First half 2020 results presentation Berlin – 31 August 2020
Agenda 1 Successful first half 2020 Well diversified German residential portfolio 2 3 Enhanced focus on developments First half 2020 results 4 Guidance 5 Appendices 6 2
1. Successful first half 2020
1. Highlights of H1 2020 ▪ €114.8m of NRI realized over the first half of 2020, up from €67.5m in H1 19 as a result of the consolidation of Adler per April 2020 ▪ €6.2/sqm/month average residential rent , up from €6.1 in H1 19 Operational ▪ 1.9% like-for-like rental growth at H1 20 , down from 3.8% in H1 19 due to the effects of the Berlin rent freeze performance ▪ 5.6% vacancy rate , up marginally from 5.4% in H1 19 ▪ €44.3m FFO I , up from €33.4m in H1 19, mainly as a result of the consolidation of Adler per April 2020 ▪ Rent deferrals relating to COVID-19 as of today stand at 1.3% of the monthly rent , mainly coming from our commercial units, put in perspective, COVID-19 the rent deferrals amount to c.€374k per month and constitutes 0.1% of our residential and 11.5% of our commercial rents ▪ The letting process at Riverside is in progress, current occupancy stands at 74% (ordinary apartments c.84%, micro flats c.10%) where we are facing lower demand for micro flats on the back of COVID-19 Portfolio ▪ ADO continues to materialize on condo sales, generating a 27.3% profit to latest book value in H1 20 (H1 19: 30.7%) ▪ Investments in the portfolio continue and we have spent €3.4/sqm on maintenance (H1 19: €3.1) and €8.1/sqm on capex (H1 19: €11.5/sqm) during the first half of 2020 as most of the capex programs in Berlin have been put on hold as a consequence of the Berlin rent freeze ▪ €8.8bn fair value of investment properties , an increase of €0.2bn vs €8.6bn in Q1 20, mainly on the back of the revaluation of the portfolio ▪ Valuation The portfolio revaluation amounted to +2.3% in total, Berlin remained stable and the remainder of the portfolio outside Berlin was up +4.7% ▪ EPRA NRV stood at €4.3bn as of H1 20, €5.5bn pro -forma post rights issue and Consus equating to pro- forma EPRA NRV per share of €45.96 ▪ 1.84% weighted average cost of debt remained stable vs 1.82% in Q1 20 Financing ▪ Successfully issued €400m 5 -year 3.25% fixed coupon bond bringing the average cost of debt to 1.95% as of today and LTV ▪ 52.2% net LTV (excluding convertibles) and 53.5% net LTV (including convertibles) 4
1. Series of transactions successfully completed Combination of Offer for ADLER Exercise of call Rights issue & Integration ongoing Next steps ADO & ADLER completed option Bond placement ◼ Completion of €457m ◼ Business combination ◼ Closing on 9 April ◼ Appointment of ◼ On 8 & 20 May 2020, ◼ Launch of voluntary exchange offer for all of ADO and ADLER 2020 Maximilian Rienecker Consus announced rights issue with 98% announced on as Co-CEO of ADO the sale of 25 non- take-up closed on 21 remaining ◼ Consolidation of 15 December 2019, strategic projects to July 2020 outstanding shares of ◼ Integration process accounts since to create a leading decrease net debt by Consus anticipated in ◼ Proposed one time 9 April 2020 and synergy €1.1bn upon closing listed residential real Q4 2020 realization started suspension of ◼ ~95% of ADLER estate company in ◼ On 29 June 2020, ◼ Ongoing integration dividend in context of ◼ Operational synergies shares controlled Europe and €450m rights issue and synergy mapping ADO exercised the after the final partially realized acquisition of a call option to acquire ◼ Dividend policy from ◼ Successful bond acceptance period ahead of schedule, strategic minority control in Consus and placement of €400m and after thorough 2021, 50% payout of stake in Consus with ◼ As of July 2020, following settlement analysis now €9.0m with a 5-year maturity FFO an option to acquire ADO’s weight in the on 6 July 2020 now expected for 2020 and a 3.25% fixed control ◼ Targeting Investment FTSE EPRA Nareit holds c.65% coupon on 29 July ◼ €3.5bn of ADLER Developed Europe Grade rating in the 2020 index increased to medium term debt secured by 0.7% from 0.3% change of control ◼ Inclusion in MDAX waivers index targeted 5
1. Firming up development capabilities by acquiring Consus €11.7bn 1 GAV and ~€2.7bn 2 Fourth largest listed European residential player with significant footprint in Top 7 German cities, ✓ market cap providing a strong platform for growth ~€1bn landbank with 10k+ new Integrated German residential platform with unique build-to-hold organic growth planned rental units totalling ✓ pipeline, secured at attractive values and incorporation of an experienced ~800k sqm development platform for future growth ~2/3 of portfolio in Top 7 Concentrated in Top 7 German cities, by addition of €4.7 -5.3bn high quality ✓ German cities new-built residential assets once developed €1.0 -1.6bn embedded build-to- + Approximately €1.2 -1.8bn embedded value uplift from developments at 4.5% hold value uplift and ~€0.2bn ✓ yield on cost (vs ~3.7% for our existing top 13 portfolio) profits from build-to-sell Rent/sqm of €17 -19 3 and Strong cash flow contribution from build-to-hold expected, given attractive Value/sqm of ✓ yield and lean development cost management, resulting in 85-90% EBITDA ~€5,700 -6,600 margins and higher cash conversion once completed €90m -104m €90 -104m synergies for Consus alone, of which the vast majority will be realized in ✓ synergies the near-term at low implementation cost ~53.5% LTV expected to further Committed to prudent financing structure with investment grade-like credit profile and IG target ✓ reduce over medium term rating in the mid-term The acquisition of Consus is a strategic move in the consolidation of the Group as a leading player in Germany’s key residential markets, is accretive to long term NAV and FFO upon completion of the build-to-hold pipeline, and positions the Group to benefit from long-term growth opportunities Source: Market data as of 30 June 2020; Last reported company information; management estimates 6 1 ADO GAV of €8.8bn and €2.9bn of Pro Forma GAV of Consus based on management estimates 2 Thomson Reuters Eikon ADO as of 27 August 2020 3 Based on a Run-Rate Build-to-Hold Portfolio
2. Well diversified German residential portfolio
2. Well diversified German residential rental portfolio Creating a geographically well balanced rental portfolio Development of number of units over time 1 100,000 Sale to Gewobag of 5,900 units 80,000 74,682 60,000 40,000 20,000 – 2015 2016 2017 2018 2019 1H2020 Development of fair value of investment property over time (€m) 10,000 €8.8bn 8,000 6,000 4,000 2,000 # units % value 0 2015 2016 2017 2018 2019 1H2020 1 Includes ground level commercial units, excluding developments, Riverside, BCP Commercial, inventories and units pending refurbishment 8
2. Top 13 cities account for 77% of the residential value Key portfolio metrics Key cities in a well diversified portfolio Fair Value Fair Value Lettable area *NRI Rental yield Vacancy Vacancy H1 20 Avg. Rent NRI Location Units €m H1 20 €/sqm 1H20 €m H1 20 Δ YoY €/sqm/month Δ YoY LFL sqm (in-place rent) H1 20 Berlin 3,921 2,963 19,098 1,323,066 116.5 3.0% 2.6% -0.3% 7.54 1.9% Leipzig 436 1,711 4,747 254,629 17.3 4.0% 5.3% -0.8% 5.98 4.6% Wilhelmshaven 388 980 6,737 396,416 23.0 5.9% 6.5% -1.0% 5.18 2.5% Duisburg 330 1,088 4,897 303,350 19.6 5.9% 3.3% -0.4% 5.57 1.4% Wolfsburg 146 1,661 1,301 87,614 6.6 4.5% 2.3% -0.9% 6.40 3.3% Göttingen 142 1,671 1,377 85,238 6.2 4.3% 1.7% -1.8% 6.12 4.5% Dortmund 133 1,316 1,754 101,194 6.8 5.1% 4.8% 1.5% 5.93 0.7% Hanover 124 1,974 1,109 63,044 5.4 4.3% 2.2% -0.4% 7.29 2.3% Kiel 115 1,727 969 66,720 5.4 4.7% 1.7% 0.8% 6.85 1.2% Düsseldorf 111 3,000 578 36,869 3.5 3.2% 2.3% -0.4% 8.18 0.7% Halle (Saale) 94 928 1,777 101,238 5.2 5.6% 12.8% 0.1% 4.95 2.7% Essen 90 1,378 1,024 65,100 4.4 4.9% 3.4% 0.5% 5.86 1.5% Cottbus 85 821 1,763 103,314 5.5 6.5% 7.0% -0.3% 4.79 1.5% Top 13 total 6,114 2,046 47,131 2,987,792 225.6 3.7% 4.0% -0.2% 6.55 2.2% Other 1,874 1,089 27,551 1,721,727 104.1 5.6% 8.5% 0.7% 5.55 1.4% Total* 7,989 1,696 74,682 4,709,519 329.7 4.1% 5.6% 0.2% 6.20 1.9% Vacancy in the top 13 cities improved marginally YoY by -0.2% to 4.0% at the end of H1 20 * Annualized NRI | Includes ground level commercial units, excluding developments, Riverside, BCP Commercial, inventories and units pending refurbishment 9
3. Enhanced focus on developments
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