LEG Immobilien SE

Earnings Release • Aug 30, 2013

LEG Immobilien AG

Q2 Results – 2013

30th August 2013

Disclaimer

While the company has taken all reasonable care to ensure that the facts stated in this presentation are accurate and that the opinions contained in it are fair and reasonable, this presentation is selective in nature and is intended to provide an introduction to, and an overview of the Company's business. Any opinions expressed in this presentation are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained in this presentation. Where this presentation quotes any information or statistics from any external sources, you should not interpret that the Company has adopted or endorsed such information or statistics as being accurate.

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation, and supply and demand. The Company has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and the Company does not undertake any duty to update the information and forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

This presentation does not constitute an offer or invitation to purchase or sell any shares in the Company and neither this presentation or anything in it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

Agenda

• I. Highlights H1-2013
• II. Portfolio and Operating Performance
• III. Financial Performance
• IV. Business Update and Outlook
• V. Appendix

I. Highlights H1-2013

Highlights H1-2013

Overall Company Development

• Acquisition of 3,500 units in the past months in three off-market deals
• Well on track to reach acquisition targets
• On track integration of two portfolios as of 1st August
• Strong performance of the Bocholt-portfolio (vacancy -100 bps, in-place rent +16% in re-letting within six months) serves as blue-print
• Dividend of €0.41 for 2012 (pro-rata) paid in Q3-2013

Strong Operational Performance

• In-place rent €4.92 /sqm /month (+1.9% from €4.83 in H1-2012)
• Positive momentum for H2 expected
• Occupancy at 97% (+90bps from 96.1% in H1-2012); Positive development across all segments
• Slightly higher maintenance/turn costs due to strong letting momentum
• FY-2013 capex /maintenance ratio expected to revert to historic average of approx. 50/50
• Due to good letting momentum total capex /maintenance for FY-2013 of €14 /sqm expected

Financial Performance Firmly on Track – Accelerating Rent Growth Ahead

• Rental income €178.1m (+4.0% from €171.2m)
• Adjusted EBITDA €113.4m (+4.9% from €108.1m)
• FFO I €68.4m (+10.9% from €61.7m)
• AFFO €56.7m (+32.5% from €42.8m)
• NAV €2,446.4m / €46.19 per share (+ 3.3% from €2,368.3 in Q4-2012)

II. Portfolio and Operating Performance

Portfolio Overview Rent and Occupancy Growth across All Submarkets

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

Total Portfolio
	30-Jun 2013	 (YOY)
# of units	90,894	+1.3%
In-place rent (sqm)	€4.92	+1.9%
Occupancy	97.0%	+90bps

High Growth Markets
	30-Jun 2013	 (YOY)
# of units	31,478	+3.9%
In-place rent (sqm)	€5.48	+2.9%
Occupancy	98.6%	+40bps

Stable Markets with Attractive Yields

	30-Jun 2013	 (YOY)
# of units	32,023	-0.1%
In-place rent (sqm)	€4.63	+0.8%*
Occupancy	96.3%	+130bps

* due to negative one-off effect from refinancing of subsidised loans in Q4-2012

Higher Yielding Markets
	30-Jun 2013	 (YOY)
# of units	26,004	0%
In-place rent (sqm)	€4.54	+0.9%
Occupancy	95.8%	+100bps

Stable Organic Growth – Accelerating Momentum Ahead

• New Mietspiegel (e.g. Munster, 1st July) should trigger accelerated rent growth in H2-2013
• Positive effects from consolidation of acquired portfolios in H2-2013
• Negative one-off effect from refinancing of subsidised loans in Q4-2012 (€1.2m p.a.)

Source: LEG as of 30-Jun-2013

Rising Occupancy due to Strong Tenant Demand and Improving Efficiency Occupancy Development

• LEG benefitting from favourable demand/supply environment
• Positive development across all sub-markets with strong letting performance in Green and Purple markets:
• Well-maintained asset base, good quality micro locations
• Re-organisation of the management platform also reflected in increasing productivity of letting activities
• Stable markets: 1,885 new lettings (+5.5% vs. H1-2012)
• Higher yielding markets: 1,529 new lettings (+17% vs. H1-2012)

Capex & Maintenance

Temporary Higher Maintenance Ratio due to Strong Letting Performance

III. Financial Performance

Financial Highlights H1-2013

Income Statement H1-2013

Condensed Income Statement (€ million)	2012	H1-2013	H1-2012	 Higher Rental income (+€6.9m/+4%)  Higher maintenance
Net rental and letting income	247.7	123.7	117.0	expenses (-€5.8m)  Lower vacancy costs
Net income from the disposal of investment property	-1.4	-0.7	-0.5	(+€0.7m)  Lower write-downs on receivables (€0.7m)
Net income from the valuation of investment property	120.3	0.0	0.0	 Others: e.g. aperiodic expenses in 2012 (€2m)
Net income from the disposal of real estate inventory	-1.8	-1.7	-1.0
Net income from Other services	3.0	1.5	1.2	 €1.8m Long Term Incentive
Administrative and Other expenses	-59.4	-22.5	-19.7	Plan – non-cash pass through item
Other income	1.7	0.3	1.2	 One-time costs €4.2m  Release of €2.3m provision in 2012
Operating earnings	310.1	100.6	98.2
Net finance costs	-195.6	-60.9	-110.5	 Lower cash interest (€45m vs. €48m)  Lower non-cash loan amortisation due to rising interest rates
Earnings before income taxes	114.5	39.7	-12.3
Income tax expense	-2.4	-5.0	2.0	 Deferred taxes (cash taxes:
Consolidated net profit	112.1	34.7	-10.3	+€0.2m)

Adjusted EBITDA H1-2013

€ million	2012	H1-2013	H1-2012	 Rising rental
EBITDA	318.7	104.8	102.5	income + lower vacancy costs more than offset
Net income from the valuation of investment property	-120.3	0.0	0.0	higher maintenance
Long-term incentive program (LTIP)	0.0	1.8	0.0
Non-recurring project costs	20.3	4.7	4.5	 Refinancing fees (€1.9m)  Restructuring costs
Extraordinary and prior-period expenses and income	1.2	-0.3	-0.4	 Other one-time fees
Net income from the disposal of investment property	1.4	0.7	0.5	 Loss related to only one special situation
Net income from the disposal of real estate inventory	1.8	1.7	1.0	 Winding down of former
Adjusted EBITDA	223.1	113.4	108.1	development business  Disposals at
				premium to book value  Inventories: €15.9m

FFO Calculation H1-2013

€ million	2012	H1-2013	H1-2012
Adjusted EBITDA	223.1	113.4	108.1
Cash interest expenses and income	-90.1	-45.2	-48.1	 Lower interest costs post refinancing (Ø3.3% H1- 2013 vs. 3.6% in H1- 2012)
Cash income taxes	3.5	0.2	1.7	 Tax reimbursement in Q1-2012 (€1.5m)
FFO I (not including disposal of investment property)	136.5	68.4	61.7
Net income from the disposal of investment property	-1.4	-0.7	-0.5
FFO II (including disposal of investment property)	135.1	67.7	61.2
Capex	-41.5	-11.7	-18.9
Capex-Adjusted FFO I (AFFO)	95.0	56.7	42.8	 €1.4m lower capex & maintenance (YOY)

FFO Bridge H1-2013

Focus: Cash Effective Interest Expense H1-2013

€ million	H1-2013	H1-2012
Reported interest expense	65.4	112.4
Interest expense related to loan amortisation	-13.8	-33.9
Refinancing fees	-2.0	-0.1
Prepayment penalties	0.0	-25.8
Interest on shareholder loans	-0.2	-0.5
Interest charges relating to valuation of assets/liabilities	-1.0	-0.1
Leasing related interest expense	-0.8	-0.7
Interest expenses related to changes in pension provisions	-1.9	-2.2
Interest income	-0.6	-0.9
Cash effective interest expense	45.2	48.1

EPRA-Net Asset Value H1-2013

€ million	H1-2013	2012
Equity*	2,187.6	2,085.5	 €40.5m increase from
Note: Shareholder loans to be converted in to equity		40.5	shareholder debt-to equity Swap in
Effect of exercising options, convertible loans and other rights	0.0	0.0	Q1-2013
NAV	2,187.6	2,085.5
Fair value of financial derivatives	52.6	89.7	 Rising interest rates with positive impact
Deferred taxes	206.2	193.1	on valuation of interest hedges
EPRA NAV	2,446.4	2,368.3
Number of shares outstanding (m)	52,963	52,963
EPRA NAV per share in €	46.19	44.72
* including minorities			 No portfolio revaluation during FY-2013  Next appraisal: end 2013

Balance Sheet H1-2013

Strong Balance Sheet Secures Defensive Profile and Paves Way for Growth

€ million	H1-2013	2012
Investment property	4,946.2	4,937.1	 Capex €11.7m
Other non-current assets	111.2	114.1
Non-current assets	5,057.4	5,051.2
Receivables and other assets	61.5	50.7
Cash and cash equivalents	151.0	133.7
Current assets	212.5	184.4
Assets held for disposal	2.6	2.2
Total Assets	5,272.5	5,237.8
Equity	2,187.6	2,085.5
Non-current financial liabilities	2,381.8	2,102.9
Other non-current liabilities	455.3	480.2
Non-current liabilities	2,837.1	2,583.1
Current financial liabilities	122.6	396.8	 Closing of several
Other current liabilities	125.2	172.4	refinancing in Q1- 2013
Current liabilities	247.8	569.2
Total Equity and Liabilities	5,272.5	5,237.8

LTV H1-2013

Ample Liquidity for Acquisitions and Headroom to Enhance LTV (max.55%)

€ million	H1-2013	2012
Financial debt	2,504.4	2,499.7
Cash & cash equivalents	-151.0	-133.7
Net Debt	2,353.4	2,366.0
Investment properties	4,946.2	4,937.1
Properties held for sale	2.6	2.2
Prepayment for investment properties	5.7	0.0
	4,947.7	4,939.3
Loan to Value (LTV) in %	47.50	47.90

• Liquidity for acquisitions of c. 10,000 units (3,500 already signed)
• LTV headroom for total c. 16,000 units

Financing Structure H1-2013

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

No major refinancing before 2016

IV. Business Update and Outlook

Business Update

Positive Momentum for Acquisitions Persists

Acquisitions:

• Successful signing of approx. 3,500 units in core markets YTD (off-market transactions)
• Currently another opportunity in advanced stages of due diligence
• Pipeline of more than 20,000 units under review
• Well on track to reach FY-2013 target of 5,000 units / total of 10,000 units by end of FY-2014
• Financial flexibility and broad presence in core market are key success factors

Ongoing strong letting performance:

• Rising demand for LEG's properties across all segments
• New letting in the first six months: Green 1,885 (+5.5% YOY), Purple 1,529 (+17% YOY)
• Good quality asset base, rising productivity of staff post reorganisation (specialisation)
• Selective modernisations:
• Case study: Gelsenkirchen/Eichkamp-Settlement (260 units)
• Q4-2011: In-place rent €2.66 /sqm, vacancy 43%
• Q3-2013: In-place rent €4.01 /sqm, vacancy 8%

Financing:

• Successful negotiations on the financing of signed acquisitions
• Decreasing credit margins due to re-opening of CMBS market, etc.

Acquisitions in H1-2013 – Strong Transaction Momentum

€6.12 /sqm (+16%)

Track Record	Bocholt	Dortmund, Essen, Bochum	Osnabruck, Dusseldorf, Minden	Greater Dusseldorf Region / Solingen
Closing Units Price Initial FFO Yield	mainly Dec.-2012 1,244 na >10%	01-Aug.-2013 ~2,200 na >8%	01-Aug.-2013 538 ~€23m* >8%	01-Oct.-2013 829 ~€34m >10%
Closing: - In place rent /sqm - Vacancy rate	€5.26 /sqm 3.9%	€4.74 /sqm 8.2%	€4.92 /sqm 8.7%	€4.92 /sqm 5.6%
Target: - In place rent /sqm - Vacancy rate	Year 5 €6.08 /sqm 1.5%	Year 5 €5.25 /sqm 4.3%	Year 5 €5.85 /sqm 4.7%	Year 5 €5.27 /sqm 4.4%
Track Record: - In place rent /sqm - Re-letting	€5.36 /sqm

Source: * excl. transaction costs

- Vacancy rate

Attractive Market Fundamentals Promise Continued Defensive Growth

2013	Guidance
Rental income:	Organic growth in 2013 > 2%
Maintenance/Capex:	approx. €80-82m (excl. acquisitions) or approx. €14 /sqm
Acquisitions:	10,000 units by end 2014
FFO I:	€138.5m - €141.5m (vs. €133m in 2012)
Dividend	65% of FFO I

2014	Guidance
FFO I	+10% (excl. future acquisitions)

V. Appendix

Mietspiegel Overview Expected New Mietspiegel in 2013

Expected Time	Growth Market1	Market1 Stable	Higher Yielding1	Total Portfolio1
Q1 – 2013	4,881 units (mainly Cologne)	11,931 units (mainly Dortmund)	1,390 units	18,202 units
Q2 – 2013	6,113 units (mainly Munster)	682 units	692 units	7,487 units
Q3 – 2013	24 units		1,158 units	1,182 units
Q4 – 2013	9,135 units (mainly Bonn+Dusseldorf)	228 units	1,155 units	10,518 units
Total	20,153 units	12,841 units	4,395 units	37,389 units

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

1) Sub-portfolios also include restricted units

LEG Share Information

Basic Data

• Prime Standard, Frankfurt Stock Exchange
• Total no. of shares: 52,963,444
• Ticker symbol: LEG
• WKN: LEG111/ ISIN: DE000LEG1110

• Indices: MDAX, FTSE EPRA/NAREIT, GPR 250

• Free float 50% (plus 1 share)

• Well-balanced shareholder structure with many property specialists at time of IPO

Source: LEG

Financial Calendar

30.08.2013	Quarterly Report Q2 as of 30th June 2013
29.11.2013	Quarterly Report Q3 as of 30th September 2013

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

Market	Residential Units	GAV Residential Assets (€m)	% of Total Residential GAV	GAV/ sqm (€)	In-Place Rent Multiple	GAV Commercial/ Other Assets (€m)	Total GAV
High Growth Markets	31,478	2,137	46%	1,030	15.9x	180	2,316
Stable Markets with Attractive Yields	32,023	1,421	31%	686	12.8x	82	1,503
Higher Yielding Markets	26,004	1,002	22%	623	11.9x	43	1,045
Subtotal NRW	89,505	4,559	98%	792	13.9x	305	4,864
Portfolio outside NRW	1,389	79	2%	853	14.3x	15	94
Total Portfolio	90,894	4,638	100%	793	13.9x	319	4,958
Other Assets							41
Total (Incl. Landbank and DevCo)							4,999

Contact

LEG Immobilien AG – Investor Relations

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

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

Hans-Böckler-Str. 38 40476 Dusseldorf