	-1.1
Interest Income	-0.3	-0.3
Cash Effective Interest Expense	20.6	22.0

EPRA-Net Asset Value

€ million	Q1-2013	2012
Equity*	2,147.3	2,085.5
Note: Shareholder loans to be converted in to equity		40.5
Effect of exercising options, convertible loans and other rights	0.0	0.0
NAV	2,147.3	2,085.5
Fair value of financial derivates	78.9	89.7
Deferred taxes	196.5	193.1
EPRA NAV	2,422.7	2,368.3
Number of shares outstanding	52,963,444	52,963,444
EPRA NAV per share in €	45.74	44.72

€40.5m increase from shareholder debt-toequity Swap in Q1-2013

* including minorities

Strong Balance Sheet Secures Defensive Profile and Paves Way for Growth

€ million	Q1-2013	2012
Investment Property	4,943.2	4,937.1	Capex and consolidation of
Other non-current assets	111.3	114.1	remaining units of
Non-current assets	5,054.5	5,051.2	Bocholt-portfolio
Receivables and other assets	71.8	50.7	• €17.8m IPO
Cash and cash equivalents	120.7	133.7	related costs to be reimbursed by
Current assets	192.0	184.4	selling
Assets hold for disposal	4.5	2.2	shareholders in
Total Assets	5,251.0	5,237.8	Q2-2013 • Neg. financing CF
Equity	2,147.3	2,085.5	(e.g. pre-payment penalties)
Non-current financial liabilities	2,302.4	2,102.9	• One-time costs
Other non-current liabilities	473.2	520.6	from Q1+Q4
Non-current liabilties	2,775.6	2,623.5
Current financial liabilities	185.7	396.8	Closing of several
Other current liabilities	142.4	132.0	refinancing in Q1- 2013
Current liabilties	328.1	528.8
Total Equity and Liabilities	5,251.0	5,237.8

Ample Liquidity for Growth and Headroom to Increase LTV (max. 55%)

€ million	Q1-2013	2012
Financial Debt	2,488.1	2,499.7
Cash & Cash Equivalents	-120.2	-133.7	IPO-reimbursement (€17.8m) not yet
Net Debt	2,367.9	2,366.0	included
Investment Properties	4,943.2	4,937.1
Properties held for sale	4.5	2.2
	4,947.7	4,939.3
Loan to Value (LTV) in %	47.86	47.90

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

No major refinancing before 2016

IV. Business Update and Outlook

Business Update

Strong Start to the Year - Delivering on Acquisitions

Acquisitions:

• Successful signing of approx. 2,200 units in core markets
• Acquisitions team recently strengthened with additional experienced hires
• Currently approx. 20,000 units under review with some deals in advanced stages of due diligence
• Financial flexibility is a competitive advantage
• On track to reach FY-2013 target of 5,000 units/ FY-2014 target of 10,000 units

Rental growth:

• 41% of portfolio with expected new Mietspiegels in 2013 (64% of Orange Markets)
• E.g. new Mietspiegel in Munster in March 2013 (+6.5%)
• Growth markets Dusseldorf and Mettmann (greater Dusseldorf) expected to release new rent tables
• Contract for refinancing of remaining €72.5m loan signed for a 10 yr term
• Currently negotiating a warehouse line of credit to increase firepower for acquisitions

Acquisition

Acquisition of approx. 2,200 Unit Portfolio in Mostly Stable Markets

• Move rent and occupancy levels to market levels (approx. 5 percentage points upside) • Ability to leverage LEG's operating presence in the portfolio's locations with low incremental costs • LEG is currently sourcing acquisition financing at approx. 60-65% LTV Investment Highlights Target Vacancy (%) Target Rent (€/sqm) Operating Strategy • Acquired 2,200 units in primarily "green markets" (Dortmund, Essen, Bochum) • Assets in attractive micro-locations within the respective cities • Annual rental income €6.1m, initial annual FFO contribution of at least €2.5m • Consolidation as of 1st August 4.74 4.97 In-place Market 8.2% 4.7% In-place Market Economics • 8%+initial FFO yield with attractive upside from improving rents and vacancies to market levels • The equity invested projected to be at an noticeable discount to NAV

Attractive Market Fundamentals Promise Continued Defensive Growth

Rental income:		Organic growth in 2013 > 2%
Maintenance/Capex:		approx. €77-80m or €13 /sqm
Acquisitions:		approx. 10,000 units by end 2014
FFO I (excluding	acquisitions):	€137m - €140m (upside from recent deal c. €1m)
Dividend:	Suggested for 2012: €0.41/share	2013 onwards: 65% of FFO I

V. Appendix

Expected New Mietspiegel in 2013

Expected Time	Growth Market1	Market1 Stable	Higher Yielding1	Total Portfolio1
Q1 – 2013	4,881 units (mainly Cologne)	11,931 units (mainly Dortmund)	1,390 units	18,202 units
Q2 – 2013	6,113 units (mainly Munster)	682 units	692 units	7,487 units
Q3 – 2013	6,086 units (mainly Dusseldorf)		1,158 units	7,472 units
Q4 – 2013	3,073 units (mainly Bonn)	228 units	1,155 units	4,228 units
Total	20,153 units	12,841 units	4,395 units	37,389 untis

Thereof:
- Dusseldorf	6,062 units
- Bonn	2,237 units
- Cologne	3,514 units
- Munster	6,113 units
- Dortmund		11,563 units
- Others	2,227 units	1,278 units	4,395 units

1) Sub-portfolios also include the restricted units

LEG Share

Shareholder Structure

EPRA Weighting
EPRA Europe	1.05%
EPRA Germany	11.45%

LEG Share Since IPO

Note: MDAX inclusion expected as fast entrant in June

Financial Calendar

Date	Event
19.07.2013	Annual General Meeting, Dusseldorf
30.08.2013	Release of the Quarterly Report Q2 as of 30 June 2013
29.11.2013	Release of the Quarterly Report Q3 as of 30 September 2013

Portfolio (as of 31 March 2013)

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

Market	GAV Residential Assets (€m)	% of Total Residential GAV	GAV/ sqm (€)	I n-Place Rent Multiple	GAV Commercial/ Other Assets (€m)	Total GAV
High Growth Markets	2,136	46%	1,029	16.0	180	2,316
Stable Markets with Attractive Yields	1,415	31%	684	12.9	82	1,498
Higher Yielding Markets	999	22%	622	12.1	43	1,042
Subtotal NRW	4,551	98%	791	14.0	305	4,856
Non-NRW	79	2%	850	14.5	12	91
Total Portfolio	4,629	100%	792	14.0	317	4,946
Leasehold – Land Values (IAS 16)						28
Inventories (IAS 2)						16
Total Balance Sheet						4,992

Contact

LEG Immobilien AG - Investor Relations

Burkhard Sawazki Head of Investor Relations Tel: +49 211 4568 204 burkhard.sawazki@leg-nrw.de

Frank Hilbertz Manager Investor Relations Tel: +49 211 4568 284 frank.hilbertz@leg-nrw.de

Hans-Böckler-Str. 38 40476 Dusseldorf