TAG Immobilien : Interim Report

INTERIM

STATEMENT

2021 ON THE 1ST QUARTER

GROWING CASHFLOWS

2
Group financials	Business development	Balance sheet

GROUP FINANCIALS

in EUR m

Income statement key figures	01/01/2021-03/31/2021	01/01/2020-03/31/2020
Net actual rent	83.1	79.7
EBITDA (adjusted)	57.0	54.9
Consolidated net income	34.5	32.1
FFO I per share in EUR	0.31	0.29
FFO I	45.6	42.0
AFFO per share in EUR	0.21	0.15
AFFO	31.3	21.3

Balance sheet key figures	03/31/2021	12/31/2020
Total assets	6,599.2	6,478.0
Equity	2,709.0	2,681.5
Equity ratio in %	41.1	41.4
EPRA Net Tangible Asset (NTA, fully diluted) per share in EUR	22.13	21.95
LTV in %	44.8	45.1

Portfolio data	03/31/2021	12/31/2020
Units Germany	88,260	88,313
Units Poland (secured pipeline)	9,027	8,742
GAV (total real estate assets)	6,017.1	5,984.5
Vacancy in % (total)	6.1	5.6
Vacancy in % (residential units)	5.9	5.3*/4.5
l-f-l rental growth in %	1.4	1.4
l-f-l rental growth in % (incl. vacancy reduction)	1.2	1.5

Employees	03/31/2021	03/31/2020
Number of employees	1,360	1,303
Capital market data
Market cap at 03/31/2021 in EUR m		3,562.6
Share capital at 03/31/2021 in EUR		146,498,765
WKN / ISIN		830350/EN0008303504
Number of shares at 03/31/2021 (issued)		146,498,765
Number of shares at 03/31/2021 (outstanding, without treasury shares)		146,366,881
Free float in % (without treasury shares)		99.91%
Index		MDAX/EPRA

* incl. acquisitions in 2020

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Income statement	Cashflow statement	Financial calendar	Contact

CONTENTS

TABLE OF CONTENTS

Group Financials

Business Development

Consolidated Balance Sheet

Consolidated Income Statement

Consolidated Cashflow Statement

Financial Calendar/Contact

02

04

24

26

27

28

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Group financials	Business development	Balance sheet

BUSINESS DEVELOPMENT

BUSINESS PERFORMANCE IN THE FIRST THREE MONTHS

OF THE 2021 FINANCIAL YEAR

FOUNDATIONS OF THE GROUP

TAG Immobilien AG ('TAG' or 'the Group' for short) is a Hamburg-based property company focused on the residential real estate sector. The properties owned by TAG and its subsidiaries are spread across various regions in Northern and Eastern Germany and North Rhine-Westphalia and, since the 2020 financial year, in Poland as well. Overall, TAG managed around 88,300 residential units in Germany at 31 March 2021 (31 December 2020: also around 88,300) and had a contractually secured project pipeline in Poland for the construction of around 9,000 units (31 December 2020: around 8,700 units).

TAG Immobilien AG shares are listed on the MDAX of the Frankfurt Stock Exchange; TAG's market capitalisation at 31 March 2021 was EUR 3.6bn (31 December 2020: EUR 3.8bn).

TAG's business model in Germany is the long-term letting of flats. All functions essential to property management are carried out by the Company's own employees. In addition, caretaker services and craftsmen's activities are provided for the Company's own portfolio. The rentals consist of affordable housing that appeals to broad sections of the population. The Group's own multimedia company expands the range of property management services by assisting with the provision of multimedia services to tenants. Energy management is poled in a subsidiary through which the Group supplies commercial heating to its own portfolio with the aim of optimising energy management. In the medium term, these services are to be further expanded and supplemented with new services for tenants.

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Income statement	Cashflow statement	Financial calendar	Contact

TAG invests primarily in medium-size towns and in the vicinity of large metropolises, where we see not only potential for growth, but in particular better opportunities for returns in comparison with investments in the big cities. The newly acquired portfolios usually have higher vacancies, which are then reduced following the acquisition, through targeted investments and proven asset-management concepts. Investments in Germany are made nearly exclusively in regions already where TAG already manages assets, to be able to use existing administrative structures. Also, local knowledge of the market is essential in the acquisition of new portfolios here.

In addition to long-term property management, the Group selectively exploits sales opportunities in order to reinvest the realised capital appreciation and liquidity into new portfolios with higher yields. This strategy of 'capital recycling' is TAG's response to the intense competition for German residential real estate, and puts a focus on returns per share. Growth in absolute orders of magnitude is no longer at the forefront of the corporate strategy. Instead, the aim is to offer tenants affordable housing through sustained and active portfolio management, and investors growing cash flows through attractive dividends.

In the last financial year 2020, TAG regionally expanded its portfolio into Poland. Vantage Development S.A. ('Vantage'), a real estate developer headquartered in Wrocław, is the platform for further development, which in future will focus on establishing a separate portfolio of residential units in Poland and currently also includes the continued sale of units already planned and yet to be built.

The growing Polish residential real estate market is the target of a regional expansion of TAG's business model, which here, too, focuses on strong cash returns (meaning FFO in relation to the equity deployed). The Polish rental housing market is characterised by a supply deficit. It is considered one of the least saturated housing markets in Europe, with a housing shortage already exceeding 3.5 million units (OECD data base). In addition, the absolute size of the Polish market (approx. 38 million inhabitants, sixth largest EU country by population), coupled with a growing service sector and favourable demographic trends ('Generation Rent' - growing preference for rental housing) supports TAG's market entry in Poland. The Management Board expects TAG's early market entry to give it a competitive advantage in terms of scale, market knowledge, market penetration, and market position.

TAG's medium-term growth target, i.e. for the next three to five years, is to build up a portfolio of around 8,000-10,000 residential units in Poland. Capital spending will focus on development projects and new buildings in large cities with favourable population trends, proximity to universities, and a well-developed infrastructure.