Vonovia SE

Investor Presentation • Jun 20, 2016

Investor Presentation

Vonovia at a Glance

€23.8bn gross asset value¹

• Europe's second largest real estate company by market capitalization (~€15bn)
• Only residential company in German Blue Chip Index DAX
• Proven track record of sustainable and growing operating cash flow (FFO) and dividends
• German-wide footprint
• Industrialized approach with high degree of internal service provision and leveraging of economies of scale
• Continuously increasing extension business to supplement organic growth (e.g. own caretaker and craftsmen organization, smart metering)

	2015	2016(E)
L-f-l rental growth	2.9%	2.8% - 3.0%
Vacancy rate	2.7%	~2.7%
Rental income	€1,415m	€1,520m - €1,540m
FFO 1 (€ million)	€608m	€720m - €740m
FFO 1 (€/share)	€1.30	€1.55 - €1.59
EPRA NAV €/share	€30.02	€30.00 - €31.00 (before yield compression)
DPS	€0.94	€1.05 (to be proposed to AGM)

¹ Q1 2016

Vonovia History

• Seed portfolios of today's Vonovia have origin in public housing provided by government, large employers and similar landlords with a view towards offering affordable housing
• At beginning of last decade, private equity invested in German resi on a large scale including into what is Vonovia today (mainly Deutsche Annington and Gagfah then)
• IPO in 2013
• Final exit of private equity in 2014
• Current free float of ca. 92% based on German Stock Exchange definition (Norges stake of ca. 8% not counted as free float)

Source: Factset, company data

German residential market: important pillar of the German economy

• Germany and its resilient economy provide a comparatively safe harbor for foreign investments
• Due to its regulatory structure, the German residential rental market is largely immune to macroeconomic fluctuations
• With a GDP contribution of more than €430bn the German real estate industry represents almost 20% of Germany's GDP
• The net asset value of residential buildings is more than €4.2 trillion (valued at replacement costs)

	Reputation & Customer Satisfaction
al n o diti Tra	1	Property Mgmt. Strategy	Systematic optimization of operating performance and core business productivity through leveraging scaling effects High degree of standardization and industrialization throughout the entire organization
	2	Financing Strategy	Ensure well-balanced financing mix and Acquisition 5 maturity profile with low financing costs, Strategy investment grade credit rating and adequate liquidity at all times Fast and unfettered access to equity and debt capital markets at all times
	3	Portfolio Mgmt. Strategy	Continuous review of on- and off-market opportunities to lever economies of scale and apply Portfolio optimization by way of tactical strategic pillars 1-4 to a growing acquisitions and non-core/non-strategic portfolio disposals to ensure exposure to strong local markets All acquisitions must meet the four stringent acquisition criteria Pro-active development of the portfolio through investments to offer the right products in the right markets and on a long-term basis
e v ati v o n n I	4	Extension Strategy	Expansion of core business to extend the value chain by offering additional services and products that are directly linked to our customers and/or the properties Insourcing of services to ensure maximum process management and cost control

Property Management Strategy

• Economies of scale evident in cost per unit
• Incremental cost per unit for new acquisitions tend to be substantially lower

Cost per unit defined as: (Rental income – adj. EBITDA Rental + Maintenance) / average number of units

Financing Strategy

CMBS overview as of March 31, 2016
Name	Amount	Rate	Maturity
GRF-1	€1,845m	2.80%	Aug 2018
GRF-2	€658m	2.69%	Nov 2018
Taurus	€1,029m	3.35%	May 2018
Total	€3,532m	2.94%

Vonovia's finance structure is based on

• a broad mix funding sources
• the reduction of future refinancing risks
• Refinancing of 2018 GAGFAH legacy CMBS will result in a well-balanced maturity profile.
• Refinancing volume of approx. €7 bn in the upcoming three years brings opportunity for further sustainable capital structure optimization
• Proceeds of €3bn Dec 2015 EMTN have been/will be used for
• DW share purchase
• prepayment of secured instruments
• refinancing of upcoming €0.7bn bond expiring July 2016 and
• general corporate purposes.
• On June 6, 2016, VNA issued two €500m bonds with an average maturity of eight years and a coupon of 1.19% (more than three times oversubscribed).

Portfolio Management Strategy - Total Return Matrix

Clear view of the individual local markets Tool for acquisition, investment and disposal decisions Expected value growth in % Current return in % Vonovia Market (Top 100 cities) Südewo Toni Vitus Franconia Gagfah DeWAG DA old Vonovia 2013 2016E Vacancy rate (%) 3.5 ~2.7 In-place rent (€/sqm) 5.40 5.84¹ Fair value (€/sqm) 901 1,075¹ No. of cities/ municipalities 533 673 Avg. no. of units per city/ municipality 329 497 ¹ 2016 Q1 actuals

Note: The chart above does not take into consideration object quality or micro location.

Portfolio Management Strategy - Investments

• Growing investments at a minimum 7% yield (unlevered)
• New initiatives and space creation with increasing significance
• Earnings impact mostly one year following the investment

* According to Program Year

Extension Strategy - Innovation as Growth Driver

• Continuous flow of innovative projects that are all immediately linked to the apartment or customer/rental contract

Acquisition Strategy

Roadshow Asia June 2016

Churches and other

0.6

Rating neutral

	FY 2015 actuals	Guidance 2016 old	Guidance 2016 new
L-f-l rental growth	2.9%	2.8-3.0%	2.8-3.0%
Vacancy	2.7%	~3%	~2.7%
Rental Income	€1,415m	€1,500-1,520m	€1,520-1,540m
FFO1	€608m	€690-710m	€720-740
FFO1/share (eop NOSH)	€1.30	€1.48-1.52	€1.55-1.59
EPRA NAV/share	€30.02	€30-31	€30-31
Adj. NAV/share	€24.19	€24-25	€24-25
Maintenance	€331m	~€330m	~€330m
Modernization	€356m	€430-500m	€430-500m
Privatization (#)	2,979	~2,400	~2,400
FMV step-up (Privatization)	30.5%	~30%	~30%
Non-core (#)	12,195	opportunistic	opportunistic
FMV step-up (Non-Core)	9.2%	~0%	~0%
Dividend/share	€0.94	~70% of FFO 1	€1.05 (+12% y-o-y)

Strong operational performance

• Industrialization effects achieved faster and better than originally anticipated
• In-place rent of €5.84 (+5.6% y-o-y). L-f-l rent growth of 2.9% y-o-y
• Adjusted EBITDA Operations¹ of €276.1m or €776 per unit (+6.4% y-o-y)
• FFO 1 of €186.3m or €0.40 per share (up 26% on a per-share basis)
• EPRA NAV per share of €30.15; adj. NAV per share of €24.32

Guidance Increase for 2016 based on Q1 operational excellence

• Rental income €1,520m €1,540m
• Vacancy rate ~2.7%
• FFO €720m €740m (€1.55 €1.59 per share; +21% y-o-y)
• DPS €1.05 (+12% y-o-y)

Investment Program 2016 rolled out and underway

• €430m €500m investment volume
• Program fully on track with €117m of projects already underway
• Increasing focus of new initiatives and space creation

Financing further improved

• Successful placement of bonds with total volume of €1bn at an average coupon rate of 1.19% p.a.
• Refinancing of existing financial liabilities at currently low interest rates

¹ Adjusted EBITDA Operations = adj. EBITDA Rental + adj. EBITDA Extension + adj. EBITDA Other Q1 2015 per share data is TERP-adjusted

			Q1 2016	Q1 2015	Delta
	In-place rent	€/month/sqm	5.84	5.53	5.6%
	In-place rent l-f-l	€/month/sqm	5.76	5.60	2.9%
+6.4% per unit	L-f-l rent growth	%	2.9	2.6	+0.3pp
(€776 vs. €729)	Vacancy rate	%	2.8	3.4	-0.6pp
	Rental income	€m	392.0	263.6	48.7%
	Adj. EBITDA Operations	€m	276.1	182.5	51.3%
	of which Adj. EBITDA Rental	€m	269.0	177.1	51.9%
	of which Adj. EBITDA Extension	€m	7.6	5.5	38.2%
+11.1% per unit	of which Adj. EBITDA Other	€m	-0.5	-0.1	---
(€523 vs. €471)	FFO 1	€m	186.3	118.0	57.9%
	FFO 1 per share (eop NOSH)	€	0.40	0.32	26.1%
	FFO 1 per share (avg. NOSH)	€	0.40	0.38	5.2%
	AFFO	€m	171.7	99.7	72.2%
	Adj. EBITDA Sales	€m	35.0	9.5	---
	Adj. EBITDA (Total)	€m	311.1	192.0	62.0%
	FFO 2	€m	195.1	125.2	55.8%
+2.0% per sqm
(€1,075 vs. €1,054)			March 31, 2016	Dec. 31, 2015	Delta
	Fair value of real estate portfolio	€m	23,814.4	24,157.7	-1.4%
	EPRA NAV	€/share	30.15	30.02	0.4%
	Adj. EPRA NAV	€/share	24.32	24.19	0.5%
	LTV	%	45.8	46.9	-1.1pp

Q1 2015 per share data is TERP-adjusted

All per share numbers as per end of respective period: Q1 2016 = 466.0m; Q1 2015 = 354.1m shares

Growing Adj. EBITDA Operations

• Adjusted EBITDA Operations margin of 70.3% in Q1 2016, up from 69.2% in Q1 2015
• Excluding expensed repairs and maintenance and including the full platform costs, the adj. EBITDA margin was 85.2%

Wrap-Up

Well positioned to benefit from favorable fundamentals of the German residential market

Classical business accompanied by value-enhancing innovations and industrialization along the value chain

Proven track-record in operational excellence and shareholder return

Unique investment vehicle to participate in German residential growth and value enhancement due to Vonovia's size and liquidity

APPENDIX

VNA Shares

Securities

	Share information
	First day of trading	July 11, 2013
	Number of shares outstanding	466 million
	Free float based on Deutsche Börse definition	92.16%
	ISIN	DE000A1ML7J1
	Ticker symbol	VNA
	Share class	Registered shares with no par value
	Listing	Frankfurt Stock Exchange
9,7	Market segment	Regulated Market, Prime Standard
British Land	Major indices	DAX; Stoxx Europe 600; MSCI Germany; GPR 250; FTSE EPRA/NAREIT Europe Index

Market cap as per early June

Maintenance Expense and Capitalized Maintenance vs. Modernization

• Reactive maintenance of €73.5m (€3.31 per sqm) in Q1 2016 with €58.6m for maintenance expense and €14.9m for capitalized maintenance
• Pro-active modernization investments of €51.9m (€2.34 per sqm) in Q1 2016 in the context of our 2016 modernization and investment program

€m	Q1 2016	Q1 2015	Delta	€/sqm	Q1 2016	Q1 2015	Delta
Expenses for maintenance	58.6	43.8	33.8%	Expenses for maintenance	2.64	2.78	-5.0%
Capitalized maintenance	14.9	18.5	-19.5%	Capitalized maintenance	0.67	1.18	-43.2%
Total	73.5	62.3	18.0%	Total	3.31	3.96	-16.4%
Modernization Investments	51.9	35.2	47.4%	Modernization investments	2.34	2.23	4.9%

Maintenance or Modernization

	Illustrative Flow of Funds
	Rental Income
-	Maintenance Expense
-	Operating expenses ("Platform costs")
+	adj. EBITDA Extension and Other
=	Adj. EBITDA Operations
-	Interest
-	Current Income Tax Rental
=	FFO 1
-	Capitalized Maintenance
=	AFFO

MAINTENANCE

• Allocation between expensed maintenance and capitalized maintenance is a major swing factor in operating margin
• Regardless of the capitalization rate, however, both combined are largely governed by German Civil Code §558 and essentially protect future EBITDAs as they are reactive, non-discretionary measures.
• Represent what is required to broadly maintain the property value.

+ cash from sales, financing

Investments

Modernization & Space Creation

FFO per Share up 26% y-o-y

First-time disclosure of FFO attributable to minorities

€m (unless indicated otherwise)	Q1 2016	Q1 2015	Delta
Adj. EBITDA Operations	276.1	182.5	51.3%
FFO interest expense	-86.0	-63.2	36.1%
Current income tax (Operations)	-3.8	-1.3	192.3%
FFO 1	186.3	118.0	57.9%
of which attributable to shareholders	173.3	110.3	57.1%
of which attributable to hybrid investors	10.0	2.8	257.1%
of which attributable to minorities	3.0	4.9	-38.8%
Capitalized maintenance	-14.6	-18.3	-20.2%
AFFO	171.7	99.7	72.2%
Current income tax (Sales)	-26.2	-2.3	>100%
FFO 2	195.1	125.2	55.8%
FFO 1 € / share	0.40	0.32	26.1%
AFFO € / share	0.37	0.27	37.5%

Q1 2015 per share data is TERP-adjusted

EPRA NAV Broadly Unchanged - As Expected

No portfolio revaluation in Q1 (next portfolio valuation is at year end)

€m (unless indicated otherwise)	March 31, 2016	Dec. 31, 2015	Delta
Equity attributable to Vonovia's shareholders	10,628.4	10,620.5	0.1%
Deferred taxes on investment properties and assets held for sale	3,217.8	3,241.2	-0.7%
Fair value of derivative financial instruments 1	268.9	169.9	58.3%
Deferred taxes on derivative financial instruments	-66.9	-43.4	54.1%
EPRA NAV	14,048.2	13,988.2	0.4%
Goodwill	-2,716.6	-2,714.7	0.1%
Adj. EPRA NAV	11,331.6	11,273.5	0.5%
EPRA NAV €/share	30.15	30.02	0.4%
Adj. EPRA NAV €/share	24.32	24.19	0.5%

1 Adjusted for effects from cross currency swaps

Further LTV Reduction

€m (unless indicated otherwise)	March 31, 2016	Dec. 31, 2015	Delta
Non-derivative financial liabilities	14,705.0	14,939.9	-1.6%
Foreign exchange rate effects	-140.4	-179.4	-21.7%
Cash and cash equivalents	-3,146.2	-3,107.9	1.2%
Net debt	11,418.4	11,652.6	-2.0%
Sales receivables	-295.3	-330.0	-10.5%
Additional loan amount for outstanding acquisitions	---	134.9	n/a
Adj. net debt	11,123.1	11,457.5	-2.9%
Fair value of real estate portfolio	23,814.4	24,157.7	-1.4%
Fair value of outstanding acquisitions	---	240.0	n/a
Shares in other real estate companies	460.6	13.7	>100%
Adj. fair value of real estate portfolio	24,275.0	24,411.4	-0.6%
LTV	45.8%	46.9%	-1.1pp

Accounting treatment:

• Deutsche Wohnen shares are accounted for under "available for-sale securities" in IFRS (in non-current assets)
• Initial inclusion at purchase cost of €405.5 million
• Accounting on a mark-to-market basis, with adjustments to fair market value accounted for in "other comprehensive income"

LTV treatment

Included with market value in LTV denominator

FFO interest expense treatment

FFO interest expense includes interest expense for share purchase (€~6m) and would include any dividend payments (€~9.1m¹)

Vonovia stake2
# shares	16.8m
Avg. purchase price per share	€24.10
Market value	€500.4m
Value mark-up	€95.1m
Premium vs purchase	23.5%

¹ Based on current 2015 DPS guidance by Deutsche Wohnen ² As of June 7, 2016

Action-driven Portfolio Clustering

• More than 50% of current portfolio in Upgrade Buildings and Optimize Apartments cluster offer significant investment potential for sustainable organic growth
• KPIs of Strategic Clusters underline strength of Vonovia's core portfolio

March 31, 2016	Residential Units	In-place rent	Vacancy Rate	Fair value	Fair value	Multiple
		(€/sqm)	(%)	(€bn)	(€/sqm)	(in-place rent)
Operate	125,556	5.92	2.4	8.7	1,063	14.8
Upgrade buildings	102,752	5.81	2.3	6.9	1,094	15.8
Optimize apartments	73,413	6.08	2.2	5.7	1,207	16.9
Subtotal Strategic Clusters	301,721	5.93	2.3	21.3	1,108	15.7
Non-strategic	13,570	4.74	6.8	0.5	589	11.0
Privatize	18,819	5.85	4.5	1.5	1,165	17.0
Non-core	9,857	4.50	10.0	0.3	518	10.8
Total	343,967	5.84	2.8	23.7	1,075	15.5

Sales Program Fully on Track

• Q1 2016 sales mostly related to the LEG portfolio sale announced in Q4 2015
• Excluding sale to LEG, Q1 sales results were in line with previous year

€m (unless indicated otherwise)	Q1 2016	Q1 2015	Q1 2016	Q1 2015	Q1 2016	Q1 2015
	Privatization		Non-core/Non-strategic		Total
No. of units sold	890	553	14,661	1,936	15,551	2,489
Income from disposal	73.8	51.4	616.7	71.6	690.5	123.0
Fair value of disposal	-56.4	-37.6	-594.3	-71.0	-650.7	-108.6
Adj. profit from disposal	17.4	13.8	22.4	0.6	39.8	14.4
Fair value step-up (%)	30.9%	36.7%	3.8%	0.8%

Rene Hoffmann Head of Investor Relations Vonovia SE Philippstr. 3 44803 Bochum Germany

+49 234 314 1629 rene.hoffmann@vonovia.de investorrelations@vonovia.de www.vonovia.de

Contact Financial Calendar 2016

June 9	Deutsche Bank GSA Conference, Berlin
June 20 - 23	EPRA Asia Roadshow
August 2	Interim report H1 2016
September 14	BAML Global Real Estate Conference, NYC
September 19	Berenberg / Goldman Sachs German Corporate
	Conference 2016, Munich
September 20	Baader Investment Conference, Munich
November 30	UBS Global Real Estate CEO / CFO Conference,
	London
November 3	Interim report 9M 2016

VONOVIA
---------	--	--

Bridge to Adjusted EBITDA (€m)	Q1 2016	Q1 2015	Change (%)
Profit for the period	79.2	30.3	161.4
Net interest result	131.3	98.1	33.8
Income taxes	42.8	22.8	87.7
Depreciation	4.4	2.0	120.0
Net income from fair value adjustments of investment properties	NA	NA	NA
EBITDA IFRS	257.7	153.2	68.2
Non-recurring items	26.7	38.9	-31.4
Total period adjustments from assets held for sale	26.7	-0.1	na
Adjusted EBITDA	311.1	192.0	62.0
Adjusted EBITDA Sales	-35.0	-9.5	268.4
Adjusted EBITDA Other	0.5	0.1	400.0
Adjusted EBITDA Extension	-7.6	-5.5	38.2
= Adjusted EBITDA Rental	269.0	177.1	51.9
Adjusted EBITDA Extension	7.6	5.5	38.2
Adjusted EBITDA Other	-0.5	-0.1	400.0
Interest expense FFO	-86.0	-63.2	36.1
Current income taxes FFO 1*	-3.8	-1.3	192.3
=FFO 1	186.3	118.0	57.9
Capitalised maintenance	-14.6	-18.3	-20.2
= AFFO	171.7	99.7	72.2
Current income taxes Sales*	-26.2	-2.3	na
FFO 2 (FFO incl. Adjusted EBITDA Sales/current income taxes sales)	195.1	125.2	55.8
FFO 1 per share in €**	0.40	0.32	26.1
AFFO per share in €**	0.37	0.27	37.5
Number of shares	466,001	354,106	31.6

• EBITDA increase mainly driven by rental business
• Adjusted EBITDA Rental reflects acquisitions as well as operational performance
• The increase of the adjusted EBITDA Extension reflects our expansion strategy to the extent they are not accounted for under rental income
• Increase of adjusted EBITDA Sales mainly due to higher Non-core sales volume and higher Non-core step-ups

€m	Q1 2016	Q1 2015	Change (%)
Income from property letting	556.6	380.9	46.1	Increase mainly acquisition-related, additionally in
Other income from property management	9.3	5.9	57.6	place rent on a like-for-like basis increased by 2.9%; additionally vacancy rate decreased by 0.6pp
Income from property management	565.9	386.8	46.3
Income from disposal of properties	690.5	123.0	461.4
Carrying amount of properties sold	-683.0	-115.8	489.8
Revaluation of assets held for sale	5.6	7.3	-23.3	Increase due to higher Non-core Sales volume, including LEG portfolio sale of 13,570 units
Profit on disposal of properties	13.1	14.5	-9.7
Net income from fair value adjustments of investment properties	na	na	na
Capitalized internal expenses	49.4	26.5	86.4	Q1/2016 increase in-sourcing effect of craftsmen organization
Cost of materials	-244.1	-171.8	42.1	and larger volume of maintenance and modernization work
Personnel expenses	-92.9	-60.7	53.0
Depreciation and amortisation	-4.4	-2.0	120.0	Ramp-up from 5,537 to 6,683 employees leads to increased personnel expenses which primarily result from TGS growth
Other operating income	23.6	19.8	19.2
Other operating expenses	-57.3	-61.9	-7.4
Financial income	9.5	0.7	na
Financial expenses	-140.8	-98.8	42.5	Increase basically driven by issuing EMTN Bond of €3.0bn in December 2015
Earnings before tax	122.0	53.1	129.8
Income taxes	-42.8	-22.8	87.7
Profit for the period	79.2	30.3	161.4
Attributable to:
Vonovia's shareholders	56.5	19.6	188.3
Vonovia's hybrid capital investors	7.4	7.4	0.0
Non-controlling interests	15.3	3.3	363.6	The figures from 2015 are only comparable to a limited extent due to acquisitions made during the
Earnings per share (basis and diluted) in €	0.12	0.06	92.1	fiscal year 2015

Balance Sheet (1/2)

€m		Mar 31, 2016	Dec 31, 2015	Change (%)
	Intangible Assets	2,741.3	2,724.0	0.6
	Property, plant and equipment	76.4	70.7	8.1
	Investment properties	23,720.6	23,431.3	1.2
	Financial assets	630.1	221.7	184.2
	Other assets	27.4	158.5	-82.7
	Income tax receivables	0.1	0.1	0.0
	Deferred tax assets	72.3	72.3	0.0
Total non-current assets		27,268.2	26,678.6	2.2
	Inventories	3.8	3.8	0.0
	Trade receivables	319.6	352.2	-9.3
	Financial assets	2.0	2.0	0.0
	Other assets	160.0	113.4	41.1
	Income tax receivables	20.8	23.1	-10.0
	Cash and cash equivalents	3,146.2	3,107.9	1.2
	Assets held for sale	51.2	678.1	-92.4
Total current assets		3,703.6	4,280.5	-13.5
Total assets		30,971.8	30.959.1	0.0

Balance Sheet (2/2)

€m	Mar 31, 2016	Dec 31, 2015	Change (%)
Subscribed capital	466.0	466.0	0.0
Capital reserves	5,892.5	5,892.5	0.0
Retained earnings	4,346.0	4,309.9	0.8
Other reserves	-76.1	-47.9	58.9
Total equity attributable to Vonovia's shareholders	10,628.4	10,620.5	0.1
Equity attributable to hybrid capital investors	1,011.5	1,001.6	1.0
Total equity attributable to Vonovia's shareholders and hybrid capital investors	11,639.9	11,622.1	0.2
Non-controlling interests	258.5	244.8	5.6
Total equity	11,898.4	11,866.9	0.3
Provisions	647.2	612.9	5.6
Trade payables	0.8	0.9	-11.1
Non-derivative financial liabilities	13,334.1	13,951.3	-4.4
Derivatives	239.3	144.5	65.6
Liabilities from finance leases	94.9	94.9	0.0
Liabilities to non-controlling interests	39.0	46.3	-15.8
Other liabilities	27.6	25.9	6.6
Deferred tax liabilities	2,546.9	2,528.3	0.6
Total non-current liabilities	16,926.8	17,405.0	-2.7
Provisions	419.9	429.5	-2.2
Trade payables	85.3	91.6	-6.9
Non-derivative financial liabilities	1,370.9	988.6	38.7
Derivatives	61.5	58.8	4.6
Liabilities from finance leases	4.6	4.4	4.5
Liabilities to non-controlling interests	17.5	9.8	78.6
Other liabilities	186.9	104.5	78.9
Total current liabilities	2,146.6	1,687.2	27.2
Total liabilities	19,073.4	19,092.2	-0.1
Total equity and liabilities	30,971.8	30,959.1	0.0

Including negative effects from cash flow hedges in the amount of € 64.3 million. On the other hand, equity increased by € 36.1 million after deferred taxes due to the book gains associated with the acquired shares in Deutsche Wohnen.

Valuation effect as a result of the development of the underlying interest rates

The decrease of the current and non-current financial liabilities is mainly explained by an unscheduled repayment of a structured loan with AXA (€ 155 million) €500m 6-year and €500m 10-year Fixed Rate Notes – 06 June 2016

Issuer:	Vonovia Finance B.V.	Type:	Senior Unsecured		Allocations by Geography
Guarantor:	Vonovia SE	Launch date:	06 June 2016	6-year	10-year
Rating:	BBB+ (stable) by S&P	Maturity:	10 June 2022 /	Other Nordics 2% 3% Switzerland	Switzerlan Nordics d 4%
Notional:	€500m / €500m		10 June 2026	6% Benelux UK /	5% Benelux
Coupon:	0.875% / 1.500%	Reoffer spread:	MS+87bp / MS+108bp	10% Ireland 27%	5% Southern
		Bookrunners:	Commerzbank / Credit Suisse	Germany / Southern Austria Europe	Europe 6%
			SG CIB / UniCredit	21% 14%	UK / Germany / Ireland

Key features of new issue:

• Vonovia SE is Germany's leading residential real estate company. Vonovia currently owns and manages some 370,000 residential units in attractive cities and regions throughout Germany.
• Vonovia's residential units are located in settlements at approximately 700 locations in Germany.
• Covenants:
• 1) Total Debt / Total Assets ≤ 60%
• 2) Secured Debt / Total Assets ≤ 45%
• 3) Interest Coverage Ratio ≥ 1.8x
• 4) Total Unencumbered Assets / Unsecured Debt ≥ 125%
• The proceeds from this trade are intended for general corporate purposes including the repayment of existing secured debt with the aim to increase the unencumbered asset ratio to min. 50%.

Bookbuilding / Spread discovery:

Outcome:

• A very successful outcome for the issuer with final pricing at the tight end of guidance
• IPTs: MS+100-105bp
• Guidance: MS+90bp (+/-3bp) MS+110bp (+/-2bp)
• The final spreads imply new issue premiums of only ca. 2bp and ca. 10bps respectively which compares well with competing transactions.
• Well diversified and high quality orderbook of €3.4bn

MS+120-125bp

• The largest share went to UK investors with 28% over both tranches closely followed by French (26%) and German investors (18%).
• Fund Managers showed the highest demand (74% over both tranches). Insurance and Pension Funds bought 14% of the deal.
• On a go/no-go call held at 9:45CET, based on a positive market opening, the decision was taken to launch the transaction. The dual-tranche transaction, with two EUR 500m "no-grow" tranches, was announced at around 9:55CET.
• With books approaching EUR 3bn skewed to the 6-year tranche guidance was released at MS+90bp (+/-3bp) and MS+110bp (+/-2bp) at 12:40CET.
• The books were closed at 12:50CET.

France 17% 14% France 35% Ireland 29% Austria 14% Other 2%

Allocations by Investor Type

Orderbook –Ticket Size

Ticket size	# orders
	6-year	10-year
<€1m	39	15
€1m-5m	72	69
€5m-10m	37	29
€10m-20m	24	26
€20m-50m	27	19
€50m-100m	4	4
Average ticket size	€8.7m	€9.1m

Vonovia SE (BBB+ stable)

€500m 6-year and €500m 10-year Fixed Rate Notes – 06 June 2016

€ Mid-Swaps Development d-o-d

EUR Mid-Swaps 10-year
30-May-16	31-May-16	01-Jun-16	02-Jun-16	03-Jun-16	06-Jun-16
Monday	Tuesday	Wednesday	Thursday	Friday	Monday
0.568%	0.539%	0.549%	0.532%	0.487%	0.514%

EUR Mid-Swaps 6-year
30-May-16 31-May-16 01-Jun-16 02-Jun-16 03-Jun-16 06-Jun-16
Monday	Tuesday	Wednesday	Thursday	Friday	Monday
0.113%	0.100%	0.106%	0.096%	0.064%	0.086%

Comments

• Since the beginning of the year the swap levels have tightened significantly
• As of now the levels are almost at record-lows
• In the course of the last week swap rates have come down by 5bp and 3bp for the 10- and 6- year tenor driven to some extent by the start of the ECB buying program of corporate bonds on 8 June and the overall accommodative monetary policy
• Compared to its secondary curve Vonovia priced its 6-year tranche with a small new issue premium (NIP) of only ca. 2bp
• Given the fairly flat yield curve of Vonovia's secondary bonds and the overall low yield environment the curve for the 10-year tranche steepened a little
• On average Vonovia achieved a NIP of ca. 6bp which compares well with competing transactions
• Two other corporate deals have been in the market together with Vonovia. Air Liquide (A3/A-) raised €3bn in a five trance transaction with tenors between 3 and 12 years. The grid operator TenneT (A3/A-) priced a €1bn two tranche transaction with tenors of 10 and 20 years
• Overall, Vonovia managed with this transaction a clear success and outperformed the market

EMTN Issuance costs Economies of scale

• We managed to establish ourself as a first class frequent issuer on the capital markets since our IPO.
• The stringent execution of our banking strategy, accompanied by processes such as our EMTN program - which are focussed on economies of scale, results in ongoing cost reduction.
• Having a strong team in place, in the current EMTN issuance we were even able to change market practice by negotiating a flat fee, i.e. irrespective of the tenor, which results in the lowest cost per €100mm issuance so far.

Cost per €100mm (1)	€mm
April 2014 Hybrid	1.21
Dec 2014 Hybrid	1.00
EMTN 2013	0.79
Yankee	0.78
Eurobond 2013	0.63
EMTN 2014	0.56
EMTN March 2015	0.46
EMTN Dec 2015	0.46
EMTN June 2016	0.39

(1) Excluding contingency; including some cost estimates for the most recent transactions as not all bills have been fully settled yet.

Bonds / Rating

Corporate Investment grade rating as of 2015-09-30

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB+	Stable	10 May 2016

Bond ratings as of 2015-09-30

	Amount	Issue price	Coupon	Final Maturity Date	Rating
3 years 2.125%
Euro Bond	€ 700m	99.793%	2.125%	25 July 2016	BBB+
6 years 3.125%
Euro Bond	€ 600m	99.935%	3.125%	25 July 2019	BBB+
4 years 3.200%			3.200%
Yankee Bond	USD 750m	100.000%	(2.970%)*	2 Oct 2017	BBB+
10 years 5.000%			5.000%
Yankee Bond	USD 250m	98.993%	(4.580%)*	2 Oct 2023	BBB+
8 years 3.625%	€ 500m	99.843%	3.625%	8 Oct 2021	BBB+
EMTN (Series No. 1)
60 years 4.625%	€ 700m	99.782%	4.625%	8 Apr 2074	BBB
Hybrid Bond
8 years 2.125%	€ 500m	99.412%	2.125%	9 July 2022	BBB+
EMTN (Series No. 2)
perpetual 4% Hybrid Bond	€ 1,000m	100.000%	4.000%	perpetual	BBB
5 years 0.875%
EMTN (Series No. 3)	€ 500m	99.263%	0.875%	30 Mar 2020	BBB+
10 years 1.500%
EMTN (Series No. 4)	€ 500m	98.455%	1.5000%	31 Mar 2025	BBB+
2 years 0.950%+3M EURIBOR			0.950%+3M EURIBOR
EMTN (Series No. 5)	€ 750m	100.000%	(0.835% hedged)	15 Dec 2017	BBB+
5 years 1.625%
EMTN (Series No. 6)	€ 1,250m	99.852%	1.625%	15 Dec 2020	BBB+
8 years 2.250%
EMTN (Series No. 7)	€ 1,000m	99.085%	2.2500%	15 Dec 2023	BBB+
6 years 0.875%
EMTN (Series No. 8)	€ 500m	99.530%	0.875%	10 Jun 2022	BBB+
10 years 1.500%
EMTN (Series No. 9)	€ 500m	99.165%	1.5000%	10 Jun 2026	BBB+
* EUR-equivalent re-offer yield

Bond KPIs	Covenant	Level	Actual
	LTV
	Total Debt / Total Assets	<60%	47%
	Secured LTV
	Secured Debt / Total Assets	<45%	22%
	ICR	>1.80x	3.17x
	LTM1 EBITDA / LTM Interest Expense
	Unencumbered Assets	>125%	214%
	Unencumbered Assets / Unsecured Debt

Rating KPIs	Covenant	Level (BBB+)
	Debt to Capital
	Total Debt / Total Equity + Total Debt	<60%
	ICR
	LTM1 EBITDA / LTM Interest Expense	>1.80x

¹ LTM = last 12 months

Name	Amount	Coupon	Contractual Maturity Date
German Residential Funding 2013-1 Limited	€ 1,845m	2.80%	27 Aug 2018
German Residential Funding 2013-2 Limited	€ 658 m	2.69%	27 Nov 2018
Taurus 2013 (GMF1) PLC	€ 1,029 m	3.35%	21 May 2018

Expected prepayment fees for early CMBS redemption (€ m)
IPD	GRF-1	GRF-2	WOBA
May 2016	64.9	24.1	14.6
Aug 2016	26.3	21.0	10.6
Nov 2016	19.2	9.5	6.7
Feb 2017	12.5	7.2	2.8
May 2017	6.1	5.0	1.4
Aug 2017	2.8	2.7	0.1
Nov 2017	0.6	1.1	0.0
Feb 2018	0.0	0.4	0.0
May 2018	0.0	0.0	0.0
Aug 2018	0.0	0.0	na
Nov 2018	na	0.0	na

Hedge break costs not considered.

Values may differ in case of deviation from sales plan.

Portfolio KPIs by Top 25 Cities

City	Residential units	In-place rent (€/sqm)	Vacancy rate March 31, 2016	Vacancy rate March 31, 2015	Share rent controlled
Dresden	37,898	5.33	2.6%	2.9%	0.0%
Berlin	30,517	5.87	1.6%	1.4%	8.7%
Dortmund	19,432	5.11	2.5%	2.7%	14.0%
Essen	12,092	5.39	4.4%	5.0%	15.1%
Kiel	11,976	5.37	1.5%	1.4%	32.3%
Frankfurt am Main	11,693	7.75	0.8%	1.1%	12.8%
Bremen	11,272	5.17	3.7%	4.3%	23.2%
Hamburg	10,970	6.50	1.2%	0.9%	15.5%
Bochum	7,519	5.44	2.2%	2.6%	9.4%
Hannover	7,206	6.05	1.7%	2.6%	22.0%
Köln	6,407	7.13	1.3%	1.7%	10.3%
Duisburg	5,536	5.20	4.1%	5.3%	3.4%
München	5,483	7.15	0.8%	0.9%	40.6%
Bonn	5,174	6.45	1.6%	2.1%	25.8%
Stuttgart	4,643	8.13	1.4%	0.9%	24.9%
Bielefeld	4,637	5.04	2.7%	2.6%	34.1%
Heidenheim an der Brenz	3,958	6.04	4.7%	5.8%	8.9%
Osnabrück	3,915	5.53	3.5%	3.9%	17.2%
Gelsenkirchen	3,887	4.89	5.4%	6.9%	7.5%
Düsseldorf	3,540	7.31	2.7%	2.3%	19.6%
Braunschweig	3,495	5.51	1.3%	0.5%	0.3%
Gladbeck	3,136	5.14	3.1%	3.0%	9.1%
Zwickau	3,106	4.26	9.6%	12.0%	0.0%
Herne	2,910	5.09	2.9%	4.3%	6.3%
Mannheim	2,748	6.63	3.4%	2.9%	9.8%
Subtotal TOP 25	223,150	5.83	2.5%	2.9%	13.0%
Remaining Cities	120,817	5.85	3.5%	4.5%	14.1%
Total	343,967	5.84	2.8%	3.4%	13.4%

Note: Residential portfolio only

Roadshow Asia June 2016 page 42

Valuation KPIs by Top 25 Cities

City	Fair value (€m)	Share in terms of FV	Fair Value (€/sqm)	Annualized in place rent	Multiple (in-place rent)
				(€m) March 31,2016
Dresden	2,104	8.9%	924	143.7	14.6
Berlin	2,564	10.8%	1,302	138.9	18.5
Dortmund	973	4.1%	811	72.9	13.3
Essen	629	2.7%	805	49.4	12.7
Kiel	614	2.6%	846	46.7	13.1
Frankfurt am Main	1,220	5.1%	1,674	68.2	17.9
Bremen	637	2.7%	903	42.9	14.8
Hamburg	1,049	4.4%	1,464	56.8	18.5
Bochum	351	1.5%	806	28.1	12.5
Hannover	509	2.1%	1,079	34.4	14.8
Köln	718	3.0%	1,561	39.3	18.3
Duisburg	255	1.1%	738	21.3	12.0
München	881	3.7%	2,354	33.5	26.3
Bonn	504	2.1%	1,372	28.2	17.8
Stuttgart	566	2.4%	1,876	29.2	19.4
Bielefeld	220	0.9%	709	18.5	11.9
Heidenheim an der Brenz	228	1.0%	926	17.5	13.0
Osnabrück	225	0.9%	891	16.4	13.7
Gelsenkirchen	166	0.7%	640	14.3	11.6
Düsseldorf	398	1.7%	1,604	22.2	17.9
Braunschweig	201	0.8%	929	14.2	14.1
Gladbeck	145	0.6%	751	11.8	12.3
Zwickau	71	0.3%	399	8.1	8.7
Herne	143	0.6%	774	11.3	12.7
Mannheim	227	1.0%	1,221	14.7	15.5
Subtotal TOP 25	15,597	65.8%	1,104	982.5	15.9
Remaining Cities	8,100	34.2%	1,023	545.9	14.8
Total	23,698	100.0%	1,075	1,528.4	15.5

	Q1 2016 /	Q1 2015 /
	March 31, 2016	March 31, 2015
Headcount	6,683	5,737
Number of units under 3rd-party management	54,364	42,083
EPRA vacancy rate	2.6%	3.2%
IFRS profit for the period	79.2	30.3
Number of units acquired	2,417	144,602
Number of units sold	15,551	2,489

FFO by Segments

Interest /Tax	Q1 2016	Q1 2015
Interest	-86.0	-63.2
Tax	-3.8	-1.3
Tax Sales	-26.2	-2.2

in €m	EBITDA Q1 2016	Carrying Amount	Interest	EBT	Tax	FFO Q1 2016
Rental	269.0	22,842.6	-84.7	184.3	-3.7	180.6
Extension	7.6	350.9	-1.3	6.3	-0.1	6.2
Other	-0.5	-	-	-0.5	0.0	-0.5
FFO I	276.1	23,193.5	-86.0	190.1	-3.8	186.3
Sales	35.0	-	-	35.0	-26.2	8.8
FFO II	311.1	23,193.5	-86.0	225.1	-30.0	195.1

in €m	EBITDA Q1 2015	Carrying Amount	Interest	EBT	Tax	FFO Q1 2015
Rental	177.1	22,842.6	-62.2	114.9	-1.3	113.6
Extension	5.5	350.9	-1.0	4.5	-0.1	4.5
Other	-0.1	-	-	-0.1	0.0	-0.1
	182.5	23,193.5	-63.2	119.3	-1.3	118.0
FFO I
Sales	9.5	-	-	9.5	-2.2	7.2
FFO II	192.0	23,193.5	-63.2	128.8	-3.6	125.2

FFO Minorities

• Up until and including the fiscal year 2015, Vonovia did not disclose an amount attributable to minority shareholders.
• Defined by the absolute € million amount, minorities are comparatively small in relation to the FFO 1 figure and can paid out of the ~30% of FFO 1 that is not distributed to equity shareholders in the form of dividends.
• At the same time, we appreciate the market's desire for more transparency, which is why starting in Q1 2016 and going forward, Vonovia discloses the line item "FFO minorites" in the FFO 1 allocation.
• The FFO minorities include all dividend payments to minorities (mainly B&O, a Gagfah legacy fund structure, Gagfah S.A. minorities).
• Fees received by co-investors and similar entities are not part of the FFO attributable to minorities. Vonovia has accounted for and will continue to account for these fees in Other Operating Expenses and hence already in EBITDA. The only exception is the fee paid to J.P.Morgan who hold a Gagfah stake that is treated as a one off.
• For comparability purposes, in 2015, the FFO attributable to minorities was €19.5m, partly driven by the Gagfah dividend paid in 2015.

This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, "Vonovia") for internal use. Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it.

This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by the recipient to any other person. Receipt of this presentation constitutes an express agreement to be bound by such confidentiality and the other terms set out herein.

This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of Vonovia ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from DA's current business plan or from public sources which have not been independently verified or assessed by Vonovia and which may or may not prove to be correct. Any forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date the presentation is provided to the recipient. It is up to the recipient of this presentation to make its own assessment of the validity of any forward-looking statements and assumptions and no liability is accepted by Vonovia in respect of the achievement of such forward-looking statements and assumptions.

Vonovia accepts no liability whatsoever to the extent permitted by applicable law for any direct, indirect or consequential loss or penalty arising from any use of this presentation, its contents or preparation or otherwise in connection with it.

No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the recipient's purposes. The delivery of this presentation does not imply that the information herein is correct as at any time subsequent to the date hereof.

Vonovia has no obligation whatsoever to update or revise any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof.

Tables and diagrams may include rounding effects.