Vonovia SE

Investor Presentation • Sep 27, 2018

Company Presentation Morgan Stanley Fixed Income Real Estate Conference

Olaf Weber, Head of Finance and Treasury Thorsten Arsan, Head of Finance - Frontoffice

Today's presenters

Olaf Weber

Head of Treasury & Finance

With Vonovia since 2013

Key responsibilities

Treasury and Finance

Previous experience

• Head of Group Treasury at Einkaufsbüro Deutscher Eisenhändler (2 yrs)
• Deputy Head of Group Treasury at OBI (4 yrs)
• Deutsche Bank (13y)

Education

Master of Business Administration

Thorsten Arsan

Head of Finance – Front Office

With Vonovia since 2013

Key responsibilities

• Finance
• DCM & ECM
• Rating

Previous experience

• Eurohypo (5 yrs)
• Moody's Investor Service (2 yrs)
• KPMG (4 yrs)

Education

Master of Business Administration

Agenda
1	Highlights			3
2	H1 2018 Results			4
3	Business Update			16
4	Guidance			20
5	Wrap-up			21
6	Appendix			23
	1. Highlights	2. H1 2018 Results 3. Business Update	4. Guidance	5. Wrap-up	6. Appendix page

	Highlights 1. Highlights	2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix
k ar e P n	Operations	Organic rent growth of 4.1% y-o-y. Operating expenses reduced by 16.8% to €110.2m as a result of eliminating the double cost structure from conwert included in H1 2017 as well as continued efficiency gains. Adj. EBITDA Operations margin (ex. maintenance) of 90.9% (+290bps y-o-y).
a o ori al d- ct n Vi a sta g, o w vi u o B n	FFO 1	FFO 1 increased by 11.5% y-o-y to €510.3m in H1 2018 as a result of better EBITDA Operations and lower interest expenses and income taxes.
o xcl. V E	Valuation	H1 valuation comprised ca. 2/3 of portfolio (20 largest German locations plus six additional German locations and Vienna). 6.9% l-f-l value growth on revalued portfolio, of which 5.7% l-f-l valuation uplift (performance + yield compression). Total value growth of €1,765m represents 5.3% on the overall portfolio.
k ar P a ori	Adj. NAV	Adj. NAV grew by 10.5% to €20,634.4m in H1 2018. On a per-share basis, Adj. NAV was €39.83, up 3.5% ytd (6.8% higher NOSH).
ct Vi g, o w u B cl. n I	Guidance	2018 Guidance now includes Buwog and Victoria Park. FFO 1 guidance of €1,050m - €1,070m or €2.03 – €2.07 p.s. on the new number of 518.1m issued shares. Back-of-an-envelope calculation: Assuming Buwog and Victoria Park had fully contributed for the first six months, the pro FFO 1 per share guidance would have been €2.08 – €2.12.
	Fixed Income Real Estate Conference	page 4

• Rental income slightly up 0.7% on a 3% smaller but higher quality portfolio.
• Adjusted EBITDA Operations up 4.1% because of substantially lower operating expenses and higher contribution from the Value-add Business.
• As a result, and supported by lower interest expenses, FFO grew by 11.5% (2.5% per share due to the 8.7% increase in NOSH from the May ABB and scrip dividend).

		H1 2018	H1 2017	Delta
Average number of residential sqm	`000	21,557	22,226	-3.0%	Portfolio reduction mainly
Average number of residential units	#	344,685	355,570	-3.1%	driven by clean-up sales
Organic rent growth (y-o-y)	%	4.1	3.7	+40 bps
In-place rent (eop)	€/month/sqm	6.41	6.12	+4.7%
Vacancy rate (eop)	%	2.8	2.9	-10 bps
Rental income	€m	838.8	833.2	+€5.6m +0.7%
Maintenance expenses	€m	-131.6	-127.3	+3.4%
Operating expenses	€m	-110.2	-132.4	-16.8%	conwert synergies and efficiency improvements
Adj. EBITDA Rental	€m	597.0	573.5	+€23.5m +4.1%
Adj. EBITDA Value-add Business	€m	51.7	45.6	+13.4%
Adj. EBITDA Operations	€m	632.6	607.6	+€25.0m +4.1%
Interest expense FFO 1	€m	-114.3	-138.0	-17.2%	8.7% higher NOSH • y-o-y
Current income taxes FFO 1	€m	-8.0	-11.9	-32.8%	Back-of-an-envelope • calculation: pro forma FFO 1 including full
FFO 1	€m	510.3	457.7	+€52.6m +11.5%	contribution from Buwog and Victoria
FFO 1 per share (eop NOSH)	€	0.98	0.96	+2.5%	Park in H1 would be ~€36m or
FFO 1 per share (avg. NOSH)	€	1.03	0.98	+5.8%	~7 cents higher

All numbers stand-alone

Rent Growth Acceleration Set to Continue

Adj. EBITDA Operations is up 4.1% to €632.6m.

All numbers stand-alone

EBITDA Operations margin (excl. maintenance) expanded to 90.9%.

€m	H1 2018	H1 2017	Delta
Rental income	838.8	833.2	+0.7%
Maintenance expenses	-131.6	-127.3	+3.4%
Operating expenses	-110.2	-132.4	-16.8%
Adj. EBITDA Rental	597.0	573.5	+4.1%
Income	610.4	483.8	+26.2%
of which external	88.3	80.1	+10.2%
of which internal	522.1	403.7	+29.3%
Operating expenses	-558.7	-438.2	+27.5%
Adj. EBITDA Value-add Business	51.7	45.6	+13.4%
Adj. EBITDA Other1	-16.1	-11.5	+40.0%
Adj. EBITDA Operations	632.6	607.6	+4.1%

¹ Mainly consolidation

Driven by better operational performance and lower interest expenses, FFO1 was up 11.5% y-o-y or 2.5% per share (eop) in spite of 8.7% more issued shares.

€m (unless indicated otherwise)	H1 2018	H1 2017	Delta
Adj. EBITDA Operations	632.6	607.6	4.1%
Interest expense FFO 1	-114.3	-138.0	-17.2%
Current income taxes FFO 1	-8.0	-11.9	-32.8%
FFO 1	510.3	457.7	11.5%
of which attributable to Vonovia's shareholders	484.7	431.1	12.4%
of which attributable to Vonovia's hybrid capital investors	20.0	20.0	0.0%
of which attributable to non-controlling interests	5.6	6.6	-15.2%
Capitalized maintenance	-49.1	-30.5	61.0%
AFFO	461.2	427.2	8.0%
Adjusted EBITDA Sales	48.3	44.3	9.0%
Current income taxes FFO 2	-13.8	-20.1	-31.3%
FFO 2	544.8	481.9	13.1%
FFO 1 € / share (eop NOSH) (H1 2018: 518.1m; H1 2017: 476.5m)	0.98	0.96	2.5%
FFO 1 € / share (avg. NOSH) (H1 2018: 493.2m; H1 2017: 468.2m)	1.03	0.98	5.8%

• Back-of-an-envelope calculation: pro forma FFO 1 including full contribution from Buwog and Victoria Park in H1 would be ~€36m or ~7 cents higher

• Valuation portfolio comprised the 20 largest cities of our German portfolio, plus six additional German locations and Vienna, representing ca. 2/3 of the entire portfolio. All other locations and values were left unchanged and adjusted only for capitalization.
• 6.9% l-f-l value growth on revalued portfolio, of which 5.7% l-f-l valuation uplift (performance + yield compression).
• Total value growth of €1,765m represents 5.3% on the overall portfolio.
• German portfolio as of June 30, 2018, valued at €1,561/sqm, 20.5x in-place rent multiple and 4.9% gross yield (Dec. 31, 2017: €1,475/sqm, 19.7x in-place rent and 5.1% yield).

Value drivers H1 (€m)		Bridge to P&L H1 (€m)
Performance	268
Rental development	228
Investments	40
Investments	347
Investments (within valuation portfolio)	240
Investments (outside of valuation portfolio)	107
Yield compression	1,150
Total value uplift	1,765

Total value uplift	1,765
Investments	-363
Benefit VTS craftsmen organization	-15
Cash out	-348
Other	-25
Net income from fair value adjustments of investment properties	1,377

All numbers stand-alone

June 30, 2018	Residential	In-place rent	Vacancy rate	Fair value1
	units	(€/sqm/month)	(%)	(€bn)	% of total
Operate	126,039	6.54	2.6	13.0	32%
Invest	217,270	6.35	2.6	21.4	53%
Subtotal Strategic Clusters	343,309	6.42	2.6	34.4	85%
Privatize	13,183	6.22	4.1	1.5	4%
Sell	10,167	5.34	5.1	0.6	1%
Total Germany	366,659	6.38	2.7	36.5	90%
Austria	23,215	4.56	4.2	2.5	6%
Sweden	14,052	8.83	1.4	1.6	4%

Note: In-place rents in Austria and Sweden are not fully comparable to Germany, as Sweden, for example, includes certain ancillary costs. The table above shows the rental level unadjusted to the German definition. ¹Fair value of the developed land excluding € 1,205.4 million, of which € 344.5 million for undeveloped land and inheritable building rights granted, € 251.9 million for assets under construction, € 461.7 million for development and € 147.3 million for other.

Adj. NAV is up 10.5% ytd or 3.5% per share in spite of 6.8% more issued shares.

€m (unless indicated otherwise)	Jun 30, 2018	Dec 31, 2017	Is Adj. NAV a good proxy for the value of a
			diverse operating business?
Equity attributable to Vonovia's shareholders	16,916.2	15,080.8	By definition, the Adj. NAV reflects the brick and mortar value of the
Deferred taxes on investment properties and assets held for sale	7,253.8	6,185.7	buildings
Fair value of derivative financial instruments1	93.4	26.9	applies market terms and assumes the
Deferred taxes on derivative financial instruments	-25.1	-8.8	properties are owned by "anyone"
EPRA NAV	24,238.3	21,284.6	This approach ignores
Goodwill	-3,603.9	-2,613.5	the Value-add Business
Adj. NAV	20,634.4	18,671.1	the cost advantage and operating platform
			of a professional owner
EPRA NAV €/share	46.79	43.88	the development business
Adj. NAV €/share	39.83	38.49	the cash flow from privatization

¹ Adjusted for effects from cross currency swaps.

LTV Remains in Comfort Zone 1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

• LTV as of June 30, 2018 was 43.9%.
• Current pro forma LTV, including 2nd offer period for Buwog and €500m bond issued in July, is ~45%.
• Against the background of the stable cash flows and the strong fundamentals in our portfolio locations we see continued upside potential for our property values, and we do not see material long-term downside risks.
• We therefore continue to believe that the LTV target range of 40% 45% is adequate for our low risk portfolio, and we feel comfortable with this range.
• Based on our internal LTV projections, an extremely bearish scenario with no yield compression in H2 2018 would result in an LTV of ~45%, so any yield compression will bring the LTV even deeper into our comfort zone (€500m of yield compression reduce the LTV level by ca. 50 bps).

€m (unless indicated otherwise)	Jun 30, 2018	Mar 31, 2018	Dec 31, 2017
Non-derivative financial liabilities	19,774.6	18,887.0	14,060.5
Foreign exchange rate effects	-29.6	-17.8	-23.5
Cash and cash equivalents	-865.8	-829.3	-266.2
Net debt	18,879.2	18,039.9	13,770.8
Sales receivables	-239.8	-232.4	-201.2
Adj. net debt	18,639.4	17,807.5	13,569.6
Fair value of real estate portfolio	41,732.3	38,485.6	33,436.3
Shares in other real estate companies	734.5	666.6	642.2
Adj. fair value of real estate portfolio	42,466.8	39,152.2	34,078.5
LTV	43.9%	45.5%	39.8%

Smooth Maturity Profile with Diverse Funding Mix

¹incl. July 2018 Bond, which is not included in KPIs. ² Average financing cost of debt maturing in the relevant year. ³ Weighted avg. financing costs excl. Equity Hybrid. Including Equity Hybrid, avg. interest rate of debt maturing in 2021 is 3.4%.⁴ excl. Equity Hybrid. ⁵ excl. 2nd offer period of Buwog. ⁶ excl. Buwog and Victoria Park.

Growing Contribution from Value-add Business

1. Highlights 2. H1 2018 Results	3. Business Update		4. Guidance			5. Wrap-up		6. Appendix
Concept			Economics
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 and offer the same cash flow stability as the rental business.			NAV does not account for Vonovia's Applying the impairment test WACC1					Value-add Business. to the 2018E Adj. EBITDA Value-add Business translates into an additional value of ~€5.0 per share (~12% on top of H1 Adj. NAV).
Insourcing of services to ensure maximum process management and cost control.						Penetration
Two types of Value-add Business			Multimedia			ca. 80%
1. External income (e.g. multimedia, smart metering)			Smart	metering		ca. 23%
2. Internal savings (e.g. craftsmen, resi	environment)		Residential environment2			ca. 30%
New initiatives always follow same low risk pattern of			Energy			~1%
Prototype development Proof of concept in pilot phase Roll-out across portfolio			Craftsmen VTS				and to enable continuous	ca. 70% (maintenance) ca. 40% (modernization) target is around 70% to allow for enough flexibility in the volumes benchmarking to market prices
Energy Craftsmen Multimedia (VTS) Rental contract Smart Metering	Residential Environment		Adj. EBITDA Value-add 23,6	37,6	Business (€m)	57,0	102,1	~120
…			2014	2015		2016	2017	2018(E)

Fixed Income Real Estate Conference page 15

¹ Pre-tax WACC of 4.68% as per Dec. 31, 2017. ² Gardening and landscaping work

Sales – Steady Cash Flow at Attractive Margins

1. Highlights

1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

2. Total sales volume in H1 2018 was 6,115 residential units (prior-year period: 4,484), of which 1,030 from Privatization portfolio (prior-year period: 1,160) and 5,085 from Sell portfolio (prior-year period: 3,324).

3. In spite of value growth of the portfolio, privatization fair value step-ups still came out to 30.5% for H1 2018.
4. The sell portfolio disposals saw a record fair value step-up of 15.4% in H1 2018, driven largely by two block sales, as we are utilizing the high market liquidity to profitably dispose of our Sell Portfolio.
5. The income and fair value figures of the Sell Portfolio for the prior-year period include a substantial amount of commercial property sales.

		PRIVATIZATION		SELL PORTFOLIO	TOTAL
€m (unless indicated otherwise)	H1 2018	H1 2017	H1 2018	H1 2017	H1 2018	H1 2017
Income from disposal	124.2	142.7	230.0	559.2	354.2	701.9
Fair value of disposal	-95.2	-108.7	-199.3	-536.1	-294.5	-644.8
Adj. profit from disposal	29.0	34.0	30.7	23.1	59.7	57.1
Fair value step-up (%)	30.5%	31.3%	15.4%	4.3%
Selling costs					11.4	-12.8

€1bn Investment Program on Track

• 2018 investment program well underway.
• All investment projects kicked-off or already completed.

Note: Numbers include projects kicked off in 2017.

Buwog Development Projects Approved since Takeover

1. Highlights 2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix
Location	Project	Completion (est.)	Investment volume	Hold vs. sell (est.)
Berlin	"Kompasshäuser" (50 resi units) "Haus an der Dahme" (33 resi units) (Part of 52° Nord Project with a total of 1,019 residential units of which 216 have been completed)	05/2020	ca. €30m	Hold Sell
Vienna	Marina Tower (486 resi units, 7 commercial units) Marina Plaza (409 resi units, Rezoning required)	3/2021 10/2023	ca. €114m ca. €140m	Hold Sell
Vienna	ERnteLAA (191 resi units, 3 commercial units)	05/2020	Ca. €36m	Hold Sell

Update on BUWOG & Victoria Park; European Activities

1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix
	BUWOG	Victoria Park	Comments
Current Vonovia stake	90.7% voting rights	61.4% voting rights (including call options)	opportunities.	European activities enhance accretive acquisition Similar to Germany, we closely monitor these clearly
Impact in 2018	Starting with Q2	Starting with Q3	acquisition criteria: Austria	defined geographies for opportunities, applying the same – run combined Buwog and conwert
Integration	Operational integration of German operating business fully on track and expected to be completed by the end of 2018. Synergy realization expected from 2019 onwards.	Victoria Park management and staff remain largely in place, as Victoria Park continues to run its business broadly unchanged. Feasibility of joint purchasing, modernization work	low exit yields Sweden France	portfolio as scalable business. Disposals more prominent in Austrian business model because of – consolidate Swedish residential market – largest long-term opportunity. Not material at this point and only a viable long-term	build on Victoria Park platform and option to the extent legislation changes and allows
Next steps	Buwog EGM to resolve on the Squeeze-out scheduled for Oct. 2. Cash compensation for minority shareholders of €29.05 per share.	and refinancing opportunities being reviewed. No integration planned as Victoria Park serves as the platform for Vonovia's potential growth in Sweden.	housing Netherlands	the payout of economic dividends from social – attractive market but no opportunities or viable partner at this point (lack of) regulation or similar related issues.	Other countries are not in our focus due to fundamentals,

Increased Guidance Suggests ca. 8% FFO per share Growth

1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix
		2017 Actuals	Initial (Nov. 2017) Excl. Buwog & Victoria Park	2018 Guidance Update (May 2018) Excl. Buwog & Victoria Park	Update (Aug. 2018) Incl. Buwog & Victoria Park1
Organic rent growth (eop)		4.2%	4.6% - 4.8%	4.6% - 4.8%	~4.4%2
Vacancy (eop)		2.5%	<2.5%	<2.5%	<2.5%
Rental Income (€m)		1,667.9	1,660 - 1,680	1,670 - 1,690	1,890 – 1,910
FFO1 (€m)		920.8	960 - 980	1,000 – 1,020 (VNA stand-alone)	1,050 – 1,070
FFO 1 (€/share, eop)		1.90	1.98 - 2.02	2.06 – 2.10 (VNA stand-alone)	2.03 – 2.07
Maintenance (€m)		346.2	~360	~360	~410
Modernization & Investments (€m)		778.6	~1,000	~1,000	~1,000
Privatization (number of units)		2,608	~2,300	~2,300	~2,800
FV step-up (Privatization)		32.7%	~30%	~30%	30% - 35%
	Sell portfolio disposals (number of units)	11,780	opportunistic	opportunistic	up to 14,000
FV step-up (Sell Portfolio)		7.9%	>0%	~5%	10% - 15%
Dividend/share		€1.32	~70% of FFO1	~70% of FFO1	~70% of FFO1
Underlying number of shares		485.1	485.1	485.1	518.1

¹Buwog contribution for 9 months and without synergies and Victoria Park contribution for 6 months and without synergies.

²Adjustment to ~4.4% is purely timing-related and driven by (i) lower-than-anticipated new construction volume as a result of building permits taking too long and (ii) a small share of the rent growth from the modernization investments getting pushed into early 2019, as some projects cannot be fully settled by September, which is the deadline for including the projects in the 2018 organic rent growth. This slight delay is caused by poor weather conditions in the beginning of the year as well as limited craftsmen availability for carrying out the work on time and on budget.

Strong operating performance with continued margin expansion.

Market conditions remain supportive as evidenced by H1 2018 valuation.

Guidance 2018 compelling but does not reflect full potential of Buwog and Victoria Park acquisitions, which will materialize starting 2019.

Outlook for 9M Reporting on December 6: New integrated reporting format in addition to and beyond the traditional FFO 1 logic to properly account for the different earnings contributors.

Appendix
1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix

Appendix

€m (unless indicated otherwise)	H1 2018	H1 2017	Delta

Expenses for maintenance	131.6	127.3	3.4%
Capitalized maintenance	50.5	31.5	60.3%
Total	182.1	158.8	14.7%
Maintenance capitalization ratio	28%	20%	4,0%

¹All numbers stand-alone Vonovia, excluding Buwog and Victoria Park.

1. Highlights 2. H1 2018 Results	German Resi: Capitalized Expenses ≠ Modernization Investments 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix
Modernization is not capex	Capex is a maintenance expense that is capitalized on the balance sheet because it has a value-enhancing element. In contrast to modernization investments, capex does not result in rent growth. Capex is not discretionary.
Modernization is NAV accretive	Our annual €1bn modernization program does not require new equity. The equity portion comes from the FFO 1 funds that are not paid out as dividends. The remainder is funded with debt (often specific debt facilities dedicated to modernization work and at very favorable terms).
	The value rerating following the modernization work renders the investment program LTV neutral. Modernization investment leads to rent growth and increases performance (and dividend potential).
In terms of cash, modernization is similar to an acquisition	Equity or organic cash flow is invested (usually supplemented with debt) for a return. The yield on that investment contributes to future rent growth / cash flows.

Maintenance ≠ Capitalized Expenses ≠ Modernization Investments Description Relevant for FFO and P&L Relevant for AFFO Relevant for cash flow Comes with a yield and generates rent growth Capitalized on the balance sheet German Civil Code Regulation Three clearly distinguishable categories in German Resi Maintenance expenses • Required to broadly maintain the property value • Protect future EBITDAs • Reactive, nondiscretionary §558 1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

• Changes character of a building or flat • Enhance future EBITDAs • Pro-active, discretionary

expenses and modernization investments are often disclosed as one even though German Civil Code Regulation allows for and even requires separate treatment of capitalized expenses and modernization investments.

§559

• Subtracting modernization investment in Vonovia's AFFO is questionable, as modernization investments are, similar to an acquisition,
• partly debt-financed
• discretionary
• Impact of modernization investments on rent growth is similar to an acquisition, hence the inclusion in organic rent growth.

Fixed Income Real Estate Conference page 26

Modernization investments

Source: Dealogic, Bloomberg, Broker research, Deutsche Bundesbank, Verband deutscher Pfandbriefbanken (VdP), FactSet.

¹ Quarterly Mortgage Pfandbrief issuances for 2005-2012 based on equal distribution of annual issuances based on VdP data; 2013 -3Q2017 figures based on Deutsche Bundesbank

² Corporate bond issuance volume includes senior unsecured and hybrid bonds ≥ €50m, issued in EUR in Western Europe

³ Excludes Mortgage Pfandbriefe in Q2 2018 as data not yet available.

Currently used by Vonovia

Decision Tree	Financing	Sources
1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix

	Covenants and KPIs (June 30, 2018)
1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix

Bond KPIs	Covenant	Level	Jun 30, 2018
	LTV
	Total Debt / Total Assets	<60%	41%
	Secured LTV	<45%	12%
	Secured Debt / Total Assets
	ICR1	>1.80x	5.1x
	Last 12M EBITDA / Last 12M Interest Expense
	Unencumbered Assets	>125%	212%
	Unencumbered Assets / Unsecured Debt

Rating KPIs	Covenant	Level (BBB+)
	Debt to Capital	<60%
	Total Debt / Total Equity + Total Debt
	ICR	>1.80x
	Last 12M EBITDA / Last 12M Interest Expense

Bonds / Rating

Corporate Investment grade rating as of 2018-08-02

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB+	Stable	02 Aug 2018

Senior Bonds (EUR and USD) as of 2018-08-02

Name	Tenor & Coupon	ISIN	Amount	Issue price	Coupon	Final Maturity Date	Rating
Bond 002 (EUR-Bond)	6 years 3.125%	DE000A1HNW52	€ 600m	99.935%	3.125%	25 July 2019	BBB+
Bond 004 (USD-Bond)	10 years 5.000%	US25155FAB22	USD 250m	98.993%	4.580%1	02 Oct 2023	BBB+
Bond 005 (EMTN)	8 years 3.625%	DE000A1HRVD5	€ 500m	99.843%	3.625%	08 Oct 2021	BBB+
Bond 007 (EMTN)	8 years 2.125%	DE000A1ZLUN1	€ 500m	99.412%	2.125%	09 July 2022	BBB+
Bond 009A (EMTN)	5 years 0.875%	DE000A1ZY971	€ 500m	99.263%	0.875%	30 Mar 2020	BBB+
Bond 009B (EMTN)	10 years 1.500%	DE000A1ZY989	€ 500m	98.455%	1.5000%	31 Mar 2025	BBB+
Bond 010B (EMTN)	5 years 1.625%	DE000A18V138	€ 1,250m	99.852%	1.625%	15 Dec 2020	BBB+
Bond 010C (EMTN)	8 years 2.250%	DE000A18V146	€ 1,000m	99.085%	2.2500%	15 Dec 2023	BBB+
Bond 011A (EMTN)	6 years 0.875%	DE000A182VS4	€ 500m	99.530%	0.875%	10 Jun 2022	BBB+
Bond 011B (EMTN)	10 years 1.500%	DE000A182VT2	€ 500m	99.165%	1.5000%	10 Jun 2026	BBB+
Bond 012 (EMTN)	2 years 3M EURIBOR+0.380%	DE000A185WC9	€ 500m	100.000%	0.140% hedged	13 Sep 2018	BBB+
Bond 013 (EMTN)	8 years 1.250%	DE000A189ZX0	€ 1,000m	99.037%	1.250%	06 Dec 2024	BBB+
Bond 014A (EMTN)	5 years 0.750%	DE000A19B8D4	€ 500m	99.863%	0.750%	25 Jan 2022	BBB+
Bond 014B (EMTN)	10 years 1.750%	DE000A19B8E2	€ 500m	99.266%	1.750%	25 Jan 2027	BBB+
Bond 015 (EMTN)	8 years 1.125%	DE000A19NS93	€ 500m	99.386%	1.125%	08 Sep 2025	BBB+
Bond 016 (EMTN)	2 years 3M EURIBOR+0.350%	DE000A19SE11	€ 500m	100.448%	3M EURIBOR+0.350%	20 Nov 2019	BBB+
Bond 017A (EMTN)	6 years 0.750%	DE000A19UR61	€ 500m	99.330%	0.750%	15 Jan 2024	BBB+
Bond 017B (EMTN)	10 years 1.500%	DE000A19UR79	€ 500m	100.805%	1.500%	14 Jan 2028	BBB+
Bond 018A (EMTN)	4.75 years 3M EURIBOR+0.450%	DE000A19X793	€ 600m	100.000%	0.793% hedged	22 Dec 2022	BBB+
Bond 018B (EMTN)	8 years 1.500%	DE000A19X8A4	€ 500m	99.188%	1.500%	22 Mar 2026	BBB+
Bond 018C (EMTN)	12 years 2.125%	DE000A19X8B2	€ 500m	98.967%	2.125%	22 Mar 2030	BBB+
Bond 018D (EMTN)	20 years 2.750%	DE000A19X8C0	€ 500m	97.896%	2.750%	22 Mar 2038	BBB+
Bond 019 (EMTN)	5 years 0.875%	DE000A192ZH7	€ 500m	99.437%	0.875%	03 Jul 2023	BBB+

¹ EUR-equivalent Coupon

Hybrid Bonds as of 2018-08-02

Name	Tenor & Coupon	ISIN	Amount	Issue price	Coupon	Final Maturity Date	Rating
Bond 006 (Hybrid)	60 years 4.625%	XS1028959671	€ 700m	99.782%	4.625%	08 Apr 2074	BBB
Bond 008 (Hybrid)	perpetual 4.000%	XS1117300837	€ 1,000m	100.000%	4.000%	perpetual	BBB-

		4+1 Strategy Has Evolved into 4+2 Strategy
	1. Highlights 2. H1 2018 Results	3. Business Update 4. Guidance	5. Wrap-up	6. Appendix
		Reputation & Customer Satisfaction
al n o diti Tra	Property Management 1	Systematic optimization of operating performance and core business productivity through leveraging scaling effects High degree of standardization and industrialization throughout the entire	5	Mergers & Acquisitions Continuous review of on
	Financing 2	organization Ensure well-balanced financing mix and maturity profile with low financing costs, investment grade credit rating and adequate liquidity at all times Fast and unfettered access to equity and debt capital markets at all times		and off-market opportunities to lever economies of scale and apply strategic pillars 1-4 to a growing portfolio All acquisitions must meet the stringent acquisition criteria
	Portfolio Management 3	Portfolio optimization by way of tactical acquisitions and non-core/non-strategic disposals to ensure exposure to strong local markets Pro-active development of the portfolio through	6	European Activities
		investments to offer the right products in the right markets and on a long-term basis		Building on existing German operations
e v ati v o n n I	4 Value-add Business	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		Measured approach Excellent partners for cooperation Leveraging know how, experience and best practices
		Core Strategies		Opportunistic Strategies

Robust business modell delivers growing cash-flows.

In-place values are still way below replacement values, in spite of accelerating valuation growth in recent years.

Note: VNA 2010 – 2014 refers to Deutsche Annington Portfolio at the time; construction costs excluding land. The land value refers to share of total fair value allocated to land. Source for market costs: Arbeitsgemeinschaft für zeitgemäßes Bauen e.V.

Vonovia location

High-influx cities ("Schwarmstädte"). For more information: http://investoren.vonovia.de/websites/vonovia/English/4050/financial-reports-_-presentations.html

Liquid Large-cap Stock

7,9% 6,9% 4,6% 2,8% 77,8% Blackrock Norges Lansdowne MFS Other Share Information First day of trading July 11, 2013 Number of shares outstanding 518.1 million Free float based on Deutsche Börse definition 93.1% ISIN DE000A1ML7J1 Ticker symbol VNA Share class Registered shares with no par value Main listing Frankfurt Stock Exchange Market segment Regulated Market, Prime Standard Major indices and weight (as of June 30, 2018) DAX Stoxx Europe 600 MSCI Germany GPR 250 World FTSE EPRA/NAREIT Europe 1.8% 0.2% 1.7% 1.7% 9.0% Shareholder Structure (June 30, 2018) Free-float factor according to Deutsche Börse definition: 93.1% According to German law the lowest threshold for voting rights notifications is at 3% 1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

VNA share price performance since IPO vs. DAX and EPRA Europe Index

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 residential 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.

Sustainability	at a Glance
1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix

Integrated element of Vonovia's business model

• With almost 400,000 apartments throughout Germany, Vonovia is the country's leading residential real estate company. This role in the housing landscape imposes on us a particular responsibility to actively shape the development of the housing industry.
• We aim to live up to the responsibility by pursuing a continuous dialogue with our stakeholder groups, and by considering social and ecological issues in our core activities. A key priority for us is to use our business model and our holistic approach to help resolve the most urgent challenges in the housing industry and make a positive contribution to social development.

Sustainability reporting at Vonovia

• Separate Sustainability Reporting Unit at Vonovia.
• Started Sustainability Reporting in 2015 with our first sustainability report published in 2016, based on GRI G4 guidelines.
• Publication of third Sustainability Report in 2018, in accordance with the core option of the GRI standards, including the voluntary sector-specific disclosures for "Constriction and Real Estate". The report is available at: http://reports.vonovia.de/2017/sustainability-report/
• Vonovia received the EPRA Silver Award for the 2016 Sustainability Report.
• Sustainability Report for 2018 to be published in April 2019.

Sustainability	Report 2017
1. Highlights	2. H1 2018 Results	3. Business Update	4. Guidance	5. Wrap-up	6. Appendix

Achievements since last report

• Expansion of the key figures base
• Clearer definition of boundaries for CO2 calculation
• Adaptation of the structure to the requirements of the CSR guidelines implementation law
• Online only: Sustainability Report only available online

Highlights

• Vonovia achieves renovation ratio of 5%
• Achieved energy savings of more than 45% for refurbished buildings
• Annual CO2 savings of approx. 50,000 tons
• Quarters development supports good neighborhood
• Company strengthens diversity

• Trainee rate of 5.5% emphasizes high significance

• Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

"The most important thing we can do as the housing sector to tackle climate change is to upgrade our portfolio," Rolf Buch, CEO Vonovia.

• In 2017, Vonovia invested >€1 bn in its properties, including maintenance. Volume of modernization ~€779 m, almost 65% above 2016.
• Vonovia exceeded the German government's targets for the energy efficient renovation of housing stock: 3 % of apartments are to be modernized p.a., Vonovia has hit 5 %. Nationwide, this rate is around 1 %.
• For new constructions, Vonovia considers feasibility of photovoltaics; within 2 years, volume of electricity generated by our own photovoltaic systems has grown from 0 to a total of 5,510 MWh, resulting in an annual saving of 2,900 metric tons of carbon dioxide.
• We are currently working on equipping existing units with photovoltaic systems and explore further possibilities: e.g. additional use of battery storage systems, cogeneration units and corresponding e-mobility concepts for tenants. The first charging stations for

e-cars are to be built on Vonovia premises before the end of 2018.

• One of the focus points of our modernization efforts has been the Ruhr area, in particular Dortmund and Essen.
• In 2017 alone, CO2 emissions were reduced by around 23,000 metric tons due to energy efficient modernization. This corresponds to calculated energy savings of more than 45% for refurbished buildings, depending on the individual consumption (Determination of these values is based on the standards of the international Greenhouse Gas Protocol).
• The company explicitly supports the goals of the Paris Climate Protection Agreement and the German Federal Government's Climate Protection Plan – housing stock should be almost climateneutral by 2050.
• The related energy savings also result in significant benefits for the tenants through lower heating costs.

"It is our social responsibility to act sustainably in order to support requirements by the German federal government. However, we also see declining acceptance for modernization measures, in particular in cities with a shortage in housing. That is why, with our projects, we have to pay even greater attention to ensuring that there is no displacement and that people can stay in their homes. We want to provide security to our tenants."

Rents are regulated via "Mietspiegel" (city-specific rent indices), which look at the asking rents of the previous four years to determine a rent growth level for existing tenants for the next two years.

Sources: Federal Statistics Office, GdW (German Association of Professional Homeowners), REIS, BofA Merrill Lynch Global Research, OECD. Note: Due to lack of q-o-q US rent growth data, the annual rent growth for a year is assumed to also be the q-o-q rent growth of that year.

German Residential – Landlords Benefit from Structural Imbalance between Supply and Demand

• Building permits often take several years because city administrations lack qualified personnel.
• Severe shortage of building capacity after years of downsizing.
• Substantial gap between in-place values and market replacement cost render construction in affordable segment economically unfeasible.

Sources: Federal Statistics Office, IW Köln, GdW (German Association of Professional Homeowners)

Sources: German Federal Statistics Office, GdW (German Association of Professional Homeowners). 2035(E) household numbers are based on trend scenario of the German Federal Statistics Office.

Valuation methodology for German residential properties is primarily based on market prices for assets – not on interest rates

• While market prices are affected by general interest rate levels, there is no significant correlation.
• Other factors such as supply/demand imbalance, rental regulation, market rent growth, location of assets etc. outweigh the impact of interest rates when it comes to pricing residential real estate.
• The steep decline in interest rates (down by 760bps since 1992) is not mirrored by asset yields (down by 160bps since 1992).
• Asset yields outperformed interest rates by ca. 240bps on average since 1992 and 520bps in June 2016.

¹ Yearly asset yields vs. rolling 200d average of 10y interest rates

Sources: Thomson Reuters, bulwiengesa

High degree of stability and predictability of underlying business (layer 1) and portfolio valuation (layer 2) is not reflected in share price development (layer 3), as equity markets appear to apply valuation parameters that are substantially less material for Vonovia's operating performance.

¹ Midpoint guidance.

Impressions Dortmund Berlin Bielefeld Essen 1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

Optimize Apartment

Upgrade Building 1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

Modular Construction

VONOVIA
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1. Highlights 2. H1 2018 Results 3. Business Update 4. Guidance 5. Wrap-up 6. Appendix

Modular Construction

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 Vonovia'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.

This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of the Company nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever.

This presentation is neither an advertisement nor a prospectus and is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by the attendees/recipients in connection with, the purchase of or investment in any securities of the Company. This presentation is selective in nature and does not purport to contain all information that may be required to evaluate the Company and/or its securities. No reliance may or should be placed for any purpose whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.

This presentation is not directed to or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

Neither this presentation nor the information contained in it may be taken, transmitted or distributed directly or indirectly into or within the United States, its territories or possessions. This presentation is not an offer of securities for sale in the United States. The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States. Consequently, the securities of the Company may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States unless registered under the Securities Act.

Tables and diagrams may include rounding effects.

For Your Notes
1. Highlights	3. Business Update	5. Wrap-up
2. H1 2018 Results	4. Guidance	6. Appendix

For Your Notes
1. Highlights	3. Business Update	5. Wrap-up
2. H1 2018 Results	4. Guidance	6. Appendix