IMMOFINANZ : Remuneration Report for the 2021 financial year

Remuneration Report 2021

for

the Executive Board and the Supervisory Board of IMMOFINANZ AG

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1. Executive Board remuneration in the 2021 financial year

IMMOFINANZ successfully implemented its value-creating growth strategy in the 2021 financial year, although markets continued to be affected by the Covid-19 pandemic. The results of operations have been increased by 45.9% to EUR 210.1 million. In the process, the company achieved increases in the result of asset management, significant improvements in results of property sales and property developments, and savings. The pandemic-related property devaluations of the previous year were partially recovered. Thus, the revaluation result from standing investments totaled EUR 85.9 million, compared to EUR -156.6 million in the same period of the previous year. The financial result improved to EUR 90.4 million as a result of higher net profit from investments. Overall, IMMOFINANZ generated a consolidated net profit of EUR 345.8 million (2020: EUR -165.9 million). That represents diluted earnings per share of EUR 2.6 (2020: EUR -1.5).

The result of asset management rose by 2.2% to EUR 211.0 million (2020: EUR 206.4 million). This increase was supported primarily by savings in real estate expenses, which fell by 14.5% to EUR -61.4 million (2020: EUR -71.8 million). Although this was still above the pre-crisis level due to the pandemic, the write-off of receivables from asset management included in this figure, which IMMOFINANZ used to support its tenants during the closure periods, were significantly reduced compared to the previous year and amounted to EUR -11.9 million (2020: EUR -29.2 million). At EUR 284.7 million (2020: EUR 289.5 million), the rental income nearly matched the previous year, whereby the slight difference is chiefly attributable to property sales in the office business.

At EUR 120.1 million, FFO 1 before taxes, which does not include valuation effects, was slightly below the previous year's figure of EUR 126.1 million. This is mainly attributable to higher financing costs due to an increased financing volume as well as a lower dividend payment from the investment in S IMMO. FFO 1 per share equaled EUR 0.97 compared with EUR 1.13 in the previous year, taking into account an increase in the number of shares.

The EPRA asset value (NTA) per share rose by 4.9% to EUR 29.2 over the course of the year (December 31, 2020: EUR 27.8). This increase is primarily attributable to the improvement in net profit. The IMMOFINANZ share started the 2021 financial year at EUR 16.97 and increased by 32.8% to EUR 22.54 at the end of December. This corresponds to a reduced discount to the EPRA NTA as of December 31, 2021 of 22.8% (December 31, 2020: 39.0%). In addition, a dividend of EUR 0.75 per share for the 2020 financial year was distributed to shareholders in financial year 2021. This yields a total shareholder return of 37.2% for the financial year 2021.

The remuneration policy for the Executive Board of IMMOFINANZ was approved by the Annual General Meeting on October 1, 2020, with 75.62% of votes of the share capital present. The remuneration policy is available on the IMMOFINANZ Website at IMMOFINANZ | Corporate Governance | Remuneration Policy and Remuneration Report.

The Supervisory Board took the voting results of the 2020 Annual General Meeting as an opportunity to deal with criticism expressed. As part of a corporate governance roadshow in September 2021, the Personnel and Nominating Committee also discussed strategic and governance topics, including the Executive Board's remuneration policy, with investors and representatives of proxy advisers. With its remuneration policy, IMMOFINANZ has taken the first step towards further developing the remuneration. In particular, through the introduction of a multi-year, share price-based remuneration component and a share ownership guideline,

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the interests of the shareholders and the Executive Board will be aligned more closely. The feedback from our shareholders regarding the remuneration policy focused in particular on the possibility of granting a special bonus. A special bonus can only be granted for extraordinary and one-time performance which, due to their extraordinary nature, cannot be reflected in the variable remuneration. The decision to grant a special bonus is up to the Personnel and Nominating Committee, which understands investors' concerns about such discretion. The possibility of granting a special bonus has been formalized by the remuneration policy, in particular with regard to the requirements. Exceptional performance may be, for example, an M&A transaction or implementation of a major project with significant volume and strategic importance. Performances that can be duly expected in the context of the duties of an Executive Board are not considered as exceptional circumstances in this sense. In case a special bonus is granted, it will be explained in detail in the remuneration report and presented to the shareholders for vote in the subsequent vote on the remuneration report.

The main features of the remuneration policy can be summarized as follows:

				Application in
Fixed remuneration (around 64% of target remuneration)	the 2021
				financial year
		Aligned to the scope of activities and responsibilities of the	✓
Base salary		respective Executive Board member
		Payment in fourteen equal installments
		- Defined-contribution pension fund (APK Pensionskasse AG)
	-	Accident insurance	✓
Additional benefits	-	D&O insurance
	-	Legal protection insurance

- Additional fringe benefits (e.g. company car)

One year variable remuneration - short-term incentive (STI) (around 18% of target remuneration)

Cap

Target achievement corridor

Performance targets

Payment date

Maximum payment amount capped at 130% of the contractually defined target amount

Possible achievement of the performance targets ranges from 0% (minimum value) and 130% (maximum value)

1. Financial targets (equally weighted)

• Results of asset management (40%)
• Funds from operations 1 (before tax and excl. S IMMO

	dividend) (40%)	✓
2. Individual and stakeholder targets (20%)
-	Individual performance
-	Stakeholder concerns (including ESG targets)
-	Major projects

Monthly advance payment of 1/12 of the target amount until 75% of the target amount is reached. The final determination will be completed with the next possible salary payment after approval of the annual financial statements for the financial year

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Multi-year variable remuneration - long-term incentive (LTI) (around 18% of target remuneration)

Plan type

Performance period

Cap

Target achievement corridor

Performance targets

Payment date

Performance cash plan
Four years
Maximum payment amount capped at 250% of the contractually
defined target amount
Possible achievement of the performance targets ranges from 0%
(minimum value) and 250% (maximum value)	✓

1. Relative total shareholder return (50%)

2. Difference between the discount of share price to EPRA net asset value (NAV) per share compared to the comparison group in percentage points (50%)

In the first financial year following the end of the relevant performance period with the next possible salary payment after approval the annual financial statements

Special bonus (maximum 250% of target remuneration)

Occasion-related		Extraordinary performance, e.g., in connection with M&A	
decision of the		transactions and implementation of major projects with significant
Supervisory Board		volumes of strategic importance
Miscellaneous
Share ownership		Investment in IMMOFINANZ AG shares amounting to 30% of gross	✓
guidelines		base salary
Malus and clawback		Option to withhold and reclaim variable remuneration contractually	
regulations		implemented

This remuneration report reflects the application of the Executive Board's remuneration policy for the 2021 financial year and will be submitted to the 2022 Annual General Meeting for approval.

The following shows how the individual remuneration components were applied in the 2021 financial year.

Details on the one-year variable remuneration (STI) awarded in the 2021 financial year

The one-year variable remuneration (short-term incentive, STI) particularly incentivizes the sustainable growth strategy of IMMOFINANZ as well as increased profitability as measured by two central financial targets. In addition, individual and stakeholder targets are taken into account in order to include, among others, the areas of environment, social, and governance (ESG targets) in remuneration. The target achievement is determined at the end of the respective financial year on the basis of criteria and target achievement curves defined in advance by the Personnel and Nominating Committee. The STI payment amount is capped at 130% of the target amount (cap).

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The functionality of the STI

Determination of the payment amount

The payment amount of the STI is calculated by multiplying the annual target amount by the respective weighted target achievement of the performance targets. The STI is based on two key financial performance indicators of IMMOFINANZ, which are of high strategic relevance as core management indicators - results of asset management and funds from operations 1 (FFO 1). Both performance targets are included with a weighting of 40% each in the calculation of the STI payment amount. The possible target achievement of the two financial results is between 0% and 130% in each case. To measure target achievement, the actual value according to the relevant approved consolidated financial statements of IMMOFINANZ is compared with the agreed target value for the respective financial year.

The following target achievement curve is used as a basis for determining the target achievement of the financial performance targets:

Target achievement curve of financial performance targets in the STI:

The agreed target values as well as the actual results and the resulting target achievements can be found in the following table:

In addition to the two financial performance targets, the STI also includes an individual component in order to take into account the individual performance of Executive Board members, important IMMOFINANZ projects as well as stakeholder concerns and ESG targets. The individual component is included in the calculation of the STI payment amount with a

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