Company Presentation December 2016 Market German Residential Safe - PowerPoint PPT Presentation

Company Presentation December 2016

Market German Residential – Safe Harbor and Low Risk German residential market: important pillar of the German economy With a GDP contribution of more than € 430bn the German real estate industry represents almost 20% of Germany’s GDP . Germany and its resilient economy provide a comparatively safe harbor for foreign investments. Germany is the economic powerhouse and growth engine of Europe. Due to its regulatory structure, the German residential rental market is largely immune to macro- economic fluctuations and provides high cash flow visibility. Residential market provides superior returns especially in low interest rate environment. Germany: regulated market ensures sustainable rent growth USA: rent growth is highly volatile % % 6 6 4 4 2 2 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E -2 -2 -4 -4 GDP growth USA (%) GDP growth Germany (%) -6 -6 Rent growth USA (%) Market rent growth Germany (%) Source: Federal Statistics Office Sources: REIS, BofA Merrill Lynch Global Research BIP USA: IMF, Statista Company Presentation – December 2016 page 2

Market German Residential – Favorable Fundamentals Low home ownership ratio – Germans prefer to rent New supply falls short of demand 500 Home ownership rate 2015 in % New constructions (‘000 units) 400 Romania 97 Total required 300 Spain 83 construction volume (incl refugees) Poland 81 200 Required construction Italy 72 volume (ex refugees) 100 UK 70 France 62 0 Austria 2015 2016 2017 2018 2019 2020 57 Ø Europe 71% Germany 53 Actual run rate of new constructions is ca. 250k, Switzerland 44 of which less than 100k are in the affordable build- 0 25 50 75 100 to-let category Growing number of smaller households (million) Fragmented ownership structure of ~23m rental units ∑ 41.0 40.1 ∑ Amateur landlords 15.0 1.0 1.4 2.9 5 or more persons -29% 3.8 3.8 Professional, not listed 2.3 5.0 4 persons -24% Government owned 2.3 15.5 13.8 3 persons -24% Cooperatives 2.1 2 persons +12% Listed property companies 0.9 17.8 16.1 1 person +11% Churches and other 0.6 2010 2030 Sources: Federal Statistics Office, IW Köln; GdW (German Association of Professional Homeowners), Eurostat, GdW (German Association of Professional Homeowners). Company Presentation – December 2016 page 3

Company Vonovia at a Glance National footprint with ~338k apartments and € 23.9bn gross asset value 338k apartments Average size of ~61 sqm Vacancy~2.5% 1 – almost fully let 13.5 years average tenure > € 1,500m 1 stable rental income ~ € 760m € 1 operating profit before sales (FFO 1) Dividend policy: approx. 70% of FFO 1 * Location Dortmund Munich Karlsruhe Schwarmstädte Based on recent forecast of Vonovia calculations. Valuation results are subject to change during the ongoing valuation process. 1 Guidance 2016 Company Presentation – December 2016 page 4

Company Management Team with Wide Range of Experience CFO CCO CEO COO Dr. A. Stefan Kirsten Gerald Klinck Rolf Buch Klaus Freiberg Since 2011 CFO of Vonovia Board member since 2012 Board member since 2010 Since 2013 CEO of Vonovia Former CEO of Majid Al Former management board Former CFO of GAGFAH Responsible for the property Futtaiim Group LLC (real Group member of Bertelsmann SE management (customer care estate development company service, management and 20+ years experience in Former CEO of Arvato AG focusing mainly on retail and letting of portfolio) (global BPO service provider leading positions in the real entertainment ventures in estate industry Former senior manager of with more than 60,000 the Emirates) employees in over 40 Arvato Group; supervised Former CFO of Metro AG and countries) and optimized the service thyssenkrupp AG in Germany centers of Deutsche Post and Deutsche Telekom Expert in pronounced customer orientation page 5 Company Presentation – December 2016

Company Scaleable Organization Asset Management Property Management ~338.000 apartments 38 Business Units 5 Business Units 4 Business Units 8 Business Units 7 Business Units 8 Business Units 6 Business Units Local Local property management, letting, care-taking South Central West North East South-East 6 Regions Product Management Central Residential Customer Technical New Construction & Modernization Environment Service Service Service Acquisition & Sales Services Shared- Finance/ Controlling / Legal/ Other IT Tax Valuation HR Functions* *other Shared-Services areas: internal audit, communications, central procurement, insurances, investor relations, accounting as of September 30, 2016 Company Presentation – December 2016 page 6

Company 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. Share price and market capitalization 20 Stoxx 600 inclusion 35 DAX Average Market Cap. ( € bn) 18 inclusion Südewo acq. 16 VWAP (Euro/share) (20k units) MSCI 30 14 Gagfah acq. inclusion (140k units) 12 MDAX inclusion 10 DeWAG & 25 Vitus acq. (41k units) 8 S-DAX inclusion 6 20 4 2 15 0 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 to date Average Market Cap. ( € bn) VWAP (Euro/share) Source: Factset, company data Company Presentation – December 2016 page 7

Company Liquid Large-cap Stock Shareholder structure (as of November 4, 2016) Share information First day of trading July 11, 2013 8.3% Number of shares outstanding 466 million 7.6% Free float based on Deutsche 92.4% Blackrock Börse definition 5.4% Norges ISIN DE000A1ML7J1 3.1% Ticker symbol VNA Lansdowne Share class Registered shares with no par value Sun Life Listing Frankfurt Stock Exchange Other 75.6% Market segment Regulated Market, Prime Standard Major indices and weight DAX 1.8% (as of Sept 30, 2016) Stoxx Europe 600 0.2% MSCI Germany 1.6% GPR 250 1.2% FTSE EPRA/NAREIT Europe 7.7% VNA share price performance since IPO vs. DAX and EPRA Europe Index + 81 % 230 Vonovia 210 DAX 190 FTSE EPRA/NAREIT Dev. Europe 170 + 30 % 150 130 + 26 % 110 90 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Source: Factset Company Presentation – December 2016 page 8

Proven Strategy Reputation & Customer Satisfaction Systematic optimization of operating Traditional performance and core business productivity through leveraging scaling effects Property Management 1 High degree of standardization and industrialization throughout the entire organization Ensure well-balanced financing mix and maturity Mergers & 5 profile with low financing costs, investment Acquisitions grade credit rating and adequate liquidity at all 2 Financing times Fast and unfettered access to equity and debt capital markets at all times 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 disposals to ensure exposure to strong local portfolio markets Portfolio Management 3 All acquisitions must meet the 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 Expansion of core business to extend the value Innovative chain by offering additional services and products that are directly linked to our 4 Extension customers and/or the properties Insourcing of services to ensure maximum process management and cost control Company Presentation – December 2016 page 9

Property 1 Management Property Management In-place rent ( € /sqm) Vacancy rate (%) 5.94 4.8 5.75 4.1 3.9 5.58 3.5 3.4 5.40 2.8 2.7 5.28 5.17 5.05 2010 2011 2012 2013 2014 2015 9M '16 2010 2011 2012 2013 2014 2015 9M '16 In-place rent ( € /sqm), eop Adj. EBITDA Operations margin* 87.7% 84.8% 82.2% 79.6% 77.4% 71.8% 67.7% 63.8% 60.8% 60.0% IPO 2013 2014 2015 9M 2016 EBITDA Operations Margin EBITDA Operations Margin (excl. Maintenance) * Please see Glossary / Sources in the Appendix for further information. Company Presentation – December 2016 page 10