Deutsche Wohnen SE — Interim / Quarterly Report 2016

May 13, 2016

Deutsche Wohnen AG

» Q1 2016 results Conference Call, 13 May 2016

» Financial highlights Q1 2016

Operational development			KPIs
In EUR m	Q1 2016	YoY	In EUR m	Q1 2016	YoY
NOI letting	138.1	+13.2%	FFO I (after minorities)	100.9	+41.5%
NOI margin	80.5%	+3.7ppt	in EUR/ share1)	0.30	+25.0%
Like-for-like rental growth	3.7%	+1.3ppt	FFO I margin	58.8%	+13.9ppt
Vacancy rate	1.8%	-0.5ppt	FFO II (after minorities)	124.6	+54.6%
NOI nursing	4.6	+21.1%	in EUR/ share1)	0.37	+37.0%
FFO contribution	4.0	+17.6%	Adj. EBITDA (excl. disposals) 2)	135.5	+19.6%
Occupancy rate	98.4%	+2.2ppt	Adj. EBITDA margin	79.0%	+7.7ppt
Earnings from disposals	23.7	+154.8%	Cost ratio	9.6%	+2.2ppt
Gross margin privatization	33%	-9ppt	per unit3) Cost (in EUR)	412	502
Gross margin inst. sales	17%	+7ppt	In EUR m	Q1 2016	YTD
Free cash flow impact	109.0	+374%	4) EPRA NAV per share (undiluted)	23.39	1.7%
ICR	5.2x	+2x	LTV	42%	+4ppt

1) Based on weighted average shares outstanding (Q1 2016: 337.42m; Q1 2015: 298.57m); 2) Adjusted for one-off effects excluding disposals; 3) Corporate expenses annualized divided by avg. units in period; 4) based on 337.4m shares outstanding

» Portfolio update Q1 2016 – focused and concentrated

Strategic cluster	Residential units	% of total measured by fair value	In-place rent1) 31/03/2016 EUR/sqm/month	Fair value 31/03/2016 EUR/sqm	Multiple in-place rent	Multiple market rent	Rent potential2) 31/03/2016 in %	Vacancy 31/03/2016 in %
Strategic core and growth regions	153,283	98.2%	5.95	1,304	18.3	15.3	21%	1.7%
Core+	133,921	88.9%	6.01	1,357	18.8	15.6	24%	1.7%
Core	19,362	9.3%	5.55	950	14.3	12.6	12%	2.3%
Non-core	4,665	1.8%	5.08	706	12.1	10.5	n/a	5.7%
Total	157,948	100%	5.93	1,284	18.1	15.1	21%	1.8%
Thereof Greater Berlin	111,201	73.9%	5.93	1,372	19.3	15.9	23%	1.7%

Further rent potential in Core⁺ regions of ~24%

Vacancy rate in Core+ portfolio declined by 40bps over 12 months to c. 1.7% (close to structural vacancy)

Attractive spread in Core+ between in-place rent and market rent multiples of more than 3x offer further potential for NAV growth

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); 3) Including signed acquisitions and disposals with transfer of ownership after 31/12/2015

» Strong like-for-like development as of 31 March 2016

Like-for-like 31/03/2016	Residential units number	In-place rent2) 31/03/2016 EUR/sqm	In-place rent2) 31/03/2015 EUR/sqm	Change y-o-y	Vacancy 31/03/2016 in %	Vacancy 31/03/2015 in %	Change y-o-y
portfolio1) Letting	129,014	6.00	5.78	3.8%	1.5%	1.8%	-0.3pp
Core+	115,470	6.06	5.83	3.9%	1.4%	1.6%	-0.2pp
Greater Berlin	95,401	5.99	5.75	4.3%	1.5%	1.7%	-0.2pp
Rhine-Main	8,427	7.40	7.20	2.8%	1.1%	1.4%	-0.3pp
Mannheim/Ludwigshafen	4,762	5.70	5.59	2.0%	0.5%	1.1%	-0.6pp
Rhineland	4,470	5.95	5.77	3.1%	0.9%	1.6%	-0.7pp
Dresden	2,410	5.14	5.08	1.3%	2.5%	2.8%	0.3pp
Core	13,544	5.49	5.37	2.2%	2.1%	2.8%	-0.7pp
Hanover / Brunswick	8,100	5.58	5.42	2.9%	1.7%	2.4%	-0.7pp
Core cities eastern Germany	4,316	5.33	5.31	0.4%	2.8%	3.5%	-0.7pp
Kiel / Lübeck	1,128	5.39	5.24	2.9%	2.9%	3.5%	-0.6pp
Total	136,2183)	5.98	5.76	3.7%	1.8%	1.9%	-0.1pp

Vacancy in Core+ letting portfolio further reduced to 1.4%

Like-for-like rental growth in Core⁺ driven by re-letting (c. 1/3) and regular rent increase (c. 2/3) in particular driven by implementation of 2015 Berlin rent table

In Dresden like-for-like rental growth derived from re-lettings only

1) Cluster block sale of strategic core and growth regions allocated to letting portfolio; 2) Contractually owed rent from rented apartments divided by rented area; 3) Total L-f-l stock incl. Non-Core

» Strong earnings and cash contributions from letting

in EUR m	Q1 2016	Q1 2015
Rental income	171.5	158.9
Non-recoverable expenses	(2.8)	(3.6)
Rental loss	(2.3)	(1.8)
Maintenance	(17.4)	(19.0)
Others	(1.8)	(2.0)
Earnings from Residential Property Management	147.2	132.5
Personnel, general and administrative expenses	(9.1)	(10.5)
Net Operating Income (NOI)	138.1	122.0
NOI margin	80.5%	76.8%
NOI in EUR / sqm / month	4.69	4.41

in EUR m Q1 2016 Q1 2015

Net operating income (NOI) 138.1 122.0 Cash interest expenses (25.9) (34.8)

Development of NOI margin
		80.5%
77.1%	76.8%
Q1-2014	Q1-2015	Q1-2016

	Increased rental income and further efficiencies in operating business, as well as seasonal lower maintenance expenses,
	resulting in improved NOI margin

112.2 87.2

Cash flow from portfolio after cash interest

expenses

» Growing prices as demonstrated by disposal business

Disposals		Privatization		Institutional sales		Total
with closing in	Q1 2016	Q1 2015	Q1 2016	Q1 2015	Q1 2016	Q1 2015
No. of units	491	453	1,280	108	1,771	561
Proceeds (EUR m)	43.5	40.0	115.6	9.7	159.1	49.7
Book value	32.8	28.1	99.2	8.8	132.0	36.9
Price in EUR per sqm	1,272	1,285	1,135	951	n/a	n/a
Earnings (EUR m)	7.6	8.7	16.0	0.6	23.7	9.3
Gross margin	33%	42%	17%	10%	21%	35%
Cash flow impact (EUR m)	27	20	82	3	109	23

Disposal business contributed cash flows of EUR 109m in Q1 2016

Privatization: Disposal of below-average quality; significant step up in prices for signed but not yet closed disposals of c. 500 units with on average EUR ~1,600 per sqm (Berlin share of sold units ~60% with gross margins >50%

Institutional sales: consisted predominantly of a Berlin city-border portfolio with 900 units

» Attractive FFO contribution from Nursing and Assisted Living

in EUR m	Q1 2016	Q1 2015
Income
Nursing	13.6	12.9
Living	1.6	1.5
Other	2.0	1.9
Total income	17.2	16.3
Costs
Nursing and corporate expenses	(3.8)	(4.3)
Staff expenses	(8.8)	(8.2)
Total costs	(12.6)	(12.5)
Earnings from Nursing and Assisted Living (NOI)	4.6	3.8
Cash interest expenses	(0.6)	(0.4)
FFO contribution	4.0	3.4

Q1 2016	# of facilities	# of places
Greater Berlin	12	1,442
Saxony	7	475
Others	1	131
In total	20	2,048

Nursing and Assisted Living business delivers RoCE of c. 10% and RoE of c. 15% based on FV of c. EUR 160m and c. 40% LTV

» Best in class EBITDA margin

in EUR m	Q1 2016	Q1 2015
Earnings from Residential Property Management	147.2	132.5
Earnings from Disposals	23.7	9.3
Earnings from Nursing and Assisted Living	4.6	3.8
Segment contribution margin	175.5	145.6
Corporate expenses	(16.5)	(18.7)
Other operating expenses/income	0.2	(7.9)
EBITDA	159.2	119.0
One-offs	0.0	3.6
EBITDA (adjusted)	159.2	122.6

Significant step-up of adj. EBITDA margin by 7.7pp (excl. disposals) driven by improvement of NOI and reduction of corporate expenses

» Operational improvements and acquisitions drive FFO growth

in EUR m	Q1 2016	Q1 2015
EBITDA (adjusted)	159.2	122.6
Earnings from Disposals	(23.7)	(9.3)
At equity valuation	0.2	0.4
Interest expense/ income	(26.1)	(35.0)
Income taxes	(7.1)	(5.5)
Minorities	(1.6)	(1.9)
FFO I	100.9	71.3
Earnings from Disposals	23.7	9.3
FFO II	124.6	80.6
in EUR1) FFO I per share	0.30	0.24
in EUR1) FFO II per share	0.37	0.27

• FFO I per share increased by 25% yoy while leverage was significantly reduced
• Dividend expected to increase by 30% to EUR 0.70 per share for 20162)

1) Based on weighted average shares outstanding (Q1 2016: 337.42m; Q1 2015: 298.57m); 2) Based on FFO I guidance of at least EUR 360m and 337.4m shares outstanding

» Steady increase of EPRA NAV per share

in EUR m	31/03/2016	31/12/2015
Equity (before non-controlling interests)	6,743.4	6,653.5
Fair values of derivative financial instruments	60.0	44.8
Deferred taxes (net)	1,090.4	1,064.1
EPRA NAV (undiluted)	7,893.8	7,762.4
Shares outstanding in m	337.4	337.4
EPRA NAV per share in EUR (undiluted)	23.39	23.01
Effects of exercise of convertibles	952.51)	952.11)
EPRA NAV (diluted)	8,846.3	8,714.5
Shares diluted in m	370.2	370.2
EPRA NAV per share in EUR (diluted)	23.90	23.54
Goodwill GSW	(535.1)	(535.1)
Shares outstanding in m	337.4	337.4
Adj. NAV per share (undiluted)	21.81	21.42

1) Current strike price: 17.79 EUR and 21.41 EUR corresponds to ~32.7m shares

» Appendix

» Bridge from adjusted EBITDA to profit

in EUR m	Q1 2016	Q1 2015
EBITDA (adjusted)	159.2	122.6
Depreciation	(1.3)	(1.3)
At equity valuation	0.2	0.4
Financial result (net)	(26.2)1)	(30.0) 1)
EBT (adjusted)	132.1	91.7
Valuation properties	0.0	0.0
Other one-off income	0.0	0.9
One-off costs for transactions	0.0	(4.5)
One-off costs financing	0.0	(5.4)
Restructuring & Reorganization	0.0	0.0
Valuation SWAP and convertible bonds	(4.3)	(109.9)
EBT	127.6	(27.2)
Current taxes	(7.1)	(5.5)
Deferred taxes	(19.9)	(11.5)
Profit	100.6	(44.2)
Profit attributable to the shareholders of the parent company	97.3	(47.1)
per share2) Earnings	0.29	(0.16)

in EUR m	Q1 2016	Q1 2015
Interest expenses	(26.5)	(35.2)
In % of rents	~16%	~22%
Non-cash interest expenses	(0.0)	(5.0)
	(26.5)	(30.2)
Interest income	0.3	0.2
Financial result (net)	(26.2)	(30.0)

Thereof EUR (7.8m) from valuation of derivatives and EUR 3.5m from convertible bonds

1) Adjusted for Valuation of SWAPs and convertible bonds; 2) Based on weighted average shares outstanding (Q1-16: 337.4m; Q1-15: 298.6m)

» Summary balance sheet

Assets			Equity and Liabilities
in EUR m	31/03/2016	31/12/2015	in EUR m	31/03/2016	31/12/2015
Investment properties	12,692.9	11,859.1	Total equity	6,986.2	6,872.0
Other non-current assets	616.4	614.3	Financial liabilities	4,357.7	3,780.4
Deferred tax assets	327.7	325.5	Convertibles	961.4	965.4
Non current assets	13,637.0	12,798.9	Bonds	500.3	498.3
Land and buildings held for sale	328.8	66.9	Tax liabilities	46.1	37.5
Trade receivables	38.8	13.4	Deferred tax liabilities	1,128.9	1,110.2
Other current assets	96.3	159.3	Derivatives	60.0	44.8
Cash and cash equivalents	331.0	661.6	Other liabilities	391.3	391.5
Current assets	794.9	901.2	Total liabilities	7,445.7	6,828.1
Total assets	14,431.9	13,700.1	Total equity and liabilities	14,431.9	13,700.1

Investment properties represent ~88% of total assets

Strong balance sheet structure offering comfort throughout market cycles

» Focused and increasing investments into the portfolio

	Q1 2016	Q1 2015
	EUR m	EUR m
Maintenance (expensed through p&l)	17.4	19.0
Modernization (capitalized on balance sheet)	13.3	15.7
Total	30.7	34.7
Total EUR/ sqm1)	12.52	15.06
Capitalization rate	43.3%	45.2%

1) Based on the quarterly average area

» Conservative long term capital structure with <1.7% interest costs

Rating	A- / A3; stable outlook
LTV	42%
ICR1)	>5x
Ø maturity	~9 years
% secured bank debt	77%
% unsecured debt	23%
Ø interest cost	<1.7% (>80% hedged)
Key financial principles	LTV: 35-45% fully flexible regarding secured or unsecured financing

• Low leverage, long maturities and best in class rating
• Flexible financing approach to optimize financing costs
• No significant maturities until and including 2019, thereafter maturity profile evenly spread
• Convertible bonds accounted 100% as debt (deeply in the money)
• Base case LTV 2016 <40% expected

1) adjusted EBITDA/ interest expenses

» Unchanged guidance (base case)

	2015	2016e	Main drivers	Mid-term perspective4)
EPRA NAV per share (undiluted)1)2)	23.01	25 – 26	Capex upgrade, rent development, further yield compression expected based on market evidence
FFO I in EUR m	303	>360	Addition of 15k units on a net base and like-for-like rent growth (EUR ~50m in total), interest cost savings (EUR ~10m)
Dividend per share3)	0.54	~0.70	Higher FFO I, payout ratio increased from 60% to 65%
LTV	38%/43%3)	<40%	Valuation uplift from capex and further yield compression

• Like-for-like rental growth of 2.5% in 2016 expected
• Targeted disposals of ~2,000 units in 2016 provide attractive income stream
• Streamlining of portfolio successfully executed, further opportunistic institutional sales possible but depending on pricing

Note: Base case guidance: without acquisitions and opportunistic portfolio disposal; 1) Excluding any changes in goodwill impairment and valuation of financial instruments; 2) Based on currently outstanding shares; 3) Pro forma acquisitions; 4) relative perspective to individual KPI

» Strong generation of total shareholder return

Development of dividend in EUR per share Development of EPRA NAV (undiluted) in EUR per share

• Top line growth via acquisitions and operational improvements as well as refinancing/ debt paydown translates into FFO growth (CAGR 2012-2015: 24%)
• Beeing invested in the right markets delivers NAV growth over time, based on strong fundamental trends (CAGR 2012-2015: 37%)
• Via targeted modernization projects, further improvement of rents and capital growth
• NAV growth results in further LTV reduction and improvement of the risk profile

» THE BERLIN-PORTFOLIO AT A GLANCE

» Disclaimer

This presentation contains forward-looking statements including assumptions, opinions and views of Deutsche Wohnen or quoted from third party sources. Various known and unknown risks, uncertainties and other factors could cause actual results, financial positions, the development or the performance of Deutsche Wohnen to differ materially from the estimations expressed or implied herein. Deutsche Wohnen does not guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and accordingly, none of Deutsche Wohnen AG or any of its affiliates (including subsidiary undertakings) or any of such person's officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Deutsche Wohnen does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation.

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