KKR Real Estate Partners Europe II (EUR) SCSp, managed by KKR & Co. Inc. (NYSE:KKR) along with and other managed funds signed a term sheet to acquire Portfolio of 14,368 Units Located in Eastern part of Germany from ADLER Real Estate AG (XTRA:ADL) and Westgrund AG (XTRA:WEG1) for transaction valued at approximately €1 billion on October 26, 2021. KKR Real Estate Partners Europe II (EUR) SCSp, managed by KKR & Co. Inc. (NYSE:KKR) along with and other managed funds signed a definitive agreement to acquire Residential Real Estate Portfolio of 14,400 Units from ADLER Real Estate AG (XTRA:ADL) and Westgrund AG (XTRA:WEG1) for transaction valued at approximately €1 billion on January 13, 2022. Under the terms of agreement, the agreed real estate value for the portfolio amounts to more than EUR 1 billion i.e. (ADLER Real Estate: €460 million; WESTGRUND: €560 million). The proposed transaction relates to 6,322 residential units and 148 commercial units of ADLER Real Estate and 7,813 residential units and 85 commercial units of WESTGRUND Aktiengesellschaft, in which ADLER Real Estate holds 98.25% of the shares. The parties are working towards a signing of the transaction in December 2021. The portfolio will be managed by KKR's portfolio company Velero. As part of the acquisition, all existing rental agreements, leases as well as 170 employees connected to the portfolio will be assumed.

The closing of the transaction is subject to due diligence conducted by the buyer, the conclusion of final agreements and the fulfillment of customary market conditions, in particular regulatory approvals, clearance by the German Federal Cartel Office and received approval from Management Board and the Supervisory Board of ADLER Real Estate. The transaction is expected to take place in Q1 2022. The net proceeds of this deal are expected to be at around €600 million, which would lead to an LTV of below 50% and would be used for repayment of secured loans. The sale may lead to a significant reduction in ADLER's leverage and return capital to its bond holders. This disposal would have no impact on ADLER´s increased financial guidance for 2021 with a Net Rental Income target of €340-345 million and an FFO 1 target of €135-140 million. CBRE acted as broker in the transaction.