Deutsche Wohnen AG

» Full year results 2016Conference Call, 21 March 2017

» Highlights 2016 & Strategic Priorities

» Highlights FY-2016

F i i l n a n c a s			P f l i & l i t t o r o o a a o n v u
in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5	Po fo l io K P Is t r	F Y- 2 0 1 6	F Y- 2 0 1 5
E P R A N A V	1 0, 0 1 7	7, 7 6 6	Nu be f r i de ia l u i t ts m r o es n n	5 1 7, 9 7 6	1 4 6, 1 2 8
/ s in E U R ha 1) re	2 9. 6 8	2 3. 0 2	in / s In lac t E U R -p e r en q m	6. 1 0	5. 8 9
F F O I	3 8 4	3 0 4	L i ke fo l i ke l g h ta t r re n ro w	2. 9 %	3. 5 %
in E U R / s ha 2) re	1. 1 4	0. 9 5	L i ke fo l i ke l g h Be l in ta t r re n ro w r	3. 5 %	4. 1 %
F F O ie l d E P R A N A V y on	3. 8 %	4. 1 %	Va te ca nc y ra	1. 8 %	1. 8 %
3) D iv i de d in E U R / s ha n re	0. 4 7	0. 5 4	6) Fa ir lu f p fo l io in E U R t va e o or m	1 5, 4 6 5	1 1, 2 1 7
D iv i de d ie l d E P R A N A V n y on	2. % 5	2. 4 %	/ s in E U R q m	1, 5 8 0	1, 2 8 2
4) ( ) A d j. E B I T D A l. d isp ls ex c os a	5 2 7	4 5 5	/s Be l in in E U R r q m	1, 7 3 8	1, 3 6 0
A d j. E B I T D A ie l d E P R A N A V y on	5. 3 %	5. 9 %	ie in Y l d lac t on -p e r en	4. 7 %	5. 5 %
A d j. E B I T D A in m ar g	4. 9 % 7	1. 8 % 7	Y ie l d ke t r t on m ar en	5. 7 %	6. 5 %
5) Co io t r t s a	1 0. 5 %	1 1. 8 %	Pr iva iza io in t t n g ro ss m ar g	3 9. 1 %	4 0. 9 %
F i i n a n c n g			T l h h l d t t o a s a r e o e r r e	2 0 1 6 u r n
L T V	3 % 7. 7	3 8. 0 %	D iv i de d / s ha N A V h / s ha in t n re g ro w re +	E U R	4 0 7.
in Av te t r te g. re s a	~1 6 %	~1 8 %	in % f E P R A N A V 2 0 1 5 o		3 2. 2 %

» Strong generation of total shareholder return

DW consistently generated high shareholder return with an EPRA NAV CAGR of 24% and a dividend CAGR of 37% for 2012-2016 while reducing its risk profile

Considering suggested dividend of EUR 0.74 per share, DW delivered a shareholder return for 2016 of EUR 7.40 or 32% of 2015 EPRA NAV (undiluted)

» Portfolio

» Portfolio update 31/12/2016 – attractive reversionary potential

S ic tra te lu te g c s r	i ia Re de t l s n	f % to ta l o	1) In lac t -p e re n	in Re -le t t t g re n	2) ia Re t p te t l n o n	Va ca nc y
	i ts un	d by me as ur e fa ir v lue a	E U R /sq /m h t m on	/sq /m E U R h t m on	in %	in %
S ic d h tra te t g co re a n g ro w io re g ns	1 5 4, 1 4 4	9 8. 8	6. 1 2	7. 4 8	2 2. 1	1. 7
Co + re	1 3 4, 8 2 0	9 0. 9	6. 2 0	7. 7 5	2 4. 9	1. 7
Co re	1 9, 3 2 4	9 7.	8 5. 5	6. 2 7	1 2. 5	1. 8
No n- co re	3, 8 3 2	1. 2	2 3 5.	3 9 5.	3. 1	1 5.
To l ta	1 5 9 6 7, 7	1 0 0	6. 1 0	4 4 7.	2 1. 9	1. 8
T he f Gr Be l in te re o ea r r	1 1 0, 6 7 3	7 5. 9	6. 1 0	7. 6 0	2 4. 4	1. 6

3) Portfolio split based on fair value4) Portfolio split based on sqm

1) Contractually owed rent from rented apartments divided by rented area 2) Unrestricted residential units (letting portfolio); rent potential = new-letting rent compared to in-place rent (letting portfolio)

» Strong like-for-like development in particular in Berlin

L i ke -fo l i ke r- / / 3 1 1 2 2 0 1 6	Re i de ia l t s n i ts un	1) In lac t -p e re n 2 0 1 6 E U R /sq /m h t m on	1) In lac t -p e re n 2 0 1 5 E U R /sq /m h t m on	L f l l h ta t re n g ro w In %	2) L f l Va ca nc y 2 0 1 6 In %	2) L f l Va ca nc y 2 0 1 5 In %
S ic tra te d t h g co re a n g ro w io re g ns
Co + re	1 2 3, 3 5 3	6. 1 7	5. 9 8	3. 2	1. 4	1. 4
Co re	1 3, 8 3 2	5. 5 7	5. 5 0	1. 4	1. 7	1. 9
fo Le ing l io t t t p or	1 3 7, 1 8 5	6. 1 1	5. 9 3	3. 0	1. 5	1. 4
To l ta	1 4 2, 0 3 4	6. 0 9	5. 9 1	2. 9	1. 7	1. 6
T he f Gr Be l in te re o ea r r	1 0 3, 0 1 1	6. 1 1	5. 9 0	3. 5	1. 5	1. 5

Strong like-for-like rental growth in Berlin of 3.5% (with no revised rent table) and 2.9% for entire portfolio

Like-for-like vacancy in Core+ letting portfolio stable at 1.4% (thereof c. 0.4% capex driven)

Like-for-like vacancy reduction by another 20bps in Core regions to 1.7%

1) Contractually owed rent from rented apartments divided by rented area2) Excluding non-core and properties held for sale/ privatization

» Strong dynamics in Core⁺ leading to EUR 2.7bn value uplift

Summary

Revaluation of EUR ~2.7 bn or EUR 298 per sqm, leading to a multiple expansion by 3.4x to 21.5x
Yield compression is underpinned by portfolio transactions in Berlin
Rent multiples of 25x-30x and above
Pricing highly dependant on quality
Current FV per sqm represents c. 50-60% of replacement costs (incl. land) in Berlin

f i K e y g u r e s	2 0 1 4	2 0 1 5	2 0 1 6
T l f i l t o a a r v a u e ( ) E U R	b 9. 8 n	b 1 1. 7 n	b 1 5. 5 n
( ) A i r e a n m s q m	9. 2 2	9. 1 5	9. 7 9
M l i l ( t t u p e c u r r e n ) t r e n	1 5. 5 x	1 8. 1 x	2 1. 5 x
A l i d n n u a s e i l t n- p a c e r e n ( ) E U R	6 2 9 m	6 4 8 m	7 1 8 m

» Significant capital growth driven by yield compression in Berlin

io Re g ns	F V ( ) 2 0 1 5 E U R m	F V ( ) 2 0 1 6 E U R m	F V ( ) 2 0 1 5 E U R /s q m	F V ( ) 2 0 1 6 E U R /s q m	Yo Y ha c ng e in %	M l ip le in t u lac t p e re n ( 2 0 1 5 )	M l ip le t u in lac t -p e re n ( 2 0 1 6 )	M l ip le t u ke t t m ar re n ( 2 0 1 6 )
S Co ic d h tra teg t re an g row ion reg s	1 1, 5 9 1	1 5, 2 8 0	1, 2 9 6	1, 6 0 3	2 4 %	1 8. 2	2 1. 7	1 7. 8
+ Co re	1 0, 6 9 7	1 4, 0 5 4	1, 3 4 7	1, 6 9 3	2 6 %	1 8. 7	2 2. 7	1 8. 3
T he f Gr Be l in ter reo ea r	8, 9 5 0	1 1, 7 3 8	1, 3 6 0	1, 7 3 8	2 8 %	1 9. 2	2 3. 7	1 8. 9
Co re	8 9 4	1, 2 2 6	8 9 4	9 9 6	1 1 %	1 3. 6	1 4. 9	1 3. 4
No Co n- re	1 3 0	1 8 6	6 4 1	7 1 6	1 2 %	1 2. 0	1 1. 8	1 0. 1
To l ta	1 1, 7 2 1	1 5, 4 6 5	1, 2 8 2	1, 5 8 0	2 3 %	1 8. 1	2 1. 5	1 7. 6

Berlin multifamily buildings in EUR/ sqm1) Berlin condominium prices in EUR/ sqm1)

Despite significant valuation gains, development of market prices for condominiums and multi-family buildings provide significant upside relative to current portfolio valuation based on current market prices

1) Source: CBRE Housing Market Report (includes new construction)

» Focused and increasing investments into the portfolio

	F Y- 2	0 1 6	F Y- 2 0 1 5
	E U R m	E U R / sq m	E U R m	E U R / sq m
Ma in te na nc e ( d hr h p & l ) t ex p en se ou g	5 9 4.	9. 6 3	8 6. 1	5 9. 4
Mo de iza io t rn n ( i l ize d ba lan ta ca p on ce	1 5 0. 0	1 5. 2 9	9 6. 0	1 0. 5 3
) he t s e
To l ta	2 4 4. 5	2 4. 9 2	1 8 2. 1	1 9. 9 8

Significant investments totalling c. EUR 245m or EUR 25 per sqm in 2016
Maintenance expenses remained stable on a per sqm basis
Significant increase of modernization expenses by more than 50%
Investment related rent increases of EUR 10.6m in 2016 resulted in an attractive yield on cost of 7.1%
Our increased EUR 1bn modernization programme is on track, total investment (incl. maintenance) will increase toEUR ~30 per sqm with focus on value enhancing modernizations
Currently c. 10,000 units are under development
Main objectives:
Holistic investment approach to upgrade the product quality
Use of sustainable, long-lived materials
High share of energy efficiency measures

» Example Siemensstadt (growth cluster)

is ic D tr t	C i f ha lo t te bu -W lm do r n rg er s r	i ia i Re de t l u ts s n n	3, 5 6 5
Re be fo d. ( in- lac ) t n re mo p e	E U R 5. 7 0 p er sq m	f m de ize d i # ts o o rn un	3 6 0
Re ion ia l te t ve rs ar p o n y	6 0 % c.	Pr j io d t p o ec er	/ 2 0 1 5 2 0 1 6

» Example Spanische Allee (hot spot cluster)

D is ic tr t	S l i -Z h len do f te tz g e r	Re i de ia l u i t ts s n n	1 7 7
Re be fo d. ( in- lac ) t n re mo p e	E U R 1 5. 5 p er sq m	f m de ize d i # o ts o rn un	1 7 7
Re ion ia l te t ve rs ar y p o n	8 0 % c.	Pr j io d t p o ec er	/ 2 0 1 5 2 0 1 6

» Valuation in perspective of rent potential and affordability

A f f d b i l i f D h W h f l i B l i ty t t o r a o a v e r a g e e u s c e o n e n a n e r n
		in D W lac -p e	Ma ke t r t r en
( /sq Re E U R t n	) m	6. 1 0	1) 9. 0 0
Av i l er ag e a nc	lar ( E U R /sq ) t y co s m	2.	0 5
Av D W er ag e a	ize tm t p ar en s	6 0 s q m
Av t p er ag e re n	2) h t er m on	E U R 5 1 6	E U R 6 9 0
Av ho t er ag e ne	1) ho l d inc us e om e	E U R 2, 9 9 0
in Ho us g co s	3) io t r t a	1 7 %	2 3 %
Gr in i ia l t os s ie l d ( % ) y	D W in- lac p e lua ion t va ( E U R 1, 3 8 / s ) 7 q m	4. 2 %	6. 2 %

Housing cost ratios across major European cities4)

Source: CBRE EMEA Residential Market Report 2016

More than 80% of DW portfolio consists of apartment sizes of less than 75sqm, average apartment size of only 60 sqm leads to advantage in terms of affordability
Based on DW in-place rent, 17% of household income is spent for housing
Assuming CBRE market rents, the housing cost ratio amounts to 23%, which is still far below the usually applied 30% affordability hurdle
Huge gap between in-place rent and market rent multiples offers further upside

1) CBRE Berlin housing market report 20172) Including ancillary costs

3) (Average size x gross rent (net rent + ancillary cost)) / average household income4) Average asking rent for a 70 sqm apartment / average purchasing power per household

» Replacement costs continue to increase

Construction costs are steadily rising partially as a result of high regulatory requirements (e.g. energy efficiency)
Land values increased significantly as a result of the dynamic demand situation and little availability of landreserves
Current average replacement costs of 3,200 EUR/sqm (including land) are significantly above current asset valuation of Deutsche Wohnen (1,738 EUR/sqm) in Berlin
New construction provides little relief to tenant market
Comparatively low rent levels result in new construction activity predominantly in luxury segment or as condominiums
Additional regulatory hurdle as greenfield projects have to provide for 30% of residential area at subsidized rent level of EUR 6.50 per sqm per month

1) Source: Amt für Statistik Berlin Brandenburg, construction cost index

2) Source: Gutachterausschuss Berlin (GAA)

» Acquisition of high quality portfolio in Berlin consisting of c. 3,900 residential units with focus on central locations

Majority of portfolio in central Berlin

K P I s
Un i ts	4, 1 6 6
T he f i de ia l i t ts reo res n un	3, 8 9 3
( ) Ar inc l. c ia l i ts ea om me rc un	2 7 4, 0 0 0 sq m
Ac is i ion ice t q u p r	E U R 6 5 5m
Im l ie d is i ion ice t p ac q p r p er sq m u	E U R 2, 3 9 0
In- lac l ip le t m t p e r en u	~3 0x
Ma ke l ip le t re t t r n mu	~2 0x
Va te ca nc y ra	~7 %

Mainly popular "Altbau(1)" located in hot spotand growth areas in Berlin

1) "Altbau" consists of pre-war buildings

» Financials & guidance

» Significant increase of adjusted NAV per share by 39%

in E U R m	/ / 3 1 1 2 2 0 1 6	/ / 3 1 1 2 2 0 1 5
Eq i ( be fo l l ing in ) ty tro te ts u re no n- co n re s	9 6 6 7, 5.	6, 8 2. 5 7
Fa ir v lue f de iva ive f ina ia l t a s o r nc ins tru ts me n	4 7. 0	4 4. 8
De fe d ( ) tax t rre es ne	2, 0 0 4. 4	1, 1 3 8. 1
E P R A N A V ( d i lu d ) te un	1 0, 0 1 0 7.	6 5. 6 7, 7
S ha d ing in ts tan re s o m u	3 3 7. 5	3 3 7. 4
E P R A N A V ha in E U R p er s re ( d i lu d ) te un	2 9. 6 8	2 3. 0 2
E f fe f ise f i b les ts t c o ex er c o co nv er	1) 9 9 2. 3	9 5 2. 1
E P R A N A V ( d i lu d ) te	1 1, 0 0 9. 3	8, 1 7 7. 7
S ha d i lu d in te re s m	3 7 0. 8	3 7 0. 2
E P R A N A V ha in E U R ( d i lu d ) te p er s re	2 9. 6 9	2 3. 5 5
Go dw i l l G S W o	( ) 0	( ) 5 3 5. 1
S ha d ing in ts tan re s o u m	3 3 7. 5	3 3 4 7.
j. ( i ) A d N A V ha d lu d te p er s re un	2 9. 6 9	2 1. 4 3

1) Current conversion prices of EUR 17.79 and EUR 21.41 per 31/12/2016 corresponds to ~32.7m shares

» Significant creation of shareholder value from the GSW acquisition

62%32%74%55%EBITDA margin FFO I margin2013 (at acquisition) ²⁰¹⁶+12pp EBITDA margin uplift+23pp FFO I margin uplift

Portfolio valuation uplift of EUR 2.4bn in aggregate since GSW acquisition in 2013
Equity more than doubled to EUR 3.4bn
Strong operating margin improvement since GSW acquisition proves success
Over-delivered on announced synergies with EBITDA increased by c. EUR 30m and FFO by EUR 55m since GSW acquisition
Significant value creation since GSW's takeover from a valuation as well as a cash flow perspective, heavily exceeding impaired GSW goodwill amount of EUR 535m

» Strong earnings and cash contributions from letting

in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5
Re l in ta n co m e	7 0 4. 5	6 3 4. 0
No b le n- re co ve ra ex p en se s	( ) 9. 8	( ) 1 2. 7
Re l los ta n s	( ) 6. 4	( ) 6. 3
Ma in te na nc e	( ) 9 4. 5	( ) 8 6. 1
O he t rs	( ) 7. 4	( ) 9. 7
Ea in fro Re i de ia l Pr t ty rn g s m s n op er Ma t na g em en	5 8 6. 4	5 1 9. 2
Pe l, l a d a dm in is ive tra t rso nn e g en er a n e xp en se s	( 4 0. ) 7	( 4 4. 3 )
Ne Op in In ( N O I ) t t er a g co m e	5 4 5. 7	4 7 4. 9
N O I in ma rg	% 7 7. 5	4. 9 % 7
N O I in E U R / s / m h t q m on	4. 6 3	4. 3 4

Significant reduction of operational cost items (in % of rental income)

Non-rec. exp.& rent loss Maintenance Other Personnel 25.1%-2.5pp

in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5
Ne ing inc ( N O I ) t o t p er a om e	4 5 5. 7	4 4. 9 7
Ca h in te t s re s ex p en se s	( 1 0 2. 0 )	( 1 2 2. 2 )
Ca h f low fro fo l io f h in t te te t s m p or a r c as re s ex p en se s	4 4 3. 7	3 5 2. 7

Improved NOI margin driven by rental growth combined with efficient management of operational costs

» Growing prices as demonstrated by disposal business

D isp ls os a	Pr iva iza io t t n		In i io l les t tu t s na sa		To l ta
wi th clo sin in g	2 0 1 6	2 0 1 5	2 0 1 6	2 0 1 5	2 0 1 6	2 0 1 5
No f i ts . o un	1, 2 3 5	1, 9 0 8	3, 0 3 7	4 9 7, 7	4, 3 0 8	9, 4 0 5
Pr ds ( E U R ) oc ee m	1 4 6	1 8 7	2 0 8	4 8 7	3 4 5	6 4 7
Pr ice in E U R p er s q m	1, 6 4 5	1, 3 9 4	9 6 1	9 2 5	/a n	/a n
Ea in ( E U R ) rn g s m	3 2. 4	4 2. 7	2 1. 9	2 6. 2	5 4. 3	6 8. 9
Gr in os s m ar g	3 9 %	4 1 %	1 3 %	8 %	2 2 %	1 6 %
Ca h f low im ( E U R ) t s p ac m	1 2 9	1 1 2	1 1 7	3 0 5	3 0 0	4 6 2

Disposal business as a strong contributor to NAV growth contributing cash flows of c. EUR 300m in 2016

For single unit privatizations EUR 2,000 per sqm in Berlin at in-place rent multiples of > 30x achieved
Non-core disposals from Olav portfolio almost completed with Q1-2017 disposal of assets for EUR 70m inDuisburg and Oberhausen at attractive gross margin of ~15%
Streamlining of portfolio successfully executed, further opportunistic institutional sales possible but depending on pricing

1) Incl. investment needs estimated by Deutsche Wohnen

» High profitability from nursing "operations" and "assets"

io ( in ) Op t E U R er a ns m	F Y- 2 0 1 6	F Y- 2 0 1 5
To l inc ta om e	7 0. 1	6 7. 1
To l e ta xp en se s	( ) 6 3. 3	( ) 6 1. 9
E B I T D A io t op er a ns	6. 8	5. 3
E B I T D A in ma rg	9. 7 %	7. 9 %
1) Le as e e xp en se s	1 3. 0	1 2. 8
E B I T D A R	1 9. 8	1 8. 1
E B I T D A R in ma rg	2 8. 2 %	2 6. 9 %
( ) As in E U R ts se m	F Y- 2 0 1 6	F Y- 2 0 1 5
1) Le inc as e om e	1 1. 9	1 1. 2
To l e ta xp en se s	( 1. 8 )	( 1. 0 )
E B I T D A ts as se	1 0. 1	1 0. 2
Op io & As ( in E U R ) t ts er a ns se m	F Y- 2 0 1 6	F Y- 5 2 0 1
To l E B I T D A ta	1 6. 8	5. 1 6
In te t e re s xp en se s	( 4. 2 )	( 4. 8 )
F F O I c i bu io tr t on n	1 2. 6	1 0. 8

EBITDA contribution including contribution of recent acquisitions of > EUR 45m in 2017 expected, translating into RoCE of c. 7% and FFO yield c. 10%

1) The delta between lease expenses (operations) and lease income assets derives from one nursing facility which is only operated but not owned by Deutsche Wohnen group

» Significant step up in EBITDA margin

in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5
Ea ing fro Re i de ia l Pr Ma t ty t rn s m s n op er na g em en	5 8 6. 4	5 1 9. 2
Ea ing fro D isp ls rn s m os a	4. 3 5	6 8. 9
Ea ing fro Nu ing d As is d L iv ing te rn s m rs a n s	1 6. 8	1 6 5.
Se i bu io in t tr t g m en co n n m ar g	6 5 7. 5	6 0 3. 7
Co te rp or a ex p en se s	( ) 7 3. 7	( ) 7 4. 7
O he ing / inc t t r op er a ex p en se s om e	( ) 8. 7	( ) 6 4. 0
E B I T D A	5 5. 1 7	4 6 5. 0
On f fs e- o	6. 6	5 8. 9
j. ( in isp ) d E B I T D A l. d ls a c os a	5 8 1. 7	5 2 3. 9
Ea ing fro D isp ls rn s m os a	( ) 5 4. 3	( ) 6 8. 9
( ) d j. E B I T D A l. d isp ls a ex c os a	5 2 7. 4	4 5 5. 0

Adj. EBITDA margin up by 3.1pp (excl. disposals) driven by improvement of NOI and further reduction of corporate expenses (cost ratio)

» Bridge from adjusted EBITDA to profit

in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5
E B I T D A ( d j d ) te a us	5 8 1. 7	5 2 3. 9
De ia ion t p re c	( 6. 4 )	( 5. 7 )
A i lua ion t e ty t q va u	2. 0	1. 8
1) F ina ia l re l ( ) t t nc su ne	( 1 2 3. 6 )	( 1 3 6 ) 5.
E B T ( d j d ) te a us	4 5 3. 7	3 8 4. 4
Va lua ion ies t t p ro p er	2, 6 6 7. 6	1, 7 3 4. 1
Go dw i l l im irm t o p a en	( 3 3 ) 5 7.	0. 0
On f fs e- o	( ) 1 1. 4	( ) 1 1 7. 6
S Va lua ion W A P d i b le bo ds t t an co nv er n	( ) 8 3. 4	( ) 2 1 3. 7
E B T	2, 4 8 9. 2	1, 8 2 7 7.
Cu t tax rre n es	( ) 3 6. 5	( ) 2 8. 0
fe De d tax rre es	( ) 8 2 9. 5	( ) 5 5 9. 3
Pr f i t o	1, 6 2 3. 2	1, 1 9 9. 9
Pr f i i bu b le he ha ho l de f t a t tr ta to t o s re rs o he t t p ar en co mp an y	1, 8 3. 9 5	1, 1 4. 9 5
2) Ea ing ha in E U R rn s p er s re	4. 6 9	3. 6 0

in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5
In te t e re s xp en se s	( ) 1 0 6. 2	( ) 1 2 7. 0
In % f ts o ren	1 5 % ~	2 0 % ~
No h in te t n- ca s re s ex p en se s	( 1 8. ) 7	( 9. ) 5
In inc te t re s om e	1. 3	0. 9
F in ia l l ( ) t t an c re su ne	( ) 1 2 3. 6	( ) 1 3 5. 6

2016: Thereof EUR (6.9m) financing, EUR (2.6m) transaction costs and EUR (1.3m) for restructuring

2016: Thereof EUR (3.8m) from valuation of derivatives and EUR (79.6m) m from convertible bonds

1) Adjusted for Valuation of SWAPs and convertible bonds

2) Based on weighted average shares outstanding (FY 2016: 337.45m; FY 2015: 320.85m)

» Operational improvements and acquisitions drive FFO growth

in E U R m	F Y- 2 0 1 6	F Y- 2 0 1 5
E B I T D A ( d j d ) te a us	5 8 1. 7	5 2 3. 9
Ea ing fro D isp ls rn s m os a	( ) 5 4. 3	( ) 6 8. 9
Lo ion -te t t ng rm re m un er a co m p on en ( ) ha -b d s re as e	2. 2	1. 0
A i lua ion t e ty t q va u	2. 0	1. 8
/ In inc te t e re s xp en se om e	( ) 1 0 4. 9	( ) 1 2 6. 1
Inc tax om e es	( 3 6. ) 5	( 2 1. ) 5
M ino i ies t r	( ) 6. 3	( ) 6. 2
F F O I	3 8 3. 9	3 0 4. 0
Ea ing fro D isp ls rn s m os a	5 4. 3	6 8. 9
F F O I I	4 3 8. 2	3 7 2. 9
1) F F O I p ha in E U R er s re	1. 1 4	0. 9 5
2) D i lu d be f ha te nu m r o s re s	3 7 0. 8	3 5 4. 2
2) D i lu d F F O I ha te p er s re	1. 0 4	0. 8 6
1) O in F F I I p ha E U R er s re	1. 3 0	1. 1 6

FFO I per share increased by 20% yoy while dividend per share increased by 37% due to higher pay-out ratio

1) Based on weighted average shares outstanding (FY 2016: 337.45m; FY 2015: 320.85m) 2) Based on total shares assuming full conversion of in the money convertible bonds

» Capital structure pro forma recent capital market transactions

Ra ing t	/ A- A 3; b le loo k ta t s ou
I C R	5. 5x ~
Ø i tu ty ma r	8. 5 y ea rs ~
% d ba k de b t se cu re n	7 2 %
d de b % t u ns ec ur e	2 8 %
Ø in te t c t re s os	(~ he dg d ) 1. 5 % 8 5 % e
L T V ta t r rg e an g e	3 5- 4 0 %

Low leverage, long maturities and strong rating
Flexible financing approach to optimize financing costs
No significant maturities until and including 2019
Flexible access to liquidity via EUR 500m commercial paper programme and EUR 440m credit facilities
Current LTV pro forma recent acquisition of 4,200 units in Berlin at the mid-point of the 35-40% target range

1) Excluding commercial paper

» Continuous and pro-active management of capital structure

Cash interest cost reduced by EUR 92m to EUR 98m over past 4 years
Interest cost ratio (measured by in-place rent) reduced from 33% to 13%

Development of LTV (2013-2016)

Significant de-risking of capital structure with current LTV within the 35-40% target range
Convertibles as useful addition to financing mix and a tool to manage the capital structure
Continuous and pro-active management of liabilities to take advantage of the current attractive financing environment for the long-term
Focus on early refinancing of upcoming maturities, including the 2021 convertible bond (issuer call as of Oct 2018)

» Guidance

	2 0 1 6	2 0 1 7 e	M i d iv a n r e r s
F F O I ( E U R ) m	3 8 4	4 2 5 ~	O i l f d i i i t t t p e r a o n a p e r o r m a n c e a n r e c e n a c q u s o n s
D i i d d h ( E U R ) v e n p e r s a r e	0. 4 7	0. 8 7 ~	f O B d 6 5 % i F F I d t t t a s e o n p a -o r a o r o m a n c r r e n y u u h d i t t s a r e s o u s a n n g
L T V	3 7. 7 %	3 5- 4 0 % ( ) t t a r g e r a n g e	A i k i t t t m o e e p c r r e n r a n g u
f L i k l i k l h t t e- o r- e r e n a g r o w	2. 9 %	3. 5 %	( ) N l i B l i i d M i i l t t t t e e n g, e r n r e n n e e s p e g e w x

» Q & A

» Appendix

» Strong like-for-like development in particular in Berlin

L i ke -fo l i ke r- 3 1 / 1 2 / 2 0 1 6	Re i de ia l u i t ts s n n be nu m r	1) In- lac t p e r en 2 0 1 6 /sq /m E U R h t m on	1) In- lac t p e r en 2 0 1 5 /sq /m E U R h t m on	L f l l h ta t re n g ro w In %	L f l Va ca nc y 2 0 1 6 in %	L f l Va ca nc y 2 0 1 5 in %
Co + re	1 2 3, 3 5 3	6. 1 7	5. 9 8	3. 2	1. 4	1. 4
Gr Be l in ter ea r	1 0 3, 0 1 1	6. 1 1	5. 9 0	3. 5	1. 5	1. 5
R h ine -M in a	8, 4 5 5	1 7. 5	3 7. 5	2. 2	1. 9	0. 8
Ma he im / Lu dw ig ha fen nn s	4, 7 6 2	5. 7 4	5. 6 8	1. 0	0. 9	0. 7
R h ine lan d	4, 4 7 7	6. 0 2	5. 8 8	2. 5	0. 8	0. 4
Dr de es n	2, 6 4 8	5. 3 2	5. 1 8	2. 6	1. 8	1. 9
Co re	1 3, 8 3 2	5. 5 7	5. 5 0	1. 4	1. 7	1. 9
/ Ha Br ic k no ve r un sw	8, 1 0 0	6 4 5.	5. 5 7	1. 3	1. 4	1. 6
Co i ies fe de l t ta tes re c ne ra s w	4, 6 0 4	5. 4 6	5. 3 9	1. 3	2. 0	2. 3
K ie l / L be k ü c	1, 1 2 8	4 8 5.	3 8 5.	2. 0	3. 0	2. 1
2) Le ing fo l io t t t p or	5 1 3 7, 1 8	6. 1 1	5. 9 3	3. 0	5 1.	1. 4
To l ta	1 4 2, 0 3 4	6. 0 9	5. 9 1	2. 9	1. 7	1. 6

1) Contractually owed rent from rented apartments divided by rented area2) Excluding non-core and properties held for sale/ privatization

» Portfolio valuation changes by cluster

Re ion g s	F V ( / / 5 ) 3 1 1 2 2 0 1 E U R m	F V ( / / 5 ) 3 1 1 2 2 0 1 /sq E U R m	Mu l ip le in- lac t p e t re n ( / / ) 3 1 1 2 2 0 1 5	F V ( / / ) 3 1 1 2 2 0 1 6 E U R m	F V ( / / ) 3 1 1 2 2 0 1 6 /sq E U R m	Mu l ip le t in- lac t p e r en ( / / ) 3 1 1 2 2 0 1 6	Mu l ip le ke t t ma r t re n ( / / ) 3 1 1 2 2 0 1 6
S ic Co d h tra teg t re an g ro w ion reg s	1 1, 5 9 1	1, 2 9 6	1 8. 2	1 5, 2 8 0	1, 6 0 3	2 1. 7	1 7. 8
Co + re	1 0, 6 9 7	1, 3 4 7	1 8. 7	1 4, 0 5 4	1, 6 9 3	2 2. 7	1 8. 3
Gr Be l in ter ea r	8, 9 5 0	1, 3 6 0	1 9. 2	1 1, 7 3 8	1, 7 3 8	2 3. 7	1 8. 9
R h ine -M in a	9 2 1	1, 5 8 1	1 7. 7	1, 0 7 7	1, 7 6 9	1 9. 9	1 6. 1
R h ine lan d	3 1 4	1, 0 7 8	1 5. 1	3 8 9	1, 2 2 6	1 5. 8	1 4. 1
Ma he im / Lu dw ig ha fen nn s	3 0 2	9 8 6	1 4. 3	3 3 5	1, 0 5 1	1 5. 2	1 3. 2
Dr de es n	2 1 0	1, 1 3 5	1 8. 5	2 1 7	1, 2 0 5	1 9. 1	1 6. 1
So ig Co t ns e re+				2 4 4	2, 8 1 7	2 3. 5	2 0. 4
Co re	8 9 4	8 9 4	1 3. 6	1, 2 2 6	9 9 6	1 4. 9	1 3. 4
Ha / Br ic k no ve r un sw	5 2 9	9 0 8	1 3. 5	5 9 5	9 8 3	1 4. 5	1 2. 4
K ie l / L ü be k c	7 4	8 0 7	1 2. 7	3 1 6	1, 0 6 6	1 5. 9	1 4. 1
Co i ies fe de l s t ta tes re c ne w ra				3 1 5	9 5 7	1 4. 8	1 4. 9
Co No n- re	1 3 0	6 4 1	1 2. 0	1 8 6	1 6 7	1 1. 8	1 0. 1
To l ta	1 1, 7 2 1	1, 2 8 2	1 8. 1	1 5, 4 6 5	1, 5 8 0	2 1. 5	1 7. 6

» Nursing homes - portfolio overview

Nursing business: Assets and operating business

				# f p lac o es
r e n w o	Re io g n	Fa i l i ies t c #	Nu in rs g #	As is d te s l iv in g #	To l ta #	O cc up an cy te ra	Fa ir Va lu e ( / / ) 3 1 1 2 2 0 1 6 E U R m
y b	G Be l in te re a r r	1 2	1, 0 7 2	3 7 0	1, 4 4 2	9 8. 2 %
d e g	1) Ha bu m rg	3	3 3 4	1 5 8	4 9 2	8 9. 0 %
a n a	Sa xo ny	7	4 3 6	3 9	4 7 5	9 9. 8 %
M	Sa Lo we r xo ny	1	1 3 1	-	1 3 1	9 8. 7 %
	in io To ta l -h t ou se op er a ns	2 3	1, 9 3 7	5 6 7	2, 5 4 0	9 6. 8 %	2 4 4. 0

Pegasus acquisition: Assets only

				f p lac # o es
	Re io g n	i i ies Fa l t c #	in Nu rs g #	As is d te s l iv in g #	To ta l #	W A L T	Pu ha rc se ice p r E U R m
s r o t	Ba ia va r	7	9 9 9	-	9 9 9	1 2. 4
a r e	No h- R h ine W ha l ia t tp r es	5	7 2 1	1 8 7	9 0 8	1 3. 7
p o	Sa Lo we r xo ny	4	6 6 1	-	6 6 1	1 1. 2
r e h t	R h ine lan d- Pa la ina t te	4	4 0 9	2 0 8	6 1 7	1 3. 4
O	Ba de W ür be t te n- m rg	5	5 5 7	1 6	5 7 3	1 3. 9
	O he t r	3	3 7 4	-	3 7 4	1 0. 1
	To ta l o t he to r op er a rs	2 8	3, 2 1 7	4 1 1	4, 1 3 2	1 2. 7	4 2 0. 5
	To l n in ta ur s g	5 1	5, 6 9 4	9 7 8	6, 6 7 2	/ n a	6 6 4. 5

1) Acquisition 2016, transfer of titles 31/12/2016

» Summary balance sheet

A t s s e s			E i d L i b i l i i t t q u y a n a e s
in E U R m	/ / 3 1 1 2 2 0 1 6	/ / 3 1 1 2 2 0 1 5	in E U R m	/ / 3 1 1 2 2 0 1 6	/ / 3 1 1 2 2 0 1 5
Inv ies tm t p t es en ro p er	1 6, 0 0 5. 1	1 1, 8 5 9. 1	To l e i ta ty q u	8, 2 3 4. 0	6, 7 9 8. 1
O he t t ts r n on -c ur re n as se	1 0 8. 6	6 1 4. 3	F ina ia l l ia b i l i ies t nc	4, 6 0 0. 0	3, 7 8 0. 4
De fe d tax ts rre as se	0. 7	2. 0	Co i b les t nv er	1, 0 4 5. 1	9 6 5. 4
No t ts n cu rre n as se	1 6, 1 1 4. 4	1 2, 4 7 5. 4	Bo ds n	7 3 2. 3	4 9 8. 3
La d a d bu i l d ing he l d fo le n n s r sa	3 8 1. 5	6 6. 9	Ta l ia b i l i ies t x	4 8. 3	3 7. 5
Tr de iva b les a re ce	1 6. 4	1 3. 4	De fe d l ia b i l i ies tax t rre	1, 6 8 7. 1	8 6 0. 6
O he t t ts r c ur re n as se	7 9. 1	1 5 9. 3	De iva ive t r s	4 7. 0	4 4. 8
Ca h d h e iva len ts s an ca s q u	1 9 2. 2	6 6 1. 6	O he l ia b i l i ies t t r	3 8 9. 8	3 9 1. 5
Cu t ts rre n as se	6 6 9. 2	9 0 1. 2	To l l ia b i l i ies ta t	8, 5 4 9. 6	6, 5 7 8. 5
To l a ta ts ss e	1 6, 8 3. 6 7	1 3, 3 6. 6 7	To l e i d l ia b i l i ies ta ty t q u an	1 6, 7 8 3. 6	1 3, 3 7 6. 6

Investment properties represent ~95% of total asset s

Strong balance sheet structure offering comfort throughout market cycles

» S f c c e s s u u k t t m a r e s r	l l i f E U R 1 3 b l i h i l t t t t c o m p e o n o n m r a n c e c a p a u - i t a n s a c o n s
I f s s a n c e o n e u w i E U R 8 0 0 b l t m c o nv e r e b d 2 0 2 4 o n s	Ag inc ip l a f E U R i l l ion iss d a d ing in Ju ly te t o 8 0 0 t p tu 2 0 2 4 g re g a p r a mo un m ue ar a n ma r , Iss d a f d a ion ium f t a 0. 3 2 5 % 5 3 % ue co up on o a n co nv er s p re m o D iv i de d ion bo E U R 0. 5 4 d iv i de d ha te t n p ro c a ve a n p er s re In i ia l c ion ice f E U R 4 8. 5 8, ing 6 4 % ium E P R A N A V 2 0 1 6 t t on ve rs p r o re p re se n a p re m vs S /o l low de ion in h a d ha he ion f tru tu t t t t c re a s re m p ca s n r s re s a o p o De he W hn he fo f lex i b le ins i l s tsc t tru t to ta tru tu o en re re me n ma na g e c ap c re u ,
f i Bu -b k l y a c o n o m n a E U R 2 5 0 i b l t m c o nv e r e b d 2 0 2 0 o n s	Ea ly f ina ing f he de ly in he d ing i b le bo d du in i h iss l l t t ts ta t 2 0 2 0 w t r re nc o ep m on ey o n co nv er n e ue r c a u ion in De be 2 0 1 t 7 op ce m r To l re ha lum f ~ E U R 4 0 i l l ion i.e 9 9 % f he ina l a ta 7 t t p ur c se vo e o m o n om mo un . > ,
C i i h l t a s c a p a n c r e a s e f E U R 5 4 5 o m	f ( f ) P lac 1 7. 2 i l l ion ha 5. 1 % he is d s ha i l i h ins i ion l t o t te ta t t tu t em en m n ew s re s o re g re re ca p w a inv to es rs Ne ha fu l l d iv i de d ig h f Ja ts 1, 2 0 1 6 s re s c ar ry n r as o nu ar w y f fo T ig h d isc 2. 1 % las los ing ice d ive da ke de in t t to t c t t ou n o p r an su p p or se co n ry ma r p er rm an ce un rp f ion tra t su cc es s o ns ac
P d d b b k i b l b d 2 0 2 0, f i h i i i i l i h i h t t t t t t r o c e e s s e o a c c o n e r e o n o n a n c e e a c q s o n p p e n e, e n r s n g o m e u u y v u u f l i i i i l l h l l i i i t t t t t p o r o o a c q s o n a s e a s o e r s m a e r r e c e n a c q s o n s u w u

» Portfolio structure – characteristics meeting strong demand

1) Excluding vacant apartments

In-place rent (Ø 6.10 EUR/sqm/month) Rental restrictions1)

» Disclaimer

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