H1 2019 results presentation August 2019 1 Agenda Introduction - - PowerPoint PPT Presentation

SLIDE 1

1

ADLER Real Estate AG: H1 2019 results presentation

August 2019

SLIDE 2

Agenda

2

Financial performance

3

Operational performance

2

ADLER Real Estate in the Capital Markets

4 1

Introduction and executive summary Guidance

5

Appendix

6

SLIDE 3

3

• 1. Introduction and executive summary

SLIDE 4

H1 2019 highlights

4

■ Like-for-like rental growth of 3.4%, average in-place rent increased to €5.54 per sqm/month as of H1 2019 (FY 2018: €5.49 per sqm/month) ■ Vacancy marginally increased by 0.4ppts to 6.4% as of H1 2019 as a result of capex measures and active asset management to reduce delinquencies across the portfolio. Consequently, year end 2019 guidance updated to 6.0%. ■ Significant increase in FFO I (+18.8%) from €35.1m in H1 2018 to €41.7m in H1 2019 ■ Fully diluted FFO I per share in H1 2019 at €0.53 (H1 2018: €0.44) (+20.5%) Operating data Financing and LTV ■ Successful placement of €400 million bond in April 2019 to refinance existing debt with a Coupon of 1.5% ■ WACD stands at 2.08% as of H1 2019 ■ YoY LTV reduction of 8.8 ppts compared to H1 2018 (67.5%). As of H1 2019, LTV stood at 58.7%. Long term target of 50- 55% and guidance for FY 2019 of c.55% Valuation and EPRA NAV ■ Fair value of investment properties (incl. inventories) as of H1 2019 at €5,008.2m (2018: €5,077.1m), slight decrease following sale of part of retail portfolio ■ Fully diluted EPRA NAV (excluding goodwill) per share of €22.23, +7% increase on FY 2018 (€20.77) Acquisitions / Disposals and

• ther

■ Non-core residential portfolio sold in December 2018 – c.3,700 units with GAV of €179.2m sold at c.3% premium ■ During the first half of 2019, 14 retail assets were sold with GAV of €321.7m (c.67% of BCP’s retail portfolio) at c.2.3% discount to ADLER’s current book value

SLIDE 5

5

ADLER Real Estate at a glance

Note: 1 In percentage of gross asset value (“GAV”; investment properties and inventories)

2 In percentage of total number of units of residential portfolio 3 Riverside / Wasserstadt-Mitte, Berlin development project is currently valued at €392.8m and is due to be completed by the end of 2019. Further information on page 12

Company description Total portfolio sector split1

■ ADLER Real Estate AG is one of Germany’s leading residential property companies. ADLER owns c.58k residential units primarily located in - or on the outskirts of - large and growing conurbations in Northern, Eastern and Western Germany. ■ Focus on affordable housing in specific regions in Germany, with a portfolio with considerable upside potential in terms of rent uplifts, vacancy reduction and revaluation gains. Benefitting from favourable market dynamics in German B-cities ensuring recurring and predictable cash flows. ■ The main business objective is the letting of residential property. Recently, ADLER has also selectively engaged in residential developments (limiting exposure in developments to an amount which complies with IG credit rating) in order to complement and diversify the existing portfolio. ■ Focus on value creation through organic growth and M&A strategies. In recent years, the company has grown rapidly by making acquisitions, the latest one being Brack Capital Properties N.V. in April 2018 ■ SDAX-listed since 2015 (also included in GPR General Index, SDAX, DIMAX, CDAX)

Total residential portfolio geographical split2 Residential portfolio KPIs

Completed by the end

• f 2019

Number of units 58,095 Rentable area (sqm) 3,546,082 Fair value (€/sqm) 1,136 Average rent (€/sqm/month) 5.54 Rental yield (%) 5.5% Vacancy (%) 6.4% LfL rental growth (%) 3.4%

31.5% 23.8%

3.3% 16.7% 6,7% 2.9% 6.2%

North Rhine-Westphalia 13,808 Lower Saxony 18,312 Berlin 1,699 Brandenburg 3,595 Saxony-Anhalt 3,877 Saxony 9,679 Thuringia 1,941

Other units 843 1.4 %

2.6%

Bremen 1,515

3.1%

Schleswig-Holstein 1,800

1.8%

Mecklenburg-Pomerania 1,026

Residential portfolio 80.5% Retail Parks 3.2% Residential Development 8.4% Berlin Riverside³ 7.9%

Total GAV €5.0bn

SLIDE 6

6

Finalised internalisation driving operational improvements

• 2. Operational performance

SLIDE 7

Operational performance significantly improved following internalization of property and facility management…

7 Total number of residential units* Investment properties Residential portfolio vacancy rate Residential portfolio LfL rental growth (YoY) Residential portfolio FV per sqm Residential average rent (€/sqm/month)

Residential Retail

Note: * Residential portfolio only; includes commercial units within the multi-family houses

24,086 48,218 47,662 46,179 58,113 58,095 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2014 2015 2016 2017 2018 H1 2019 5.02 4.93 5.04 5.21 5.49 5.54 4.60 4.80 5.00 5.20 5.40 5.60 2014 2015 2016 2017 2018 H1 2019 €/sqm/month 12.8% 11.2% 8.6% 7.9% 6.0% 6.4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2014 2015 2016 2017 2018 H1 2019 0.3% 1.2% 1.5% 3.8% 3.4% 3.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 2014 2015 2016 2017 2018 H1 2019

4,578 4,848

1,171 2,235 2,442 3,022 5,077 5,008 1,000 2,000 3,000 4,000 5,000 6,000 2014 2015 2016 2017 2018 H1 2019 €m 732 735 817 928 1,095 1,136 200 400 600 800 1,000 1,200 2014 2015 2016 2017 2018 H1 2019 €/sqm

SLIDE 8

Growing property portfolio in attractive B locations

8 Overview of top cities (Residential portfolio) ▪ Top 20 locations account for c. 63% of total portfolio in terms of units ▪ BCP assets have enhanced overall portfolio diversification with c. 12k residential units in high growth markets such as Leipzig, Dortmund and Hannover

ADLER Real Estate portfolio at a glance

Overview

v

■ Wilhelmshaven is ADLER´s TOP location concerning number of

• units. The demographic

development in the last four years has been stable given the ever-increasing use of the Jade- Weser Port, Germany’s only deep-sea harbor, and the increasing importance of the naval base Wilhelmshaven. Further increases in the population can be expected in the future. ■ In locations with vacancy rates above 10%, ADLER has targeted tenant improvement capex measures.

Source: ADLER Research

Location Units Lettable area sqm NRI €m Q2 2019 NRI

€/sqm/month

Q2 2019 NRI

€/sqm/month

Q2 2018 YoY NRI Δ

€/sqm/month

Vacancy rate Q2 2019 Vacancy rate Q2 2018 YoY vacancy Δ Fair Value €m Q2 2019 Fair Value €/sqm Q2 2019 Rental yield (in- place rent) Wilhelmshaven

6,896 406,713 23.1 5.10 5.00 2.0% 7.3% 8.1%

• 0.8%

382.1 939 6.0%

Duisburg

4,925 305,003 19.5 5.51 5.39 2.3% 3.6% 2.9% 0.8% 327.8 1,075 5.9%

Leipzig

4,738 254,003 16.5 5.77 5.59 3.2% 6.1% 6.3%

• 0.2%

380.8 1,499 4.3%

Cottbus

1,868 110,045 5.8 4.75 4.65 2.3% 6.8% 15.0%

• 8.1%

84.5 768 6.9%

Halle (Saale)

1,858 105,895 5.3 4.79 4.78 0.4% 12.2% 13.7%

• 1.5%

88.5 835 6.0%

Dortmund

1,770 102,251 6.9 5.78 5.61 3.1% 3.2% 2.4% 0.8% 111.7 1,092 6.2%

Berlin

1,699 111,736 7.6 5.88 5.80 1.5% 3.3% 2.6% 0.8% 242.6 2,171 3.1%

Göttingen

1,377 85,238 5.9 5.98 5.85 2.2% 3.5% 4.1%

• 0.6%

124.2 1,457 4.8%

Wolfsburg

1,301 87,614 6.4 6.25 6.07 3.0% 3.3% 5.7%

• 2.4%

132.4 1,511 4.8%

Helmstedt

1,219 70,703 4.4 5.23 5.17 1.3% 1.7% 3.7%

• 2.0%

65.4 925 6.7%

Hannover

1,115 63,349 5.3 7.15 6.85 4.3% 2.7% 4.4%

• 1.7%

118.6 1,872 4.5%

Essen

1,039 65,921 4.4 5.76 5.61 2.7% 2.9% 3.9%

• 1.0%

85.3 1,294 5.2%

Kiel

967 66,588 5.3 6.71 6.44 4.3% 0.8% 3.2%

• 2.4%

96.7 1,452 5.5%

Borna

900 50,189 2.2 4.68 4.60 1.8% 22.5% 18.6% 3.8% 36.7 731 5.9%

Bremen

873 53,645 3.9 6.24 5.94 5.1% 2.8% 4.3%

• 1.5%

72.4 1,350 5.4%

Chemnitz

850 53,070 2.4 4.78 4.72 1.2% 13.2% 23.8%

• 10.6%

42.7 805 5.6%

Schöningen

846 50,192 2.5 5.01 5.06

• 0.9%

17.2% 18.5%

• 1.4%

40.6 809 6.2%

Oberhausen

819 62,642 3.6 5.07 4.92 3.0% 5.3% 4.2% 1.1% 53.7 858 6.7%

Schwerin

816 48,021 2.6 4.81 4.72 1.9% 5.8% 8.7%

• 2.9%

43.4 904 6.0%

Norden

795 50,217 3.2 5.44 5.23 4.0% 1.4% 2.3%

• 1.0%

52.0 1,035 6.2%

Top 20 total 36,671 2,203,036 136.8 5.51 5.38 2.4% 5.9% 7.0%

• 1.1%

2,582.1 1,172 5.3% Other locations

21,424 1,343,047 82.7 5.58 5.45 2.5% 7.5% 8.7%

• 1.3%

1,444.8 1,076 5.7%

Total 58,095 3,546,082 219.5 5.54 5.40 2.5% 6.4% 7.7%

• 1.3%

4,026.9 1,136 5.5%

SLIDE 9

Capex, maintenance & modernisation

Increased capital expenditure leading to portfolio valuation upside and FFO accretion

9 Residential portfolio capex & maintenance (€m) Residential portfolio capex & maintenance (€/sqm)

■ In 2019, in addition to ongoing capex / maintenance ADLER will be spending an incremental €40-50m capex for tenant improvement / vacancy reduction

Tenant improvement program in 2019 ADLER’s modernisation program – key measures

Modernisation project Investment volume IRR (levered) Completion Göttingen €150m 13% 3 years Wolfsburg €130m 13% 3 years

Capex Maintenance

• Modernisation of the facade with exterior insulation and finish system and

new windows

• Extension of the building with elevators
• Renewal of the entrance areas
• Modernisation of the fresh water with counter and sewage lines
• Modernisation of the stairways and electrical lines
• Roof renovation incl. improvement of thermal insulation
• Addition of a full floor with modern floor plans

Capex Maintenance 11.0 16.8 32.9 46.4 20.1 27.8 21.1 27.5 22.5 22.3 9.5 9.8 32.1 44.4 55.4 68.7 29.6 37.6 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 2015 2016 2017 2018 H1 2018 H1 2019 €m 4.35 5.62 10.46 12.11 11.28 15.59 8.40 9.18 7.15 5.81 5.31 5.49 12.7 14.8 17.6 17.9 16.6 21.1 0.00 5.00 10.00 15.00 20.00 25.00 2015 2016 2017 2018 H1 2018 H1 2019 €/sqm

SLIDE 10

Developments

Growth through selective development projects in A locations at attractive yields

10

■ ADLER will complement future growth through acquisitions with selective developments in A locations at attractive yields ■ Development pipeline of €1.7bn to be completed over the next 6-7 years ■ For developments built to keep ADLER targets 4-5.5% net initial yield

Development pipeline Developments split by GAV

Düsseldorf

Grafenberg (Zauberberg) Gerresheim (Glasmacherviertel) Grafental I Grafental II Aachen (Tuchmacherviertel) Berlin, Riverside Berlin, Schönefeld Dresden, Trachau

Note: 1 Riverside / Wasserstadt Mitte, Berlin development project is currently valued at €392.8m and is due to be completed by the end of 2019. Further information on page 12 Berlin, Riverside¹ 48% Other developments 49% Land bank 3%

Total GAV €0.8bn

SLIDE 11

Developments breakdown

11 Developments currently under construction Future pipeline

Total construction costs

Düsseldorf, Gerresheim (Glasmacherviertel)

Gross area: 187,000 sqm Expected construction costs: 2,300 €/sqm Current status: Land development plan in proposal

Düsseldorf, Grafenberg (Zauberberg)

Gross area: 27,000 sqm Expected construction costs: 2,800 €/sqm Current status: Land development plan in proposal

Berlin, Schönefeld

Gross area: 304,000 sqm Expected construction costs: 2,400 €/sqm Current status: Land development plan in proposal

Dresden, Trachau

Gross area: 45,000 sqm Expected construction costs: 2,200 €/sqm Current status: Land development plan in proposal

Berlin, Riverside

GDV: €454.2m Units: 753

Düsseldorf, Grafental I

GDV: 88% of units sold, remaining GDV €79.4m Units: 855

Aachen, Tuchmacherviertel

GDV: €115.7m Units: n/a

Düsseldorf, Grafental II

GDV: €409.7m Units: 468

SLIDE 12

Riv iversid ide projec ject (Wasserstadt Mit itte)

Inner-city district in the area between Berlin Central Station and the Government District

12

▪ Secured contract with general contractor ▪ Strategically located in the government district close to Berlin’s main station ▪ Currently in ADLER’s balance sheet at €392.8m with 4.9% NIY ▪ GDV at completion is €454.2m ▪ Overall 753 residential units (498 apartments and 255 micro- apartments) ▪ Expected completion by the end of 2019 ▪ Full rental income from September 2020 onwards

Project information ▪ Total rentable space of c. 50,240 sqm and landbank with a planning permission for c. 10,600 sqm GFA ▪ Financing secured and in line with target to reduce LTV < 55% ▪ Strengthening of position in attractive Berlin market

SLIDE 13

13

Considerably improved financial metrics on the back of refinancing activities

• 3. Financial performance

SLIDE 14

Results H1 2019 – highlights

14 € m H1 2019 H1 2018 H1 2019 vs H1 2018 (%) Net rental income

127.2 109.1 16.6%

Earnings from property lettings (NOI)

112.5 96.5 16.6%

• Adj. EBITDA

85.0 76.5 11.1%

FFO I

41.7 35.1 18.8%

▪ ADLER Real Estate has significantly improved its operational performance Solid operational performance € m H1 2019 FY 2018 H1 2019 vs FY 2018 (%) Investment properties (incl. inventories)

5,008.2 5,077.1

• 1.4%

EPRA NAV

1,805.1 1,692.3 6.7%

Adjusted diluted EPRA NAV (excl. goodwill)

1,754.2 1,639.0 7.0%

Equity ratio (%)

28.3% 27.0% 1.30 ppts

LTV (excl. convertibles) (%) - Net debt over GAV

58.7% 61.4%

• 2.70 ppts

WACD (%)

2.08% 2.23%

• 0.15 ppts

SLIDE 15

Strong performance track record

15 Net rental income (€m) FFO I (€m) Diluted EPRA NAV per share (excl. goodwill) Diluted FFO I per share (€) EPRA NAV (excl. goodwill) Adjusted EBITDA (€m)

56.1 131.6 160.9 170.3 238.4 109.1 127.2 0.0 50.0 100.0 150.0 200.0 250.0 300.0 2014 2015 2016 2017 2018 H1 2018H1 2019 €m

• 1.1

16.1 27.3 40.5 74.2 35.1 41.7

• 10.0

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 2014 2015 2016 2017 2018 H1 2018H1 2019 €m

• 0.03

0.25 0.39 0.51 0.94 0.44 0.53

• 0.20

0.00 0.20 0.40 0.60 0.80 1.00 2014 2015 2016 2017 2018 H1 2018H1 2019 € 358.1 783.9 971.9 1,230.5 1,639.0 1,754.2 0.0 500.0 1,000.0 1,500.0 2,000.0 2014 2015 2016 2017 2018 H1 2019 €m 9.10 12.24 13.79 15.37 20.77 22.23 0.00 5.00 10.00 15.00 20.00 25.00 2014 2015 2016 2017 2018 H1 2019 € 27.2 95.6 124.3 128.4 165.4 76.5 85.0 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 2014 2015 2016 2017 2018 H1 2018H1 2019 €m

SLIDE 16

Sources of funding and debt profile

16 Debt maturity schedule Debt KPIs LTV WACD ICR Sources of funding

74.9% 73.7% 59.9% 59.4% 61.4% 58.7% 55.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% 2014 2015 2016 2017 2018 H1 2019 2019 target LT target 50-55% 4.15% 3.99% 3.69% 2.72% 2.23% 2.08% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 2014 2015 2016 2017 2018 H1 2019 100.9 138.5 1,270.4 577.8 624.7 384.8 111.4 564.6 0.0 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1,400.0 2019 2020 2021 2022 2023 2024 2025 >2025 Secured debt Corporate bonds Convertibles €m

Total interest-bearing debt (€m) 3,744 Net LTV 58.7% ICR 2.4x Fixed / hedged debt 89.3% Unsecured debt 59.3% Weighted average cost of debt 2.08% Weighted average maturity 3.9 years Corporate credit rating (S&P) BB

Secured bank loans 40.7% Corporate bonds 56.0% Convertibles 3.3% 1.30 1.43 1.59 1.71 2.33 2.45 0.00 0.50 1.00 1.50 2.00 2.50 3.00 2014 2015 2016 2017 2018 H1 2019

SLIDE 17

Debt schedule

17 Current maturity profile

BV H1 2019 €m Volume €m Maturity Nominal interest rate Other comments Premature redemption Rate, at which premature redemption is possible

Bonds

2017/21 497 500 06 Dec 21 1.50% Anytime ▪Under condition of make whole 2017/24 297 300 06 Feb 24 2.10% Anytime ▪Under condition of make whole 2018/23 492 500 27 Apr 23 1.90% Anytime ▪Under condition of make whole 2018/26 294 300 27 Apr 26 3.00% Anytime ▪Under condition of make whole 2019/22 396 400 17 Apr 22 1.50% Anytime ▪Under condition of make whole

Total 1,976 2,000 3.9 years 1.90% Convertibles

2016/21 122 130 19 Jul 21 2.50% Strike price of €12.55, no.

• f potential ADLER shares

from conversion 9.4m Conversion from 19 July 2019 ▪At face value, if trading at more than 130% of strike price for at least 20 out of 30 trading days

Total 122 130* 2.1 years 2.50% BCP bonds

Debenture A 30 30 Jul-20 4.80% Permitted ▪Under condition of make whole Debenture B 51 48 Dec-24 3.29% Permitted ▪Under condition of make whole Debenture C 40 38 Jul-26 3.30% Permitted ▪Under condition of make whole

Total 121 116 4.9 years 3.67% Bank debt 1,525 1,527 4.0 years 2.10%

Total interest bearing debt 3,744 3,773 3.9 years 2.08% * Conversions are reflected

SLIDE 18

18

Trading at substantial discount to its EPRA NAV

• 4. ADLER Real Estate in the Capital Markets

SLIDE 19

Market cap and shareholder structure

19

Key metric In € EPRA NAV/share (excl. goodwill), basic / diluted 26.36 / 22.23

Upside Potential vs. EPRA NAV/share (basic / diluted)

• c. 54% / 46%

Broker consensus for EPRA NAV/share (FY 2019, median) 20.63

Upside potential vs. broker consensus

• c. 41%

Share price (close as at 13 Aug 2019) 12.12

▪ ADLER is trading at significant discount to EPRA NAV with the broker community consensus upside of c.60% vs. current trading levels

Key broker recommendations Key trading considerations ADLER Real Estate shareholders’ structure (31 July 2019)

Share information Total voting rights 71,063,622 Treasury shares 1,603,232 Listed/Stock exchange Prime Standard/Frankfurt am Main Indices: SDAX, CDAX, GPR General Index, DIMAX 3M / 6M ADTV 169k shares (€2.1m) / 157k shares (€2.0m)

Key share information (31 July 2018)

Company Recommendation Target (€) Date Berenberg buy 17.40 May-19 Deutsche Bank buy 20.00 May-18 DZ Bank buy 16.80 Jul-19 Pareto Securities buy 22.00 Jul-19 HSBC buy 21.00 Jul-19 Kempen & Co. neutral 14.00 Jun-19 National Bank buy 18.00 May-18 ODDO buy 15.90 Aug-19 Consensus (median) 17.70

Mezzanine IX 14.4% Wecken 14.7% Fairwater 13.5% Thomas Bergander 6.7% Tresury Shares 2.3% Free Float 48.4% Anchor shareholders 42.6%

SLIDE 20

20

Taking ADLER Real Estate to the next level

• 5. 2019 Guidance

SLIDE 21

ADLER Real Estate guidance and outlook 2019

21 ADLER Real Estate historical review and guidance

Key metrics 2017 2018 Target FY 19 as at August 19

Net rental income (€m) 170.3 238.4 235-240 Historical guidance n/a c.230 Achieved n/a

✓

Vacancy rate 7.9% 6.0% 6.0% Historical guidance 7.0% 6.0% Achieved

 ✓

Ø rent (€/sqm/month) 5.21 5.49 5.60-5.65 Historical guidance 5.08 5.45 Achieved

✓ ✓

FFO I (€ m) 40.5 74.2 83-86 Historical guidance 40 73-75 Achieved

✓ ✓

LTV (excl. convertibles) 59.4% 61.4% c.55% Historical guidance 55% c.55% Achieved

 

WACD 2.72% 2.23% 2.0-2.1% Historical guidance 3.45% 2.24% Achieved

✓ ✓

Guidance for vacancy updated from 5.0% to 6.0% as a result of active portfolio management to reduce delinquencies across the portfolio.

SLIDE 22

22

• 6. Appendix

SLIDE 23

ADLER Real Estate has shown a consistent track record of value creating M&A and successful integration

23

Note: 1 Total offer enterprise value

Corporate M&A 2014

■ First public takeover by ADLER Real Estate, offer initially accepted by 92.7% of shareholders ■ The acquisition also brought its ESTAVIS’ subsidiary ACCENTRO, focused on the privatisation of residential housing

2015

■ Second takeover by ADLER Real Estate, adding c. 21,000 units to the Group ■ WESTGRUND had a business model very similar to ADLER Real Estate, but with key focus in medium and large towns in North and East Germany

2016

■ Initial stake bought in August 2015 ■ In January 2017 ADLER Real Estate received € 422 m in connection with the successful tender of its 26% share in conwert Immobilien Invest to Vonovia ■ Economic profit amounting to c. € 48 m ■ Additional c. € 10 m in FFO I and LTV ratio and WACD improvements

2017

■ Successful disposal of the residential housing privatisation business ACCENTRO at a considerable premium to book ■ ACCENTRO will have delivered a contribution to equity of more than €70m over a 3 year period

Track record and key milestones 2018

■ Acquisition of 41% stake from main shareholder and tender offer for up to 70% in Brack Capital Properties NV. successfully achieved ■

• c. €6m of synergies identified already at announcement, with further potential gains in the medium-to-long term financing synergies through enhanced overall credit profile

Portfolio

• c. 2,400 units

Portfolio

• c. 8,500

units ESTAVIS AG

• c. 2,100 units

Portfolio

• c. 4,300 units

2014

Portfolio 1,906 units Westgrund AG Takeover offer

• c. 21,000 units

Ajax portfolio

• c. 2,700 units

Acquisition of 24.79% of ATX listed conwert Immobilien Invest SE 29,896 units ADLER Real Estate announces a package

• f measures to

sustainably boost earnings strength Portfolio

• c. 700 units

2015

Portfolio

• c. 6,750 units

Additional 5m shares in conwert aquired Stake in conwert sold to Vonovia SE Portfolio 160 units Portfolio

• c. 200

units Sale of 82% stake in ACCENTRO

• c. € 180 m

Portfolio

• c. 2,500

units Successful disposal of legacy Commercial assets

2017 2016 2018

Corporate Bond 14/19 € 50 m Capital increase in kind € 80 m Tap 14/19 Corporate Bond € 50 m Capital Increase € 21 m Corporate Bond 15/20 € 300 m Mandatory Convertible Bond (IFRS Equity) € 175 m Tap Corporate Bond 15/20 € 50 m Change in the Group’s Management Board Convertible Bond 16/21 € 137 m Redemption Schuldscheindarlehen € 62 m Redemption Schuldscheindarlehen € 30 m Redemption Margin Loan € 200 m Tap 14/19 Corporate Bond € 30 m Tap Corporate Bond 15/20 € 150 m Buyback ACCENTRO convertible € 12 m Redemption Bond 14/19 € 130 m Corporate Bond 17/21-24 € 800 m Brack Capital Properties takoever offer annoucement € 1.5 bn1 Capital increase in kind € 190 m Completion of STO for Brack Capital Properties takeover

• ffer

€ 1.5 bn1

2019

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M

Successful disposal of Berlin assets 1,174 units ADLER Real Estate AG and Benson Elliot Capital Management enter into a JV to opportunistically dispose of c. 2,300 (€118m) Residential Units Corporate Bond 18 / 23 - 26 € 800 m Disposal of residential units of non-core residential portfolio

• c. 1,400 units

(€61.5m) Successful disposal of 3 of the BCP retail assets 3 retail assets (€180.6m)

SLIDE 24

ADLER Real Estate management team

24 Tomas DE VARGAS MACHUCA

Chairman of the Management Board (Co-CEO), Chairman of the Executive Committee ■ Has assumed the role as Co-CEO as at 22nd December 2017 together with Maximilian Rienecker ■ Responsible for the Company’s Capital Markets

• perations since 2013

■ Before joining ADLER, Tomas de Vargas Machuca spent 15 years in the real estate business of which 10 years in banking ■ He was an Executive Director at UBS Investment Bank’s Real Estate Finance ■ He holds a B.A. in Economics and a M.A. in Management of International Firms from Bocconi University in Milan, Italy.

Sven-Christian FRANK

COO, Management Board, Executive Committee ■ COO since 9th June 2016 ■ Responsible for operational management (asset, property and facility mgmt) and transaction ■ Formerly held various leading positions in real estate business, notably at Gestrim Deutschland AG and Deutsche Real Estate AG ■ Born 1965, attorney at law, mediator (DAA), real estate asset manager (IREBS)

Maximilian RIENECKER

Chairman of the Management Board (Co-CEO), Executive Committee ■ Has assumed the role as Co-CEO as at 22nd December 2017 together with Tomas de Vargas Machuca ■ With ADLER since February 2017, when he was appointed Head of Corporate Finance and Strategy. ■ Maximilian Rienecker calls on more than 5 years of experience in the real estate industry after roles in Sales and Marketing at ING Investment Management in Hong Kong and Corporate Strategy and M&A at SBM Offshore in Monaco.

SLIDE 25

Group governance organisational chart

25 Lean Governance structure ADLER REAL ESTATE AG Supervisory Board

• Dr. D. Hoffmann,
• T. Schmid, C. Jorgensen

Accounting, Controlling & Treasury Portfolio Management Bank Financing Investor Relations Legal Corporate Governance Compliance & Human Resources

• A. Gotthardt

Member of the EC

• M. Rienecker

(Co-CEO, Digitalization, Corporate Finance)

Management Board

• S. Frank

(COO, Project Development)

• T. de Vargas Machuca

(Co-CEO, Chairman of the EC)

Project Development

• F. Sitta

Member of the EC

• C. Wolff

Member of the EC

• P. Hoffmann

Member of the EC

• T. Kladnik

Member of the EC

• S. Frank

Member of the EC

• S. Frank

Member of the EC

Executive Committee (EC)

SLIDE 26

Profit and loss statement H1 2019

26 ■ All items impacted by the acquisition of BCP ■ Personnel expenses and expenses from property lettings increased only disproportionally compared to increase in rental income. Increases were mainly due to internalization of property and facility management and acquisition of BCP. ■ Improvement in financial result is mainly due to efforts to reduce interest expenses and interest on ACCENTRO receivable Comments Operating results increased

Insourcing impacts structure of expenses

SLIDE 27

Balance sheet as of 31 March 2019

27 Reflecting the company´s successful activities of financial consolidation Comments ■ Balance sheet extended by more than 40% following acquisition of BCP ■ Increase in equity due to net retained profit and acquisition of BCP ■ Current liabilities decreased as promissory notes reclassified to current liabilities were repaid

SLIDE 28

EPRA NAV bridge as of 30 June 2019

28 EPRA NAV calculation Comments

■ Net asset value (EPRA NAV), which is calculated in accordance with the guidelines issued by the European Public Real Estate Association (EPRA), reached €1,754.2m as of H1 2019. ■ Based on the total number of existing shares in circulation at the balance sheet date less treasury shares plus the shares resulting from the assumed conversion of the mandatory convertible bond counted as shareholders’ equity, undiluted EPRA NAV per share amounted to €26.36 as of H1 2019 (FY 2018: €24.71). ■ Diluted EPRA NAV per share amounted to €24.40 as of H1 2019 (FY 2018: €22.94). ■ Adjusting for the goodwill in connection with the previous acquisitions, the diluted EPRA NAV per share stood at €22.23 (FY 2018: €20.77).

SLIDE 29

LTV bridge as of 31 March 2019

29 LTV calculation Comments ■ Since the first quarter of 2018, ADLER has been calculating LTV as the ratio of financial liabilities (adjusted for cash and cash equivalents, non- current assets held for sale, purchase price receivables and liabilities held for sale) to ADLER’s total property assets – as is customary in the industry. ■ LTV was as of H1 2019 at 58.7%, decrease of 270bps compared to FY 2018 (excluding convertibles, i.e. assuming that the convertible bonds outstanding at the reporting date were converted into shares as they are trading in the money). ■ The acquisition of BCP in April 2018 had a significant influence on the temporary increase in LTV.

SLIDE 30

Financial calendar 2019

30

21 January 18th German Corporate Conference 2019 (UniCredit & Kepler Cheuvreux), Frankfurt 30 January Roadshow London 20 February 13th ODDO BHF German Conference (ODDO BHF), Frankfurt 19 - 21 February Mid/Small Cap Forum Asia (Lond Capital), Hong Kong & Singapure 7 - 8 March European Property Seminar New York (Kempen), NYC 28 March Annual report 2018 1 - 4 April European Roadshow (Brussels, Nordics, London, Zurich) 15 May Q1 2019 report 22 - 23 May 17th European Property Seminar (Kempen), Amsterdam 24 May 14th HSBC European Real Estate Conference (HSBC), Frankfurt 11 June Annual General Meeting 2019 16 - 21 June EPRA Asia Week (EPRA), Singapore, Hong Kong, Taipei, Seoul & Tokyo 22 - 25 July US Roadshow (NYC, Boston) 14 August H1 2019 report 2 - 6 September European Roadshow 9 September NYC Roadshow 10 - 12 September EPRA Conference (EPRA), Madrid 23 - 24 September 8th German Corporate Conference (Berenberg & Goldman Sachs), Munich 25 - 26 September 6th Annual German Corporate Conference (Baader Bank), Munich 8 - 11 October US Roadshow 14 November Q3 2019 report 2 - 5 December Berenberg European Conference (Berenberg), London

SLIDE 31

Disclaimer

31

This document and its contents are confidential and not meant for forwarding.

• transmission. publication. duplication. or disclosure (in whole or part) to other
• persons. Outside of Germany the distribution of this document may be restricted by

applicable laws. This document does not constitute an offer to sell or an invitation to make an offer to buy or subscribe for securities. This document and the information contained therein may not be distributed in the United States of America. Canada. Australia. Japan or other jurisdictions. in which such offer. respectively. such invitation to make an offer to buy or subscribe for securities is not allowed. This document does not constitute an offer to sell securities in the United States. Securities. including the securities of ADLER Real Estate Aktiengesellschaft may not be sold or offered for sale within the United States or to or for the account of / in favour of US citizens (as defined in Regulation S under the U.S. Securities Act of 1933 in the current version (the "Securities Act") unless they are registered under the regulations of the Securities Act or unless they are subject to an exemption from registration. This document includes 'forward-looking statements'. Forward-looking statements are all statements. which do not describe facts of the past. but containing the words "believe". "estimate". "expect". "anticipate". "assume". "plan". "intend". "could". and words of similar meaning. These forward-looking statements are subject to inherent risks and uncertainties since they relate to future events and are based on current assumptions and estimates of ADLER Real Estate Aktiengesellschaft. which might not occur at all or occur not as assumed. They therefore do not constitute a guarantee for the occurrence of future results or performances of ADLER Real Estate Aktiengesellschaft. The actual financial position and the actual results of ADLER Real Estate Aktiengesellschaft. as well as the overall economic development and the regulatory environment may differ materially from the expectations. which are assumed explicitly or implicitly in the forward-looking statements and do not comply to them. Therefore. investors are warned to base their investment decisions with respect to ADLER Real Estate Aktiengesellschaft on the forward-looking statements mentioned in this document.

SLIDE 32

Contact

32

ADLER Real Estate AG Joachimsthaler Straße 34 10719 Berlin www.adler-ag.com Tel: +49 (0) 162 424 6833 E-mail: t.kladnik@adler-ag.com