Corestate Capital Holding S.A.

GROUP MANAGEMENT REPORT

PRELIMINARY REMARKS

The management report and consolidated ﬁnancial statements of Corestate Capital Holding S.A. (hereinafter “Corestate” or “the Company”) cover the reporting period from 1 January 2022 until 31 December 2022, unless otherwise indicated. Information on market and product oﬀering developments pertains to 2022 as well, unless otherwise indicated. The 2022 ﬁnancial statements have been subject to an external audit by KPMG Audit S.à r.l., Luxembourg.

Certain statements contained herein may be statements of future expectations and/or other forward-looking statements that are based on our current views and assumptions. These involve known and unknown risks and uncertainties that may cause actual results, performance or events to diﬀer materially from those expressed or implied in such statements. Corestate does not intend and does not undertake any obligation to revise these forward-looking statements.

A non-ﬁnancial statement for Corestate was prepared for the reporting period 1 January 2022 until 31 December 2022 and will be disclosed on the Company’s website. The non-ﬁnancial statement has been prepared based on Luxembourg corporate law without any additional frameworks applied. The non-ﬁnancial statement was presented to KPMG Audit S.à r.l., Luxembourg, but was not subject to an audit.

COMPANY BACKGROUND

Corestate Capital Holding S.A. and its subsidiaries (collectively “the Group”) was until the year end 2022 an investment manager for real estate equity and debt specializing in the creation and subsequent realization of real estate related investments in Europe for private and institutional clients. Corestate oﬀered a fully integrated business model, being active as a co-investor and asset and property manager and was focused on residential and commercial (primarily oﬀice, mixed use and retail) real estate as well as micro-living projects. Geographically, the Group primarily concentrated on the German market but also is selectively active in other attractive markets in Europe such as France, United Kingdom, Austria, Switzerland, Poland and Spain. The investment product oﬀering covered the full range of the risk / return curve, i.e. from value-add / opportunistic to core, and, in each case, is tailor made to the speciﬁc requirements of its clients.

Corestate Annual Report 2022 29

GROUP MANAGEMENT REPORT

Our business reporting for 2022 is divided into three segments: (i) “Real Estate Equity”, (ii) “Real Estate Debt” and (iii) “Other”.

(i) The Real Estate Equity Segment encompassed the sourcing and acquisition of relevant real estate opportunities and investments. It covered ongoing and day-to-day asset and property management and other related services as well as project monitoring over the holding period with the aim of actively enhancing value and optimizing the relevant assets. It also encompassed management of the realization of the value of investment products through multiple eligible exit channels (e.g. asset-by-asset sales, portfolio sales, auctions). The products were held in separate vehicles established by respective clients together with Corestate. Revenues were generated through acquisition fees, asset management fees, property management fees (in equity products) and sales and promote fees. The asset and property management services that were provided during the holding period support the investment strategy deployed from the early sourcing phase through business planning. Such early involvement allowed e.g. for an eﬀicient implementation of value enhancing measures such as capex investment, rent increases, vacancy reductions and operational cost optimization programmes, all based on an experienced real estate management team‘s in-depth understanding of each deal and its underlying assets. This business provided commercial and technical property management services including service charge accounting to their clients. The asset management services also included ongoing ﬁnancial and real estate reporting for clients and banks.

(ii) The Real Estate Debt Segment for 2022 contained structures and implements investment products via Corestate Bank. Furthermore, with our Group subsidiary HFS (Helvetic Financial Services) we oﬀered mezzanine ﬁnancing for residential and commercial real estate developments in Germany, Austria, Switzerland as well as Spain and seek to gain cross-selling opportunities from being involved in our clients‘ development from a very early stage. The core business was to act as an initiator focusing on investments via debt securities. The fund capital was used to acquire bonds which are issued by the bond issuer, typically a real estate development company, for the early stages of a real estate development, usually as equity-replacing bridge ﬁnancing until certain milestones (e.g. the building permit or construction progress) have been achieved and the follow-on ﬁnancing for the entire project has been secured.

(iii) The Other Segments comprised alignment capital management activities as well as real estate operations and assets held for warehousing purposes, i.e.assets which were acquired on our own balance sheet for a certain short-term period in order to convert them into investment products and – to a lesser extent – assets Corestate Annual Report 2022 30 GROUP MANAGEMENT REPORT owned by non-client third parties, with the aim of actively value-enhancing and optimizing the assets and, ultimately, structuring the exit from such real estate investments. As part of its business purpose, Corestate has no technological research and development activities and is not dependent on licenses and patents. Our integrated business model enabled the Company to cover the entire lifecycle of investments in real estate equity and debt. The focus of our business strategy is on core and core+ investments. The diversiﬁcation oﬀered additional business opportunities while mitigating business risks at the same time.

The Company has, historically, concentrated on the German-speaking countries, Germany, Switzerland and Austria (“GSA” or the “GSA region”). Germany is and will remain the main market for Corestate. However, the Company was also selectively looking at other attractive real estate markets in Europe such as Austria, Switzerland, France, the UK, Spain and the Benelux countries. Corestate operated principal oﬀices in Germany, Switzerland, Spain, France and the UK, as well as a German network of branch oﬀices of its property management platform Capera. As at 31 December 2022, the Group employed 415 FTEs (previous year: 811 FTEs).

Some changes to the Management Board occurred in the ﬁnancial year 2022 and beyond (see Note F.6). At the beginning of the year, the Corestate Supervisory Board removed Johannes Märklin and Sebastian Ernst from the Group‘s Management Board with immediate eﬀect and released them from all further functions. Shortly thereafter in March, Stavros Efremidis stepped down from the Supervisory Board to join the Company‘s Management Board as Chief Executive Oﬀicer. In addition, Izabela Danner was newly appointed to the Group‘s Management Board as Chief Operating Oﬀicer and Ralf Struckmeyer as Chief Investment Oﬀicer. In this Context, René Parmantier, the previous CEO, left the Company‘s Management Board. Following the creditors‘ meetings on 28 November 2022, in connection with the conditions from the agreed restructuring concept, Stephan Götschel joined the Management Board in the new role of Chief Restructuring Oﬀicer. At the end of the year 2022, Stavros Efremidis and Ralf Struckmeyer left the Management Board at their own request. As a result of the creditors‘ meetings in November 2022, Dr Nedim Cen and Dr Sven- Marian Berneburg were appointed as new members of the Supervisory Board with immediate eﬀect. Prior to this, the previous Supervisory Board members Dr Roland Folz and Dr Friedrich Oelrich had resigned from oﬀice. Dr Cen was also appointed Chairman of the Supervisory Board at the ﬁrst constituent Supervisory Board meeting on 16 January 2023 retroactively and Dr Malmendier was elected to be his Deputy.

Corestate Annual Report 2022 31 GROUP MANAGEMENT REPORT

CONTROL SYSTEM

The Company‘s control system is geared toward the corporate strategy and is therefore consistently aligned with the Group’s short to medium-term objectives. The Management Board is responsible for overall planning and thus for achieving the stated objectives as part of the strategic corporate development. With the involvement of the Executive Committee (ExCom), the Management Board used a strategy process to steer the development of the business segments and monitors the implementation of deﬁned measures. On the basis of global trends, growth paths are deﬁned, opportunities and risks are evaluated, portfolio decisions were made, and the focus of in-house market research was determined at annual strategy meetings. Strategy and planning meetings provided a planning basis for the following year and in medium- term Group planning. A planning forecast for the coming year and a ﬁve-year period was made annually based on the corporate strategy and based on the market-driven strategic planning in the segments. The “counter ﬂow method” is used for planning (bottom up – top down). In the course of a year, the planning for that period was updated in several forecast cycles.

Weekly Board meetings were used for operational control. There the division heads reported to the Management Board on the development of transactions and customer relationships, the competitive situation and any exceptional business transactions. They employed standardized reporting methods largely involving performance indicators, information variables and qualitative assessments, which are then used to deﬁne further operating and strategic measures to achieve the objectives in the event of planning deviations. The internal reports – which are prepared monthly – provided aggregated ﬁnancial and non-ﬁnancial information for the segments and the holding company, which was used as a basis to allocate resources in a targeted manner, and pass resolutions on the Management Board.

Corestate is mainly managed based on the aggregated revenue & gains and EBITDA (on adjusted and reported basis). Furthermore, assets under management, fund volume, investment return, net proﬁt, earnings per share, cash ﬂow, net ﬁnancial debt as well as speciﬁc ﬁnancial ratios associated to the key performance indicators are usually used by management to measure operating performance and for steering the Company. We use these metrics as a basis for strategic planning and forecasting, and they represent measures that we believe are widely used by certain investors, securities analysts and other parties as supplemental measures of operating and ﬁnancial performance.

Corestate’s non-ﬁnancial performance indicators include maturity proﬁle, attrition rate as well as asset allocation and ESG-related performance measures. Furthermore, Corestate utilizes planning tools such as corporate planning as well as rolling liquidity planning, which are used to steer operational business development.

Corestate Annual Report 2022 32 GROUP MANAGEMENT REPORT

TARGETS AND STRATEGIES

In 2022 and 2023, Corestate Capital Holding S.A. transitioned to a streamlined structure centered on its operating subsidiaries, while divesting non-core assets. In September 2023, Corestate decided to discontinue the banking business consolidated under Corestate Bank GmbH and return its securities license, positioning itself as a management holding with distinct operating subsidiaries. The strategic realignment is complemented by a rigorous cost-cutting program, which reduces non-essential expenditures and streamlines operations. This initiative, alongside the Company‘s comprehensive restructuring, aligns operational costs with its newly deﬁned asset management-focused strategy. In essence, Corestate‘s strategic realignment aims to bolster liquidity and recalibrate its business strategy toward investment and asset management mandates.

MARKET DEVELOPMENT

The year 2022 was a turning point for the German real estate investment market in many respects. The initial catalyst was the reversal in interest rates, which was swiftly followed by a reversal in turnover and returns. In total, approximately € 66.0bn in real estate was traded in Germany in 2022. Of this, about € 51.6bn was for commercial property and about € 14.4bn for residential property. This represents a decrease of 12% and 72% respectively, compared to the previous year.

After initial uncertainty, the realization grew among market participants that the turnaround in interest rates has not only changed the market environment in the short term, but that the return of interest rates represents a paradigm shift for the real estate investment markets – at least compared to the last ten years. In the course of the year, a widespread between the price expectations of buyers and sellers was observed. The diverging price expectations are a major reason why both sides are acting very cautiously. This was reﬂected in the signiﬁcantly reduced transaction volume and the decline in the overall number of transactions. There were numerous instances where sales processes were terminated prematurely or remained incomplete. Those who were compelled to sell during this period often resorted to oﬀ-market transactions by selectively approaching a limited number of potential investors.

However, the reluctance of many investors also opened up opportunities for those who were less aﬀected by the turnaround in interest rates or who did not get a chance in the intense bidding war of previous years. These include, above all, buyers with a strong equity base. Private investors (incl. family oﬀices) and sovereign wealth funds are among the few investor types whose net purchase volume of commercial real estate was above the respective ﬁve-year average in 2022. Both Groups invested more than € 800m on balance. The market environment also became more attractive for investors with an aﬀinity [and appetite] for risk, especially in the value-add segment. Because most institutional core Corestate Annual Report 2022 33 GROUP MANAGEMENT REPORT investors were no longer willing to compromise in the current environment. As a result, the playing ﬁeld for value-add investors became larger again.

The general downturn in the investment market had a signiﬁcant impact on all types of use in 2022. Only mixed-use properties (+12%) recorded slight increases in turnover compared to 2021. Despite a drop in turnover of more than a quarter, oﬀice property was by far the strongest type of use in terms of turnover (€ 22.0bn), down by 20%, followed by residential property (€ 14.4bn), which recorded a drop in volume of around 72%. Industrial/logistics properties (€ 9.6bn) less by 6%, defended the third place they had captured the year before, ahead of retail properties (€ 9.4bn). The decline in turnover particularly hit the project developers suﬀering under the changed market conditions.Germany’s office rental market showed no signs of weakness in 2022. The current situation had only slightly dampened the sentiment. This describes the past year in terms of economic trends and Germany’s office rental market. 2022 ended with an office take-up of 3.5 million sqm in the country’s seven major real estate strongholds, exceeding the same period the year before by 6.5%. Few had expected such a robust growth in the market in the face of numerous challenges. The market has become more differentiated than ever before, with a decoupling of prime office rents and vacancy rates observed in major cities. Today, it is no longer a paradox that both are rising in parallel. Whilst fierce competition for ultra-modern and ESG-compliant space is driving up rents in prime locations, it is proving increasingly difficult to find occupiers for peripheral locations with lower quality space, which is leading to a rise in availability.

All the indicators that regularly survey the mood of consumers and companies show a rather gloomy picture at the end of the year. Nonetheless and to the surprise of most experts, some facts have turned out much better than expected. These included economic growth, which has not declined in the last two quarters 2022 but still registered a slight increase. In 2022, real GDP in the European Union (EU-27) increased by around 3.5% compared to the previous year, while GDP in the eurozone also risen by around 3.5%.

RESULTS OF OPERATIONS

Unless otherwise stated, only information on continuing operations is provided in the following sections. In general, the markets were confronted with a macroeconomic environment that was unique in this constellation. After two exceptional years, the real estate market in 2022 was significantly dominated by the interest rate shock and the new energy regulations. In addition, the business development of Corestate 2022 was also influenced by the uncertainties that arose in connection with the restructuring measures that have been initiated.

Corestate Annual Report 2022 34 GROUP MANAGEMENT REPORT

Total revenue as a result of our operation are shown in the table below:

€ million	2022	20211
Total Revenue from Real Estate Equity Segment	57.7	89.5
Total Revenue from Real Estate Debt Segment	25.9	121.9
Total Revenue from Other Segment2	9.2	6.3
Total Revenue	92.8	217.7

1 Prior year is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial year 2021 (see Note A.2).
2 Total Revenue from Other Segment covers only Rental Income and Service Charges.

REAL ESTATE EQUITY

The real estate equity segment experienced a mixed performance in 2022. Revenues from asset management fees declined to € 30.4m from € 37.0m in the previous year due to the loss of several mandates. Conversely, property management fees increased to € 21.1m (2021: € 17.2m) mainly due to higher occupancy rates in student housing assets managed by UPARTMENTS and CRM. Other revenue streams experienced notable shifts. Acquisition fees decreased to € 2.2m from € 9.7m, while sales and promotion fees declined significantly to € 0.7m from € 23.1m. Both declines were a result of reduced transaction volumes. On the other hand, development fees increased to € 3.2m from € 2.5m due to increased project management and development coordination services.

€ million	2022	20211
Revenue from Acquisition Fees	2.2	9.7
Revenue from Asset Management Fees	30.4	37.1
Revenue from Property Management Fees	21.1	17.2
Revenue from Sales and Promote Fees realised	0.8	23.1
Revenues from Development Fees	3.2	2.5
Total	57.7	89.6

1 Prior year is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial year 2021 (see Note A.2).

Total expenses from the segment increased to € 80.1m from € 86.5m, primarily due to higher personnel costs including expenses for LTIs and retention plan.

REAL ESTATE DEBT

In 2022, the real estate debt segment underwent significant changes, particularly within the HFS business. After reaching an agreement between the fund manager and investors on restructuring the Stratos II fund, a liquidation agreement was signed to dissolve the fund by the end of 2025. Additionally, a termination agreement ended HFS‘s advisory role for Stratos II as of 1 January 2023, resulting in the loss of performance-based fees.

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The underwriting and structuring fees experienced a sharp decline, falling by € 35.0m to € 1.0m from € 36.0m in 2021. This reduction was primarily due to project delays and cancellations that heavily impacted Corestate Bank, and HFS‘s inability to generate underwriting fees because the Stratos funds lacked the liquidity to structure new bonds. Furthermore, no performance fees were earned in 2022, contrasting sharply with the € 49.5 m recorded in 2021. This was primarily due to reduced transaction volumes in the private debt market and liquidity issues in the Stratos II and IV funds, which did not meet the necessary hurdle rate. Income from mezzanine loans decreased to € 6.9m, down from € 18.1m in 2021, due to increased risk provisions across nearly all loans. A provision of € 6.1m was recorded in expenses due to the uncertain recoverability of the remaining bridge financing loans. Asset management fees declined slightly to € 15.1m from € 17.3m, reflecting reduced fund volumes during 2022. However, income from trading activities increased to € 2.9m, up from € 1.0m, generated exclusively through Corestate Bank’s proprietary trading of real estate debt products.

€ million	2022	2021
Revenue from Underwriting and Structuring Fees	1.0	36.0
Revenue from Performance Fees	-	49.5
Income from Mezzanine Loans	6.9	18.1
Revenue from Asset Management Fees	15.1	17.3
Income from Trading Activities	2.9	1.0
Total	25.9	121.9

Total expenses for the real estate debt segment increased to € 128.6m from € 66.1m in 2021. This was driven by heightened risk provisions for trade receivables and contract assets at the HFS level, primarily linked to Stratos II. This increase reflected the segment‘s efforts to address market shifts and optimize financial stability in the context of evolving market conditions.

OTHER SEGMENT

Total income from the other segment reversed to a negative balance of € -27.8m in 2022, compared to € 15.9m in previous year. This decline was primarily driven by reduced profit/loss contributions from Associates due to negative valuation impacts, lower dividend payments and valuation losses on financial instruments. Net rental income rose to € 9.2m from € 6.3m, benefiting from the new warehousing and operational asset in Augsburg. The net result from warehousing exits improved slightly to € -0.4m (2021: € -2.7m), reflecting margins from warehousing activities, valuation adjustments and costs related to asset liquidation.

Corestate Annual Report 2022 36 GROUP MANAGEMENT REPORT

The share of profit/loss from Associates and Joint Ventures for the year amounted to € -23.2m (2021: € 2.5m), reflecting the Group’s results from Associates and Joint Ventures using the equity method. The sharply negative earnings contribution was due to significant devaluations across asset classes resulting from changing market circumstances and rising capital costs. Dividends from other alignment capital declined to € 2.7m (2021: € 12.8m) due to the underperformance of the underlying structures. Fair value measurements of financial instruments led to an overall loss of € -16.1m (2021: € -2.9m), primarily due to negative valuation effects on Stratos funds (€ -14.7m) and Corestate’s Opportunity Fund (€ -3.6m), partially offset by positive effects tied to HANNOVER LEASING.

€ million	2022	2021
Rental Income and Service Charges	9.2	6.3
Net result from property holding and warehousing exits	(0.4)	(2.7)
Share of Profit/Loss from Associates and Joint Ventures	(23.2)	2.5
Dividends from other Alignment Capital	2.7	12.8
Gains/Losses from Fair Value measurement of financial instruments	(16.1)	(2.9)
Total income from Other Segment	(27.8)	15.9

Expenses from other segment reached € 26.0m (2021: € 7.3m) due to direct costs related to asset operations, personnel, and overhead expenses. This increase was mainly driven by the divestment of alignment capital, particularly legacy assets where immediate liquidity was prioritized over continued holding.

EARNINGS POSITION

Other income increased to € 79.0m (2021: € 15.5m). The main drivers are the reversal of previously written-down receivables (€ 30.7m), income from the reversal of provisions (€ 9.0m) as well as several individual items within other income (€ 39.3m), such as the sale of Corestate’s former property management business in Capera (€ 11.6m), the short-term settlement of a contingent receivable in relation to a HL-managed airplane fund (€ 9.4m) and the reversal of formerly granted LTI shares where management members are no longer entitled to receive shares (€ 3.6m).

General and Administrative Expenses of € 68.2m (2021: € 59.5m) include both personnel and overhead expenses not allocated to the segments Real Estate Equity, Real Estate Debt Segment or Other Segment. The expenses increased particularly due to the higher personnel costs as a result of the organizational transformation related to the financial restructuring currently being undertaken. In addition, prior year, one-off expenses in the context of the acquisition of Corestate Bank and due to transformation measures, provisioning for the efficiency enhancement

Corestate Annual Report 2022 37 GROUP MANAGEMENT REPORT

program as well as severance payments for management board members were still reflected here. In addition to the subdued development of turnover and the increase in operating expenses, the comprehensive risk provisions and the corresponding impairments on financial assets and receivables led to a Group EBITDA of € -168.1m in the reporting period, after € 24.4m in the previous year.Further, in 2022, depreciation, amortization and impairment expense in the amount of € 535.8m (prior year: € 218.8m) contains goodwill impairment charges of € 450.0m which were recognized due to the signiﬁcantly lower income expectations for most of Corestate’s goodwill-carrying CGUs. The impairment of both the HFS and Corestate Bank goodwill is related to the Real Estate Debt segment. In addition, an impairment had to be recognized on the STAM goodwill which is related to the Real Estate Equity segment (see also Note E.1 for more details on the individual impairments). All in all, key ﬁnancial data from continued operations of the period is as follows:

€ million	2022	2021¹
EBITDA	(168.1)	24.4
EBIT	(703.9)	(194.3)
EBT	(718.5)	(212.7)
Loss from Continued Operations	(742.6)	(199.0)
Earnings per Share in Euros	(21.72)	(6.45)

¹ Prior year is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial year 2021 (see Note A.2).

The ﬁnancial result mainly includes the bond-related interest expense in the amount of € 17.3m oﬀset by foreign currency gains of € 3.2m (prior year: € 17.6m and € 3.6m, respectively). Due to the aforementioned business course and the value adjustments and changes in risk provisions, Corestate’s net loss from continued operations increased further from € -199.0m in the previous year to € -742.6m in 2022, which translates into earnings per share of € -21.72 (previous year: € -6.45).

Corestate Annual Report 2022 38

GROUP MANAGEMENT REPORT

BALANCE SHEET POSITION

The table below summarizes the key data per balance sheet:

€ million	2022	2021
Non-Current Assets	378.5	990.9
Current Assets	271.9	399.2
Assets held for sale	-	23.5
Total Assets	650.4	1,413.6
Total Equity	(120.3)	626.2
Non-Current Liabilities	84.7	349.1
Current Liabilities	686.0	429.4
Liabilities held for sale	-	8.9
Total Equity and Liabilities	650.4	1,413.6

As of 31 December 2022, total non-current assets were down to € 378.5m (2021: € 990.9m). The most signiﬁcant change occurred in the position goodwill and other intangible assets, mainly driven by the impairments at HFS, Corestate Bank and STAM in the Corestate’s debt business. Also, the investments in associates and joint ventures dropped to € 84.6m (2021: € 145.9m), mainly attributable to the disposal of the projects Vision One and Moviestar as well as loss participations in several other projects. See Note E.3 for additional details.

Total current assets amount to € 271.9m as of 31 December 2022 (2021: € 399.2m). Inventories, i.e. assets held for warehousing, went up from € 100.0m to € 121.1m, in particular due to the temporary appropriation of an oﬀice project in Augsburg as well as the ongoing CAPEX-measures at the Giessen property. This was oﬀset by the sale of a micro living project in Bremen in the amount of € 14.9m. Trade receivables went down from € 47.2m at the end 2021 to € 26.2m as of the current balance sheet date, primarily related to the payments for a residential and an oﬀice project in Germany. Further on, due to the risk provisioning in the HFS business and the restructuring initiated for the Stratos II fund, the contract assets decreased from € 58.5m to € 3.0m at the end of 2022. The carrying amount of other current ﬁnancial assets has been reduced from € 86.5m to € 31.1m, mainly driven by further provisions for expected credit losses on bridge loans in the Real Estate Debt Segment.

Cash and cash equivalents amounted to € 56.1m as of 31 December 2022 (2021: € 62.8m). The restricted cash decreased from € 12.9m to € 0.5m mainly due to the contractually committed CAPEX-expenditure for a warehousing asset (Neustädter Tor, Giessen).

Corestate Annual Report 2022 39

GROUP MANAGEMENT REPORT

Overall, as at 31 December 2022 the Group’s equity position became negative and amounted to € -120.3m (2021: positive equity of € 626.2m) which is mainly driven by the signiﬁcant impairment charges related to Corestate’s real estate debt business. Current and non-current liabilities added up to € 770.7m (2021: € 778.5m) without any major movements during the reporting period, other than the 2018 senior unsecured bond having been classiﬁed as current ﬁnancial liabilities from bonds due to the maturity date in April 2023.

CASH FLOW ANALYSIS

Cash ﬂows from operating activities decreased from € 30.5m to € 0.7m in the reporting period in line with the operative earnings development. Cash ﬂows from investing activities amounted to € 17.5m (previous year: € 9.7m) primarily reﬂecting increased divestment activities related to subsidiaries and other ﬁnancial assets in 2022. Such activity was mainly related to the sale of the participations in Capera Property Management Platform (sale of subsidiaries) and Moviestar GmbH (inﬂow from repayment of alignment capital investments) in 2022. As an opposing eﬀect, the investment in other securities (other ﬁnancial instruments) led to a cash outﬂow of € 18.1m. On this basis, the free cash ﬂow decreased from € 40.2m in prior year to € 18.2m in the ﬁscal year 2022.

Cash outﬂows from ﬁnancing activities declined to € -37.3m from € -55.7m in the year before. The repayment of the HFS Lombard of € 10.0m and the pro rata repayment for the Highstreet Giessen (Ginova) project with € 13.5m and the redemption of the convertible loan with an amount of € 4.0m besides interest payments on the bond as well as on bank loans are the main cash outﬂows in 2022, whereas in prior year higher loan repayments were recorded thus leading to higher outﬂows then. As a partly oﬀsetting eﬀect, the Company received cash inﬂows of € 9.9m from the increase of the bridge loan in 2022.

RISK REPORT

Risk Management

Corestate has established a risk management system at Group level which considers the risks of the holding company as well as the risks of the subsidiaries. For this purpose, Corestate has appointed a Group Chief Risk Oﬀicer, to whom a team is assigned, but who can also draw on dedicated persons in all subsidiaries of Corestate. In accordance of the ”three lines of defense“ theory, the risk management department operates within the second line of defense.

Corestate Annual Report 2022 40

GROUP MANAGEMENT REPORT

Deﬁnition of Risk

Risks are related to speciﬁc causes and result from the uncertainty of future events and a mostly incomplete level of information. In terms of impact, a risk is (mostly) reﬂected in a negative deviation from a deﬁned target value.

Concept, objective and fundamental orientation of Risk Management

Risk management is seen as the totality of all organizational regulations and measures for identifying and handling risks. The term risk management thus encompasses all methods, systems and systematic measures for identifying, analyzing, assessing, controlling and monitoring signiﬁcant risks that aﬀect the objectives and expectations of the Group. It also includes the further development of risk management instruments and cross-process monitoring and control. The aim of risk management is, on the one hand, to sustainably secure or increase the value of the Company, to secure the strategic and operative corporate objectives, to secure the future success of the Company and to optimize the medium and long-term risk costs by dealing with risks appropriately. Only by recording all the risks to which the Company is exposed can the necessary level of transparency be achieved.

Prior to a business transaction or implementing any new process, all potentially inherent risks are assessed and evaluated. However, there are risks that are not acceptable to the Group as a matter of principle. These risks are in particular:

Risks resulting from actions that violate applicable laws (laws, ordinances, regulations);
Risks resulting from actions that violate the internal guidelines of the Group or, at the level of individual companies, also the internal guidelines of the respective individual subsidiary;
Risks resulting from actions that cannot be reconciled with market practices in markets where Corestate operates and therefore entail a not inconsiderable reputational risk;
Risks resulting from actions that could endanger the continued existence of Corestate or individual companies of Corestate.

The Group ensures that all identiﬁed risks are supervised by the Management Board of Corestate, specially the liquidity risks, to keep the Group ongoing.

Risk concentrations and diversiﬁcation

Concentrations of risk (e.g. concentration exclusively on the real estate market of a single city) are avoided at all levels wherever possible. Where this is not possible, special attention is paid to such concentrations, and measures to reduce such concentrations are continuously reviewed and – where appropriate – implemented.

Corestate Annual Report 2022 41

GROUP MANAGEMENT REPORT

Risk diversiﬁcation, e.g. spreading the investments across various asset classes, markets or addressing diﬀerent groups of investors (family oﬀices, institutional investors, investors from the DACH region, from Asia, Africa, Russia, the Americas), is implemented where possible to keep dependencies as low as possible.

Risk Management and Controlling Process

To ensure eﬀective risk management, appropriate risk management and controlling processes have been set up in all individual companies to identify, assess, manage, monitor and communicate material risks and associated risk concentrations. The risk management and controlling processes ensure that the material risks – including those of outsourced activities and processes – are identiﬁed at an early stage, fully recorded and presented in an appropriate manner. The following sub-processes exist for Corestate in the area of risk management and risk controlling activities: The main functions involved in this process are as follows: The risk management and controlling processes are adjusted promptly to changing conditions as required. Accordingly, the documentation specifying the risk process is updated if necessary.Risks are also regularly reviewed to determine whether they are acceptable in the context of the respective business. In case of doubt, the responsible member of the management body or Group risk management is consulted.

Corestate Annual Report 2022 42 GROUP MANAGEMENT REPORT

Risks that are within unacceptable limits are examined to see whether they can be reduced or whether the risk acceptance needs to be changed. If neither of these is the case, it is examined whether the transaction based on such a risk can be continued or should be terminated.

Risk Identiﬁcation

Risk identiﬁcation is an ongoing process and deals with the question of what risks exist. The following risk type scheme, which is based on the regulatory minimum requirements for the regulated subsidiaries and is therefore also applied at Group level, serves as the identiﬁcation grid. Accordingly, a distinction is made between the following types of risk, which are deﬁned for Corestate as shown below. All identiﬁed risks are meaningfully sorted into one of the following four risk categories.

Market price risks

Market price risks relate to the possibility of negative changes in value due to unexpected changes in the underlying market parameters. The term market price risk therefore covers risks that arise because investments initiated by Corestate do not develop as forecast. This directly aﬀects investments made by a group company itself, i.e. separate investment funds are out of scope (see below). These investments can be used to be sold into an investment fund later (so-called warehousing). Risks of investments of investment funds do not aﬀect individual companies or Corestate per se. These risks only have relevance beyond the investment assets if they radiate to the companies of Corestate, e.g. via damage to reputation or lost legal disputes. In these cases, the radiance to Corestate is usually accompanied by a previous product, system or process deﬁciency or by human error within Corestate. Consequently, such risks are included in the category “operational risk“.

Market price risks can comprise all investment classes (i.e. real estate, other real assets, equities, commodities, ﬁxed income and credit). They therefore include interest rate risks. Within market price risks, general market risk must be distinguished from investment- speciﬁc risks (speciﬁc market risk and event risk). General market risk is the risk arising from the development of the market in which Corestate operates. Speciﬁc market risk and event risk relates to developments in individual companies or assets or sub-groups of companies or assets.

Counterparty default risks

Counterparty default risks are deﬁned as risks that involve the danger of partial or complete default of contractually agreed payments. They include counterparty risk. As with market price risks, counterparty default risks in the investment assets (e.g. default of tenants in commercial properties or lessees of moveable assets) do not aﬀect Corestate per se for the time being. Only if there are suspected spillover eﬀects on Corestate are corresponding risks included in this category.

Corestate Annual Report 2022 43 GROUP MANAGEMENT REPORT

Liquidity risks

Liquidity risks are dangers that arise from the lack of suﬀicient ﬁnancial resources. On the one hand, this includes liquidity risk in the narrower sense, which consists of the risk that Corestate companies will not be able to meet their current and future payment obligations in full or on time (e.g. due to the loss of existing sources of ﬁnancing). On the other hand, it contains risks resulting from the increase in the cost of ﬁnancing sources (funding risk). Here, too, a corresponding distinction is made between risks of the investment assets and risks of Corestate, as already mentioned.

Operational risks

Operational risks (including compliance risks) are deﬁned as the risk of losses caused by the inadequacy or failure of technology and infrastructure, employees, internal processes or external inﬂuences. The deﬁnition includes legal risks, because the business activities of Corestate are subject to the general conditions of tax, environmental, investment, rental and construction law, among others. Operational risk generally consists of many possible risk scenarios that are attributable to very diﬀerent failure aspects of individual risk causes, or several of those at the same time. A sub-risk is so-called compliance risk. This involves the risk of violation or infringement of internal or external rules. Risk consequences can be:

monetary losses resulting from inadequate procedures or processes (e.g. ﬁnes or loss of licenses and approvals)
damage to reputation (e.g. because companies of Corestate are subject of oﬀicial investigation proceedings).

Risks related to the COVID-19 Pandemic

Risks that relate to the COVID-19 pandemic are incorporated in the given risk framework either by considering such risks in existing risks or by adding newly identiﬁed risks to the risk inventory. The main risks due to the COVID-19 pandemic are on the market and on the liquidity side. Corestate is one of the main managers of student apartments and the temporary letting of micro-apartments, which are usually rented by long-distance commuting professionals and their employers. During the COVID-19 pandemic, universities tend to oﬀer mostly distance learning, which led to demand for student apartments falling sharply. Travel was restricted, so international students could not travel to their universities. Many countries ordered to work from home wherever possible to reduce contacts during commuting and in oﬀices the closure of hotels and similar accommodation. This caused demand for micro-apartments and other similar facilities to drop to nearly zero.

Corestate Annual Report 2022 44 GROUP MANAGEMENT REPORT

Corestate also manages a high number of malls and high street assets. During the pandemic, malls, shops, bars and restaurants were ordered to close several times, and sometimes for a longer period. In addition, access to such malls and shops was restricted by government measures (e.g. access only for vaccinated or recovered persons). The revenues of the malls and shops dropped accordingly, as tenants were not always able to pay full rents, or they terminated contracts partially or completely. This all led to the situation that the annual valuation of these assets was lower than before, which made it diﬀicult (if not impossible) to sell them at the originally expected price. Investors refrained also from investing in such asset classes, resulting in less opportunities to initiate new projects. In addition, Corestate is usually remunerated based on the value of the assets managed. Therefore, any lower valuations resulted in lower fee income.

Risk Assessment

Risk assessment is of crucial importance for risk management measures. It describes the importance of the individual risks and is determined from the probability of occurrence (measure of the probability of the risk occurring), the impact (potential damage before measures are taken) and the measures already implemented and planned (control options). It thus represents the basis for planning and controlling risks.

Procedure for identifying sub-risk types and individual risks

The existence and exact nature of the risk types described above and the sub-risks to be subsumed under them are checked by means of risk identiﬁcation. As part of risk identiﬁcation, the causes and eﬀects of the risk are described in each case.

Classiﬁcation of ESG risks

In accordance with various supervisory bodies that provide guidance on managing ESG risks, Corestate considers these risks within the framework of the existing risk landscape and risk inventory, as well as in case of new risks as a part of these. Only in those cases where the risks are purely ESG risks and there is no relation to existing risks are these risks newly and separately registered and integrated into the existing risk landscape using the existing risk categories.

Loss event database

Incidents of damage that have occurred can provide a basis for identifying and assessing risks. Claims are therefore recorded. A loss event is the occurrence of an operational risk (no matter whether or not already registered) which is claimed in the form of a loss. Known loss events above a certain amount are considered when assessing operational risks. In addition to the costs incurred, opportunities in the form of additional internal expenses and measures to limit or avoid damage are also recorded.

Corestate Annual Report 2022 45 GROUP MANAGEMENT REPORT

Entry and update cycle

The initial recording of a risk is carried out ad hoc when it is identiﬁed. An update must be carried out no later than twelve months after the date of its entry or last update. If necessary, the data is entered or updated ad hoc. In the event of a signiﬁcant change in the risk situation, a written ad hoc report is submitted to the risk management of Corestate.

General valuation rules

Risks are assessed net, i.e. considering measures that have been implemented. To determine an expected loss, the following formula is applied:

Component	Description
Damage	equals probability of occurrence
Frequency	multiplied by the expected loss frequency in the event of a loss according to the Poisson distribution
Amount	multiplied by the average amount of damage

In the case of risks that can only occur individually, the factor for the expected frequency of losses in the event of a claim is always 1, in order to rule out overestimation of risks.

Quantitative risk assessment

The quantitative risk assessment requires precise ﬁgures for the amount of loss (impact) in the respective currency (e.g. €, USD) and the probability of occurrence in % for the basic data. Individual risks are assessed based on their probability of occurrence and the impact/loss they cause. Wherever possible, historical values or planned ﬁgures and relevant indicators are used for this purpose.In cases where no corresponding data basis is available, the best educated guesses of the decentralized risk managers are used. If a single risk event can occur more than once or in several cases, this circumstance is appropriately considered in the probability of occurrence and the amount of loss, using the Poisson distribution.

Quantiﬁcation via qualitative risk assessment

Qualitative assessment is used if it is not possible to quantify a risk objectively or “subjectively“ in a reliable manner.

Combination of quantitative and qualitative risks

If risks are assessed both qualitatively and quantitatively, the highest category of both assessments must be used for the overall risk categorization.

Corestate Annual Report 2022 46 GROUP MANAGEMENT REPORT

Control priorities

All risks are depicted on a 5x5 matrix in a standardized manner regarding the extent of damage and probability of occurrence. The matrix itself is structured as follows:

Likelihood of occurrence: This is divided into class 1 to class 5 with the following ranges:

Impact: This is also divided into class 1 to class 5 with the following ranges:

Risk Mitigation

Risk management comprises the timely, situation-dependent, appropriate, and eﬀicient selection and implementation of risk management tools. Corestate applies various management approaches in dealing with risks, namely avoiding, spreading, limiting, minimizing/reducing, passing on and accepting the respective risk.

Corestate Annual Report 2022 47 GROUP MANAGEMENT REPORT

Major risks

– at Group level, risks are considered material if they have a high control priority, although non-substantial risks are of course also included in the risk management process.

Risk Reporting

Regular Reporting

Reports on the risk situation are submitted to the Management Board at least quarterly. This includes the top risks as well as the signiﬁcant risks, for which a detailed risk description is provided, including changes to the last report. The Supervisory Board is informed about the risk situation at least every quarter. This report also includes the top risks as well as the signiﬁcant risks, for which a detailed risk description is provided, including changes to the last report.

Ad-Hoc-Reporting

Both signiﬁcant risks identiﬁed outside the reporting dates and known risks whose assessment changes after a reporting date in such a way that the risk is classiﬁed as “material“ are reported ad hoc to the Management Board and, if applicable, to the Supervisory Board.

Corestate Annual Report 2022 48 GROUP MANAGEMENT REPORT

Internal Control System

Elements of the Control System

The internal control system (ICS) consists of regulations for managing the activities of Corestate (internal management system) and regulations for monitoring compliance with these regulations (internal monitoring system). It is structured as required by management and set up by the departments responsible and process owners. Its functionality and eﬀectiveness are periodically reviewed and adjusted. The internal monitoring system includes process-integrated (organizational security measures, controls) and process-independent monitoring measures, which are primarily carried out by Internal Audit. By deﬁning objectives and controls to provide assurance, management can gradually explore the overall need for controls.

Organizational Measures

Organizational security measures are carried out by automated facilities. They comprise error-preventing measures that are integrated into both the structural and procedural organization of the companies and are intended to guarantee a speciﬁed level of security (e.g. separation of functions, access restrictions in the IT area, payment guidelines).

Controls

Controls are carried out by means of measures that are embedded as a process in the work and operating procedures of the Corestate companies. Checks may be carried out before, during or after the operation to be checked. They can be carried out both by process-dependent persons and by automatic facilities, especially by IT (e.g. plausibility checks). The control associated with the work process has the aim of ﬁnding and preventing errors, if possible before the work process (or parts of it) is

Corestate Annual Report 2022 49 GROUP MANAGEMENT REPORT

completed. As far as possible, upstream controls should therefore be preferred to downstream controls.

Documentation of the Controls

The controls are deﬁned, established and documented in the processes. As part of risk management, the decentralized risk managers identify, record, assess, regularly review and update risks in a regular process and in cooperation with the respective specialist departments. The risks are regularly recorded by the decentralized risk managers. Regular reports on the risks are provided. Special focus has been put on the regulated entities of the Corestate Group while at the same time a best practice risk-based audit plan for all entities has been worked out.

Overall Risk Situation of the Group

The overall risk situation of the entire Group as at 31 December 2022 is “medium-high” (31 December 2021: “low-medium”). The following top 10 individual risks have been assessed as having a very high impact (category 5) and a medium to high likelihood of occurrence (category 3 to 4):

Variable returns from co-investments
Settlement of individual invoices
Impairment of funds
Variable returns from segments
Changing business environment
Individual placement guarantee
Tax risks/RETT
Litigation risks
Credit risks
Individual placement guarantee

The risk inventory shows that all relevant risks have been properly identiﬁed and assessed. Risks are managed accordingly. Material risks are appropriately examined by both the Management Board and the Supervisory Board, and measures taken are reviewed regularly. Overall, in view of the current assessment and measures taken, there are no risks that endanger the continued existence of the Group.

Corestate Annual Report 2022 50 GROUP MANAGEMENT REPORT

MATERIAL EVENTS AFTER THE REPORTING DATE

In January 2023, the suspensive conditions from the bondholder resolutions of 28 November 2022, regarding Corestate’s 2022 convertible bond and 2023 bond, were fulﬁlled.

In March 2023, Corestate reached an agreement with the bank ﬁnancing the Highstreet Giessen project to partially repay € 5.8m of the debt. This was necessitated by a breach of the debt service coverage ratio, driven by interest rate ﬂuctuations as of 31 December 2022. As part of the agreement, the remaining loan was extended until 30 June 2025.

A creditors’ meeting was held on 14 April 2023 to address both the senior unsecured and convertible bonds, resulting in their extension until 31 July 2023. Interest payments were deferred, and certain termination rights were waived to allow Corestate additional time to implement critical reorganization steps necessary for ﬁnancial restructuring.

In May 2023, Corestate resolved to implement the alternative restructuring concept and announced changes to the Management and Supervisory Boards: Dr. Nedim Cen was appointed to the Management Board as CEO, Stephan Götschel stepped down, and Dr. Carlos Enrique Mack was co-opted onto the Supervisory Board.

In June 2023, the creditors’ meetings approved, by a large majority, amendments to the bond terms, including a reduction of the total nominal volume from €488.3 million to approximately €105.5m, modiﬁcations to the bond conditions, and a request to transfer the stock market listing from the Prime Standard to the General Standard segment.

In July 2023, Corestate placed over 50% of the shares in HL Augsburg Oﬀices with investors, leading to a reclassiﬁcation into Investments in Associates and Joint Ventures. The inventory (€ 43.8m) and related liabilities, including non-controlling interests (€ 43.7m), were deconsolidated accordingly. By December 2023, all shares in HL Augsburg Oﬀices were fully placed among investors, and the remaining RETT (“Real Estate Transfer Tax”) blocker was reclassiﬁed into Other Financial Instruments.

In August 2023, the debt restructuring and recapitalization were completed, based on the resolutions passed by the creditors’ meeting and General Meetings in June and July 2023. This included a reduction in the ﬁnancial liabilities from bonds by around 78% waiver by creditors of bond obligations for an amount of € 394.1m out of which € 382.8m is related to bond nominal amounts and € 11.6m relates to interest due and an extension of the term until 31 December 2026. Further, a capital reduction was executed, decreasing the Group´s issued share capital by € 2,558,497.50 to € 6,174.00, without any cancellation of shares or any payments to shareholders. Immediately thereafter, a capital increase

Corestate Annual Report 2022 51 GROUP MANAGEMENT REPORT

was carried out, raising the share capital by € 23,826.00 to € 30,000.00 through the issuance of 132 million new shares to the bondholders and to the management.

In September 2023, the Management Board decided to discontinue the regulated operations of Corestate Bank GmbH and initiated the withdrawal of its license as a securities trading bank with BaFin (the German Federal Financial Supervisory Authority). Consequently, the remaining goodwill of Corestate Bank GmbH, valued at € 13.1m as of 31 December 2022, was fully impaired in 2023.

In October 2023, Corestate Capital Holding S.A. transitioned from the Prime Standard to the General Standard segment of the Frankfurt Stock Exchange.

Throughout 2023, Corestate successfully completed asset sales including three development projects and two student residences in Spain with a combined (transaction/book) value of € 29.3m.At the Company’s Supervisory Board meeting held on 29 August 2024, the Management Board of CCH SA has accepted the commercial oﬀer of KPMG Audit S.à r.l. in Luxembourg to mandate KPMG as sole auditor for the consolidated and standalone annual accounts of Corestate for the ﬁnancial year 2022. Throughout 2024, Corestate completed asset sales worth about € 39m including the sale of CRM Students Ltd. / UPARTMENTS Real Estate GmbH for about € 12m. In December 2024, Corestate settled all claims related to the Cologne-based Laurenz Carré project with an out-of-court payment of € 5.5m. This resolution ended the legal disputes, limited ﬁnancial exposure, and allowed the Group to refocus on its project development strategy. The project had originally been the subject of a forward purchase agreement signed in December 2021, contingent on building permits, with an expected purchase price of around € 320m. After notarisation errors were identiﬁed and Corestate withdrew from the contract, subsequent lawsuits were interrupted by the sellers’ insolvency, leading to the ﬁnal settlement in 2024.

In January 2025, HANSAINVEST Hanseatische Investment GmbH (“HANSAINVEST”) ﬁled a claim for damages against HFS Helvetic Financial Services AG (“HFS”) at the Hamburg Regional Court (Landgericht), accusing HFS of breaching its obligations (i) under consulting agreements between (among others) HFS and HANSAINVEST, and (ii) under trust agreements (indirectly) in favour of HANSAINVEST in relation to 18 bond issues for real estate project developments, which were subscribed by the special-AIF (Alternative Investment Fund) Stratos Immobilienanleihefonds II and the special AIF Stratos Immobilienanleihefonds IV in the period from 2017 to 2021. HFS has assessed the aforementioned claims internally as well as together with two renowned law ﬁrms and concluded the prospects of success of such claim to be around a maximum of 20%. In order to avoid lengthy legal proceedings, the associated costs and expenses, and to eliminate any ﬁnancial risks despite the low prospects of success, both Corestate Annual Report 2022 52 GROUP MANAGEMENT REPORT parties have agreed to settle the legal dispute amicably by way of an out-of-court settlement in November 2025. In the settlement agreement, HFS has agreed to assign certain assets to HansaInvest with a value of € 28.7m as of 31 December 2022, € 20.2m as of 31 December 2023 and € 16.0m as of 31 December 2024 in the consolidated statement of ﬁnancial position. Such settlement agreement is subject to the condition precedent that these assets, which are currently pledged as part of the security package in relation to the ﬁnancial liabilities of CCH SA under its outstanding bonds, shall be released and free of any encumbrances. The Company has received written instructions by the necessary 75% majority of noteholders in each of their outstanding bonds to release the relevant assets. Therefore, fulﬁllment of the condition precedent and closing of the transaction is expected to occur by end of December 2025.

In April 2025, Corestate signed an exclusive agreement with the French investment Group Atland for the sale of STAM Europe SAS (Paris) and its subsidiaries, including AIFM STAM France Investment Managers. In July 2025 CCH SA successfully sold its approximately 35% stake in the investment vehicle Liver Building Co, which owns the Royal Liver Building in Liverpool, United Kingdom, through its subsidiary HANNOVER LEASING to the Princes Group, one of the leading food and beverage companies in the United Kingdom. The sale price is around GBP 57m. After deducting all bank liabilities, including a shareholder loan, Corestate received a net amount of approximately € 16m. In September 2025, Corestate closed its sale of STAM Europe SAS (Paris) and its subsidiaries, including AIFM STAM France Investment Managers to the French investment Group Atland. Following the closing of the STAM Europe sale, Corestate resolved to make an early repayment of € 17.5m on the Super Senior Note (ISIN DE000A3LJQY6) eﬀective 14 October 2025.

In November 2025, the Group has reached an agreement with investment ﬁrms holding in excess of 75% of its two outstanding Senior Notes to extend their maturities by two years. Under the agreed amendment, the interest rate on the Senior Notes will increase from 8% to 12% in 2027 and to 15% in 2028. Supporting noteholders have executed a lock-up agreement, and creditors’ meetings to pass the formal resolutions are scheduled for December 2025. This extension provides Corestate with the necessary time to continue its asset disposal program without sales pressure and to maximize value.

Corestate Annual Report 2022 53 GROUP MANAGEMENT REPORT

OUTLOOK

Many of the issues that were sources of uncertainty in the market in 2022, supply bottlenecks, rising inﬂation, sustainability, and the future of work, remain unresolved. Overall, investors are continuing to focus on safe core properties in the face of high investment pressure and are taking ESG criteria into account. As a result, declining yields will contribute to a market revival in the non-core segment in the long term. At the same time, the further development of the European Central Bank’s interest rate policy remains uncertain. Hence, the environment for real estate transactions remains challenging, although it may be observed that the market plunge has reached its bottom.

Corestate will continue to pursue its strategic agenda rigorously and sustainably by concentrating on the Company’s core business asset management within the real estate equity segment and consolidating the activities by reducing property management activities and the real estate debt segment, particularly discontinuing the banking business. Besides value-driving portfolio eﬀects the Management Board’s focus is to secure the cash position and further to continue stabilizing the business by implementing restructuring measures eliminating double structures and gaining eﬀiciencies through reengineered processes. All in all, the return to proﬁtable margins through a clear concentration on the core business asset management as well as the operational restructuring is expected to lead to proﬁtable sustainable results again.

As for the performance in 2023 (including the later divested entities CRM Students Ltd. and UPARTMENTS Real Estate GmbH), the Company records a preliminary net revenue of € 11.5m, which includes extraordinary eﬀects of ﬁnancial asset impairment of € 555.5m, hence preliminary revenue on normalized basis for the ﬁnancial year 2023 amounts to € 67.0m. This reﬂects the discontinuation of the property management and the real estate debt segment becomes visible. For 2024 Management Board recorded (unaudited) aggregate revenue and gains on a normalized basis of € 36.6m based on an unadjusted ﬁgure of € 16.0m and extraordinary write-downs in ﬁnancial assets of € 20.6m. Like in 2023, in 2024 the real estate equity segment has further been focussed on the real estate asset management business while the real estate debt business will further be driven down as a whole. Following the turnaround and based on the thereby achieved leaner portfolio structure, new investments will be made to enable future proﬁtable growth again.

During the turnaround phase, EBITDA in 2023 (including the later divested entities CRM Students Ltd. and UPARTMENTS Real Estate GmbH) amounts to € 282.0m on a preliminary basis, which contains an extraordinary gain from the debt waiver in the amount of € 393.8m as well as partly oﬀsetting extraordinary expenses for restructuring (€ 32.8m) and ﬁnancial asset impairment (€ 52.0m). For the ﬁnancial year 2024, Management Board expects an unadjusted EBITDA of € -26.5m, which comes to € -7.0m restated by extraordinary eﬀects for valuation (€ 5.0m) and restructuring (€ 14.5m) charges.

Corestate Annual Report 2022 54 GROUP MANAGEMENT REPORT

While the year 2025 is considered to be another year in the turnaround phase in which measures are expected to generate increasing contributions, subject to the actual future development of the real estate market as well as the overall economy in the light of all known and unknown circumstances EBITDA break-even of the Group is expected for 2026. Corestate took the general decision not to pay a dividend to the shareholders for the time being. The Management Board believes that in the current time it is crucial for the Company to maintain stable capital resources in order to achieve sustainable organic growth and increase value for its shareholders. Therefore, the Company does not intend to propose any dividend payment until the outstanding bonds are fully repaid.

Luxembourg, 16 December 2025
Dr. Nedim Cen
Chief Executive Oﬀicer
Chief Financial Oﬀicer

Corestate Annual Report 2022 55

CONSOLIDATED FINANCIAL STATEMENTS

Corestate Annual Report 2022 56

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

€ million	Notes	31 Dec 2022	31 Dec 2021
Non-Current Assets
Goodwill	E.1	45.0	487.2
Other Intangible Assets	E.2	27.2	84.8
Investments in Associates and Joint Ventures	E.3	84.6	145.9
Other Financial Instruments	E.4	151.1	151.5
Property, Plant and Equipment	E.5	33.7	13.4
Non-Current Receivables	E.6	9.7	51.7
Non-Current Loans to Associated Entities	E.7	11.7	14.9
Deferred Tax Assets	D.14	15.5	41.5
Total Non-Current Assets		378.5	990.9
Current Assets
Inventories	E.8	121.1	100.0
Trade Receivables	E.9	26.2	47.2
Contract Assets	E.10	3.0	58.5
Receivables from Associated Entities	E.11	10.9	16.8
Other Current Financial Assets	E.12	31.1	86.5
Other Current Assets	E.13	12.6	12.1
Current Income Tax Assets	D.14	10.4	2.5
Restricted Cash	E.14	0.5	12.9
Cash and Cash Equivalents	E.14	56.1	62.8
Total Current Assets		271.9	399.2
Assets Held for Sale	B.1, B.3	-	23.5
TOTAL ASSETS		650.4	1,413.6

CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 57

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

€ million Notes 31 Dec 2022 31 Dec## CONSOLIDATED STATEMENT OF PROFIT OR LOSS

€ million	Notes	2022	2021¹
Revenue from Acquisition Fees	D.2	2.2	9.7
Revenue from Asset Management Fees	D.2	30.4	37.1
Revenue from Property Management Fees	D.2	21.1	17.2
Revenue from Sales and Promote Fees realized	D.2	0.8	23.1
Revenue from Development Fees	D.2	3.2	2.5
Total Revenue from Real Estate Equity Segment	D.2	57.7	89.6
Total Expenses from Real Estate Equity Segment	D.3	(80.1)	(86.5)
Total Earnings from Real Estate Equity Segment		(22.4)	3.1
Revenue from Underwriting and Structuring Fees	D.4	1.0	36.0
Revenues from Performance Fees	D.4	-	49.5
Income from Mezzanine Loans	D.4	6.9	18.1
Revenue from Asset Management Fees	D.4	15.1	17.3
Income from Trading Activities	D.4	2.9	1.0
Total Revenue from Real Estate Debt Segment	D.4	25.9	121.9
Total Expenses from Real Estate Debt Segment	D.5	(128.6)	(66.1)
Total Earnings from Real Estate Debt Segment		(102.7)	55.8
Rental Income and Service Charges	D.6	9.2	6.3
Net Result from Property Holding and Warehousing Exits	D.6	(0.4)	(2.7)
Share of Profit or Loss from Associates and Joint Ventures	D.6	(23.2)	2.5
Dividends from other Alignment Capital	D.6	2.7	12.8
Gains/(Losses) from Fair Value Measurement of Financial Instruments	D.6	(16.1)	(2.9)
Total Income/(Losses) from Other Segment	D.6	(27.8)	16.0
Total Expenses from Other Segment	D.7	(26.0)	(7.3)
Total Earnings from Other Segment		(53.8)	8.7
Reversal of Written-Down Receivables	D.8	30.7	3.4
Income from Reversal of Provisions	D.9	9.0	5.5
Other Income	D.10	39.3	7.4
General and Administrative (G&A) and Other Expenses	D.11	(68.2)	(59.5)
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)		(168.1)	24.4
Depreciation, Amortization and Impairment	D.12	(535.8)	(218.8)
Earnings before Interest and Taxes (EBIT)		(703.9)	(194.3)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS (CONTINUED)

€ million	Notes	2022	2021¹
Earnings before Interest and Taxes (EBIT)		(703.9)	(194.3)
Financial Income	D.13	8.2	7.3
Financial Expenses	D.13	(22.8)	(25.7)
Earnings before Taxes (EBT)		(718.5)	(212.7)
Income Tax Expense	D.14	(24.1)	13.7
Net Loss for the Year from Continued Operations		(742.6)	(199.0)
Net Loss for the Year from Discontinued Operations	B.3	(1.5)	(1.1)
Net Loss for the Year		(744.1)	(200.1)
of which attributable to Equity Holders of Parent Company		(743.8)	(201.1)
of which attributable to Non-Controlling Interests		(0.3)	1.0
Total Revenues²		92.8	217.7
Total Expenses³		(302.9)	(219.4)
Earnings per share based on net profit/loss attributable to equity holders of Parent Company (in €):
Loss per share from continued operations	D.15	(21.72)	(6.45)
Loss per share from discontinued operations	D.15	(0.04)	(0.04)

¹ The Consolidated Statement of Profit or Loss is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial 2021 (see Note A.2).
² Not including: Share of Profit or Loss from Associates and Joint Ventures, Net Result from Property Holding and Warehousing Exits, Dividends from other Alignment Capital, and Gains/(Losses) from Fair Value Measurement of Financial Instruments .
³ Excluding Financial Expenses and Depreciation, Amortization and Impairment.

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

€ million	2022	2021
Net Loss for the Year	(744.1)	(200.1)
Other Comprehensive Income
Other Comprehensive Income to be Reclassified to Profit or Loss in Subsequent Periods (Net of Tax):
Exchange differences on translation of foreign operations	(1.2)	4.4
thereof recycled	-	2.5
Net Other Comprehensive Loss to be Reclassified to Profit or Loss in Subsequent Periods	(1.2)	4.4
Remeasurement Gains/(Losses) on Defined Benefit Plans	0.9	-
Deferred Tax effect	-	(0.1)
Other Comprehensive Income not to be Reclassified to Profit or Loss in Subsequent Periods	0.9	1.1
Other Comprehensive (Loss)/Income for the Year, Net of Tax	(0.3)	5.4
Total Comprehensive Income for the Year, Net of Tax	(744.4)	(194.7)
of which attributable to equity holders of Parent Company	(744.1)	(195.7)
of which attributable to non-controlling interests	(0.3)	1.0

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Table data truncated for structure representation as provided in input)

CONSOLIDATED STATEMENT OF CASH FLOWS

€ million	Notes	2022	2021¹
Earnings before Interest and Taxes (EBIT)		(703.9)	(194.3)
Adjustments for:
Depreciation, amortization and impairment of non-current assets	D.12	516.0	218.8
Impairment of inventories	D.12	19.8	-
Net (gain)/loss on disposal of non-current assets	B.3	(7.4)	2.4
Losses from fair value measurement of financial instruments	D.6	16.1	2.9
Share of results from Associates and Joint Ventures	D.6	23.2	(2.5)
Equity-settled share-based payment transactions		(3.4)	3.5
Changes in:
Changes from purchase and sale of inventories and advanced payments	E.8	(14.3)	(18.6)
Changes in receivables and other assets that are not attributable to investing activities	E.6, E.9, E.10, E.11, E.12	179.9	24.3
Changes in liabilities that are not attributable to financing activities	E.23	(8.5)	17.8
Changes in provisions	E.21	5.2	3.6
Cash generated from operating activities
Interest paid	A.2	(0.6)	(0.7)
Income taxes paid	D.14	(21.4)	(26.7)
Net cash flows from operating activities		0.7	30.5
Acquisition of Subsidiaries		-	7.5
Sale of Subsidiaries	B.3	13.3	-
Outflow for Alignment Capital Investments		(0.8)	(1.7)
Inflow from repayment of Alignment Capital Investments	E.3	9.9	0.2
Payments for acquisition of PPE		(0.5)	(0.6)
Proceeds from sale of PPE		0.1	1.6
Payments for acquisition of intangible assets		(0.1)	(0.5)
Proceeds from sale of other intangible assets		0.6	-
Purchase of other financial instruments	E.4	(18.1)	-
Sale of other financial instruments	E.4	13.1	3.2
Net cash flows generated from investing activities		17.5	9.7

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

€ million	Notes	2022	2021¹
Net cash flows generated from investing activities		17.5	9.7
Repayment of lease liabilities	A.2	(4.2)	(4.5)
Proceeds from loans and borrowings	E.20	10.6	0.8
Repayment of loans and borrowings	E.20	(31.3)	(39.5)
Interest Expenses	D.13	(14.1)	(14.6)
Interest Income		1.7	2.1
Net cash flows used in financing activities		(37.3)	(55.7)
Cash and cash equivalents at the beginning of the Year		75.7	91.2
Net decrease in cash and cash equivalents		(19.1)	(15.5)
Cash and cash equivalents at the end of the Year		56.6	75.7

¹ The Consolidated Statement of Cash Flows is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial 2021 (see Note A.2).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

A. CORPORATE INFORMATION & BASIS OF PREPARATION

A.1 Corporate Information

Corestate Capital Holding S.A. (hereafter “CCH SA”or “the Company”) is a limited liability company (Société Anonyme) incorporated under Luxembourg law, with registered oﬀice at 4, Rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg. The Company was registered with the Luxembourg Register of Commerce and Companies (Registre de Commerce et des Sociétés) under number B 199 780 on 7 September 2015.Since 2017 the Company’s shares are traded on the regulated market segment (Regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). CCH SA is an investment manager for real estate equity and debt specializing in the creation and subsequent realization of real estate related investments in Europe for private and institutional clients. CCH SA and its subsidiaries (collectively “the Group” or “Corestate”) oﬀered a fully integrated business model, are active as a co-investor and asset and property manager and are focused on residential and commercial (primarily oﬀice, mixed use and retail) real estate as well as micro-living projects.

Geographically, the Group primarily concentrated on the German market but also was selectively active in other attractive markets in Europe such as France, United Kingdom, Austria, Switzerland, Poland and Spain. Its investment product oﬀering covered the full range of the risk / return curve, i.e. from value-add / opportunistic to core, and, in each case, was tailor made to the speciﬁc requirements of its clients. As a key element of its business model, the Group was actively warehousing certain real estate in order to seize opportunities both in competitive situations as well as in order to establish seed portfolios for institutional products.

As per 31 December 2022, the Group employs 415 FTE (2021: 811 FTE) in 6 countries with main oﬀices in Luxembourg, Frankfurt, Pullach, Madrid, Paris, Oxford, and Pfäﬀikon, providing direct access to local markets. These employees are mainly based in Germany (221 FTE), United Kingdom (113 FTE), Luxembourg (22 FTE), France (21 FTE), Switzerland (18) and others.

The consolidated ﬁnancial statements of CCH SA and its subsidiaries for the year ended 31 December 2022 were authorized for issue in accordance with a resolution of the Management Board and the Supervisory Board on 16 December 2025. The consolidated NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 65 ﬁnancial statements are subject to approval by the Annual General Meeting of Shareholders. The consolidated ﬁnancial statements of CCH SA are published according to the provisions of the Luxembourg Law and the exchange rules of the Frankfurt Stock Exchange. They will be available on the Company’s website and at the Company’s oﬀices at 4, Rue Jean Monnet, L-2180 Luxembourg, Grand Duchy of Luxembourg. Please note that on 1 August 2025 the Company’s oﬀices moved to 9-11, Grand-Rue, L-1661 Luxembourg. Additionally, the annual accounts under Luxembourg GAAP of the Company will be ﬁled with the Companies Register and an extract will be published in the Recueil Electronique des Sociétés et Association in accordance with Luxembourg Company Law.

A.2 Basis of Preparation

General principles

The consolidated ﬁnancial statements of CCH SA for the year ended 31 December 2022 have been prepared in accordance with International Financial Reporting Standards (IFRS® Accounting Standards) as adopted by the European Union (“EU”). The consolidated ﬁnancial statements have been prepared on a historical cost basis, except for certain ﬁnancial assets and liabilities that have been measured at fair value (see Note F.5 Fair Value Assets and Liabilities).

The consolidated ﬁnancial statements are presented in Euro, which is the presentation currency of the Group and the functional currency of the Parent Company. For each entity, the Group determines the functional currency and items included in the ﬁnancial statements of each entity are measured using the functional currency. The Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that is reclassiﬁed to proﬁt or loss reﬂects the amount that arises from using this method. All values are rounded to the nearest million (€m), except when otherwise indicated. Due to rounding, numbers presented may not add up precisely to totals provided.

The consolidated ﬁnancial statements provide comparative information in respect of the previous period. The Group presents assets and liabilities in its consolidated statement of ﬁnancial position based on current/non-current classiﬁcation. Assets and liabilities are classiﬁed as current when the Group expects them to be realized or settled in the normal operating cycle (e.g., inventories from warehousing or other current ﬁnancial assets), the Group holds the asset or liability primarily for the purpose of trading, the Group expects them to be realized or settled within twelve months after the reporting date and does not have the right (at the end of the reporting period) to defer settlement of the liability for at least twelve month after the reporting period (e.g., trade receivables/payables), or the asset is cash or cash equivalent unless restricted.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 66

All other assets and liabilities are classiﬁed as non-current, incl. deferred tax assets and liabilities. Financial information presented in parentheses denotes the negative of such number presented. In respect of ﬁnancial data set out in these consolidated ﬁnancial statements, a dash (“–”) signiﬁes that the relevant ﬁgure is not available, while a zero (“0”) signiﬁes that the relevant ﬁgure is available but has been rounded to or equals zero.

European Single Electronic Format (“ESEF”)

The consolidated ﬁnancial statements of Corestate Capital Holding S.A. for the ﬁnancial year ended 31 December 2022 have been prepared in accordance with the requirements of the European Single Electronic Format (“ESEF”). In line with the applicable regulatory framework, the Group has prepared its primary ﬁnancial statements in valid xHTML format and applied XBRL tagging using the relevant core taxonomy to ensure consistent, transparent and machine-readable digital reporting. Corestate Capital Holding S.A. has duly submitted and published the ESEF-compliant annual ﬁnancial report, including the xHTML document and the accompanying XBRL tags, in accordance with the ﬁling and disclosure obligations applicable in the European Union. The Company is committed to maintaining high-quality digital reporting standards and ensuring full compliance with the ESEF Regulation for the beneﬁt of investors and other stakeholders.

Going concern basis

The Management Board is responsible for the assessment of the Group’s ability to continue as a going concern. In the evaluation, the Management Board considered the inherent risks to the Group’s business model, including the ongoing conﬂict in Ukraine, the current interest rate environment and wider macroeconomic landscape. The Management Board analyzed how these risks might aﬀect the Group’s ﬁnancial resources or ability to continue operations in the foreseeable future.

As at 31 December 2022, the Group is in a net current liability position of € 414.1m (2021: € 30.2m). This is primarily due to amounts owed to bondholders of the Group for an amount of € 502.0m, classiﬁed as “Current Financial Liabilities from Bonds” (2021: € 488.9m), see also Note E.20. These liabilities were restructured post-year-end and will no longer be repaid in 2023. Due to various impairments and necessary individual value adjustments (incl. risk provisions) in 2022, the Group is also in a negative net equity position of € 120.3m as at year end (2021: positive net equity of € 626.2m). “Cash and cash equivalents” amount to € 56.1m, excluding restricted cash of € 0.5m (2021: € 62.8m).

In assessing the Group’s ability to continue as a going concern, the Management Board has considered the Group’s capacities in generating positive future cash ﬂow results. Based upon the resolutions passed by the creditors’ meeting and General Meetings in June and July 2023, the debt restructuring and recapitalization were completed in August

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 67

This included a reduction in the ﬁnancial liabilities from bonds by around 78% through waiver by creditors of bond obligations for an amount of € 394.1m, out of which € 382.5m is related to bond nominal amounts and € 11.6m relates to interest due, and an extension of the bond repayment deadline until 31 December 2026. Further, a capital reduction was executed, decreasing the Group´s issued share capital by € 2,558,498.50 to € 6,174.00, without any cancellation of shares or any payments to shareholders. Immediately thereafter, a capital increase was carried out, raising the share capital by € 23,826.00 to € 30,000.00 through the issuance of 132 million new shares to the bondholders and to the management. These measures together with the period’s operations of 2023 led to a preliminary (unaudited) positive net equity of € 107.3m and a cash position of € 39.3m as of 31 December 2023.

In addition, the operational restructuring of Corestate including an extensive cost-cutting program has been successfully implemented by end of 2024. With the liquidation of Corestate Bank as well as the sale of CRM and STAM, the Group structure will consist in the future of Corestate as a holding company and Hannover Leasing as operating subsidiary with a clear focus on investment and asset management.

In November 2025, the Group reached agreement with a majority of holders of its two outstanding senior notes amounting to € 64.8m and to € 40.7m, to further extend the bonds’ maturities to 31 December 2028. As of 31 December 2022, before the ﬁnancial restructuring, the senior notes were referred to as senior unsecured and convertible bonds. More than 75% of the noteholders support the planned adjustments, which include, among other things, an extension of the maturity until the end of 2028. Under the agreed amendment, the interest rate on the senior notes will be 8%, 12% and 15% in 2026, 2027 and 2028 respectively. A corresponding lock-up agreement has been signed by the main noteholders.The creditors’ meetings for formal resolution are scheduled for the end of December 2025. This extension gives Corestate the necessary time to implement the ongoing asset disposal program without sales pressure and thus maximize value. Refer to Note F.9 Signiﬁcant Events after the Reporting Date for further details. In summary, the circumstances that lead to a material going concern uncertainty relate primarily to the Group’s assumptions and liquidity forecast. The key assumptions for the going concern are the following: a) the full repayment of the Super Senior Bonds through its remaining asset disposals by end of 2026; b) the extension of the Senior Bonds until end of 2028 and the partial repayment of those notes through the remaining asset disposals; and c) the Group’s capacities in generating positive future EBITDA / cash ﬂow results and therefore its ability to repay or reﬁnance the remaining bond values by end of 2028.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corestate Annual Report 2022 68

Overall, considering the above assumptions, as at the date of the issuance of these consolidated ﬁnancial statements, the Management Board expects that the Group will have adequate resources to meet its cash ﬂow requirements for at least the next twelve months. These consolidated ﬁnancial statements were prepared using the going concern assumption that the Group will continue its operations for the foreseeable future. The Group plans to repay its liabilities using proceeds from assets expected to be disposed of in the future. However, uncertainty remains for the next twelve months from the approval of these ﬁnancial statements in the future fair value of the assets. The above circumstances, nevertheless, indicate that a material uncertainty exists that may cast signiﬁcant doubt on the Group’s ability to continue as a going concern.

Comparatives

Consolidated Statement of Cash Flows
For 2021 the presentation of cash payments for the interest portion of lease payments amounting to € 0.7m has been changed to show it as a cash ﬂow from operating activities under “Interest paid” within the Consolidated Statement of Cash Flows, rather than as a cash ﬂow from ﬁnancing activities within “Repayment of lease liabilities” in order to achieve more appropriate presentation and to ensure comparability with the balances for the ﬁnancial year ended 31 December 2022. Such regrouping or reclassiﬁcation did not aﬀect previously reported balances.

Consolidated Statement of Proﬁt or Loss
Other income
The presentation of Other Income in 2021 has been changed to show the additional line items Reversal of Written-Down Receivables in the amount of € 3.4m and Income from Reversal of Provisions in the amount of € 5.5m, rather than to include both amounts in the line-item Other Income in order to ensure comparability with the balances for the ﬁnancial year ended 31 December 2022. Such regrouping or reclassiﬁcation did not aﬀect previously reported balances.

Representation of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Consolidated Statement of Cash Flows
The net cash ﬂows from operating and investing activities for 2021 were represented according to the requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations to show CRM in continued operations rather than in discontinued operations. The changes of the net cash ﬂows from operating activities related to the following line items: Earnings before Interest and Taxes (EBIT) (€ -6.4m), Depreciation, amortization and impairment of non-current assets (€ 4.5m), Share of results from Associates and Joint Ventures (€ -2.7m), Changes in receivables and other assets that are not attributable to investing activities (€ 2.9m), Changes in liabilities that are not attributable to ﬁnancing activities (€ 0.6m) and Income taxes paid (€ 0.6m) resulting in a change of Net cash ﬂows from operating activities of € -0.5m. The changes of the net cash ﬂows from investing activities related to the following line items: Payments

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 69

for acquisition of PPE (€ -0.2m) resulting in a change of net cash ﬂows from investing activities of € -0.1m. Such representation did not aﬀect previously reported balances.

Consolidated Statement of Proﬁt or Loss
The presentation of Net loss for the Year from Discontinued Operations for 2021 of € 7.2m was changed to € 1.1m to show the revised strategy concerning the sale of CRM. Due to the fact that it is no longer seen as held for sale and consequently to show it as a continued operation, CRM was represented from the Net Loss for the Year from Discontinued Operations to the respective “Total Revenue from Real Estate Equity Segment” (€ 11.9m), “Total Expenses from Real Estate Equity Segment” (€ -15.1m), “Total Expenses from Other Segment” (€ 0.2m), “Other Income” (€ 0.8m), “Depreciation, Amortization and Impairment” (€ -4.4m) and “Income Tax Expense” (€ 0.3m) line items and ultimately to the Net Loss for the Year from Continued Operations for 2021 (€ -6.1m) following the requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Such representation did not aﬀect previously reported balances. However, the strategic options for CRM were re-evaluated by management in 2022 and it is no longer seen as held for sale since the quarter-end close 30 September 2022. Due to these circumstances the net loss for the year from discontinued operations for 2021 related to CRM was represented to the net loss for the year from continued operations.

A.3 General Remarks on Macro-Economic Circumstances

Overall, Corestate faces an increasingly complex and uncertain macroeconomic and geopolitical environment, including potential energy and gas shortages or supply disruptions. In addition, there is less predictable and increasing volatility in commodity and ﬁnancial markets, including equity and currency prices, due to rising interest rates and inﬂation rates, and increasing fears of a possible economic downturn. The impact of the coronavirus pandemic (COVID-19) on Corestate's consolidated ﬁnancial statements was considered dependent on the further development of virus variants and their threat, the progress of global vaccinations, the eﬀectiveness of vaccines and, related to this, the continued imposition of lockdowns. The impact varied signiﬁcantly by region and customer industry. The business environment in 2022 required Corestate to address COVID-19, the war in Ukraine and the sanctions imposed on Russia, in addition to considering potential countermeasures by Russia. Uncertainties in forecasts continue to exist, leading to the use of estimate- and assumption-sensitive accounting policies and management judgements. These may have a negative impact on the fair values and carrying amounts of assets and liabilities as well as the amount and timing of Corestate's proﬁt realisation and cash ﬂows. The severity and duration are critical to the extent of potential impacts to Corestate's consolidated

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 70

ﬁnancial statements. The Company based its estimates and assumptions on currently available knowledge and the best information available. Despite the uncertainties, management expects a stabilized outlook for the next years compared to 2021. This is also reﬂected in the planning periods of the Group’s CGUs (cash-generating-units; for goodwill and impairment test issues see Note C.4 and E.1). In addition, the large-scale business disruptions caused by the aforementioned macro-economic uncertainties may give rise to (temporary) liquidity issues for some entities within product structures. Deterioration in credit quality of loan portfolios and trade receivables (amongst other items) as well as the uncertainty caused by COVID-19 may have a non-negatable impact on the fair value measurements explicit for all ﬁnancial instruments and for all impairment testing assets in the Group.

A.4 New and revised IFRS Accounting Standards in issue but not yet eﬀective

The amendments presented in the following table had no material eﬀect on the consolidated ﬁnancial statements of Corestate:

Standard / Interpretation	Title and date of issuance	Date of publication in the Official Journal	Date of endorsement
IFRS 3	Amendments to “Business Combinations”: Amendment to References to the Conceptual Framework (issued on 14 May 2020)	28 June 2021	2 July 2021
IAS 16	Amendments to “Property, Plant and Equipment”: Proceeds before Intended Use (issued on 14 May 2020)	28 June 2021	2 July 2021
IAS 37	Amendments to “Provisions, Contingent Liabilities and Contingent Assets”: Onerous Contracts – Cost of Fulfilling a Contract (issued on 14 May 2020)	28 June 2021	2 July 2021
Annual improvements to IFRS 2018–2020	IFRS 1 “First-time adoption of International Financial Reporting Standards”: Subsidiary as a First-Time Adopter”	28 June 2021	2 July 2021
	IFRS 9 “Financial Instruments”: Fees in the “10% Test” for Derecognition of Financial Liabilities
	IFRS 16 “Leases”: Lease Incentives
	IAS 41 “Agriculture”: Taxation in Fair Value Measurements (issued on 14 May 2020)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 71

At the date of authorization of these consolidated ﬁnancial statements, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet eﬀective and in some cases have not yet been adopted:

Standard / Interpretation	Title and date of issuance	EU effective date	Date of endorsement	Date of publication in the Official Journal
IFRS 19	New Standard “Subsidiaries without Public Accountability: Disclosures” (issued on 9 May 2024)	1 January 2027	Not yet endorsed	Not yet published
IFRS 19	Amendments to “Subsidiaries without Public Accountability: Disclosures” (issued on 21 August 2025)	1 January 2027	Not yet endorsed	Not yet published

Standard / Interpretation	Title and date of issuance	EU effective date	Date of endorsement	Date of publication in the Official Journal
IFRS 18	“Presentation and Disclosure in Financial Statements” (issued on 9 April 2024)	1 January 2027	Not yet endorsed	Not yet published (expected for Q1/2026)
Annual Improvements Volume 11	Improvements clarifications, simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards: IFRS 1 “First-time Adoption of International Financial Reporting Standards”: Hedge accounting by a first-time adopter; IFRS 7 “Financial Instruments: Disclosures”: a) Gain or loss on derecognition; b) deferred difference between fair value and transaction price; c) credit risk disclosures; IFRS 9 “Financial Instruments”: a) Lessee derecognition of lease liabilities b) Transaction price; IFRS 10 “Consolidated Financial Statements”; Determination of a ‘de facto agent’; IAS 7 “Statement of Cash Flows”: Cost method (issued on 18 July 2024)	1 January 2026	9 July 2025	10 July 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 72

Standard / Interpretation	Title and date of issuance	EU effective date	Date of endorsement	Date of publication in the Official Journal
IFRS 9 and IFRS 7	Amendments to “Financial Instruments”: Contracts Referencing Nature-dependent and Electricity (issued on 18 December 2024)	1 January 2026	30 June 2025	1 July 2025
IFRS 9 and IFRS 7	Amendments to “Financial Instruments”: Classification and Measurement of Financial Instruments (issued on 30 May 2024)	1 January 2026	27 May 2025	28 May 2025
IAS 21	Amendments to “The Effects of Changes in Foreign Exchange Rates”: Determination of Exchange Rates in the Event of Lack of Exchangeability (issued on 15 August 2023)	1 January 2025	12 November 2024	13 November 2024
IAS 7 and IFRS 7	Amendments to “Statement of Cash Flows” and “Financial Instruments: Disclosures”: Disclosure requirements in connection with supplier finance arrangements (issued on 25 May 2023)	1 January 2024	15 May 2024	16 May 2024
IAS 1	Amendments to “Presentation of Financial Statements” – Classification of Liabilities as Current or Noncurrent (issued on 23 January 2020) –Deferral of Effective Date (issued on 15 July 2020) – Classification of Noncurrent Liabilities with Covenants (issued on 31 October 2022)	1 January 2024	19 December 2023	20 December 2023
IFRS 16	Amendments to “Leases”: Accounting of a Lease Liability in a Sale and Leaseback (issued on 22 September 2022)	1 January 2024	20 November 2023	21 November 2023
IAS 12	Amendments to “Income taxes”: International Tax Reform – Pillar Two Model Rules (issued on 23 May 2023)	Immediately 1 January 2023	8 November 2023	9 November 2023
IFRS 17	Amendments to “Insurance contracts”: Initial Application of IFRS 17 and IFRS 9: Comparative Information (issued on 9 December 2021)	1 January 2023	8 September 2022	9 September 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 73

Standard / Interpretation	Title and date of issuance	EU effective date	Date of endorsement	Date of publication in the Official Journal
IAS 12	Amendments to “Income Taxes”: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (issued on 7 May 2021)	1 January 2023	11 August 2022	12 August 2022
IAS 1	Amendments to “Presentation of Financial Statements” and IFRS Practice Statement 2: “Disclosure of Accounting policies” (issued on 12 February 2021)	1 January 2023	2 March 2022	3 March 2022
IAS 8	Amendments to “Accounting policies, Changes in Accounting Estimates and Errors”: Definition of Accounting Estimates (issued on 12 February 2021)	1 January 2023	2 March 2022	3 March 2022
IFRS 17	New Standard “Insurance Contracts” (issued on 18 May 2017); including Amendments to IFRS 17 (issued on 25 June 2020)	1 January 2023	19 November 2021	23 November 2021

The Group is still in the process of assessing the impact of the accounting standards IFRS 19 Subsidiaries without Public Accountability: Disclosures; the Amendments to IFRS 19; Annual Improvements Volume 11 (including amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7); the Amendments to IFRS 9 and IFRS 7 Financial Instruments: Contracts Referencing Nature-dependent and Electricity; the Amendments to IFRS 9 and IFRS 7 Classiﬁcation and Measurement of Financial Instruments; the Amendments to IAS 21 The Eﬀects of Changes in Foreign Exchange Rates; the Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements; the Amendments to IAS 1 Presentation of Financial Statements; the Amendments to IFRS 16 Leases: Sale and Leaseback; the Amendments to IAS 12 Income Taxes: Pillar Two Model Rules; the Amendments to IFRS 17 Insurance Contracts; the Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction; the Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies; the Amendments to IAS 8 Deﬁnition of Accounting Estimates; IFRS 17 Insurance Contracts and IFRS 18 Presentation and Disclosure in Financial Statements, particularly with respect to the structure of the Group’s consolidated statement of proﬁt or loss, the consolidated statement of other comprehensive income, the consolidated statement of cash ﬂows and the additional disclosures required for management-deﬁned performance measures (MPMs).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 74

B. SCOPE OF CONSOLIDATION AND BUSINESS COMBINATIONS

B.1 Consolidation Scope

The consolidated ﬁnancial statements comprise the ﬁnancial statements of CCH SA and its subsidiaries as at 31 December 2022. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to aﬀect those returns through its power over the investee. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated ﬁnancial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Proﬁt or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deﬁcit balance. When necessary, adjustments are made to the ﬁnancial statements of subsidiaries to bring their accounting policies into line with the Group‘s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash ﬂows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non- controlling interest and other components of equity while any resultant gain or loss is recognized in proﬁt or loss. Any investment retained is recognized at fair value.

In the reporting period 2021, the property management businesses of Capera (Capera Immobilien Service GmbH) and CRM (a boutique comprising the following entities: CRM Students Ltd., Hartly Invest S.L.U, Cisnes e Silhuetas Unipessoal Lda and CRM MICRO LIVING SERVICES Italy S.R.L.) were classiﬁed and reported as held for sale in the consolidated ﬁnancial statements in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (refer to Note A.2). In May 2022, the Group successfully sold the property management business of Capera for € 13.3m in cash (refer to Note B.3).

Eleven additions to the consolidated entities were made in 2022. A notable impact on the consolidated ﬁnancials only resulted from the warehousing asset located in Augsburg (i.e., LAUREA Verwaltungsgesellschaft mbH & Co. Vermietungs KG). This entity was deconsolidated in 2023 following the disposal of all remaining shares to external investors (full market placement of the warehousing asset).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 75

The following table shows the movements of consolidated entities:

Consolidated Entities	2021	First consolidation	Deconsolidation	Merger	2022
Consolidated Entities	118	11	13	12	104
thereof Germany	55	7	4	7	51
thereof Other Countries	63	4	9	5	53

Seventeen associated companies have been disposed of during the reporting period. The following table shows the movements of associated entities:

Associated Entities	2021	Additions	Disposals	Merger	2022
Associated Entities	98	-	17	1	80
thereof Germany	17	-	3	-	14
thereof Other Countries	81	-	14	1	66

Overall, the Group acquired a total of net assets amounting to € 3.8m (2021: € 40.0m) through ﬁrst-time consolidation of nine entities presented below. Accordingly these acquisitions are considered immaterial individually and collectively. Net assets acquired primarily consist of tangible assets while other asset types or liabilities are considered insigniﬁcant. No goodwill arose as a result of these business combinations. These entities were consolidated in line with IFRS 3“Business combination”as a result of gaining control via majority of the votes. In total, these ﬁrst-time consolidated entities account for revenues in the amount of € 1.2m (2021: € 27.1m) and net results of € 0.8m (2021: € -4.4m).

Name of Acquired Company	Seat and Country of Incorporation	Date of Acquisition	Equity Interest
HANNOVER LEASING Finance GmbH	Pullach / Germany	28 Feb 2022	94.90%
HL Augsburg Offices GmbH & Co. geschlossene Investment-KG	Pullach / Germany	30 Apr 2022	53.43%
King AIF 1 S.à r.l.	Luxembourg	31 Dec 2022	100.00%
King AIF 2 S.à r.l.	Luxembourg	31 Dec 2022	100.00%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 76

The following table includes the number of companies that have been excluded from consolidation due to their immaterial eﬀects on the Group's net assets, ﬁnancial position, and results of operations. These are predominantly shelf companies without any operating business or general partner limited liability companies without any further business operations.

Number of Companies	2022	2021
Not consolidated companies due to immaterial effects
Subsidiaries	143	166
Associates & Joint Ventures	51	52

25 entities presented below have been deconsolidated during the year. Thirteen formerly full-consolidated entities (9 of them liquidated, 4 sold) led to a total net result of € 10.0m (2021: € 0.0m). This was mainly due to a positive eﬀect of € 11.6m from the sale of Capera (see also Notes B.3 and D.10). 12 formerly fully consolidated entities have been merged within the Group.

Name of Deconsolidated Company	Seat and Country of Incorporation	Equity Interest
Aggregate Debt Advisory GmbH	Frankfurt on Main / Germany	merged
Corestate Capital International S.à r.l.	Luxembourg	merged
Corestate Capital Investors (Europe) GmbH	Frankfurt on Main / Germany	merged
Corestate Capital Sales Holding S.à r.l.	Luxembourg	merged
Corestate Marketing GmbH	Frankfurt on Main / Germany	merged
Corestate Shelf 11 S.àr.l.	Luxembourg	merged
Dedan AIF S.à r.l.	Luxembourg	merged
GALENA Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	merged
JOYN Vermietungsgesellschaft mbH	Frankfurt on Main / Germany	merged
Livision GmbH	Frankfurt on Main / Germany	merged
Madison HoldCo S.à r.l.	Luxembourg	merged
NOVELLINO Geschäftsbesorgungs GmbH & Co. Verwaltungs KG	Pullach / Germany	merged
Corestate Capital Italy S.R.L.	Milan / Italy	liquidated
Corestate Capital Partners UK Ltd.	London / United Kingdom	liquidated
Court PropCo S.à r.l.	Luxembourg	liquidated
Freizeitgeräte Leasing GmbH i. L.	Pullach / Germany	liquidated
LOMBARDO Verwaltungsgesellschaft mbH	Pullach / Germany	liquidated
Mariggo Investments sp.z.o.o.	Warsaw / Poland	liquidated
Paolia sp.z.o.o.	Warsaw / Poland	liquidated
Wallhalla PropCo S.á r.l.	Luxembourg	liquidated

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 77

Name of Deconsolidated Company (continued)	Seat and Country of Incorporation	Equity Interest
Wallhalla HoldCo S.á r.l.	Luxembourg	liquidated
Capera Immobilien Service GmbH	Neu-Isenburg / Germany	sold
CE Bad Honnef Betriebsgesellschaft mbH	Frankfurt on Main / Germany	sold
HARBOUR AcquiCo 1 AIF S.à r.l.	Luxembourg	sold
Rose HoldCo S.à r.l.	Luxembourg	sold

B.2 Business Combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquisition. The Group as acquirer measures the identiﬁable assets acquired and the liabilities assumed (including contingent liabilities) at their acquisition-date fair values. For each business combination, the Group measures the non-controlling interests in the acquisition at the proportionate share of the acquiree‘s identiﬁable net assets. Acquisition-related costs are expensed as incurred and included in the respective expense category (e.g. legal and consulting costs) as well as segment reporting.

The Group as acquirer recognises goodwill as of the acquisition date measured as the excess of (a) the aggregate of the consideration transferred and the amount of any non- controlling interest in the acquiree over (b) the net of the acquisition-date amounts of the identiﬁable assets acquired, and the liabilities assumed measured in accordance with IFRS 3.

The acquisition of an asset or a group of assets that does not constitute a business: in such cases the acquirer shall identify and recognise the individual identiﬁable assets acquired (including those assets that meet the deﬁnition of, and recognition criteria for, intangible assets in IAS 38 Intangible Assets) and liabilities assumed. The cost of the group shall be allocated to the individual identiﬁable assets and liabilities based on their relative fair values at the date of purchase. Such a transaction or event does not give rise to goodwill.

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classiﬁcation and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. Any contingent liabilities recognised in a business combination are initially measured at fair value at acquisition date. After initial recognition and until the liabilities are settled, cancelled or expired, these liabilities are measured at the higher of (a) the amount that would be recognised in accordance with IAS 37; and (b) the amount initially recognised less, if appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15 Revenue from Contracts with Customers.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 78

B.3 Deconsolidation

In May 2022, the Group successfully sold the property management business of Capera for € 13.3m in cash. The purchase price was reduced by € 0.1m compared to the quarterly statement as of 30 June 2022 due to the contractually stipulated assumption of the generated loss of Capera in the amount of 30% until the date of sale. The amount of the loss absorption is based on the annual ﬁnancial statements of Capera for the shortﬁnancial period from 1 January 2022 to 31 May 2022, which were prepared and audited on 18 November 2022. With the intention to sell the Company since November 2021, the business of Capera, initially part of the Real Estate Equity segment, has been shown as discontinued operations up to the point of sale. The proﬁt of the deconsolidation is part of the Groups’ Other Income and comprises the following items:

€ million	Capera Immobilien Service GmbH
Voting rights sold	100.0%
Property, Plant & Equipment	2.5
Intangible Assets	1.6
Trade Receivables	1.4
Other Assets	0.4
Cash and Cash Equivalents	0.3
Total Assets	6.2
Other Provisions	1.4
Liabilities to CCH SA	0.3
Trade Payables	0.3
Other Liabilities	2.5
Total Liabilities	4.6
Net Assets sold	1.6
Sale Price	13.3
Gain from Deconsolidation	11.6
Revenues until Date of Deconsolidation1	7.4
Net Loss until Date of Deconsolidation2	(1.5)

1 Amount is presented under Net (gain)/loss on disposal of non-current assets in the Consolidated Statement of Cash Flows
2 Amount is presented as Net Loss for the Year from Discontinued Operations in the Consolidated Statement of Profit or Loss

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 79

C. SIGNIFICANT ACCOUNTING & VALUATION POLICIES

C.1 Signiﬁcant Accounting Judgements, Estimates and Assumptions

The preparation of the Group‘s consolidated ﬁnancial statements requires management to make judgements, estimates and assumptions that aﬀect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities aﬀected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next ﬁnancial year, are described below.

The Group based its assumptions and estimates on parameters available when the consolidated ﬁnancial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reﬂected in the assumptions when they occur.

In the process of applying the Group‘s accounting policies, management has made the following judgements and estimates, which have signiﬁcant eﬀect on the amounts recognized in the consolidated ﬁnancial statements:

Business Combinations

In a business combination, all identiﬁable assets, liabilities and contingent liabilities acquired are recorded at the date of acquisition at their respective fair value. One of the most signiﬁcant estimates relates to the determination of the fair value of these asset and liabilities. Land, buildings and equipment are usually independently appraised while marketable securities are valued at market price. If any intangible assets identiﬁed, depending on the type of intangible asset and the complexity of determining its fair value, the Group either consults with an independent external valuation expert or develops the fair value internally, using an appropriate valuation technique which is generally based on a forecast of the total expected future net cash ﬂows. These valuations are linked closely to the assumptions made by the Group’s management regarding the future performance of the assets concerned and any changes in the discount rate applied (see Note E.1).### Recoverability of Goodwill and brand names

The Group tests annually and, in addition, if any internal or external indicator exists, whether goodwill and brand names with indeﬁnite useful lives need to be impaired. If an indicator prevails, the recoverable amount of the aﬀected cash-generating unit(s) has to be estimated which is determined as the greater of the fair value less costs to sell and the value in use. The determination of the recoverable amount involves making judgements and estimates related to the projection and discounting of future cash ﬂows. Although the Group’s management believes the assumptions used to calculate recoverable amounts NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 80 are appropriate, any unforeseen changes in these assumptions could result in an impairment to goodwill or brand names in the future which could adversely aﬀect the future ﬁnancial position and operating results (see Note E.1).

Other Financial Instruments

For other ﬁnancial instruments that are measured at fair value, there is estimation uncertainty in determining the fair value. Depending on the level of fair values, the estimation uncertainty is being regarded as signiﬁcant. This particularly relates to level 3 fair values for which the lowest level input that is signiﬁcant to the fair value measurement is unobservable.

Expected Credit Loss

For ﬁnancial assets measured at amortized cost a provision for expected credit losses (ECLs) is recognized. The determination of the ECL follows a 3-stage approach:

For credit exposures for which there has not been a signiﬁcant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (ECL Stage 1)
For those credit exposures for which there has been a signiﬁcant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (ECL Stage 2) – this step also applies to trade receivables, for which a simpliﬁed approach starting with ECL Stage 2 is applied
If the ﬁnancial asset’s credit risk increases to the point where it is considered credit-impaired, a loss allowance is still required for credit losses expected over the remaining life of the exposure, however, interest revenue is then calculated based on the loan’s amortized cost (ECL Stage 3)

The provision rates are based on multiple inputs (i.e. depending on geographical region, product type, customer type and rating, and collateral). The calculation of the provision reﬂects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. In particular for ﬁnancial assets that are considered credit impaired (ECL Stage 3) the determination of the provision of ECL is subject to signiﬁcant estimation uncertainty relating to assumptions on the expected timing of cash ﬂows and the value of credit enhancements (such as collateral). The maximum exposure to credit risk at the reporting date is the carrying value of each class of ﬁnancial assets disclosed in Note F.4.

Assessing signiﬁcant inﬂuence on Associates and Joint Ventures

Generally, entities are classiﬁed as Associates in case the Group holds more than 20% and less than 50% of the voting rights. However, the Group classiﬁes entities also as an Associate if it holds less than 20% of the voting rights and considers that it has a NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 81 signiﬁcant inﬂuence on such entity based on the underlying investment documentation. Signiﬁcant inﬂuence is usually evidenced in one or more of the following ways:

Representation on the Board of directors or equivalent governing body of the investee,
Participation in policy-making processes, including participation in decisions about dividends or other distributions,
Material transactions between the entity and its investee,
Interchange of material personnel,
Provision of essential technical information.

With regard to providing real estate investment management services the Group regularly enters into asset management agreements with all parties involved. A signiﬁcant part of these asset management services is to provide the investee with the Group‘s expertise which also involves technical services, i.e., market information, asset management and business plan expertise. Hence, the provision of technical services through an asset management contract to associated entities as investees is considered a supplementary indicator (see Note E.3).

Valuation of Investment properties of Associates and Joint Ventures, and Inventories

The fair value of investment property as the main assets of the Associates and Joint Ventures, and Inventories (real estate properties in “Real Estate Operations and Warehousing” as part of other segments) is determined by using recognised valuation techniques. Such fair value measurement has a signiﬁcant impact on the Group‘s Investment in Associates, and Inventories. The valuation technique comprises mainly the income method (DCF (discounted cash ﬂow) based). Under the DCF method, a property‘s fair value is estimated using explicit assumptions regarding the property’s cash inﬂows and outﬂows over its life including estimated rental income and an exit or terminal value. This involves the projection of future cash ﬂows which are discounted by a market-derived discount rate in order to determine the property‘s fair value. For the purpose of IFRS 13, the fair value measurement of investment property and inventories is considered to be a Level 3 method (see Note C.2).

Main key input parameters used in the DCF models include:

Discount rate
Cap rate
Market rents
Vacancy rate (current/long-term)
Annual rent adaptation NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 82
Maintenance costs
Inﬂation rate
Costs to sell

The net cash ﬂow for the planning period is discounted to the valuation date using an appropriate discount rate for each property. The capitalization rate is used to forecast future cash ﬂows into perpetuity following the ten-year planning period (as it is assumed that properties are held for a 10-year period). Key input parameters may vary depending on the real estate property usage (i.e., commercial or residential building, student homes and developments), on the location and condition of the property and market trends. If the property market or general economic situation develops negatively, there is a risk that the measurements might have to be adjusted. If the real estate assets decline in value, this would have a negative eﬀect on the Group‘s Investment in Associates and Joint Ventures, Loans to Associates and Joint Ventures and Receivables from Associates or Joint Ventures (for further information see Note A.3 and a sensitivity analysis of the eﬀect of changes in the value of the Associates and Joint Ventures see Note E.3).

Promote and Coupon Participation Fee

In some projects, the Group is entitled to receive a success fee ("promote fee") equalling from 15% to 20% of the net project returns. The claim for the promote fee is only recognised when the relevant transaction documentation resulting in a net project return has been validly entered into (signed) and becomes only payable after all investor commitments have been fully repaid to the investors. At this time, it is probable that the promote fee will ﬂow to the Group. Promote fees represent a compensation for the Group's investment management services rendered in relation to a particular investment and predominantly is an element in the fee pattern of investment products for private clients. In case certain amounts of the net project return are withheld at closing of a transaction for escrow purposes, the payment of the pro-rated promote fee is also deferred until the amounts in escrow are released.

Coupon Participation Fees, included in Revenue from Sales and Promote Fees realised line item, are generated through sustainable and signiﬁcant excess returns of HFS products (mezzanine ﬁnancing) above a certain pre-agreed hurdle rate. The Group’s contracts with customers for these types of services generally include one performance obligation. The Group has concluded that revenue from Coupon Participation Fees should be recognized over time when the services are provided because the Group’s performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. The Group uses an output method to measure progress towards complete satisfaction of the return on investment of the HFS Funds based on monthly fair value measurement of the mezzanine ﬁnancing (see Note C.18).

Provisions and contingent liabilities

Provisions are liabilities of uncertain amount or due date. The recognition of a provision generally requires a present obligation as a result of a past event, that a corresponding outﬂow of resources is probable and that the amount of this outﬂow of resources can be reliably estimated. This can inter alia include obligations from restructuring activities or litigation cases. Provisions are measured using the best estimate of the extent of the obligation.

Contingent liabilities are possible obligations for which the event has not occurred, or the probability of a settlement is not more likely than not at the reporting date. This amongst others can include obligations to make additional ﬁnancial contributions to investments or obligations from guarantees or letters of comfort.Contingent liabilities are measured using the best estimate of the extent of the obligation.

C.2 Fair Value Measurement

The Group measures some ﬁnancial instruments such as derivatives and some non-ﬁnancial assets such as investment properties in Associates at fair value at each balance sheet date. Fair value related disclosures for ﬁnancial instruments and non-ﬁnancial assets that are measured at fair value or where fair values are disclosed are summarized in the following Notes:

Disclosure	Note
Disclosures for valuation methods, significant estimates and assumptions	Note F
Disclosures of fair value measurement hierarchy	Note F
Investment properties	Note C.6
Inventories	Note C.10
Investment in unquoted equity shares	Note F
Financial instruments (including those carried at amortized cost)	Note F

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 84

A fair value measurement of a non-ﬁnancial asset takes into account a market participant‘s ability to generate economic beneﬁts by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which suﬀicient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the ﬁnancial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is signiﬁcant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities,
Level 2 – Valuation techniques for which the lowest level input that is signiﬁcant to the fair value measurement is directly or indirectly observable (comparable transactions),
Level 3 – Valuation techniques for which the lowest level input that is signiﬁcant to the fair value measurement is unobservable (valuation models).

For assets and liabilities that are measured at fair value on a recurring basis in the ﬁnancial statements, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is signiﬁcant to the fair value measurement as a whole) at the end of each reporting period.

The Group’s Executive Management (“Group’s management”) determines the policies and procedures for both recurring fair value measurement, such as investment properties and certain ﬁnancial assets. At each reporting date, the Group’s management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies. For this analysis, the Group’s management veriﬁes the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. Generally external valuers are involved for valuation of signiﬁcant assets, such as investment properties. Involvement of external valuers is determined annually by the Group’s management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 85

C.3 Foreign Currencies

The Group’s presentation currency is the Euro (€), which is the presentation currency of the Group and the functional currency of the Parent Company and for the majority of the subsidiaries which are fully consolidated. The Group’s performance and its liquidity management is evaluated in Euro. Therefore, the Euro is considered as the currency that most faithfully represents the economic eﬀects of the underlying transactions, events and conditions. As the sole exception, for CRM the functional currency is the British Pound (GBP).

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction ﬁrst qualiﬁes for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Diﬀerences arising on settlement or translation of monetary items are recognized in proﬁt or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

On consolidation, the assets and liabilities of foreign operations (i.e. CRM) are translated into Euro at the rate of exchange prevailing at the reporting date and their statements of proﬁt or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange diﬀerences arising on translation for consolidation are recognized in OCI. On disposal of a foreign operation, the component of OCI relating to that foreign operation is reclassiﬁed to proﬁt or loss. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

C.4 Goodwill

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the net identiﬁable assets acquired and liabilities assumed). After initial recognition, goodwill is measured at cost less any accumulated impairment losses (see also Note C.1). As such, goodwill as well as other long-lived assets (see Note C.5) are tested annually for impairment and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. In determining an asset’s value in use, the estimated future cash ﬂows are discounted using a pre-tax rate that reﬂects the market’s current assessment of the cost of money for the investment period and the speciﬁc risk proﬁle of the asset. The

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 86

recoverable amount is the higher of an asset’s fair value less cost to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are identiﬁable cash ﬂows (CGU’s). For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGU’s or groups of CGU’s that are expected to beneﬁt from the combination, irrespective of whether other assets or liabilities of the acquisition are assigned to those units. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense and is not subsequently reversed.

C.5 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. The useful lives of intangible assets are assessed as either ﬁnite or indeﬁnite. Intangible assets with ﬁnite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a ﬁnite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic beneﬁts embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Amortization is calculated on a straight-line basis over the estimated useful lives of the intangible assets with a ﬁnite life, as follows:

Software: 3 to 5 years
Asset Management Agreements: 2 to 17 years
Order Backlog: up to 2 years
Customer Relationships: 4 years
Corporate brand ‘YOUNIQ’: 14 years

Intangible assets with indeﬁnite useful lives relate to goodwill and brand names, since both of them are not being worn down throughout a lifespan and are not being used together with speciﬁc other assets that have a ﬁnite usage period.Goodwill and brand names are not amortized but are tested for impairment annually at the cash-generating unit level.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 87

Gains or losses arising from derecognition of an intangible asset are measured as the diﬀerence between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of proﬁt or loss when the asset is derecognized.

C.6 Investments in Associates & Joint Ventures

Recognition and subsequent measurement

An Associate is an entity over which the Group has signiﬁcant inﬂuence. Signiﬁcant inﬂuence is the power to participate in the ﬁnancial and operating policy decisions of the investee but is not control or joint control over those policies.

A Joint Venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the Joint Venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

The Group’s investments in its Associates and Joint Venture are accounted for using the equity method. Under the equity method, the investment in an Associate or a Joint Venture is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Group’s share of net assets of the Associate or Joint Venture since the acquisition date. Goodwill relating to the Associate or Joint Venture is included in the carrying amount of the investment and is not tested for impairment individually.

The consolidated statement of proﬁt or loss reﬂects the Group‘s share of the results of operations of the Associate or Joint Venture. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognized directly in the equity of the Associate or Joint Venture, the Group recognizes its share of any changes, when applicable, in the consolidated statement of changes in equity.

Unrealized gains and losses resulting from transactions between the Group and the Associate or Joint Venture are eliminated to the extent of the interest in the Associate or Joint Venture. The aggregate of the Group’s share of proﬁt or loss of an Associate or a Joint Venture is shown in Share of Proﬁt or Loss from Associates or Joint Venture on the face of the consolidated statement of proﬁt or loss. All balance sheet items and line items in the consolidated statement of other comprehensive income that are related to the associated entities belong to the Alignment Capital Management segment.

The ﬁnancial statements of the Associate or Joint Venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. Typically, adjustments are made to account for the investment properties held by the Associates or Joint Venture at fair value rather than at cost (see below).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 88

After application of the equity method, the Group determines whether it is necessary to recognize an impairment loss on its investment in its Associate or Joint Venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the Associate or Joint Venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the diﬀerence between the recoverable amount of the Associate or Joint Venture and it’s carrying amount and then recognizes the loss as Share of Proﬁt or Loss from Associates or Joint Ventures in the consolidated statement of proﬁt or loss.

Upon loss of signiﬁcant inﬂuence over the Associate or joint control over the Joint Venture, the Group measures and recognises any retained investment at its fair value. Any diﬀerence between the carrying amount of the Associate or Joint Venture upon loss of signiﬁcant inﬂuence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in proﬁt or loss.

Investment properties

Investment properties are only held indirectly as at equity investment and are shown in investment in associates and joint ventures. Investment properties as the main assets of the associates are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value, which reﬂects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in proﬁt or loss in the period in which they arise, including the corresponding tax eﬀect.

Fair values are determined based on a periodic evaluation performed by an accredited external independent valuer applying a valuation model recommended by the International Valuation Standards Council (Royal Institution of Chartered Surveyors (RICS) Valuation – Global Standards (“Red Book”). In case of investment properties being measured at cost (e.g. based on local GAAP requirements), the investment property value is being adjusted to fair value before equity accounting pick-up.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic beneﬁt is expected from their disposal. The diﬀerence between the net disposal proceeds and the carrying amount of the asset is recognised in proﬁt or loss in the period of derecognition.

C.7 Financial Assets

Initial recognition and measurement

Financial assets are recognized when the entity becomes party to the contractual provisions of the instruments. Financial assets are classiﬁed, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through proﬁt or loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 89

The classiﬁcation of ﬁnancial assets at initial recognition depends on the ﬁnancial asset’s contractual cash ﬂow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a signiﬁcant ﬁnancing component or for which the Group has applied the practical expedient, the Group initially measures a ﬁnancial asset at its fair value plus, in the case of a ﬁnancial asset not at fair value through proﬁt or loss, transaction costs. Trade receivables that do not contain a signiﬁcant ﬁnancing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15.

In order for a ﬁnancial asset to be classiﬁed and measured at amortized cost or fair value through OCI, it needs to give rise to cash ﬂows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Group’s business model for managing ﬁnancial assets refers to how it manages its ﬁnancial assets in order to generate cash ﬂows. The business model determines whether cash ﬂows will result from collecting contractual cash ﬂows, selling the ﬁnancial assets, or both. Purchases or sales of ﬁnancial assets that require delivery of assets within a time frame established by regulation or convention in the market (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, the Group’s ﬁnancial assets are classiﬁed in the following categories:
– Financial assets at amortized cost
– Financial assets at fair value through proﬁt or loss

Financial assets at amortized cost

The Group measures ﬁnancial assets at amortized cost if both of the following conditions are met:
– The ﬁnancial asset is held within a business model with the objective to hold ﬁnancial assets in order to collect contractual cash ﬂows, and
– The contractual terms of the ﬁnancial asset give rise on speciﬁed dates to cash ﬂows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost are subsequently measured using the eﬀective interest (EIR) method and are subject to impairment. Gains and losses are recognized in proﬁt or loss when the asset is derecognized, modiﬁed or impaired.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 90

The Group’s ﬁnancial assets at amortized cost include trade receivables, other receivables and cash and cash equivalents. See Notes F.4 and F.5 for additional details.

Financial assets at fair value through proﬁt or loss

Financial assets at fair value through proﬁt or loss include ﬁnancial assets designated upon initial recognition at fair value through proﬁt or loss, or ﬁnancial assets mandatorily required to be measured at fair value. Financial assets are classiﬁed as fair value through proﬁt or loss if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classiﬁed as fair value through proﬁt or loss unless they are designated as eﬀective hedging instruments.

Financial assets with cash ﬂows that are not solely payments of principal and interest are classiﬁed and measured at fair value through proﬁt or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classiﬁed at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through proﬁt or loss on initial recognition if doing so eliminates, or signiﬁcantly reduces, an accounting mismatch.Financial assets at fair value through profit or loss are carried in the consolidated statement of financial position at fair value with net changes in fair value recognized in the consolidated statement of profit or loss. This category includes non-current receivables, other financial instruments (see also Note E.4) and non-current loans to Associated Entities. See Notes F.4 and F.5 for additional details.

Derecognition

A financial asset is derecognized when the rights to receive cash flows from the asset have expired, risks and rewards are transferred or when a financial instrument is written off. Therefore, a financial asset is derecognized when there is no reasonable expectation of recovering the contractual cash flows.

Impairment of financial assets

Further disclosures relating to impairment of financial assets are also provided in Note C.1. The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 91

For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). The Group determines that a debt instrument has significantly increased in credit risk when its contractual cash flows and the underlying contractual agreements are amended adversely (see also C.1 Expected credit loss).

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix for mass business transactions that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment as well as supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

Trade receivables relating to one single debtor that constitute more than ten percent of total balance as of respective year-end date are separated and evaluated either on individual credit ratings if available or based on corresponding sector indices. The provision matrix is initially based on the Group’s historical observed default rates. The Group calibrates the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (e.g., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the sector where the Group operates, the historical default rates are adjusted.

At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

The Group considers a financial asset in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. Credit assessment is performed on a regular basis both by accounting department as well as fund and asset management in consent with executive management.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 92

C.8 Property, Plant and Equipment

Property, plant and equipment is recognized at cost, net of accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:

Asset Type	Useful Life
Owner-occupied buildings	33 to 50 years
Cars	3 to 5 years
IT equipment	2 to 3 years
Office equipment	3 to 10 years

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on sale of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is presented net in the Income statement. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

C.9 Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease.

Group as a Lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option,

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 93

depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. The Group’s right-of-use assets are included in tangible assets, i.e. in the same line item as that within which the corresponding underlying assets would be presented if they were owned.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

C.10 Inventories

Inventories are primarily related to the Group’s warehousing activities and comprise real estate acquired with the intention of selling it within the normal business cycle in the normal course of our warehousing business. In this respect, except for individual cases the “normal business cycle” generally comprises a period of up to three years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 94

Inventories are valued at the lower of cost and net realizable value.The costs include freehold and leasehold rights for land, amounts paid to contractors for construction, borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, construction overheads and other related costs. Non-refundable commissions paid to sales or marketing agents on the sale of real estate units are expensed when paid. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

C.11 Contract Balances

Contract Assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is conditional. Contract assets are predominantly related to the Coupon Participation Fee of HFS (see also Note C.18).

Contract Liabilities
A contract liability is an entity’s obligation to transfer goods or services to a customer for which the Group has received consideration. If a customer of the Group pays consideration or has a right to an amount of consideration that is unconditional, before the Group transfers its goods or services to the customer, a contract liability is recognized.

C. 12 Cash and Cash Equivalents

Cash and cash equivalents in the consolidated statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value and are classified as financial assets at amortised cost. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.

C.13 Discontinued operations

The Group classifies all subsidiaries as a discontinued operation when the entity either has been disposed of or met the requirements as held for sale and represents a separate major business line or a geographical area of operation, or is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or it is a subsidiary acquired exclusively with a view to resale. The classification of assets and liabilities as held for sale is met if their carrying amounts will be recovered principally through a sale transaction than through continuing use. Such assets and liabilities are measured at the lower of their carrying amount and fair value less cost to sell which comprise the incremental costs directly attributable to the disposal, excluding finance costs and income tax expense.

Non-Current Assets Held for Sale and Discontinued Operations
For classification as held for sale the sale of the underlying entity is highly probable, it is available for immediate distribution in its present condition and the appropriate level of management must be committed to a plan to sell the asset (or disposal group), and an active program to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sale will be withdrawn. Management must be committed to the sale expected within one year from the date of classification.

Property, plant, and equipment as well as intangible assets are not depreciated or amortised once classified as held for sale. All assets and liabilities classified as held for sale are presented separately as current items in the consolidated statement of financial position.

C.14 Share-based Payments

Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised in employee benefits expense, together with a corresponding increase in equity (other reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the consolidated statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note D.15 and F.6). The share-based compensation plan was discontinued in 2022.

Cash-settled transactions
A liability is recognised for the fair value of cash-settled transactions. The fair value is measured initially and at each reporting date up to and including the settlement date, with changes in fair value recognized in employee benefits expense. The fair value is expensed over the period until the vesting date with recognition of a corresponding liability.

C.15 Financial Liabilities

Initial recognition and measurement
At initial recognition, financial liabilities are classified as:
* “financial liabilities at fair value through profit or loss”(financial liabilities at FVTPL)
* “financial liabilities at amortized cost”, or
* derivatives designated as hedging instruments in an effective hedge.

All financial liabilities are recognized initially at fair value and, in the case of financial liabilities at amortized cost, net of directly attributable transaction costs. The Group’s financial liabilities include mainly:
* long-term and short-term financial liabilities to banks,
* other long-term and short-term liabilities (mainly bonds),
* trade payables,
* other non-current and current Liabilities (mainly loans)

Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:

Financial Liabilities at amortized cost
This is the category most relevant to the Group. After initial recognition, the respective liabilities (e.g. interest-bearing payables, loans and other liabilities, bonds) are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.

Financial liabilities at FVTPL
Financial liabilities are classified as fair value through profit or loss if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as fair value through profit or loss unless they are designated as effective hedging instruments. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied.

Derecognition
A financial liability is derecognized when the obligation under the liability is discharged, cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.The difference in the respective carrying amounts is recognized in the consolidated statement of profit or loss.

C.16 Provisions

General Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the consolidated statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a financial expense.

Restructuring provisions

Restructuring provisions are recognised only when the Group has a constructive obligation, which is when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline, and the employees affected have been notified of the plan’s main features.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 98

C.17 Revenue from Real Estate Equity segment

Revenues from Real Estate Equity segment result from fees from the operating equity business of the Group, such as:
* Acquisition Fees,
* Asset and Property Management Fees,
* Development Fees,
* Sales Fees,
* Promote Fees

and are recognized with reference to the relevant individual contractual terms and on accrual basis.

Acquisition Fees and Sales Fees relate to fees earned in relation to the acquisition or divestment of real estate assets by the Associates or third parties. Acquisition related fees vary from 0.8% to 1.5% of the purchase price depending on the contract. In certain situations a lump-sum on-Boarding fee amounting to up to € 0.5m is agreed with the clients. These fees are paid for sourcing and structuring of the transaction, conducting the due diligence, administrating and supervising the step-by-step acquisition of the real estate asset or the establishment of real estate products and are typically received and paid at the conclusion of the transaction documentation. The Group’s contracts with customers for these types of services generally include one performance obligation. Revenue from Acquisition related Fees and Sales Fees is recognized at a point in time when the services are provided because none of the criteria in IFRS 15.35 is met.

Asset Management Fees are determined monthly/quarterly in a range of 0.35% to 0.60% of the value of the real estate assets of the projects and third-party assets managed and differ between investment products offered to private clients and those offered to institutional clients. Property Management Fees are derived from the provision of property management services. These fees are also recognized on an accrual basis over the time when the services are rendered. The Group’s contracts with customers for these types of

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 99

services generally include a single performance obligation as stipulated in the property management contract along with the property management fee charged per year. The Group has concluded that revenue from these services should be recognized over time when the services are provided because the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs. As the Group’s efforts and inputs are expended evenly throughout the performance period, the Group recognizes revenues on a straight-line basis.

Development Fees are generated by providing development services for the construction of new or the repositioning of an existing property. This includes services like planning, coordination, technical management and economical administration as well as supervising work. The Group’s contracts with customers for these types of services typically include one performance obligation that is predominantly fulfilled over time. Development fees usually result from the performance obligation to develop real estate property. The transaction price is often a percentage based on construction costs of the property.

In certain transactions, the Group is entitled to receive Promote fees that regularly amount to 15%-20% of the net project return at the end of the life of a fund or deal structure. The promote fees might be tied to a certain hurdle rate. The performance obligation is thus the promotion of the property and the transaction price is variable depending on the success of the promotion. Revenue is being recognized point-in-time. Net project returns are defined as operating income, aggregate proceeds from sales and re-financing proceeds, in each case net of all principal repayments, working capital requirements and after any debt service, and irrespective of whether these will be paid by way of capital repayment, dividends or by any other means to the investors (Promote fees are basically being paid out as a disproportional profit allocation).

C.18 Revenue from Real Estate Debt Segment

Revenues from Real Estate Debt segment result from fees from the operating equity business of the Group, such as:
– Performance (Coupon Participation) Fees,
– Underwriting & Structuring Fees,
– Asset Management Fees (see Note C.1),
– Income from Mezzanine loans,
– Income from Trading Activities

Coupon Participation Fees are generated through sustainable and significant excess returns of mainly HFS products (mezzanine financing). The performance obligation results from consulting costs during the set up and structuring of the funds. The

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 100

transaction price is depending on the performance of the fund and typically tied to a certain pre-agreed hurdle rate. The Group’s contracts with customers for these types of services generally include one performance obligation. Revenue is being recognized point-in-time.

Underwriting & structuring fees are determined in a range from 0.5% to 2.5% of the value of the real estate debt financing product. The fees are recognized at a point in time when the debt financing product is issued to the customer. The service of structuring real estate debt financing products is offered to institutional as well as private clients.

Income from Mezzanine Loans comprises the interest income from short-term bridging activities of Mezzanine Loans to Real Estate development Companies in the German speaking region. Such loans are intended to be transferred to the Mezzanine Funds managed by the Group as soon as a corresponding cash return or equity contribution in the funds takes place.

Income from trading activities is recognized from Corestate Bank’s underwriting business and proprietary trading. In the underwriting business, a bearer bond or a promissory note loan is generated for a customer and is recognized as financial asset at Corestate Bank. After successful issuance, the sale of the financial asset to the customer takes place. The delta between the amount of the financial instrument on inception date and the amount of the financial instrument on date of sale is recognized as trading income. The measurement of the financial instruments follows the requirements of IFRS 9 (see Note F.4 for details).

C.19 Alignment Capital Share of Profit or Loss from Associates and Joint Ventures

Share of Profit or Loss from Associates and Joint Ventures relates to the Group’s alignment capital investments and comprises the Group’s share of the results of operations of the Associates using the equity method as well as gains and losses from the disposal of shares in Associates (see D.6). The periodic results of operations of the Associates typically include the recurring result from rental operations as well as results from sales of real estate assets and potential fair value adjustments of the underlying properties, net of costs, financial expenses and taxes. Dividends from other Alignment Capital reflect the Group’s share of the cash distribution of the investment and are recognized in the consolidated statement of profit or loss when the right of payment has been established. This is generally when shareholders approve the dividend.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 101

C.20 Total Income/(Losses) from Other Segment

Rental Income and Service Charges

Rental Income arising from operating leases on investment property is accounted for on a straight-line basis over the lease terms. Contingent rental income is recognized when it arises. Tenant lease incentives are recognized as a reduction of rental revenue on a straight-line basis over the term of the lease. Income arising from expenses recharged to tenants (Revenue from Service Charges) is recognized in the period in which the respective services are rendered. Service and management charges and other such receipts are recorded separately gross of the related costs, as the directors concluded that the Group acts as a principal in this respect.

Net Results from Property Holding and Warehousing Exits

Net Results from Property Holding and Warehousing Exits comprises the proceeds from selling real estate holding companies/inventories, less selling costs, less carrying amount of the assets and liabilities. Such real estate holding companies were established to purchase investment property for the sale in the ordinary course of business in the course of the Group’s warehousing activities.The net gain/loss is recognized when control over the relevant real estate holding Company is transferred to the buyer.

C. 21 Financial Income and Financial Expenses

Financial Income comprises interest income from bank balances and loans granted and gains on the disposal of ﬁnancial assets as well as foreign currency gains and losses. Interest income is recognized as it accrues in proﬁt or loss, using the eﬀective interest rate method (EIR method).

Financial Expenses mainly comprise interest expenses on ﬁnancial liabilities, fees incurred in connection with the arrangement of debt facilities, foreign currency gains and losses, impairment losses recognized on ﬁnancial assets (other than trade receivables)and ﬁnancial expenses attributable to partnership NCIs.

C.22 Income Taxes

Current income taxes

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary diﬀerences between the tax bases of assets and liabilities and their carrying amounts for ﬁnancial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary diﬀerences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, aﬀects neither the accounting proﬁt nor taxable proﬁt or loss;
In respect of deductible temporary diﬀerences associated with investments in subsidiaries, Associates and interests in Joint Ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary diﬀerences will reverse in the foreseeable future and taxable proﬁt will be available against which the temporary diﬀerences can be utilized.

Deferred tax assets are recognized for all deductible temporary diﬀerences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable proﬁt will be available against which the deductible temporary diﬀerences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

When the deferred tax asset relating to the deductible temporary diﬀerence arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, aﬀects neither the accounting proﬁt nor taxable proﬁt or loss;
In respect of deductible temporary diﬀerences associated with investments in subsidiaries, Associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary diﬀerences will reverse in the foreseeable future and taxable proﬁt will be available against which the temporary diﬀerences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that suﬀicient taxable proﬁt will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable proﬁts will allow the deferred tax asset to be recovered.

Deferred tax relating to items recognized outside proﬁt or loss is recognized outside proﬁt or loss. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. The Group oﬀsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set oﬀ current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or diﬀerent taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which signiﬁcant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

D. NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS

D. 1 Total Earnings by Income Line

The total earnings by income line comprise both revenues and other/net income items including corresponding expenses to provide comprehensive insight in the respective earnings for Real Estate Equity, Real Estate Debt and Other Segments. The following revenues and income types determine the segments’ top line (for further information regarding the Group’s segment reporting please refer to Note F.1).

Revenue stream	Description	Recognition
Real Estate Equity
Acquisition fees	fees are earned upon successful acquisition of assets	point in time (IFRS 15)
Asset & property management fees	fees are earned over the holding period of the respective asset for providing both asset and property management services (series of distinct services), including success fees earned from managed equity funds above a certain hurdle rate	over time (IFRS 15)
Sales / Promote fees	sales fee is a percentage of the asset value upon sale (net project returns); promote fees are gained once the overall return surpasses a certain hurdle rate	point in time (IFRS 15)
Development fees	The fees are earned by providing technical expertise with regard to (re-)positioning real estate estates, including refurbishment, change in asset class, or other measures	over time (IFRS 15)
Real Estate Debt
Underwriting & structuring fees	fees are earned upon successful structuring/ placement of real estate debt financing products	point in time (IFRS 15)
Asset management fees	fees are earned over the holding period of the respective asset for providing asset management services	over time (IFRS 15)
Performance fee	success fee that allows the Company to participate in the performance of its managed debt funds above a certain hurdle rate (coupon participation fee)	over time (IFRS 15)
Income from Mezzanine Loans	interest income yielding from short-term bridge financing via Mezzanine Loans for development companies	measurement of financial assets (IFRS 9)
Income from trading activities	margin income resulting from short-term trading activities of financing tranches	measurement of financial assets (IFRS 9)
Other Segment
Rental income and service charges	Rental income for assets that are in a warehousing structure	rental income
Net results from property holding and warehousing structures	occasional income/expense that results from sale of assets in share deals, liquidation of structures after asset deals, and similar transactions	Measurement of gain or loss on warehousing exits (IFRS 10); measurement of financial assets (IFRS 9)
Share of profit or loss of associates	income results from the subsequent measurement of Corestate’s share in the net profit of its associated entities	share of net profit (IAS 28)
Dividends from associated entities	other income results from dividends paid by Corestate’s alignment capital	dividends (IAS 28)
Gains & losses from changes in fair value of other financial instruments	Corestate’s other financial instruments that are measured at fair value in line with the eligible IFRS 9 categories	measurement of fair value (IFRS 9); measurement of financial instruments

D. 2 Total Revenue from Real Estate Equity Segment

€ million	2022	2021
Revenue from Acquisition Fees	2.2	9.7
Revenue from Asset Management Fees	30.4	37.1
Revenue from Property Management Fees	21.1	17.2
Revenue from Sales and Promote Fees realized	0.8	23.1
Revenues from Development Fees	3.2	2.5
Total	57.7	89.6

Revenue from Acquisition Fees
The revenue from acquisition fees in 2022 fell to € 2.2m (2021: € 9.7m). The decline is caused by a lower level of transaction volume.

Revenues from Asset and Property Management Fees
The revenues from asset management fees amounting to € 30.4m (2021: € 37.1m) are below prior year’s level primarily due to the loss of several asset management mandates throughout the ﬁscal year 2022. The property management fees increased to € 21.1m (2021: € 17.2m) which is mainly due to higher occupancy rates in student housing assets managed by UPARTMENTS and CRM.

Revenue from Sales and Promote Fees realised
Revenue from sales and promote fees realised changed signiﬁcantly to € 0.8m (2021: € 23.1m). The decrease is, similarly to the reduced acquisition fees, caused by the overall decline in transaction volumes within the real estate market.

Revenues from Development Fees
The revenue from development fees increased to € 3.2m (2021: € 2.5m) due to a slightly higher volume of services performed in project management and development coordination.3 Total Expenses from Real Estate Equity Segment

Expenses from real estate equity segment of € 80.1m (2021: € 86.5m) include both personnel and overhead expenses (e.g., rent and leasing expenses, IT and telecommunication expenses, travel expenses, provisions for expected credit losses, legal and other advisory fees) relating to the Group‘s Real Estate Equity activities.

D.4 Total Revenue from Real Estate Debt Segment

In 2022, the real estate debt segment underwent a signiﬁcant change related to HFS business. After an agreement was found between the HansaInvest - Hanseatische Investment GmbH Kapitalverwaltungsgesellschaft (“KVG”, the “fund manager”) and the investors on the necessary restructuring of STRATOS Immobilienanleihefonds II (hereafter the “Stratos II fund”), a liquidation agreement was signed between the fund manager and the investors which foresaw liquidation of Stratos II fund by the end of 2025. Furthermore, a termination agreement was concluded between the fund manager and HFS regarding the advisory agreement of HFS; consequently, HFS is no longer active in an advisory capacity for Stratos II as of 1 January 2023 and is therefore not entitled to any (performance-based) fees any longer. Since 2022 the liquidation of the fund continues. So far no signiﬁcant returns for the investors were generated, which likely will result in a prolongation of the liquidation of the fund beyond end of 2025. For additional events related to the real estate debt segment after the balance sheet date, please refer to the information in Note F.9 Signiﬁcant events after the reporting date.

Revenue from Underwriting and Structuring Fees	2022	2021
Revenue from Underwriting and Structuring Fees	1.0	36.0
Revenue from Performance Fees	-	49.5
Income from Mezzanine Loans	6.9	18.1
Revenue from Asset Management Fees	15.1	17.3
Income from Trading Activities	2.9	1.0
Total	25.9	121.9

The Underwriting and Structuring fees decreased signiﬁcantly by € 35.0m to € 1.0m (2021: € 36.0m). Moreover, HFS also was not able to generate further underwriting fees as all managed Stratos funds did not receive due payments and, therefore, did not have the necessary liquidity to structure new bonds.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 107

Revenue from Performance Fees

In 2022, no performance fees (2021: € 49.5m) were earned. The decrease is mainly due to a signiﬁcantly reduced transaction volume in the private debt market in general and, exclusively for HFS, due to the illiquidity of Stratos II and IV caused by unsettled bond repayments and/or even default status of several bonds in both funds. Hence, the performance of both funds also did not achieve the necessary hurdle rate for any performance fees.

Income from Mezzanine Loans

Income from Mezzanine Loans is recognized as interest income from short-term bridging activities through Mezzanine Loans to Real Estate developers. These bridging activities were partially deemed to secure the project pipeline for the Stratos funds. The decrease in income from Mezzanine Loans to € 6.9m (2021: € 18.1m) is primarily driven by the increased risk provisions across almost all loans. Management assessed all remaining bridge ﬁnancing loans for recoverability and concluded that the collectability is currently not foreseeable. This leads to a corresponding risk provision (ECL) of € 6.1m which is recognized in the total expenses from Real Estate Debt segment (for further information of the risk provision see Notes D.5, E.11 and F.4).

Revenue from Asset Management Fees

Revenue from asset management fees in the real estate debt segment amounted to € 15.1m (2021: € 17.3m) and are slightly below prior year corresponding to further reduced fund volumes throughout ﬁscal year 2022.

Income from Trading Activities

Income from trading activities increased by € 1.9m to € 2.9m (2021: € 1.0m). Trading income is exclusively generated by Corestate Bank and its proprietary trading of real estate debt ﬁnancing products.

D.5 Total Expenses from Real Estate Debt Segment

Expenses from real estate debt segment of € 128.6m (2021: € 66.1m) include both personnel and overhead expenses (e.g. rent and leasing expenses, IT and telecommunication expenses, travel expenses, provisions for expected credit losses, legal and other advisory fees) relating to the Group‘s Real Estate Debt activities. The increase in expenses in 2022 compared with prior year is mainly driven by individually signiﬁcant risk provisions, such as a value adjustment on a loan (€ 47.1m) or a write oﬀ for expected credit losses for contract assets (€ 34.7m). See note E.10 for details.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 108

D.6 Total Income from Other Segment

Overall, total income from Other Segment was visibly reversed to € -27.8m (2021: € 16.0m). The main diﬀerences result from the signiﬁcant eﬀect of the Share of Proﬁt or Loss from Associates and Joint Ventures which was particularly aﬀected by negative valuation impacts in 2022, reduced dividend payments, and valuation losses on ﬁnancial instruments.

€ million	2022	2021
Rental Income and Service Charges	9.2	6.3
Net Result from Property Holding and Warehousing Exits	(0.4)	(2.7)
Share of Profit or Loss from Associates and Joint Ventures	(23.2)	2.5
Dividends from other Alignment Capital	2.7	12.8
Gains/(Losses) from Fair Value Measurement of Financial Instruments	(16.1)	(2.9)
Total	(27.8)	16.0

Rental Income and Service Charges

Net rental income of € 9.2m (2021: € 6.3m) primarily relates to income from one operational asset held as inventory. In 2022, the net rental income is particularly higher due to the new warehousing but also operational asset in Augsburg which is currently placed among investors.

Net Result from Property Holding and Warehousing Exits

The net result from warehousing exits of € -0.4m (2021: € -2.7m) reﬂects primarily the realized margin from the Group’s warehousing activities, eventual adjustments to the net realizable value to warehousing assets under development, and costs incurred in connection with the liquidation of previously used structures.

Share of Proﬁt or Loss from Associates and Joint Ventures

Share of proﬁt or loss for the year of € -23.2m (2021: € 2.5m) comprises the Group’s share of the results of operations of the Associates and Joint Ventures using the equity method as well as gains and losses from the disposal of shares in Associates and Joint Ventures. The signiﬁcant negative contribution to earnings in 2022 results from the substantial devaluations that were determined on the basis of external valuation reports. The main drivers for this can be found in the signiﬁcantly declining yield expectations across almost all asset classes given the changed market circumstances as well as the overall increase in reﬁnancing and capital costs due to the changed market environment.

Dividends from Other Alignment Capital

Dividends from other Alignment Capital amounting to € 2.7m (2021: € 12.8m) were signiﬁcantly reduced due to the decreased performance of the underlying structures.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 109

Gains or losses from Fair Value Measurement of Financial Instruments

Gains/(Losses) from Fair Value Measurement of Financial Instruments cumulated to € - 16.1m (2021: € -2.9m) and comprise the Group’s results of operations that are allocated to ﬁnancial instruments measured at fair value through proﬁt and loss. The overall loss results primarily from negative valuation eﬀects on Stratos funds by € 14.7m and Corestate’s Opportunity Fund amounting to € 3.6m, which was partially oﬀset by positive € 3.3m valuation eﬀects related to the investments of Hannover Leasing.

D.7 Expenses from Other Segment

Expenses from Other Segment totalled to € 26.0m (2021: € 7.3m) and include direct expenses in relation to the operation of the assets as a concurrent eﬀect with the development of rental income as well as personnel and overhead expenses allocated to the Management of Associates. Compared to 2021 the increase was mainly driven by the reclassiﬁcation of project RAW (creation of building rights for the project site “RAW-East”) from G&A and Other Expenses to Total Expenses from Other Segment (€ 7.9m) as well as increased expenses within the following entities: Ginova PropCo S.à r.l. € 5.9m and King PropCo S.à r.l. € 5.2m.

D.8 Reversal of Written-Down Receivables

The Income from Written-Down Receivables amounting to € 30.7m (2021: € 3.4m) results from the reversal of previously risk-provisioned receivables.

D.9 Income from Reversal of Provisions

The reversal of provisions of € 9.0m (2021: € 5.5m) mainly results from reversals of restructuring provisions, provisions for cash settled payments for former members of the Management Board and provisions for Bonus, as well as litigation costs.

D.10 Other Income

Other Income increased to € 39.3m (2021: € 7.4m). The main drivers were the sale of Corestate’s former property management business in Capera (€ 11.6m) (see Note B.3), the short-term settlement of a contingent receivable in relation to an airplane fund (Flight Invest 51 KG) managed by Hannover Leasing ( € 9.4m) and the reversal of formerly granted LTI shares where management members are no longer entitled to receive shares (€ 3.6m).

D.11 General and Administrative (G&A) and Other Expenses

G&A and Other Expenses of € 68.2m (2021: € 59.5m) include both personnel and overhead expenses not allocated to the segments Real Estate Equity, Real Estate Debt Segment or Other Segment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 110

The allocation of G&A expenses across segments follows a detailed methodology that takes into account the business characteristics, individual item allocation as well as the distribution of overhead expenses.The increase in the share of G&A expenses not allocated to Real Estate Equity, Real Estate Debt or Other segments resulted mainly from restructuring-related expenses such as personnel costs (particularly severance payments) as well as consulting costs. On 29 August 2024, with the consent of the Supervisory Board, the Management Board of Corestate Capital Holding S.A. has accepted the commercial oﬀer to mandate the auditing ﬁrm KPMG Audit S.à r.l. in Luxembourg as auditor for the consolidated ﬁnancial statements and standalone annual accounts of CCH SA for the ﬁnancial years 2022, 2023 and 2024. KPMG will be recommended to the Company's shareholders for election at the upcoming Annual General Meeting (foreseen for Q1 2026). At this Annual General Meeting, it is also intended to submit the audited consolidated ﬁnancial statements and standalone annual accounts for the 2022 ﬁnancial year for approval. The following table shows the breakdown of audit and audit-related services that are presented in the audit and accounting expenses, as well as tax and other services rendered by KPMG audit ﬁrm network and the predecessor auditor:

€ million	2022	2021
Predecessor auditor - Ernst & Young Luxembourg
Audit fees	(0.6)	(0.3)
Audit-related fees	-	(0.3)
KPMG Audit S.à r.l.
Audit fees	(1.0)	-
Other Audit related fees	(0.0)	-
Total	(1.6)	(0.6)

The audit fees expensed in 2022 in relation to the predecessor auditor relate to the year ended 31 December 2021. The services provided by the external auditor for the year ended 31 December 2022 mainly included services for the annual ﬁnancial audit and, to a lesser extent, audit-related services as well as for tax consultation services. The fees for annual audit services related to expenses for the audit of the consolidated ﬁnancial statements of the Corestate Group and the standalone annual accounts of Corestate.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 111

D.12 Depreciation, Amortization and Impairment

€ million	2022	2021
Goodwill impairment	(450.0)	(177.3)
Customer relationships impairment and amortization	(8.9)	(16.6)
Order backlog impairment and amortization	(2.2)	(9.0)
Other intangible assets impairment and amortization	(47.7)	(10.6)
Property, plant and equipment depreciation	(1.0)	(1.2)
Rights of Use depreciation	(4.2)	(3.4)
Inventory impairment	(19.8)	-
Others depreciation	(2.0)	(0.7)
Total	(535.8)	(218.8)

Depreciation, Amortization and Impairment mainly result from impairment expenses on goodwill (€ 450.0m), on other intangible asset impairment (€ 47.7m) and on inventories (€ 19.8m). For goodwill total impairment expenses of € 450.0m (2021: € 177.3m) were recognized in 2022 due to the signiﬁcantly lower income expectations for most of Corestate’s goodwill-carrying CGUs. The impairment of both the HFS and Corestate Bank goodwill is related to the Real Estate Debt segment. In addition, a ﬁrst impairment had to be recognized on the STAM goodwill which is related to the Real Estate Equity segment (see also Note E.1 for more details on the individual impairments). The depreciation for the other intangible assets mainly results from the impairment of the HFS brand in full as a result of the strategic realignment of HFS (€ 41.7m) and from acquired asset management contracts (€ 6.0m). Impairment on inventories include the Ginova PropCo S.a.r.l (€ 16.0m), Gabriela (€ 2.0m) and Bego (€ 1.8m). The decrease of order backlog and customer relationships mainly results from the impairment of the order backlog and customer relationships identiﬁed during the acquisition of Corestate Bank (for further information see Note E.2).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 112

D.13 Financial Income and Expenses

In 2022, ﬁnancial income increased by € 0.9m to € 8.2m (2021: € 7.3m). Income from currency translation eﬀects decreased by € 0.4m which is due to slightly weaker foreign exchange rate developments. In contrast, interest income increased by € 1.3m (2021: € 0.6m) resulting from € 0.7m interest from associates and € 0.6m from income from ﬁnancial instruments.

€ million	2022	2021
Interest income	5.0	3.7
Foreign currency income	3.2	3.6
Other financial income	0.1	0.0
Total	8.2	7.3

Financial expenses decreased in 2022 by € 2.9m to € 22.8m (2021: € 25.7m). The main portion of Interest expenses is related to the two corporate bonds issued in 2017 and 2018 that amount to interest expenses of € 17.3m in 2022 (2021: € 17.6m). At the end of 2022, the Company issued senior secured bonds in an aggregate principal amount of € 10.0m. These bonds were issued in bearer form with a principal amount of € 100,000 each, which rank pari passu among themselves. The senior secured bonds were provided by a group of bond holders to bridge the immediate need of the Group for fresh money in December 2022. The secured bonds have an initial maturity until 15 April 2023 which can be subject to prolongation if the restructuring needs more time; they were placed with a coupon of 8.0% per annum. The Company has provided collateral comprising ﬁrst-priority pledges in certain subsidiaries, certain bank accounts and notes as well as assignments of current and future intra-group and external receivables vis-à-vis third parties Expenses from currency translation were € 0.8m lower than in the previous year. Other ﬁnancial expense mainly comprises bank charges.

€ million	2022	2021
Interest expenses	(22.3)	(23.2)
Other financial income	1.2	(0.2)
Foreign currency expenses	(1.0)	(1.8)
Other financial expense	(0.6)	(0.5)
Total	(22.8)	(25.7)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 113

D.14 Income Taxes

The following table separates income taxes into current and deferred tax (expense) or beneﬁt:

€ million	2022	2021¹
Current income tax expense	(0.1)	(14.3)
Deferred taxes	(24.0)	28.0
Total	(24.1)	13.7

¹ Prior year is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial 2021 (see Note A.2).

Current taxes decreased to € 0.1m mainly as a result of a loss situation in the Group’s entities thus leaving almost no room for a current taxation. Deferred tax expense mainly results from the write-down of deferred tax assets on loss carry forwards from the previous and current year. Further, the deferred tax expense is partly oﬀset by income from deferred taxes, which is mainly due to changes in temporary valuation diﬀerences primarily related to impairment of assets.

Tax rate reconciliation
The tax reconciliation statement below describes the relationship between the eﬀective tax expense/beneﬁt as recorded in the Group’s Consolidated Statement of Proﬁt or Loss and the originally expected tax expenses based on the consolidated Earnings before Taxes (EBT) according to IFRS by applying the statutory income tax rate of 24.94% (2021: 24.94%) for CCH SA in Luxembourg.

€ million	2022	2021¹
Consolidated Earnings before Taxes (EBT)	(718.5)	(212.7)
Luxembourg statutory income tax rate for CCH SA	24.94%	24.94%
Projected income tax (gain)	(179.2)	(53.0)
Adjustments in respect of income tax of previous years	(1.0)	1.6
Current tax losses for which no deferred tax asset has been recognized	88.9	1.9
Effect from permanent differences	52.9	25.4
Effect from different tax rates	58.9	12.6
Effect from dividends and other income exempt from taxation or non-deductible expenses	3.6	(1.8)
Other differences	(0.0)	(0.4)
Income tax reported in the consolidated statement of profit or loss	24.1	(13.7)
Effective tax rate	-3.4%	6.4%

¹ Prior year is represented in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations for the financial 2021 (see Note A.2).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Corestate Annual Report 2022 114

The main reconciling eﬀects are due to goodwill impairment charges (“Eﬀect from permanent diﬀerences”), recognizing additional valuation allowance on prior year’s net operating losses and current year’s losses not capitalized (“Current tax losses for which no deferred tax asset has been recognized”) and eﬀects from diﬀerent tax rates.

Deferred tax assets recognition
No deferred tax assets have been recognized on tax loss carry-forwards related to German Corporate taxes of € 124.2m (2021: € 23.3m), German trade tax on income of € 241.6m (2021: € 83.6m) and other income taxes of € 1,123.2m (2021: € 129.3m). These tax loss carry-forwards are indeﬁnitely available with the exception of those related to other income taxes in an amount of € 0.2m expiring after ﬁve years, € 142.2m expiring after seven years and in an amount of € 948.2m which expire after 17 years. Deferred taxes on tax loss carry-forwards and temporary diﬀerences are recognized only to the extent that suﬀicient future taxable income is expected to be generated against which the losses and temporary diﬀerences can be utilized based on a tax planning or to the extent of the reversal of existing taxable temporary diﬀerences. As such, the carrying amounts of the deferred tax assets related to tax loss carry-forwards have been reduced in accordance with IAS 12.56 to the full extent. The total amount of accordingly unrecognized deferred tax assets is € 306.3m (2021: € 39.9m). For the year ended 2021, management anticipates that the Group will generate proﬁts in the future and beneﬁt from the deferred tax assets. The beneﬁt arising from previously unrecognized tax loss that is used to reduce deferred tax expense amounts to € 0.6m (2021: € 13.0m). Deferred tax expense arising from the write-down of a deferred tax asset amounts to € 26.1m (2021: € 2.7m).### Current tax assets and liabilities

The following table shows current taxes in the statement of ﬁnancial position:

€ million	2022	2021
Current income tax assets	10.4	2.5
Current tax liabilities	(10.2)	(29.5)
Total, net	0.2	(27.0)

The increase in current tax assets mainly relates to increased tax refund receivables of Corestate Capital Group GmbH in the amount of € 4.5m (2021: € 0.5m) and Corestate Bank GmbH in the amount of € 4.0m (2021: € nil). Current tax liabilities decreased primarily due to increased losses compared to prior year.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 115

Deferred tax assets and liabilities

Deferred tax assets and liabilities by nature are shown in the following table:

€ million	2022	2021
Deferred tax assets
from tax loss carryforward	0.0	26.1
from temporary differences on accruals	1.7	2.4
from temporary differences on liabilities	2.7	0.9
from temporary differences on shares in subsidiaries	8.1	8.5
from temporary differences on properties	0.3	0.0
from temporary differences on intangible assets	0.9	1.0
from temporary differences on financial assets	13.6	4.2
from temporary differences on receivables	1.4	1.0
from valuation of other assets	0.8	0.3
from temporary differences on financial liabilities	8.6	3.8
Set-off of deferred tax liabilities	(22.6)	(7.4)
Total	15.5	41.5
Deferred tax liabilities
from temporary differences on financial assets	13.3	6.2
from at-equity valuation of Associates	0.1	0.2
from temporary differences on liabilities	5.1	1.2
from temporary differences on receivables	0.6	0.1
from temporary differences on accruals	2.2	1.8
from temporary differences on properties	8.3	1.8
from temporary differences on intangible assets	7.3	12.1
from temporary differences on other assets	0.6	1.5
Set-off of deferred tax assets	(22.6)	(7.4)
Total	14.9	17.5

Deferred taxes assets capitalized as of 31 December 2022 primarily result from temporary diﬀerences on ﬁnancial assets which have increased to € 13.6m in 2022 from € 4.2m mostly due to higher impairments recorded under IFRS for speciﬁc ﬁnancial assets which are considered long-term in nature and thus deemed to be recoverable. Further, deferred tax assets include temporary diﬀerences on ﬁnancial liabilities, however relating to deferred tax liabilities on properties, which are both mainly derived out of IFRS 16 “Leases” and subject to an oﬀset in the balance sheet.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 116

D. 15 Earnings/(Loss) per Share

Basic earnings per share amounts are calculated by dividing net proﬁt for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. The weighted average number of ordinary shares outstanding is calculated as follows:

	31 Dec 2022		31 Dec 2021
	number of shares	days	number of shares	days
Calculation of undiluted shares
Shares at the beginning of the period	34,193,808	365	25,666,025	365
Issue of new shares on 25 May2021	-	-	8,500,000	221
Issue of new shares on 07 July2021	-	-	27,783	178
Shares at the end of the period	34,193,808		34,193,808
Weighted average number of shares for the period (undiluted)	34,193,808		30,826,149
Calculation of diluted shares
Weighted average number of shares for the period (diluted)	34,193,808		30,826,149

The eﬀect from potential ordinary shares from the conversion of convertible bonds was ignored for determining dilutive EPS as the conversion price set out in the terms and conditions for the convertible bond is ﬁxed as € 61.958 per share (only subject to anti-dilution adjustments), which is signiﬁcantly higher than the average market price of Corestate’s shares during 2022. The Group’s management considered the convertible bonds to be anti-dilutive. Also, the 200m shares in the 2022 authorized capital (see also E.14) are not recognized in the measurement as the mere passing of a resolution does not give rise to any rights of entitlement.

Earnings/(Loss) per share, both diluted as well as undiluted, are calculated as follows:

€	2022	2021
Loss for the Year from Continued operations (m€)	(742.6)	(199.0)
Loss for the Year from Discontinued operations (m€)	(1.5)	(1.1)
Loss for the Year	(744.1)	(200.1)
Loss attributable to ordinary equity holders of the Parent:	(743.8)	(201.1)
Profit/(Loss) attributable to non-controlling interests:	(0.3)	1.0
Loss attributable to ordinary equity holders of the Parent for basic earnings	(743.8)	(201.1)
Weighted average number of ordinary shares (undiluted): Share Capital	34,193,808	30,826,149
Weighted average number of ordinary shares (total)	34,193,808	30,826,149
Loss per share from discontinued operations	(0.04) €	(0.04) €
Loss per share from continued operations	(21.72) €	(6.45) €
Loss per share	(21.76) €	(6.49) €

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 117

E. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

E.1 Goodwill

As at 31 December 2022 the goodwill of € 45.0m (2021: € 487.2m), which is allocated to multiple CGUs within both the Real Estate Equity and Real Estate Debt segment, comprises the following individual positions:

€ million	2022	2021
Real Estate Debt
HFS Helvetic Financial Services AG	-	345.4
CORESTATE Bank GmbH	13.1	94.6
Real Estate Equity
STAM Europe	9.1	32.2
HANNOVER LEASING GmbH & Co. KG	15.0	15.0
CRM Students Ltd.	7.8	-
Total	45.0	487.2

CGUs have been established within the reporting segments of IFRS 8 based on diﬀerent criteria. HFS Helvetic Financial Services AG and STAM Europe cover geographical regions (Switzerland and France). Other CGUs , such as CORESTATE Bank GmbH, cover speciﬁc business models (here: banking). In the reporting period 2021, CRM, with goodwill of € 8.3m, was classiﬁed and reported as held for sale in the consolidated ﬁnancial statements in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. However, the strategic options for CRM were reevaluated by management in 2022 and it is no longer seen as held for sale since the quarter-end close 30 September 2022. Therefore, as at 31 December 2022 the CRM goodwill is presented under “Goodwill” (see Notes A.2).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 118

€ million	2022	2021
Acquisition cost
As of 1 January	683.7	599.4
Changes in scope of consolidation	7.8	84.3
Thereof additions	-	94.6
Thereof disposals / reclassification	8.4	(10.3)
Thereof Currency translation effects	(0.6)	-
As of 31 December	691.5	683.7
impairment losses
As of 1 January	196.5	21.7
Impairment for the year	450.0	174.8
As of 31 December	646.5	196.5
Total (Carrying amount)	45.0	487.2

The Group performed its annual impairment test at year end. The Group determines whether goodwill and other intangible assets with indeﬁnite useful lives are impaired at least on an annual basis. Since brand names do not generate independent cashﬂows they generally form part of the assets within the respective CGUs which are tested for impairment. The following major assumptions have been applied for determining value in use for the remaining goodwill-carrying CGUs:

CGU HFS Helvetic Financial Services AG (“HFS”)	2022	2021
Discount rate (before Tax)	10.7%	8.9%
Growth rate after year 5	0.0%	1.0%
CGU Hannover Leasing GmbH & Co. KG (“HL”)	2022	2021
Discount rate (before Tax)	9.0%	7.0%
Growth rate after year 5	0.0%	1.0%
CGU STAM	2022	2021
Discount rate (before Tax)	9.0%	7.5%
Growth rate after year 5	0.0%	1.0%
CGU CORESTATE Bank	2022	2021
Equity Costs	12.3%	9.1%
Growth rate after year 5	0.0%	1.0%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 119

CGU CRM	2022	2021
Discount rate (before Tax)	11.1%	11.1%
Growth rate after year 5	0.0%	0.0%

Short term cashﬂows up to year 5 have been determined based on management estimates. The recoverable amounts (value in use) of HFS, STAM and Corestate Bank were below their respective carrying value. Therefore, the goodwill-carrying CGUs had to be impaired as follows:

€ million	2022	2021
Real Estate Debt
CGU HFS Helvetic Financial Services AG	345.4	174.8
CGU CORESTATE Bank GmbH	81.5	-
Real Estate Equity
CGU STAM Europe SAS	23.1	-
Total	450.0	174.8

The Group’s most recent budget and forecast as well as extrapolations for periods beyond budgeted projections includes a detailed budget for 2023 as well as a medium-term projection of 4 years for each CGU until 2027. The Group generally expects the number of transactions to normalize to pre-pandemic and pre-war levels across all asset classes in the following years; however, given the structural change in real estate asset comparative attractiveness due to the increase in interest rates in particular this might take longer than previously expected. This is mirrored in the Group’s planning assumptions via a slower recovery in transaction volumes and a growth-rate of 0.0% (2021: 1.0%). In the ﬁrst half of 2022, the redemption of unit certiﬁcates and the restructuring in Stratos II Fund led to a signiﬁcant reduction of the expected fee situation in HFS’s short to medium-term business prospects and a ﬁrst impairment recognized on 14 June 2022 (€ 273.5m). In the second half of 2022, at the end of Q3 2022, the fund manager and HFS agreed on the termination of the HFS advisory contract as at year-end 2022, hence the income situation for HFS was substantially deteriorated as of 2022 which led to a further impairment at CGU-level “HFS” on 30 September 2022 (€ 71.4m). Considering the full impairment of GENOST of € 0.5m (included in the CGU ‘HFS’), there did not remain any further goodwill allocated to the CGU “HFS” as at 31 December 2022. For HL, the Group expects a continued focus on business with semi-institutional investors and expects the budgeted sales to be on a level of the year 2022.In addition, the Group intends to bundle all of its new business in the DACH region with institutional and semi-institutional investors at HL subgroup level (including all HL entities) which should provide HL subgroup with additional growth potential compared to prior years. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 120 For STAM, actual revenues do not fully meet the expectations, therefore the Group recorded an impairment of the goodwill amounting to € 23.1m. With the intention to sell the CGU in 2021, goodwill on CRM was reported as Assets Held for Sale from discontinued operations in accordance with IFRS 5. In 2022 management re-evaluated CRM’s strategic ﬁt to the Group and decided that CRM should remain with the Group. In October 2023, the decision was revised, and CRM was placed for divestment and ﬁnally sold in April 2024 (see also Note F.9 Signiﬁcant Events after the Reporting Date). The signiﬁcant changes in the macroeconomic environment and particularly in the private debt market for developments are also reﬂected in Corestate Bank‘s entity value. A short- and medium-term but also signiﬁcant deterioration in expected performance led to a reduction for the medium-term projections and proﬁtability. To reﬂect the deteriorated economic outlook, additional impairment losses of € 450.0m were recorded in 2022. A sensitivity analysis was performed on the major assumptions for the impairment test; no sensitivity is provided for CGUs that had an impairment at the respective reporting date. The following table shows an analysis at what percentage these assumptions must change to reach a headroom of zero.

CGU	EBITDA 2022	EBITDA 2021	WAAC post Tax 2022	WAAC post Tax 2021	Growth Rate 2021	Growth Rate 2022
CORESTATE Bank	-	-40.8%	-	13.1%	-	-4.9%
HL	-38.2%	-56.4%	12.9%	11.3%	-6.4%	-7.0%
STAM	-	-36.6%	-	9.4%	-	-3.6%
CRM	-13.1%	-	13.2%	-	-9.1%	-

E.2 Other Intangible Assets

The decrease in other intangible assets to € 27.2m (2021: € 84.8m) is mainly driven by impairments, particularly the impairment of the HFS brand name amounting to € 41.8m. The recoverable amount of the other intangible assets that have been impaired was zero. This impairment followed the management decision to strategically realign the market presence of HFS which served as triggering event to reassess the CGU value with particular focus on the acquired brands. The remaining impairment amounting to € 9.1m based on the reassessed value in use is attributable to order backlog and customer relationships recognized within the business combination of Corestate Bank in May 2021. The remaining other intangible assets include mainly a brand name in the micro-living business and formerly acquired asset management contracts. These contracts have remaining useful lives between 1 and 16 years. The brand names have indeﬁnite useful lives. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 121

€ million	Brand names	Acquired mgm’t contracts	Customer relationships	Order backlog	Other Intangible assets	Total 2022	Total 2021
Acquisition cost
As of 1 January	47.3	113.6	25.5	11.2	7.6	205.2	181.6
Additions from business combinations	-	-	-	-	-	-	36.7
Additions	-	-	-	-	0.1	0.1	0.2
Disposals/ Reclassifications	-	7.2	-	-	(0.6)	6.6	(13.3)
As of 31 December	47.3	120.8	25.5	11.2	7.1	211.9	205.2
Amortization and impairment losses
As of 1 January	0.7	89.3	16.6	9.0	4.8	120.4	93.8
Additions to cumulative amortization	-	4.7	1.1	0.9	1.2	7.9	20.2
Impairment	41.8	-	7.8	1.3	-	50.9	14.5
Disposals/ Reclassifications	-	6.1	-	-	(0.6)	5.5	(8.0)
As of 31 December	42.5	100.1	25.5	11.2	5.4	184.7	120.4
Total (Carrying amount)	4.8	20.7	-	-	1.7	27.2	84.8

E.3 Investments in Associates and Joint Ventures

The following table provides summarized ﬁnancial information of the balance sheet and comprehensive income of the Group’s ﬁve major investments in Associates as at 31 December 2022:

€ million	QUARTIER LIVER	HIGH-STREET VIII	TEMPEL-WEST	TWINS	ECHO
Property, Plant and Equipment	69.3	-	125.4	107.2	68.4
Other Non-Current Assets	-	29.8	2.2	-	-
Cash (Restricted and Free Cash)	0.6	0.2	27.4	1.5	0.9
Other Current Assets	4.2	-	9.8	4.5	2.0
Non-Current Financial Liabilities	(34.0)	-	-	-	-
Other Non-Current Liabilities	-	-	(44.9)	(3.9)	-
Current Financial Liabilities	-	-	(75.4)	(21.5)	(45.6)
Other Current Liabilities	(0.6)	(0.1)	(8.9)	(2.8)	(3.8)
Equity	39.5	29.9	35.6	85.0	21.9

€ million	QUARTIER LIVER	HIGH-STREET VIII	TEMPEL-WEST	TWINS	ECHO
Revenues	6.6	-	13.3	3.2	2.9
Interest Income	-	-	0.1	-	-
Interest Expenses	(1.2)	-	(3.1)	(0.2)	(1.3)
Income Tax Expense or Income	1.3	-	(1.1)	0.2	0.9
Profit / (Loss) from continuing Operations	(23.1)	(0.2)	(20.4)	0.2	(4.4)
Total Comprehensive Income	(23.1)	(0.2)	(20.4)	0.2	(4.4)

The table below shows the key ﬁnancial information of the Group‘s major investments in Associates as of 31 December 2021:

€ million	VISION ONE	QUARTIER LIVER	HIGH-STREET VIII	WEST	ECHO
Property, plant and equipment	158.2	97.8	-	226.7	69.6
Other Non-Current Assets	-	-	31.8	2.2	-
Cash (Restricted and Free Cash)	0.3	2.5	0.1	16.6	1.1
Other Current Assets	10.2	4.0	-	12.3	0.8
Non-Current Financial Liabilities	(81.4)	(36.1)	-	(142.0)	-
Other Non-Current Liabilities	-	(1.1)	-	(43.4)	(1.0)
Current Financial Liabilities	(47.0)	-	-	(4.2)	(38.8)
Other Current Liabilities	(1.7)	(1.1)	(0.0)	(12.2)	(6.3)
Equity	38.7	66.0	31.9	56.1	26.4

€ million	VISION ONE	QUARTIER LIVER	HIGH-STREET VIII	WEST	ECHO
Revenues	0.0	6.7	0.3	18.2	2.3
Interest Income	0.0	-	-	-	-
Interest Expenses	(0.2)	(1.2)	(0.0)	(4.0)	(0.6)
Income Tax Expense or Income	-	2.6	-	0.5	0.1
Profit / (Loss) from continuing Operations	(1.5)	6.3	(0.2)	1.6	0.0
Total Comprehensive Income	(1.5)	6.3	(0.2)	1.6	0.0

Joint Ventures have been insigniﬁcant in size and therefore have not been further detailed. Investment properties held by the Associates are measured at fair value in line with IAS 40 which includes assumptions on macro and micro economic developments in the future. Developments held as inventory by the investments are valued at cost or net realizable value. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 123 The decrease in investments in Associates and Joint Ventures to € 84.6m (2021: € 145.9m) is mainly driven by several disposals of projects. Moreover, Hannover Leasing placed the last Vision One and NEUSS project shares among institutional investors, hence only a minority share is held back which is therefore reclassiﬁed to Other Financial Instruments (see also Note E.4). The main disposal within the Joint Ventures relates to the MOVIESTAR project. Here, an interest amounting to € 10.2m was sold for € 8.5m In addition, the share of losses for the period rose to € 19.4m which can be primarily linked to negative valuation results for the projects LIVER, ECHO, HIGHSTREET VIII and HIGHSTREET PII. Valuation results as well as operating losses pose the main risks associated with the interests in associates and joint arrangements. The risk is limited to the carrying amounts of the investments. The following tables show the participation quote and the movements in Group’s investments in Associates and Joint Ventures.

Investment in Associates and Joint Ventures – Movement in carrying amount 2022 (in € million)

Project	Quote 1 Jan 2022	Quote 31 Dec 2022	1 Jan 2022	Additions/ Transfers	Share of P/(L) for the period	Dividends and capital repayment	Disposals/ Transfers	CTA	31 Dec 2022
LIVER	35.1%	35.1%	20.7	-	(6.5)	-	-	(0.7)	13.5
QUARTIER WEST	31.7%	31.7%	13.3	-	0.2	(0.3)	-	-	13.2
HIGHSTREET VIII	21.6%	21.6%	10.4	-	(2.1)	-	-	-	8.3
ECHO	38.1%	38.1%	10.4	-	(2.5)	-	-	-	7.8
TEMPELHOF TWINS	10.1%	10.1%	8.1	0.1	(0.4)	(0.1)	-	-	7.6
TABLAS	48.5%	48.5%	6.5	-	(0.1)	-	-	-	6.3
TURICUM	6.0%	6.0%	5.6	-	(0.1)	-	-	-	5.5
PALLARS	48.6%	48.6%	4.8	-	(0.6)	-	-	-	4.2
HIGHSTREET VI	10.0%	27.5%	5.0	-	(3.4)	-	-	-	1.6
OLYMPIC	10.5%	10.5%	3.4	-	(0.4)	-	-	-	3.0
BAIN	10.0%	10.0%	2.6	0.5	(0.2)	-	-	-	3.0
PLUTOS	11.5%	11.5%	2.7	-	(0.3)	(0.1)	-	-	2.3
BOCHUM	10.1%	10.1%	1.8	0.1	(0.1)	-	-	-	1.8
CONDOR	10.5%	10.5%	1.7	-	-	-	-	-	1.7
HIGHSTREET PII	10.0%	10.1%	3.9	-	(2.2)	-	-	-	1.7
CASSANDRA	11.0%	11.0%	1.3	-	-	-	-	-	1.3
DONALD	5.1%	5.1%	1.0	-	-	-	-	-	1.0

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 124

Project (cont’d)	Quote 1 Jan 2022	Quote 31 Dec 2022	1 Jan 2022	Additions/ Transfers	Share of P/(L) for the period	Dividends and capital repayment	Disposals/ Transfers	CTA	31 Dec 2022
ISABELA	11.1%	11.1%	1.5	-	(0.3)	(0.9)	-	-	0.3
VENLOER 4711	10.1%	10.1%	0.8	-	(0.7)	-	-	-	0.1
HABANA	49.0%	49.0%	0.1	-	-	-	-	-	0.1
POSEIDON	10.4%	10.4%	1.0	-	(1.0)	-	-	-	0.0
ANNAPURNA	10.3%	10.3%	1.3	-	(1.3)	-	-	-	0.0
KING	10.6%	sold	0.0	-	-	-	-	-	0.0
VISION ONE	21.5%	sold1	22.5	-	-	-	(22.5)	-	0.0
NEUSS	26.6%	sold	3.5	-	-	-	(3.5)	-	0.0
ACROSS	5.5%	sold	0.3	-	-	-	(0.3)	-	0.0
ROSE	5.4%	sold	0.2	-	-	-	(0.2)	-	0.0
Associates, total	-	-	134.4	0.7	(22.1)	(1.4)	(26.5)	(0.7)	84.3
SANTES FAIR	50.0%	50.0%	0.1	0.1	-	-	-	-	0.2
SCORE	50.0%	50.0%	0.1	-	-	-	-	-	0.1
RAW	45.0%	45.0%	1.1	-	(1.1)	-	-	-	0.0
ACCONTIS	50.0%	50.0%	0.0	-	-	-	-	-	0.0
EXPORO MOVIESTAR	18.0%	sold	10.2	-	-	-	(10.2)	-	0.0
Joint Venture, total	-	-	11.5	0.1	(1.1)	-	(10.2)	-	0.3
Total	-	-	145.9	0.8	(23.2)	(1.4)	(36.7)	(0.7)	84.6

1 reclassified to other financial instruments (see Note E.4) due to placing out

Investment in Associates and Joint Ventures – Movement in carrying amount 2021 (in € million)

Project	Quote 1 Jan 2022	Quote 31 Dec 2022	1 Jan 2021	Additions/ Transfers	Share of P/(L) for the period	Dividends and capital repayment	Disposals/ Transfers	CTA	31 Dec 2021
VISION ONE	-	21.5%	-	22.5	-	-	-	-	22.5
LIVER	35.1%	35.1%	17.8	-	1.8	-	-	1.1	20.7
QUARTIER WEST	31.7%	31.7%	13.7	-	(0.3)	-	(0.1)	-	13.3
HIGHSTREET VIII	21.6%	21.6%	10.1	-	0.3	-	-	-	10.4
ECHO	38.1%	38.1%	11.3	0.3	(1.2)	-	-	-	10.4
TEMPELHOF TWINS	10.1%	10.1%	6.5	0.1	1.6	(0.0)	-	-	8.1

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 124# FINANCIAL STATEMENTS Corestate Annual Report 2022 125

Project	Share	1 Jan 2022	Addition	Disposals/ Repayments	P/(L) for period	CTA	Transfers	31 Dec 2022	31 Dec 2021
TABLAS	48.5%	6.6	-	(0.1)	(0.0)	-	-	6.5	48.5%
TURICUM	6.0%	2.6	-	3.0	-	-	-	5.6	6.0%
HIGHSTREET VIP	10.0%	4.9	-	0.2	-	-	-	5.0	10.0%
PALLARS	48.6%	5.1	-	(0.3)	(0.0)	-	-	4.8	48.6%
HIGHSTREET PII	10.0%	(0.1)	-	-	3.9	0.1	-	3.9	10.0%
NEUSS	35.5%	5.0	-	0.3	-	(1.8)	-	3.5	26.6%
OLYMPIC	10.5%	3.3	0.2	(0.0)	(0.0)	-	-	3.4	10.5%
PLUTOS	11.5%	2.8	-	0.0	(0.1)	-	-	2.7	11.5%
BAIN	10.0%	2.2	0.5	(0.1)	-	-	-	2.6	10.0%
BOCHUM	10.1%	1.8	0.2	(0.2)	-	-	-	1.8	10.1%
CONDOR	10.5%	1.4	0.2	0.0	-	-	-	1.7	10.5%
ISABELA	11.1%	1.5	0.0	(0.0)	-	-	-	1.5	11.1%
CASSANDRA	11.0%	1.3	0.2	(0.1)	(0.0)	-	-	1.3	11.0%
ANNAPURNA	10.3%	1.3	-	(0.0)	-	-	-	1.3	10.3%
POSEIDON	10.4%	1.4	-	(0.3)	(0.0)	-	-	1.0	10.4%
DONALD	5.1%	0.8	-	0.2	(0.0)	-	-	1.0	5.1%
VENLOER 4711	10.1%	0.7	-	0.1	-	-	-	0.8	10.1%
ACROSS	12.3%	1.0	-	(0.8)	-	-	-	0.3	5.5%
ROSE	5.4%	0.1	-	0.0	-	-	-	0.2	5.4%
HABANA	49.0%	0.1	-	0.0	-	-	-	0.1	49.0%
KING	10.6%	0.5	-	(0.5)	-	-	-	0.0	10.6%
FLIGHT	26.0%	0.4	0.0	-	-	(0.4)	-	0.0	0.0%
Associates, total		108.0	24.2	3.7	(0.2)	2.3	1.1	134.4
MOVIESTAR	18.0%	10.2	-	(0.2)	-	-	-	10.4	18.0%
RAW	50.0%	2.3	(0.1)	(1.1)	-	-	-	1.1	45.0%
SCORE	50.0%	0.0	-	0.1	-	-	-	0.1	50.0%
SANTES	50.0%	-	-	-	0.1	-	-	0.1	50.0%
FAIR		0.0	0.0	0.1	-	-	-	0.1
ACCONTIS	50.0%	0.0	-	(0.0)	(0.0)	-	-	0.0	50.0%
EXPORO Joint Venture, total		12.8	(0.1)	(1.2)	(0.0)	-	-	11.5
Total		120.8	24.1	2.5	(0.2)	2.3	1.1	145.9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 126

The following sensitivity analysis shows how the Group's Investment in Associates and Joint Ventures and Loans to Associates and Joint Ventures (carrying amount) would have been affected if the relevant property value of the Associates and Joint Ventures increased / decreased by 5% and 10% (as a result of changes in the main key input parameters stated above):

Property Value € million	Property Value (10%)	Property Value (5%)	Carrying Value	Property Value (-5%)	Property Value (-10%)
2022	98.9	93.1	84.6	81.5	75.6
2021	163.3	154.8	145.9	137.0	127.5

E.4 Other Financial Instruments

The major positions for 2022 relate to Corestate’s Opportunity Fund and the Stratos funds managed by HFS. Both funds are equity instruments measured at fair value through profit and loss (a sensitivity analysis of the level 3 fair value measurement is presented in Note F.5). The remaining financial instruments predominantly contain minority participation rights in partnership structures managed by HL, which are invested in real estate. The following overview shows the amount of the major positions of Group’s other financial instruments:

€ million	2022	2021
Opportunity Fund	45.0	48.6
Stratos Funds	15.7	37.5
Vision One	9.5	-
Private Invest	6.7	7.5
Bel Air	6.6	7.4
Weitblick Augsburg	4.8	5.0
Covent Garden	4.5	4.9
HeWiPPP	5.5	2.3
Johannis Quartier Chemnitz	3.4	3.9
Kera	2.9	1.6
Nigresco	2.3	2.3
Gordion	2.1	1.3
Herschel	-	3.2
RAW	16.6	0.0
Other Instruments	25.5	26.0
Total	151.1	151.5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 127

The other financial instruments amount to € 151.1m (2021: € 151.5m). Movement was mainly caused by redemption of Stratos funds’ shares in the amount of € 7.1m, the sale of Herschel amounting to € 3.2m and various sales for € 2.8m which were offset by negative valuation effects of € 14.7m (primarily due to reduced performance of Stratos II and Stratos IV) and Corestate’s Opportunity Fund amounting to € 3.6m as well as some positive valuation effects related to the investments of Hannover Leasing. Furthermore, the investment “Vision One” (formerly presented under associated entities) was placed out this year and the remaining share of € 9.5m is shown in Other Financial Instruments. The position also includes securities of € 16.6m with a new maturity date of 30 June 2025 for the RAW project which were reclassified from Other Current Financial Assets.

E.5 Property, Plant and Equipment

Property, plant and equipment comprises both, owned and leased assets:

€ million	Land and buildings	Office equipment	Advance payments and assets under construction	2022	2021
Acquisition cost
As of 1 January	19.4	7.9	0.0	27.3	38.1
Changes in scope of consolidated companies	0.0	0.0	0.0	(0.1)	1.2
Currency changes	0.0	(0.2)	0.0	(0.2)	0.0
Additions	23.9	0.6	0.3	24.8	2.3
Disposals / Reclassifications	0.9	3.6	0.0	4.5	(14.3)
As of 31 December	44.1	11.9	0.3	56.3	27.2
Depreciation and impairment losses
As of 1 January	7.9	5.9	0.0	13.8	15.8
Changes in scope of consolidated companies	(0.1)	0.0	0.0	(0.1)	0.1
Currency changes	0.0	(0.1)	0.0	(0.1)	0.0
Additions to cumulative depreciation	3.2	1.2	0.0	4.4	4.1
Impairment losses	0.8	0.0	0.0	0.8	0.0
Disposals / Reclassifications	0.4	3.4	0.0	3.8	(6.2)
As of 31 December	12.2	10.4	0.0	22.6	13.8
Total (Carrying amount)	31.9	1.5	0.3	33.7	13.4

From the total of € 33.7m (2021: € 13.4m) presented above, an amount of € 1.7m (2021: € 1.6m) is related to owned assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 128

The Group acts as a lessee of office premises, offices and other equipment, and cars. Office premises have lease terms between one and 10 years, whilst cars and office equipment have lease terms mostly between 2 and 5 years. Generally, the Group is restricted from assigning and subleasing the leased assets. In 2022, the additions of € 24.8m mainly include a new lease contract of € 21.1m for the office “Marienturm” in Frankfurt for Capital Advisors GmbH and other Frankfurt-based entities. This resulted in an increase of right of use assets and lease liabilities of € 20.9m (see also Notes E.18 and E.24). The maturity analysis of lease liabilities is disclosed in Note F.4 Liquidity risk. Also, an impairment of right-of-use assets was recognized due to the impairment of goodwill at CGU HFS based on the impairment expenses recognized as of 30 September 2022. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

€ million	Office premises	Cars	Office equipment	Other assets	Total
As of 1 January 2022	11.4	0.3	0.1	0.1	11.8
Additions	22.6	-	-	-	22.6
Disposals / Reclassification	1.8	(0.1)	-	-	1.7
Impairment losses	(0.8)	-	-	-	(0.8)
Depreciation	(3.2)	(0.1)	-	(0.1)	(3.4)
As of 31 December 2022	31.8	0.1	0.1	-	32.0

Set out below are the carrying amounts of lease liabilities (included in other non-current and current financial liabilities) and the movements during the period:

€ million	2022	2021
As of 1 January	19.5	27.4
Additions	22.5	1.5
Disposals / Reclassification	(2.7)	(5.3)
Accretion of interest	0.6	0.8
Payments	(4.3)	(4.9)
As of 31 December	35.6	19.5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 129

The Group also has certain leases with lease terms of twelve months or less and leases of office equipment with low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these leases. The following table shows the amounts recognised in profit or loss.

€ million	2022	2021
Depreciation Expense of Right-of-Use Assets	(4.2)	(3.3)
Interest Expense on Lease Liabilities	(0.6)	(0.9)
Interest Income on Lease Receivables	-	0.3
Expense relating to Leases of Low-Value Assets	(0.5)	(0.2)
Expense relating to Short-Term Leases	0.0	0.0
Total Amount Recognized in Profit or Loss	(5.3)	(4.1)

In consequence, Corestate had total cash outflows for leases of € 4.8m (2021: € 5.1m).

E.6 Non-Current Receivables

€ million	2022	2021
Non-Current Loans to Third Parties	7.5	34.2
Non-Current Loans to former Majority Shareholder of HL	2.1	8.0
Non-Current Loans Other	0.1	9.5
Total	9.7	51.7

Non-current receivables decreased by € 42.0m to € 9.7m (2021: € 51.7m) Non-current loans to third parties include a repayment of € 9m, a write-off of € 2.5m and a provision for expected credit losses amounting to € 13.5m (2021: € 0.1m; for further details of the credit risk see Note F.4). Non-current loans to the former majority shareholder of Hannover Leasing decreased due to a reclassification to other current receivables. The decrease in Non-Current Loans Other resulted from the sale of CE Bad Honnef Betriebsgesellschaft mbH during the year.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 130

E.7 Non-Current Loans to Associated Entities

€ million	2022	2021
Kanada Haus KG	5.6	5.6
RAW-Ost HC S.à r.l.	3.2	0.8
Pallars AIF HoldCo Sarl	1.9	1.9
HL Invest Neuss GmbH	-	3.0
Others	1.0	3.6
Total	11.7	14.9

The Non-Current Loans to Associated Entities decreased by € 3.2m to € 11.7m (2021: € 14.9m). This decrease is mainly resulting from the complete repayment of € 3.0m of the loan against HL Invest Neuss GmbH which was fully placed out in the reporting period. The carrying amount of the loan against RAW-Ost HC S.à r.l. increased due to the issuance of a shareholder loan. In addition, the provision for expected credit losses has been reduced by € 1.6m to € 7.9m (2021: € 9.5m; for further details of the credit risk see Note F.4).

E.8 Inventories

Inventories comprise real estate properties in “Real Estate Operations and Warehousing” as part of the other segment which are deemed to be converted into investment products by way of selling them into independent investment structures. At the end of fiscal year 2022, inventories in the amount of € 121.1m (2021: € 100.0m) are primarily related to the Projects Highstreet Giessen, a shopping centre, and Augsburg Offices (LAUREA Verwaltungsgesellschaft mbH & Co. Vermietungs KG), an office realestate property. Two development assets located in Spain complete the inventories. In 2022 the increase in the amount of € 21.1m is mainly due to the purchase of the property Augsburg Offices by Hannover Leasing. The closing for Augsburg Offices (LAUREA Verwaltungsgesellschaft mbH & Co. Vermietungs KG) took place on 1 April 2022.In addition to a loan in the amount of €20.6m, equity capital already deposited by investors in the Augsburg Offices fund was used to pay the purchase price. However, since the Augsburg Offices fund has not yet been fully placed (placement status as of 31 December 2022: € 10.7m of € 24.5m placement volume, corresponding to 43.7%), an equity bridge of € 9.5m was provided by HANNOVER LEASING GmbH & Co. KG (HL KG). The Group fully placed the asset among investors during 2023 (see also Note F.9 Significant Events after the Reporting Date). The closing of the sale of the Wallhalla asset was completed on 31 May 2022 and led to a decrease in inventories by € 14.9m. With the disposal, the corresponding liabilities were also repaid in full.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 131

The CAPEX measures at the Highstreet Giessen project were mostly finalized during the reporting period. Ongoing CAPEX measures amounted to €13.6m in 2022 (see also Note E.13 for the corresponding decrease in restricted cash). Management reassessed the valuation of the project which resulted in a current net realizable value of € 73.3m, the asset had to be written down by € 16.0m accordingly. According to the underlying business plan, all real estate assets classified as inventories are expected to be sold in the normal business cycle (up to three years). An amount of € 0.3 m related to various projects has been reflected under miscellaneous.

€ million	2022	2021
Ginova PropCo S.à r.l. (property located in Giessen)	73.3	75.7
Laurea KG (property located in Augsburg)	41.4	-
Gabriela PropCo S.L. (property located in Spain)	2.5	4.0
Bego PropCo I S.L. (property located in Spain)	3.6	5.4
Walhalla PropCo S.à r.l. (property located in Bremen)	-	14.9
Miscellaneous	0.3	-
Total (Carrying amount)	121.1	100.0

As a result of the reassessment of the net realizable value of the two Spanish development assets, both were impaired by a total of € 3.3m.

E.9 Trade Receivables

Trade receivables of € 26.2m (2021: € 47.2m) result from various fee income streams generated by the Group’s Real Estate Equity and Debt Business with third party clients and receivables from renting activities. The table below shows the risk provision for financial assets at amortised cost (within the simplified approach) showing cumulative expected credit losses of € 20.7m (2021: € 10.5m):

€ million	Stage 3 Simplified Approach	Stage 2 Simplified Approach	Total
1 January 2022	1.7	8.8	10.5
Provision for expected credit losses	(0.1)	10.3	10.2
31 December 2022	1.6	19.1	20.7

The increase relates mainly to HFS and is due to the illiquidity of Stratos II. The 2020/21 performance fee receivable amounted to € 21.3m, of which the full amount was invoiced but only € 13.0m was paid as at the beginning of Q4 2022. The remaining € 8.3m has been impaired. A detailed overview of the expected credit losses recognized is shown in Note F.4.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 132

E.10 Contract Assets

The decline in contract assets to € 3.0m (2021: € 58.5m) is mainly driven by the invoiced amounts of the coupon participation fees for the Stratos Funds at the level of HFS as part of the termination agreement between the funds’ manager and HFS. The coupon participation fees are calculated by the external fund manager on a monthly basis but are chargeable by HFS generally every six months. As the Stratos II Fund is in liquidation and the redemption of unit certificates is still suspended (see Note E.1), no relevant performance occurred in 2022 which led to a strong decline in already accrued performance fees of the fund for the fiscal year beginning on 1 November 2021. For contract assets an amount of € 34.7m (2021: € 3.2m) was written off during the year. This was driven by increased risk provisions at the HFS level primarily linked to Stratos II due to reduced performance of the project. The movement of contract assets is shown in the following table:

€ million	2021	Change in contract assets	Write off	2022
Gross carrying amount	61.7	24.0	34.7	3.0
Contra account	3.2	3.2	0.0	0.0
Net carrying amount	58.5	20.8	34.7	3.0

E.11 Receivables from Associated Entities

The receivables from associated entities consist of € 4.8m (2021: € 14.4m) trade receivables from various entities, € 3.2m loans (2021: € 0.0m) and € 2.9m (2021: € 2.4m) other receivables.

E.12 Other Current Financial Assets

Other Current Financial Assets amounted to € 31.1m (2021: € 86.5m). The reduction resulted mainly from the complete write off of a loan for bridge financing granted by Corestate Capital Services GmbH (CCS) whose carrying amount was € 60.5m in 2021. This effect was only partly balanced by a reclassification of trade tax receivables with a carrying amount of € 8.3m (2021: € 8.3m) from Non-Current Receivables to Other Current Financial Assets.

E.13 Other Current Assets

Other Current Assets, predominantly consisting of other tax receivables, amount to € 12.6m (2021: € 12.1m) and remained relatively stable.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 133

E.15 Equity

Share Capital

€ million	2022	2021
As of 1 January	2.6	1.9
Issue of share capital (contribution in cash)	-	0.6
As of 31 December	2.6	2.6

The Company´s share capital remained unchanged in 2022 compared to prior year as no movement in number of shares occurred. (see D.14). Overall, the Company´s share capital as of December 2022 is set at € 2,564,536 represented by 34,193,808 shares (2021: 34,193,808). All shares are dematerialized shares without a par value. The shares are freely transferable in accordance with the legal requirements for shares in dematerialized form, that is, through book-entry transfers. There are no prohibitions on disposals or restrictions with respect to the transferability of the shares. All shares are subject to and governed by Luxembourg law. Each share carries one vote at the Company’s shareholders’ meeting. There are no restrictions on voting rights. All shares carry the same dividend rights. In the event of the Company’s liquidation, any proceeds will be distributed to the holders of the shares in proportion to their interest in the Company’s Share Capital

Authorized Capital

The Management Board may withdraw or limit the preferential subscription rights of the shareholders under the authorized capital in accordance with the Articles of Association. On 20 December 2022, in the context of the financial restructuring, the extraordinary shareholders’ meeting concluded to authorize the Management Board for a period of five years to issue up to 200,000,000 new shares in the Share Capital amount of up to € 15m with a limitation and/or waiver of the preferential subscription rights.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 134

E.14 Restricted Cash, Cash and Cash Equivalents

Cash and Cash Equivalents of € 56.1m (2021: € 62.8m) in the Consolidated Statement of Financial Position comprise cash at banks and on hand as well as short-term deposits with a maturity of three months or less. Cash is held with banks rated from Aa3 to A2 (according to Moody’s). The position cash and cash equivalents generally include restricted cash since it is considered an integral part of the Group’s cash management. In 2022 restricted cash only amounts to € 0.5m (2021: € 12.9m) and mainly relates to the remaining contractually committed CAPEX expenditure for the warehousing asset Giessen (see Note E.8).

Other Reserves

The other reserves decreased by € 203.2m to € 618.6m (2021: € 821.7m) mainly relating to the transfer of the prior year’s Group net loss amounted to € -201.1m. The composition and development of the other reserves is shown in the Consolidated Statement of Changes in Equity. The shareholders’ share of profits is determined based on their respective interests in the Company’s share capital. In a Luxembourg public limited company (société anonyme), resolutions concerning the distribution of dividends for a given financial year, and the amount thereof, are adopted by the annual general meeting of shareholders related to such financial year. The annual general meeting of shareholders decides on the allocation of the annual profit, if any. In accordance with the Company’s Articles of Association, every year at least 5% of the annual net income (based on the local statutory financial statements) of the Company has to be set aside in order to build up the “legal reserve”. As it has already reached 10% of the subscribed share capital the balance of the net profit is at the disposal of the annual general meeting of shareholders. The general meeting of shareholders may also allocate net profits to reserves other than the legal reserve, and, subject to compliance with all legal requirements, such reserves are available for distribution by a decision of the general meeting of shareholders. No dividend distribution may be decided by the annual general meeting of shareholders when, on the closing date of the last financial year, the net assets as set out in the annual accounts are, or following such distribution would become, lower than the amount of the subscribed share capital plus the legal reserve or any other reserves that may not be distributed by virtue of the Articles of Association.

Negative Equity

Overall, as at 31 December 2022 the Group’s equity position comes to a negative equity in the amount of € -120.3m (2021: positive equity of € 626.2m) which is mainly driven by the significant impairment expenses related to Corestate’s real estate debt business.This balance sheet over-indebtedness was resolved by a haircut on the outstanding bonds combined with a capital reduction and subsequent capital increase in 2023 using the 2022 authorized capital as agreed upon in the December 2022 shareholders’meeting; in addition, the Management Board further expects the Company to have the abilities to meet its future obligations under the new capital structure out of operating and further divestment cashﬂows. Refer to “Going concern basis” section of Note A.2 for further details.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 135

E.16 Non-Current Financial Liabilities from Bonds

Both the senior and convertible bond have been reclassiﬁed to Current Financial Liabilities from Bonds (see Note E.20).

€ million	2022	2021	2018
Senior unsecured Bonds	-	298.0	-
Total	-	298.0	-

E.17 Non-Current Financial Liabilities to Banks

The increase of non-current ﬁnancial liabilities to banks of € 17.0m to € 20.5m (2021: € 3.5m) results from the reclassiﬁcation of a loan from current to non-current due to maturity in 2032 (€ 20.5m) and repayments or sale of the relevant investment structures (€ 3.5m).

E.18 Other Non-Current Financial Liabilities

Other non-current ﬁnancial liabilities of € 35.0m (2021: € 19.9m) mainly consist of lease liabilities amounting to € 32.7m (2021: € 15.0m) related to procurement leases, particularly oﬀices and cars. Due to the planned relocation to a new oﬀice building in Frankfurt on Main at the beginning of 2023, the existing oﬀice lease agreement was not extended, and the previously included extension option was reduced by 5 years to the new contractual end date of 28 February 2023.

E.19 Other Non-Current Provisions

Other non-current provisions include diﬀerent forms of guarantees and other commitments that typically arise from Corestate’s warehousing or product placement activities. As at 31 December 2022, sundry other non-current provisions mainly include pension-related and similar obligations.

€ million	1 Jan 2022	Utilization	Reversals	Addition	31 Dec 2022
Guarantees and other commitments	0.4	-	-	-	0.4
Sundry other non-current provisions	0.8	0.0	(0.3)	0.6	1.1
Total	1.2	0.0	(0.3)	0.6	1.5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 136

E.20 Current Financial Liabilities from Bonds

The table below shows the amounts of the Group’s current ﬁnancial liabilities from bonds:

€ million	2022	2021	2018
Senior unsecured bonds	299.5	-	2017
Convertible bonds	192.6	190.9	-
Senior secured bridge bonds	9.9	-	-
Total	502.0	190.9	-

Senior Secured ‘Bridge’ Notes (“Bonds”)

At the end of 2022, the Company has issued senior secured bonds in an aggregate principal amount of € 10.0m. These bonds are issued in bearer form with a principal amount of € 100,000 each, which rank pari passu among themselves and are listed under the ISIN DE000A3LBT12. The senior secured bonds were provided by a group of bond holders to bridge the immediate cash need of the Group in December 2022. The secured bonds had an initial maturity until 15 April 2023 which can be subject to prolongation if the restructuring needs more time; they were placed with a coupon of 8.0% per annum.

The Company has provided collateral comprising ﬁrst-priority pledges over the shares certain subsidiaries, certain bank accounts and notes as well as assignments of current and future intra-group and external receivables vis-à-vis third parties. The aforementioned collateral serves to secure the existing liabilities arising from the bonds and contains various restrictions, particularly with regard to the further encumbrance or sale of the assets provided as collateral but otherwise allows for the usual dispositions in the ordinary course of business (e.g. permission to use bank accounts, etc.).

As an additional part of the restructuring in 2023, the bridge ﬁnancing of formerly € 10m was increased to € 37m nominal and transferred into new bonds (“New Super Senior Notes“), maturing on 31 December 2026, accounted for as of 31 December 2023 under the caption “Non-Current Financial Liabilities from Bonds” for an amount of € 38.7m including interest.

Senior Unsecured Bonds

The Company has issued senior unsecured bonds in the aggregate principal amount of € 300m. The bonds are issued in denomination with a principal amount of € 100,000 each, which rank pari passu among themselves and are listed under the ISIN DE000A19YDA9. The Group used the net proceeds for the reﬁnancing of existing debt as well as for general corporate purposes. The bonds with a maturity of ﬁve years were issued at 98.857% and will be redeemed at 100%. The bonds were placed with a coupon of 3.5% per annum, payable semi-annually in arrears. The issuance of the bonds took place on 23 March 2018.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 137

The senior unsecured bonds were disclosed as “Non-Current Financial Liabilities from Bonds” in 2021 (€ 300m) and are presented as “Current Financial Liabilities from Bonds” in 2022 due to the maturity date in March 2023.

Convertible Bonds

In 2017, the Company has issued unsubordinated and unsecured convertible bonds in the aggregate principal amount of € 200.0m. The convertible bonds are issued in bearer form with a principal amount of € 100,000 each, which rank pari passu among themselves and are listed under the ISIN DE000A19SPK4. The Group used the net proceeds for the reﬁnancing of existing debt as well as for general corporate purposes. The convertible bonds with a maturity of 5 years were issued at 100% and will be redeemed at 100% of their principal amount, unless previously converted or repurchased and cancelled. The bonds were placed with a coupon of 1.375% per annum, payable semi-annually in arrears and the conversion price was set to € 61.9580, representing a premium of 27.5% above the reference share price at the bond issue date. The settlement of the bonds took place around 28 November 2017.

After the reporting date the maturity of the convertible bonds was extended to 31 December 2026. As part of the restructuring in 2023, the repayment of the bonds was largely waived, meaning that € 148.2m was booked out through proﬁt or loss to € 36.7m (including transaction costs) as at 31 December 2023 (see also F.9 Signiﬁcant Events After The Reporting Date).

The convertible bonds have both an equity- and debt component. The equity component, included within other reserves, amounts to €9.7m (2021: €9.7m) and reﬂects the value of the conversion right (written call option). Refer to Note D.15 for details on the earnings per share calculation.

The Company being the issuer may, on giving not less than 30 nor more than 60 days‘ prior notice to the bondholders, redeem all, but not some only, of the outstanding bonds with eﬀect from the redemption date (which shall be no earlier than 19 December 2020). However, such notice may only be given if the share price on each of not less than 20 trading days during an observation period of 30 consecutive trading days is equal to or exceeds 130% of the conversion price in eﬀect on each such trading day. The issuer grants to each bondholder the right (the “conversion right”) to convert each bond in whole, but not in part, at the conversion price into settlement shares on any business day during the conversion period (period from 8 January 2018 to the earlier of the following days: the 35th Business Day prior to the maturity date or if the bonds are redeemed by the issuer the 10th Business Day prior to the redemption date). The bonds bear interest on their principal amount at a rate of 1.375% p.a. as from 28 November 2017. Each bond will cease to bear interest when the bondholder exercises the conversion right in respect of any bond or a bond is redeemed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 138

Overall, the ﬁnancial liabilities from convertible bonds increased by € 1.7m in 2022 (2021: € -6.5m).

E.21 Other Current Provisions

The table below shows the detailed composition of the current provisions:

€ million	1 Jan 2022	Utilization	Reversals	Change in scope	Transfer /Reclassification	Addition	31 Dec 2022
Litigation costs	2.5	(0.4)	(0.7)	-	-	1.3	2.7
Restructuring	7.5	(1.4)	(3.2)	-	-	1.3	4.2
Guarantees and other Commitments	0.3	(0.2)	-	-	-	7.5	7.6
Trade tax	0.0	0.0	0.0	0.0	5.9	0.0	5.9
Sundry	3.3	(0.5)	(0.1)	0.1	(0.6)	1.8	4.0
Total	13.6	(2.5)	(4.0)	0.1	5.3	11.8	24.4

Litigation Costs mainly include potential claims from investors from real estate funds and from former employees as part of ongoing legal proceedings. Provision for restructuring includes costs for the realisation of the strategic goal of transforming the Company. The increased Guarantees and other Commitments mainly relate to an amount of € 7.5m, which is a provision of contingent drawdown on the guarantee of the project RAW. As part of the ﬁnancing of the RAW transaction, Corestate has provided a guarantee for an initial maximum amount of € 11.0m (cap). Against the backdrop of the challenging real estate market and the resulting ﬂuctuations in property values, particularly for project developments such as RAW, a provision has been made for a contingent drawdown on the guarantee. In 2022 trade tax provisions of € 5.9m for which Hannover Leasing GmbH & Co. KG is not the debtor were reclassiﬁed from Current Income Tax Liabilities to Other Current Provisions. Sundry mainly includes potential tax claims from ongoing proceedings.

E.22 Other Current Financial Liabilities to Banks

The other current ﬁnancial liabilities to banks of € 42.7m (2021: € 68.3m) mainly comprise warehousing-related debt, including a warehousing loan for the project Highstreet Giessen (€ 40.5m; interest rate 3,25 %; maturity September 2022, extended to June 2023; see also Note E.8). A debt covenant breach occurred and was resolved in 2022. Pleaserefer to Note F.9 for additional details.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 139

E.23 Trade Payables
The trade payables of € 18.8m (2021: € 27.6m) mostly consist of amounts due to utilized services and are not interest-bearing. The year-on-year decrease is mainly due to a reduced use of, and the shorter payment terms granted by, external service providers in 2022.

E.24 Other Current Financial Liabilities
Other current ﬁnancial liabilities amount to € 33.0m (2021: € 41.4m) mostly comprising of lease liabilities. The year-on-year decrease is mainly driven by the reduction in lease liabilities by € 1.7m to € 2.9 (2021: € 4.5), the sale of the Bad Honnef operating Company, and the reassessment of certain lease contracts as well as the regular lease payments. Moreover, Hannover Leasing placed the last Vision One and Neuss projects shares among institutional investors, hence only a minority share is held back. The closing of the sale of the warehousing asset “Wallhalla” was completed on 31 May 2022 (see Note E.8). With the disposal, the corresponding liabilities were also repaid in full.

E.25 Other Current Liabilities

€ million	2022	2021
Liabilities from Employee Benefits	12.7	14.8
Liabilities from Other Taxes (VAT, stamp duty)	7.5	9.3
Contract Liabilities	9.9	0.2
Sundry	15.8	15.7
Total	45.9	40.0

The increase of other current liabilities is mainly due to higher contract liabilities resulting particularly from reimbursement obligations at HFS level. The position ‘sundry’ primarily includes other taxes in the amount of € 7.5m (2021: € 9.3m) and liabilities for social security of € 1.3m (2021: € 1.2m).

The movement of contract liabilities is shown in the following table:

€ million	2021	Recognized as revenue	Additions	2022
Contract Liabilities	0.2	(0.2)	9.9	9.9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 140

F. ADDITIONAL INFORMATION

F.1 Segment Information

Operating segments & chief operating decision maker (CODM)
For management purposes, the Group is organized into business units based on its assets and services and therefor reports the three following segments:
* Real Estate Equity,
* Real Estate Debt, and
* Other segment, comprising the Group’s business in Alignment Capital Management and Real Estate Warehousing and Operations.

The segment deﬁnition and reporting in the Group corresponds to internal reporting to the chief operating decision-maker and is based on operating business divisions (“management approach”). The chief operating decision-maker (“CODM”) is the Group’s Management Board. The Group’s management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on EBITDA and is measured consistently with proﬁt or loss in the consolidated ﬁnancial statements. The Group‘s General and Administrative expenses, other Income and In-come Taxes (including Deferred and Current Taxes) are managed on a Group basis and are not allocated to operating segments.

“Real Estate Equity” encompasses the revenues from acquisition fees, from asset management fees, from property management fees and from sales and promote fees realized. This includes the business of Hannover Leasing, STAM, CRM, Upartments, and Corestate’s asset and investment management. The “Real Estate Debt” segment summarizes the revenue streams underwriting and structuring fees, asset management fees, performance fees, income from bridge loans and trading income. Hence, this segment comprises the HFS and GENOST business as well as the CORESTATE Bank business. The “Other” Segment incorporate all line items from the remaining segments “Alignment Capital Management” and “Real Estate Operations and Warehousing”. The Group’s revenues comprise the revenues from its segments Real Estate Equity and Real Estate Debt as well as the net rental income and the revenues from service charges from Real Estate Operations/Warehousing.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 141

Segment Information
The following tables present information on the Group’s operating segments for 2022 and 2021, respectively. Operating results are monitored for the purpose of making decisions about resource allocation and performance assessment by the CODM. The Group‘s General and Administrative (G&A) and Other Expenses, Financial Result (including Financial Income and Expenses) and Income Taxes (including Deferred and Current Taxes) are primarily managed on a Group basis and are not allocated to operating segments. Impairment losses are accounted for in proﬁt or loss, not in other comprehensive income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 142

Segment Information for the year from 1 January to 31 December 2022

€ million	Real Estate Equity	Real Estate Debt	Other Segment	Total Segments	Overhead	Consolidated Financial Statements
Revenues:
Revenues	57.7	25.9	9.2	92.6	0.0	92.8
Inter-segment revenues	-	-	-	-	-	-
Total revenues	57.7	25.9	9.2	92.6	0.0	92.6
Income/ expenses:
Expenses from Real Estate Equity Segment	(80.1)	0.0	0.0	(80.1)	0.0	(80.1)
Expenses from Real Estate Debt Segment	0.0	(128.6)	0.0	(128.6)	0.0	(128.6)
Net Gain from Selling Warehousing Assets	0.0	0.0	(0.4)	(0.4)	0.0	(0.4)
Share of Profit or Loss from Associates and Joint Ventures	0.0	0.0	(23.2)	(23.2)	0.0	(23.2)
Dividends from other Alignment Capital	0.0	0.0	2.7	2.7	0.0	2.7
Gains/(Losses) from fair value measurement of financial instruments	0.0	0.0	(16.1)	(16.1)	0.0	(16.1)
Expenses from Other Segment	0.0	0.0	(26.0)	(26.0)	0.0	(26.0)
Total earnings	(22.4)	(102.7)	(53.8)	(179.0)	0.0	(179.0)
General and Administrative (G&A) and Other Expenses	0.0	0.0	0.0	0.0	(68.2)	(68.2)
Other income	0.0	0.0	0.0	0.0	79.0	79.0
EBITDA	(22.5)	(102.8)	(53.7)	(179.0)	10.8	(168.2)
Depreciation, Amortization & Impairment	(32.0)	(481.3)	(17.9)	(531.2)	(4.6)	(535.8)
Financial Income	0.0	0.0	0.0	0.0	8.2	8.2
Financial Expenses	0.0	0.0	0.0	0.0	(22.8)	(22.8)
Income Tax Expense	0.0	0.0	0.0	0.0	(24.1)	(24.1)
Segment Net Profit/(Loss)	(54.5)	(584.1)	(71.6)	(710.2)	(32.4)	(742.6)
Total Assets (31 Dec 2022)	170.3	67.0	379.5	616.7	33.7	650.4
Total Equity and Liabilities (31 Dec 2022)	234.8	72.2	400.7	707.8	62.9	650.4
Investment in Associates and Joint Ventures	0.0	0.0	84.6	84.6	0.0	84.6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 143

Segment Information for the year from 1 January to 31 December 2021

€ million	Real Estate Equity	Real Estate Debt	Other Segment	Total Segments	Overhead	Consolidated Financial Statements
Revenues:
Revenues	89.6	121.9	6.3	217.8	0.0	217.8
Inter-segment revenues	-	-	-	-	-	-
Total revenues	89.6	121.9	6.3	217.8	0.0	217.8
Income/ expenses:
Expenses from Real Estate Equity Segment	(86.5)	0.0	0.0	(86.5)	0.0	(86.5)
Expenses from Real Estate Debt Segment	0.0	(66.1)	0.0	(66.1)	0.0	(66.1)
Net Gain from Selling Warehousing Assets	0.0	0.0	(2.7)	(2.7)	0.0	(2.7)
Share of Profit or Loss from Associates and Joint Ventures	0.0	0.0	2.5	2.5	0.0	2.5
Dividends from other Alignment Capital	0.0	0.0	12.8	12.8	0.0	12.8
Gains/(Losses) from fair value measurement of financial instruments	0.0	0.0	(2.9)	(2.9)	0.0	(2.9)
Expenses from Other Segment	0.0	0.0	(7.3)	(7.3)	0.0	(7.3)
Total earnings	3.1	55.8	8.7	67.6	0.0	67.6
General and Administrative (G&A) and Other Expenses	0.0	0.0	0.0	0.0	(59.5)	(59.5)
Other income	0.0	0.0	0.0	0.0	16.3	16.3
EBITDA	3.1	55.8	8.7	67.6	(43.2)	24.4
Depreciation, Amortization & Impairment	(5.1)	(202.5)	(0.1)	(207.7)	(11.1)	(218.8)
Financial Income	0.0	0.0	0.0	0.0	7.4	7.4
Financial Expenses	0.0	0.0	0.0	0.0	(25.7)	(25.7)
Income Tax Expense	0.0	0.0	0.0	0.0	13.7	13.7
Segment Net Profit/(Loss)	(2.0)	(146.7)	8.6	(140.1)	(59.0)	(199.0)
Total Assets (31 Dec 2021)	214.3	712.7	435.2	1,362.2	27.9	1,390.1
Total Equity and Liabilities (31 Dec 2021)	107.0	434.0	206.3	747.3	31.2	778.5
Investment in Associates and Joint Ventures	0.0	0.0	145.9	145.9	0.0	145.9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 144

Group-Wide Disclosures

The Group operates currently with a focus on Germany, United Kingdom, Spain, Switzerland, Poland and Portugal. The Group has segmented its capital allocation by geographical area based on the location of the properties in its Real Estate Equity, Real Estate Debt as well as Real Estate Operations/Warehousing business. The Group generates a major part of its revenues and income in Germany, because the Group and/or its Associates are focused on the German real estate market. The following table sets forth the Group’s revenues as well as non-current assets (other than ﬁnancial instruments, deferred tax assets, post-employment beneﬁt assets and rights arising under insurance contracts) by geography for the periods indicated:

Geographical Segment Information (Secondary Segments)

€ million	2022	2021
Non-Current Asset - Goodwill	45.0	487.2
Luxembourg	45.0	487.2
Non-Current Asset – Other Intangible Assets	27.2	84.8
Germany	22.5	37.0
France	4.6	6.1
Switzerland	0.0	41.7
Other	0.1	0.0
Non-Current Asset – Investment in Associates and Joint Ventures	84.6	145.9
Germany	84.6	145.9
Non-Current Asset – Property, Plant and Equipment	33.7	13.4
Germany	31.2	11.1
France	0.5	0.1
Other	2.0	2.2
Revenues	92.8	205.8
Germany	67.3	179.0
UK	16.4	0.8
Benelux	5.2	5.3
Austria	1.8	6.0
Spain	0.8	1.6
USA	0.1	5.4
Other	1.3	7.7

Compared to previous years, in which turnover of >10% was regularly achieved with one customer (i.e. the Stratos II fund), in 2022 there is no longer a customer that is solely responsible for more than 10% of the turnover achieved in the reporting period.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 145

F.2 Commitments and Contingencies

The Corestate Group’s contingent liabilities and other obligations are primarily potential future payment obligations of the Group attributable to guarantees that have been provided. These contingencies are not recognized in the balance sheet but disclosed in accordance with IAS 37. The table below provides an overview of the contingencies as of 2022:

€ million	2022	2021
Obligations under guarantees and warranty agreements	61.7	45.3
Loan Commitment	5.3	29.8
Placing and takeover obligations	0.8	36.1
Total Loss Contingencies	67.8	111.2

The increase in the obligations under guarantees and warranty agreements is almost entirely due to the project “Laurenz Carré” (€ 17.0m). The decrease in loan commitments is mainly the result of the Hannover Leasing projects “Vision One (HL Vision One KG)”, HL Augsburg Oﬀices GmbH & Co. geschlossene Investment-KG and “Invest Neuss (HL Invest Neuss KG)” amounting together to a decrease of about € 22.6m. In 2022, all remaining shares of project “Vision One” were sold to external investors (fully placed) and “Augsburg Oﬀice” is fully consolidated. The reduction of placing and takeover obligations results mainly from obligations for “HL Augsburg Oﬀices GmbH & Co. geschlossene Investment-KG” and “Objektgesellschaft Tec-Park mbH”, amounting together to a decrease of € 35.6m.

F.3 Capital Management

The Group’s policy is to maintain a strong capital base in order to maintain investor, creditor, and general capital markets conﬁdence, and to support the ongoing development and growth of the Group for further maximizing shareholder value. Corestate group is not subject to regulatory capital requirements. For the Group’s capital management, capital includes share capital and all other equity reserves attributable to the shareholders of the parent. The Group proactively manages its capital structure and makes necessary adjustments by either changing dividend pay- outs, returning capital to shareholders, or issuing new shares. No changes were made in the objectives, policies, or processes for managing capital during the year ended 31 December 2022.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 146

F.4 Financial Risk Management Objectives and Policies

The Group’s principal ﬁnancial liabilities comprise liabilities to bonds, liabilities to banks, trade payables, current liabilities to associates and other ﬁnancial liabilities with the main purpose of ﬁnancing the Group’s operations. Vice versa, the Group has loan, trade and other receivables, as well as cash and cash equivalents directly resulting from its operations. The Group also holds other ﬁnancial instruments and enters derivative transactions if necessary. The Group is exposed to credit risk, liquidity risk, and interest rate risk. The overarching risk management system, which is designed in line with the size and operations of the Group, is geared towards the unpredictable nature of developments on the ﬁnancial markets and aims to minimize potential negative eﬀects on the Group’s ﬁnancial position. The Group identiﬁes measures at regular intervals. In addition, the Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risk. The Group’s management oversees the administration of these risks to ensure that an appropriate balance between risk and control is achieved. The Group’s management reviews and agrees policies for managing each of these risks which are summarized below.

Liquidity Risk

The Group monitors its risk of a shortage of funds using a continuous liquidity planning on a monthly basis. For short-term liquidity risks an eﬀicient net working capital management is in place. In addition, liquidity may also be aﬀected by changing interest rates. The table below summarizes the maturity proﬁle of the Group’s ﬁnancial liabilities based on contractual undiscounted payments. Lease liabilities with a carrying amount of € 35.6m (2021: € 19.5m) have nominal interest rates between 3.1% and 4.7% with a maturity from 2023 to 2032. Corresponding Face values of lease liabilities amount to € 41.0m (2021: € 23.0m).

Maturities of Financial Liabilities (2022)

€ million	31 Dec 2022	< 1 year	1 to 5 years	> 5 years
Financial Liabilities to Bonds	502.0	502.0	-	-
Financial Liabilities to Banks	63.2	42.7	0.0	20.5
Other Financial Liabilities	68.0	33.0	17.5	17.5
thereof lease liabilities	35.6	2.9	15.9	16.9
Current liabilities to Associates	9.0	9.0	-	-
Trade payables	18.8	18.8	-	-
Total financial liabilities	661.0	605.5	17.5	38.0

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 147

Maturities of Financial Liabilities (2021)

€ million	31 Dec 2021	< 1 year	1 to 5 years	> 5 years
Financial Liabilities to Bonds	488.9	190.9	298.0	-
Financial Liabilities to Banks	71.8	68.3	3.5	-
Other Financial Liabilities	61.3	41.4	11.9	8.0
thereof lease liabilities	19.5	2.9	8.6	8.0
Current liabilities to Associates	18.1	18.1	-	-
Trade payables	27.6	27.6	-	-
Total financial liabilities	667.8	346.3	313.4	8.0

Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a ﬁnancial instrument or a customer contract, eventually leading to a ﬁnancial loss. The Group is exposed to credit risk from its operating activities which, in turn, are dependent on the operating performance of the underlying investments. Such operating performance is very closely monitored by the Group‘s asset, property and ﬁnance management teams. The carrying amount of the Group‘s ﬁnancial assets represents the maximum credit exposure. The expected credit loss for trade receivables is assessed using a matrix to determine the maturity of these receivables (simpliﬁed approach). The credit risk of other receivables (general approach) is qualiﬁed by allocating debtors to a corresponding industry and using relevant market data such as sector speciﬁc CDS-spreads. The main focus is on the real estate industry. The table below shows all recognized expected credit losses per asset class for all ﬁnancial assets classiﬁed at amortized cost as at 31 December 2022:

€ million	Gross carrying amount at amortized cost	ECL Stage I	ECL Stage II	ECL Stage III	Total ECL	Net carrying amount at 31 Dec 2022
Other Financial Instruments	15.2	0.0	0.0	11.4	11.4	3.8
Non-Current Receivables	19.3	0.0	0.0	13.4	13.5	5.9
Non-Current Loans to Associated Entities	22.9	0,1	0.0	7.8	7.9	14.9
Other Current Financial Assets	14.2	0,1	0.1	2.0	2.3	11.9
Contract Assets	3.0	0,1	0.0	0.0	0.0	3.0
Receivables from Associated Entities	12.3	0.0	0.2	4.4	4.6	7.7
Trade Receivables	46.9	0.0	1.6	19.1	20.7	26.2
Restricted Cash	0.5	0.0	0.0	0.0	0.0	0.5
Cash and Cash Equivalents	56.1	0.0	0.0	0.0	0.0	56.1
Total	190.3	0.3	1.9	58.2	60.4	129.9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 148

The following table shows the corresponding values as a 31 December 2021:

€ million	Gross carrying amount at amortized cost	ECL Stage I	ECL Stage II	ECL Stage III	Total ECL	Net carrying amount at 31 Dec 2021
Other Financial Instruments	4.9	0.0	0.0	0.0	0.0	4.9
Non-Current Receivables	16.2	0.1	0.0	0.0	0.1	16.1
Non-Current Loans to Associated Entities	13.6	0.1	0.0	9.4	9.5	4.1
Other Current Financial Assets	122.9	0.1	0.1	38.2	38.5	84.4
Contract Assets	61.7	0.1	0.0	3.1	3.2	58.5
Receivables from Associated Entities	23.1	0.0	0.5	5.8	6.3	16.8
Trade Receivables	57.7	0.0	1.7	8.8	10.5	47.2
Restricted Cash	12.9	0.0	0.0	0.0	0.0	12.9
Cash and Cash Equivalents	62.8	0.0	0.0	0.0	0.0	62.8
Total	375.7	0.5	2.3	65.3	68.1	307.6

The development of expected credit losses from 31 December 2021 to 31 December 2022 can be reconciled based on the following table:

€ million
Balance 1 January 2022	68.1
Additional ECL	126.9
Impairment Reversal	(30.7)
Write off	(104.0)
31 December 2022	60.4

The table below shows the default ratios per aging item for trade receivables as of 31 December 2022:

€ million	Not yet due	Past-due 1 to 90 days	Past-due 91 to 180 days	Past-due 181 to 360 days	Past-due from 361 days	Total
Default ratio	0.0%	0.7%	2.2%	6.1%	0.0%	3.4%
Gross carrying amount of trade receivables as of 31 December 2022	0.0	14.9	11.9	20.1	0.0	46.9
Expected credit loss Stage 2	0.0	0.1	0.3	1.2	0.0	1.6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 149

The table below shows the default ratios per aging item for trade receivables as of 31 December 2021:

€ million	Not yet due	Past-due 1 to 90 days	Past-due 91 to 180 days	Past-due 181 to 360 days	Past-due from 361 days	Total
Default ratio	0.4%	0.5%	7.7%	10.0%	14.7%	3.6%
Gross carrying amount of trade receivables as of 31 December 2022	24.1	10.5	2.5	7.2	2.8	47.2
Expected credit loss Stage 2	0.1	0.1	0.2	0.8	0.5	1.7

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes in foreign exchange rates. Except for a minor portion of its cost base, which is denominated in USD, GBP and CHF, the Group does not have any foreign currency risk relating to ﬁnancial instruments. The following tables demonstrate the sensitivity to a reasonably possible change in USD, GBP and CHF exchange rates. with all other variables held constant.

Currency	Change in FX rate	Effect on EBIT 2022 € million	Effect on EBIT 2021 € million
USD	+10%	1.0	1.7
USD	- 10%	(1.2)	(2.1)
GBP	+10%	< 0.1	< 0.1
GBP	- 10%	< (0.1)	< (0.1)
CHF	+10%	< 0.1	< 0.1
CHF	- 10%	< (0.1)	< (0.1)

As well, no signiﬁcant impact is expected on the Group’s Proﬁt or Loss or on Equity.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes in market interest rates.The Group‘s exposure to the risk of changes in market interest rates relates primarily to the Group‘s short and long- term debt obligations with ﬂoating interest rates. In the case of variable-rate (loan) liabilities, there is an interest rate risk insofar as the interest rate for the loans raised is usually linked to the EURIBOR (European Interbank Oﬀered Rate) reference rate. All of the Group’s ﬁnancial assets – with the exception of loans to Associated Entities – are even non-interest bearing or partly with fees of 40–50 basis points. The following table provides the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings aﬀected. With all other variables held constant, the Group‘s earnings before tax (EBT) would be aﬀected through the impact on ﬂoating rate ﬁnancial instruments, as follows:

Increase/ decrease in basis points	Effect on financial result 2022 € million	Effect on financial result 2021 € million
+50 bps	< (0.2)	< (0.1)
-50 bps	< 0.2	< 0.1

F.5 Fair Value of Assets and Liabilities

IFRS 13 requires disclosures related to fair value measurements using a three- level fair value hierarchy. The availability of input factors determines the level of fair value hierarchy. Hence, the Group uses the following Fair Value Hierarchies:

– Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
– Level 2: Valuation techniques for which the lowest level input that is signiﬁcant to the fair value measurement is directly or indirectly observable (comparable transactions)
– Level 3: Valuation techniques for which the lowest level input that is signiﬁcant to the fair value measurement is unobservable (valuation models)

As in the previous year the Group‘s fair value measurements of assets are mainly within Level 3, whereas the fair value measurement of ﬁnancial liabilities is mainly within level 1 due to both corporate bonds being traded on the regulated market, speciﬁcally listed on the Frankfurt Stock Exchange (FSE) (see Note E.20 for details). Financial instruments measured within Level 3 are being valued based on real estate appraisals without observable market input parameters. The Group’s management considers the appropriateness of the valuation methods and inputs and may request that alternative valuation methods are applied to support the valuation arising from the method chosen. Any changes in valuation methods are discussed and agreed with the Group‘s Management Board.

The table below summarizes the ﬁnancial instruments that the Group holds, compares the carrying amount with the fair value of each class of ﬁnancial instrument and distinguishes between ﬁnancial instruments measured at amortized cost or at fair value as of 31 December 2022:

€ million	Carrying amount 31 Dec 2022	Amortized cost	Fair value recognized through profit and loss	Addition1	Fair value 31 Dec 2022
Other Financial Instruments	151.1	3.8	147.4	-	151.1
Non-Current Receivables	9.7	5.2	4.4	0.1	9.6
Non-Current Loans to Associated Entities	11.7	5.3	6.4	-	11.7
Other Current Financial Assets	31.1	28.7	-	2.4	28.7
Contract Assets	3.0	3.0	-	-	3.0
Receivables from Associated Entities	10.9	10.9	-	-	10.9
Trade Receivables	26.2	26.2	-	-	26.2
Restricted Cash	0.5	0.5	-	-	0.5
Cash and Cash Equivalents	56.1	56.1	-	-	56.1
Total Financial Assets	300.3	139.7	158.2	2.5	297.7
Non-Current Financial Liabilities to banks	20.5	20.5	-	-	20.5
Other Non-Current Financial Liabilities	35.0	2.3	-	32.7	2.2
Current Financial Liabilities from bonds	502.0	502.0	-	-	40.7
Current Financial Liabilities to banks	42.7	42.7	-	-	42.7
Other Current Financial Liabilities	33.0	30.2	-	2.9	30.2
Current Liabilities to Associated Entities	9.0	9.0	-	-	9.0
Trade Payables	18.8	18.8	-	-	18.8
Total Financial Liabilities	661.0	625.5	-	35.6	164.1

1 Rights and obligations under leases to which IFRS 16 applies, are not part of the fair value hierarchy of IFRS 9 and therefore labelled as “Addition”

Part of the current ﬁnancial liabilities from bonds is a convertible bond with a book value of € 192.6m (2021: € 190.9m).

The table below summarizes the ﬁnancial instruments that the Group holds and compares the carrying amount with the fair value of each class of ﬁnancial instrument as of 31 December 2021:

€ million	Carrying amount 31 Dec 2021	Amortized cost	Fair value recognized through profit and loss	Addition1	Fair value 31 Dec 2021
Other Financial Instruments	151.5	4.9	146.6	-	151.5
Non-Current Receivables	51.7	16.1	18.6	17.1	34.7
Non-Current Loans to Associated Entities	14.9	4.1	10.8	-	14.9
Other Current Financial Assets	86.5	84.4	-	2.0	84.4
Contract Assets	58.5	58.5	-	-	58.5
Receivables from Associated Entities	16.8	16.8	-	-	16.8
Trade Receivables	47.2	47.2	-	-	47.2
Restricted Cash	12.9	12.9	-	-	12.9
Cash and Cash Equivalents	62.8	62.8	-	-	62.8
Total Financial Assets	502.7	307.6	176.0	19.1	483.6
Non-Current Financial Liabilities to banks	3.5	3.5	-	-	3.5
Non-Current Financial Liabilities from bonds	298.0	298.0	-	-	259.5
Other non-Current Liabilities	19.9	4.9	-	15.0	4.9
Current Financial Liabilities from bonds	194.9	194.9	-	-	155.9
Current Financial Liabilities to banks	68.3	68.3	-	-	68.3
Other Current Financial Liabilities	37.5	33.0	-	4.5	33.0
Current Liabilities to Associated Entities	18.1	18.1	-	-	18.1
Trade Payables	27.6	27.6	-	-	27.6
Total Financial Liabilities	667.8	648.3	-	19.5	570.8

1 Rights and obligations under leases to which IFRS 16 applies, are not part of the fair value hierarchy of IFRS 9 and therefore labelled as “Addition”

The table below shows which level of the fair value hierarchy is used to measure fair value as of 31 December 2022:

Fair Value Hierarchy 2022 (€ million)	Fair Value	Level 1	Level 2	Level 3
Financial Assets for which fair values are disclosed
Other Financial Instruments	151.1	-	3.7	147.4
Non-Current Receivables	9.6	-	9.6	-
Non-Current Loans to Associated Entities	11.7	-	11.7	-
Other Current Financial Assets	28.7	-	28.7	-
Contract Assets	3.0	-	3.0	-
Receivables from Associated Entities	10.9	-	10.9	-
Trade Receivables	26.2	-	-	-
Restricted Cash	0.5	-	-	-
Cash and Cash Equivalents	56.1	-	-	-
Total Financial Assets	297.7	-	67.6	147.4
Financial Liabilities for which fair values are disclosed
Non-Current Financial Liabilities to banks	20.5	-	20.5	-
Other Non-Current Financial Liabilities	2.2	-	2.2	-
Current Financial Liabilities from bonds	40.7	40.7	-	-
Current Financial Liabilities to banks	42.7	-	42.7	-
Other Current Financial Liabilities	30.2	-	30.2	-
Current Liabilities to Associated Entities	9.0	-	9.0	-
Trade Payables	18.8	-	-	-
Total Financial Liabilities	164.1	40.7	104.6	-

This table does not include fair value information for ﬁnancial assets and ﬁnancial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value (such as trade receivables, trade payables or cash). No transfers between levels occurred during 2022.

The table below shows which level of the fair value hierarchy is used to measure fair value as of 31 December 2021. It does not include fair value information for ﬁnancial assets and ﬁnancial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value (such as trade receivables, trade payables or cash):

Fair Value Hierarchy 2021 (€ million)	Fair Value	Level 1	Level 2	Level 3
Financial Assets for which fair values are disclosed
Other Financial Instruments	151.5	-	4.9	146.6
Non-Current Receivables	34.7	-	34.7	-
Non-Current Loans to Associated Entities	14.9	-	14.9	-
Other Current Financial Assets	84.4	-	84.4	-
Contract Assets	58.5	-	58.5	-
Receivables from Associated Entities	16.8	-	16.8	-
Trade Receivables	47.2	-	-	-
Restricted Cash	12.9	-	-	-
Cash and Cash Equivalents	62.8	-	-	-
Total Financial Assets	483.6	-	214.2	146.6
Financial Liabilities for which fair values are disclosed
Non-Current Financial Liabilities to banks	3.5	-	3.5	-
Non-Current Financial Liabilities from bonds	259.5	259.5	-	-
Other Non-Current Financial Liabilities	4.9	-	4.9	-
Current Financial Liabilities from bonds	155.9	155.9	-	-
Current Financial Liabilities to banks	68.3	-	68.3	-
Other Current Financial Liabilities	33.0	-	33.0	-
Current Liabilities to Associated Entities	18.1	-	18.1	-
Trade Payables	27.6	-	-	-
Total Financial Liabilities	570.8	415.4	127.8	-

The table below reconciles Level 3 ﬁnancial instruments from the opening balance to the closing balance for 2022:

€ million	Other Financial Instruments
Fair Value as at 1 January 2022	146.6
Additions / Disposals	(0.9)
Changes in the fair value valuation through profit and loss	1.1
Gains/losses from exchange rate differences	0.6
Fair Value as at 31 December 2022	147.4

The table below reconciles Level 3 ﬁnancial instruments from the opening balance to the closing balance for 2021:

€ million	Other Financial Instruments
Fair Value as at 1 January 2021	148.9
Additions / Disposals	5.8
Changes in the fair value valuation through profit and loss	(8.9)
Gains/losses from exchange rate differences	0.7
Fair Value as at 31 December 2021	146.6

Changes in the fair value valuation through proﬁt and loss are recognized in “Gains/losses from fair value measurement of ﬁnancial instruments”. Gains/losses from exchange rate diﬀerence are recognized in “Other Income” and are primarily related to the Pinbridge companies under securities held in USD. For the major components of “Other Financial Instruments” the Group uses the net asset value as the fair value of the respective shares.The table below provides a summary per IFRS 9 category for the net gains and losses resulting from ﬁnancial instruments as of 31 December 2022:

€ million	At Amortized Cost	FVtPL	Financial liabilities
Net results from disposal	-	-	-
Net measurement effects	3.2	(1.1)	(16.3)
Impairment gain/loss	(126.9)	-	-
Effective interest rate income	1.8	-	2.1
Effective interest rate expenses	-	(21.7)	-
Total	(121.9)	(22.8)	(14.2)

The table below provides a summary per IFRS 9 category for the net gains and losses resulting from ﬁnancial instruments as of 31 December 2021:

€ million	At Amortized Cost	FVtPL	Financial liabilities
Net results from disposal	-	-	(0.1)
Net measurement effects	3.6	(1.7)	-
Impairment gain/loss	(60.0)	-	(12.7)
Effective interest rate income	1.9	-	1.4
Effective interest rate expenses	-	(22.3)	-
Total	(54.5)	(24.0)	(11.4)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 156

The Group’s liabilities arising from ﬁnancing activities mainly relate to the senior unsecured and convertible bond as well as lease liabilities. The bonds do not change signiﬁcantly during their term and the lease liabilities are initially not cash eﬀective. In 2022, the main cash eﬀective change in liabilities from ﬁnancing activities is driven by current ﬁnancial liabilities from bonds (see Note E.20).

F.6 Related Party Information

CCH SA has identiﬁed all Group companies as related parties as well as the following entities and persons as related parties:

Related parties as at 31 Dec 2022 through report date	Related to/as
Dr Nedim Cen	Supervisory Board (since 3 December 2022 until 4 May 2023)
Dr Bertrand Malmendier	Management Board (since 4 May 2023)
Dr Sven-Marian Berneburg	Supervisory Board (since 1 January 2022 until 31 December 2024)
Dr Carlos Mack	Supervisory Board (since 4 May 2023 until 31 December 2024)
Wolfgang Rudi Bauer	Supervisory Board (since 1 January 2025)
Andreas Paul Uelhoff	Supervisory Board (since 1 January 2025)
Izabela Danner	Management Board (since 7 March 2022 until 31 December 2024)
Udo Giegerich	Management Board (until 31 May 2023)
Stephan Götschel	Management Board (since 1 January 2023 until 4 May 2023)
CCI GmbH	Supervisory Board (Cen) (since 3 December 2022 until 4 May 2023)
Malcon GmbH & Co. KG	Supervisory Board (Malmendier) (since 1 January 2022 until 31 December 2024)
GEPLABAU, Gesellschaft für Planungs- und Baugenehmigungsberatung mbH	Supervisory Board (Malmendier) (since 1 January 2022 until 31 December 2024)
BAB Immobilien GbR	Supervisory Board (Malmendier) (since 1 January 2022 until 31 December 2024)
Omonia Office AG	Supervisory Board (Malmendier) (since 1 January 2022 until 31 December 2024)
CAML Endeavors UG	Supervisory Board (Berneburg) (since 3 December 2022)
Wohnungsbau und Treuhand AG	Supervisory Board (Berneburg) (since 3 December 2022)
Caledonian Management Consultants Ltd	Supervisory Board (Mack) (since 4 May 2023 until 31 December 2024)
i-Management GmbH	Management Board (Götschel) (since 1 January 2023 until 4 May 2023)
Sievert SE	Supervisory Board (Bauer) (since 1 January 2025)
UE Elbe Beteiligung I UG	Supervisory Board (Uelhoff) (since 1 January 2025)
SCHNIGGE Capital Markets SE	Supervisory Board (Uelhoff) (since 1 January 2025)
Quell Eule Management GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 157

Related parties as at 31 Dec 2022 through report date (continued)	Related to/as
Quell Real Estate Holding GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Quell Real Estate Verwaltungs- und Management GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Petroton Service GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Nexure Service GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Kratos Beteiligung GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Jakobina Service GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Hansa Service GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Gaia Service und Beteiligungs GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Eule Beteiligung GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
EULE Corporate Capital GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Elbe Marina GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Comeritas Service GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Avexon Service GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Setec gGmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
Quell Real Estate Wohnbau SH GmbH	Supervisory Board (Uelhoff) (since 1 January 2025)
RIPAG AG	Supervisory Board (Uelhoff) (since 1 January 2025)

Former Related Parties as at 31 Dec 2022	related to/as
Dr Roland Folz	Supervisory Board until 2 December 2022
Dr Friedrich Oelrich	Supervisory Board until 2 December 2022
Stavros Efremidis	Management Board until 31 December 2022
Ralf Struckmeyer	Management Board until 31 December 2022
René Parmantier	Management Board until 7 March 2022
Johannes Märklin	Management Board until 7 February 2022
Sebastian Ernst	Management Board until 7 February 2022
RP Verwaltungsgesellschaft mbH	Management Board (R. Parmantier) until 7 March 2022
RP Vermögensverwaltungsgesellschaft mbH	Management Board (R. Parmantier) until 7 March 2022
Meiyo Capital Partners AG	Management Board (R. Parmantier) until 7 March 2022
Leonis Capital Management GmbH	Management Board (J. Märklin) until 7 February 2022
Leonis Real Estate GmbH	Management Board (J. Märklin) until 7 February 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 158

Former Related Parties as at 31 Dec 2022 (continued)	related to/as
Dach Finance GmbH	Management Board (J. Märklin & S. Ernst) until 7 February 2022
Dach Real Estate GmbH	Management Board (J. Märklin & S. Ernst) until 7 February 2022
Feldmannhof Capital GmbH	Management Board (S. Ernst) until 7 February 2022
CCH SA	Key Management Personnel

The Supervisory Board of Corestate Capital Holding S.A. resolved on 7 February 2022 to remove Johannes Märklin and Sebastian Ernst from the Management Board of Corestate Capital Holding S.A. and all further Group functions. On 8 February 2022, the Group announced that René Parmantier assumes full responsibility for the Real Estate Debt-segment in addition to his role as CEO of Corestate (until 7 February 2022), and thus also the management of Corestate Bank.

On 7 March 2022 the Supervisory Board decided to strengthen the governance structure and resolved to appoint the former Chairman of the Supervisory Board Stavros Efremidis as CEO with immediate eﬀect. The former CEO René Parmantier left the Group’s Management Board to focus his activities on Corestate’s Real Estate Debt business, incl. HFS and Corestate Bank, until his departure in July 2022. In addition, on 7 March 2022 the Group’s Management Board was extended to four members by Izabela Danner as Chief Operating Oﬀicer (COO) and Ralf Struckmeyer as Chief Investment Oﬀicer (CIO).

Furthermore, on 3 December 2022 the newly formed supervisory board appointed Stephan Götschel as Chief Restructuring Oﬀicer (CRO) with eﬀect as of 1 January 2023 as a preceding condition under the ﬁnancial restructuring agreement for the transition period meaning the time until the operational restructuring has been successfully implemented; simultaneously the mandates for Stavros Efremidis (CEO) and Ralf Struckmeyer (CIO) were terminated by mutual agreement eﬀective as of 31 December 2022.

The members of the Management Board during the reporting period 2022 until today are appointed for a term of three years unless otherwise stated and are listed below:

– Dr Nedim Cen (Chief Executive Oﬀicer and Chief Financial Oﬀicer) – since 4 May 2023 (CEO) and since 1 June 2023 (CFO)
– Izabela Danner (Chief Operating Oﬀicer and Chief Investment Oﬀicer) – since 7 March 2022 (COO) and since January 2023 (CIO) until 31 December 2024
– Udo Giegerich (Chief Financial Oﬀicer) – since 1 August 2021 until 31 May 2023
– Stephan Götschel (Chief Restructuring Oﬀicer) – since 1 January 2023 until 4 May 2023

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 159

– Stavros Efremidis (Chief Executive Oﬀicer) – since 7 March 2022 until 31 December 2022
– Ralf Struckmeyer (Chief Investment Oﬀicer) – since 7 March 2022 until 31 December 2022
– René Parmantier (Chief Executive Oﬀicer) – since 1 December 2020 until 7 March 2022
– Johannes Märklin (Chief Debt Financing Oﬀicer) – since 14 January 2021 until 7 February 2022

In addition to the individually agreed base salary, annual bonus payments, and long-term share-based incentives, under their service agreements, the Management Board members are entitled to ancillary beneﬁts that include, among other things, continued payment of remuneration in case of sickness or death for a certain period, contributions to private health insurance as well as D&O (Directors and Oﬀicers liability insurance) and E&O (Errors and Omission) insurance coverage at usual market terms. The Company also reimburses all travelling costs and incidental expenses.The members of the Supervisory Board during the reporting period 2022 until today are:
– Dr Sven-Marian Berneburg (Chairman) – since 3 December 2022
– Dr Bertrand Malmendier (Deputy Chairman) – since 1 January 2022 (Chairman since 8 March 2022 until 2 December 2022, Deputy Chairman since 3 December 2022 until 31 December 2024)
– Dr Carlos Mack (Member) – since 4 May 2023 until 31 December 2024
– Dr Nedim Cen (Chairman) – since 3 December 2022 until 3 May 2023
– Dr Roland Folz (Deputy Chairman) – since 8 March 2022 until 2 December 2022
– Dr Friedrich Oelrich (Member) – since 30 November 2020 until 2 December 2022
– Stavros Efremidis (Chairman) – since 1 January 2022 until 7 March 2022
– Wolfgang Rudi Bauer – since 1 January 2025
– Andreas Paul Uelhoﬀ (Deputy Chaiman) – since 1 January 2025

Dr Berneburg headed the audit committee and was considered the independent ﬁnancial expert (until 3 May 2023). Since 4 May 2023, Dr Carlos Mack headed the audit committee as the independent ﬁnancial expert until 31 December 2024. Since 1 January 2025, Wolfgang Rudi Bauer heads the audit committee and is considered as the independent ﬁnancial expert.
– Sebastian Ernst (Chief Debt Investment Oﬀicer) – since 14 January 2021 until 7 February 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 160

Transactions with Shareholders and Shareholder-Related Entities

Same as in 2021 but unlike years before, also in 2022 no payments have been made to shareholders and/or shareholders’ related entities by the Group in the period 1 January through 31 December 2022.

Transactions with Key Management Personnel

The total remuneration of the Management Board consists of the basic remuneration as well as a short-term incentive and a long-term incentive component. The basic remuneration relates to the annual base salary agreed under the service agreements with each member of the Group‘s Management Board. The short-term incentive (STI) is a cash bonus component that depends on certain Group-related and individually agreed targets as described in the entities remuneration policy. The long-term incentive (LTI) is a share- or cash-based program that either grants or give the option of equity-settled shares or phantom shares, which are settled in cash. See below the remuneration of the Management Board granted in 2022:

€ million	2022¹	2021
Basic Remuneration	(2.4)	(3.9)
Fixed Remuneration	(2.4)	(3.9)
STI	(0.2)	(1.7)
LTI	-	(3.7)
Variable Remuneration	(0.2)	(5.4)
Compensation/Termination Payments	(1.2)	(2.6)
Total Remuneration	(3.8)	(11.9)

¹in addition, income of reversal of prior year’s LTI-provision in the amount of € 3.5 was recognized.

In December 2022, the mandates for Stavros Efremidis (CEO) and Ralf Struckmeyer (CIO) were terminated by mutual agreement. No severance payments were agreed, only for Stavros Efremidis an additional agreement was made as per which the Company is obliged to pay his ﬁxed remuneration until 30 June 2023. The Management Board members have been subject to long term equity or cash settled share-based payment plans, which however had not come into eﬀect in the year 2022. Due to the restructuring of the Company no LTI was granted to the members of the Management Board in 2022 (2021: €3.7m). Given the termination of the mandates for René Parmantier, Johannes Märklin, and Sebastian Ernst throughout 2022, all expenses recognized until end of 2021 have been reversed (€ 3.5m) and no further expenses were recognized for the three individuals in 2022. Furthermore, a total of €1.2m (2021: €2.7m) was expensed which solely related to René Parmantier and resulting from the termination of his service agreement. The 2021 amount

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 161

is exclusively associated with the compensation payments for former management board members Lars Schnidrig, Daniel Löhken and Nils Hübener. The total remuneration of the Supervisory Board members amounted to € 0.6m in 2022 (2021: € 0.5m). This includes € 0.1m in severance payments for two former Supervisory Board members. For a detailed description of management’s remuneration system, we refer to the separate management’s remuneration report.

Corestate Capital Holding S.A. Share Program (2019)

In 2019, Corestate started a Performance Share Program for important senior manager and high per-former (outside of Management Board) as well as for new hires who joined the Group after the 1 January 2019. At the beginning of the performance period in 2019 or if the participant is entering one or more years later, all participants receive an individualized grant letter in which the individual target value of the performance shares in Euro (“target value”) is set out. The grant letter contains the number of virtual performance shares granted. Performance shares are not linked to any administrative, voting or dividend rights or rights to other distributions. They merely represent a calculation item for determining the future conditional entitlement to Corestate shares to be issued and transferred (real shares). Performance shares are transferred to the participants in annual tranches in the form of real shares from the third year on-wards or if the participants join the program later from their third year on based on their start date in the program (it requires a waiting period of two years in which no real shares are transferred). The transfer takes place in four or less equivalent tranches (25% or 33,33% or 50% of the total number of performance shares each, depending on the start of the participant in the program) – subject to the achievement of the relevant performance targets which is an annually increase of the share price of 10% each year. The increase in the stock market price as the key performance target is calculated by dividing the “transfer price” by the closing price. The transfer price is deﬁned as the arithmetic mean of the closing prices of the last 12 trading months prior to 31 December of the respective year of the performance period. As said, the performance target is deemed to have been achieved if the cumulative transfer price increased by at least 10% each year compared with the closing rate (annual performance target). The fair value of the synthetic stock options is measured using a Monte Carlo option pricing model considering the terms and conditions upon which the options were granted. The beneﬁciary may exercise the options between the end of the waiting period and the end of the term of the option on the condition that the employment contract has not been terminated and neither the beneﬁciary nor the Company has notiﬁed in writing the termination of the employment contract by that date. For the stock option valuation, the contractual life of the options and the possibility of early exercise were considered in the Monte Carlo simulation. The risk-free interest rate

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 162

is the implied yield currently available on Luxembourg government issues with a remaining term equal to the term of the options. The future volatility for the lives of the options was estimated based on historical volatilities also considering the management’s expectation of future market trends. The Performance Share Program was classiﬁed as equity-settled plan and the resulting expense are recognized during the vesting period on a pro-rata-basis with a corresponding increase in equity (other reserves). Furthermore, the amount recognized is based on the best available estimate of the number of options expected to vest and is revised, if subsequent information indicates that the number of options expected to vest diﬀers from previous estimates. The total fair value of the awards granted in 2019 originally amounted to € 3.7m. In 2022, due to a further reduction in the number of beneﬁciaries, an income in the amount of € 0.9m (2021: € 1.1m) was recognized due to the reversal of reserves.

Corestate Capital Holding S.A. Retention Program (2022)

In 2022, Corestate started a retention program for success-critical employees (outside Management Board) which includes cash-settled commitments. The transfer of cash is individually granted if the beneﬁciaries are still in an unterminated contract at diﬀerent points in time, predominantly in 2023 and 2024. For this program a provision of € 2.3m was made in the middle of the FY 2022 for employments that were not terminated in 2022 and 2023. Moreover, an additional provision of € 2.2m was made at the end of 2022 for employments that were not terminated in 2023 and 2024.

Transactions and Balances with Associated Entities (Co-Investments & Joint Ventures)

The terms and conditions agreed with Associates for the services of the Group are negotiated and set out in the underlying documentation for each investment with the respective investor (JVCIA, AMA, etc.). Related party transactions were made on terms and conditions equivalent to those that prevail in arm’s length transactions.| Transactions with Associates | € million | 2022 | 2021 |
| :--- | :--- | :--- | :--- |
| Revenue from Asset Management Fees | | 6.1 | 6.5 |
| Revenue from Property Management Fees | | 0.7 | - |
| Revenue from Development Fees | | 0.4 | 1.9 |
| Share of Profit or Loss from Associates and Joint Ventures | | (22.3) | 2.5 |
| Gains/losses from Selling Property Holding Companies | | 0.1 | 0.1 |
| Other Income | | (0.3) | 0.0 |
| Interest income from Associated Entities | | 2.0 | 1.3 |
| Interest expenses from Associated Entities | | (0.6) | (0.3) |

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 163

Balances with Associates	2022	2021
Non-Current Loans to Associated Entities	14.9	14.9
Receivables from Associated Entities	7.7	16.8
Receivables from Affiliated Companies	3.4	4.1
Non-current Trade receivables	0.0	0.5
Non-Current Loans granted from Associated Entities	(0.1)	(0.1)
Current Liabilities to Associated Entities	(9.0)	(18.1)
Current Liabilities from Affiliated Companies	(3.1)	(3.3)

F.7 Group Entities

CCH SA is the parent and the ultimate parent company of the Group. The consolidated ﬁnancial statements include all companies which the Group controls i.e. for which particularly CCH SA owns, directly or indirectly through subsidiaries, more than half of the voting rights. There are no restrictions regarding cash or dividend payments from such subsidiaries. The following overview shows the Group's shareholdings. During 2022, changes in equity interests in some subsidiaries occurred that did not change the consolidation status:

Name	Seat and Country of Incorporation	Equity Interest 2022	Equity Interest 2021
Corestate Capital Holding S.A.	Luxembourg	Parent Company	Parent Company
AF ATHENA GmbH	Frankfurt on Main/ Germany	100.00%	100.00%
Aggregate Debt GP S.á r.l.	Luxembourg	100.00%	100.00%
Aggregate Debt Fund S.C.A. SICAV-RAIF	Luxembourg	100.00%	100.00%
Bayreuth Student Home AcquiCo II S.à r.l.	Luxembourg	100.00%	100.00%
Bego HoldCo I S.L.	Madrid / Spain	100.00%	100.00%
Bego HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
Bego PropCo I S.L.	Madrid / Spain	100.00%	100.00%
BER REV HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
Cisnes e Silhuetas Unipessoal Lda	Lisbon / Portugal	100.00%	100.00%
Corestate Bank GmbH	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate Ben HoldCo GmbH & Co. KG	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate Capital Advisors GmbH	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate CAPITAL AG	Baar / Switzerland	100.00%	100.00%
Corestate Capital Beteiligung Verwaltung GmbH	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate Capital Group GmbH	Frankfurt on Main/ Germany	100.00%	100.00%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 164

Name (continued)	Seat and Country of Incorporation	Equity Interest 2022	Equity Interest 2021
Corestate Capital France HoldCo SAS	Paris / France	100.00%	100.00%
Corestate CAPITAL Fund Management S.à r.l	Luxembourg	100.00%	100.00%
Corestate Capital Partners GmbH	Zurich / Switzerland	100.00%	100.00%
Corestate Capital Services GmbH	Wollerau / Switzerland	100.00%	100.00%
Corestate Capital Transactions AG	Baar / Switzerland	100.00%	100.00%
Corestate CIV GmbH	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate FIF I Portfolio Verwaltung GmbH	Hamburg / Germany	100.00%	100.00%
Corestate MCIF GmbH & Co. KG	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate MCIF Germany GmbH & Co. KG	Frankfurt on Main/ Germany	100.00%	100.00%
Corestate Shelf 15 S.àr.l.	Luxembourg	100.00%	100.00%
Corestate Student Home Holding S.à r.l.	Luxembourg	100.00%	100.00%
Court HoldCo GmbH	Frankfurt on Main/ Germany	100.00%	100.00%
CRM Micro Living Services Italy S.R.L.	Milan / Italy	100.00%	100.00%
CRM Students Ltd.	Oxford / United Kingdom	100.00%	100.00%
DONALD HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
Echo HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
Frankfurt Student Home AcquiCo II S.à r.l.	Luxembourg	100.00%	100.00%
Gabriela HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
Gabriela HoldCo S.L.	Madrid / Spain	100.00%	100.00%
Gabriela PropCo S.L.	Madrid / Spain	100.00%	100.00%
GENOST Consulting GmbH	Leipzig / Germany	100.00%	100.00%
Ginova AIF S.à r.l.	Luxembourg	100.00%	100.00%
Ginova PropCo S.à r.l.	Luxembourg	100.00%	100.00%
Grindel AcquiCo II S.à r.l.	Luxembourg	100.00%	100.00%
Hannover Leasing Verwaltungsgesellschaft mbH	Pullach / Germany	100.00%	100.00%
Hartly Invest S.L.U.	Madrid / Spain	100.00%	100.00%
HFS Helvetic Financial Services AG	Wollerau / Switzerland	100.00%	100.00%
Iberian HoldCo II S.à r.l.	Luxembourg	100.00%	100.00%
Iberian Investment II HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
King AIF 1 S.à r.l.	Luxembourg	100.00%	n/a
King AIF 2 S.à r.l.	Luxembourg	100.00%	n/a
King OpCo S.à r.l.	Luxembourg	100.00%	n/a
King PropCo S.à r.l.	Luxembourg	100.00%	n/a
Mainz Student Home AcquiCo II S.à r.l.	Luxembourg	100.00%	100.00%
Monet S.à r.l.	Luxembourg	88.35%	77.67%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 165

Name (continued)	Seat and Country of Incorporation	Equity Interest 2022	Equity Interest 2021
Palmyra Verwaltungsgesellschaft mbH & Co. Vermietungs KG i.L.	Pullach / Germany	89.58%	89.58%
Palmyra Verwaltungsgesellschaft mbH & Co. Vermietungs KG S.e.n.c.	Luxembourg	84.92%	84.92%
Plutos HoldCo S.á r.l.	Luxembourg	100.00%	100.00%
Potsdam Student Home AcquiCo II S.à r.l.	Luxembourg	100.00%	100.00%
Projekt AcquiCo III S.à r.l.	Luxembourg	100.00%	100.00%
Stadttor Düsseldorf AcquiCo S.à r.l.	Luxembourg	100.00%	100.00%
STAM Co-Invest	Luxembourg	88.35%	77.67%
STAM Europe SAS	Paris / France	100.00%	100.00%
STAM France Investment Managers SAS	Paris / France	100.00%	100.00%
STAM Property Management SAS	Paris / France	100.00%	100.00%
Tempelhof Twins HoldCo S.à r.l.	Luxembourg	100.00%	100.00%
Tempelhof Twins TopCo S.à r.l.	Luxembourg	100.00%	100.00%
UPARTMENTS Real Estate GmbH	Leipzig / Germany	100.00%	100.00%
Urban Micro Estate Immobilienverwaltungs GmbH	Vienna / Austria	100.00%	100.00%
Urban Micro Estate Poland	Warsaw / Poland	100.00%	100.00%
Urban Micro Estate Spain	Spain	100.00%	100.00%
Urban Micro Estate Swiss Immobilienverwaltungs GmbH	Zurich / Switzerland	100.00%	100.00%

The following table shows the entities of the sub group Hannover Leasing:

Name	Seat and Country of Incorporation	Equity Interest 2022	Equity Interest 2021
HANNOVER LEASING GmbH & Co. KG	Pullach / Germany	94.90%	94.90%
Accontis GmbH Finanzanlagen und Beteiligungen	Frankfurt on Main/ Germany	94.90%	94.90%
AKANTHUS Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
BERYTOS Verwaltungsgesellschaft mbH	Pullach / Germany	85.30%	85.30%
CORNALES Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	94.90%	94.90%
Delta Vermietungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
DIRAN Verwaltungsgesellschaft mbH	Pullach / Germany	85.30%	85.30%
DIV Deutsche Immobilienfonds GmbH	Pullach / Germany	94.90%	94.90%
FRICTION Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
GELIMER Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	86.43%	86.43%
GORDION Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
HANNOVER LEASING Belgien Beteiligungs GmbH & Co.KG	Pullach / Germany	94.90%	94.90%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 166

Name (continued)	Seat and Country of Incorporation	Equity Interest 2022	Equity Interest 2021
HANNOVER LEASING Beteiligungs GmbH & Co.KG	Pullach / Germany	94.90%	94.90%
HANNOVER LEASING Finance GmbH	Pullach / Germany	94.90%	n/a
HANNOVER LEASING Investment Beteiligungs GmbH	Pullach / Germany	94.90%	94.90%
HANNOVER LEASING Investment GmbH	Pullach / Germany	85.30%	85.30%
HANNOVER LEASING Private Invest Beteiligungs GmbH	Pullach / Germany	92.58%	92.57%
HANNOVER LEASING Private Invest II GmbH & Co.KG	Pullach / Germany	92.58%	92.57%
HANNOVER LEASING Treuhand GmbH	Pullach / Germany	94.90%	94.90%
HANNOVER-LEASING Treuhand-Vermögensverwaltung GmbH	Pullach / Germany	94.90%	94.90%
HANNOVER LEASING Wachstumswerte Europa Beteiligungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
HANNOVER LEASING Wachstumswerte Europa VI GmbH & Co. KG i.L.	Pullach / Germany	94.90%	94.90%
HERSCHEL Verwaltungsgesellschaft mbh	Pullach / Germany	94.90%	94.90%
HL Augsburg Offices GmbH & Co. geschlossene Investment-KG	Pullach / Germany	53.43%	n/a
IKARIA Verwaltungsgesellschaft mbH & Co. VermietungsKG	Pullach / Germany	94.90%	94.90%
KERA Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
LAUREA Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	57.62%	n/a
LIVIA Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
MANCALA Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	94.90%	94.90%
MITHRAS Verwaltungsgesellschaft mbH	Pullach / Germany	85.31%	n/a
NIGELLA Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	82.53%	n/a
NIGRESCO Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
ORION Verwaltungsgesellschaft mbH & Co. Beteiligungs KG	Pullach / Germany	94.90%	94.90%
SINGULI Verwaltungsgesellschaft mbH	Pullach / Germany	94.90%	94.90%
SUBSTANTIA Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	94.90%	94.90%
VANESSA Verwaltungsgesellschaft mbH & Co. Vermietungs KG	Pullach / Germany	94.90%	94.90%

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 167

F.8 Report on Business Relationships with Structured Entities

Disclosures on Unconsolidated Structured Entities
The fund business and other operating activities of the Group‘s companies give rise to various business relationships with structured entities within the meaning of IFRS 12. A structured entity is an entity that has been designed so that the exercise of voting or similar rights under Company law is not the dominant factor in deciding who controls the entity as deﬁned by IFRS 10. The non-consolidated structured entities with which Corestate has business relationships are funds divided into the asset classes media, real estate and large-scale facilities.The fund volume of the structured entities is based on the amount of historical fund assets under management (investment costs). As of 31 December 2022, the fund volume of unconsolidated structured entities is allocated across asset classes as follows:

€ million	Media	Real Estate	Large installations	Total
Fund volume 2022	30.0	404.0	40.0	474.0
potential financial risk	1.3	-	-	1.3
Fund volume 2021	836.0	404.0	188.0	1,428.0
potential financial risk	0.8	-	-	0.8

The decrease in the overall fund volume by € 954.0m compared to prior year-end is related to divestments in the amount of € 420.4m, the termination of asset under management in the amount of € 385.3m and decrease in fair value of € 148.3m. As of 31 December 2022, advances to unconsolidated structured entities and revenues generated from such entities are not material. The Group’s ﬁnancial risk of these non-consolidated structured entities amounts to € 1.3m (2021 € 0.8m). The amount is recognized as a provision. Furthermore, there is no additional payment obligation arising from such structured entities.

Disclosures on Consolidated Structured Entities

If a structured entity is included in the basis of consolidation in accordance with IFRS 10, the business relationships with other consolidated entities are subject to the normal consolidation requirements. As of 31 December 2022, two structured entities were consolidated in accordance with IFRS 10 and aﬀect all real estate funds. Corestate only participates in these companies with equity. The ﬁnancial risk associated with Corestate’s relationships with consolidated structured entities results from the inherent business risks within the structured entities, such as valuation risks from real estate funds distributed among investors, typically according to their individual equity share.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 168

F.9 Signiﬁcant Events after the Reporting Date

In January 2023, the suspensive conditions from the bondholder resolutions of 28 November 2022, regarding Corestate’s 2022 convertible bond and 2023 bond, were fulﬁlled. In March 2023, Corestate reached an agreement with the bank ﬁnancing the Highstreet Giessen project to partially repay € 5.8m of the debt. This was necessitated by a breach of the debt service coverage ratio, driven by interest rate ﬂuctuations as of 31 December 2022. As part of the agreement, the remaining loan was extended until 30 June 2025. A creditors’ meeting was held on 14 April 2023 to address both the senior unsecured and convertible bonds, resulting in their extension until 31 July 2023. Interest payments were deferred, and certain termination rights were waived to allow Corestate additional time to implement critical reorganization steps necessary for ﬁnancial restructuring.

In May 2023, backed by bondholders, investors, and shareholders, the Management Board approved an alternative restructuring concept. This included an increase in bridge ﬁnancing from € 25m to € 35m, involving both existing and new investors. In May 2023, Corestate resolved to implement the alternative restructuring concept and announced changes to the Management and Supervisory Boards: Dr. Nedim Cen was appointed to the Management Board as CEO, Stephan Götschel stepped down, and Dr. Carlos Enrique Mack was co-opted onto the Supervisory Board.

In June 2023, the creditors’ meetings approved, by a large majority, amendments to the bond terms, including a reduction of the total nominal volume from €488.3m to approximately €105.5m, modiﬁcations to the bond conditions, and a request to transfer the stock market listing from the Prime Standard to the General Standard segment.

In July 2023, Corestate placed over 50% of the shares in HL Augsburg Oﬀices with investors, leading to a reclassiﬁcation into Investments in Associates and Joint Ventures. The inventory (€ 43.8m) and related liabilities, including non-controlling interests (€ 43.7m), were deconsolidated accordingly. By December 2023, all shares in HL Augsburg Oﬀices were fully placed among investors, and the remaining RETT (Real Estate Transfer Tax) blocker was reclassiﬁed into Other Financial Instruments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 169

In August 2023, the debt restructuring and recapitalization were completed, based on the resolutions passed by the creditors’ meeting and General Meetings in June and July 2023. This included a reduction in the ﬁnancial liabilities from bonds by around 78% waiver by creditors of bond obligations for an amount of € 394.1m, out of which € 382.8m is related to bond nominal amounts and € 11.6m relates to interest due, and an extension of the term until 31 December 2026. Further, a capital reduction was executed, decreasing the Group´s issued share capital by EUR 2,558,497.50 to EUR 6,174.00, without any cancellation of shares or any payments to shareholders. Immediately thereafter, a capital increase was carried out, raising the share capital by € 23,826.00 to € 30,000.00 through the issuance of 132 million new shares to the bondholders and to the management.

In October 2023, CCH SA transitioned from the Prime Standard to the General Standard segment of the Frankfurt Stock Exchange. Throughout 2023, Corestate successfully completed asset sales including three development projects and two student residences in Spain with a combined (transaction/book) value of €29.3m were sold (the “Spanish Assets”).

At the Company’s Supervisory Board meeting held on 29 August 2024, the Management Board of CCH SA has accepted the commercial oﬀer of KPMG Audit S.à r.l. in Luxembourg to mandate KPMG as sole auditor for the consolidated and standalone annual accounts of Corestate for the ﬁnancial year 2022. Throughout 2024, Corestate completed asset sales worth about € 39m including the sale of CRM/Upartments for about € 12m.

In December 2024, Corestate settled all claims related to the Cologne-based Laurenz Carré project with an out-of-court payment of € 5.5m. This resolution ended the legal disputes, limited ﬁnancial exposure, and allowed the Group to refocus on its project development strategy. The project had originally been the subject of a forward purchase agreement signed in December 2021, contingent on building permits, with an expected purchase price of around € 320m. After notarisation errors were identiﬁed and Corestate withdrew from the contract, subsequent lawsuits were interrupted by the sellers’ insolvency, leading to the ﬁnal settlement in 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corestate Annual Report 2022 170

trust agreements (indirectly) in favour of HANSAINVEST in relation to 18 bond issues for real estate project developments, which were subscribed by the special-AIF (Alternative Investment Fund) Stratos Immobilienanleihefonds II and the special AIF Stratos Immobilienanleihefonds IV in the period from 2017 to 2021. HFS has assessed the aforementioned claims internally as well as together with two renowned law ﬁrms and concluded the prospects of success of such claim to be around a maximum of 20%. In order to avoid lengthy legal proceedings, the associated costs and expenses, and to eliminate any ﬁnancial risks despite the low prospects of success, both parties have agreed to settle the legal dispute amicably by way of an out-of-court settlement in November 2025. In the settlement agreement, HFS has agreed to assign certain assets to HansaInvest with a value of € 28.7m as of 31 December 2022, € 20.2m as of 31 December 2023 and € 16.0m as of 31 December 2024 in the consolidated statement of ﬁnancial position. Such settlement agreement is subject to the condition precedent that these assets, which are currently pledged as part of the security package in relation to the ﬁnancial liabilities of CCH SA under its outstanding bonds, shall be released and free of any encumbrances. The Company has received written instructions by the necessary 75% majority of noteholders in each of their outstanding bonds to release the relevant assets. Therefore, fulﬁllment of the condition precedent and closing of the transaction is expected to occur by end of December 2025.

In April 2025, Corestate signed an exclusive agreement with the French investment Group Atland for the sale of STAM Europe SAS (Paris) and subsidiaries, including AIFM STAM France Investment Managers. In July 2025 CCH SA successfully sold its approximately 35% stake in the investment vehicle Liver Building Co, which owns the Royal Liver Building in Liverpool, United Kingdom, through its subsidiary Hannover Leasing to the Princes Group, one of the leading food and beverage companies in the United Kingdom. The sale price is around GBP 57m.After deducting all bank liabilities, including a shareholder loan, Corestate received a net amount of approximately € 16m. In September 2025, Corestate closed its sale of STAM Europe SAS (Paris) and subsidiaries, including AIFM STAM France Investment Managers to the French investment Group Atland. Following the closing of the STAM Europe sale, Corestate resolved to make an early repayment of € 17.5m on the Super Senior Note (ISIN DE000A3LJQY6) eﬀective 14 October 2025.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corestate Annual Report 2022 171

In November 2025, the Group has reached an agreement with investment ﬁrms holding in excess of 75% of its two outstanding Senior Notes to extend their maturities by two years. Under the agreed amendment, the interest rate on the Senior Notes will increase from 8% to 12% in 2027 and to 15% in 2028. Supporting noteholders have executed a lock-up agreement, and creditors’ meetings to pass the formal resolutions are scheduled for the end of December 2025. This extension provides Corestate with the necessary time to continue its asset disposal program without sales pressure and to maximize value.

Luxembourg, 16 December 2025

Dr. Nedim Cen
Chief Executive Oﬀicer
Chief Financial Oﬀicer

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corestate Annual Report 2022 172

RESPONSIBILITY STATEMENT OF THE CONSOLIDATED AND STATUTORY ACCOUNTS OF CORESTATE CAPITAL HOLDING S.A.

I conﬁrm in accordance to Article 3 (2) c of the Luxembourg Law on Transparency requirements for the Issuers, to the best of my knowledge, that the consolidated ﬁnancial statements of Corestate Capital Holding S.A. and its subsidiaries (“Group”) which have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, and the annual accounts of Corestate Capital Holding S.A. (“Company”) which have been prepared in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts, give a true and fair view of the assets, liabilities, ﬁnancial position and proﬁt or loss of the Group and the Company, and that the Group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities, uncertainties and risks associated with the expected development of the Group.

Dr. Nedim Cen
Chief Executive Oﬀicer
Chief Financial Oﬀicer

RESPONSIBILITY STATEMENT

Corestate Annual Report 2022 173

KPMG Audit S.à r.l.
1 39, Avenue John F. Kennedy
L-1855 Luxembourg
Tel: +352 22 51 51
Fax: +352 22 51 71
E-mail: [email protected]
Internet: www.kpmg.lu

To the Shareholders of Corestate Capital Holding S.A.
9-11, Grand Rue
L-1661 Luxembourg
Luxembourg

REPORT OF THE REVISEUR D’ENTREPRISES AGREE

Report on the audit of the consolidated financial statements

Qualified Opinion

We have audited the consolidated financial statements of Corestate Capital Holding S.A. and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2022, and the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, except for the possible effects of the matters described in the “Basis for qualified opinion” section of our report, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2022, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the European Union.

Basis for qualified opinion

Goodwill impairment in the Cash Generating Unit Corestate Bank GmbH (“CGU Corestate Bank”)

During the year, an amount of EUR 81.5 million was recognised as impairment charge on the goodwill of CGU Corestate Bank in caption “Depreciation, Amortization and Impairment” of the consolidated statement of profit or loss. As a result, as at 31 December 2022, the goodwill in relation to the “CGU Corestate Bank” amounts to EUR 13.1 million as shown in note E.1 to the consolidated financial statements. We were not provided with sufficient appropriate supporting documentation over the assumptions and data used in the model. Consequently, we were unable to determine whether any adjustments were necessary to the caption “Goodwill” in the consolidated statement of financial position as at 31 December 2022, the caption “Depreciation, Amortization and Impairment” of the consolidated statement of profit or loss, as well as the related disclosures as required by IAS 36 Impairment of Assets for the year then ended.

Investments in associates

The Group’s investments in Pallars AIF HoldCo S.à r.l. and Pallars HoldCo S.L.U. (collectively “Pallars”) and BCC Investments S.à r.l. (“Bain”) associates accounted for by the equity method, are carried at EUR 4.2 million and EUR 3.0 million respectively on the consolidated statement of financial position under caption “Investments in associates and joint ventures” as at 31 December 2022. The Group’s share of Pallar’s and Bain’s net loss for the year of EUR 0.6 million and EUR 0.2 million respectively is included in the Group’s loss for the year then ended under caption “Share of Profit or Loss from Associates and Joint Ventures” of the consolidated statement of profit or loss.

©2025 KPMG Audit S.à r.l., a Luxembourg entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. R.C.S Luxembourg B 149133

We were unable to obtain sufficient appropriate audit evidence about the carrying amount of the Group’s investments in Pallars and Bain because we were not provided with nor granted access to the financial information of Pallars and Bain to support the carrying amount of these investments. Consequently, we were unable to determine whether any adjustments were necessary to the caption “Investments in associates and joint ventures” in the consolidated statement of financial position as at 31 December 2022 and the caption “Share of Profit or Loss from Associates and Joint Ventures” in the consolidated statement of profit or loss, as well as the related disclosures as required by IAS 28 Investments in associates and joint ventures for the year then ended.

CRM Students Ltd personnel and sub-contractor expenses

The Group carries personnel and sub-contractor expenses from its wholly owned UK subsidiary, CRM Students Ltd. (“CRM”), at EUR 6.9 million and EUR 5.3 million respectively (collectively EUR 12.2 million) in the consolidated statement of profit or loss for the year ended 31 December 2022 under caption “Total Expenses from Real Estate Equity Segment”, and a related recharge of sub-contractor expenses through revenue from property management fees amounting to EUR 5.3 million in the consolidated statement of profit or loss for the year ended 31 December 2022 under caption “Revenue from Property Management Fees” which is included in the “Total Revenue from Real Estate Equity Segment”.

We were unable to obtain sufficient appropriate audit evidence about the carrying amount of:
a) CRM personnel expenses of EUR 6.9 million charged during the year in the consolidated statement of profit or loss under caption “Total Expenses from Real Estate Equity Segment”, and whether this amount, or part thereof, was paid in cash or remained part of a liability as at 31 December 2022;
b) CRM sub-contractor expenses of EUR 5.3 million charged during the year in the consolidated statement of profit or loss under caption “Total Expenses from Real Estate Equity Segment”, the related recharge for the same amount as revenue from property management fees in the consolidated statement of profit or loss under caption “Total Revenue from Real Estate Equity Segment – Revenue from Property Management Fees”, and whether these amounts, or part thereof, were paid/received in cash or remained part of a liability/asset as at 31 December 2022.

We were not provided with sufficient appropriate audit evidence of the related CRM accounting journals recorded to determine which portion represents actual cash payments/receipts (cash outflows/inflows) and which portion remains outstanding as a liability/asset as at 31 December 2022 because the related data could not be retrieved due to the subsequent sale of CRM during financial year 2024. Consequently, we were unable to determine whether any adjustments were necessary to the captions “Total Expenses from Real Estate Equity Segment” and “Total Revenue from Real Estate Equity Segment – Revenue from Property Management Fees” in the consolidated statement of profit and loss, the captions “Other Current Liabilities” and “Other Current Assets” in the consolidated statement of financial position as well as the related disclosures.

We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (the “Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier (the “CSSF”). Our responsibilities under the EU Regulation N° 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of “réviseur d'entreprises agréé” for the audit of the consolidated financial statements » section of our report.We are also independent of the Group in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Material Uncertainty related to Going Concern

We draw attention to note A.2 “Basis of Preparation” of the consolidated financial statements, which indicates that the Group is in a net current liability position of EUR 414.1 million as at year end (2021: EUR 30.2 million). This is primarily due to amounts owed to bondholders of the Group for an amount of EUR 502.0 million. These were restructured post-year end and will no longer be repaid in 2023. The Group is also in a negative net equity position of EUR 120.3 million as at year end (2021: positive net equity position of EUR 626.2 million).

In 2023, the Group completed a debt restructuring, which included the waiver by creditors of bond obligations for an amount of € 394.1 million (€ 382.5 million related to bond nominal amounts and € 11.6 million related to interest due), and extended the bond repayment deadline to 31 December 2026. Furthermore, in November 2025, the Group reached agreement with a majority of holders of its two outstanding senior notes amounting to EUR 64.8 million and to EUR 40.7 million, to further extend the notes’ maturities to 31 December 2028. The Group plans to repay the bonds maturing on 31 December 2026 mainly from the proceeds of assets expected to be disposed of in the future. However, if the value of these remaining assets declines, there is a risk that the Group may not be able to resolve its financial obligations. As stated in note A.2, these events or conditions, along with other matters as set forth in Note A.2, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our qualified opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Except for the matters described in the Basis for Qualified Opinion and Material Uncertainty related to Going Concern sections, we have determined there are no other key audit matters to communicate in our report.

Emphasis of Matter

We draw attention to note F.9 "Significant Events after the Reporting Date" of these consolidated financial statements which indicates that HANSAINVEST Hanseatische Investment GmbH (“HansaInvest”) has filed a claim for damages of approximately EUR 550 million against HFS Helvetic Financial Services AG (“HFS”), a Group subsidiary, subsequent to the year end. In November 2025, both parties entered into a settlement agreement to resolve their legal dispute through an out-of-court settlement. Our qualified opinion is not modified in respect of this matter.

Other Matter

The consolidated financial statements of the Group as at and for the year ended 31 December 2021 were audited by another auditor who expressed an unmodified opinion on those statements on 21 April 2022.

Other information

The Management Board is responsible for the other information. The other information comprises the information stated in the annual report including the “Highlights 2022”, the “To Our Shareholders”, the “Corporate Governance” and the “Group Management Report”, but does not include the consolidated financial statements and our report of the “réviseur d'entreprises agréé” thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. As described in the Basis for Qualified Opinion section of our report, we were unable to obtain sufficient appropriate audit evidence about the impairment of goodwill in the CGU Corestate Bank, the carrying amount of the Group’s investments in Pallars and Bain and the CRM Students Ltd’s personnel and sub-contractor expenses. Accordingly, we were unable to conclude whether or not the other information is materially misstated with respect to these matters.

Responsibilities of the Management Board and Those Charged with Governance for the consolidated financial statements

The Management Board is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as adopted by the European Union, and for such internal control as the Management Board determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

The Management Board is responsible for presenting and marking up the consolidated financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”).

In preparing the consolidated financial statements, the Management Board is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management Board either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Responsibilities of the “réviseur d’entreprises agréé” for the audit of the consolidated financial statements

The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Our responsibility is to assess whether the consolidated financial statements have been prepared in all material respects with the requirements laid down in the ESEF Regulation.

As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

— Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management Board.

— Conclude on the appropriateness of the Management Board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of the “réviseur d’entreprises agréé”. However, future events or conditions may cause the Group to cease to continue as a going concern.

— Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.— Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter.

Report on other legal and regulatory requirements

The signature and issuance of the present report of the “réviseur d’entreprises agréé” (the “Report”) are conditional on our appointment by the general meeting of shareholders (the “General Meeting”) of Corestate Capital Holding S.A. (the “Condition Precedent”). Should the Condition Precedent not be fulfilled when the Report will be presented for approval to the General Meeting, the Report shall be deemed null and void and shall not produce any legal effect.

The duration of our uninterrupted engagement, including previous renewals and reappointments, will be 1 year.

Except for the matters described in the Basis for Qualified Opinion section of our report, the Group Management Report is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements. The accompanying Corporate Governance Statement is included in the “Corporate Governance” report.

The information required by Article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings as amended, is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.

Except for the below, we confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014 were not provided and that we remained independent of the Group in conducting the audit.

On 28 January 2025, we identified that a KPMG member firm had provided tax services for the financial periods ending 31 December 2022 and 31 December 2023 to a controlled subsidiary of Corestate Capital Holding S.A., Hannover Leasing Private Invest Beteiligungs GmbH, which is a deviation from the local law in Germany (“Gesetz zur Stärkung der Finanzmarktintegrität (Finanzmarktintegritätsstärkungsgesetz – FISG)”). The services, which were finalized before our appointment, were administrative in nature and did not involve any management decision-making or participation in any decision-making processes. Furthermore, the services did not involve advocating the Group’s interests vis-à-vis the Tax Authorities. The work had no direct or indirect effect on the Group’s consolidated financial statements, and we have estimated that the fees of these services in relation to the total audit fees charged are below 5%.

In our professional judgement, we confirm that based on our assessment of the breach, our objectivity and independence as réviseur d’entreprises agréé have not been compromised. We have discussed the above with the Audit Committee which has agreed with our conclusion, given the nature and size of the above-mentioned services.

We have checked the compliance of the consolidated financial statements of the Group as at 31 December 2022 with relevant statutory requirements set out in the ESEF Regulation that are applicable to consolidated financial statements.

For the Group it relates to:

— consolidated financial statements prepared in a valid xHTML format;
— The XBRL markup of the consolidated financial statements using the core taxonomy and the common rules on markups specified in the ESEF Regulation as described in Note A.2.

In our opinion, the consolidated financial statements of Corestate Capital Holding S.A. as at 31 December 2022, identified as 529900GNB86RB7HRX793-2022-12-31-0-en.zip, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation.

Our audit report only refers to the consolidated financial statements of Corestate Capital Holding S.A. as at 31 December 2022, identified as 529900GNB86RB7HRX793-2022-12-31-0-en.zip, prepared and presented in accordance with the requirements laid down in the ESEF Regulation, which is the only authoritative version.

Luxembourg, 16 December 2025

KPMG Audit S.à r.l.
Cabinet de révision agréé

Michael Eichmüller de Souza

AI assistant

Corestate Capital Holding S.A. — Annual Report (ESEF) 2022

Corestate Capital Holding S.A.

GROUP MANAGEMENT REPORT

PRELIMINARY REMARKS

COMPANY BACKGROUND

CONTROL SYSTEM

TARGETS AND STRATEGIES

MARKET DEVELOPMENT

RESULTS OF OPERATIONS

REAL ESTATE EQUITY

REAL ESTATE DEBT

OTHER SEGMENT

EARNINGS POSITION

GROUP MANAGEMENT REPORT

BALANCE SHEET POSITION

GROUP MANAGEMENT REPORT

CASH FLOW ANALYSIS

RISK REPORT

Risk Management

GROUP MANAGEMENT REPORT

Deﬁnition of Risk

Concept, objective and fundamental orientation of Risk Management

Risk concentrations and diversiﬁcation

GROUP MANAGEMENT REPORT

Risk Management and Controlling Process

Corestate Annual Report 2022 42 GROUP MANAGEMENT REPORT

Risk Identiﬁcation

Market price risks

Counterparty default risks

Corestate Annual Report 2022 43 GROUP MANAGEMENT REPORT

Liquidity risks

Operational risks

Risks related to the COVID-19 Pandemic

Corestate Annual Report 2022 44 GROUP MANAGEMENT REPORT

Risk Assessment

Procedure for identifying sub-risk types and individual risks

Classiﬁcation of ESG risks

Loss event database

Corestate Annual Report 2022 45 GROUP MANAGEMENT REPORT

Entry and update cycle

General valuation rules

Quantitative risk assessment

Quantiﬁcation via qualitative risk assessment

Combination of quantitative and qualitative risks

Control priorities

Risk Mitigation

Major risks

Risk Reporting

Regular Reporting

Ad-Hoc-Reporting

Internal Control System

Elements of the Control System

Organizational Measures

Controls

Documentation of the Controls

Overall Risk Situation of the Group

MATERIAL EVENTS AFTER THE REPORTING DATE

OUTLOOK

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS (CONTINUED)

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

A. CORPORATE INFORMATION & BASIS OF PREPARATION

A.1 Corporate Information

A.2 Basis of Preparation

General principles

European Single Electronic Format (“ESEF”)

Going concern basis

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Comparatives

A.3 General Remarks on Macro-Economic Circumstances

A.4 New and revised IFRS Accounting Standards in issue but not yet eﬀective

B. SCOPE OF CONSOLIDATION AND BUSINESS COMBINATIONS

B.1 Consolidation Scope

Corestate Capital Holding S.A. Annual Report (ESEF) 2022