LEG Immobilien SE

Quarterly Report • Aug 10, 2023

H1-2023

LEG Immobilien SE H1-2023 Results

10 August 2023

H1-2023 Results – Agenda

Highlights H1-2023

Portfolio & Operating Performance

Financial Performance

Outlook

While LEG Immobilien SE ("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 forwardlooking 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.

Highlights H1-2023 1

Highlights

Financial Summary H1-2023

|--|

Operating results		H1-2023	H1-2022	+/- %
Net cold rent	€m	414.3	396.2	+4.6%
NOI (recurring)	€m	339.4	336.7	+0.8%
EBITDA (adjusted)	€m	335.2	322.3	+4.0%
FFO I	€m	226.0	241.4	–6.4%
FFO I per share	€	3.05	3.31	–7.9%
AFFO	€m	118.6	79.4	+49.4%
AFFO per share	€	1.60	1.09	+46.8%
NOI margin (recurring)	%	81.9%	85.0%	–310bps
EBITDA margin (adjusted)	%	80.9%	81.3%	–40bps
FFO I margin	%	54.5%	60.9%	–640bps
AFFO margin	%	28.6%	20.0%	+860bps
Portfolio		30.06.2023	30.06.2022	+/- %
Residential units	number	166,890	166,628	+0.2%
In-place rent (l-f-l)	€/m2	6.52	6.25	+4.3%
Capex (adj.)1	€/m2	8.13	13.34	–39.1%
Maintenance (adj.)1	€/m2	5.95	4.98	+19.5%
EPRA vacancy rate (l-f-l)	%	2.6	2.7	–10bps

Balance sheet		30.06.2023	31.12.2022	+/- %
Investment properties	€m	18,919.7	20,204.4	–6.4%
Cash and cash equivalents2	€m	331.4	362.2	–8.5%
Equity	€m	8,052.8	9,083.9	–11.4%
Total financing liabilities	€m	9,397.2	9,460.8	–0.7%
Net debt3	€m	8,967.7	9,036.6	–0.8%
LTV	%	46.6	43.9	+270bps
Average debt maturity	years	6.1	6.5	–0.4
Average debt interest cost	%	1.40	1.26	+14bps
Equity ratio	%	40.2	42.5	–230bps
EPRA NTA, diluted	€m	10,100.7	11,377.2	–11.2%
EPRA NTA per share, diluted	€	136.29	153.52	–11.2%

1 Excl. new construction activities on own land, own work capitalised and consolidation effects. 2 Excluding short term deposits of €79.8m as of H1-2023 (FY-2022: €40.0m). 3 Excl. lease liabilities according to IFRS 16 and incl. short term deposits.

Highlights

Ongoing strong performance of operations

AFFO-guidance increased to €165m - €185m

• AFFO +49.4% to €118.6m
• AFFO p.s. +46.8% to €1.60
• FFO I –6.4% to €226.0m
• Adj. EBITDA-Margin 80.9%
• LTV 46.6%
• Debt @ 6.1y for 1.40%

• NTA p.s. €136.29

• Net cold rent +4.6%

• l-f-l rental growth +4.3%

• l-f-l vacancy 2.6% (–10bps)

• Site visit from Vice-Chancellor/Federal Minister for Economic Affairs and Climate Action Robert Habeck (Green Party) at serial refurbishment site of RENOWATE

• AI-based thermostat from LEG's joint venture seero.io for hydraulic balancing about to start pre-series production
• SBTi to be validated by end of August 2023

AFFO-guidance increased to €165m – €180m

Less capex for new construction and lower energy tax effect

Transaction markets remain calm H1-2023 devaluation of 7.4%

Strong rent growth continues

Increased guidance to +3.8% − +4.0% rental growth

Successful refinancings and strong liquidity position 2023 and 2024 bond maturity covered

AFFO guidance increased to €165m – €180m (vs. €125m – €140m)

Drivers mainly of one-off nature

Stronger market momentum

Stronger market development experienced already in Q1 expected to continue

Favourable market dynamics expected to persist

Forward sale of electricity production at 2022 peak prices

• Pro-actively sold forward 2023 green electricity production
• Uncertainty remained on the extent and application period of the excess profit margin tax Lfl-rent growth 2023e New development capex 2023e
• For the original guidance LEG opted for a conservative approach with regards to taxation

Lower tax on profit from electricity production expected for 2023

Reduction of new development capex

Cancellation of several smaller projects

Lower capex for new development; capex in standing assets confirmed at €35/sqm

c. €3m AFFO effect

c. €19 – 22m AFFO effect

Portfolio & Operating Performance 2

Portfolio transactions

Almost 700 units sold in H1 – some additions from completion of new construction

Number of units based on date of transfer of ownership1,2

1 Residential units. 2 Note: The date of the transaction announcement and the transfer of ownership are usually several months apart. The number of units may therefore differ from other disclosures, depending on the data basis.

Additions

• In Q1 transfer of ownership of one larger portfolio (Düsseldorf and Cologne) signed in 2022
• In Q2 nearly all additions from finished new construction projects

Disposals

• Disposal volume of c.€39m at around book value in H1
• In Q1 one bigger portfolio with 219 units (high rise buildings in weak technical condition) as well as a portfolio of 120 units in Siegen. Additionally small ticket sales of noncore units in Eastern Germany
• In Q2 one bigger portfolio (100 units) and continuation of small ticket sales of non-core units in Eastern Germany

Rent growth gains momentum

Strong rent table growth with 2.1% – cost rent adjustment adds another 0.8%-pts

l-f-l free financed rent development

• Residential rent increase of 4.3% with strong contribution from rent table adjustments
• Cost rent increase of 5.4% for the subsidised units contributed 0.8%-pts to the H1-2023 rent growth
• Free financed rent increase of 4.0%

Capex and Maintenance

Significant reduction as of H1 – on track for 35€/sqm investment into standing portfolio for 2023

• Investments per sqm declined by 23.1% yoy to €14.08/sqm
• Shift towards AFFO steering leads to lower capitalisation rate (58% vs 73% H1-2022) and increases expensed maintenance
• Investments in H1 remained below pro-rata level to achieve guidance of €35/sqm. Capex levels to increase in following quarters with higher share of finished work
• Hence €35/sqm investment guidance still valid
• New construction spending remained on low level of c. €10m

1 Excl. new construction activities on own land, own work capitalised and consolidation effects.

Value-added services

Normalisation of earnings contribution after tailwinds from energy prices in 2022

Financial Performance 3

Financial highlights H1-2023

Net cold rent growth offsets higher energy costs

Net cold rent €m 396.2 414.3 H1-2022 H1-2023 EBITDA (adjusted)1 +4.6%

€m

H1-2022 H1-2023

AFFO

Net cold rent

Growth driven by 4.3% l-f-l rent growth and some positive effects from additions to the portfolio

Net operating income (recurring)

• Normalisation in H1 after -3.9% in Q1
• Margin decline from 85.0% to 81.9% driven by
• Higher operating expenses (–€6.7m) e.g. due to higher non-transferable operating and heating costs
• Decline in other income (–€4.4m) driven by volatile energy markets affecting service entity ESP

EBITDA (adjusted)

Positive effects from other services (recurring), esp. from forward sale of electricity (+€12.2m),

FFO I –6.4% to €226.0m

Negatively affected by higher interest expenses (–€8.9m), higher maintenance costs (ext. procured) (–€11.7m) and decline in own work capitalised (–€4.2m)

AFFO

Reduction of investments (capex) by 33% to €107.5m from €162.0m supports AFFO generation

1 Previous year adapted to new definition, i.e. excluding maintenance (externally-procured services) and own work capitalized.

80.9%

(81.3%)

AFFO Bridge H1-2023

Decline in capex drives strong AFFO improvement

Portfolio valuation H1-2023 – Breakdown of revaluation losses

7.4% valuation decline in H1-2023

Valuation decline by markets l-f-l 1

H2 22

H1 23

Highlights

• Valuation adjustment of –7.4% in H1-2023 after –4.0% in H2-2022
• Average object-specific discount rate of 3.7% at year end 2022 increased to 4.3% (cap rate up from 5.2% to 5.5%)
• Low volume on market transactions

1 Property valuation with cut-off date as of 31 March 2023 and revaluation date as of 30 June 2023.

Portfolio valuation H1-2023

Total Portfolio	166,890	17,671	1,666	4.6%	21.6x	685	18,3561
Higher-Yielding Markets	50,194	3,523	1,158	6.0%	16.7x	95	3,619
Stable Markets	66,754	6,594	1,545	4.8%	20.7x	208	6,802
High-Growth Markets	49,942	7,554	2,293	3.8%	26.1x	382	7,936
Market segment	Residential Units	GAV Residential Assets (€m)	GAV/ m2 (€)	Gross yield	In-Place Rent Multiple	GAV Commercial/ Other (€m)	Total GAV (€m)

1 GAV of IAS 40 portfolio (including leasehold, land value and assets under construction) was €18,920m.

Financial Performance

Well balanced financial profile as at 06/2023

Weighted

2023 and 2024 bond maturity covered

Maturity profile1

Average debt maturity

Average interest cost

Highlights

• Repayment of €52m loan in Q1
• All remaining financing needs for 2023 and 2024 maturing bond covered
• Undrawn RCF of €600m /CP-programme of €600m
• Average debt maturity of 6.1 years
• Average interest cost increase by 25 bps (y/y)
• Interest hedging rate of c.94%
• LTV above medium-term target level of 43%, no effect on ability to refinance
• Net debt/adj. EBITDA2 of 14.0x as at end of June

2024 maturing bond already covered

More than half-way through the entire 2024 refinancing and well on track

Total refinancing volume until 12/2024

Upcoming maturities by instrument and refinancing strategy

51% of financing volumes 11% of total debt to mature until end of 2024

• LEG's diversified financing structure pays off and offers optionality going forward
• All 2023 and 2024 bond maturities as well as first secured financings due in 2024 already covered by mix of unsecured and mainly secured financing at attractive terms as well as cash
• Remaining 2024 secured debt maturities not before 06/2024
• Well on track to roll over entire 2024 maturing secured debt
• Strong liquidity position
• No reliance on disposal proceeds to refinance – disposals offer potential to deleverage

Outlook 4

Outlook

Guidance 2023: Focus on AFFO

Well on track – guidance increased already ahead of H1-reporting

		Guidance 20231
AFFO2		€165m – 180m
Adj. EBITDA margin3		c.80%
l-f-l rent growth		3.8% – 4.0%
Investments		c. 35€/sqm
LTV		Medium-term target level max. 43%
Dividend		100% AFFO as well as a part of the net proceeds from disposals
Disposals		Not reflected1
	2023–2026	Reduction of persistent relative CO emission saving costs in €/ton by 10% achieved by permanent 2
Environment	2023	structural adjustments to LEG residential buildings 4,000 tons CO reduction from modernisation projects 2 and customer behavior change
Social	2023–2026 2023	Improve high employee satisfaction level to 70% Trust Index Timely resolution of tenant inquiries regarding outstanding receivables
Governance	2023	85% of Nord FM, TSP, biomass plant, 99% of all other staff holding LEG group companies have completed digital compliance training

1 Guidance based on 167 k units. 2 Adjusted for capex financed in full by subsidised, long-term loans accounted for at fair value or at cost; currently no such projects are planned; if those projects are contracted, these will be reported separately. 3 Based on the adjusted EBITDA definition effective since business year 2023, i.e. excluding maintenance (externally-procured services) and own work capitalized.

Positive operational trends – valuation declined

Strong rent growth and continued vacancy reduction

High-growth 42.7 Stable 37.3 Higher-yielding 19.9

In-place rent, l-f-l €/m2

Vacancy, l-f-l

Markets

	Total portfolio		High-growth		Stable		Higher-yielding
	H1-2023	 (YOY)	H1-2023	 (YOY)	H1-2023	 (YOY)	H1-2023	 (YOY)
# of units	166,890	+0.2%	49,942	+0.9%	66,754	+0.2%	50,194	–0.6%
GAV residential assets (€m)	17,671	–8.7%	7,554	–10.1%	6,594	–8.2%	3,523	–6.5%
In-place rent (m2 ), l-f-l	€6.52	+4.3%	€7.31	+4.1%	€6.28	+4.7%	€5.98	+3.8%
EPRA vacancy, l-f-l	2.6%	–10bps	1.6%	–40bps	2.4%	–10bps	4.3%	+10bps

AFFO calculation

€m	H1 -2023	H1 -2022
Net cold rent	414.3	396.2
Profit from operating expenses	–9.8	–3.1
Personnel expenses (rental and lease)	–52.6	–51.4
Allowances on rent receivables	–9.7	–8.5
Other income (rental and lease)	–5.0	–0.7
Non -recurring special effects (rental and lease)	2.2	4.2
Net operating income (recurring)	339.4	336.7
Net income from other services (recurring)	17.5	5.2
Personnel expenses (admin.)	–15.0	–15.3
Non -personnel operating costs	–12.1	–14.4
Non -recurring special effects (admin.)	5.4	10.1
Administrative expenses (recurring)	–21.7	–19.6
Other income (admin.)	0.0	0.0
EBITDA (adjusted)	335.2	322.3
Net cash interest expenses and income FFO I	–63.0	–54.1
Net cash income taxes FFO I	–2.7	0.0
Maintenance (externally -procured services)	–47.6	–35.9
Own work capitalised	5.9	10.1
FFO I (including non -controlling interests)	227.8	242.4
Non -controlling interests	–1.8	–1.0
FFO I (excluding non -controlling interests)	226.0	241.4
FFO II (including disposal of investment property)	222.7	240.7
Capex (recurring)	–107.5	–162.0
AFFO (capex -adjusted FFO I)	118.6	79.4

Net cold rent
---------------	--

• +€18.1m or +4.6 %
• Organic growth: + €15.0 m
• Acquisitions (net): + €3.1 m

Profit from operating expenses

Higher operating expenses (–€6.7m) e.g. due to higher non transferable operating and heating costs

Allowances on rent receivables

Lower increase than in previous quarters due to periodic decline in total amount of rent receivables (–€1.2m)

Other income (rental and lease)

Decline in other income (–€4.4 m) driven by volatile energy markets affecting service entity ESP

Net income from other services (rec.)

Positive effects from forward sale of electricity (+ €12.2m)

Maintenance

Increase due to change to AFFO steering and hence lower capitalisation ratio

Balance sheet

€m	30.06.2023	31.12.2022
Investment property	18,919.7	20,204.4
Other non -current assets	512.7	579.0
Non -current assets	19,432.4	20,783.4
Receivables and other assets	277.6	179.5
Cash and cash equivalents	331.4	362.2
Current assets	609.0	541.7
Assets held for sale	14.9	35.6
Total Assets	20,056.3	21,360.7
Equity	8,052.8	9,083.9
Non -current financing liabilities	8,298,3	9,208.4
Other non -current liabilities	2,218.2	2,491.1
Non -current liabilities	10,516.5	11,699.5
Current financing liabilities	1,098.9	252.4
Other current liabilities	388.1	324.9
Current liabilities	1,487.0	577.3
Total Equity and Liabilities	20,056.3	21,360.7

Investment property

• Revaluation: –€1,496.1 m
• Acquisitions (net): + €106.5 m
• Capex: + €105.9 m

Other non -current assets

BCP stake (35.7%) included with market value of €260.8 m

Receivables and other assets

Increase mainly driven by an increase in short -term deposits of €39.9m and not yet invoiced operating costs of €42.9 m

Cash and cash equivalents

• Operating activities: +€264.2m
• Investing activities: –€226.0m (incl. –€39.6m increase in short term deposits)
• Financing activities: – €69.0m (mainly repayment of loans)

Financing liabilities

Shift from non-current to current financing liabilities due to change in maturity profile

Loan to Value

€m	30.06.2023	31.12.2022
Financial liabilities	9,397.2	9,460.8
Excluding lease liabilities (IFRS 16)	18.3	22.0
Cash & cash equivalents1	411.2	402.2
Net Debt	8,967.7	9,036.6
Investment properties	18,919.7	20,204.4
Properties held for sale	14.9	35.6
Prepayments for investment properties and acquisitions	0.4	60.8
companies1 Participation in other residential	299.5	306.7
Prepayments for business combinations	–	–
Property values	19,234.5	20,607.5
Loan to Value (LTV) in %	46.6	43.9

1 Since Q1-2022 calculation adapted to the current standard practices, i.e. inclusion of short-term deposits and inclusion of participation in other residential companies (in particular BCP) into property values.

Loan to Value

Increase to 46.6% as at June 30, 2023 from 43.9% as at December 31, 2022 driven by devaluation effects

Participation in other residential companies

BCP is included with a value of €260.8m based on a share price of €94.60 at Tel Aviv Stock Exchange as at June 30, 2023 (€97.19 as at December 31, 2022)

EPRA NRV – NTA – NDV

€m	30.06.2023			31.12.2022
	EPRA NRV	EPRA NTA1	EPRA NDV	EPRA NRV	EPRA NTA	EPRA NDV
	– diluted	– diluted	– diluted	– diluted	– diluted	– diluted
IFRS equity attributable to shareholders (before minorities)	8,027.7	8,027.7	8,027.7	9,058.6	9,058.6	9,058.6
Hybrid instruments	31.0	31.0	31.0	31.0	31.0	31.0
Diluted NAV (at Fair Value)	8,058.7	8,058.7	8,058.7	9,089.6	9,089.6	9,089.6
Deferred tax in relation to fair value gains of IP and deferred tax on subsidised loans and financial derivatives	2,086.4	2,086.4	–	2,371.9	2,371.9	–
Fair value of financial instruments	–38.9	–38.9	–	–78.5	–78.5	–
Goodwill as a result of deferred tax	–	–	–	–	–	–
Goodwill as per the IFRS balance sheet	–	–	–	–	–	–
Intangibles as per the IFRS balance sheet	–	-5.5	–	–	–5.8	–
Fair value of fixed interest rate debt	–	–	1,089.5	–	–	1,208.3
Deferred taxes of fixed interest rate debt	–	–	-229.5	–	–	–643.6
Revaluation of intangibles to fair value	–	–	–	–	–	–
Estimated ancillary acquisition costs (real estate transfer tax)	1,832.5	–	–	1,955.3	–	–
NAV	11,938.7	10,100.7	8,918.7	13,338.3	11,377.2	9,654.3
Fully diluted number of shares	74,109,276	74,109,276	74,109,276	74,109,276	74,109,276	74,109,276
NAV per share (€)	161.10	136.29	120.35	179.98	153.52	130.27

1 Including RETT (Real Estate Transfer Tax) would result into an NTA of €11,933.2m or €161.02 per share (31.12.2022: €13,332.4m or €179.90 per share).

Income statement

€m	H1-2023	H1-2022	Net operating income (see also p.24)
Net operating income	286.9	242.3	 Increase net cold rent (+€18.1m)  Higher operating expenses (–€6.7m) due to
Net income from the disposal of investment property	–0.9	–0.8	higher non-transferable operating and heating costs
Net income from the valuation of investment property	–1,496.1	1,169.3	 Higher maintenance costs (externally procured) (-€11.7m)
Net income from the disposal of real estate inventory	–0.1	0.0	Lower result from value-add services due to  volatility in energy markets
Net income from other services	17.2	4.8	Positive impact from significantly lower  depreciation/amortization (+€55.9m); H1-2022
Administrative and other expenses	–28.7	–72.6	included amortisation of goodwill (-€58.9m) Net income from valuation
Other income	0.1	0.0	 –7.4% devaluation effect as of June 30 Net finance costs
Operating earnings	–1,221.6	1,343.0	 H1-2022 strongly positively affected by embedded derivatives from the convertible
Net finance costs	–73.4	–21.9	bonds while almost no effect in H1-2023 (effect: -€151.9m)
Earnings before income taxes	–1,295.0	1,321.1	 H1-2022 strongly negatively affected by valuation effects of BCP while almost no effect
Income tax expenses	266.9	–260.9	in H1-2023 (effect: +€109.3m)
Consolidated net profit	–1,028.1	1,060.2	Income tax expenses  Devaluation of properties lead to lower potential capital gains in case of disposals and

hence to lower deferred taxes

LEG's portfolio comprised c. 167,000 units end of H1

Well balanced portfolio with significant exposure also in target markets outside NRW

Appendix

€/m2

LEG's investment track record in nominal and real terms

Investments into the standing portfolio

Nominal (adjusted) investments

Inflation adjusted (2013 based) investments

€/m2

New construction pipeline further reduced to a total of c.€130m

Manageable size of projects and investment volume, cash potential from built to sell

Investment volume per year

Aggregated completions

Aggregated investment volume

Around 19% of portfolio comprises subsidised units

Reversionary potential amounts to 45% on average

Rent potential subsidised units

• Until 2028, around 20,000 units will come off rent restriction
• Units show significant upside to market rents
• The economic upside can theoretically be realised the year after restrictions expire subject to general legal and other restrictions4

Around 60% of units to come off restriction until 2028

Number of units coming off restriction and rent upside (ytd 2023: c.1,500)

Spread to market rent

€/m2/month

1 Employed by CBRE as indicator of an average rent value that could theoretically be achieved, not implying that an adjustment of the in-place rent to the market rent is feasible, as stringent legal and contractual restrictions regarding rent increases exist. 2 ≤5 years = 2023–2027; 6-10 years = 2028–2032; >10 years = 2033ff. 3 Rent upside is defined as the difference between LEG in-place rent and market. 4 For example rent increase cap of 11% (tense markets) or 20% for three years.

Subsidised units – Inflation-dependent components of the cost rent (i.e. admin and maintenance) were adjusted in January 2023 based on 3-year CPI development1

Cost rent components2

Management costs

Depreciation

Operating costs

Loss of rental income risk

Administration costs

Maintenance costs

CPI - linked

Calculation for LEG's subsidised portfolio

		122.2		from 01/2020	adjustm. 01/2023
	+15.2% (applied to		Administration costs4 per unit/year	298.41	+15%
106.1	admin costs and maintenance costs)		Maintenance costs4 per sqm/year
			Building age <22y	9.21	+15%
			Building age >22y<32y	11.68	+15%
			Building age >32y	14.92	+15%
CPI index Oct 20193		CPI index Oct 20223

Capital costs

Financing costs

Historic view

Impact on cost rent adjustment at LEG

	2014	2017	2020	2023
3 year period CPI development	+5.7%	+1.9%	+4.8%	+15.2%
Total rent increase for LEG's subsidised portfolio (l-f-l)	+2.4%	+1.2%	+2.0%	+5.4%5

LEG portfolio

Subsidised units (H1-2023)

Location	Number of subsidised units	Average net cold rent month/sqm (€)
High growth markets	11,419	5.76
Stable markets	13,761	5.25
Higher-yielding markets	7,066	4.88
Total subsidised portfolio	33,246	5.35

1 CPI development from October 2019 (index = 106.1) to October 2022 (index = 122.2 acc. to Federal Statistical Office). 2 Legal basis for calculation: II. Berechnungsverordnung. 3 Basis 2015 = 100. 4 Administration and maintenance costs are lump sums. 5. as of H1 2023

Demand – supply imbalance will persist for the coming years

Immigration remains a driver to further push demand for affordable units while new supply erodes

German population at highest level ever in 2022

No. of building permissions for apartments with strongest decline within last decade

Heat Planning Act (WPG) as basis for the individual building plan (GEG)

Heat Planning Act (Wärmeplanungsgesetz WPG)

• Municipalities and cities have to provide their individual plans on how to transition their heat infrastructure into a climate neutral grid
• Major cities need to provide their plans until June 2026, smaller communities until June 2028
• Local utility companies, grid operator and manufacturing companies to provide data in respect to energy source and consumption
• Basis for individual heat energy transition planning on private owner level, landlord level and public buildings

Energy Act for Buildings

(Gebäudeenergiegesetz GEG)

• Renewable energy obligation (REO): New heating systems must cover at least 65% of heat energy demand of the building with renewable energies
• Target is to achieve a national climate neutral heat supply by 2045
• New buildings: REO as of 1 January 2024, transition periods for new buildings outside new construction areas
• Existing buildings: transition periods for defect heating systems: 3 years (general), 10 years (connecting to a heating grid), 13 years (centralisation of decentralised heating systems)
• Permitted technologies: Connection to the heating network, electric heat pumps, direct electricity heating such as air-to-air heat pumps, hybrid heating, heating based on solar thermal energy, "H2- Ready" gas heating or when using green gases, biomass heating (mandatory from 2029)
• Duty for external consultation on heating system replacement from 2024

Timeline (planned)

1st week of September 2023

Adoption of the GEG amendment in the German parliament

By the end of 2023 Adoption of the Heat Planning Act (WPG)

1 of January 2045

Complete ban on fossil-fuelled heating systems

Funding concept for new heating systems

Implemented via the BEG (federal funding for energy-efficient buildings act)

Basic subsidy for all 30% of the modernisation costs

Sprinter bonus additional up to 20%, declining over time (only for owner-occupied properties)

Hardship supplement 30% for owner-occupied properties with a house-hold income <40k € (total subsidy max. 70%)

Additional modernisation levy (new § 559e BGB included in the GEG draft) Option 1

8% of the investment costs for heating replacement and related work minus maintenance; cap at €0.50 sqm per month

Option 2

10% of the investment costs for heating replacement and related work minus maintenance, if landlord takes advantage of subsidies; cap at €0.50 sqm per month

• Previous modernisation levy of 8% remains in place for remaining modernisation measures
• Offset against the existing modernisation levy cap of €2/sqm/month (cold rent <7.00€/sqm) or €3/sqm/month (cold rent ≥7.00€/sqm)

Timeline (planned)

Until 30th of September 2023

Presentation of new funding concept (BEG) by Ministry of Economics / Ministry of Finance; budget and duration not yet specified

Only applicable for private persons

Rent table basics

2

Coverage

• Free financed units
• To be established for cities above 50,000 inhabitants1
• Not valid for all units sizes e.g. rent table Dortmund only for units between 20 145 sqm
• Validity period of 2 years with adjustments via CPI-development or via control sample for another 2 years
• New compilation after 4 years
• City specific, i.e. not standardised amongst cities in respect to number of criteria

Process

• Commissioned by the cities
• Compilation by representatives from tenant associations, landlords and the real estate valuation board based on rental value surveys
• Look-back period of 6 years reflecting new letting rents and rent adjustments of sitting tenants within that period

vs.

Differentiation

Qualified rent table

• Based on scientific principles
• Regulated by the rent table directive

• Implication: Higher level of legal security 3 Simple rent table

• More simplistic approach

• Implication: Lower level of legal security, application of "three comparable apartment rule"

1 Further obligations to compile qualified rent tables for municipalities with more than 100,000 inhabitants have already been agreed in the coalition agreement (implementation date unclear).

Rent table example Dortmund 2023 vs. 2021

Area

Etc.

Number of potential variations and building block principle

Building block principle

• Based on year of construction
• Size of the apartment
• Type of facilities, floor , heating system etc.

Calculation on an individual apartment basis¹

	Freitag, 24. Februar 20
Betrag in C je m 2 pro Monat	mittelt werden konnte, sowie Unterschiede, die sich aus den konkreten Stand: merkmalen ergeben, die vom Metspiegel nicht- fasst wurden (siehe Punkt 5.7: "Gebietseinteilun Wohnumfeld").
0.38
0.04
0.22
0.38
0.14	Baujahr	Spanne	Mittelwert	Spanne Obergre
0.21		in Gre?	Mittell	in Gre?
0.28				6.79
0.27				6.55
0.36				6.97
0.41	1950-1959	5.11	5.93	676
	1970.1981	4.76	5.74	6.66
	1982-1994	5.29	6.31	7.46
	1995-2009	5.55	6.62	7.70
	2010-2014	5.67	7.21	8.79
	2015-2019	784	0.86	12.76
sich die Zuordnung nach dem ursprünglichen Baujahr und nicht nach dem Jahr der Modernisierung. 5. Zu- und Abschläge 3.2 Mietsgannen Die Tabellenfelder enthalten neben einem Mittelwert. (arithmetisches Mittel) für vergleichbare Objekte entspre- chand den Vorschriften des BGB ieweils auch Mietspan- nen (Untergrenze und Obergrenze) und dokumentieren damit die Streuung der Mieten um den Mittelwert. Dabei handelt es sich um den Unter- bzw. Obenwert der jewei- ligen Zwei-Drittel-Spanne. Diese werden gebildet, in dem für iede Baujahresklasse jeweils ein Sechstel der Fälle am ten Mittelwert begründen. oberen und unteren Ende der Verteilung entfernt wird. $-2-$
	Mietvertragliche Vereinbarungen hinsichtlich der Umlage von Betriebskosten werden durch den Metspiegel nicht geändert. Zur Umrechnung einer vertraglich vereinbarten Teilinklusiv- mista/Inklusivmicta auf die ortsäbliche Vergleichsmiete können folgende, für Dortmund übliche Betriebskostersätze für Sach- und Haftpflichtversicherungen Kosten für Grundsteuer (Betrag in € je m3 pro Monat) 3. Erläuterungen zur Mietspiegeltabelle Das Alter einer Wohnung bestimmt maßgeblich ihre Boschaffenheit und damit die Miethöhe. Die Mietspiegel- tabelle weist neun Baujahresidassen aus. Zur Einordnung ist das Jahr der Fertigstellung der Wish- nung oder das Jahr des Wiederaufbaus des Gebäudes maßgeblich. Auch bei modernisierten Wohnungen richtet	bis 1939 1910-1934 1935-1959	DORTMUNDER SEKANNTMACHUNGEN Austruck kommen: 4. Mietspiegeltsbelle Unterprenas 4.49 4.47 4.92	In diesen Spannen können folgende Unterschiede zun . Art. Umfang und Qualität der Ausstattung, sow- nicht durch Zu- und Abschläge ausgewiesen. Enflux von Merkmalen, die nicht in ausnichen Fallzahl vorhanden waren bzw. nicht abgefragt. wurden bzw. für die kein eindeutiger Einfluss er Als Orienterungshife wird ein Mittelwert (anthreetischer Mittel) aller Beobachtungswerte ausgewiesen. Das arith- metische Mittel wird berechnet, in dem die Summe der einzelnen Mieten durch ihre Anzahl geteilt wird. Metzn innerhalb dieser Spannen gelten noch als ortsäblich. (arithm. in Cirel 5.60 5.50 5.92 Die im Folgenden aufgeführten Zu- und Abschläge wi den - falls zutreffend - für die entsprechenden Merkn auf die unter Punkt 4 dargestellten Mieten (Mittelwer und Spannenwerte) hinzugerechnet bzw. abgezogen. Bei den Zu- und Abschlägen handelt es sich um Durch schnittswerte. Sie stellen auf eine jeweilige Durchschn qualität des Merkmals ab. Abweichungen davon nach oben oder unten sind möglich. Das Vorhandensein we terer Ausstattungs- oder Beschaffenheitsmerkmale ka- das Abweichen vom in der Mietspiegeltabelle dargest Ausstattungsmerkmale sind nur zu berücksichtig wenn sie von Vermietenden eingebracht wurden

Freitag, 24. Februar 2023			Nr. 8-79, Jahrgang	DORTMUNDER AFKANNTMACHUNGEN
	folgende Unterschiede zum Ität der Ausstattung, soweit bschläge ausgewiesen. n, de richt in ausreichender ren bzw. nicht abgefragt. ein eindautiger Einfluss er- . sowie aus den konkreten Standort-		5.1 Wohnungsgröße und Wohnungstyp Der Mietspiegel ist anwendbar für Wohnungen von 20 m 2 bis zu einer Größe von 145 m 3 . Die in der Metspiegeltabelle ausgewiesenen Mieten und Spannen beziehen sich auf Woh- nungen mit einer Wohnfläche von 60.01 bis 80.00 m 3 . Die Meten für kleinere Wohnungen und Appartements liegen in der Regel über den in der Mietspiegeltabelle angegebenen. Westen, die Mieten für artifere Wohnungen liegen darunter. Die Zu- und Abschläge sind wie folgt zu bemessen:		5.2 Bad-Ausstattur Wohnungen mit eine wanne werden im M Wohnungen, die kei oder bei denen das V gebaut wurde, sind n Substandard-Wohnu tierung. Für folgende Zu- oder Abschläge:
	Se vom Metspiegel nicht er- nkt 5.7: "Gebietseintelung/		Wohnungsgröße pro m 2 Wohnfläche	Zu- bzw. Abschlag	Meckenal
			20.00 bis 25 m 3	$+1.66E$	Zusätzliches, zweites
	in Mittelwert Grithmetisches		25.01 his 30 m 1	$+1.23E$	Radiobimmer mit Durc (auch mit zusätzliche
	erte ausgewiesen. Das arith- net, in dem die Summe der		30.01 bis 35 m 3	$+1.22E$	Aveites Radesimmer
	Argahl getelt wird. Metpreise (ten noch als ortsüblich.		35.01 bis 40 m 3	$+0.88E$	Saum mit Badeware spain Waschbecken
	Mittelwert	Spanne	40.01 bis 45 m 1	$+0.546$	Kein Badezimmer in
	(atthen. Mittell	Obergrenze in Gre?	45.01 bis 50 m 2	$+0.426$
	in Ors 2		50.01 bis 60 m 2 $+0.196$		5.3 Rodenbeläge Wohnungen, die inn
	5.60	6,79	60.01 bis 80 m 2	überwiegend mit Lan fachern PVC-Bodenb
	5.50 5.92	6.55 6.97	80.01 bis 110 m 2	Mintspiegel als Stand ohne Oberböden ver
	5.93	676	110.01 bis 145 m 2	$-0.12E$	andere überwiegend Wohn- und Schlafräu
	5.74	6.66	Wohnungstyp		Merkmal
	6.31	7.46	Bei bestimmten Wohnungstypen können die folgenden Zu- und Abschläge angewendet werden. Der Zuschlag
	6.62	7.70	für Appartements ist mit den Zuschlägen für Kleinwoh- nungen bis 50.00 m 2 kombinierbar. Der Zuschlag für		Parkettboden oder a
	7.21	8.79	Maisonette- oder Galerie-Wohnungen kann mit den Zu- schlägen für Dachgeschoss- und Souternain-Wohnungen		Keramik-Matursteinb
	0.86	12.26	kombiniert werden.		Hochwertiger PVC-B (fest verklebter Desig
			Merkmall pro m 2 Wohnfläche	Zu- und Abschlag	Ohne Oberböcken sm
irten Zu- und Abschläge wer- die entsprechenden Merkmale stellten Misten (Mittelwerte erechnet bzw. abgezogen. n handelt es sich um Durch- af eine jeweilige Durchschnitts- Abweichungen davon nach lich. Das Vorhandensein wei-			Appartement (abgeschlossene Einzimmenwohnung mit Badewanne oder Dusche sowie WC und einer ausgestatteten Kochnische mit bis zu 50.00 m/h Maisonette- oder Galerie-Wohnung (Treppe innerhalb der Wohnung mit nutzbaren	$+0.51E$ $+0.076$	5.4 Beheizungsart Hinsichtlich der Behe als Standard mit eine auspestattet. Andere (alle Aufenthaltsräum vorbandene Reheizur Abschläge:
	schaffenheitsmerkmale kann Mietzziegeltabelle dargestell-		Wohnräumen auf mindestens zwei Etagen) Dachpeschoss-Wohnung	$+0.056$
	ind nur zu berücksichtigen, den eingebracht wurden.		(Zimmer haben teilweise Dachschrägen)
			Souteman-Wohnung (telweise unterhalb der Oberfläche liegend)	$-0.096$

Local infrastructure like public

transportation, health centre, shops

Number of potential variations – Example Dortmund 2023 2021

Year of construction	9	8
Size of apartment	10	13
Type of apartment	4	2
Bathroom	5	4
Floor	4	3
Heating	3	2
Windows	3	2
Exterior	2	3
Accessibility	2	4
Other characteristics	6	3
Modernisation measures and date	8	7
City location	7	7

Rent table example Dortmund City-North 2023 vs. 2021

Base rent based on year of construction plus additions/ deductions/ sqm as per characteristics

Among the best in class

Upgrade to AAA rating by MSCI

1 As at 05/2023

LEG additional creditor information

Unsecured financing covenants Financing mix

Covenant	Threshold	H1-2023
Consolidated Adjusted EBITDA / Net Cash Interest	≥1.8x	4.9x1
Unencumbered Assets / Unsecured Financial Indebtedness	≥125%	157.4%
Net Financial Indebtedness / Total Assets	≤60%	45.2%
Secured Financial Indebtedness / Total Assets	≤45%	16.8%

Type	Rating	Outlook
Long Term Rating	Baa1	Negative
Short Term Rating	P-2	Stable

Ratings (Moody's) Key financial ratios

	H1-2023	H1-2022
Net debt / adj. EBITDA2	14.0x	13.2x
LTV	46.6%	42.1%
Secured Debt / Total Debt	37.2%	36.1%
Unencumbered Assets / Total Assets	39.8%	39.5%
Equity ratio	40.2%	45.1%

1 Based on the adjusted EBITDA definition effective until business year 2022. Based on the adjusted EBITDA definition effective since business year 2023, i.e. excluding maintenance (externally-procured services) and own work capitalized, KPI is 5.3x. 2 Average net debt last four quarters / adjusted EBITDA LTM.

Capital market financing Corporate bonds

Maturity	Issue Size	Maturity Date	Coupon	Issue Price	ISIN	WKN
2017/2024	€500m	23 Jan 2024	1.250% p.a.	99.409%	XS1554456613	A2E4W8
2019/2027	€500m	28 Nov 2027	0.875% p.a.	99.356%	DE000A254P51	A254P5
2019/2034	€300m	28 Nov 2034	1.625% p.a.	98.649%	DE000A254P69	A254P6
2021/2033	€600m	30 Mar 2033	0.875% p.a.	99.232%	DE000A3H3JU7	A3H3JU
2021/2031	€700m	30 Jun 2031	0.750% p.a.	99.502%	DE000A3E5VK1	A3E5VK
2021/2032	€500m	19 Nov 2032	1.000% p.a.	98.642%	DE000A3MQMD2	A3MQMD
2022/2026	€500m	17 Jan 2026	0.375% p.a.	99.435%	DE000A3MQNN9	A3MQNN
2022/2029	€500m	17 Jan 2029	0.875% p.a.	99.045%	DE000A3MQNP4	A3MQNP
2022/2034	€500m	17 Jan 2034	1.500% p.a.	99.175%	DE000A3MQNQ2	A3MQNQ
Financial Covenants			Adj. EBITDA/ net cash interest ≥ 1.8x Unencumbered assets/ unsecured financial debt ≥ 125% Net financial debt/ total assets ≤ 60%

Secured financial debt/ total assets ≤ 45%

1. Includes €100m bond tap as of 10 July 2023

Capital market financing

Convertible bonds

	2017/2025	2020/2028
Issue Size	€400m	€550m
Term / Maturity Date	8 years/ 1 September 2025	8 years/ 30 June 2028
Coupon	0.875% p.a. (semi-annual payment: 1 March, 1 September)	0.400% p.a. (semi-annual payment: 15 January, 15 July)
# of shares	3,531,959	3,580,370
Initial Conversion Price	€118.4692	€155.2500
Adjusted Conversion Price1	€113.2516 (since 2 June 2022)	€153.6154 (since 7 June 2022)
Issuer Call	From 22 September 2022, if LEG share price >130% of the then applicable conversion price	From 5 August 2025, if LEG share price >130% of the then applicable conversion price
ISIN	DE000A2GSDH2	DE000A289T23
WKN	A2GSDH	A289T2

1 Dividend-protection: The conversion price will not be adjusted until the dividend exceeds €2.76 (2017/2025 convertible) and €3.60 (2020/2028 convertible).

LEG share information

Share (7.8.2023; indexed; in %; 1.2.2013 = 100)

Market segment Stock Exchange Total no. of shares Ticker symbol	Prime Standard Frankfurt 74,109,276 LEG
ISIN	DE000LEG1110
Indices	MDAX, FTSE EPRA/NAREIT, GPR 250, Stoxx Europe 600, DAX 50 ESG, i.a. MSCI Europe ex UK, MSCI World ex USA, MSCI World Custom ESG Climate Series
Weighting	MDAX 2.6% (30.6.2023)

EPRA Developed Europe 2.5% (30.6.2023)

Basic data Shareholder structure1

Share price and market capitalisation since IPO

IPO = Initial Public Offering; CI = capital increase; CIK = capital increase in kind; CB = convertible bond; SD = stock dividend.

Financial calendar

IR Contact

Investor Relations Team For questions please use

Frank Kopfinger, CFA Head of Investor Relations & Strategy

Tel: +49 (0) 211 4568 – 550 E-Mail: frank.kopfinger@leg-se.com ir@leg-se.com

Elke Franzmeier Corporate Access & Events

Tel: +49 (0) 211 4568 – 159 E-Mail: elke.franzmeier@leg-se.com

Karin Widenmann Senior Manager Investor Relations

Tel: +49 (0) 211 4568 – 458 E-Mail: karin.widenmann@leg-se.com Gordon Schönell, CIIA Senior Manager Investor Relations

Tel: +49 (0) 211 4568 – 286 E-Mail: gordon.schoenell@leg-se.com

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