j.p. morgan ubs investment bank - perfect...

PROSPECTUS DATED October 14, 2014

Prospectus

for the public offering

of

9,302,326 newly issued bearer shares with no par value (Stückaktien) from a capital increase against contribution in cash to beresolved by an extraordinary shareholders’ meeting of the Company

and

24,197,674 bearer shares with no par value (Stückaktien) from the holdings of the Existing Shareholders

and

3,350,000 bearer shares with no par value (Stückaktien) from the holdings of one of the Existing Shareholders in connectionwith a possible over-allotment

and at the same time for the

admission to trading on the regulated market segment (regulierter Markt) of the stock exchange in Frankfurt am Main withsimultaneous admission to the sub-segment of the regulated market with additional post-admission obligations

(Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse)

of

up to 9,302,326 newly issued bearer shares with no par value (Stückaktien) from a capital increase against contribution in cashto be resolved by an extraordinary shareholders’ meeting of the Company

and

52,000,000 existing bearer shares with no par value (Stückaktien) (existing share capital),

each such share with a notional value of €1.00 and full dividend rights from January 1, 2014

of

TLG IMMOBILIEN AG

Price Range: €10.75 – €13.75

International Securities Identification Number (ISIN): DE000A12B8Z4German Securities Code (Wertpapierkennnummer, WKN): A12B8Z

Common Code: 111597880Ticker Symbol: TLG

Joint Global Coordinators and Joint Bookrunners

J.P. Morgan UBS Investment Bank

Joint Bookrunners

COMMERZBANK Kempen & Co HSBC

CONTENTSSection Page

Summary of the Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1

A—Introduction and Warnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1

B—Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1

C—Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-13

D—Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-13

E—Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-16

German Translation of the Summary of the Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-23

A—Einleitung und Warnhinweise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-23

B—Emittent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-23

C—Wertpapiere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-37

D—Risiken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-37

E—Angebot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-40

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Market and Business Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Financing Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Regulatory, Legal and Tax Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Risks related to the Offering and the Offered Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Purpose of this Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Forward-looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Appraiser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Sources of Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Documents Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Currency Presentation and Presentation of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Subject Matter of the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Price Range, Offer Period, Offer Price and Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Expected Timetable for the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Information on the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Transferability of the Shares; Lock-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Existing Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Allotment Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Stabilization Measures, Over-Allotments and Greenshoe Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Lock-up Agreement, Limitations on Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Admission to the Frankfurt Stock Exchange and Commencement of Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Designated Sponsors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Interests of Parties Participating in the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Proceeds of the Offering and Costs of the Offering and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Reasons for the Offering and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Dividend Policy; Results and Dividends per Share; Use of Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

General Provisions Relating to Profit Allocation and Dividend Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Dividend Policy and Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Capitalization and Indebtedness; Statement on Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Statement on Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

i

Section Page

Selected Consolidated Financial Information and Company Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Selected Consolidated Financial Data Prepared in Accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Additional Key Performance Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Selected Consolidated Financial Data Prepared in Accordance with German GAAP . . . . . . . . . . . . . . . . . . . . . . . . 38

Management’s Discussion and Analysis of Net Assets, Financial Condition and Results of Operations . . . . . . . . . 40

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Historical Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Key Factors Influencing TLG’s Portfolio, Results of Operations and the Comparability of FinancialInformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Selected Consolidated Statement of Comprehensive Income Data Prepared in Accordance with IFRS . . . . . . . . . . 46

Selected Consolidated Statement of Financial Position Prepared in Accordance with German GAAP . . . . . . . . . . . 53

Investment Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Other Financial Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Additional Information from the Unconsolidated Financial Statements Prepared in Accordance with GermanGAAP as of and for the Year Ended December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Quantitative and Qualitative Disclosure about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Reconciliation between German GAAP and IFRS for the Fiscal Year 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Profit Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Forecast of Funds from Operations Post Tax (Excluding Results of Disposals) for the Fiscal Year 2014 for TLGIMMOBILIEN AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

FFO Forecast for the Current Fiscal Year 2014 for the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Auditor’s Report on the Funds from Operations Post Tax (Excluding Results of Disposals) (FFO Forecast) ofTLG IMMOBILIEN AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Markets and Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

TLG’s Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

TLG’s Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

TLG’s Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

TLG’s Business Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Regulatory Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Tenancy Law for Commercial Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Land-use Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Building Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Protection of Existing Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Energy Saving Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Monument Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Regulation Relating to Environmental Damage, Contamination and Property Maintenance . . . . . . . . . . . . . . . . . . . 103

German Law on Property Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Capital Investments Act (Kapitalanlagegesetzbuch) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Information on the Existing Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Shareholder Structure (Before and After the Offering) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

General Information on the Company and the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Formation, Incorporation, Commercial Name, Fiscal Year and Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . 108

History and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

ii

Section Page

Duration of the Company and Corporate Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Group Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Statutory Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Notifications, Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Description of Share Capital of TLG IMMOBILIEN AG and Applicable Regulations . . . . . . . . . . . . . . . . . . . . . . . 111

Current Share Capital; Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Development of the Share Capital since the Company’s Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Authorized Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Conditional Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

Purchase of Own Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

General Provisions Governing a Liquidation of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

General Provisions Governing a Change in the Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

General Provisions Governing Subscription Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Exclusion of Minority Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Shareholder Notification Requirements; Mandatory Takeover Bids; Directors’ Dealings . . . . . . . . . . . . . . . . . . . . . 114

EU Short Selling Regulation (Ban on Naked Short-Selling) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Description of the Governing Bodies of TLG IMMOBILIEN AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Share Participation Plan and Employee Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Certain Information Regarding the Members of the Management Board and Supervisory Board . . . . . . . . . . . . . . . 125

Shareholders’ Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Certain Relationships and Related-Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Relationships with the Existing Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Relationships with Members of the Management Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Relationships with Members of the Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Greenshoe Option and Securities Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Termination/Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Selling Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Taxation in the Federal Republic of Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Taxation of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Taxation of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

Taxation of Dividends of Shareholders with a Tax Domicile in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Taxation of Dividends of Shareholders without a Tax Domicile in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Taxation of Capital Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Special Treatment of Companies in the Financial and Insurance Sectors and Pension Funds . . . . . . . . . . . . . . . . . . 138

Inheritance and Gift Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

Taxation in the Grand Duchy of Luxembourg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Luxembourg Taxation of Shares of a Non-Resident Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

iii

Section Page

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1

Recent Developments and Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . O-1

Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SIG-1

iv

SUMMARY OF THE PROSPECTUS

Summaries are made up of disclosure requirements known as elements (“Elements”). These Elements arenumbered in Sections A - E (A.1 - E.7). This summary contains all the Elements required to be included in a summary for thistype of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numberingsequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type ofsecurity and issuer, it is possible that no relevant information can be given regarding the Element. In such cases, the summaryincludes a short description of the Element with the words “not applicable”.

A—Introduction and Warnings

A.1 Warnings. This summary should be read as an introduction to this prospectus (the“Prospectus”). Any decision to invest in the securities should bebased on consideration of this Prospectus as a whole by the investor.

If any claims are asserted before a court of law based on theinformation contained in this Prospectus, the investor appearing asplaintiff may have to bear the costs of translating this Prospectus priorto the commencement of the court proceedings pursuant to the nationallegislation of the member states of the European Economic Area.

TLG IMMOBILIEN AG (the “Company”, and, together with itsconsolidated subsidiaries, “TLG”), together with J.P. MorganSecurities plc, London, United Kingdom (“J.P. Morgan”) and UBSLimited, London, United Kingdom (“UBS” and, together withJ.P. Morgan the “Joint Global Coordinators”), and together withCOMMERZBANK Aktiengesellschaft, Frankfurt am Main, Germany(“COMMERZBANK”), Kempen & Co N.V., Amsterdam, theNetherlands (“Kempen & Co”) and HSBC Trinkaus & Burkhardt AG,Dusseldorf, Germany (“HSBC” and, together with the Joint GlobalCoordinators, COMMERZBANK and Kempen & Co, the “JointBookrunners” or the “Underwriters”), have assumed responsibilityfor the contents of this summary pursuant to Section 5 (2b) no. 4 of theGerman Securities Prospectus Act (Wertpapierprospektgesetz). Thosepersons who are responsible for the summary, including the translationthereof, or for the issuing (Veranlassung), can be held liable but onlyif this summary is misleading, inaccurate or inconsistent when readtogether with the other parts of this Prospectus or it does not provide,when read together with the other parts of this Prospectus, allnecessary key information.

A.2 Information regarding thesubsequent use of the prospectus.

Not applicable. Consent regarding the use of this Prospectus for asubsequent resale or placement of the shares has not been granted.

B—Issuer

B.1 Legal and commercial name. The Company’s legal name is TLG IMMOBILIEN AG.

The Company is TLG’s parent company; TLG primarily operatesunder the commercial name “TLG IMMOBILIEN”.

B.2 Domicile, legal form, legislationunder which the issuer operates,country of incorporation.

The Company has its registered office at Hausvogteiplatz 12,10117 Berlin, Germany, and is registered with the commercial registerof the local court (Amtsgericht) of Charlottenburg, Germany, under thedocket number HRB 161314 B. The Company is a stock corporation(Aktiengesellschaft) governed by German law.

B.3 Current operations and principalbusiness activities and principalmarkets in which the issuercompetes.

TLG believes it is a leading commercial real estate company for Berlinand eastern Germany. As of June 30, 2014, TLG’s portfolio compriseda total of 509 properties with an aggregate fair value of €1,510 million.With a remaining average contractual lease term for unexpired leaseswith a contractually fixed maturity of 8.0 years and an EPRA VacancyRate (as defined below in B.7) of just 4.0% (excluding non-coreproperties), the Company believes that this portfolio is well positioned

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to generate stable cash flows for the foreseeable future. TLG isheadquartered in Berlin and operates five local offices in Dresden,Leipzig, Rostock, Erfurt and Chemnitz.

TLG’s core portfolio comprises 321 office, retail and hotel propertieswith an aggregate fair value of €1,338.9 million, as of June 30, 2014,which TLG intends to hold for the long term (the “Core Portfolio”).TLG’s Core Portfolio accounts for approximately 89% of the overallportfolio. Approximately 72% of this Core Portfolio is located withinthe city limits of Berlin, Dresden, Leipzig and Rostock, with Berlinaccounting for the largest portion of these holdings (approximately46% of the Core Portfolio). These cities and eastern Germany haveseen increased demand for commercial real estate. From 2009 to 2012,investment volumes for commercial real estate in Berlin and easternGermany increased from €1.22 billion to €3.48 billion and from€0.3 billion to €1.36 billion, respectively (Source: CommercialPortfolio TLG). Given investment volumes of approximately€1.3 billion in Berlin and €1.37 billion in eastern Germany during thesix-month period ended June 30, 2014 (Source: Commercial PortfolioTLG), the Company believes that this trend will continue and thatrental income, letting and overall vacancies for the Core Portfolioshould be positively affected as a result.

Office properties, most of them situated in good or very good locationsof city centers in Berlin, Dresden, Leipzig and Rostock, accounted for36% of TLG’s Core Portfolio (based on fair value as of June 30,2014). The tenant base for this office portfolio includes “blue chip”companies and their subsidiaries such as Daimler Real Estate GmbHand SAP Deutschland AG & Co. KG, government related entities andagencies such as Ostseesparkasse Rostock and the Federal Agency forReal Estate (Bundesanstalt für Immobilienaufgaben) as well as smalland medium sized enterprises. TLG plans to grow its office portfoliothrough additional acquisitions. The Company believes that this willfurther improve its market position in what it considers to be the verydynamic eastern German office market.

Retail properties, the majority of which are located in attractive micro-locations in Berlin and eastern German growth regions, accounted forapproximately 50% of TLG’s Core Portfolio (based on fair value as ofJune 30, 2014). The micro-locations in which TLG’s retail propertiesare located are particularly attractive for food retailers and other sellersof essential consumer goods because they are located in areas thatallow the tenant to be a significant, in some cases even the sole,retailer of the relevant consumer goods in the catchment area. As ofJune 30, 2014, approximately 35% of the annualized in-place rentfrom TLG’s Core Portfolio related to lease agreements with majorsupermarket and discounter chains, including large supermarket chains“EDEKA”, “REWE” and “Kaiser’s” and discounters “Aldi”, “Lidl”,“Netto” and “Penny” with which TLG maintains longstanding andclose business relationships. With a remaining average contractuallease term for unexpired leases with a contractually fixed maturity of7.3 years and an EPRA Vacancy Rate (as defined below in B.7) of just1.0% (each as of June 30, 2014), TLG’s retail portfolio was virtuallyfully-let and offers stable and secure rental income. This makes tenantrelationships with food retailers the backbone of TLG’s business. TLGalso intends to grow its retail portfolio through selected accretiveacquisitions.

Five hotel properties located in the city centers of Berlin, Dresden andRostock accounted for the remaining 15% of TLG’s Core Portfolio(based on fair value as of June 30, 2014). The tenant base for theseproperties includes the well-known hotel chains “Steigenberger”,“Motel One” and “Ramada”. With an EPRA Vacancy Rate (as definedbelow in B.7) of just 1.7%, these properties were virtually fully-let andthe long-term commitment of TLG’s tenants was evidenced by a

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remaining average contractual lease term for unexpired leases with acontractually fixed maturity of 16.7 years (both as of June 30, 2014).Lease agreements for TLG’s hotel properties generally provide forfixed lease payments, limiting TLG’s dependence on the performanceof hotel operators. Stable cash flows and a focus on dynamic marketsmake TLG’s hotel portfolio a fitting complement for its office andretail portfolio.

TLG has classified 188 properties with an aggregate fair value of€171 million as of June 30, 2014 as non-core and plans to divest themajority of this non-core portfolio in the medium term. As of June 30,2014, the remaining average contractual lease term for unexpiredleases with a contractually fixed maturity for TLG’s non-coreproperties was 5.5 years and the EPRA Vacancy Rate (as definedbelow in B.7) amounted to 12.2%. Through September 15, 2014,TLG sold, or signed agreements to sell, 48 non-core properties with anaggregate fair value of €70.6 million. However, the buyer of oneproperty that TLG had agreed to sell for approximately €23.9 millionmay have the right to withdraw from the purchase agreement or toconsiderably reduce the purchase price, and in that case, TLG wouldlikely incur a significant non-cash loss.

The independent, external appraiser Savills Advisory Services GmbH,Taunusanlage 19, 60325 Frankfurt am Main, Germany, (“Savills”)prepared a valuation report for 469 properties in TLG’s portfolio andhas assessed the aggregate fair value of these properties with€1,450 million as of June 30, 2014. The difference between thenumber and the value of the properties appraised by Savills to TLG’stotal portfolio of 509 properties with an aggregate fair value of€1,510 million relates to 40 properties with an aggregate fair value of€60 million, which were not valued by Savills because for 27 of theseproperties with an aggregate fair value of €58 million sale andpurchase agreements had already been signed as of June 30, 2014. Ofthe remaining 13 properties, ten properties with an aggregate fair valueof €2 million were accounted for under inventories and TLG plans tosell these properties. TLG did not attribute any value to the other threeproperties.

The Company believes that the following competitive strengths havebeen the primary drivers of TLG’s success in the past and willcontinue to set it apart from its competitors in the future:

• The Company believes that it has a market leading integratedplatform for commercial real estate in eastern Germany with afocus on the growth markets Berlin, Dresden, Leipzig andRostock.

• Based on fair value, close to 44% of TLG’s portfolio ofapproximately €1.5 billion as of June 30, 2014, is located inBerlin, which has seen particularly dynamic development inrecent years.

• TLG considers its portfolio particularly attractive given thesignificant share of newly built or recently modernized propertiesand believes that this attractiveness is evidenced by low vacancyrates.

• The Company believes that its strong cash flow profile willsupport its dividend capacity.

• The Company has a solid balance sheet with a commitment to aconservative financing approach and targets a long-term NetLTV-Ratio (as defined under B.7. below) of 45-50%.

• The Company believes that it has the ability to unlock tangiblefuture growth through active portfolio management and selectedaccretive acquisitions.

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requirements of German commercial law pursuant to Section 315a (1) ofthe German Commercial Code (Handelsgesetzbuch (HGB)). Theconsolidated financial statements of the Company as of and for the fiscalyears ended December 31, 2011 and 2012 have been prepared inaccordance with the German Commercial Code (Handelsgesetzbuch(HGB)) (“German GAAP”). IFRS and German GAAP differ in materialways and are thus not comparable (e.g., property held for generatingrental income or for capital appreciation is classified as investmentproperty in accordance with IAS 40 and measured at fair value underIFRS while it is measured at cost less depreciation under GermanGAAP). Until December 31, 2011, TLG’s portfolio consisted ofcommercial and residential properties. With effect from January 1, 2012,TLG’s residential portfolio was spun-off to TLG WOHNEN GmbH, anew company specifically established for this purpose, whose soleshareholder was the Federal Republic of Germany. Due to this spin-off,the Company’s consolidated financial statements prepared for the fiscalyears ended December 31, 2011 and 2012 under German GAAP are notfully comparable given that the residential portfolio represented asignificant share of TLG’s overall portfolio and business in 2011. Theunaudited condensed interim consolidated financial statements of theCompany as of and for the six-month period ended June 30, 2014 havebeen prepared in accordance with IFRS on interim financial reporting(IAS 34). Additional information included in this Prospectus has beentaken or derived from the audited unconsolidated financial statements ofthe Company for the fiscal year ended December 31, 2013, which wereprepared in accordance with German GAAP. Due to the abovementionedswitch of the accounting principles for the consolidated financialstatements from German GAAP to IFRS, for purposes of the comparisonof consolidated financial data as of and for the fiscal years endedDecember 31, 2011 and December 31, 2012, consolidated financial databased on German GAAP are used, whereas for a comparison ofconsolidated financial data as of and for the fiscal years endedDecember 31, 2012 and December 31, 2013 as well as the six month-periods ended June 30, 2013 and June 30, 2014, consolidated financialdata based on IFRS are used.

Ernst & Young Wirtschaftsprüfungsgesellschaft GmbH, Stuttgart,office Berlin, Germany, has audited the Company’s consolidatedfinancial statements as of and for the fiscal years ended December 31,2011, 2012 and 2013, and the unconsolidated financial statements forthe fiscal year ended December 31, 2013, and issued in each case anunqualified auditor’s report thereon.

Where financial data in the following tables are labelled “audited”,this means that it has been taken from the audited financial statementsmentioned above. The label “unaudited” is used in the following tablesto indicate financial data that have not been taken from the auditedfinancial statements mentioned above but were taken either from theCompany’s unaudited condensed interim consolidated financialstatements or the Company’s internal reporting system, or calculatedfigures from the abovementioned sources.

All of the financial data presented in the text and tables below areshown in millions of euro (in € million), except as otherwise stated.Certain financial data (including percentages) in the following tableshave been rounded according to established commercial standards. Asa result, the aggregate amounts (sum totals or sub-totals or differencesor if numbers are put in relation) in the following tables may notcorrespond in all cases to the aggregated amounts of the underlying(unrounded) figures appearing elsewhere in this Prospectus.Furthermore, in those tables, these rounded figures may not add upexactly to the totals contained in those tables. Financial informationpresented in parentheses denotes the negative of such numberpresented. In respect of financial data set out in this Prospectus, a dash(“—”) signifies that the relevant figure is not available, while a zero(“0.0”) signifies that the relevant figure is available but has beenrounded to zero.

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Selected Consolidated Financial Data Prepared in Accordance with IFRS

Consolidated Statement of Comprehensive Income Data

For the year endedDecember 31,

For the six-monthperiod ended

June 30,2012 2013 2013 2014

(audited) (unaudited)(in € million) (in € million)

Net operating income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . 97.1 106.3 52.7 50.0Income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138.8 141.3 69.6 66.9Expenses related to letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41.6) (35.1) (16.9) (16.9)

Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . 53.1 72.2 34.4 51.3Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . (0.0) 0.5 0.2 0.5Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . 27.4 7.8 5.5 2.3

Proceeds from real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . 77.5 21.4 14.3 5.9Book value of real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . (50.2) (13.6) (8.8) (3.6)

Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 18.7 3.9 3.6Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.9) (23.4) (15.4) (7.7)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) (1.5) (0.7) (0.7)Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8.3) (7.8) (2.3) (2.4)

Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . 158.4 172.8 78.3 96.9Income from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 2.1 2.1 0.0Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.5) (36.0) (18.1) (12.1)Gain/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . (10.0) 6.9 5.4 (2.0)

Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.8 146.4 68.1 83.2Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63.5) (47.3) (22.0) (25.8)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3 99.1 46.1 57.4Other comprehensive income (OCI)

thereof non-recyclingActuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) (0.0) — —

thereof recyclingHedge accounting reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.1) — (4.7)

Total comprehensive income for the period . . . . . . . . . . . . . . . . . . . . . . . . 75.3 99.0 46.1 52.7

Consolidated Statement of Financial Position Data

As of December 31, As of June 30,2012 2013 2014


Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,615.2 1,448.1 1,456.6Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511.7 1,414.7 1,423.0Advance payments on investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.7 2.5Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4 17.8 16.4Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 0.9 0.7Investment in joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.1 0.0 0.0Other non-current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1 0.1Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 8.4 8.4Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 3.5 5.4

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.2 187.6 99.3Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 13.4 13.3Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 11.6 13.7Receivables from income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.2 0.3Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0Other current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 5.0 3.2Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 0.7 2.9Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.5 138.9 24.5Assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 17.8 41.6

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,719.4 1,635.7 1,555.9

S-7



Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,006.7 801.0 621.5Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 52.0 52.0Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151.5 410.2 252.5Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804.3 339.9 322.9Other comprehensive income (OCI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) (1.2) (5.9)

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712.6 834.7 934.4Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508.6 630.2 787.2

Non-current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . 392.9 513.0 672.4Pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 6.9 6.8Non-current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.3 18.8 8.7Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 3.4 2.9Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.3 88.1 96.3

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204.0 204.4 147.3Current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . 87.2 113.2 55.6Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.8 14.6 12.2Other current provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 16.2 12.3Tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7 44.3 57.3Current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 0.0 0.0Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.1 16.1 9.9

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,719.4 1,635.7 1,555.9

Consolidated Cash Flow Statement Data



June 30,2012 2013 2013 2014


Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162.9 76.1 26.5 33.4Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.7) (57.0) (33.9) (35.6)Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.7) (5.9) (0.6) (4.5)

Net cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.3 13.8 (7.6) (6.3)Net cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79.0) 220.9 55.1 20.3Net cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28.4) (156.3) (37.1) (128.4)

Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.9 78.4 10.5 (114.4)

Additional Key Performance Indicators

The Company believes that the key performance indicators described in this section constitute the most importantindicators for measuring the operating and financial performance of TLG’s business.

TLG expects the key performance indicators rental income, net operating income from letting activities, EBITDA,Adjusted EBITDA, FFO, AFFO, Equity-Ratio, Net LTV-Ratio, interest coverage ratio, EPRA NAV and EPRA VacancyRate (the “Key Performance Indicators”) to be of use for potential investors. TLG believes that the Key PerformanceIndicators are useful in evaluating TLG’s operating performance, the net value of TLG’s portfolio, the level of itsindebtedness and of cash flows generated by TLG’s business, because a number of companies, in particular companies inthe real estate sector, also publish these figures as key performance indicators.

However, the Key Performance Indicators are not recognized as measures under IFRS and should not be considered assubstitutes for figures on net assets, results before taxes, net earnings, cash flow from operating activities or other data fromthe consolidated statement of comprehensive income, the consolidated cash flow statement or the consolidated statement offinancial position as determined in accordance with IFRS, or as measures of profitability or liquidity. The Key PerformanceIndicators neither necessarily indicate whether cash flow will be sufficient or available for TLG’s cash requirements, norwhether any such measure is indicative of TLG’s historical operating results. The Key Performance Indicators are notmeant to be indicative of future results. Because not all companies calculate these Key Performance Indicators in the sameway, TLG’s presentation of the Key Performance Indicators is not necessarily comparable with similarly-titled measuresused by other companies.

S-8

Performance and Profitability

The following table provides information on TLG’s key performance and profitability measures:



June 30,2012 2013 2013 2014

(unaudited and in € million,unless otherwise specified)


Rental income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116.1 118.3 59.2 57.0Net operating income from letting activities(2) . . . . . . . . . . 97.1 106.3 52.7 50.0EBITDA(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.9 102.0 44.6 46.3Adjusted EBITDA(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.5 90.4 45.8 42.0FFO(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0FFO (per share and in €)(5) . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 0.89 0.47 0.50AFFO(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 40.4 22.5 23.8AFFO (per share and in €)(5) . . . . . . . . . . . . . . . . . . . . . . . 0.77 0.78 0.43 0.46

(1) Rental income refers to income from letting activities without income from recharged utilities and other operating costs and incomefrom other goods and services as reflected in the consolidated statement of comprehensive income for the respective period. Auditedfor the years ended December 31, 2012 and 2013.

(2) Net operating income from letting activities refers to income from letting activities less expenses related to letting activities, all asreflected in the consolidated statement of comprehensive income for the respective period. Audited for the years ended December 31,2012 and 2013.

(3) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is defined as consolidated net income or loss for theperiod before income taxes, interest result, income from joint ventures, gain/loss from the remeasurement of derivatives, depreciationas well as before the result from the remeasurement of investment property, all as reflected in the Company’s respective consolidatedfinancial statements.

(4) “Adjusted EBITDA” is defined as EBITDA adjusted for result from the disposal of investment property, result from the disposal ofreal estate inventory and one-off items.

The following table shows the calculation of EBITDA and Adjusted EBITDA, each starting from EBIT:



June 30,2012 2013 2013 2014(audited, unless

otherwise specified)(unaudited)

(in € million) (in € million)Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.4 172.8 78.3 96.9Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 1.5 0.7 0.7Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . (53.1) (72.2) (34.4) (51.3)EBITDA (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.9 102.0 44.6 46.3Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 (0.5) (0.2) (0.5)Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.4) (7.8) (5.5) (2.3)Severance Packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6.9 6.9 —Reversal of a provision for real estate transfer taxes in connection with the spin-off

of TLG WOHNEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5.4) — —Reversal of liabilities and provisions from the pass-through of purchase prices and

accrued interest (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (4.8) — —Reversal of a provision for subsidy payment risk . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (2.3)Share based payment obligation (bonus agreements) . . . . . . . . . . . . . . . . . . . . . . . . — — — 0.8

Adjusted EBITDA (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.5 90.4 45.8 42.0

(5) Funds from operations post tax (excluding result from disposals) (“FFO”) is a measure of cash generation for real estate companies.The Company defines FFO as net income/loss for the period adjusted for the result from the disposal of investment property, theresult from the disposal of real estate inventory, the result from the remeasurement of investment property, the gain/loss from theremeasurement of derivatives and other effects, as well as deferred taxes and the tax effects from the result of the disposal ofinvestment property and the disposal of real estate inventory, as well as the tax effects from the settlement of interest rate swaps.

“AFFO” represents FFO less capex.

S-9

The following table shows the calculation of FFO and AFFO for the periods shown:



June 30,2012 2013 2013 2014(audited, unless


(in € million) (in € million)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3 99.1 46.1 57.4Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 (0.5) (0.2) (0.5)Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.4) (7.8) (5.5) (2.3)Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . (53.1) (72.2) (34.4) (51.3)Gain/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 (6.9) (5.4) 2.0Other effects(a) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15.4) (6.8) 4.2 (1.7)Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.0 9.8 5.5 8.3Correction of current income taxes due to lump sum calculation for interim

periods(b) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A 0.6 9.5Adjustment for tax effects from the result of the disposal of investment property

and the disposal of real estate inventory as well as tax effects from thesettlement of interest rate swaps(c) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 31.4 13.6 4.6

FFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0FFO (per share(d) and in €) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 0.89 0.47 0.50FFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0Capex(e) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12.6) (5.7) (1.9) (2.2)AFFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 40.4 22.5 23.8AFFO (per share(d) and in €) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 0.78 0.43 0.46

(a) Other effects include:

(i) Depreciation of owner-occupied properties (IAS 16) of €0.3 million for the fiscal year ended December 31, 2012,€0.3 million for the fiscal year ended December 31, 2013, €0.1 million for the six-month period ended June 30, 2013 and€0.1 million for the six-month period ended June 30, 2014;

(ii) Income from the service agreement with TAG Wohnen GmbH (formerly: TLG WOHNEN GmbH) that will expire onDecember 31, 2014 of €2.9 million for the fiscal year ended December 31, 2012, €1.6 million for the fiscal year endedDecember 31, 2013, €0.7 million for the six-month period ended June 30, 2013 and €0.3 million for the six-month periodended June 30, 2014;

(iii) Income from the 33% interest in the joint venture Altmarkt-Galerie Dresden KG, sold in 2013, of €12.9 million for thefiscal year ended December 31, 2012, €2.1 million for the fiscal year ended December 31, 2013 and €2.1 million for thesix-month period ended June 30, 2013;

(iv) Personnel expenses for severance packages in connection with TLG’s reorganization in the amount of €6.9 million for thefiscal year ended December 31, 2013 and €6.9 million for the six-month period ended June 30, 2013 as well as share basedpayment expenses of €0.8 million for the six-month period ended June 30, 2014;

(v) Income from the reversal of provisions for real estate transfer tax, provided for in connection with the spin-off of TLG’sresidential properties to TLG WOHNEN GmbH in 2012, of €5.4 million for the fiscal year ended December 31, 2013; and

(vi) Income from the reversal of liabilities and provisions in connection with purchase price pass-through obligations andaccrued interest which resulted from TLG’s obligation to pass on parts of the purchase price received for the sale ofproperties which were co-owned by TLG, BEDIG AG i.L. and the state of Berlin in the amount of €4.8 million for thefiscal year ended December 31, 2013 and income from reversal of a provision for the subsidy repayment risk of€2.3 million for the six-month period ended June 30, 2014.

(b) The current income taxes shown in the six-month periods ended June 30, 2013 in the amount of €16.5 million and 2014 in theamount of €17.5 million were calculated by using the integral method in accordance with IAS 34.30. Due to this calculationmethod a correction in the amount of €0.6 million for the first half year of 2013 and in the amount of €9.5 million for the firsthalf year of 2014 is made to show the actually lower current tax expenses for the respective six-month period in an amount of€15.9 million for 2013 and of €8.0 million for 2014.

(c) Adjustments of the actual tax effect on current income taxes from the result of the disposal of investment property and realestate inventory amounted to €3.2 million for the fiscal year ended December 31, 2012, €36.8 million for the fiscal year endedDecember 31, 2013, €13.6 million for the six-month period ended June 30, 2013 and €10.9 million for the six-month periodended June 30, 2014.

Adjustments of the reverse effect from the tax effective settlement of interest rate swaps (originally decreasing tax expense) amountedto €5.5 million for the fiscal year ended December 31, 2013 and €6.4 million for the six-month period ended June 30, 2014.

(d) Based on a total of 52,000,000 shares outstanding as of the date of this Prospectus.

(e) Capex refers to capital expenditure excluding cost of acquisitions of properties, cost of project developments and maintenanceexpenses.

S-10

Financing and Leverage

As of andfor the year

ended December 31,

As of andfor the six-month period

ended June 30,

2012 2013 2014

(unaudited)(in %, unless otherwise specified)

(unaudited)(in %, unless otherwise specified)

Equity Ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.5 49.0 39.9Net LTV-Ratio(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 33.3 47.0Interest coverage ratio (as multiple)(3) . . . . . . . . . . . . . 3.7x 2.6x 3.6x

(1) The equity ratio is the ratio of total equity (attributable to shareholders) to total equity and liabilities (the “Equity Ratio”). As ofDecember 31, 2012 the Equity Ratio is derived from dividing equity in an amount of €1,006.7 million by the total equity and liabilities in anamount of €1,719.4 million. As of December 31, 2013 the Equity Ratio is derived from dividing equity in an amount of €801.0 million bythe total equity and liabilities in an amount of €1,635.7 million. As of June 30, 2014 the Equity Ratio is derived from dividing equity in anamount of €621.5 million by the total equity and liabilities in an amount of €1,555.9 million.

(2) The net loan to value ratio is the ratio of net debt (sum of non-current and current liabilities due to financial institutions less cash andcash equivalents), to real estate (sum of investment property, owner-occupied properties, prepayments for investment properties,assets classified as held for sale and inventories) (the “Net LTV-Ratio”).

The following table shows the calculation of the Net LTV-Ratio as of the dates shown:

As of December 31, As of June 30,

2012 2013 2014

(auditedand in € million, unless

otherwise specified)

(unaudited)(in € million unlessotherwise specified)

Non-current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . 392.9 513.0 672.4Current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . 87.2 113.2 55.6Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60.5) (138.9) (24.5)

Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419.5 487.3 703.5

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511.7 1,414.7 1,423.0Owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 16.5 15.1Prepayments for investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.7 2.5Assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 17.8 41.6Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 13.4 13.3

Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,553.7 1,465.1 1,495.5

Net loan to value (Net LTV) (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 33.3 47.0

(3) The interest coverage ratio is the ratio of Adjusted EBITDA to interest result for the respective period and may not correspond tosimilar terms used for financial covenants in TLG’s credit agreements. The interest coverage ratio for the fiscal year endedDecember 31, 2012 is derived from dividing the Adjusted EBITDA of €79.5 million by the interest result of €21.6 million. Theinterest coverage ratio for the fiscal year ended December 31, 2013 is derived from dividing the Adjusted EBITDA of €90.4 millionby the interest result of €35.3 million. The interest coverage ratio for the six-month period ended June 30, 2014 is derived fromdividing the Adjusted EBITDA of €42.0 million by the interest result of €11.7 million.

EPRA Key Performance Indicators

As of December 31, As of June 30,

2012 2013 2014

(audited and in € million,unless


(unaudited)(in € million, unlessotherwise specified)

Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,006.7 801.0 621.5Fair value remeasurement of other non-current assets (IAS 16)(1) (unaudited) . . . 2.1 3.8 2.7Fair value remeasurement of properties in inventories(2) (unaudited) . . . . . . . . . . 4.6 5.3 5.1Fair values of financial derivatives (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.4 18.8 8.7Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.5) (3.5) (5.4)Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.3 88.1 96.3EPRA NAV(3) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,131.7 913.5 728.9EPRA NAV (per share and in €)(4) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . 21.76 17.57 14.02EPRA Vacancy Rate (in %)(5) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7 5.1 5.0

(1) Fair value remeasurement of other non-current assets (IAS 16) means the surplus arising from the remeasurement at fair value ofowner-occupied properties, which are included in the consolidated statement of financial position at the lower of cost less anyaccumulated depreciation and impairments and fair value.

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(2) Fair value remeasurement of properties in inventories means the surplus arising from the remeasurement at fair value of tradingproperties, which are recognized under IFRS at the lower of cost and net realizable value and recognized under inventories as statedin the consolidated statement of financial position.

(3) EPRA NAV is calculated in accordance with the definition recommended by the European Public Real Estate Association (the“EPRA”) and used as an indicator of TLG’s long-term equity and is calculated based on equity (i) plus fair value remeasurement ofother non-current assets (IAS 16) and fair value remeasurement of properties in inventories and (ii) excluding the fair values offinancial derivatives, deferred tax assets and deferred tax liabilities (the “EPRA NAV”).

(4) Based on a total of 52,000,000 shares outstanding as of the date of this Prospectus.

(5) The EPRA vacancy rate is the estimated rental value (ERV) of vacant space divided by the estimated rental value of the wholeportfolio (“EPRA Vacancy Rate”).

Selected Consolidated Financial Data Prepared in Accordance with German GAAP

For theyear ended

December 31,2011 2012

(audited, unless otherwisespecified)

(in € million)Consolidated Income Statement DataSales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247.4 219.7Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 7.1Consolidated net income for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.7 2.5

As ofDecember 31,

2011 2012(audited, unless otherwise

specified)(in € million)

Consolidated Balance Sheet DataFixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,795.9 1,339.2Current assets (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108.5 104.6Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 7.3

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,911.5 1,451.1

Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962.7 805.3Negative consolidation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 7.0Special reserve for investment grants and subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.8 16.4Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.2 89.2Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812.3 533.2Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 0.1

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,911.5 1,451.1

For theyear ended

December 31,2011 2012


(in € million)Consolidated Cash Flow Statement DataCash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.3 142.5Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115.9) (86.6)Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.2 (28.4)

B.8 Selected key pro forma financialinformation.

Not applicable. No pro forma financial information has been preparedby the Company.

B.9 Profit forecast and estimate. Based on the trends of the fiscal year 2014, the Company’smanagement anticipates FFO of €50 million for the fiscal year 2014.

B.10 Qualifications in the audit report onthe historical financial information.

Not applicable. The auditor’s reports on the historical financialinformation included in this Prospectus have been issued withoutqualification.

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B.11 Insufficiency of the issuer’s workingcapital for its present requirements.

Not applicable. The Company is of the opinion that TLG is in aposition to meet the payment obligations that become due within atleast the next twelve months.

C—Securities

C.1 Type and class of the securities beingadmitted to trading.

Ordinary bearer shares with no par value (Stückaktien), each with anotional value of €1.00 and full dividend rights from January 1, 2014.

Security identification number. International Securities Identification Number (ISIN):DE000A12B8Z4

German Securities Code (Wertpapierkennnummer, WKN): A12B8Z

Common Code: 111597880

Ticker Symbol: TLG

C.2 Currency. Euro.

C.3 The number of shares issued andfully paid.

52,000,000 bearer shares with no par value (Stückaktien). The sharecapital has been fully paid up.

Notional value. Each of the shares of the Company represents a notional share of€1.00 in the Company’s share capital.

C.4 A description of the rights attachedto the securities.

Each share in the Company carries one vote at the Company’sshareholders’ meeting. There are no restrictions on voting rights. Theshares carry full dividend rights as from January 1, 2014.

C.5 A description of any restrictions onthe free transferability of thesecurities.

Not applicable. The Company’s shares are freely transferable inaccordance with the legal requirements for bearer shares. There are noprohibitions or restrictions on disposals with respect to thetransferability of the Company’s shares.

C.6 Application for admission to tradingon a regulated market and identity ofregulated markets where thesecurities are to be traded.

The Company expects to apply for admission of its shares to tradingon the regulated market segment (regulierter Markt) of the FrankfurtStock Exchange (Frankfurter Wertpapierbörse) and, simultaneously,to the sub-segment thereof with additional post-admission obligations(Prime Standard) on or about October 15, 2014. The listing approval isexpected to be announced on October 23, 2014. Trading on theFrankfurt Stock Exchange (Frankfurter Wertpapierbörse) is currentlyexpected to commence on October 24, 2014.

C.7 Dividend policy. The Company intends to pay dividends in the amount of 70-80% of itsannual FFO, provided that TLG’s business performance remains atleast stable. Given that the IPO is scheduled to be completed just twomonths prior to the end of the current fiscal year, the Companycurrently plans to pay a dividend in the total amount of €10-15 millionfor the fiscal year 2014.

D—Risks

D.1 Key risks specific to the issuer and itsindustry.

An investment in the shares of the Company is subject to risks.Therefore, investors should carefully consider the following risks andthe other information contained in this Prospectus when decidingwhether to invest in the Company’s shares. The market price of theCompany’s shares could fall if any of these risks were to materialize,in which case investors could lose some or all of their investment. Thefollowing risks, alone or together with additional risks anduncertainties not currently known to the Company, or that theCompany might currently deem immaterial, could materially adverselyaffect TLG’s business, net assets, financial condition and results ofoperations.

The order in which the risks are presented is not an indication of thelikelihood of the risks actually materializing, or the significance or

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degree of the risks or the scope of any potential harm to TLG’sbusiness, net assets, financial condition or results of operations. Therisks mentioned herein may materialize individually or cumulatively.

Market and Business Risks

• TLG could be adversely affected by negative developments in theGerman economy and commercial real estate markets,e.g., general deflation in the Eurozone or rising interest rates.

• TLG could be adversely affected by a deterioration of economicconditions and the business environment in Berlin and easternGermany, in particular negative demographic trends.

• TLG may not be able to implement its strategy of growingthrough acquisitions due to a lack of attractive properties orportfolios available for purchase, competition for suchacquisitions or an inability to obtain the required acquisitionfinancing.

• TLG may be unable to identify all risks associated with propertiesor portfolios it acquires and may overestimate the value and/orfinancial performance of such acquisition opportunities.

• TLG may face risks related to (re-)development activities anddevelopment activities intended in the future may not be possible.

• TLG may be unable to sell properties from its non-core portfolioon favorable terms or may be unable to do so at all and this maylimit the funds available for TLG’s growth strategy.

• TLG could be subject to liability claims in connection with soldproperties.

• TLG’s portfolio bears certain concentration risks and negativedevelopments affecting demand for office, retail and hotelproperties, TLG’s major tenants and its most valuable propertiescould have a particularly adverse effect on TLG’s business.

• TLG may be unable to find or retain suitable and solvent tenantson acceptable terms and existing tenants may be unable to meettheir payment obligations.

• Indexation clauses in TLG’s lease agreements could adverselyaffect TLG’s rental income.

• TLG may incur substantial unexpected maintenance, repair andmodernization costs and failure to undertake appropriatemaintenance measures could adversely affect its rental income.

• The valuation report and financial information contained in thisProspectus may incorrectly assess the value of TLG’s properties.

• TLG may be required to adjust the current fair values of itsinvestment properties or record lower results from theremeasurement of investment property and therefore recognizesignificant losses.

• TLG may be unable to replace the members of the Company’smanagement board and key personnel or to hire additionalqualified personnel.

• TLG’s IT-systems could malfunction or become impaired.

• TLG’s IT-based portfolio management tools could fail tocorrectly reflect and support the business decisions that are inTLG’s best interest.

• TLG could incur substantial losses from damage not covered by,or exceeding the coverage limits of, its insurance policies.

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• The Company’s cash flows and possible future dividendpayments also depend on the profitability of its subsidiaries and itmay not be able to implement significant changes with regards tosuch subsidiaries.

Financing Risks

• TLG’s ability to repay existing and future debt could be limitedand TLG may be unable to obtain new sources of financing atattractive terms, or at all.

• If TLG breaches covenants under its financing agreements itcould be forced to sell properties irrespective of the prices it canachieve and its creditors or security agents could seize or realizesignificant collateral, which could ultimately lead to aninsolvency of the Company.

Regulatory, Legal and Tax Risks

• TLG may be adversely affected by changes to the generalregulatory environment in Germany.

• TLG may incur costs in connection with residual pollutionincluding wartime ordnance, soil contaminations and hazardousmaterials.

• Standard clauses used in TLG’s lease agreements may be invalidand some of these agreements may not fulfill the strict writtenform requirements under German law.

• TLG’s compliance structure may not have been, or may not be,sufficient to adequately protect TLG from all legal or financialrisks.

• TLG is exposed to risks from potential future legal disputes.

• TLG may be forced to repay certain subsidies.

• TLG may be subject to restitution or compensation claims if itsproperties have been unlawfully expropriated, and this coulddelay or prevent the transfer of its properties.

• TLG may be adversely affected by changes to the general taxenvironment in Germany as such changes might result in anincrease of TLG’s tax burden.

D.3 Key risks specific to the securities. Risks related to the Offering and the Offered Shares

• The offering may not be completed if the Joint Bookrunnersterminate the Underwriting Agreement (as defined in E.3 below)or the Company withdraws from the offering.

• The Company’s consolidated financial statements from the fiscalyear 2013 onwards may be difficult to compare to those fromprevious periods.

• TLG’s FFO forecast for the fiscal year 2014 may differ materiallyfrom TLG’s actual FFO for the fiscal year 2014 and the Companymay decide to reduce its divided payments.

• The market price and trading volume of the Company’s sharescould fluctuate considerably.

• Following the listing, East AcquiCo will still be in a position toexert substantial influence on TLG. The interests of EastAcquiCo could differ from the interests of the other shareholders.Any future sales of the Company’s shares by major shareholdersof the Company could depress the market price of the shares.

• Future capital measures could lead to a substantial dilution ofexisting shareholders’ interests in the Company.

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• The Company will face additional administrative requirementsand incur higher ongoing costs as a result of the initial publicoffering.

E—Offer

E.1 The total net proceeds. At the mid-point of the price range set for the offering of the OfferShares (the “Price Range”), gross proceeds from the offering areexpected to total approximately €451.4 million (assuming placementof all Offer Shares (as defined below in E.3)). Assuming expensesrelated to the offering and commissions payable to the Underwriters ina total amount of approximately €20.9 million, the total net proceedsfrom the offering would amount to approximately €430.5 million atthe mid-point of the Price Range.

The Company will receive only the proceeds of the offering resultingfrom the sale of the New Shares (as defined below in E.3). TheCompany will not receive any proceeds from the sale of the ExistingShares (as defined below in E.3) from the holdings of the ExistingShareholders. Assuming a placement of all Offer Shares (as defined inE.3 below) at the mid-point of the Price Range, the Company willreceive gross proceeds of approximately €114.0 million(corresponding to estimated net proceeds of approximately€108.5 million). However, the Company reserves the right to onlyallocate such number of New Shares (as defined below in E.3) as toreach its minimum gross proceeds target of €100 million.

At the mid-point of the Price Range, gross proceeds to the ExistingShareholders (assuming placement of the maximum number ofExisting Shares (as defined below in E.3) and assuming full exerciseof the Greenshoe Option (as defined below in E.3)) will amount toapproximately €337.4 million and estimated net proceeds ofapproximately €322.0 million.

Estimate of the total expenses of theoffering and listing, includingestimated expenses charged to theinvestor by the issuer.

Assuming an offer price at the mid-point of the Price Range, theexpenses related to the offering of the Offer Shares (as defined belowin E.3) and listing of the Company’s entire share capital are expectedto total approximately €20.9 million.

The expenses of the Company related to the offering of the OfferShares (as defined below in E.3) and listing of the Company’s entireshare capital are expected to total approximately €8.5 million(excluding underwriting and placement commissions payable to theUnderwriters), thereof approximately €6.1 million will be borne by theExisting Shareholders, which means that the Company will ultimatelybear approximately €2.4 million thereof. The Existing Shareholderswill bear the offering and listing related costs of the Company in theratio of Existing Shares (as defined below in E.3) to Base Shares (asdefined below in E.3).

Assuming an offer price at the mid-point of the Price Range, aplacement of all New Shares (as defined below in E.3) and aplacement of the maximum number of Existing Shares and Over-Allotment Shares (as defined below in E.3) (and the GreenshoeOption, as defined below in E.3, has been fully exercised) andassuming further payment in full of the discretionary fee of up to€5.6 million, at the mid-point of the Price Range, the commissionpayable to the Underwriters will amount to €12.4 million. Thereof,€3.1 million are attributable to the placement of the New Shares (asdefined below in E.3) and will be borne by the Company; of theremaining €9.3 million, €8.2 million are attributable to the placementof the Existing Shares (as defined below in E.3) and will directly beborne by the Existing Shareholders and €1.1 million are attributable tothe placement of the Over-Allotment Shares (as defined below in E.3)and will directly be borne by East AcquiCo.

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Neither the Company nor the Existing Shareholders nor theUnderwriters will charge expenses to investors. Investors will have tobear customary transaction and handling fees charged by theiraccount-keeping financial institution.

E.2a Reasons for the offering. The Company intends to list its shares on the regulated marketsegment (regulierter Markt) of the Frankfurt Stock Exchange(Frankfurter Wertpapierbörse) and, simultaneously, on thesub-segment thereof with additional post-admission obligations (PrimeStandard) of the Frankfurt Stock Exchange (FrankfurterWertpapierbörse) to get access to the capital markets. The Companyalso intends to pursue the offering to receive the proceeds from theplacement of the New Shares (as defined below in E.3).

The Existing Shareholders will offer their shares to partially divesttheir stake in the Company and to ensure a sufficient freefloat andtrading liquidity in the Company’s shares.

Use of Proceeds, estimated netamount of the proceeds.

The Company intends to use the net proceeds of the offering of theNew Shares (as defined below in E.3), together with additional debtfinancing, to fund future acquisitions. Such acquisitions could includea retail property in Berlin with a potential acquisition price (includingancillary acquisition costs) of approximately €35 million, for which itis in negotiations with the seller, an office property in Rostock with apotential acquisition price (including ancillary acquisition costs) ofapproximately €16 million, for which it is conducting due diligence,and one or more of the other office and retail properties with anaggregate fair value of €20 million and €140 million, respectively,which it is currently reviewing in more detail, or other properties. Thebalance of the proceeds, if any, will be used for general corporatepurposes. Assuming a placement of all Offer Shares (as defined belowin E.3) at the mid-point of the Price Range, the Company expects toreceive gross proceeds of approximately €114.0 million in the offeringand net proceeds of approximately €108.5 million.

E.3 Offer conditions. The offering (including any potential Over-Allotment) relates to thesale of 36,850,000 Offer Shares with no par value (Stückaktien), eachrepresenting a notional value of €1.00 in the Company’s share capitaland with full dividend rights from January 1, 2014, consisting of:

• 9,302,326 newly issued bearer shares with no par value(Stückaktien) from a capital increase against contribution in cashto be resolved by an extraordinary shareholders’ meeting of theCompany (the “New Shares”);

• 24,197,674 existing bearer shares with no par value (Stückaktien)from the holdings of the Existing Shareholders (the “ExistingShares” and together with the New Shares, the “Base Shares”);and

• 3,350,000 existing bearer shares with no par value (Stückaktien)from the holdings of East AcquiCo in connection with a possibleOver-Allotment (the “Over-Allotment Shares” and, togetherwith the Base Shares, the “Offer Shares”).

The offering consists of a public offering of the Offer Shares inGermany and Luxembourg and private placements of the Offer Sharesin certain jurisdictions outside Germany and Luxembourg. In theUnited States, the Offer Shares will be offered for sale to qualifiedinstitutional buyers in reliance on Rule 144A under the U.S. SecuritiesAct of 1933, as amended. Outside the United States, the Offer Shareswill be offered in reliance on Regulation S under the U.S. SecuritiesAct of 1933, as amended.

Offer Period. The offer period, during which investors may submit purchase ordersfor the Offer Shares, is expected to begin on October 15, 2014 and isexpected to end on October 23, 2014 at 12:00 noon CEST (CentralEuropean Summer Time) for retail investors (natural persons) and at

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16:00 CEST (Central European Summer Time) for institutionalinvestors. Purchase orders must be of at least 50 shares and limit stepsmust be denominated in full euro amounts or euro cent figures of 25,50, or 75 cents. Multiple purchase orders are permitted.

Price Range and Offer Price. The Price Range within which purchase orders may be placed is€10.75 to €13.75 per Offer Share.

Amendments to the Term of theOffering.

The Company and the Existing Shareholders reserve the right, togetherwith the Joint Bookrunners, to increase or decrease the total number ofOffer Shares, to increase or decrease the upper limit and/or the lowerlimit of the Price Range and/or to extend or shorten the offer period.Changes in the number of Offer Shares, changes to the Price Range orthe extension or shortening of the offer period will not invalidate anyoffers to purchase that have already been submitted. If such changerequires the publication of a supplement to this Prospectus, investorswho submitted purchase orders before the supplement is publishedshall have the right, under the German Securities Prospectus Act(Wertpapierprospektgesetz), to withdraw these offers to purchasewithin two business days of the publication of the supplement. Insteadof withdrawing the offers to purchase placed prior to the publication ofthe supplement, investors may change their orders or place newlimited or unlimited offers to purchase within two business days of thepublication of the supplement. To the extent that the terms of theoffering are changed, such change will be published by means ofelectronic media (such as Thomson Reuters or Bloomberg) and, ifrequired by the German Securities Trading Act(Wertpapierhandelsgesetz) or the German Securities Prospectus Act(Wertpapierprospektgesetz), as an ad hoc release via an electronicinformation system and on the Company’s website and as asupplement to this Prospectus. Investors who have submitted offers topurchase will not be notified individually. Under certain conditions,the Joint Global Coordinators, on behalf of the Underwriters, mayterminate the underwriting agreement relating to the offering enteredinto with the Company and the Existing Shareholders on October 14,2014 (the “Underwriting Agreement”), even after commencement oftrading (Aufnahme des Handels) of the Company’s shares on theregulated market segment (regulierter Markt) of the Frankfurt StockExchange (Frankfurter Wertpapierbörse).

Placement Price. The placement price and the final number of Offer Shares to be placedin the offering have not yet been fixed as of the date of thisProspectus.

The placement price and the final number of Offer Shares placed inthe offering will be set jointly by the Company, the ExistingShareholders and the Underwriters. The price will be set on the basisof the purchase orders submitted by investors that have been collatedin the order book prepared during a bookbuilding process.

Price-setting is expected to occur on or about October 23, 2014. Theplacement price and the final number of Offer Shares placed in theoffering (i.e., the result of the offering) are expected to be publishedby means of an ad hoc release, via an electronic informationdissemination system and on the Company’s website on or aboutOctober 23, 2014.

Should the placement volume prove insufficient to satisfy all ordersplaced at the placement price, the Underwriters reserve the right toreject orders, or to accept them only in part.

Delivery and Payment. The delivery of the Offer Shares against payment of the offer price isexpected to take place on October 28, 2014. The Offer Shares will bemade available to the shareholders as co-ownership interests in theglobal share certificate.

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Stabilization Measures, Over-Allotments and Greenshoe Option.

In connection with the placement of the Offer Shares, J.P. Morgan orits affiliates, acting for the account of the Underwriters, will act as thestabilization manager and may, as stabilization manager and acting inaccordance with legal requirements (Section 20a (3) of the GermanSecurities Trading Act (Wertpapierhandelsgesetz) in conjunction withCommission Regulation (EC) No. 2273/2003 of December 22, 2003),make Over-Allotments and take stabilization measures to support themarket price of the Company’s shares and thereby counteract anyselling pressure.

The stabilization manager is under no obligation to take anystabilization measures. Therefore, no assurance can be provided thatany stabilization measures will be taken. Where stabilization measuresare taken, these may be terminated at any time without notice. Suchmeasures may be taken from the date the shares of the Company arelisted on the regulated market of the Frankfurt Stock Exchange(Frankfurter Wertpapierbörse) and must be terminated no later than30 calendar days after this date (the “Stabilization Period”).

These measures may result in the market price of the Company’sshares being higher than would otherwise have been the case.Moreover, the market price may temporarily be at an unsustainablelevel.

Under the possible stabilization measures, investors may, in additionto the Base Shares, be allocated up to 3,350,000 Over-AllotmentShares as part of the allocation of the shares to be placed (“Over-Allotment”). For the purpose of a possible Over-Allotment, thestabilization manager, for the account of the Underwriters, will beprovided with up to 3,350,000 Over-Allotment Shares from theholdings of East AcquiCo in the form of a securities loan; this numberof shares will not exceed 10% of the Base Shares. In addition, EastAcquiCo will grant the Underwriters an option to acquire up to3,350,000 shares of the Company at the offer price less agreedcommissions (the “Greenshoe Option”). This option will terminate30 calendar days after the commencement of the stock exchangetrading of the Company’s shares.

The stabilization manager, for the account of the Underwriters, isentitled to exercise the Greenshoe Option to the extent Over-Allotments were initially made; the amount of shares is to be reducedby the number of shares held by the stabilization manager as of thedate on which the Greenshoe Option is exercised and that wereacquired by the stabilization manager in the context of stabilizationmeasures.

Once the Stabilization Period has ended, an announcement will bemade within one week in various media outlets distributed across theentire European Economic Area as to whether stabilization measureswere taken, when price stabilization started and finished, and the pricerange within which stabilization measures were taken; the latter willbe made known for each occasion on which price stabilizationmeasures were taken. Exercise of the Greenshoe Option, the timing ofits exercise and the number and type of shares concerned will also beannounced promptly in the same manner.

E.4 Interests material to the listing. In connection with the offering and the admission to trading of theCompany’s shares, the Underwriters have formed a contractualrelationship with the Company and the Existing Shareholders.

The Underwriters are acting for the Company and the ExistingShareholders on the offering and coordinating the structuring andexecution of the offering. In addition, both J.P. Morgan and UBS havebeen appointed to act as designated sponsors for the Company’s sharesand COMMERZBANK has been appointed to act as paying agent.Upon successful implementation of the offering, the Underwriters willreceive a commission.

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The Existing Shareholders will receive the proceeds of the ExistingShares sold in the offering. East AcquiCo will receive the proceeds ofthe shares from the exercise of the Greenshoe Option, if any.Assuming full placement of all Existing Shares and Over-AllotmentShares at the mid-point of the Price Range and full exercise of theGreenshoe Option, and after deducting fees and expenses to be paid bythe Existing Shareholders in connection with the offering, the proceedsto the Existing Shareholders from the offering would amount toapproximately €322.0 million, or 74.8% of the total net proceeds fromthe offering. Of these proceeds to the Existing Shareholders,approximately 90.4% would accrue to the benefit of East AcquiCo andapproximately 9.6% would accrue to the benefit of Delpheast.

Some of the Underwriters or their affiliates have, and may from timeto time in the future continue to have, business relations with TLG andthe Existing Shareholders (including lending activities) or mayperform services for TLG or the Existing Shareholders in the ordinarycourse of business.

Conflicting interests. Not applicable. There are no conflicting interests.

E.5 Name of the person or entity offeringto sell the security.

The shares are being offered for sale by J.P. Morgan, UBS,COMMERZBANK, Kempen & Co and HSBC (as defined under A.1above).

Lock-up agreement: the partiesinvolved; and indication of the periodof the lock up.

In the Underwriting Agreement, the Company agreed with eachUnderwriter that, during the period commencing on October 14, 2014and ending six months after the first day of trading of the Company’sshares on the Frankfurt Stock Exchange (currently expected to take placeon October 24, 2014), to the extent legally permissible, without the priorwritten consent of the Joint Global Coordinators, which may not beunreasonably withheld or delayed, the Company, or its managementboard or its supervisory board will not, and will not agree to:

• cause or approve, directly or indirectly, the announcement,execution or implementation of any increase in the share capitalof the Company or a direct or indirect placement of shares of theCompany; or

• submit a proposal for a capital increase to any shareholders’meeting for resolution; or

• announce to issue, effect or submit a proposal for the issuance ofany securities convertible into shares of the Company, withoption rights for shares of the Company; or

• enter into a transaction or perform any action economicallysimilar to those described above.

The Company may, however, (i) issue or sell any shares or othersecurities to employees and members of executive bodies of theCompany or its subsidiaries under management participation plans and(ii) pursue any corporate actions undertaken by the Company forpurposes of the entering into any joint venture or the acquisition of anycompanies, provided that the parties to the joint venture or acquiringentity to which such shares will be issued agree to comply with thesame restrictions on the disposal of the shares vis-à-vis theUnderwriters that apply to the Company.

For the period commencing on October 14, 2014 until the date whichfalls six months after the first day of trading of the Company’s shareson the Frankfurt Stock Exchange (currently expected to take place onOctober 24, 2014), East AcquiCo undertook to the Joint GlobalCoordinators, not to:

• offer, pledge, allot, distribute, sell, contract to sell, sell any optionor contract to purchase, purchase any option to sell, grant anyoption, right or warrant to purchase, transfer or otherwise dispose

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of, directly or indirectly any shares of the Company other than theshares of the Company held by it as of October 14, 2014 (the“Restricted Shares”), including, but not limited to, the issuanceor sale of any securities exchangeable into shares of the Company;

• cause or approve, directly or indirectly, the announcement,execution or implementation of any increase in the share capitalof the Company or a direct or indirect placement of shares of theCompany (other than as already disclosed in this Prospectus);

• propose, directly or indirectly, any increase in the share capital ofthe Company to any shareholders’ meeting for resolution, or votein favor of such a proposed capital increase (other than as alreadydisclosed in this Prospectus);

• cause or approve, directly or indirectly, the announcement,execution or proposal of any issuance of financial instrumentsconstituting options or warrants convertible into shares of theCompany; or

• enter into a transaction or perform any action economicallysimilar to those described above, in particular enter into any swapor other arrangement that transfers to another, in whole or in part,the economic risk of ownership of Restricted Shares, whether anysuch transaction is to be settled by delivery of Restricted Shares,in cash or otherwise,

in each case without the prior written consent of the Joint GlobalCoordinators which consent may not be unreasonably withheld ordelayed. The foregoing shall not apply to (i) transfers to affiliates ofEast AcquiCo (ii) future pledges granted to one or more of the JointGlobal Coordinators or their affiliates having been agreed by the JointGlobal Coordinators and (iii) any transfers of shares to one or more ofthe Joint Global Coordinators or their affiliates pursuant toenforcement of any pledge entered into in accordance with(ii), provided in each case that such transferee(s) agree to be bound bythe same lock-up undertaking.

E.6 Amount and percentage of immediatedilution resulting from the offering.

The offering involves the issuance of new shares. Equity attributable toshareholders of the Company amounted to €621.5 million as of June 30,2014, and would amount to €11.95 per share based on 52,000,000outstanding shares of the Company immediately before the offering.

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The dilutive effect of the offering is illustrated in the table belowdemonstrating the amount by which the offer price at the low end,mid-point and high end of the Price Range exceeds the equityattributable to shareholders per share after completion of the offeringassuming the below-described steps of the offering had taken place onJune 30, 2014. In this respect, the equity attributable to shareholders asof June 30, 2014 is adjusted for the effects of the offering, assuming(i) the execution of the capital increase in the maximum number ofoffered New Shares and (ii) an increase in the equity attributable toshareholders at the low end, mid-point and high end of the PriceRange by €94.8 million, €108.5 million and €122.0 million,respectively. The assumed increase is based on the expected netproceeds not considering any tax effects. The adjusted equityattributable to shareholders is expressed as a per share figure,assuming 61,302,326 outstanding shares of the Company uponcompletion of the offering (this per share figure being referred to asthe “Post-IPO Equity attributable to Shareholders per Share”).

As of June 30, 2014Low End Mid-Point High End

Price per share (in €) . . . . . . . . . . . . . . . 10.75 12.25 13.75Equity attributable to shareholders per

share (based on 52,000,000outstanding shares of the Companybefore the offering) (net bookvalue)(1) (in €) . . . . . . . . . . . . . . . . . . 11.95 11.95 11.95

Post-IPO Equity attributable toShareholders per Share (net bookvalue)(1) (in €) . . . . . . . . . . . . . . . . . . 11.68 11.91 12.13

Amount by which the price per shareexceeds the Post-IPO Equityattributable to Shareholders perShare (immediate dilution per share)(in €) . . . . . . . . . . . . . . . . . . . . . . . . . (0.93) 0.34 1.62

Immediate dilution (in %) . . . . . . . . . . . (8.7) 2.8 11.8

(1) Net book value refers to the sum of the Company’s total assets minus thesum of its total liabilities and non-controlling interest.

Each of the New Shares will have the same voting rights as theCompany’s existing shares. Prior to the offering, the ExistingShareholders held 100% of the voting rights. Upon completion of theoffering (including exercise of the Greenshoe Option in full), thevoting rights held by the Existing Shareholders would amount to39.9%.

E.7 Estimated expenses charged to theinvestor by the issuer.

Not applicable. Neither the Company nor the Existing Shareholdersnor the Underwriters will charge expenses to investors.

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GERMAN TRANSLATION OF THE SUMMARY OF THE PROSPECTUSZUSAMMENFASSUNG DES PROSPEKTS

Zusammenfassungen bestehen aus geforderten Angaben, die als „Punkte“ bezeichnet sind. Diese Punkte sind inden Abschnitten A - E (A.1 - E.7) fortlaufend nummeriert. Diese Zusammenfassung enthält alle Punkte, die für die vorliegendeArt von Wertpapieren und Emittenten in eine Zusammenfassung aufzunehmen sind. Da einige Punkte nicht behandelt werdenmüssen, können in der Nummerierungsreihenfolge Lücken auftreten. Selbst wenn ein Punkt wegen der Art der Wertpapiereund des Emittenten in die Zusammenfassung aufgenommen werden muss, ist es möglich, dass in Bezug auf diesen Punkt keinerelevanten Informationen gegeben werden können. In diesem Fall enthält die Zusammenfassung eine kurze Beschreibung desPunkts mit dem Hinweis „Entfällt“.

A—Einleitung und Warnhinweise

A.1 Einleitung und Warnhinweise. Diese Zusammenfassung sollte als Einleitung zu diesem Prospekt (der„Prospekt“) verstanden werden. Bei jeder Anlageentscheidung solltesich der Anleger auf die Prüfung des gesamten Prospekts stützen.

Für den Fall, dass vor einem Gericht Ansprüche aufgrund der indiesem Prospekt enthaltenen Informationen geltend gemacht werden,könnte der als Kläger auftretende Anleger in Anwendung dereinzelstaatlichen Rechtsvorschriften der Staaten des EuropäischenWirtschaftsraums die Kosten für die Übersetzung dieses Prospekts vorProzessbeginn zu tragen haben.

Die TLG IMMOBILIEN AG (die „Gesellschaft“ und gemeinsam mitihren konsolidierten Tochtergesellschaften, „TLG“) zusammen mitJ.P. Morgan Securities plc, London, Vereinigtes Königreich,(„J.P. Morgan“) und UBS Limited, London, Vereinigtes Königreich(„UBS“ und zusammen mit J.P. Morgan, die „Joint GlobalCoordinators“) und zusammen mit der COMMERZBANKAktiengesellschaft, Frankfurt am Main, Deutschland(„COMMERZBANK“) und Kempen & Co N.V., Amsterdam,Niederlande („Kempen & Co“), HSBC Trinkaus & Burkhardt AG,Düsseldorf, Deutschland („HSBC“ und zusammen mit den JointGlobal Coordinators, die „Joint Bookrunners“ oder die„Konsortialbanken“), haben nach § 5 Abs. 2b Nr. 4Wertpapierprospektgesetz die Verantwortung für den Inhalt dieserZusammenfassung übernommen. Diejenigen Personen, die für dieZusammenfassung einschließlich ihrer Übersetzung dieVerantwortung übernommen haben oder von denen der Erlass ausgeht,können haftbar gemacht werden, aber nur, wenn dieZusammenfassung irreführend, unrichtig oder widersprüchlich ist,sofern sie zusammen mit anderen Teilen dieses Prospekts gelesen wirdoder wenn sie nicht alle erforderlichen Schlüsselinformationenvermittelt, sofern sie zusammen mit den anderen Teilen des Prospektsgelesen wird.

A.2 Angabe über spätere Verwendungdes Prospekts.

Entfällt. Eine Zustimmung zur Verwendung des Prospekts für einespätere Weiterveräußerung oder Platzierung der Aktien wurde nichterteilt.

B—Emittent

B.1 Juristische und kommerzielleBezeichnung.

Die Firma der Gesellschaft lautet TLG IMMOBILIEN AG.

Die Gesellschaft ist die Muttergesellschaft von TLG, TLG betreibtihre Geschäfte hauptsächlich unter dem Handelsnamen„TLG IMMOBILIEN“.

B.2 Sitz und Rechtsform des Emittenten,geltendes Recht, Land derGründung.

Die Gesellschaft hat ihren Sitz am Hausvogteiplatz 12, 10117 Berlin,Deutschland, und ist im Handelsregister des AmtsgerichtsCharlottenburg, Deutschland, unter HRB 161314 B eingetragen. DieGesellschaft ist eine Aktiengesellschaft, die deutschem Rechtunterliegt.

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B.3 Art der derzeitigenGeschäftstätigkeit undHaupttätigkeiten des Emittentensamt der hierfür wesentlichenFaktoren, wobei Hauptprodukt- und/oder Dienstleistungskategorien sowiedie Hauptmärkte, auf denen derEmittent vertreten ist, anzugebensind.

TLG glaubt, ein führendes Unternehmen für Gewerbeimmobilien inBerlin und Ostdeutschland zu sein. Zum 30. Juni 2014 bestand dasPortfolio von TLG aus 509 Immobilien mit einem beizulegendenZeitwert von insgesamt €1.510 Millionen. Angesichts einergewichteten durchschnittlich verbleibenden Restmietlaufzeit vonbestehenden Verträgen mit fester Laufzeit von 8,0 Jahren und einerEPRA Leerstandsquote (wie nachstehend unter B.7 definiert) von nur4,0% (ohne Berücksichtigung von nicht-strategiekonformenImmobilien) geht die Gesellschaft davon aus, dass dieses Portfolio gutpositioniert ist, um in absehbarer Zukunft stabile Cashflows zugenerieren. Der Firmensitz von TLG ist in Berlin und TLG betreibtfünf örtliche Niederlassungen in Dresden, Leipzig, Rostock, Erfurtund Chemnitz.

Zum 30. Juni 2014 umfasst das strategiekonforme Portfolio vonTLG 321 Büro- Einzelhandels- und Hotelimmobilien mit einembeizulegenden Zeitwert von €1.338,9 Millionen, welche TLGlangfristig zu halten beabsichtigt (das „StrategiekonformePortfolio“). Das Strategiekonforme Portfolio macht ca. 89% desGesamtportfolios aus. Ca. 72% dieses Strategiekonformen Portfoliosliegen innerhalb der Stadtgrenzen von Berlin, Dresden, Leipzig undRostock, wobei Berlin den größten Anteil dieses Bestands ausmacht(ca. 46% des Strategiekonformen Portfolios). Diese Städte undOstdeutschland haben eine steigende Nachfrage nachGewerbeimmobilien verzeichnet. Von 2009 bis 2012 stiegen dieInvestitionsvolumina für Gewerbeimmobilien in Berlin bzw.Ostdeutschland von €1,22 Milliarden auf €3,48 Milliarden bzw. von€0,3 Milliarden auf €1,36 Milliarden an (Quelle: CommercialPortfolio TLG). Angesichts der Investitionsvolumina vonca. €1,30 Milliarden in Berlin und €1,37 Milliarden in Ostdeutschlandim Laufe des Sechsmonatszeitraums, der am 30. Juni 2014 endete(Quelle: Commercial Portfolio TLG), geht die Gesellschaft davon aus,dass sich dieser Trend fortsetzen wird und dass die Mieteinnahmen,die Vermietung und der Gesamtleerstand des StrategiekonformenPortfolios in der Folge hiervon positiv beeinflusst werden dürften.

Mehrheitlich in guten oder sehr guten Lagen in den Stadtkernen vonBerlin, Dresden, Leipzig und Rostock gelegene Büroimmobilienmachten 36% des Strategiekonformen Portfolios von TLG aus(ausgehend von dem beizulegenden Zeitwert zum 30. Juni 2014). DerMieterstamm für diese Büroimmobilien umfasst Großkonzerne bzw.deren Tochtergesellschaften wie die Daimler Real Estate GmbH unddie SAP Deutschland AG & Co. KG, mit dem Staat verbundeneGesellschaften und Anstalten wie die Ostseesparkasse Rostock und dieBundesanstalt für Immobilienaufgaben sowie kleinere undmittelständische Unternehmen. TLG plant ihr Portfolio anBüroimmobilien durch zusätzliche Ankäufe zu vergrößern. DieGesellschaft nimmt an, dass dies ihre Marktstellung in dem aus ihrerSicht sehr dynamischen Markt für Büroimmobilien in Ostdeutschlandweiter verbessern wird.

Einzelhandelsimmobilien, die mehrheitlich in attraktiven Mikro-Lagenin Berlin und den Wachstumsregionen Ostdeutschlands belegen sind,machen ca. 50% des Strategiekonformen Portfolios von TLG aus(ausgehend von dem beizulegenden Zeitwert zum 30. Juni 2014). DieMikro-Lagen, in denen TLG’s Einzelhandelsimmobilien belegen sind,sind besonders attraktiv für Nahversorger und andere Verkäufer vonessentiellen Verbrauchsgütern, da sie in Gebieten gelegen sind, die esdem Mieter ermöglichen, ein bedeutender und in einigen Fällen sogarder einzige Händler der jeweiligen Verbrauchsgüter innerhalb desEinzugsbereichs zu sein. Zum 30. Juni 2014 entfielen ca. 35% derannualisierten Ist-Mieten aus dem Strategiekonformen Portfolio vonTLG auf Mietverträge mit großen Supermarkt- und Discounterketten,einschließlich der großen Supermarktketten „EDEKA“, „REWE“ und

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„Kaiser’s“ sowie der Discounter „Aldi“, „Lidl“, „Netto“ und „Penny“,mit denen TLG langfristige und enge Geschäftsbeziehungen unterhält.Mit einer gewichteten durchschnittlich verbleibenden Restmietlaufzeitvon bestehenden Verträgen mit fester Laufzeit von 7,3 Jahren undeiner EPRA Leerstandsquote (wie nachstehend unter B.7 definiert)von nur 1,0% (beides zum 30. Juni 2014) war dasEinzelhandelsportfolio der TLG nahezu vollvermietet und bietetstabile und sichere Mieteinnahmen. Dies macht die Mietbeziehungenmit Nahversorgern zum Rückgrat des Geschäfts von TLG. TLG plantauch ihr Portfolio am Einzelhandelsimmobilien durch ausgewähltewertsteigernde Zukäufe zu vergrößern.

Auf fünf Hotelimmobilien, die in den Stadtkernen von Berlin, Dresdenund Rostock liegen, entfallen die verbleibenden 15% desStrategiekonformen Portfolios von TLG (ausgehend vombeizulegenden Zeitwert zum 30. Juni 2014). Der Mieterstamm dieserImmobilien beinhaltet bekannte Hotelketten wie „Steigenberger“,„Motel One“ und „Ramada“. Mit einer EPRA Leerstandsquote (wienachstehend unter B.7 definiert) von nur 1,7% sind diese Immobiliennahezu vollvermietet und die langfristige Bindung der Mieter vonTLG wurde durch eine gewichtete durchschnittlich verbleibendeRestmietlaufzeit von bestehenden Verträgen mit fester Laufzeit von16,7 Jahren belegt (beides zum 30. Juni 2014). Die Mietverträge fürdie Hotelimmobilien von TLG sehen allgemein feste Mietzahlungenvor, was die Abhängigkeit von TLG im Hinblick auf den Erfolg derHotelbetreiber beschränkt. Stabile Cashflows und ein Fokus aufdynamische Märkte machen das Hotelportfolio von TLG zu einerpassenden Ergänzung ihres Büro- und Einzelhandelsportfolios.

TLG hat 188 Immobilien mit einem beizulegenden Zeitwert voninsgesamt €171 Millionen zum 30. Juni 2014 als nicht-strategiekonform klassifiziert und plant, mittelfristig die Mehrheitdieses nicht-strategiekonformen Portfolios zu veräußern. Zum 30. Juni2014 betrug die gewichtete durchschnittlich verbleibendeRestmietlaufzeit von bestehenden Verträgen mit fester Laufzeit für dienicht-strategiekonformen Immobilien 5,5 Jahre und die EPRALeerstandsquote (wie nachstehend unter B.7 definiert) 12,2%.Bis zum 15. September 2014 hat TLG bereits 48 nicht-strategiekonforme Immobilien mit einem beizulegenden Zeitwert voninsgesamt €70,6 Millionen verkauft oder hierfür Kaufverträgeunterschrieben. Allerdings könnte dem Käufer einer Immobilie, derenVerkauf zu einem Preis von €23,9 Millionen TLG zugestimmt hat, dasRecht zustehen, vom Kaufvertrag zurückzutreten oder den Kaufpreiserheblich zu reduzieren und als Konsequenz würde TLGwahrscheinlich einen erheblichen nicht liquiditätswirksamen Verlusterleiden.

Der unabhängige, externe Gutachter Savills Advisory Services GmbH,Taunusanlage 19, 60325 Frankfurt am Main, Deutschland („Savills”)hat ein Bewertungsgutachten für 469 Immobilien aus dem Portfoliovon TLG erstellt und den beizulegenden Zeitwert dieser Immobilienzum 30. Juni 2014 mit insgesamt €1.450 Millionen bewertet. DieDifferenzen zwischen der Anzahl und dem Wert der von Savillsbewerteten Immobilien zum Gesamtportfolio von TLG aus509 Immobilien mit einem beizulegenden Zeitwert von insgesamt€1.510 Millionen ergeben sich aus 40 Immobilien mit einembeizulegenden Zeitwert von insgesamt €60 Millionen, die Savills nichtbewertet hat, da für 27 dieser Immobilien mit einem beizulegendenZeitwert von insgesamt €58 Millionen zum 30. Juni 2014 bereitsKaufverträge unterschrieben waren. Von den restlichen 13 Immobilienwurden zehn Immobilien mit einem beizulegenden Zeitwert voninsgesamt €2 Millionen unter Vorräten verbucht und TLGbeabsichtigt, diese Immobilien zu verkaufen. Den anderen dreiImmobilien hat TLG keinen Wert zugeschrieben.

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Die Gesellschaft geht davon aus, dass die folgendenWettbewerbsstärken die wesentlichen Erfolgstreiber von TLG in derVergangenheit waren und sie auch in der Zukunft weiterhin von ihrenWettbewerbern unterscheiden werden:

• Die Gesellschaft ist der Auffassung, dass sie über einemarktführende, integrierte Plattform für Gewerbeimmobilien inOstdeutschland verfügt, mit einem Fokus auf dieWachstumsmärkte Berlin, Dresden, Leipzig und Rostock.

• Ausgehend vom beizulegenden Zeitwert liegen beinahe 44% desPortfolios von TLG, das sich zum 30. Juni 2014 auf ca.€1,5 Milliarden belief, in Berlin, welches in den letzten Jahreneine besonders dynamische Entwicklung erlebt hat.

• TLG schätzt ihr Portfolio angesichts des hohen Anteils von neuenoder kürzlich modernisierten Immobilien als besonders attraktivein und glaubt, dass diese Attraktivität durch die niedrigenLeerstandsquoten belegt wird.

• Die Gesellschaft ist der Meinung, dass ihr starkes Cashflow-Profil ihre Dividendenkapazität unterstützen wird.

• Die Gesellschaft verfügt über eine robuste Bilanz, verbunden miteiner Festlegung auf einen konservativen Finanzierungsansatzund strebt ein langfristiges Netto LTV-Verhältnis (wienachstehend unter B.7 definiert) von 45-50% an.

• Die Gesellschaft glaubt, dass sie die Fähigkeit hat, konkretes,zukünftiges Wachstum durch aktives Portfolio-Management undausgewählte wertsteigernde Ankäufe freizusetzen.

B.4a Wichtigste jüngste Trends, die sichauf den Emittenten und dieBranchen, in denen er tätig ist,auswirken.

Die Geschäftstätigkeit von TLG wird von zahlreichendemographischen, wirtschaftlichen und politischen Faktorenbeeinflusst. TLG ist am stärksten von Entwicklungen auf und imZusammenhang mit dem Gewerbeimmobilienmarkt in Deutschland,insbesondere in Berlin und Ostdeutschland (Brandenburg,Mecklenburg-Vorpommern, Sachsen, Sachsen-Anhalt und Thüringen)betroffen, wo sich das gesamte Portfolio von TLG befindet. DasPortfolio von TLG besteht hauptsächlich aus Büro-, Einzelhandels-und Hotelimmobilien. In Anbetracht dieses Fokusses istTLG allgemein von Entwicklungen bei makroökonomischenIndikatoren wie Bevölkerungswachstum, Wirtschaftswachstum,Beschäftigung, Kaufkraft und dem Verbraucherpreisindex betroffen.Insbesondere ist TLG näher von Trends bei den mikroökonomischenIndikatoren wie dem Mietpreisniveau und den Leerstandsquoten inden Regionen und Branchen, in denen TLG tätig ist, betroffen.

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werden, als Finanzinvestition gehaltene Immobilien im Sinne vonIAS 40 klassifiziert und gemäß IFRS mit dem beizulegenden Zeitwertbewertet, während sie nach HGB zu Anschaffungskosten abzüglichAbschreibungen bewertet werden). Bis zum 31. Dezember 2011bestand das Portfolio von TLG aus Gewerbe- und Wohnimmobilien.Mit Wirkung zum 1. Januar 2012 wurde dasWohnimmobilienportfolio von TLG auf die TLG WOHNEN GmbH,eine neue, eigens zu diesem Zweck gegründete Gesellschaft,abgespalten, deren einzige Gesellschafterin die BundesrepublikDeutschland war. Aufgrund der Abspaltung sind die von TLG gemäßHGB erstellten Konzernabschlüsse für die zum 31. Dezember 2011und 2012 endenden Geschäftsjahre nicht vollständig vergleichbar, dadas Wohnimmobilienportfolio einen wesentlichen Teil desGesamtportfolios und -geschäfts von TLG ausmachte. Der ungeprüfteverkürzte Konzernzwischenabschluss für den zum 30. Juni 2014endenden Sechsmonatszeitraum wurde gemäß den IFRS fürZwischenberichterstattung (IAS 34) erstellt. Zusätzliche Informationenin diesem Prospekt wurden dem geprüften Jahresabschluss derGesellschaft für das am 31. Dezember 2013 endende Geschäftsjahr,der gemäß den Vorschriften des HGBs erstellt wurde, entnommenoder aus diesem abgeleitet. Aufgrund der zuvor genannten Umstellungder Rechnungslegungsgrundsätze in den Konzernabschlüssen vonHGB auf IFRS wurden für Zwecke eines Vergleichs derkonsolidierten Finanzdaten für die zum 31. Dezember 2011 und31. Dezember 2012 endenden Geschäftsjahre die konsolidiertenFinanzdaten auf Basis von HGB verwendet, während für einenVergleich der konsolidierten Finanzdaten für die zum 31. Dezember2012 und 31. Dezember 2013 endenden Geschäftsjahre sowie für dieam 30. Juni 2013 und 30. Juni 2014 endenden Sechmonatsperioden diekonsolidierten Finanzdaten auf Basis von IFRS verwendet wurden.

Die Konzernabschlüsse der am und zum 31. Dezember 2011, 2012und 2013 endenden Geschäftsjahre und der Jahresabschluss derGesellschaft für das am 31. Dezember 2013 endende Geschäftsjahrwurden durch die Ernst & Young GmbH,Wirtschaftsprüfungsgesellschaft, Stuttgart, Büro Berlin, Deutschland,geprüft und jeweils mit einem uneingeschränktenBestätigungsvermerk versehen.

Sofern Finanzdaten in den nachstehenden Tabellen als „geprüft“gekennzeichnet sind, bedeutet dies, dass sie den oben genanntengeprüften Abschlüssen entnommen wurden. Die Kennzeichnung„ungeprüft“ wird in den nachstehenden Tabellen zurKenntlichmachung von Finanzdaten verwendet, die nicht den obengenannten geprüften Abschlüssen entnommen wurden, sondernentweder dem ungeprüften verkürzten Konzernzwischenabschluss derGesellschaft oder dem internen Berichtssystem der Gesellschaftentnommen wurden oder auf Berechnungen beruhen, bei denen Zahlenaus den ebenerwähnten Quellen zugrunde gelegt wurden.

Sämtliche Finanzdaten, die im Text und den nachfolgenden Tabellendargestellt sind, sind in Millionen Euro angegeben (€ Mio.), sofernnicht anders angegeben. Bestimmte Finanzdaten (einschließlich vonProzentsätzen) in den nachfolgenden Tabellen wurden entsprechendanerkannter kaufmännischer Standards gerundet. Daher kann es sein,dass die zusammengerechneten Werte (Gesamt- oderZwischensummen oder Differenzen oder Zahlenverhältnisse) in dennachfolgenden Tabellen nicht in allen Fällen mit den addierten(ungerundeten) Werten übereinstimmen, die an anderer Stelle indiesem Prospekt erscheinen. Des Weiteren kann es sein, dass diesegerundeten Werte sich nicht auf die Gesamtwerte in diesen Tabellenaufaddieren lassen. In Klammern dargestellte Finanzdaten stehen füreinen negativen Wert der entsprechenden Zahl. Im Hinblick auf die indiesem Prospekt enthaltenen Finanzdaten bedeutet ein Bindestrich

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(„—“), dass die entsprechende Zahl nicht verfügbar ist, während eineNull („0,0“) bedeutet, dass die entsprechende Zahl verfügbar, aber aufNull gerundet worden ist.

Ausgewählte konsolidierte Finanzdaten gemäß IFRS

Daten aus der Konzern-Gesamtergebnisrechnung

Für dasGeschäftsjahr

endend zum 31. Dezember

Für denSechsmonatszeitraumendend zum 30. Juni

2012 2013 2013 2014

(geprüft) (ungeprüft)(in € Millionen) (in € Millionen)

Ergebnis aus Vermietung und Verpachtung . . . . . . . . . . . . . . . . . . 97,1 106,3 52,7 50,0Erlöse aus der Objektbewirtschaftung . . . . . . . . . . . . . . . . . . . . . 138,8 141,3 69,6 66,9Aufwendungen aus der Objektbewirtschaftung . . . . . . . . . . . . . . (41,6) (35,1) (16,9) (16,9)

Ergebnis aus der Bewertung der als Finanzinvestition gehaltenenImmobilien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,1 72,2 34,4 51,3

Ergebnis aus der Veräußerung von als Finanzinvestition gehaltenenImmobilien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0,0) 0,5 0,2 0,5

Ergebnis aus der Veräußerung von Vorratsimmobilien . . . . . . . . . . . . 27,4 7,8 5,5 2,3Erlöse aus dem Verkauf von Vorratsimmobilien . . . . . . . . . . . . . 77,5 21,4 14,3 5,9Aufwand Buchwertabgang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50,2) (13,6) (8,8) (3,6)

Sonstige betriebliche Erträge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,7 18,7 3,9 3,6Personalaufwand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,9) (23,4) (15,4) (7,7)Planmäßige Abschreibungen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,6) (1,5) (0,7) (0,7)Sonstige betriebliche Aufwendungen . . . . . . . . . . . . . . . . . . . . . . . . . (8,3) (7,8) (2,3) (2,4)

Ergebnis vor Zinsen und Steuern (EBIT) . . . . . . . . . . . . . . . . . . . . 158,4 172,8 78,3 96,9Ergebnis aus Anteilen an Gemeinschaftsunternehmen . . . . . . . . . . . . 12,9 2,1 2,1 0,0Finanzerträge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,9 0,7 0,4 0,4Finanzaufwendungen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22,5) (36,0) (18,1) (12,1)Ertrag/Aufwand aus der Bewertung derivativer

Finanzinstrumente . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,0) 6,9 5,4 (2,0)

Ergebnis vor Steuern (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139,8 146,4 68,1 83,2Steuern vom Einkommen und vom Ertrag . . . . . . . . . . . . . . . . . . . . . . (63,5) (47,3) (22,0) (25,8)

Konzernperiodenergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,3 99,1 46,1 57,4Kumuliertes sonstiges Ergebnis (OCI)

davon in Folgejahren nicht in den Gewinn/Verlustumzugliedern

Versicherungsmathematische Gewinne/Verluste . . . . . . . . (1,0) (0,0) — —davon in Folgejahren in den Gewinn/Verlust umzugliedern

Rücklage Hedge Accounting . . . . . . . . . . . . . . . . . . . . . . . . — (0,1) — (4,7)

Gesamtergebnis für die Periode . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,3 99,0 46,1 52,7

S-30

Daten aus der Konzern-Bilanz

Zum 31. Dezember Zum 30. Juni

2012 2013 2014


Langfristige Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.615,2 1.448,1 1.456,6Als Finanzinvestition gehaltene Immobilien . . . . . . . . . . . . . . . . . . . . . . . . . . 1.511,7 1.414,7 1.423,0Anzahlungen auf als Finanzinvestition gehaltene Immobilien . . . . . . . . . . . . 3,0 2,7 2,5Sachanlagen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,4 17,8 16,4Immaterielle Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,5 0,9 0,7Anteile an Gemeinschaftsunternehmen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,1 0,0 0,0Sonstige langfristige finanzielle Vermögenswerte . . . . . . . . . . . . . . . . . . . . . 0,1 0,1 0,1Sonstige Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,9 8,4 8,4Aktive latente Steuern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,5 3,5 5,4

Kurzfristige Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,2 187,6 99,3Vorräte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,3 13,4 13,3Forderungen aus Lieferungen und Leistungen . . . . . . . . . . . . . . . . . . . . . . . . 9,6 11,6 13,7Forderungen aus Ertragsteuern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,2 0,2 0,3Derivative Finanzinstrumente . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 0,0 0,0Sonstige kurzfristige finanzielle Vermögenswerte . . . . . . . . . . . . . . . . . . . . . 10,0 5,0 3,2Sonstige Forderungen und Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . . . 1,6 0,7 2,9Zahlungsmittel und Zahlungsmitteläquivalente . . . . . . . . . . . . . . . . . . . . . . . 60,5 138,9 24,5Zur Veräußerung gehaltene Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 17,8 41,6

Summe Aktiva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.719,4 1.635,7 1.555,9

Eigenkapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.006,7 801,0 621,5Gezeichnetes Kapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,0 52,0 52,0Kapitalrücklage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151,5 410,2 252,5Gewinnrücklagen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804,3 339,9 322,9Kumulierte sonstige Rücklagen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,0) (1,2) (5,9)

Fremdkapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712,6 834,7 934,4Langfristige Verbindlichkeiten . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508,6 630,2 787,2

Langfristige Verbindlichkeiten ggü. Kreditinstituten . . . . . . . . . . . . . . . 392,9 513,0 672,4Pensionsverpflichtungen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,9 6,9 6,8Langfristige derivative Finanzinstrumente . . . . . . . . . . . . . . . . . . . . . . . 25,3 18,8 8,7Sonstige langfristige Verbindlichkeiten . . . . . . . . . . . . . . . . . . . . . . . . . 4,3 3,4 2,9Passive latente Steuern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,3 88,1 96,3

Kurzfristige Verbindlichkeiten . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204,0 204,4 147,3Kurzfristige Verbindlichkeiten ggü. Kreditinstituten . . . . . . . . . . . . . . . 87,2 113,2 55,6Verbindlichkeiten aus Lieferungen und Leistungen . . . . . . . . . . . . . . . . 29,8 14,6 12,2Sonstige kurzfristige Rückstellungen . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,2 16,2 12,3Steuerschulden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,7 44,3 57,3Kurzfristige derivative Finanzinstrumente . . . . . . . . . . . . . . . . . . . . . . . 18,2 0,0 0,0Sonstige kurzfristige Verbindlichkeiten . . . . . . . . . . . . . . . . . . . . . . . . . 34,1 16,1 9,9

Summe Passiva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.719,4 1.635,7 1.555,9

S-31

Daten aus der Konzern-Kapitalflussrechnung

Für das Geschäftsjahr endendzum 31. Dezember

Für den Sechsmonatszeitraumendend zum 30. Juni

2012 2013 2013 2014


Cashflow aus laufender Geschäftstätigkeit . . . . . 162,9 76,1 26,5 33,4Erhaltene Zinsen . . . . . . . . . . . . . . . . . . . . . . 0,9 0,7 0,4 0,4Gezahlte Zinsen . . . . . . . . . . . . . . . . . . . . . . (21,7) (57,0) (33,9) (35,6)Gezahlte Ertragsteuern . . . . . . . . . . . . . . . . . (7,7) (5,9) (0,6) (4,5)

Netto Cashflow aus laufenderGeschäftstätigkeit . . . . . . . . . . . . . . . . . . . . . . . 134,3 13,8 (7,6) (6,3)

Netto Cashflow aus der Investitionstätigkeit . . . . (79,0) 220,9 55,1 20,3Netto Cashflow aus der

Finanzierungstätigkeit . . . . . . . . . . . . . . . . . . . (28,4) (156,3) (37,1) (128,4)

Zahlungswirksame Veränderung desFinanzmittelbestands . . . . . . . . . . . . . . . . . . . 26,9 78,4 10,5 (114,4)

Zusätzliche Leistungskennzahlen

Die Gesellschaft ist der Auffassung, dass die in diesem Abschnitt beschriebenen Leistungskennzahlen die wichtigstenIndikatoren zur Messung der operativen und finanziellen Leistung des Geschäfts von TLG darstellen.

TLG nimmt an, dass die Leistungskennzahlen Mieterlöse, Ergebnis aus Vermietung und Verpachtung, EBITDA,Bereinigtes EBITDA, FFO, AFFO, die Eigenkapitalquote, das Netto LTV-Verhältnis, der Zinsdeckungsgrad, EPRA NAVund die EPRA Leerstandsquote (die „Leistungskennzahlen“) für potenzielle Investoren von Nutzen sind. TLG nimmt an,dass die Leistungskennzahlen zur Bewertung der operativen Leistung von TLG, des Nettowerts von TLG’s Portfolio, desVerschuldungsgrades von TLG und der von TLG’s Geschäftstätigkeit generierten Cashflows nützlich sind, weil eineVielzahl von Unternehmen, insbesondere Unternehmen aus der Immobilienbranche, diese Zahlen ebenfalls alsLeistungskennzahlen veröffentlichen.

Ungeachtet dessen sind die Leistungskennzahlen nicht als Messgrößen unter IFRS anerkannt und sollten nicht als Ersatzfür gemäß IFRS ermittelte Angaben zu den Nettovermögenswerten, dem Ergebnis vor Steuern, dem Periodenergebnis, demCashflow aus laufender Geschäftstätigkeit oder anderen Daten aus der Konzern-Gesamtergebnisrechnung, Konzern-Kapitalflussrechnung oder Konzern-Bilanz oder als Messgrößen für die Profitabilität oder Liquidität betrachtet werden. DieLeistungskennzahlen geben weder notwendigerweise Aufschluss darüber, ob der Cashflow ausreichend oder verfügbar fürden Liquiditätbedarf von TLG sein wird, noch ob irgendeine solche Messgröße Aufschluss über vergangeneBetriebsergebnisse von TLG geben kann. Die Leistungskennzahlen sind nicht als Indikatoren für zukünftige Ergebnisseaufzufassen. Da nicht alle Unternehmen die Leistungskennzahlen in derselben Art und Weise berechnen, ist dieDarstellung der Leistungskennzahlen von TLG nicht notwendigerweise vergleichbar mit ähnlich bezeichneten Messgrößen,die andere Unternehmen verwenden.

Leistung und Profitabilität

Die folgende Tabelle beinhaltet Informationen zu den wichtigsten Leistungs- und Profitabilitätskennzahlen vonTLG:

Für das Geschäftsjahrendend zum 31. Dezember

Für den Sechsmonatszeitraumendend zum 30. Juni

2012 2013 2013 2014(ungeprüft und in € Millionen,sofern nicht anders angegeben)

(ungeprüft und in € Millionen,sofern nicht anders angegeben)

Mieterlöse(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,1 118,3 59,2 57,0Ergebnis aus Vermietung und Verpachtung(2) . . . 97,1 106,3 52,7 50,0EBITDA(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,9 102,0 44,6 46,3Bereinigtes EBITDA(4) . . . . . . . . . . . . . . . . . . . . . 79,5 90,4 45,8 42,0FFO(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,6 46,1 24,4 26,0FFO (pro Aktie und in €)(5) . . . . . . . . . . . . . . . . . 1,01 0,89 0,47 0,50AFFO(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,0 40,4 22,5 23,8AFFO (pro Aktie und in €)(5) . . . . . . . . . . . . . . . . 0,77 0,78 0,43 0,46

(1) Die Mieterlöse beziehen sich auf die Erlöse aus der Objektbewirtschaftung ohne Erlöse aus der Weiterberechnung vonBetriebskosten und Erlöse aus anderen Lieferungen und Leistungen, wie in der Konzern-Gesamtergebnisrechnung für den jeweiligenZeitraum angegeben. Geprüft für die zum 31. Dezember 2012 und 2013 endenden Geschäftsjahre.

(2) Das Ergebnis aus Vermietung und Verpachtung bezieht sich auf die Erlöse aus der Objektbewirtschaftung abzüglich derAufwendungen aus der Objektbewirtschaftung, wie in der Konzern-Gesamtergebnisrechnung für den jeweiligen Zeitraumangegeben. Geprüft für die zum 31. Dezember 2012 und 2013 endenden Geschäftsjahre.

S-32

(3) Das Ergebnis vor Zinsen, Steuern, Abschreibungen und Wertberichtigungen („EBITDA“) ist definiert als der Konzerngewinn-/verlust für die Periode vor Steuern vom Einkommen und vom Ertrag, Finanzergebnis, Ergebnis aus Anteilen anGemeinschaftsunternehmen, Ertrag/Aufwand aus der Bewertung derivativer Finanzinstrumente, planmäßigen Abschreibungen sowievor dem Ergebnis aus der Bewertung der als Finanzinvestition gehaltenen Immobilien, wie sie in den entsprechendenKonzernabschlüssen der Gesellschaft wiedergegeben sind.

(4) „Bereinigtes EBITDA“ ist definiert als EBITDA angepasst um das Ergebnis aus der Veräußerung von als Finanzinvestitiongehaltenen Immobilien, das Ergebnis aus der Veräußerung von Vorratsimmobilien und Einmaleffekte.

Die folgende Tabelle zeigt die Berechnung des EBITDA und des Bereinigten EBITDA für die angegebenen Zeiträume, jeweils beimEBIT beginnend:

Für dasGeschäftsjahr endend

zum 31. Dezember


2012 2013 2013 2014(geprüft, sofern nicht

anders angegeben)(in € Millionen)

(ungeprüft)(in € Millionen)

Ergebnis vor Zinsen und Steuern (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . 158,4 172,8 78,3 96,9Planmäßige Abschreibungen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,6 1,5 0,7 0,7Ergebnis aus der Bewertung der als Finanzinvestition gehaltenen

Immobilien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,1) (72,2) (34,4) (51,3)EBITDA (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,9 102,0 44,6 46,3Ergebnis aus der Veräußerung von als Finanzinvestition gehaltenen

Immobilien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 (0,5) (0,2) (0,5)Ergebnis aus der Veräußerung von Vorratsimmobilien . . . . . . . . . . . . . . . . . . . (27,4) (7,8) (5,5) (2,3)Abfindungen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6,9 6,9 —Auflösung einer Rückstellung für Grunderwerbsteuern in Zusammenhang mit

der Abspaltung von TLG WOHNEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5,4) — —Auflösung von Verbindlichkeiten und Rückstellungen aus der Weiterreichung

von Kaufpreisen und aufgelaufenen Zinsen (ungeprüft) . . . . . . . . . . . . . . . . — (4,8) — —Auflösung einer Rückstellung für das Rückzahlungsrisiko von

Subventionen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (2,3)Verpflichtung aus aktienbasierter Vergütung (Bonusvereinbarung) . . . . . . . . . — — — 0,8

Bereinigtes EBITDA (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,5 90,4 45,8 42,0

(5) Der Mittelzufluss aus der operativen Tätigkeit nach Steuern (ohne das Veräußerungsergebnis) („FFO“) ist eine Messgröße für denLiquiditätszufluss von Immobilienunternehmen. Die Gesellschaft definiert FFO als den Konzerngewinn/-verlust für die Periodeangepasst um das Ergebnis aus der Veräußerung von als Finanzinvestition gehaltenen Immobilien, das Ergebnis aus der Veräußerungvon Vorratsimmobilien, das Ergebnis aus der Bewertung der als Finanzinvestition gehaltenen Immobilien, des Ertrags/Aufwands ausder Bewertung derivativer Finanzinstrumente und sonstigen Effekten sowie latente Steuern und Steuereffekte aus dem Ergebnis ausder Veräußerung von als Finanzinvestition gehaltenen Immobilien und dem Ergebnis aus der Veräußerung von Vorratsimmobiliensowie der Steuereffekte aus der Abwicklung von Zinssicherungsgeschäften.

„AFFO“ stellt FFO angepasst um Investitionsausgaben (Capex) dar.

Die folgende Tabelle zeigt die Berechnung von FFO und AFFO für die angegebenen Zeiträume:


zum 31. Dezember


2012 2013 2013 2014(geprüft, sofern nichtanders angegeben in)

(ungeprüft)(in € Millionen)

(in € Millionen)Konzernperiodenergebnis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,3 99,1 46,1 57,4Ergebnis aus der Veräußerung von als Finanzinvestition gehaltenen

Immobilien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,0 (0,5) (0,2) (0,5)Ergebnis aus der Veräußerung von Vorratsimmobilien . . . . . . . . . . . . . . . . . . . . . . (27,4) (7,8) (5,5) (2,3)Ergebnis aus der Bewertung der als Finanzinvestition gehaltenen Immobilien . . . . (53,1) (72,2) (34,4) (51,3)Ertrag/Aufwand aus der Bewertung derivativer Finanzinstrumente . . . . . . . . . . . . . 10,0 (6,9) (5,4) 2,0Sonstige Effekte(a) (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,4 6,8 4,2 1,7Latente Steuern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,0 9,8 5,5 8,3Korrektur aktueller Steuern vom Einkommen und vom Ertrag aufgrund einer

pauschalen Berechnung für Zwischenperioden(b) (ungeprüft) . . . . . . . . . . . . . . . N/A N/A 0,6 9,5Bereinigung von Steuereffekten aus der Veräußerung der als Finanzinvestition

gehaltenen Immobilien und den Vorratsimmobilien sowie Steuereffekten ausder Ablösung von Zinssicherungsgeschäften(c) (ungeprüft) . . . . . . . . . . . . . . . . . 3,2 31,4 13,6 4,6

FFO (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,6 46,1 24,4 26,0FFO (je Aktie(d) und in €) (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,01 0,89 0,47 0,50FFO (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,6 46,1 24,4 26,0Capex(e) (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,6) (5,7) (1,9) (2,2)AFFO (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,0 40,4 22,5 23,8AFFO (je Aktie(d) und in €) (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,77 0,78 0,43 0,46

S-33

(a) Sonstige Effekte beeinhalten:

(i) Abschreibung von selbstgenutzten Immobilien (IAS 16) von €0,3 Millionen für das Geschäftsjahr, das am 31 Dezember2012 endete, €0,3 Millionen für das Geschäftsjahr, das am 31. Dezember 2013 endete, €0,1 Millionen für denSechsmonatszeitraum, der am 30. Juni 2013 endete, und €0,1 Millionen für den Sechsmonatszeitraum, der am 30. Juni2014 endete;

(ii) Erträge aus dem zum 31. Dezember 2014 auslaufenden Dienstleistungsvertrag mit der TAG Wohnen GmbH (vormals:TLG WOHNEN GmbH) in Höhe von €2,9 Millionen für das Geschäftsjahr, das am 31. Dezember 2012 endete, €1,6Millionen für das Geschäftsjahr, das am 31. Dezember 2013 endete, €0,7 Millionen für den Sechsmonatszeitraum, der am30. Juni 2013 endete und €0,3 Millionen für den Sechsmonatszeitraum, der am 30. Juni 2014 endete;

(iii) Ergebnis aus dem 33%igen Anteil an dem Gemeinschaftsunternehmen Altmarkt-Galerie Dresden KG, verkauft in 2013,von €12,9 Millionen für das Geschäftsjahr, das am 31. Dezember 2012 endete, €2,1 Millionen für das Geschäftsjahr, dasam 31. Dezember 2013 endete und €2,1 Millionen für den Sechsmonatszeitraum, der am 30. Juni 2013 endete;

(iv) Personalaufwand für Abfindungen in Verbindung mit der Reorganisation von TLG in Höhe von €6,9 Millionen für dasGeschäftsjahr, das am 31. Dezember 2013 endete, €6,9 Millionen für den Sechsmonatszeitraum, der am 30. Juni 2013endete, sowie Aufwendungen für aktienbasierte Vergütung in Höhe von €0,8 Millionen für den Sechsmonatszeitraum, deram 30. Juni 2014 endete;

(v) Erträge aus der Auflösung von Rückstellungen für die Grunderwerbsteuer, die in Verbindung mit der Abspaltung vonTLGs Wohnimmobilien auf die TLG WOHNEN GmbH in 2012 gebildet wurden, in Höhe von €5,4 Millionen für dasGeschäftsjahr, das am 31. Dezember 2013 endete; und

(vi) Erträge aus der Auflösung von Verbindlichkeiten und Rückstellungen für die Weiterreichung von Kaufpreisen undaufgelaufenen Zinsen durch TLG, die aus TLGs Verpflichtung resultierten, Teile der Kaufpreise weiterzuleiten, welchedurch den Verkauf von Immobilien, die im Miteigentum der TLG, BEDIG AG i.L. und des Landes Berlin standen, erzieltwurden in Höhe von €4,8 Millionen für das Geschäftsjahr, das am 31. Dezember 2013 endete, und die Auflösung einerRückstellung für das Rückzahlungsrisiko von Subventionen in Höhe von €2,3 Millionen für den Sechsmonatszeitraum,der am 30. Juni 2014 endete.

(b) Die aktuellen Steuern vom Einkommen und vom Ertrag in Höhe von €16,5 Millionen und in Höhe von €17,5 Millionen für dieSechsmonatszeiträume, die am 30. Juni 2013 und 2014 endeten, wurden mithilfe des Integralverfahrens in Übereinstimmungmit IAS 34.30 errechnet. Aufgrund dieser Berechnungsmethode ist eine Korrektur in Höhe von €0,6 Millionen für das ersteHalbjahr 2013 und in Höhe von €9,5 Millionen für das erste Halbjahr 2014 vorzunehmen, um die niedrigeren tatsächlichenSteueraufwendungen für den entsprechenden Sechsmonatszeitraum in Höhe von €15,9 Millionen in 2013 und in Höhe von €8,0Millionen in 2014 zu zeigen.

(c) Bereinigungen des tatsächlichen Steueraufwands um die laufenden Steuern vom Einkommen und vom Ertrag aus demVerkaufsergebnis der als Finanzinvestition gehaltenen Immobilien sowie der Vorratsimmobilien beliefen sich auf€3,2 Millionen für das Geschäftsjahr, das am 31. Dezember 2012 endete, €36,8 Millionen für das Geschäftsjahr, das am 31.Dezember 2013 endete, €13,6 Millionen für den Sechsmonatszeitraum, der am 30. Juni 2013 endete und €10, 9 Millionen fürden Sechsmonatszeitraum, der am 30. Juni 2014 endete.

Die Bereinigung des gegenläufigen (ursprünglich den laufenden Steueraufwand mindernden) Effekts aus der steuernwirksamenAblösung von Zinssicherungsgeschäften betrug €5,5 Millionen für das Geschäftsjahr, das am 31. Dezember 2013 endete, und€6,4 Millionen für den Sechsmonatszeitraum, der am 30. Juni 2014 endete.

(d) Basierend auf insgesamt 52.000.000 ausstehenden Aktien zum Zeitpunkt dieses Prospekts.

(e) Capex bezieht sich auf die Investitionsaufwendungen ohne Kosten für Zukäufe von Immobilien, Kosten fürProjektentwicklungen und ohne den laufenden Instandhaltungsaufwand.

Finanzierung und Verschuldung

Für das Geschäftsjahr undzum 31. Dezember

Für den Sechsmonatszeitraum undzum 30. Juni

2012 2013 2014(ungeprüft)

(in %, sofern nicht anders angegeben)(ungeprüft)

(in %, sofern nicht anders angegeben)Eigenkapitalquote(1) . . . . . . . . . . . . . . . . . . . . 58,5 49,0 39,9Netto LTV-Verhältnis(2) . . . . . . . . . . . . . . . . . 27,0 33,3 47,0Zinsdeckungsgrad (als Vielfaches)(3) . . . . . . . 3,7x 2,6x 3,6x

(1) Die Eigenkapitalquote ist das Verhältnis des (den Gesellschaftern zustehenden) Eigenkapitals zu Eigen- und Fremdkapital (die„Eigenkapitalquote“). Zum 31. Dezember 2012 berechnet sich die Eigenkapitalquote durch Division des Eigenkapitals in Höhe von€1.006,7 Millionen durch das gesamte Eigen- und Fremdkapital in Höhe von €1.719,4 Millionen. Zum 31. Dezember 2013 berechnetsich die Eigenkapitalquote durch Division des Eigenkapitals in Höhe von €801,0 Millionen durch das gesamte Eigen- undFremdkapital in Höhe von €1.635,7 Millionen. Zum 31. Juni 2014 berechnet sich die Eigenkapitalquote durch Division desEigenkapitals in Höhe von €621,5 Millionen durch das gesamte Eigen- und Fremdkapital in Höhe von €1.555,9 Millionen.

(2) Das Netto-“Loan-to-Value”-Verhältnis ist das Verhältnis von Nettofremdkapital (Summe aus langfristigen und kurzfristigenVerbindlichkeiten ggü. Kreditinstituten abzüglich der Zahlungsmittel und Zahlungsmitteläquivalente), zum Immobilienvermögen(Summe aus als Finanzinvestition gehaltenen Immobilien, eigengenutzten Immobilien, Anzahlungen auf als Finanzinvestitiongehaltene Immobilien, zur Veräußerung gehaltenen Vermögenswerten und Vorräten (das „Netto LTV-Verhältnis“).

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Die folgende Tabelle zeigt die Berechnung des Netto LTV-Verhältnisses zu den angegebenen Zeitpunkten:

Zum 31. Dezember Zum 30. Juni2012 2013 2014

(geprüft und in€ Millionen, sofern

nicht andersangegeben)

(ungeprüft)(in € Millionen, sofern


Langfristige Verbindlichkeiten ggü. Kreditinstituten . . . . . . . . . . . . . . . . . 392,9 513,0 672,4Kurzfristige Verbindlichkeiten ggü. Kreditinstituten . . . . . . . . . . . . . . . . . 87,2 113,2 55,6Zahlungsmittel und Zahlungsmitteläquivalente . . . . . . . . . . . . . . . . . . . . . . (60,5) (138,9) (24,5)

Nettofremdkapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419,5 487,3 703,5

Als Finanzinvestition gehaltene Immobilien . . . . . . . . . . . . . . . . . . . . . . . . 1.511,7 1.414,7 1.423,0Eigengenutzte Immobilien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,7 16,5 15,1Anzahlungen auf als Finanzinvestition gehaltene Immobilien . . . . . . . . . . 3,0 2,7 2,5Zur Veräußerung gehaltene Vermögenswerte . . . . . . . . . . . . . . . . . . . . . . . 0,0 17,8 41,6Vorräte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,3 13,4 13,3

Immobilienvermögen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.553,7 1.465,1 1.495,5

Netto-Loan-to-Value (Net LTV) (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . 27,0 33,3 47,0

(3) Der Zinsdeckungsgrad ist das Verhältnis zwischen dem Bereinigten EBITDA und dem Finanzergebnis für den jeweiligen Zeitraumund stimmt möglicherweise nicht mit ähnlichen Begriffen überein, die für Finanzkennzahlen in den Kreditverträgen von TLGverwandt werden. Der Zinsdeckungsgrad für das Geschäftsjahr, das am 31. Dezember 2012 endete, berechnet sich durch Divisiondes Bereinigten EBITDA von €79,5 Millionen durch das Finanzergebnis von €21,6 Millionen. Der Zinsdeckungsgrad für dasGeschäftsjahr, das am 31. Dezember 2013 endete, berrechnet sich durch Division des Bereinigten EBITDA von €90,4 Millionendurch das Finanzergebnis von €35,3 Millionen. Der Zinsdeckungsgrad für den Sechsmonatszeitraum, der am 30. Juni 2014 endete,berechnet sich durch die Division des Bereinigten EBITDA von €42,0 Millionen durch das Finanzergebnis von €11,7 Millionen.

EPRA Leistungskennzahlen

Zum 31. Dezember Zum 30. Juni2012 2013 2014

(geprüft und in€ Millionen, sofern


(ungeprüft)(in € Millionen, sofern


Eigenkapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.006,7 801,0 621,5Marktwertanpassung anderer Vermögensgegenstände des

Anlagevermögens (IAS 16)(1) (ungeprüft) . . . . . . . . . . . . . . . . . . . . . 2,1 3,8 2,7Marktwertanpassung auf Vorratsimmobilien(2) (ungeprüft) . . . . . . . . . . 4,6 5,3 5,1Marktwerte derivativer Finanzinstrumente (ungeprüft) . . . . . . . . . . . . . 43,4 18,8 8,7Aktive latente Steueren . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,5) (3,5) (5,4)Passive latente Steuern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,3 88,1 96,3EPRA NAV(3) (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.131,7 913,5 728,9EPRA NAV (je Aktie und in €)(4) (ungeprüft) . . . . . . . . . . . . . . . . . . 21,76 17,57 14,02EPRA Leerstandsquote (in %)(5) (ungeprüft) . . . . . . . . . . . . . . . . . . 8,7 5,1 5,0

(1) Die Marktwertanpassung anderer Vermögensgegenstände des Anlagevermögens (IAS 16) bezeichnet den Überschuss aus derNeubewertung zum beizulegenden Zeitwert der selbstgenutzten Immobilien, welche in der Konzernbilanz mit dem niedrigeren Wertaus Anschaffungskosten abzüglich kumulierter Abschreibungen und Wertminderungen und beizulegendem Zeitwert enthalten sind.

(2) Die Marktwertanpassung auf Vorratsimmobilien bezeichnet den Überschuss aus der Neubewertung zum beizulegenden Zeitwert vonzu veräußernden Immobilien, die gemäß IFRS mit dem niedrigeren Wert aus Anschaffungskosten oder Nettoveräußerungswert unterden Vorräten in der Konzernbilanz enthalten sind.

(3) Das EPRA NAV berechnet sich anhand der Definition der European Public Real Estate Association (die „EPRA“) und findetVerwendung als Indikator für das langfristige Eigenkapital von TLG und wird berechnet anhand des Eigenkapitals (i) einschließlichder Marktwertanpassung anderer Vermögensgegenstände des Anlagevermögens (IAS 16) sowie der Marktwertanpassung aufVorratsimmobilien, (ii) ausschließlich des Marktwerts derivativer Finanzinstrumente, aktiver latenter Steuern und passiver latenterSteuern (das „EPRA NAV“).

(4) Basierend auf einer Gesamtzahl von 52.000.000 ausstehenden Aktien zum Datum dieses Propekts.

(5) Die EPRA Leerstandsquote entspricht dem geschätzten Mietwert von leerstehenden Räumlichkeiten geteilt durch den geschätztenMietwert des Gesamtportfolios („EPRA Leerstandsquote“).

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Ausgewählte konsolidierte Finanzdaten gemäß HGBFür das

Geschäftsjahr endendzum 31. Dezember2011 2012(geprüft, sofern


(in € Millionen)Daten aus der Konzern-Gewinn- und VerlustrechnungUmsatzerlöse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247,4 219,7Ergebnis der gewöhnlichen Geschäftstätigkeit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,0 7,1Konzernjahresüberschuss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,7 2,5

Zum 31. Dezember2011 2012(geprüft, sofern


(in € Millionen)Daten aus der KonzernbilanzAnlagevermögen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.795,9 1.339,2Umlaufvermögen (ungeprüft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,5 104,6Rechnungsabgrenzungsposten . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,1 7,3

Aktiva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.911,5 1.451,1

Eigenkapital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962,7 805,3Unterschiedsbetrag aus der Kapitalkonsolidierung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,9 7,0Sonderposten für Investitionszulagen und Investitionszuschüsse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,8 16,4Rückstellungen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,2 89,2Verbindlichkeiten . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812,3 533,2Rechnungsabgrenzungsposten . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0,6 0,1

Passiva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.911,5 1.451,1


zum 31. Dezember2011 2012(geprüft, sofern


(in € Millionen)Daten aus der Konzern-KapitalflussrechnungCashflow aus laufender Geschäftstätigkeit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,3 142,5Cashflow aus der Investitionstätigkeit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,9) (86,6)Cashflow aus der Finanzierungstätigkeit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,2 (28,4)

B.8 Ausgewählte wesentliche Pro-forma-Finanzinformationen.

Entfällt. Die Gesellschaft hat keine Pro-Forma-Finanzinformationenerstellt.

B.9 Gewinnprognosen oder -schätzungen. Basierend auf dem Trend des Geschäftsjahrs 2014 rechnet dasManagement der Gesellschaft mit einem FFO von €50 Millionen fürdas Geschäftsjahr 2014.

B.10 Beschränkungen imBestätigungsvermerk zu denhistorischen Finanzinformationen.

Entfällt. Die in diesem Prospekt enthaltenen historischenFinanzinformationen wurden jeweils mit einem uneingeschränktenBestätigungsvermerk versehen.

B.11 Nicht Ausreichen desGeschäftskapitals des Emittenten zurErfüllung bestehenderAnforderungen.

Entfällt. Die Gesellschaft ist der Ansicht, dass TLG in der Lage ist, dieZahlungsverpflichtungen zu erfüllen, die mindestens in den nächstenzwölf Monaten fällig werden.

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C—Wertpapiere

C.1 Beschreibung von Art und Gattungder angebotenen und/oder zumHandel zuzulassenden Wertpapiere,einschließlich jederWertpapierkennung.

Auf den Inhaber lautende Stammaktien ohne Nennbetrag(Stückaktien), jeweils mit einem anteiligen Betrag am Grundkapitalvon €1,00 und mit voller Dividendenberechtigung ab dem 1. Januar2014.

International Securities Identification Number (ISIN):DE000A12B8Z4

Wertpapierkennnummer (WKN): A12B8Z

Common Code: 111597880

Ticker Symbol: TLG

C.2 Währung der Wertpapieremission. Euro.

C.3 Zahl der ausgegebenen und volleingezahlten Aktien und derausgegebenen, aber nicht volleingezahlten Aktien.

52,000,000 auf den Inhaber lautende Stammaktien ohne Nennbetrag(Stückaktien). Das Grundkapital wurde vollständig eingezahlt.

Nennwert pro Aktie bzw. Angabe,dass die Aktien keinen Nennwerthaben.

Jede Aktie der Gesellschaft repräsentiert einen anteiligen Betrag desGrundkapitals der Gesellschaft von €1,00.

C.4 Beschreibung der mit denWertpapieren verbundenen Rechte.

Jede Aktie der Gesellschaft berechtigt zu einer Stimme in derHauptversammlung der Gesellschaft. Es bestehen keineStimmrechtsbeschränkungen. Die Aktien sind mit vollerDividendenberechtigung ab dem 1. Januar 2014 ausgestattet.

C.5 Beschreibung aller etwaigenBeschränkungen für die freieÜbertragbarkeit der Wertpapiere.

Entfällt. Die Aktien der Gesellschaft sind in Übereinstimmung mit dengesetzlichen Bestimmungen für auf den Inhaber lautende Stammaktienfrei übertragbar. Es bestehen keine Verfügungsverbote oder-beschränkungen hinsichtlich der Übertragbarkeit der Aktien derGesellschaft.

C.6 Angabe, ob für die angebotenenWertpapiere die Zulassung zumHandel an einem geregelten Marktbeantragt wurde bzw. werden soll,und Nennung aller geregeltenMärkte, an denen die Wertpapieregehandelt werden oder werdensollen.

Die Gesellschaft erwartet, dass sie die Zulassung der Aktien derGesellschaft zum regulierten Markt mit gleichzeitiger Zulassung zumTeilbereich des regulierten Marktes mit weiterenZulassungsfolgepflichten (Prime Standard) an der FrankfurterWertpapierbörse voraussichtlich am oder um den 15. Oktober 2014beantragen wird. Der Zulassungsbeschluss wird voraussichtlich am23. Oktober 2014 bekannt gegeben werden. Der Handel an derFrankfurter Wertpapierbörse wird voraussichtlich am 24. Oktober2014 beginnen.

C.7 Beschreibung der Dividendenpolitik. Die Gesellschaft beabsichtigt, eine Dividende in Höhe von 70-80%ihres jährlichen FFO auszuschütten, sofern die Geschäftsentwicklungvon TLG zumindest stabil bleibt. Da vorgesehen ist, dass derBörsengang nur zwei Monate vor dem Ende des laufendenGeschäftsjahres abgeschlossen ist, plant die Gesellschaft derzeit, eineDividende in Höhe von insgesamt €10-15 Millionen für dasGeschäftsjahr 2014 auszuschütten.

D—Risiken

D.1 Zentrale Angaben zu den zentralenRisiken, die dem Emittenten oderseiner Branche eigen sind.

Der Erwerb von Aktien der Gesellschaft ist mit Risiken verbunden.Daher sollten Investoren bei der Entscheidung über eine Investition inAktien der Gesellschaft die nachfolgend beschriebenen Risiken unddie sonstigen in diesem Prospekt enthaltenen Informationen sorgfältigprüfen. Der Marktpreis der Aktien der Gesellschaft könnte beiVerwirklichung jedes einzelnen dieser Risiken fallen; in diesem Fallkönnten die Anleger ihre Einlage ganz oder teilweise verlieren. Die

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folgenden Risiken könnten allein oder zusammen mit weiteren Risikenund Unwägbarkeiten, die der Gesellschaft derzeit nicht bekannt sindoder die sie derzeit als unwesentlich erachtet, die Geschäfts-,Vermögens-, Finanz- und Ertragslage der TLG erheblich nachteiligbeeinträchtigen.

Die Reihenfolge, in welcher die Risikofaktoren dargestellt sind, stelltweder eine Aussage über die Eintrittswahrscheinlichkeit noch über dieBedeutung und Höhe der Risiken oder das Ausmaß eines möglichenSchadens der Geschäfts-, Vermögens-, Finanz- und Ertragslage derTLG dar. Die hier genannten Risiken können sich einzeln oderkumulativ verwirklichen.

Markt- und Geschäftsrisiken

• Nachteilige Entwicklungen der Konjunktur und derGewerbeimmobilienmärkte in Deutschland, wie z. B. allgemeineDeflation in der Eurozone oder steigende Zinsen, könnten sichnachteilig auf TLG auswirken.

• Eine Verschlechterung der wirtschaftlichen Bedingungen und desGeschäftsumfeldes in Berlin und Ostdeutschland, insbesonderenachteilige demografische Entwicklungen, könnten sichnachteilig auf TLG auswirken.

• TLG ist möglicherweise nicht in der Lage, ihre Strategie desWachstums durch Akquisitionen aufgrund eines Mangels aninteressanten, zum Verkauf angebotenen Liegenschaften oderImmobilienportfolios, des Wettbewerbs um solche Ankäufe oderdas Unvermögen die erforderliche Akquisitionsfinanzierung zubeschaffen, umzusetzen.

• TLG ist möglicherweise nicht in der Lage, sämtliche mit denerworbenen Immobilien bzw. Portfolios verbundenen Risiken zuerkennen und überschätzt möglicherweise den Wert und/oder diefinanzielle Leistungsfähigkeit derartiger Akquisitionsgelegenheiten.

• TLG könnte sich mit Risiken bei Sanierungs- undEntwicklungsmaßnahmen konfrontiert sehen und für die Zukunftgeplante Maßnahmen könnten sich als undurchführbarherausstellen.

• TLG kann möglicherweise Immobilien aus ihrem nicht-strategiekonformen Portfolio nicht oder nicht zu günstigenBedingungen veräußern und dies kann die für TLGsWachstumsstrategie zur Verfügung stehenden Mittelbeschränken.

• Gegen TLG könnten Haftpflichtansprüche im Zusammenhangmit veräußerten Immobilien geltend gemacht werden.

• Das Portfolio der TLG betreffen gewisse Konzentrationsrisiken,und nachteilige Entwicklungen bei der Nachfrage nach Büro-,Einzelhandels- und Hotelimmobilien, bei den Hauptmietern derTLG und ihren wertvollsten Immobilien könnten sich besondersnachteilig auf das Geschäft der TLG auswirken.

• TLG kann möglicherweise außerstande sein, geeignete undzahlungsfähige Mieter zu annehmbaren Bedingungen zu findenoder zu halten, und bestehende Mieter könnten nicht in der Lagesein, ihren Zahlungsverpflichtungen nachzukommen.

• Indexierungsklauseln in den Mietverträgen von TLG könntensich nachteilig auf die Mieteinnahmen der TLG auswirken.

• Auf TLG könnten erhebliche unerwartete Instandhaltungs-,Reparatur- und Modernisierungskosten zukommen und dasUnterlassen angemessener Instandhaltungsmaßnahmen könntedie Mieteinnahmen von TLG beeinträchtigen.

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• Das Sachverständigengutachten und die Finanzinformationen, diein diesem Prospekt enthalten sind, geben möglicherweise eineunzutreffende Einschätzung des Wertes der Immobilien von TLGwieder.

• TLG könnte verpflichtet sein, die gegenwärtigen beizulegendenZeitwerte ihrer als Finanzinvestition gehaltenen Immobilienanzupassen oder ein niedrigeres Ergebnis aus der Neubewertungder als Finanzinvestitionen gehaltenen Immobilien zu verbuchenund daher erhebliche Verluste zu erfassen.

• TLG ist möglicherweise nicht in der Lage, Mitglieder desVorstands sowie Personal in Schlüsselpositionen zu ersetzen bzw.zusätzliches qualifiziertes Personal einzustellen.

• Die IT-Systeme von TLG könnten nicht richtig funktionierenoder beschädigt werden.

• Die IT-gestützten Instrumente der Portfolioverwaltung könntenGeschäftsentscheidungen, die im wohlverstandenen Interesse vonTLG liegen, fehlerhaft wiedergeben und unsachgemäßunterstützen.

• TLG könnte erhebliche Verluste aufgrund von Schäden erleiden,die von den Versicherungspolicen nicht gedeckt sind oder welchedie Deckungsgrenzen der Versicherungspolicen überschreiten.

• Die Kapitalflüsse und die möglichen zukünftigenDividendenzahlungen der Gesellschaft hängen auch von derProfitabilität ihrer Tochtergesellschaften ab, und die Gesellschaftist möglicherweise nicht in der Lage, bedeutende Veränderungenbei diesen Tochtergesellschaften umzusetzen.

Finanzierungsrisiken

• Die Fähigkeit von TLG, bestehende und zukünftige Schulden zutilgen, könnte begrenzt sein, und TLG kann möglicherweise neueFinanzierungsquellen nicht oder nicht zu attraktiven Bedingungenerschließen.

• Sollte TLG Verpflichtungen aus ihren Finanzierungsvereinbarungenverletzen, könnte sie gezwungen sein, Immobilien ohne Rücksichtauf den Preis, den sie erzielen kann, zu veräußern, und ihreGläubiger oder Sicherheitentreuhänder könnten bedeutendeSicherheiten pfänden und verwerten, was letztendlich zur Insolvenzder Gesellschaft führen könnte.

Regulatorische, rechtliche und steuerliche Risiken

• Änderungen der allgemeinen regulatorischen Rahmenbedingungenin Deutschland können sich nachteilig auf TLG auswirken.

• TLG können Kosten im Zusammenhang mit Altlasteneinschließlich Kriegsmunition, Bodenverschmutzungen undGefahrstoffen entstehen.

• In den Mietverträgen von TLG verwendete Standardklauseln sindmöglicherweise unwirksam, und einige dieser Verträge erfüllenmöglicherweise nicht die strengen Schriftformerfordernisse nachdeutschem Recht.

• Die Struktur von TLG zur Einhaltung gesetzlicher Vorschriften(Compliance-Struktur) ist oder war möglicherweise nichtausreichend, um TLG angemessen vor sämtlichen rechtlichenoder finanziellen Risiken zu schützen.

• TLG ist Risiken aufgrund möglicher zukünftigerRechtsstreitigkeiten ausgesetzt.

• TLG könnte verpflichtet sein, bestimmte Subventionenzurückzuzahlen.

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• TLG kann möglicherweise Gegenstand von Rückerstattungs- undSchadenersatzansprüchen werden, wenn ihre Immobilienunrechtmäßig enteignet wurden, und dies könnte die Übereignungihrer Grundstücke verzögern oder verhindern.

• Änderungen der allgemeinen steuerlichen Rahmenbedingungenin Deutschland können sich nachteilig auf TLG auswirken, dasolche Änderungen einen Anstieg der Steuerlast von TLG nachsich ziehen könnten.

D.3 Zentrale Angaben zu denzentralen Risiken, die denWertpapieren eigen sind.

Risiken in Bezug auf das Angebot und die Angebotsaktien

• Das Angebot kann möglicherweise nicht zum Abschluss gebrachtwerden, wenn die Joint Bookrunners den Übernahmevertrag (wienachfolgend unter E.3 definiert) kündigen oder sich dieGesellschaft aus dem Angebot zurückzieht.

• Es könnte schwierig sein, die Konzernabschlüsse von derGesellschaft aus den Geschäftsjahren ab 2013 mit denen ausvorangegangenen Zeiträumen zu vergleichen.

• Die prognostizierten Mittel aus der operativen Tätigkeit (FFO)von TLG für das Geschäftsjahr 2014 könnten erheblich von demtatsächlichen FFO für das Geschäftsjahr 2014 abweichen und dieGesellschaft könnte sich dazu entscheiden, ihreDividendenzahlung zu verringern.

• Der Aktienkurs und das Handelsvolumen der Aktien derGesellschaft könnten erheblich schwanken.

• Nach der Börsennotierung wird East AcquiCo weiterhin in derLage sein, wesentlichen Einfluss auf TLG auszuüben. Dabeikönnten die Interessen der East AcquiCo von den Interessen derübrigen Aktionäre abweichen. Zukünftige Verkäufe derGesellschaftsaktien durch Großaktionäre der Gesellschaftkönnten zu einem Rückgang des Aktienkurses führen.

• Zukünftige Kapitalmaßnahmen könnten eine erheblicheVerwässerung der Anteile der bestehenden Aktionäre derGesellschaft zur Folge haben.

• Die Gesellschaft wird mit zusätzlichen Verwaltungsanforderungenund höheren laufenden Kosten als Folge der Börsennotierungkonfrontiert werden.

E—Angebot

E.1 Gesamtnettoerlöse und geschätzteGesamtkosten der Emission/desAngebots, einschließlich dergeschätzten Kosten, die dem Anlegervom Emittenten oder Anbieter inRechnung gestellt werden.

In der Mitte der für die Emission der Angebotsaktien vorgesehenenPreisspanne (die „Preisspanne“) wird als Bruttoerlös aus demAngebot ein Gesamtbetrag von ca. €451,4 Millionen erwartet (unterAnnahme der Platzierung sämtlicher Angebotsaktien (wie nachstehendunter E.3 beschrieben)). Unter Annahme von angebotsbezogenenKosten und an die Konsortialbanken zu zahlenden Provisionen inHöhe von insgesamt ca. €20,9 Millionen würde sich der Nettoerlös ausdem Angebot in der Mitte der Preisspanne auf ca. €430.5 Millionenbelaufen.

Die Gesellschaft erhält nur den Erlös aus der Emission, der aus demVerkauf von Neuen Aktien (wie nachstehend unter E.3 definiert)stammt. Die Gesellschaft erhält keinen Erlös aus dem Verkauf derBestehenden Aktien (wie nachstehend unter E.3 definiert) aus demAktienbesitz der Bestehenden Aktionäre. Bei Platzierung sämtlicherAngebotsaktien (wie nachstehend unter E.3 beschrieben) in der Mitteder Preisspanne würde die Gesellschaft einen Bruttoertrag vonungefähr €114,0 Millionen (entspricht einem geschätzten Nettoertragvon ungefähr €108,5 Millionen) erhalten. Die Gesellschaft behält sichjedoch das Recht vor, nur eine solche Anzahl von Neuen Aktien (wieunter E.3 beschrieben) zuzuteilen, wie dies zum Erreichen ihresMindestbruttoerlösziels von €100 Millionen notwendig ist.

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In der Mitte der Preisspanne wird sich der den BestehendenAktionären zukommende Bruttoertrag (unter der Annahme derPlatzierung der größten Anzahl Bestehender Aktien (wie nachstehendunter E.3 definiert) und unter der Annahme vollständiger Ausübungder Greenshoe Option (wie nachstehend unter E.3 definiert)) aufungefähr €337,4 Millionen und der geschätzte Nettoertrag aufungefähr €322,0 Millionen belaufen.

Unter der Annahme eines Angebotspreises in der Mitte derPreisspanne, werden sich die durch die Emission der Angebotsaktien(wie nachstehend unter E.3 beschrieben) und die Börsennotierung desgesamten Aktienbestandes der Gesellschaft entstehenden Kostenerwartungsgemäß auf insgesamt ungefähr €20,9 Millionen belaufen.

Die der Gesellschaft durch die Emission der Angebotsaktien (wienachstehend unter E.3 beschrieben) und die Börsennotierung desgesamten Aktienbestandes der Gesellschaft entstehenden Kostenwerden sich erwartungsgemäß auf insgesamt ungefähr €8,5 Millionen(ausgenommen den Konsortialbanken zu zahlende Konsortial- undPlatzierungsprovisionen) belaufen. Hiervon werden ungefähr€6,1 Millionen von den Bestehenden Aktionären übernommen, wasbedeutet, dass die Gesellschaft letztendlich ungefähr €2,4 Millionender Kosten zu tragen hat. Die Bestehenden Aktionäre werden dieKosten der Emission und der Börsennotierung der Gesellschaft imVerhältnis der Bestehenden Aktien (wie nachstehend unterE.3 beschrieben) zu den Basisaktien (wie nachstehend unterE.3 beschrieben) übernehmen.

Unter der Annahme eines Angebotspreises in der Mitte derPreisspanne, einer Platzierung sämtlicher Neuer Aktien (wienachstehend unter E.3 beschrieben) sowie einer Platzierung dergrößten Anzahl Bestehender Aktien und Mehrzuteilungsaktien (wienachstehend unter E.3 beschrieben) (und der vollständigen Ausübungder Greenshoe Option, wie nachstehend unter E.3 beschrieben) sowieunter der Annahme der weiteren vollständigen Zahlung derErmessensgebühr von bis zu €5,6 Millionen in der Mitte derPreisspanne wird sich die an die Konsortialbanken zu zahlendeProvision auf €12,4 Millionen belaufen. Hiervon entfallen€3,1 Millionen auf die Platzierung der Neuen Aktien (wie nachstehendunter E.3 beschrieben) und werden von der Gesellschaft gezahlt. Vonden verbleibenden €9,3 Millionen entfallen €8,2 Millionen auf diePlatzierung der Bestehenden Aktien (wie nachstehend unterE.3 beschrieben) und werden unmittelbar von den BestehendenAktionären übernommen, €1,1 Millionen entfallen auf die Platzierungder Mehrzuteilungsaktien (wie nachstehend unter E.3 beschrieben)und werden unmittelbar von East AcquiCo gezahlt.

Weder die Gesellschaft, noch die Bestehenden Aktionäre, noch dieKonsortialbanken werden den Anlegern Kosten in Rechnung stellen.Investoren werden die üblichen Transaktions- undAbwicklungskosten, welche ihr kontoverwaltendes Finanzinstitut inRechnung stellt, tragen müssen.

E.2a Gründe für das Angebot. Die Gesellschaft beabsichtigt die Zulassung ihrer Aktien zumregulierten Markt der Frankfurter Wertpapierbörse mit gleichzeitigerZulassung zum Teilbereich des regulierten Marktes mit weiterenZulassungsfolgepflichten (Prime Standard) an der FrankfurterWertpapierbörse, um einen Zugang zum Kapitalmarkt zu erhalten. DieGesellschaft beabsichtigt mit der Emission ebenfalls, den Erlös aus derPlatzierung der Neuen Aktien (wie nachstehend unter E.3 beschrieben)zu erzielen.

Die Bestehenden Aktionäre bieten ihre Aktien an, um ihre Beteiligungan der Gesellschaft teilweise zu desinvestieren und für ausreichendenStreubesitz und ausreichende Handelsliquidität zu sorgen.

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Zweckbestimmung der Erlöse,geschätzte Nettoerlöse.

Die Gesellschaft beabsichtigt, den Nettoerlös aus der Emission derNeuen Aktien (wie nachstehend unter E.3 beschrieben), zusammen mitzusätzlicher Fremdfinanzierung, zu verwenden, um zukünftigeAkquisitionen zu finanzieren. Diese zukünftigen Akquisitionenkönnen eine Einzelhandelsimmobilie in Berlin mit einem möglichenKaufpreis von circa €35 Millionen (einschließlichErwerbsnebenkosten), über die sie derzeit mit dem Verkäuferverhandelt, eine Büroimmobilie in Rostock mit einem möglichenKaufpreis von circa €16 Millionen (einschließlichErwerbsnebenkosten), für die sie derzeit die Due Diligence durchführtund eine oder mehrere der anderen Büro- undEinzelhandelsimmobilien mit einem beizulegenden Zeitwert voninsgesamt €20 Millionen bzw. insgesamt €140 Millionen, die siederzeit detaillierter prüft, oder anderen Objekte, beinhalten. Einetwaiger Restbetrag der Erlöse wird für allgemeineUnternehmenszwecke verwandt. Bei angenommener Platzierungsämtlicher Angebotsaktien (wie nachstehend unter E.3 beschrieben) inder Mitte der Preisspanne geht die Gesellschaft davon aus, dass sieeinen Bruttoerlös von ungefähr €114,0 Millionen und einen Nettoerlösvon ungefähr €108,5 Millionen aus der Emission erhält.

E.3 Beschreibung derAngebotskonditionen.

Das Angebot (einschließlich eventueller Mehrzuteilungen) beziehtsich auf den Verkauf von 36.850.000 auf den Inhaber lautenderStammaktien ohne Nennbetrag (Stückaktien) mit einem anteiligenBetrag am Grundkapital von jeweils €1,00 und mit vollerDividendenberechtigung ab dem 1. Januar 2014 und setzt sichzusammen aus:

• 9.302.326 neu emittierten auf den Inhaber lautendenStammaktien ohne Nennbetrag (Stückaktien) aus einerKapitalerhöhung gegen Bareinlage, die durch eineaußerordentliche Hauptversammlung der Gesellschaft zubeschließen ist („Neue Aktien“);

• 24.197.674 bestehenden auf den Inhaber lautenden Stammaktienohne Nennbetrag (Stückaktien) aus dem Bestand der BestehendenAktionäre („Bestehende Aktien“ und zusammen mit den NeuenAktien, die „Basisaktien“); und

• 3.350.000 bestehenden auf den Inhaber lautenden Stammaktienohne Nennbetrag (Stückaktien) aus dem Bestand von EastAcquiCo in Verbindung mit einer möglichen Mehrzuteilung(„Mehrzuteilungsaktien“ und zusammen mit den Basisaktien,die „Angebotsaktien“).

Das Angebot besteht aus einem öffentlichen Angebot derAngebotsaktien in Deutschland und Luxemburg sowiePrivatplatzierungen der Angebotsaktien in einigen anderenRechtsordnungen außerhalb Deutschlands und Luxemburgs. In denVereinigten Staaten von Amerika werden die Aktien qualifizierteninstitutionellen Anlegern zum Verkauf gemäß Rule 144A nach demU.S. Securities Act von 1933 in der derzeit gültigen Fassungangeboten. Außerhalb der Vereinigten Staaten von Amerika werdendie Aktien gemäß der Regulation S nach dem Securities Act von 1933in der derzeit gültigen Fassung angeboten.

Angebotszeitraum. Der Angebotszeitraum, innerhalb dessen Anleger ihre Kaufangebotefür die Aktien abgeben können, beginnt voraussichtlich am15. Oktober 2014 und endet voraussichtlich am 23. Oktober 2014 um12:00 MESZ (Mitteleuropäische Sommerzeit) für Privatanleger(natürliche Personen) und um 16:00 MESZ (MitteleuropäischeSommerzeit) für institutionelle Anleger. Kaufangebote müssen fürmindestens 50 Angebotsaktien und Limitstufen in vollen Eurobeträgenoder Eurocentbeträgen von 25, 50 oder 75 Eurocent abgegebenwerden. Mehrfachzeichnungen sind zulässig.

Preisspanne und Angebotspreis. Die Preisspanne, innerhalb derer Verkaufsangebote abgegeben werdendürfen, liegt bei €10,75 bis €13,75 je Angebotsaktie.

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Änderung der Angebotsbedingungen. Die Gesellschaft und die Bestehenden Aktionäre behalten sich dasRecht vor, zusammen mit den Joint Bookrunners die Gesamtzahl derAngebotsaktien zu erhöhen oder zu vermindern, die Ober- und/oderUntergrenze der Preisspanne zu erhöhen oder zu senken und/oder denAngebotszeitraum zu verlängern oder zu verkürzen. DurchÄnderungen der Anzahl der Angebotsaktien, Änderungen bei derPreisspanne oder durch die Verlängerung bzw. Verkürzung desAngebotszeitraums werden bereits unterbreitete Kaufangebote nichtunwirksam. Sollte solch eine Änderung die Veröffentlichung einesProspektnachtrags erfordern, steht Anlegern, die ihre Kaufaufträge vorVeröffentlichung des Prospektnachtrags unterbreiteten, gemäß demWertpapierprospektgesetz des Recht zu, diese Kaufaufträge innerhalbvon zwei Tagen nach Veröffentlichung des Nachtrags zu widerrufen.Anstelle des Widerrufs der vor der Veröffentlichung des Nachtragsunterbreiteten Kaufaufträge können die Anleger ihre Aufträge ändernoder neue begrenzte oder unbegrenzte Kaufangebote innerhalb vonzwei Tagen nach Veröffentlichung des Nachtrags platzieren. Bei einerÄnderung der Angebotsbedingungen wird diese Änderung im Wegeder elektronischen Medien (wie Thomson Reuters oder Bloomberg)und, sofern nach dem Wertpapierhandelsgesetz oder demWertpapierprospektgesetz erforderlich, als Ad-hoc-Mitteilung über einelektronisches Informationssystem, auf dem Internetportal derGesellschaft und als Nachtrag zu diesem Prospekt veröffentlicht.Anleger, die Kaufangebote unterbreitet haben, werden nicht einzelnbenachrichtigt. Unter bestimmten Bedingungen können die JointGlobal Coordinators den Übernahmevertrag betreffend das Angebot,den sie mit der Gesellschaft und den Bestehenden Aktionäreneingegangen sind, im Auftrag der Konsortialbanken am 14. Oktober2014 (der „Übernahmevertrag“) selbst nach Aufnahme des Handelsder Aktien der Gesellschaft am regulierten Markt der FrankfurterWertpapierbörse kündigen.

Platzierungspreis. Der Platzierungspreis und die endgültige Anzahl an in dem Angebotzu platzierenden Angebotsaktien standen zum Datum des vorliegendenProspektes noch nicht fest.

Der Platzierungspreis sowie die endgültige Anzahl der in demAngebot zu platzierenden Angebotsaktien werden von derGesellschaft, den Bestehenden Aktionären und den Konsortialbankengemeinsam festgelegt. Der Preis wird auf Grundlage der von denAnlegern erteilten Kaufaufträge festgelegt, die in dem Auftragsbuch,das während des Bookbuilding-Verfahrens vorbereitet wurde, erfasstwurden.

Die Preisfestsetzung wird voraussichtlich am oder um den 23. Oktober2014 stattfinden. Der Platzierungspreis sowie die endgültige Anzahlan in dem Angebot platzierten Angebotsaktien (d.h. das Ergebnis desAngebots) werden voraussichtlich am oder um den 23. Oktober 2014mittels Ad-hoc-Mitteilung, über ein elektronischesInformationsverbreitungssystem und auf der Webseite der Gesellschaftveröffentlicht.

Sollte sich das Platzierungsvolumen als unzureichend zur Erfüllungsämtlicher Kaufaufträge zum Platzierungspreis herausstellen, behaltensich die Konsortialbanken das Recht zur Ablehnung oder zur nurteilweisen Annahme von Kaufaufträgen vor.

Lieferung und Abrechnung. Die Angebotsaktien werden voraussichtlich am 28. Oktober 2014gegen Zahlung des Angebotspreises geliefert. Die Angebotsaktienwerden den Aktionären als Miteigentumsanteile an der Globalurkundezur Verfügung gestellt

Stabilisierung, Mehrzuteilung undGreenshoe-Option.

Im Zusammenhang mit der Platzierung der Angebotsaktien handeltJ.P. Morgan oder mit ihr verbundene Unternehmen, die sämtlich fürRechnung der Konsortialbanken handeln, als Stabilisierungsmanager

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und kann in Übereinstimmung mit den rechtlichen Bestimmungen(§ 20a Abs. 3 Wertpapierhandelsgesetz in Verbindung mit derVerordnung (EG) Nr. 2273/2003 vom 22. Dezember 2003)Mehrzuteilungen vornehmen und Stabilisierungsmaßnahmenergreifen, um den Marktpreis der Aktien der Gesellschaft zu stützenund um dadurch einem etwaigen Verkaufsdruck entgegenzuwirken.

Der Stabilisierungsmanager ist nicht zu Stabilisierungsmaßnahmenverpflichtet. Es kann daher nicht zugesichert werden, dassStabilisierungsmaßnahmen ergriffen werden. SolltenStabilisierungsmaßnahmen ergriffen werden, können diese jederzeitohne Vorankündigung beendet werden. Solche Maßnahmen können abdem Zeitpunkt der Aufnahme des Börsenhandels der Aktien derGesellschaft am Regulierten Markt der Frankfurter Wertpapierbörsevorgenommen werden und müssen spätestens am dreißigstenKalendertag nach diesem Zeitpunkt („Stabilisierungszeitraum“)beendet sein.

Diese Maßnahmen können dazu führen, dass der Börsenkurs derAktien der Gesellschaft höher ist, als es ohne solche Maßnahmen derFall gewesen wäre. Des Weiteren kann sich vorübergehend einBörsenkurs auf einem Niveau ergeben, das nicht von Dauer ist.

Bei möglichen Stabilisierungsmaßnahmen können Anlegern zusätzlichzu den Basisaktien der Gesellschaft bis zu 3.350.000Mehrzuteilungsaktien als Teil der Zuteilung der zu platzierendenAktien zugeteilt werden („Mehrzuteilung“). Zum Zwecke einermöglichen Mehrzuteilung werden dem Stabilisierungsmanager bis zu3.350.000 Mehrzuteilungsaktien für Rechnung der Konsortialbankenaus dem Aktienbesitz von East AcquiCo in Form einesWertpapierdarlehens zur Verfügung gestellt. Dabei wird die Anzahlder Aktien 10% der Basisaktien nicht übersteigen. Zudem wird EastAcquiCo den Konsortialbanken eine Option zum Erwerb von bis zu3.350.000 Aktien der Gesellschaft zum Angebotspreis abzüglich dervereinbarten Provisionen gewähren („Greenshoe Option“). DieseOption endet 30 Kalendertage nach dem Beginn des Börsenhandelsder Aktien der Gesellschaft.

Der Stabilisierungsmanager ist berechtigt, die Greenshoe Option indem Maß der ursprünglichen Mehrzuteilung für Rechnung derKonsortialbanken auszuüben. Dabei ist der Aktienbetrag um dieAnzahl der Aktien zu vermindern, die von demStabilisierungsmanager am Tag der Ausübung der Greenshoe Optiongehalten wurden und die von diesem im Zusammenhang mitStabilisierungsmaßnahmen erworben wurden.

Bei Beendigung des Stabilisierungszeitraums wird innerhalb einerWoche in verschiedenen Presseerzeugnissen, die im gesamtenEuropäischen Wirtschaftsraum vertrieben werden, eine Mitteilungveröffentlicht, ob es Stabilisierungsmaßnahmen gab, wann dieseMaßnahmen begannen und endeten und in welcher Preisspanne siesich bewegten. Letzteres wird jedes Mal mitgeteilt, sobaldPreisstabilisierungsmaßnahmen getroffen wurden. Die Ausübung derGreenshoe Option, der zeitliche Ablauf der Ausübung und die Anzahlund Art der betroffenen Aktien werden unverzüglich in derselbenWeise angekündigt werden.

E.4 Beschreibung aller für dieEmission/das Angebot wesentlichen,Interessen.

Im Zusammenhang mit dem Angebot und der Aufnahme des Handelsder Aktien der Gesellschaft sind die Konsortialbanken eineVertragsbeziehung mit der Gesellschaft und den BestehendenAktionären eingegangen.

Die Konsortialbanken handeln bei dem Angebot für die Gesellschaftund die Bestehenden Aktionäre und koordinieren die Strukturierungund die Durchführung des Angebots. Zudem wurden J.P. Morgan und

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UBS als designierte Börsenhändler für die Aktien der Gesellschafternannt und die COMMERZBANK wurde als Zahlstelle ernannt.Nach erfolgreicher Umsetzung des Angebots erhalten dieKonsortialbanken eine Provision.

Die Bestehenden Aktionäre erhalten den Erlös aus den bei demAngebot verkauften Bestehenden Aktien. East AcquiCo wird denErlös der Aktien aus der Ausübung einer etwaigen Greenshoe Optionerhalten. Unter der Annahme vollständiger Platzierung sämtlicherBestehender Aktien sowie Mehrzuteilungsaktien in der Mitte derPreisspanne und vollständiger Ausübung der Greenshoe Option sowienach Abzug von Gebühren und Aufwendungen, die von denBestehenden Aktionären im Zusammenhang mit dem Angebot zuzahlen sind, würde sich der den Bestehenden Aktionären aus demAngebot zukommende Erlös auf ungefähr €322,0 Mio. bzw. 74,8%des Nettogesamterlöses aus dem Angebot belaufen. Von diesem denBestehenden Aktionären zukommendem Erlös würden ungefähr90,4% East AcquiCo zugute kommen und ungefähr 9,6% Delpheast.

Einige der Konsortialbanken oder ihrer Tochtergesellschaftenunterhalten Geschäftsbeziehungen mit TLG und den BestehendenAktionären (einschließlich Darlehensgeschäften) und werden diese inZukunft voraussichtlich weiterhin unterhalten oder erbringen für TLGoder die Bestehenden Aktionäre im gewöhnlichen Geschäftsbetriebmöglicherweise Dienstleistungen.

Beschreibung kollidierenderInteresen.

Entfällt. Es bestehen keine kollidierenden Interessen.

E.5 Name der Person/des Unternehmens,die/welches das Wertpapier zumVerkauf anbietet.

Die Aktien werden von J.P. Morgan, UBS, COMMERZBANK,Kempen & Co und HSBC (wie obenstehend unter A.1 definiert) zumVerkauf angeboten.

Lock-up Vereinbarungen: Diebeteiligten Parteien und die Lock-upFrist.

In dem Übernahmevertrag hat sich die Gesellschaft gegenüber jederKonsortialbank verpflichtet, soweit dies gesetzlich zulässig ist, dassdie Gesellschaft, ihr Vorstand oder ihr Aufsichtsrat ohne vorherigeschriftliche Zustimmung der Joint Global Coordinators, die nicht ohnevernünftigen Grund verweigert oder verzögert werden darf, innerhalbeines am 14. Oktober 2014 beginnenden Zeitraums von sechs Monatennach dem ersten Handelstag der Aktien der Gesellschaft an derFrankfurter Wertpapierbörse (derzeit voraussichtlich am 24. Oktober2014) weder Folgendes zu unternehmen noch Folgendemzuzustimmen:

• die Ankündigung, Durchführung oder Umsetzung einer Erhöhungdes Kapitals der Gesellschaft oder einer mittelbaren oderunmittelbaren Platzierung der Aktien der Gesellschaft mittelbaroder unmittelbar zu veranlassen oder zu genehmigen,

• einen Vorschlag für eine Kapitalerhöhung mittelbar oderunmittelbar zur Beschlussfassung in einer Hauptversammlungvorzulegen,

• die Vorlage, Herbeiführung oder Unterbreitung eines Vorschlagszur Begebung von in Aktien der Gesellschaft wandelbareFinanzinstrumente mit Optionsrechten auf Aktien derGesellschaft anzukündigen oder

• Geschäfte mit wirtschaftlich vergleichbarer Wirkung zu den obengenannten einzugehen oder eine sonstige derartige Handlungvorzunehmen.

Die Gesellschaft kann jedoch (i) Arbeitnehmern und Mitgliedern derGeschäftsführungsorgane der Gesellschaft bzw. ihrerTochtergesellschaften in Übereinstimmung mitUnternehmensbeteiligungsplänen für Führungkräfte, Aktien oder

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sonstige Wertpapiere begeben oder verkaufen und(ii) gesellschaftsrechtliche Maßnahmen ergreifen, die von derGesellschaft zum Zweck der Teilnahme anGemeinschaftsunternehmen oder eines Unternehmenserwerbsdurchgeführt werden, vorausgesetzt, dass die Parteien desGemeinschaftsunternehmens oder der übernehmende Rechtsträger, fürden diese Aktien begeben werden, dieselbenVeräußerungsbeschränkungen gegenüber den Konsortialbankenakzeptieren, die für die Gesellschaft gelten.

Die East AcquiCo verpflichtet sich hiermit gegenüber jedem der JointGlobal Coordinators innerhalb eines am 14. Oktober 2014beginnenden Zeitraums von sechs Monaten nach dem erstenHandelstag der Aktien der Gesellschaft an der FrankfurterWertpapierbörse (derzeit voraussichtlich am 24. Oktober 2014), dasssie nicht

• Aktien der Gesellschaft mit Ausnahme der Aktien, die von ihr am14. Oktober 2014 gehalten werden (die „Gesperrten Aktien“),anbietet, verpfändet, zuteilt, vertreibt, verkauft oder sich zumVerkauf verpflichtet, Kaufoptionen oder Kaufkontrakteveräußert, Verkaufsoptionen erwirbt, Kaufoptionen, Kaufrechteoder Bezugsscheine gewährt, oder die genannten Aktien überträgtoder auf andere Weise unmittelbar oder mittelbar über sieverfügt, wobei dies insbesondere für die Begebung oder denVerkauf von in Aktien der Gesellschaft wandelbare Wertpapieregilt,

• die Ankündigung, Durchführung oder Umsetzung einer Erhöhungdes Kapitals der Gesellschaft oder einer mittelbaren oderunmittelbaren Platzierung der Aktien der Gesellschaft mittelbaroder unmittelbar veranlasst oder genehmigt (unbeschadet andererDarlegungen in diesem Prospekt),

• eine Erhöhung des Grundkapitals der Gesellschaft mittelbar oderunmittelbar zur Beschlussfassung in einer Hauptversammlungvorschlägt oder für eine solche vorgeschlagene Kapitalerhöhungstimmt (andere als die bereits in diesem Prospekt offengelegtsind),

• die Ankündigung, Durchführung oder den Vorschlag einerBegebung von in Aktien der Gesellschaft wandelbareFinanzinstrumente, die Optionen oder Optionsscheine darstellen,die in Aktien der Gesellschaft wandelbar sind, mittelbar oderunmittelbar veranlasst oder genehmigt, oder

• Geschäfte mit wirtschaftlich vergleichbarer Wirkung zu den obengenannten eingeht oder eine sonstige derartige Handlungvornimmt. Dies gilt insbesondere für Swapgeschäfte oder andereAbmachungen, durch die das wirtschaftliche Risiko derInhaberschaft von Gesperrten Aktien ganz oder zum Teil aufDritte übertragen wird, unabhängig davon, ob ein solchesGeschäft durch Lieferung von Gesperrten Aktien in bar oder aufsonstige Weise beglichen werden soll;

in jedem dieser Fälle ohne die vorherige schriftliche Zustimmung derJoint Global Coordinators, die nicht ohne vernünftigen Grundverweigert oder verzögert werden darf. Sofern sich der betreffendeErwerber verpflichtet, dieselben Lock-Up-Verpflichtungeneinzuhalten, gilt das Vorgenannte nicht für (i) Übertragungen an mitEast AcquiCo verbundene Unternehmen, (ii) zukünftigeVerpfändungen an einen oder mehrere der Joint Global Coordinatorsoder an mit diesen verbundene Unternehmen vorbehaltlich derZustimmung der Joint Global Coordinators und (iii) sämtlicheÜbertragungen von Aktien an einen oder mehrere der Joint Global

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Coordinators oder an mit diesen verbundene Unternehmen imZusammenhang mit der Vollstreckung jeglicher Verpfändungen die imEinklang mit (ii) vereinbart wurden.

E.6 Betrag und Prozentsatz der aus demAngebot resultierendenunmittelbaren Verwässerung. ImFalle eines Zeichnungsangebots andie existierenden AnteilseignerBetrag und Prozentsatz derunmittelbaren Verwässerung, für denFall, dass sie das neue Angebot nichtzeichnen.

Das Angebot schließt die Emission neuer Aktien mit ein. Das auf dieAktionäre der Gesellschaft entfallende Eigenkapital belief sichzum 30. Juni 2014 auf €621,5 Millionen und würde sich auf €11,95 jeAktie auf der Grundlage von 52.000.000 ausstehenden Aktien derGesellschaft, die unmittelbar vor dem Angebot ausgegeben wurden,belaufen.

Die verwässernde Wirkung des Angebots ist in der untenstehendenTabelle dargestellt, aus welcher der Betrag ersichtlich ist, um den derAngebotspreis am unteren Ende, in der Mitte und am oberen Ende derPreisspanne das auf die Aktionäre entfallende Gesamtkapital je Aktienach Abschluss des Angebots übersteigt, angenommen die untenbeschriebenen Schritte wären am 30. Juni 2014 vorgenommen worden.In dieser Hinsicht wurde das auf die Aktionäre am 30. Juni 2014entfallende Eigenkapital um die Auswirkungen des Angebots unter derAnnahme bereinigt, dass (i) die Kapitalerhöhung mit der Höchstzahlder angebotenen Neuen Aktien durchgeführt wird und (ii) dass das aufdie Aktionäre entfallende Eigenkapital am unteren Ende, in der Mitteund am oberen Ende der Preisspanne um jeweils €94,8 Millionen,€108,5 Millionen und €122,0 Millionen erhöht wird. Dieangenommene Erhöhung beruht auf dem erwarteten Nettoerlös ohneBerücksichtigung von Steuereffekten. Das bereinigte, auf die Aktionäreentfallende Eigenkapital ist als eine Kennzahl je Aktie unter derAnnahme von 61.302.326 außenstehenden Aktien der Gesellschaftnach Abschluss des Angebots dargestellt (diese Kennzahl je Aktie wirdals „auf die Aktionäre entfallendes Eigenkapital je Aktie nach demAngebot“ bezeichnet).

Zum 30. Juni 2014Unteres

EndeMittel-wert

OberesEnde

Preis pro Aktie (in €) . . . . . . . . . . . . . . . . . . . . 10,75 12,25 13,75Auf die Aktionäre entfallendes Eigenkapital

(Nettobuchwert)(1) je Aktie zum 30. Juni2014 (auf Grundlage von 52.000.000außenstehenden Aktien der Gesellschaft vordem Angebot) (in €) . . . . . . . . . . . . . . . . . . . 11,95 11,95 11,95

Auf die Aktionäre entfallendes Eigenkapital jeAktie nach dem Angebot (Nettobuchwert)(1)

(in €) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,68 11,91 12,13Betrag, um den der Preis pro Aktie das auf die

Aktionäre entfallende Eigenkapital je Aktienach dem Angebot übersteigt (unmittelbareVerwässerung pro Aktie) (in €) . . . . . . . . . . (0,93) 0,34 1,62

Unmittelbare Verwässerung (in %) . . . . . . . . . (8,7) 2,8 11,8

(1) Der Nettobuchwert bezieht sich auf die Summe des Gesamtvermögens derGesellschaft abzüglich des Betrags ihrer gesamten Verbindlichkeiten sowienicht beherrschender Anteile.

Jede der Neuen Aktien ist mit denselben Stimmrechten wie diebestehenden Aktien der Gesellschaft ausgestattet. Vor dem Angebothielten die Bestehenden Aktionäre 100% der Stimmrechte. NachDurchführung des Angebots (einschließlich der vollständigen Ausübungder Greenshoe Option) würden sich die Stimmrechte der BestehendenAktionäre auf 39,9% belaufen.

E.7 Schätzung der Ausgaben, die demAnleger vom Emittenten oderAnbieter in Rechnung gestelltwerden.

Entfällt. Weder die Gesellschaft, noch die Bestehenden Aktionäre, nochdie Konsortialbanken werden den Anlegern Kosten in Rechnung stellen.

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RISK FACTORS

Before deciding to invest in shares of TLG IMMOBILIEN AG, with its registered office atHausvogteiplatz 12, 10117 Berlin, Germany, and registered with the commercial register of the local court (Amtsgericht) ofCharlottenburg, Germany, under the docket number HRB 161314 B (the “Company”, and, together with its consolidatedsubsidiaries, “TLG”), prospective investors should carefully review and consider the following risks and other informationcontained in this prospectus (the “Prospectus”). The market price of the Company’s shares could fall if any of these riskswere to materialize, in which case investors could lose some or all of their investment. The following risks, alone or togetherwith additional risks and uncertainties not currently known to the Company, or that the Company might currently deemimmaterial, could materially adversely affect TLG’s business, net assets, financial condition, cash flow and results ofoperations.

The order in which the risks are presented is not an indication of the likelihood of the risks actually materializing orthe significance or degree of the risks or the scope of any potential harm to TLG’s business, net assets, financial condition,cash flow, or results of operations. The risks mentioned herein may materialize individually or cumulatively.

Market and Business Risks

TLG could be adversely affected by negative developments in the German economy and commercial real estate markets,e.g., general deflation in the Eurozone or rising interest rates.

TLG is active in the German commercial real estate markets. Commercial real estate markets are generallysusceptible to changes in the overall economy, and therefore volatile in themselves. Thus, factors that directly or indirectlyaffect the overall economy also impact supply and demand for commercial real estate and thereby influence market prices ofcommercial real estate, rent levels and vacancy rates.

TLG’s business is therefore highly dependent on macroeconomic and political developments, including changes inlegislation, as well as other general trends affecting Germany. As an export driven economy, Germany itself is affected by thedevelopment of the world economy in general and the Eurozone in particular. Since the financial crisis, high levels ofsovereign debt and unemployment in many developed countries, particularly in the Eurozone and the United States, havepersisted. Economic volatility, instability in the credit and financial markets and weak consumer confidence in general maycontinue to put pressure on the global economy. In addition, the current geopolitical crises in the Middle East and the Ukraineas well as the economic sanctions being imposed on and by the Russian Federation may have negative repercussions for theEuropean economy.

For the Eurozone, the European Central Bank (the “ECB”) aims for a long-term inflation rate of below but close to2%, which it considers beneficial for the European economy. As a result of weak growth in the aftermath of the financialcrisis, actual inflation has been considerably lower than the rate of inflation targeted by the ECB. Therefore, the ECB has beenmaking an effort to increase inflation through looser monetary policy, recently taking the unprecedented step of introducingnegative deposit rates for banks depositing funds with the ECB (i.e., such banks have to pay interest for depositing funds).Notwithstanding these steps, however, to date these efforts to increase inflation have not resulted in any upward pressure onconsumer prices and in some Eurozone countries prices have actually declined. If economic weakness in the Eurozone anddeclining consumer confidence were to result in prices decreasing over time as part of a general deflationary trend, theeconomy in the Eurozone might enter a prolonged recession. While the German economy has so far been relatively resilientdespite these negative developments, persisting instabilities and the resulting market volatility pose contagion risks even foreconomically strong countries like Germany. A general economic downturn could spread to the German economy andparticularly affect German commercial real estate markets. TLG has no influence over any of these macroeconomic andpolitical developments or other general trends, but may be severely adversely affected by them.

Although low interest rates have yet to lead to any increase in inflation, they have had a stabilizing effect on theEurozone economies and supported demand for real estate, including commercial real estate, particularly as a result of theavailability of inexpensive financing. The benign interest rate environment has also had a positive impact on real estatevaluations as it tends to result in an increase of the value of future cash flows. Should the overall economy begin to growagain, particularly if this growth leads to tightening in the labor market, the ECB could become more vigilant with regard toinflationary pressures and begin a cycle of monetary tightening, including through progressive increases in base interest rates.In the event that interest rates were to increase significantly in future periods, the value of commercial real estate could beadversely affected due to increases in the discount rate and a reduction in the availability of attractive financing options. Anysuch decline in the value of, or demand for, commercial real estate generally would also have an adverse effect on TLG.Although the long-term nature of many of TLG’s lease agreements provides some protection against a general decline inrental levels, if rents begin to rise in the context of an improving economy, TLG may not be able to increase its rental incomein line with rental growth in the overall commercial real estate market.

As a result of the geographic concentration of TLG’s commercial real estate portfolio in Germany, macroeconomicand political developments and other general trends in Germany could have a material adverse effect on TLG’s business, netassets, financial condition, cash flows or results of operations.

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TLG could be adversely affected by a deterioration of economic conditions and the business environment in Berlin andeastern Germany, in particular negative demographic trends.

TLG’s entire real estate portfolio is located in Berlin (approximately 44%) and eastern Germany, in particular in andaround Leipzig, Dresden (approximately 19%) and Rostock (approximately 9%). Regional economic and politicaldevelopments as well as other trends in Berlin and eastern Germany therefore have a significant impact on the demand forTLG’s commercial real estate properties and the rents that it is, and will be, able to achieve, as well as on the valuation of itsproperties.

Such local developments may differ considerably from overall developments in Germany. In the past, easternGermany’s regional centers lagged behind western Germany’s in terms of absolute economic performance and consumerpurchasing power. While some cities and regions in eastern Germany have seen decreasing unemployment rates and growingpurchasing power in recent years, there is no guarantee that this trend will continue. Moreover, since reunification, easternGermany’s overall population has in fact shrunk by 11.4%, meaning a reduction of more than two million inhabitants.Until 2030, eastern Germany’s population is expected to decrease by another 11.7% (approximately 1.9 million inhabitants)(Source: Commercial Portfolio TLG). Such negative demographic trends could lead to a decline in population levels in Berlinand other eastern German cities and regions, particularly among younger segments of the active working population, whichcould reduce demand for commercial real estate, and thereby adversely affect rent levels and rental income for TLG’sproperties.

Negative regional economic and political developments as well as other trends in Berlin and eastern Germany couldhave a material adverse effect on TLG’s business, net assets, financial condition, cash flows or results of operations.

TLG may not be able to implement its strategy of growing through acquisitions due to a lack of attractive properties orportfolios available for purchase, competition for such acquisitions or an inability to obtain the required acquisitionfinancing.

As of June 30, 2014, TLG’s core portfolio consisted of 321 office, retail and hotel properties located in Berlin andeastern Germany which TLG plans to hold long term (the “Core Portfolio”). As part of its business strategy, TLG seeks tocapture external growth opportunities by acquiring new properties and portfolios that complement this Core Portfolio. Inparticular, it intends to use some of the proceeds from the offering in order to finance such future acquisitions. TLG aims toincrease the fair value of its Core Portfolio to approximately €2.0 billion in the medium term.

Such acquisitions can, however, only be implemented if attractive properties or portfolios are available for purchaseand if the prices for such properties and portfolios are reasonable. Given its clear focus on office, retail and, to a lesser extent,hotel properties in Berlin and eastern Germany, a large number of the available commercial real estate properties does notmeet TLG’s Core Portfolio criteria. In addition, a number of factors beyond TLG’s control, such as the overall developmentof commercial real estate markets, building activity and planning laws, influence the availability of office, retail and hotelproperties in Berlin and eastern Germany. A lack of attractive acquisition opportunities could drive up prices for the type ofproperties and portfolios TLG seeks to acquire. Thus, TLG might also be unable to deploy the proceeds from the offering in atimely manner, or at all, and might therefore be unable to achieve a sufficient return on these proceeds.

Furthermore, given the current strong demand for commercial real estate in Germany, there may be fiercecompetition for such properties and portfolios and attractive acquisition opportunities may be unavailable or available only onunfavorable terms. Competitors with acquisition strategies similar to TLG’s may possess greater financial resources and lowercosts of capital than TLG and may therefore be able to offer higher prices.

Also, TLG intends to finance such acquisitions at least partially through additional debt while aiming to maintain along-term net loan to value ratio of 45-50%. The availability and terms of debt financing available to TLG depends on anumber of factors, in particular interest rate levels and the overall state of the financial markets. Rising interest rate levels or amarket crisis could therefore limit TLG’s ability to obtain acquisition financing at acceptable terms or any financing at all.This could limit the prices that TLG is able to offer when acquiring additional properties and portfolios or prevent suchacquisitions. In order to maintain its net loan to value ratio, TLG may also seek to raise additional capital. There is noguarantee that there will be sufficient demand for the Company’s shares and thus sufficient equity capital required to financecontemplated acquisitions may not be available.

Any inability to acquire properties or portfolios could impair TLG’s strategy to capture external growthopportunities by increasing its Core Portfolio and to capitalize on economies of scale, and could thus have a material adverseeffect on TLG’s business, net assets, financial condition, cash flows or results of operations.

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TLG may be unable to identify all risks associated with properties or portfolios it acquires and may overestimate the valueand/or financial performance of such acquisition opportunities.

TLG generally conducts a thorough due diligence investigation of properties and portfolios it intends to acquire.Due to a need for quick reaction to attractive opportunities and constraints imposed by the sellers, TLG may, however, insome cases only be able to conduct a limited due diligence investigation. Accordingly, TLG may not always be in a positionto examine all risks associated with acquisitions. For example, TLG may not be able to assess whether the original owners ofthe properties (and potential successors) have obtained, maintained or renewed all required permits, satisfied all permitconditions, received all necessary licenses and fire and safety certificates or satisfied all other requirements. In addition, theproperties may suffer from hidden defects or damages. Moreover, TLG may not be in a position to carry out all follow-upinvestigations, inspections and appraisals (or to obtain the results of such inquiries). Accordingly, in the course of theacquisition of properties or portfolios, specific risks may not be, or might not have been, recognized, evaluated and addressedcorrectly. Legal and/or economic liabilities may be, or might have been, overlooked or misjudged.

Although sellers typically make various warranties in the purchase agreements that TLG enters into in connectionwith such acquisitions, it is possible that these warranties do not cover all risks or that they fail to cover such risks sufficiently.Additionally, warranties may be unenforceable due to a seller’s insolvency or for other reasons. In some cases, a seller maymake no representation or warranty as to the sufficiency and correctness of the information made available in the context of adue diligence investigation, or as to whether such information remains correct during the period between the conclusion of thedue diligence investigation and the closing of the respective acquisition.

Furthermore, TLG could overestimate the earnings potential and potential synergies from acquisitions, in particularin the case of acquisitions of portfolios, underestimate the rental and cost risks, including expected demand from tenants forthe respective property or portfolio, and consequently pay a purchase price that exceeds a property’s or portfolio’s actualvalue. In addition, properties and portfolios could be inaccurately appraised for other reasons, even if they were acquired onthe basis of valuation reports and due diligence investigations. Therefore, neither a particular cash flow from rentals, nor, ifapplicable, a certain price upon resale can be guaranteed with respect to acquired properties and portfolios.

Any failure to assess the value and risks associated with properties or portfolios it acquires could have a materialadverse effect on TLG’s business, net assets, financial condition, cash flows or results of operations.

TLG may face risks related to (re-)development activities and development activities intended in the future may not bepossible.

While TLG does not currently engage in any significant development activities, it has retained the experience andcapacity for value-enhancing (re-)developments and may choose to do so selectively if it can identify suitably attractiveopportunities within the current portfolio. Such developments, which are typically long-term in nature, are associated withnumerous risks, including cost overruns, which may result in projects becoming unprofitable, and changes in the economicenvironment, which may lead to insolvencies among the subcontractors on which TLG depends for such projects or maymake it difficult or impossible to fully lease projects upon completion.

Furthermore, the ability to (re-)develop certain properties depends on the land-use regulation applicable to therespective property, in particular local development plans (Bebauungspläne). For example, the master plan for the officeproperty located on Alexanderstraße 1, 3, 5 in Berlin (the “1alex Property”) currently allows for an increase of the overallsize of the property from 9,226 sqm to 12,540 sqm and an increase of the building size from approximately 57,000 sqm to upto approximately 150,000 sqm. Local legislative bodies might, however, consider changes to the master plan for the areaaround Alexanderplatz, Berlin, and such changes could prevent TLG from further developing the 1alex Property. In this case,TLG may be unable to realize the expected levels of rental income relating to the 1alex Property.

Any unplanned costs associated with developments and inability to seize attractive development opportunities couldhave a material adverse effect on TLG’s business, net assets, financial condition, cash flows or results of operations.

TLG may be unable to sell properties from its non-core portfolio on favorable terms or may be unable to do so at all andthis may limit the funds available for TLG’s growth strategy.

As part of its business strategy TLG plans to sell a total of 188 properties with an aggregate fair value of€171 million as of June 30, 2014 in the medium term in order to further streamline its portfolio and to use the proceeds foradditional acquisitions of properties complementing its Core Portfolio. In the future, TLG may also decide to sell propertiesthat it has currently classified as belonging to its Core Portfolio if it believes that these properties no longer fit its strategicpositioning. However, TLG will only implement this strategy to the extent that it is able to receive sufficiently attractiveoffers for its properties. An overall decline in demand for commercial real estate properties, e.g., due to rising interest ratelevels, could adversely affect demand for TLG’s properties.

Given the geographic focus of TLG’s portfolio on Berlin and eastern Germany, there is only a limited number ofpotential buyers interested in acquiring such properties. Furthermore, many of the properties in TLG’s non-core portfolio are

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located in parts of eastern Germany that could be considered less attractive. This could further limit the number of prospectivebuyers. From time to time, auctions of properties from TLG’s non-core portfolio have failed due to a lack of bids and suchefforts may prove to be futile in the future as well and result in additional costs. TLG may also chose to sell properties at lessthan their fair value in order to reduce the size of its non-core portfolio so as to increase the efficiency of its portfoliomanagement.

Any failure to dispose of properties at adequate prices or at all would limit the funds available for TLG’s growthstrategy and could therefore have a material adverse effect on TLG’s business, net assets, financial condition, cash flows orresults of operations.

TLG could be subject to liability claims in connection with sold properties.

TLG has sold a large number of properties in recent years and plans to continue to sell properties from its non-coreportfolio. In connection with property sales, the seller usually makes or has to make representations, warranties and negativedeclarations of knowledge to the purchaser with respect to characteristics of the sold property. The potential liability resultingtherefrom usually continues to exist for a period of several years after the sale. TLG could be subject to claims for damagesfrom purchasers, who could assert that TLG has failed to meet its obligations, or that its representations were incorrect.Furthermore, TLG could become involved in legal disputes or litigation over such claims. If TLG as the seller has providedwarranties to a purchaser of properties in connection with maintenance and modernization measures, and claims are assertedagainst TLG because of defects, TLG may not have recourse against the companies that performed the work.

As a seller of properties, TLG may be liable to tenants for breaches of lease agreements by the purchaser, evenwhere TLG no longer has any control over the respective property. When selling properties, TLG typically informs all tenantsin writing of the change in landlord either alone or together with the purchaser in order to be released from persistingobligations. A release from liability does not apply to security deposits (Mietsicherheiten) provided by the tenants. If a tenantis unable to receive its security deposit from the purchaser of a property, the liability to repay such security deposit remainswith TLG as the seller.

Liabilities for properties that TLG has sold in the past or may sell in the future could have a material adverse effecton TLG’s business, net assets, financial condition, cash flows or results of operations.

TLG’s portfolio bears certain concentration risks and negative developments affecting demand for office, retail and hotelproperties, TLG’s major tenants and its most valuable properties could have a particularly adverse effect on TLG’sbusiness.

TLG faces concentration risks due to its focus on certain types of commercial properties and its dependency on alimited number of main tenants and individual properties with particularly high fair value.

TLG’s Core Portfolio only comprises office, retail and hotel properties. For retail properties, TLG further focuseson food retail properties suitable for supermarkets and discounters, which predominantly account for rental income from retailproperties in TLG’s Core Portfolio. Demand for retail, office and hotel properties is not only affected by the overalldevelopment of commercial real estate markets but also by business developments affecting existing and potential tenants forthese types of properties. Such developments include:

• an increase of food purchases via internet and trends towards smaller, high-quality food retailers for TLG’sfood retail properties,

• trends towards working from home offices or from tax friendly headquarters located away from city centers forTLG’s office properties, and

• the development of city tourism and hotel taxes for TLG’s hotel properties.

If the businesses of TLG’s tenants suffer, demand for TLG’s office, retail and hotel properties could decline.

Furthermore, TLG generates a significant portion of its annualized in-place rent (i.e., contracted rents as of June 30,2014, without deduction for any applicable rent free periods, multiplied by twelve (the “Annualized In-Place Rent”) fromonly a limited number of main tenants; approximately 65% of Annualized In-Place Rent derives from retail properties in theCore Portfolio from the top seven tenants (namely discounters, supermarkets and do-it-yourself stores operating under the“Netto”, “REWE”, “Hellweg”, “Penny”, “EDEKA”, “Kaisers” and “Lidl” brands), and 51% of Annualized In-Place Rentfrom office properties in the Core Portfolio derives from the top ten tenants (among others, Daimler Real Estate GmbH andOstseesparkasse Rostock). If such major tenants were to face financial difficulties or default on their lease obligations, reduceor abandon their operations in Berlin and eastern Germany, attempt to renegotiate lease agreements to TLG’s disadvantage,fail to extend their lease agreements or terminate them prematurely, TLG could lose a substantial amount of its AnnualizedIn-Place Rent.

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Also, certain properties in TLG’s Core Portfolio represent a particularly large portion of its holdings. Based on fairvalue as of June 30, 2014, the top five office properties represented 55% of the total office properties in TLG’s Core Portfolio(with the top fifteen representing 84%). For example, the 1alex Property is TLG’s second most valuable property,(representing 13% of the total office properties in the Core Portfolio based on fair value as of June 30, 2014). Likewise, theRamada hotel, also located near the Alexanderplatz in Berlin, accounts for 47% of TLG’s hotel properties, based on fair valueas of June 30, 2014. Negative developments such as the loss of major tenants and persisting vacancies, restrictive governmentorders limiting the use of a property, construction work allowing for rent reductions, fire and other catastrophes could have amaterial adverse effect on any single property. If one of TLG’s most valuable properties were to be affected by suchdevelopments, this could have a material adverse effect on TLG’s overall portfolio. For example, the vacancy rate for the1alex Property increased to approximately 67% in 2011 following the loss of two major tenants. While TLG has been able tosubsequently reduce vacancies for the 1alex Property, its vacancy rate still amounted to 37% as of June 30, 2014.

As a result of such concentrations, negative developments affecting demand for office, retail and hotel properties,TLG’s major tenants and its most valuable properties could have a material adverse effect on TLG’s business, financialcondition, cash flows or results of operations.

TLG may be unable to find or retain suitable and solvent tenants on acceptable terms and existing tenants may be unableto meet their payment obligations.

The letting of properties in its Core Portfolio is the most important aspect of TLG’s daily operations. TLG’s rentalincome depends on its ability to let large parts of its portfolio at attractive rental levels. Such efforts are influenced by anumber of factors, including the remaining term of existing lease agreements, the solvency of current tenants and theattractiveness of properties for suitable tenants. TLG may be unable to renew expiring lease agreements on acceptable termsor to find suitable, solvent tenants willing to enter into long-term lease agreements. Also, there is no guarantee that TLG willbe able to successfully face competition for suitable tenants from other landlords. In particular, other landlords may be able tooffer more attractive properties or lower rent levels or both. Failure to find and retain suitable tenants may prevent TLG frommaintaining its current vacancy rate or renting vacant space or force TLG to reduce the rent levels it demands from currentand future tenants.

In addition, a tenant’s creditworthiness may deteriorate, entailing the risk that the tenant becomes unable to meet itsobligations under its lease agreement and fails to render payments in time, or at all. This could force TLG to reduce rent levelsfor the respective property and the rental income could be significantly lower than originally estimated, while TLG’soperating costs might remain largely fixed or might even increase.

Failure to let its portfolio to suitable tenants willing and able to meet their payment obligations could therefore havea material adverse effect on TLG’s business, net assets, financial condition, cash flows or results of operations.

Indexation clauses in TLG’s lease agreements could adversely affect TLG’s rental income.

Some of TLG’s lease agreements, especially those for retail properties, include clauses providing for full or partialindexation of the applicable rent in line with a reference index, such as the German consumer price index. These clausesprovide not only for upward adjustments, but also for downward adjustments tied to changes in the relevant index. Thus,rental income may decrease if consumer prices decline, e.g., as part of a general deflation. If a lease agreement contains noindexation or equivalent adjustment clause, the applicable rent may remain constant for the term of the lease agreement, whileTLG’s costs of maintaining the respective property may increase due to inflation. This risk is compounded by the fact thatmany of TLG’s lease agreements provide for long-term leases.

Rent reductions due to indexation clauses or inability to adapt rents to improving market developments could have amaterial adverse effect on TLG’s business, net assets, financial condition, cash flows or results of operations.

TLG may incur substantial unexpected maintenance, repair and modernization costs and failure to undertake appropriatemaintenance measures could adversely affect its rental income.

While the Company believes that there are currently no capex backlogs (i.e., modernizations and refurbishmentsrequired to maintain the operability and attractiveness of the respective property) in its portfolio, it aims to continue to investin its Core Portfolio to ensure that its properties meet technical requirements and market demand. Maintenance andmodernization measures may also be required to meet changing legal, environmental or market requirements (e.g., with regardto health and safety requirements and fire protection). Failure to maintain the properties could pose a risk to the health andsafety of TLG’s tenants as well as their employees and customers. Typically, the costs associated with keeping properties upto market demand are borne primarily by the property owner and thus TLG may be burdened with substantial expenses. TLGcould incur additional costs if the actual costs of maintaining or modernizing its properties exceed TLG’s estimates, if it is notpermitted to raise rents in connection with maintenance and modernization measures, or if hidden defects not covered byinsurance or contractual warranties are discovered during the maintenance or modernization process or if additional spendingis required. Any failure to undertake appropriate maintenance and modernization measures could adversely affect TLG’srental income and entitle tenants to withhold or reduce rental payments or even to terminate existing lease agreements.

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If TLG incurs substantial unplanned maintenance, repair and modernization costs or fails to undertake appropriatemaintenance measures, this could have a material adverse effect on TLG’s business, net assets, financial condition, cash flowsor results of operations.

The Valuation Report and financial information contained in this Prospectus may incorrectly assess the value of TLG’sproperties.

The report on the fair value of TLG’s real estate portfolio as of June 30, 2014 pursuant to IAS 40 in conjunctionwith IFRS 13 (the “Valuation Report”) included in this Prospectus was prepared by the independent, external appraiserSavills Advisory Services GmbH, Taunusanlage 19, 60325 Frankfurt am Main, Germany (“Savills”), and in accordance withthe standards of the Royal Institution of Chartered Surveyors (RICS). The Valuation Report is based on standard valuationprinciples and represents the opinion of Savills. The Valuation Report is based on assumptions, some of them of a generalnature and some of them of a more specific nature, that could subsequently turn out to have been incorrect. The valuation ofreal estate is based on a multitude of internal factors such as the current contractual letting status and the physical condition ofthe portfolio and external factors such as general market environment, tourism business, interest rates, the creditworthiness oftenants, conditions in the rental market and the development of individual locations as well as Savills’ subjective judgment.The valuation of real estate contained in the Valuation Report is therefore subject to numerous uncertainties. The past orfuture assumptions underlying the property valuations may later be determined to have been erroneous.

The values assigned to the appraised properties in the Valuation Report and in TLG’s existing or future publishedannual or interim financial reports may exceed the proceeds that TLG can generate from the sale of the appraised properties,particularly those properties located in markets with only limited transparency (e.g., TLG’s non-core portfolio which it plansto sell in the medium term). This could also be the case for sales that occur on, or shortly after, the respective valuation date.Accordingly, the Valuation Report does not necessarily represent sales prices realistically achievable in the future.

Erroneous valuations of TLG’s portfolio could have a material adverse effect on TLG’s business, net assets,financial condition, cash flows or results of operations.

TLG may be required to adjust the current fair values of its investment properties or record lower results from theremeasurement of investment property and therefore recognize significant losses.

TLG accounts for its investment properties (i.e., properties that are held for the purpose of earning rental income,for capital appreciation or both) at fair value in accordance with IAS 40 in conjunction with IFRS 13. The fair value of aproperty held to generate rental income or for capital appreciation or both is measured with the discounted cash flow method(the “DCF Method”). According to the DCF Method, the fair value of a property is the sum of the discounted cash flows fora planning period (e.g., ten years) plus the residual value of the property at the end of the planning period discounted to thevaluation date. The applied discount rate reflects the market situation, location, condition and letting situation of the property,the yield expectations of a potential investor and the level of uncertainty and the inherent risk of the forecasted future cashflows, while the applicable exit capitalization rate is derived from the applied discount rate. Properties generating nosustainable operating cash flows are valued using their liquidation value. TLG recognizes any changes in the fair value ofsuch investment properties in profit or loss presented in a separate line “result from the remeasurement of investmentproperty” in the consolidated statement of comprehensive income. If TLG’s cash flows from investment properties decreaseor discount rates used in the DCF Method valuation rise (e.g., due to increased interest rates), TLG would have to revise thevalue of its portfolio on the consolidated statement of financial position downwards.

With respect to properties classified as investment property, TLG applies the following accounting treatment in thecase of the sale of a property: With the notarization of the sale and purchase agreement, the property is generally reclassifiedas an asset held for sale, unless the payment of the purchase price commences during the same period (i.e., signing andclosing occur within the same reporting period). The difference between the carrying amount of the property and the purchaseprice, if any, is recognized under result from the remeasurement of investment property. Thus, if the purchase price exceedsthe carrying amount, the Company is able to record a gain in the excess amount. However, if a sale fails to close or if thepurchase price is reduced between signing and closing of the transaction (e.g., due to an agreed purchase price adjustmentmechanism or TLG’s failure to fulfill representations and warranties included in the purchase agreement), the Company maybe forced to record a loss in subsequent reporting periods in which the transaction closes. For example, TLG recently signedan agreement to sell a property with a fair value of approximately €4.7 million as of December 31, 2013 (as appraised bySavills), for approximately €23.9 million. However, due to the fact that the outline building permit (Bauvorbescheid) for thisproperty will likely only allow for a more limited development than previously expected, the buyer may have the right towithdraw from the purchase agreement or to considerably reduce the purchase price. While the Company believes that it willstill be able to sell this property, TLG would likely be forced to incur a significant non-cash loss.

Any deterioration of the fair value of TLG’s investment properties or any failure to close disposals at the agreedpurchase price or at all could force TLG to recognize a loss and could have a material adverse effect on TLG’s business, netassets, financial condition, cash flows or results of operations.

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TLG may be unable to replace the members of the Management Board and key personnel or to hire additional qualifiedpersonnel.

TLG only employs a small number of employees in central functions responsible for managing its business. Itssuccess greatly depends on the performance of the members of the Company’s management board (the “ManagementBoard”) and other qualified employees in key positions, particularly those with substantial sector expertise, who areresponsible for the management of TLG’s portfolio and corporate functions. Furthermore, TLG may need to hire additionalqualified employees if its future growth exceeds its current platform or if TLG is forced to replace qualified employees. Dueto the intense competition for qualified personnel in the commercial real estate sector, there is no guarantee that TLG will beable to hire sufficiently qualified key employees at acceptable terms in the future.

The loss of any of the members of the Management Board or any other key employees or failure to attract newqualified employees, could impair TLG’s growth and make it difficult to maintain its business activities at current levels andtherefore could have a material adverse effect on TLG’s business, net assets, financial condition, cash flows or results ofoperations.

TLG’s IT-systems could malfunction or become impaired.

IT-systems are essential for the daily running of TLG’s business operations. Any interruptions in, failures of ordamage to its IT-systems could lead to delays or interruptions in TLG’s business processes. In particular, TLG’s IT-systemsmay be vulnerable to security breaches and cyber-attacks from unauthorized persons outside and within TLG. Despite takingwhat it considers to be sufficient precautions, TLG cannot guarantee that anticipated and/or recognized malfunctions orsecurity deficits can be avoided by appropriate preventive security measures in every case.

Delays and interruptions to TLG’s IT-systems could lead to increased costs and may result in lost rental income andcould therefore have a material adverse effect on TLG’s business, net assets, financial condition, cash flows or results ofoperations.

TLG’s IT-based portfolio management tools could fail to correctly reflect and support the business decisions that are inTLG’s best interest.

The administration and management of TLG’s portfolio is conducted, inter alia, with IT-based portfoliomanagement tools (i.e., the real estate value creator, Wodis Sigma, and the property database (Liegenschaftsdatenbank)) thatanalyze data of individual properties and the respective tenant basis and help monitor the compliance of individual propertieswith TLG’s current business plan. These management tools allow TLG to constantly check, monitor and compare individualproperties for a number of relevant key performance indicators. The reliance on such management tools could lead todecisions that are not in TLG’s best interest, for instance, if essential data cannot be collected or has to be estimated for thefuture, if model assumptions turn out to be wrong, or if the used key performance indicators are not relevant for TLG’slong-term success.

Failure to make the correct business decisions could have a material adverse effect on TLG’s business, net assets,financial condition, cash flows or results of operations.

TLG could incur substantial losses from damage not covered by, or exceeding the coverage limits of, its insurance policies.

Insurance policies taken out by TLG, including against fire, natural disasters, operational interruptions andthird-party liability, are subject to exclusions and limitations of liability both in amount and with respect to the insured events.There can be no assurance that TLG’s assessment that it is sufficiently insured against contingencies is accurate. Floods, fires,storms and similar natural disasters as well as acts of terrorism or other events may cause damage to a property in excess ofinsurance coverage and may thus lead to significant costs that must be borne by TLG in connection with remediation andrepair work. In addition, significant costs could ensue if tenants terminated their lease agreements or withheld part or all of theagreed rent payments as a consequence of any of the foregoing events. Even in cases where TLG has obtained sufficientinsurance coverage, its insurance providers could become insolvent, forcing TLG to bear any liabilities and losses itself.

If TLG suffers a loss or incurs a liability against which it is uninsured or insufficiently insured, this could have amaterial adverse effect on TLG’s business, net assets, financial condition, cash flows, or results of operations.

The Company’s cash flows and possible future dividend payments also depend on the profitability of its subsidiaries and itmay not be able to implement significant changes with regards to such subsidiaries.

The Company itself holds and administers real estate, but is also a holding company for subsidiaries that holdindividual properties. As a result, in order to cover its operating costs and to make distributions, the Company relies ondistributions it receives from its subsidiaries and other investment interests or, as the case may be, repayments of loansgranted to its subsidiaries. Any distributions by the subsidiaries depend, in turn, on the subsidiaries’ operating results and theirability to make those distributions under applicable law. There can be no assurance that such funds will be sufficient in thefuture to satisfy all of its payment obligations.

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The Company currently does not own all of the shares in every one of its consolidated subsidiaries. It also holds50% interests in two entities and may in the future acquire interests in entities with majority shareholders, participate in jointventures or sell minority interests in its existing subsidiaries. Minority shareholders in such entities may be protected byGerman laws, including provisions requiring unanimous consent to structural changes. Thus, the management of subsidiarieswith minority shareholders may prove difficult for the Company.

The materialization of one or more of these risks could have a material adverse effect on TLG’s business, net assets,financial condition, cash flows or results of operations.

Financing Risks

TLG’s ability to repay existing and future debt could be limited and TLG may be unable to obtain new sources of financingat attractive terms, or at all.

TLG uses debt financing to fund its existing portfolio, ongoing operations and future acquisitions and thereforedepends on the availability of such financing. General conditions for real estate financing are subject to constant change andthe attractiveness of different financing options depends on a variety of factors beyond TLG’s control, including overallmonetary policy, interest rates, general tax conditions and the value of commercial real estate to be used as collateral. In thepast, financial difficulties in the capital markets in general and the Eurozone in particular have adversely impacted theavailability of debt financing. Furthermore, regulatory changes could restrict the lending activities of banks.

TLG’s current and non-current liabilities due to financial institutions measured in accordance with InternationalFinancial Reporting Standards as adopted by the European Union (“IFRS”) amounted to €727.9 million as of June 30, 2014,resulting in a net loan to value ratio of approximately 47.0%. TLG’s ability to repay existing debt could be limited if it wereunable to obtain new debt financing or extend existing credit facilities and its level of debt could lead banks to not to makenew loans available to TLG, or to only make them available on less favorable terms, or to refuse to extend existing creditlines, or to grant an extension of existing credit lines only on less favorable terms (e.g., demanding additional collateral,increasing interest rates etc.). Further, some loans depend on the participation structure and provide for termination rights ofthe respective lender if the control over the Company changes; in case of the exercise of such termination rights a refinancingunder changed conditions is required. Rising interest rates could increase TLG’s financing costs and prevent it from achievingan adequate spread between cash flows from rental income and disposals on the one hand and interest payments on the otherhand, or any positive cash flow at all. While TLG may try to substitute debt financing through equity financing, TLG may beunable to raise capital at attractive terms, or at all.

Furthermore, TLG’s acquisition of additional properties and portfolios may also be financed by taking on additionaldebt or by issuing and offering new shares or equity-linked instruments, or a combination thereof. If TLG is unable to obtainthe necessary capital on reasonable terms, it may be unable to make acquisitions, or may be able to do so only to a limitedextent. If TLG is no longer able to obtain the debt or equity financing needed to acquire additional properties and portfolios,or if it is able to do so only on less favorable terms, its further business development and competitiveness could be severelyconstrained. Even if debt financing is available, any additional debt could have a significant negative impact on TLG’sperformance indicators and could result in higher interest expenses.

In addition, TLG has hedged the majority of financial debt with floating interest rates and plans to continue to hedgeagainst interest rate changes. When extending existing debt or taking on new debt, TLG may, however, be unable to enter intohedging instruments or may only be able to do so at significant costs when trying to limit its exposure to such developments.

Any failure to obtain the required financing could have a material adverse effect on TLG’s business, net assets,financial condition, cash flows or results of operations.

If TLG breaches covenants under its financing agreements it could be forced to sell properties irrespective of the prices itcan achieve and its creditors or security agents could seize or realize significant collateral, which could ultimately lead toan insolvency of the Company.

TLG’s financing agreements require TLG to comply with certain general and financial covenants such as maximumnet loan to value ratios, minimum interest or debt-service cover ratios as well as leverage or equity ratios. A failure to complywith such covenants could have severe consequences, including:

• creditors may have the right to terminate the loan agreement, and outstanding loan amounts could be declaredimmediately due and payable;

• other creditors could also be entitled to terminate their loan agreements with TLG as a result of cross-defaultprovisions;

• creditors may be entitled to extraordinary prepayments or higher interest rates; and

• creditors may have the right to request the granting of additional security interest.

To secure the repayment of its loans, TLG has granted land charges over its properties and has assigned as securityrental income, potential insurance claims and other claims; it has also pledged to its creditors rental income and other

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accounts as well as the shares of one subsidiary. If TLG is unable to perform obligations under its financing agreements, itscreditors could seize and realize this collateral without further negotiations. This could result in a loss of part or all of TLG’sreal estate or a forced sale of properties on economically unfavorable terms. If the proceeds from such forced sales areinsufficient for the repayment of TLG’s liabilities, this could ultimately lead to an insolvency of the Company.

A breach of covenants under TLG’s financing agreements could have a material adverse effect on TLG’s business,net assets, financial condition, cash flows or results of operations.

Regulatory, Legal and Tax Risks

TLG may be adversely affected by changes to the general regulatory environment in Germany.

TLG’s business is subject to the general regulatory framework that applies to commercial properties and leaseagreements for such properties as well as special provisions of other laws, such as construction and construction planninglaws, the building code, environmental laws and safety regulations, including fire protection. If German federal or state lawsor the interpretation or application thereof change, this could force TLG to significantly change the way it conducts itsbusiness and therefore affect the value of its portfolio. TLG could incur additional expenses in trying to comply with morerestrictive laws. Furthermore, European and German legislators or regulators could subject TLG’s business to additionalregulatory obligations and restrictions, in particular investment fund regulations.

Any changes to the general regulatory environment could have a material adverse effect on TLG’s business, netassets, financial condition, cash flows or results of operations.

TLG may incur costs in connection with residual pollution including wartime ordnance, soil contaminations andhazardous materials.

Some of TLG’s properties do, and some of the properties TLG acquires may, contain soil contaminations,hazardous materials (including asbestos), other residual pollution or wartime ordnance. As of June 30, 2014, 103 propertiesfrom TLG’s portfolio (including 53 properties from its Core Portfolio) were affected by soil contaminations. The Companyestimates that the total exposure from soil contaminations amounted to €9.4 million as of June 30, 2014. TLG has receiveddeclarations of indemnification (Freistellungserklärungen) relating to these contaminations and it may be, and has on pastoccasions been, otherwise released and indemnified, pursuant to the Environmental Framework Act (Umweltrahmengesetz)and administrative agreements, from certain responsibilities for sites contaminated and polluted prior to July 1, 1990. TheCompany believes that these indemnifications cover €5.8 million, or approximately 62%, of TLG’s exposure from soilcontaminations as of June 30, 2014. Thus, TLG’s uncovered exposure (e.g., for additional costs associated with remediation)for soil contaminations amounts to €3.6 million, or approximately 38%, as of June 30, 2014. However, declarations ofindemnification only cover periods prior to July 1, 1990. Other periods could be relevant for contamination and pollution.Also, such declarations of indemnification may not cover all costs associated with remediation measures (e.g., loss of rentetc.). The existence or even suspected existence of soil contaminations or wartime ordinance may negatively affect TLG’sability to lease or sell such properties.

As of June 30, 2014, TLG was already engaged in remediating soil contaminations with an aggregate exposure of€7.5 million relating to 18 properties. The Company expects that the costs associated with remediation for these properties notcovered by declarations of indemnification will amount to approximately €1.7 million, or approximately 23% of the aggregateexposure. However, any remediation or removal of any pollution and related measures may involve considerable additionalcosts that may not be covered for by declarations of indemnification.

TLG could also be responsible for remediation of properties that it has sold in the past. In the case of soilcontaminations, the Federal Soil Protection Act (Bundesbodenschutzgesetz) provides for an ongoing responsibility of previousproperty owners if the property has been sold or transferred after March 1, 1999 and the contamination was, or should havebeen, known to the previous owner. TLG sold a large number of properties in the past and plans to sell further properties inthe future. It could thus be held liable as a previous owner, but also as the entity having caused the contamination.

For example, TLG is or was the owner of several properties in Apolda, Thuringia that had soil contaminations.Furthermore, contaminated soil from TLG’s properties was moved to a neighboring property owned by GESA Gesellschaftzur Entwicklung und Sanierung von Altstandorten mbH (“GESA”). In 2011, GESA estimated that costs for a full remediationof contaminated properties in Apolda owned by TLG and GESA would amount to between €20 million to €44 million. TheCompany believes that removal of the contaminated soil on the property owned by GESA would amount to €1.7 million. TLGvoluntarily agreed to pay 6% of the costs associated with the investigation of soil contaminations on the contaminatedproperties in Apolda owned by TLG and for the preparation of a remediation plan. It received a declaration of indemnificationin the amount of €20.2 million by the state of Thuringia and TLG could request additional indemnifications if this amountwould prove to be insufficient. However, there is no guarantee that such indemnification will be granted or that theindemnification granted will prove sufficient. Furthermore, TLG also obtained indemnifications from purchasers of thoseApolda properties that it sold. However, there is no guarantee that all costs incurred by TLG will ultimately be covered bydeclarations of indemnification or purchase agreements, or that the buyers of TLG’s properties will be able to fulfill theirindemnification obligations.

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As of June 30, 2014, a total of 24 buildings located on TLG’s properties (including 11 buildings located onproperties from TLG’s Core Portfolio) contained hazardous materials. While remediation of such hazardous materials wouldonly be required if TLG were to engage in building activities with respect to the affected buildings, the Company estimatesthat the total exposure from such hazardous materials amounted to €1.8 million as of June 30, 2014. Furthermore, even if TLGitself is not responsible for existing contamination or pollution of the soil or buildings, it might be legally or practicallydifficult or impossible to force the responsible parties to remedy or remove the damage or have recourse against such parties.The existence or even suspected existence of hazardous materials or other residual pollution may negatively affect TLG’sability to lease or sell such properties.

The incurrence of unforeseen costs to remove or dispose of substances or hazardous materials or to remediateenvironmental contamination or other environmental liabilities could have a material adverse effect on TLG’s business, netassets, financial condition, cash flows or results of operations.

Standard clauses used in TLG’s lease agreements may be invalid and some of these agreements may not fulfill the strictwritten form requirements under German law.

TLG uses standardized contracts in its contractual relationships with a large number of parties, in particular with itstenants. Any invalid provisions or ambiguities in standardized contracts can therefore affect a multitude of contractualrelationships. Standardized terms under German law are required to comply with the statutory law on general terms andconditions (Allgemeine Geschäftsbedingungen), which means that they are subject to fairness control by the courts regardingtheir content and the way they are presented to the other contractual party by TLG. As a general rule, standardized terms areinvalid if they are not transparent, unclearly worded, unbalanced or discriminatory. Any standardized clauses in TLG’scontracts being invalid could lead to a substantial number of claims being brought against TLG or TLG being forced to bearcosts which it had previously considered to be allocable to its contractual counterparties.

Real estate owned by TLG is leased predominantly long term. Pursuant to German law, fixed-term lease agreementswith a term exceeding one year can be terminated prior to their contractually agreed expiration date if certain formalrequirements are not complied with. These include the requirement that there be a document that contains all the materialterms of the lease agreement, including all attachments and amendments and the signatures of all parties thereto. While thedetails of the applicable formal requirements are assessed differently by various German courts, most courts agree that suchrequirements are, in principle, strict. Some lease agreements regarding real estate owned by TLG may not satisfy the strictestinterpretations of these requirements. In this case, the respective lease agreement would be deemed to have been concludedfor an indefinite term and could therefore be terminated one year after handover of the respective property to the tenant at theearliest, provided that the statutory notice period is complied with (i.e., notice of termination is admissible at the latest on thethird working day of a calendar quarter towards the end of the next calendar quarter). Consequently, some of TLG’s tenantsmight attempt to invoke alleged non-compliance with these formal requirements in order to procure an early termination oftheir lease agreements or a renegotiation of the terms of these lease agreements to TLG’s disadvantage.

The occurrence of any one or more of the aforementioned risks could have a material adverse effect on TLG’sbusiness, net assets, financial condition, cash flows or results of operations.

TLG’s compliance structure may not have been, or may not be, sufficient to adequately protect TLG from all legal orfinancial risks.

TLG appointed an anti-corruption officer and a data protection officer and a group-wide code of conduct wasimplemented to protect TLG against legal risks and other potential harm. These binding policies address law-abiding conduct,including corruption prevention, insider information, conflicts of interest, information and data protection, and protection ofcompany property and apply to all employees, the members of the Management Board and the Company’s supervisory board.While the Company believes that the aforementioned compliance policies will offer a degree of protection, they may not besufficient to completely rule out all unauthorized practices, legal infringements or corruption by employees of TLG.

Any failure in compliance could have a material adverse effect on TLG’s business, net assets, financial condition,cash flows, results of operations and reputation.

TLG is exposed to risks from potential future legal disputes.

TLG may become the subject of legal disputes, administrative proceedings and government investigations. Suchlegal disputes, proceedings and investigations may, in particular, arise from its relationships with investors, tenants,employees, third-party facility managers, building contractors and other contractual counterparties, neighbors and publicauthorities alleging breaches of contract, tort or the failure to comply with applicable laws and regulations. TLG may berequired to pay damages or fines and to take, or to refrain from taking, certain actions. There may also be investigations bygovernmental authorities into circumstances of which TLG is currently not aware of or which will arise in the future,including possible regulatory and environmental laws, licensing requirements or criminal proceedings.

If TLG were to be found liable under any such claims or even if complaints, law suits or investigations broughtagainst TLG are unsuccessful, they could have a material adverse effect on TLG’s business, net assets, financial condition,cash flows, results of operations and reputation.

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TLG may be forced to repay certain subsidies.

As of June 30, 2014, TLG had received investment supplements (Investitionszulagen), investment subsidies(Investitionszuschüsse) and other public grants with unexpired commitment periods (Bindungsfristen) in an aggregate amountof approximately €34 million relating to properties in its portfolio as of that date. Certain subsidies were directly paid out toTLG and set-off against the lease obligations of the respective tenants. The administrative decisions, based on which thesesubsidies were granted, impose certain obligations on such tenants. Failure to comply with these obligations or an insolvencyof the tenant or other factors could lead to a revocation of subsidies and force TLG to repay amounts paid out to TLG, evenwhere it may not have recourse against its tenants. As a result, TLG has been involved in litigation with governmentauthorities over the revocation of grants and is still involved in several such proceedings.

In addition, as of June 30, 2014, TLG had received subsidies in an aggregate amount of approximately €96 millionrelating to properties in its portfolio as of that date, where there are no commitment periods or where commitment periodshave already expired. While TLG was rarely forced to repay subsidies for which there were no commitment periods or forwhich commitment periods had already expired in the past, the authorities granting such subsidies could nevertheless demandrepayment of such subsidies if they were to decide that TLG or its tenants have violated certain obligations or due to otherreasons.

Furthermore, TLG has sold a number of properties for which it had received subsidies in the past. It could be forcedto repay these subsidies if the buyer of the respective property does not qualify for such subsidies or violated obligationsunder the administrative decisions granting these subsidies. While TLG may have obtained contractual indemnities against therespective buyer, it may be unable to actually take recourse (e.g., due to an insolvency of the respective buyer).

In addition, TLG has received subsidies for development measures, which also impose certain obligations on TLG.It may be forced to repay these subsidies if TLG were in breach of the obligations thereunder.

An obligation to repay certain subsidies could have a material adverse effect on TLG’s business, net assets,financial condition, cash flows and results of operations.

TLG may be subject to restitution or compensation claims if its properties have been unlawfully expropriated, and thiscould delay or prevent the transfer of its properties.

TLG has been and may in the future be subject to third-party claims in connection with restitution and compensationclaims. Under German law, former owners of assets that were dispossessed either by the national socialist governmentbetween January 30, 1933 and May 8, 1945 or by the former German Democratic Republic (Deutsche DemokratischeRepublik) can demand the restitution of such assets. TLG has obtained contractual indemnity claims against the FederalInstitute for Special Tasks Arising from Unification (Bundesanstalt für vereinigungsbedingte Sonderaufgaben) if restitution orcompensation is successfully claimed because of unlawful expropriation during certain historical periods.

Furthermore, when disposing of properties TLG has to comply with the German Real Estate Transfer Ordinance(Grundstücksverkehrsordnung (GVO)), pursuant to which TLG needs to obtain approval from the competent authorities priorto disposing of any properties it has not purchased itself. If any restitution claims have been filed for a property that TLGintends to sell, such approval will not be granted before the claim has been settled. Therefore, restitution claims may adverselyimpact TLG’s ability to dispose of properties, in particular properties from its non-core portfolio.

Inability to transfer properties due to restitution claims could have a material adverse effect on TLG’s business, netassets, financial condition, cash flows, results of operations and reputation.

TLG may be adversely affected by changes to the general tax environment in Germany as such changes might result in anincrease of TLG’s tax burden.

TLG is dependent on the general tax environment in Germany. TLG’s tax burden depends on various tax laws, aswell as their application and interpretation; for instance, increases in the real estate transfer tax rate, as recently experienced inmost German states, could make the acquisition and sale of properties more expensive and adversely affect TLG’s business.Its tax planning and optimization depends on the current and expected tax environment. Amendments to tax laws may have aretroactive effect and their application or interpretation by tax authorities or courts may change more or less unexpectedly.Furthermore, court decisions are occasionally limited to their specific facts by tax authorities by way of non-applicationdecrees. This may also increase TLG’s tax burden.

No tax assessments have been received by the Company or any of its consolidated subsidiaries for several years.The unavailability of more recent tax assessments increases the uncertainty regarding the tax authorities’ interpretations ofapplicable tax laws for periods for which no assessment has been received and increases the possibility that theseinterpretations may differ from the TLG’s interpretations. Any tax assessments that deviate from TLG’s expectations couldlead to an increase in its tax obligations and, additionally, could give rise to interest payable on the additional amount of taxes.

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TLG is regularly subject to tax audits in Germany. The competent tax authorities are currently conducting a taxaudit covering the fiscal years from 2007 up to and including the year 2011. The Company believes that this tax audit willlead to payments by TLG in the amount of approximately €9.4 million for which the Company has already created provisionsin an amount of €9.0 million. The tax authorities informed the Company that the tax audit for the fiscal year 2012 regardinginvestment supplements (Investitionszulagen) is expected to commence on October 17, 2014. Future tax audits and otherinvestigations conducted by the competent tax authorities could result in the assessment of additional taxes. In particular, thismay be the case with respect to changes in TLG’s shareholding structure, other reorganization measures or impairment onproperties with regard to which tax authorities could take the view that they ought to be disregarded for tax purposes.Furthermore, expenses could be treated as non-deductible or real estate transfer tax could be assessed. Any of these findingscould lead to an increase in TLG’s tax obligations and could result in the assessment of penalties. TLG has established, andwill continue to establish, provisions for risks associated with audits based on its past experience. These provisions, however,may prove to be insufficient and when paid may negatively impact TLG’s cash flow.

TLG may become party to tax proceedings. The outcome of such tax proceedings may not be predictable and mayturn out to be detrimental to TLG.

The materialization of any of these risks could have a material adverse effect on TLG’s business, net assets,financial condition, cash flows or results of operations.

Risks related to the Offering and the Offered Shares

The offering may not be completed if the Joint Bookrunners terminate the Underwriting Agreement or the Companywithdraws from the offering.

On October 14, 2014, J.P. Morgan Securities plc, London, United Kingdom and UBS Limited, London,United Kingdom, COMMERZBANK Aktiengesellschaft, Frankfurt am Main, Germany, Kempen & Co N.V., Amsterdam, theNetherlands and HSBC Trinkaus & Burkhardt AG, Dusseldorf, Germany, (the “Joint Bookrunners”) as well as theCompany, LSREF II East AcquiCo S.à r.l., Luxemburg, a limited liability company (société à responsibilité limitée),registered with the commercial and company register of Luxembourg (Registre de Commerce et des Socieétés Luxembourg)under the company number B 173323, having its registered office at 33, rue du Puits Romain, L-8070 Bertrange,Luxembourg, (“East AcquiCo”) and Delpheast Beteiligungs GmbH & Co. KG, a limited partnership with a limited liabilitycompany as general partner, registered with the commercial register of the local court (Amtsgericht) of Frankfurt am Main,Germany, under the docket number HRA 47217, having its registered office at Hamburger Allee 14, 60486 Frankfurt amMain, Germany, entered into an agreement for the underwriting of 36,850,000 of the Company’s shares in connection with theoffering with a view to offering these shares to investors (the “Underwriting Agreement”). The Underwriting Agreementcan be terminated by the Joint Global Coordinators under certain circumstances. If the Underwriting Agreement is terminatedbecause the Joint Bookrunners withdraw before the publication of the offering in the German Federal Gazette(Bundesanzeiger), because the Company withdraws from the offering, or because the implementation of the capital increasefor the creation of new shares in connection with the offering is not registered in the commercial register in a timely manner,the offering will lapse or the offering will not take place, in which case any allotments already made to investors will beinvalidated and investors will have no claim for delivery. Claims with respect to subscription fees already paid and costsincurred by an investor in connection with the subscription will be governed solely by the legal relationship between theinvestor and the financial intermediary to which the investor submitted its purchase order. Investors who engage in short-selling bear the risk of being unable to satisfy their delivery obligations. The Company would receive no proceeds from theoffering in the event of a termination of the Underwriting Agreement.

Furthermore, even if the offering is completed, the Company may not be able to place all of its shares which mayresult in substantially lower proceeds from the offering.

The Company’s consolidated financial statements from the fiscal year 2013 onwards may be difficult to compare to thosefrom previous periods.

The Company’s consolidated financial statements are based on IFRS and the additional requirements of Germancommercial law pursuant to Section 315a (1) of the German Commercial Code (Handelsgesetzbuch (HGB)), which it hasapplied since January 1, 2013. Thus, the consolidated financial statements for the fiscal year 2013, including comparativefigures for 2012, were the Company’s first consolidated financial statements prepared in accordance with IFRS and theadditional requirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code(Handelsgesetzbuch (HGB)). The consolidated financial statements for prior years were prepared in accordance with theGerman Commercial Code (Handelsgesetzbuch (HGB)) (“German GAAP”). IFRS differs from German GAAP in materialways (e.g., property held for generating rental income or for capital appreciation is classified as investment property inaccordance with IAS 40 and measured at fair value under IFRS while it is measured at cost less depreciation under GermanGAAP). Therefore the Company’s consolidated financial statements prepared in accordance with IFRS and the additionalrequirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code (Handelsgesetzbuch(HGB)) are not directly comparable with its consolidated financial statements prepared in accordance with German GAAP forprevious periods.

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Furthermore, the consolidated financial statements for the fiscal year 2011 are also not directly comparable to thosefor the fiscal years 2012 and 2013 given that the consolidated financial statements for the fiscal year 2011 still include theresidential real estate portfolio that was split-off into a separate company, TLG WOHNEN GmbH, with effect as of January 1,2012, whose sole shareholder was the Federal Republic of Germany.

These factors affect the comparability of the Company’s consolidated financial statements and could make itdifficult to assess TLG’s performance for any period prior to 2012.

TLG’s FFO forecast for the fiscal year 2014 may differ materially from TLG’s actual FFO for the fiscal year 2014 and theCompany may decide to reduce its dividend payments.

This Prospectus contains forecasts and other forward-looking information, including a forecast of TLG’s funds fromoperations (“FFO” post tax and excluding result from disposals) for the fiscal year 2014 (the “FFO Forecast”).

In arriving at a forecast for FFO, the Management Board makes certain assumptions regarding the development ofTLG’s portfolio, several key performance indicators (income from letting activities and other operating income), expenses(expenses related to letting activities, administration, the current income tax and other effects) and financing costs. Suchassumptions are based on and influenced by overall trends and developments, including the general economic developmentsand the state of the commercial real estate markets, interest rate levels and the absence of any unforeseen events or materialchanges to the regulatory environment. TLG has no influence over such overall trends and developments. While theManagement Board believes that its assumptions are reasonable in the current environment, they may vary, prove to beincorrect, or turn out to be inaccurate compared to actual future developments.

Should one or more of the assumptions on which the FFO Forecast is based prove to be incorrect or inaccurate,TLG’s actual FFO for the fiscal year 2014 may differ materially from the FFO Forecast contained in this Prospectus and theCompany may decide to reduce its dividend payments.

The market price and trading volume of the Company’s shares could fluctuate considerably.

Prior to the offering, there has been no public market for the shares of the Company. There is no certainty that aliquid market will develop for these shares.

Securities markets in general and shares of companies in the commercial real estate sector in particular have beenvolatile in the past. The trading volume and price of the Company’s shares may fluctuate considerably. If the Company’sshare price declines, investors may be unable to resell the Company’s shares at or above their respective purchase price. Someof the factors that could negatively affect the share price of the Company’s shares or result in fluctuations in the price ortrading volume of the Company’s shares include, for example, changes in the Company’s actual or projected results ofoperations or those of its competitors, changes in earnings projections or failure to meet investors’ and analysts’ earningsexpectations, investors’ evaluations of the success and effects of the strategy described in this Prospectus, as well as theevaluation of the related risks, changes in general economic conditions and changes in the Company’s shareholder base andliquidity as well as an exclusion from indexes. Additionally, general fluctuations in share prices, particularly of shares ofcompanies in the commercial real estate sector, could put pricing pressure on the Company’s shares, even where there maynot necessarily be a reason for this in TLG’s business or earnings outlook.

Following the listing, East AcquiCo will still be in a position to exert substantial influence on TLG. The interests of EastAcquiCo could differ from the interests of the other shareholders. Any future sales of the Company’s shares by majorshareholders of the Company could depress the market price of the shares.

Upon completion of the offering, East AcquiCo, the largest shareholder of the Company, will hold approximately45.4% of the issued shares (assuming the placement of 21,545,674 shares of the Company from the holdings of East AcquiCoand excluding any exercise of the greenshoe option). Due to its large shareholdings, East AcquiCo will be in a position toexert substantial influence at the Company’s shareholders’ meeting and, consequently, on matters decided by theshareholders’ meeting, including the appointment of the members of the Company’s supervisory board, the distribution ofdividends, and any proposed capital increase. East AcquiCo’s future stake in the Company would endow it with the ability toblock certain corporate measures that require the approval of the Company’s shareholders’ meeting.

Moreover, if any large shareholders of the shares of the Company were to sell substantial amounts of theirshareholdings on the public exchange or if market participants were to become convinced that such sales might occur, thiscould have a material adverse effect on the market price of the shares of the Company.

Future capital measures could lead to a substantial dilution of existing shareholders’ interests in the Company.

TLG may require additional capital in the future to finance acquisitions and business operations or to repay itsdebts. The raising of additional equity through the issuance of new shares and the (potential) exercise of conversion or optionrights by holders of convertible bonds or bonds with warrants, which may be issued in the future, may dilute existingshareholders’ interests. The Company’s articles of association currently provide for the authorization to issue up to26,000,000 additional shares and up to 26,000,000 additional shares as conditional capital. The Company may issue these

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shares without any additional approval by the shareholders and under certain conditions, for example, in the event of a capitalincrease against contributions in kind, without reserving any pre-emptive subscription rights to the existing shareholders.Because the Company’s decision to issue securities in any future offering will also depend on market conditions and otherfactors beyond its control, the Company cannot predict or estimate the amount, timing or nature of future offerings. Thus,holders of shares bear the risk of the Company’s future offerings reducing the market price of the shares and diluting theirshareholdings in the Company.

The Company will face additional administrative requirements and incur higher ongoing costs as a result of the initialpublic offering.

After the offering, the Company will be subject to the legal requirements for German stock corporations listed on apublic exchange for the first time. These requirements include periodic financial reporting and other public disclosures ofinformation (including those required by the stock exchange listing authorities), regular calls with securities and industryanalysts and other required disclosures. There is no guarantee that TLG’s accounting, controlling and legal or other corporatefunctions will be capable of responding to these additional requirements without difficulties and inefficiencies that cause TLGto incur significant additional costs and/or expose it to regulatory or civil litigation or penalties. Furthermore, the preparingfor, and convening of, general shareholders’ meetings and the Company’s regular communications with shareholders andpotential investors will entail substantially greater expenses and risks. The members of the Management Board will need todevote time to these additional requirements that they could have otherwise devoted to other aspects of managing TLG’soperations, and these additional requirements could also entail substantially increased time commitments and costs for theaccounting, controlling and legal departments and other administrative functions.

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GENERAL INFORMATION

Responsibility Statement

TLG IMMOBILIEN AG, with its registered office at Hausvogteiplatz 12, 10117 Berlin, Germany, and registeredwith the commercial register of the local court (Amtsgericht) of Charlottenburg, Germany, under the docket numberHRB 161314 B (the “Company”, and, together with its consolidated subsidiaries, “TLG”), together with J.P. MorganSecurities plc, London, United Kingdom (“J.P. Morgan”) and UBS Limited, London, United Kingdom (“UBS” and, togetherwith J.P. Morgan the “Joint Global Coordinators”), and together with COMMERZBANK Aktiengesellschaft, Frankfurt amMain, Germany (“COMMERZBANK”), Kempen & Co N.V., Amsterdam, the Netherlands (“Kempen & Co”) andHSBC Trinkaus & Burkhardt AG, Dusseldorf, Germany (“HSBC” and, together with the Joint Global Coordinators,COMMERZBANK and Kempen & Co, the “Joint Bookrunners” or the “Underwriters”), have assumed responsibility forthe contents of this prospectus (the “Prospectus”) pursuant to Section 5 (4) of the German Securities Prospectus Act(Wertpapierprospektgesetz) and declare that the information contained in this Prospectus is, to the best of their knowledge,correct and contains no material omissions.

If any claims are asserted before a court of law based on the information contained in this Prospectus, the investorappearing as plaintiff may have to bear the costs of translating this Prospectus prior to the commencement of the courtproceedings pursuant to the national legislation of the member states of the European Economic Area.

The information in this Prospectus will not be updated subsequent to the date hereof except for any significant newevent or significant error or inaccuracy relating to the information contained in this Prospectus that may affect an assessmentof the securities and occurs or comes to light following the approval of this Prospectus but before the completion of the publicoffering or admission of the securities to trading, whichever is later. These updates must be disclosed in a prospectussupplement in accordance with Section 16 (1) sentence 1 of the German Securities Prospectus Act(Wertpapierprospektgesetz).

Purpose of this Prospectus

For the purpose of the public offering of securities, this Prospectus relates to 9,302,326 of the Company’s NewShares (as defined below) and to 27,547,674 of the Company’s existing bearer shares with no par value, each representing anotional value of €1.00 and with full dividend rights from January 1, 2014, consisting of:

• 9,302,326 newly issued bearer shares with no par value (Stückaktien) from a capital increase againstcontribution in cash to be resolved by an extraordinary shareholders’ meeting of the Company (the “NewShares”);

• 24,197,674 existing bearer shares with no par value (Stückaktien) from the holdings of the ExistingShareholders (of which 21,545,674 existing bearer shares with no par value (Stückaktien) are offered by EastAcquiCo and 2,652,000 existing bearer shares with no par value (Stückaktien) are offered by Delpheast) (the“Existing Shares” and, together with the New Shares, the “Base Shares”); and

• 3,350,000 existing bearer shares with no par value (Stückaktien) from the holdings of East AcquiCo inconnection with a possible over-allotment (the “Over-Allotment Shares” and, together with the Base Shares,the “Offer Shares”).

For the purpose of admission to trading on the regulated market of the Frankfurt Stock Exchange (FrankfurterWertpapierbörse) and the simultaneous admission to the sub-segment of the regulated market with additional post-admissionobligations (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse), this Prospectus relates to up to9,302,326 New Shares and 52,000,000 of the Company’s existing bearer shares (being the entire share capital of the Companyfollowing the registration of the capital increase) with no par value, each with a notional value of €1.00 and with full dividendrights from January 1, 2014.

Forward-looking Statements

This Prospectus contains forward-looking statements. A forward-looking statement is any statement that does notrelate to historical facts or events or to facts or events as of the date of this Prospectus. This applies, in particular, tostatements in this Prospectus containing information on TLG’s future earnings capacity, plans and expectations regarding itsbusiness growth and profitability, and the general economic conditions to which TLG is exposed. Statements made usingwords such as “predicts”, “forecasts”, “plans”, “endeavors” or “expects” may be an indication of forward-looking statements.

The forward-looking statements in this Prospectus are subject to risks and uncertainties, as they relate to futureevents, and are based on estimates and assessments made to the best of the Company’s present knowledge. Theseforward-looking statements are based on assumptions, uncertainties and other factors, the occurrence or non-occurrence ofwhich could cause the Company’s actual results, including the financial condition and profitability of TLG, to differmaterially from or fail to meet the expectations expressed or implied in the forward-looking statements. These expressions can

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be found in several sections in this Prospectus, particularly in the sections entitled “Risk Factors”, “Profit Forecast”,“Markets and Competition”, “Business” and “Recent Developments and Outlook”, and wherever information is contained inthis Prospectus regarding TLG’s intentions, beliefs, or current expectations relating to its future financial condition and resultsof operations, plans, liquidity, business outlook, growth, strategy and profitability, as well as the economic and regulatoryenvironment to which TLG is subject.

In light of these uncertainties and assumptions, it is also possible that the future events mentioned in this Prospectusmight not occur. In addition, the forward-looking estimates and forecasts reproduced in this Prospectus from third-partyreports could prove to be inaccurate (for more information on the third-party sources used in this Prospectus, see “—Sourcesof Market Data”). Actual results, performance or events may differ materially from those in such statements due to, amongother reasons:

• changes in general economic conditions in Germany, including changes in the unemployment rate, the level ofconsumer prices, wage levels etc.;

• demographic changes, in particular with respect to Germany;

• changes affecting interest rate levels;

• changes in the competitive environment, including changes in the level of construction activity relating tocommercial real estate;

• changes in demand for office, retail and hotel properties;

• political changes;

• changes to the taxation of corporations and particularly tax rates for RETT; and

• changes in laws and regulations, in particular tenancy and environmental laws and regulations.

Moreover, it should be noted that neither the Company nor any of the Underwriters assumes any obligation, exceptas required by law, to update any forward-looking statement or to conform any such statement to actual events ordevelopments. Nevertheless, the Company has the obligation to disclose any significant new event or significant error orinaccuracy relating to the information contained in this Prospectus that may affect an assessment of the securities and occursor comes to light following the approval of this Prospectus, but before the completion of the public offering or the admissionof the securities to trading, whichever is later. These updates must be disclosed in a prospectus supplement in accordance withSection 16 (1) sentence 1 of the German Securities Prospectus Act (Wertpapierprospektgesetz).

See “Risk Factors” for a further description of some of the factors that could influence the Company’s forward-looking statements.

Appraiser

The independent, external appraiser Savills Advisory Services GmbH, Taunusanlage 19, 60325 Frankfurt am Main,Germany (“Savills”), has prepared a condensed evaluation report on the fair value of TLG’s real estate portfolios as ofJune 30, 2014 pursuant to IAS 40 in conjunction with IFRS 13 (the “Valuation Report”) and in accordance with thestandards of the Royal Institution of Chartered Surveyors (RICS), which is reprinted in this Prospectus on pages V-1 et seq.For more information on Savills’s independence, see “Declaration of Independence” on page V-10 of the Valuation Report.Savills employs certified valuation experts according to DIN EN ISO/EC 17024 and members of the Royal Institution ofChartered Surveyors (RICS). Savills has consented to the inclusion of the Valuation Report in this Prospectus in theunmodified form authorized by them and has approved the context in which it is presented. For the avoidance of doubt,Savills only accepts responsibility for the Valuation Report and for no other part or parts of this Prospectus. The Companyaffirms that, as of the date of this Prospectus, no material change in the value of the properties appraised in the ValuationReport has occurred since the valuation date of June 30, 2014.

Sources of Market Data

To the extent not otherwise indicated, the information contained in this Prospectus on the market environment,market developments, growth rates, market trends and competition in the markets in which TLG operates are based on theCompany’s assessments. These assessments, in turn, are based in part on internal observations of the markets and on variousmarket studies.

The following sources were used in the preparation of this Prospectus:

• Bloomberg as of September 2, 2014, Database, “10 year bond yields”, compiled July 28, 2014, (“Bloombergas of September 2, 2014”);

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• Bulwiengesa, Research Publication, “Food Retail Properties in Germany 2014: Market Trends and InvestmentOpportunities”, copyrighted June 2014, (“Bulwiengesa, Food Retail Properties in Germany 2014”);

• CBRE Global Research and Consulting, Research Publication, “Hotel Market Germany: Market View”,published 2013, (“CBRE”);

• DG Hyp, Research Publication, “Main Regional Real Estate Markets in Germany 2014: Office and RetailProperties Continue to Show Solid Performance in the Main Regions”, released March 2014, (“DG Hyp”);

• Economist Intelligence Unit, Database, GDP Historicals, compiled July 29, 2014, (“Economist IntelligenceUnit, GDP Historicals”);

• Economist Intelligence Unit, Database, Government Debt Historicals, compiled September 2, 2014,(“Economist Intelligence Unit, Government Debt”);

• Eurostat, Unemployment Rate 2002-2013 (%), http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_statistics, published May 8, 2014, (“Eurostat, Unemployment Rate”);

• Federal and State Statistical Offices (Statistische Ämter des Bundes und der Länder), National Accounts GDP(Volkswirtschaftliche Gesamtrechnungen Bruttoinlandsprodukt), published March 28, 2014, (“Federal andState Statistical Offices, GDP”);

• Federal Foreign Office (Auswärtiges Amt), Übersicht: “Deutschland”, Website, http://www.auswaertiges-amt.de/DE/Aussenpolitik/Laender/Laenderinfos/01-Nodes_Uebersichtsseiten/Deutschland_node.html,(“Federal Foreign Office”);

• German Federal Statistical Office (Statistisches Bundesamt), Genesis Online Datenbank, https://www-genesis.destatis.de/genesis/online;jsessionid=976EB558678A1783A416D09E5547A638.tomcat_GO_1_2?Menu=Impressum, updated August 19, 2014, (“Federal UnemploymentAgency”);

• German Federal Statistical Office (Statistisches Bundesamt), Publication, Consumer Price Index 2013 vs 2012(Verbraucherpreisstatistik 2013 gegenüber dem Vorjahr, 2012), accessed January 17, 2014, (“FederalStatistical Office, Consumer Price Index”);

• German Federal Statistical Office (Statistisches Bundesamt), Publication, Statistics of the Federal EmploymentAgency (Statistik der Bundesagentur für Arbeit), Table, Employment Market: Unemployment Rate, Germany(Arbeitsmarkt: Arbeitslosenquote, Deutschland), published 2014, (“Federal Statistical Office,Unemployment Rate”);

• Hahn Group, in cooperation with Gfk GeoMarketing and CBRE, Retail Real Estate Report Germany,8th Edition, 2013/2014, (“Hahn Group, Retail Real Estate Report Germany 8th Edition”);

• Handelsblatt, Article, “Diese deutschen Städte sind Touristen-Magneten”, http://www.handelsblatt.com/panorama/aus-aller-welt/ranking-diese-deutschen-staedte-sind-touristen-magneten/9642972.html?slp=false&p=10&a=false#image, published March 21, 2014, (“Handelsblatt”);

• Savills on behalf of TLG IMMOBILIEN GmbH, Berlin, Germany, Valuation Report: Commercial Portfolio“TLG”, updated as at June 30, 2014, (“Commercial Portfolio TLG”);

• Immobilienscout24 und WirtschaftsWoche, Graphic, Die Besten Städte 2013: Ergebnis Dynamikranking,http://www.wiwo.de/staedteranking/, published 2013, (“Immobilienscout24 and WirtschaftsWoche”);

• TLG Immobilien GmbH, “Property Markets in Berlin and Eastern Germany 2013: Market Data for UrbanDistricts and the City of Berlin”, published October 2013, (“TLG Real Estate in Berlin and EasternGermany”).

It should be noted in particular that reference has been made in this Prospectus to information concerning marketsand market trends. Such information was obtained from the abovementioned sources. The Company has accuratelyreproduced such information and, as far as it is aware and able to ascertain from information published by such third parties,no facts have been omitted that would render the reproduced information inaccurate or misleading. Nevertheless, prospectiveinvestors are advised to consider this data with caution. For example, market studies are often based on information orassumptions that may not be accurate or appropriate, and their methodology is inherently predictive and speculative.

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Irrespective of the assumption of responsibility for the content of this Prospectus by the Company and theUnderwriters (see “—Responsibility Statement”), neither the Company nor the Underwriters have independently verified thefigures, market data or other information on which third parties have based their studies. Accordingly, the Company and theUnderwriters make no representation or warranty as to the accuracy of any such information from third-party studies includedin this Prospectus. Prospective investors should note that the Company’s own estimates and statements of opinion and beliefare not always based on studies of third parties.

Documents Available for Inspection

For the period during which this Prospectus is valid, the following documents will be available for inspection duringregular business hours at the Company’s offices at Hausvogteiplatz 12, Berlin, Germany (tel. +49 (0) 30-2470-50):

• the Company’s articles of association (the “Articles of Association”);

• the Company’s unaudited condensed interim consolidated financial statements prepared in accordance withInternational Financial Reporting Standards as adopted by the European Union (“IFRS”) as of and for thesix-month period ended June 30, 2014;

• the Company’s audited consolidated financial statements prepared in accordance with IFRS and the additionalrequirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code(Handelsgesetzbuch (HGB)) for the fiscal year ended December 31, 2013;

• the Company’s audited consolidated financial statements prepared in accordance with the German CommercialCode (Handelsgesetzbuch (HGB)) (“German GAAP”) for the fiscal years ended December 31, 2012 and2011; and

• the Company’s audited unconsolidated financial statements prepared in accordance with German GAAP forthe fiscal year ended December 31, 2013.

The above documents are also available on the Company’s website. The unconsolidated financial statementsreferred to above are also published in the German Federal Gazette (Bundesanzeiger).

In addition, the Valuation Report prepared by Savills and dated September 29, 2014, relating to the fair value,pursuant to IAS 40 in conjunction with IFRS 13, of TLG’s real estate portfolio as of June 30, 2014 is available for inspectionat the Company’s offices.

The Company’s future consolidated financial statements, unconsolidated financial statements and condensedconsolidated interim financial statements will be available from the Company on its website and from the paying agentdesignated in this Prospectus (see “General Information on the Company and the Group—Notifications, Paying Agent”).

Currency Presentation and Presentation of Figures

In this Prospectus, “euro” and “€” refer to the single European currency adopted by certain participating memberstates of the European Union, including the Federal Republic of Germany (“Germany”).

Where financial data in this Prospectus is labelled “audited”, this means that such data has been taken from theaudited financial statements included elsewhere in this Prospectus. The label “unaudited” is used in tables in this Prospectusto indicate financial data that have not been taken from the audited financial statements included elsewhere in this Prospectusbut was taken either from the Company’s unaudited condensed interim consolidated financial statements or the Company’sinternal reporting system, or is based on calculations of figures from the abovementioned sources. All of the financial datapresented in the text and tables in this Prospectus are shown in millions of euro (in € million), except as otherwise stated.Certain financial data (including percentages) in this Prospectus have been rounded according to established commercialstandards. As a result, the aggregate amounts (sum totals or sub-totals or differences or if numbers are put in relation) in tablesin this Prospectus may not correspond in all cases to the aggregated amounts of the underlying (unrounded) figures appearingelsewhere in this Prospectus. Furthermore, in those tables, these rounded figures may not add up exactly to the totalscontained in those tables. Financial information presented in parentheses denotes the negative of such number presented. Inrespect of financial data set out in this Prospectus, a dash (“—”) signifies that the relevant figure is not available, while a zero(“0.0”) signifies that the relevant figure is available but has been rounded to zero.

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THE OFFERING

Subject Matter of the Offering

The offering (including any potential Over-Allotment) relates to the sale of 36,850,000 Offer Shares with no parvalue (Stückaktien), each representing a notional value of €1.00 and with full dividend rights from January 1, 2014, consistingof:

• 9,302,326 newly issued bearer shares with no par value (Stückaktien) from a capital increase againstcontribution in cash to be resolved by an extraordinary shareholders’ meeting of the Company (the NewShares);

• 24,197,674 existing bearer shares with no par value (Stückaktien) from the holdings of the ExistingShareholders (of which 21,545,674 existing bearer shares with no par value (Stückaktien) are offered by EastAcquiCo and 2,652,000 existing bearer shares with no par value (Stückaktien) are offered by Delpheast) (theExisting Shares and together with the New Shares, the Base Shares); and

• 3,350,000 existing bearer shares with no par value (Stückaktien) from the holdings of East AcquiCo inconnection with a possible Over-Allotment (the Over-Allotment Shares and, together with the Base Shares, theOffer Shares).

The offering consists of a public offering of the Offer Shares in Germany and the Grand Duchy of Luxembourg(“Luxembourg”) and private placements of the Offer Shares in certain jurisdictions outside Germany and Luxembourg. Inthe United States, the Offer Shares will be offered for sale to qualified institutional buyers in reliance on Rule 144A(“Rule 144A”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Outside the United States, the OfferShares will be offered in reliance on Regulation S under the Securities Act (“Regulation S”).

The IPO Capital Increase to create the New Shares, which is expected to be approved by the extraordinaryshareholders’ meeting of the Company expected to be held on October 22, 2014 and is expected to be registered with thecommercial register on October 23, 2014, would result in a capital increase of the Company’s share capital of up to€9,302,326. Upon registration of the IPO Capital Increase with the commercial register, the New Shares are issued. Assumingthe IPO Capital Increase is approved by the extraordinary shareholders’ meeting of the Company and registered with thecommercial register of the Company in the maximum amount, the share capital of the Company will amount to €61,302,326.The share capital of the Company represented by the Offer Shares that are the subject of the offering including potential Over-Allotments will total €36,850,000 million. Thus, approximately 60.1% of the Company’s shares (after effectuation of theissuance of all New Shares) will be offered (approximately 54.6% without the Over-Allotment Shares).

Immediately prior to the offering, all of the Company’s share capital was held by the Existing Shareholders (see“Information on the Existing Shareholders”). Following completion of the offering and assuming full placement of the OfferShares, issuance of all New Shares and full exercise of the Greenshoe Option (“—Stabilization Measures, Over-Allotmentsand Greenshoe Option”), the Existing Shareholders will hold approximately 39.9% of the Company’s share capital. TheExisting Shareholders will receive consideration for the sale of the Existing Shares and the shares from the exercise of theGreenshoe Option, if any (after deduction of fees and commissions). The Company will receive the proceeds from the sale ofthe New Shares (after deduction of fees and commissions), but will not receive any of the proceeds from the sale of theExisting Shares or the shares from the exercise of the Greenshoe Option, if any.

The Underwriters are acting in the following capacities: J.P. Morgan and UBS are acting as the Joint GlobalCoordinators and COMMERZBANK, Kempen & Co and HSBC, together with J.P. Morgan and UBS, are acting as the JointBookrunners.

Price Range, Offer Period, Offer Price and Allotment

The price range within which purchase orders may be placed is €10.75 to €13.75 per Offer Share (the “PriceRange”).

The offer period, during which investors may submit purchase orders for the Offer Shares, is expected to begin onOctober 15, 2014 and is expected to end on October 23, 2014 at 12:00 noon CEST (Central European Summer Time) forretail investors (natural persons) and at 16:00 CEST (Central European Summer Time) for institutional investors (the “OfferPeriod”). Retail investors (natural persons) may submit purchase orders for the public offering in Germany and Luxembourgduring the Offer Period at the branch offices of the Underwriters. Purchase orders must be of at least 50 Offer Shares and limitsteps must be denominated in full euro amounts or euro cent figures of 25, 50, or 75 cents. Multiple purchase orders arepermitted.

The Company and the Existing Shareholders reserve the right, together with the Joint Bookrunners, to increase ordecrease the total number of Offer Shares, to increase or decrease the upper limit and/or the lower limit of the Price Rangeand/or to extend or shorten the Offer Period. Changes in the number of Offer Shares, changes to the Price Range or theextension or shortening of the Offer Period will not invalidate any offers to purchase that have already been submitted. If suchchange requires the publication of a supplement to this Prospectus, investors who submitted purchase orders before the

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supplement is published shall have the right, under the German Securities Prospectus Act (Wertpapierprospektgesetz), towithdraw these offers to purchase within two business days of the publication of the supplement. Instead of withdrawing theoffers to purchase placed prior to the publication of the supplement, investors may change their orders or place new limited orunlimited offers to purchase within two business days of the publication of the supplement. To the extent that the terms of theoffering are changed, such change will be published by means of electronic media (such as Thomson Reuters or Bloomberg)and, if required by the German Securities Trading Act (Wertpapierhandelsgesetz) or the German Securities Prospectus Act(Wertpapierprospektgesetz), as an ad hoc release via an electronic information system and on the Company’s website and as asupplement to this Prospectus. Investors who have submitted offers to purchase will not be notified individually. Undercertain conditions, the Joint Global Coordinators, on behalf of the Underwriters, may terminate the underwriting agreementrelating to the offering entered into with the Company and the Existing Shareholders on October 14, 2014 (the“Underwriting Agreement”), even after commencement of trading (Aufnahme des Handels) of the Company’s shares on theregulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse), see“Underwriting—Termination/Indemnification”.

After the expiration of the Offer Period, the offer price and the final number of the Offer Shares placed in theoffering will be set jointly by the Company, the Existing Shareholders and the Joint Bookrunners. The price will be set on thebasis of the purchase orders submitted by investors that have been collated in the order book prepared during the bookbuildingprocess. Price-setting is expected to take place on or about October 23, 2014. These orders will be evaluated according to theprices offered and the investment horizons of the respective investors. This method of setting the number of shares that will beplaced at the offer price is, in principle, aimed at maximizing proceeds. Consideration will also be given to whether the offerprice and the number of shares to be placed allow for the reasonable expectation that the share price will demonstrate steadyperformance in the secondary market given the demand for the Company’s shares noted in the order book. Attention will bepaid not only to the prices offered by investors and the number of investors wanting shares at a particular price, but also to thecomposition of the group of shareholders in the Company that would result at a given price, and expected investor behavior.For further information regarding allotment criteria, see “—Allotment Criteria”. Neither the Company nor the ExistingShareholders nor the Underwriters will charge expenses to investors. Investors will have to bear customary transaction andhandling fees charged by their account-keeping financial institution.

After the offer price has been set, the Offer Shares will be allotted to investors on the basis of the offers to purchasethen available. The offer price and the final number of Offer Shares and the final number of New Shares placed in the offering(that is, the result of the offering) are expected to be published on or about October 23, 2014 by means of an ad hoc releaseand via an electronic information system and on the Company’s website.

Investors who have placed orders to purchase Offer Shares with one of the Underwriters can obtain informationfrom that Underwriter about the offer price and the number of Offer Shares allotted to them on the business day following thesetting of the offer price. As commencement of trading (Aufnahme des Handels) of the Company’s shares on the regulatedmarket segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) is expected to take placenot earlier than on the second business day following the setting of the offer price, investors may not have obtainedinformation about the number of Offer Shares allotted to them at the time of commencement of trading. Book-entry deliveryof the allotted Offer Shares against payment of the offer price is expected to take place one business day after commencementof stock exchange trading. Should the placement volume prove insufficient to satisfy all orders placed at the offer price, theUnderwriters reserve the right to reject orders, or to accept them only in part.

Expected Timetable for the Offering

The following is the expected timetable of the offering, which may be extended or shortened:

October 14, 2014 . . . . . . . . . . . . Approval of this Prospectus by the German Federal Financial Supervisory Authority(Bundesanstalt für Finanzdienstleistungsaufsicht, the “BaFin”) and publication of theapproved Prospectus on the Company’s website.

Notification of the approved Prospectus to the Luxembourg Commission for theSupervision of the Financial Sector (Commission de Surveillance du Secteur Financier).

October 15, 2014 . . . . . . . . . . . . Commencement of the Offer Period.

Application for listing filed with the Frankfurt Stock Exchange (FrankfurterWertpapierbörse).

October 22, 2014 . . . . . . . . . . . . Resolution on the IPO Capital Increase for the issuance of the New Shares.

October 23, 2014 . . . . . . . . . . . . Registration of the IPO Capital Increase with the commercial register.

Listing approval issued by the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse).

Close of the Offer Period for retail investors (natural persons) at 12:00 noon (CentralEuropean Summer Time) and for institutional investors at 16:00 (Central EuropeanSummer Time).

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Determination of the offer price and allotment; publication of the offer price in the formof an ad hoc release, on an electronic information system and subsequently on thecompany’s website.

October 24, 2014 . . . . . . . . . . . . First day of trading.

October 28, 2014 . . . . . . . . . . . . Book-entry delivery of the Offer Shares against payment of the offer price (closing).

This Prospectus will be published on the Company’s website at www.tlg.de after approval by the BaFin onOctober 14, 2014. In addition, free copies of the printed Prospectus will be available during regular business hours at theCompany’s offices at Hausvogteiplatz 12, 10117 Berlin, Germany (tel. +49 (0) 30-2470-50), at the offices of J.P. Morgan inFrankfurt, Junghofstraße 14, 60311 Frankfurt am Main, Germany and at the offices of UBS, Frankfurt, BockenheimerLandstraße 2-4, 60306 Frankfurt, Germany.

Information on the Shares

Voting Rights

Each share in the Company carries one vote at the Company’s shareholders’ meeting. There are no restrictions onvoting rights.

Dividend and Liquidation Rights

The Offer Shares carry full dividend rights from January 1, 2014. In the event of the Company’s liquidation, anyproceeds will be distributed to the holders of the Company’s shares in proportion to their interest in the Company’s sharecapital.

Form and Certification of the Shares

All of the Company’s shares are bearer shares with no par value. The Company’s current share capital in the amountof €52,000,000.00 is represented by one global share certificate, which will be deposited with Clearstream BankingAktiengesellschaft, Mergenthalerallee 61, 65760 Eschborn, Germany (“Clearstream”). The New Shares will be representedby a second global share certificate, which will also be deposited with Clearstream.

Section 5 (2) of the Articles of Association excludes the shareholders’ right to receive individual share certificatesto the extent permitted by law and unless mandated by the rules of a stock exchange to which the shares are admitted. TheCompany’s management board (the “Management Board”), in consultation with the Company’s supervisory board (the“Supervisory Board”), determines pursuant to Section 5 (3) of the Articles of Association the form of the share certificates.The Offer Shares provide holders thereof with the same rights as all of the other shares of the Company and do not provideany additional rights or advantages.

Delivery and Settlement

The delivery of the Offer Shares against payment of the offer price is expected to take place on October 28, 2014.The Offer Shares will be made available to the shareholders as co-ownership interests in the global share certificate.

At the shareholder’s option, the Offer Shares purchased in the offering will be credited either to a securities depositaccount maintained by a German bank with Clearstream or to a securities account of a participant in Euroclear BankS.A./N.V., 1, Boulevard Roi Albert II, 1120, Brussels, Belgium, as the operator of the Euroclear system, or to ClearstreamBanking S.A., 42 Avenue JF Kennedy, 1855 Luxembourg, Luxembourg, for the account of such shareholder.

ISIN/WKN/Common Code/Ticker Symbol

International Securities Identification Number (ISIN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DE000A12B8Z4German Securities Code (Wertpapierkennnummer, WKN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12B8ZCommon Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111597880Ticker Symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TLG

Transferability of the Shares; Lock-up

The Company’s shares are freely transferable in accordance with the legal requirements for bearer shares. Exceptfor the restrictions set forth in “—Lock-up Agreement, Limitations on Disposal” and “Underwriting—Selling Restrictions”,there are no prohibitions on disposals or restrictions with respect to the transferability of the Company’s shares.

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Existing Shareholders

Immediately prior to the offering, East AcquiCo, holds 94.9% of the Company’s outstanding share capital andDelpheast holds 5.1% of the Company’s outstanding share capital. For a discussion of the ownership structure of the ExistingShareholders, see “Information on the Existing Shareholders—Shareholder Structure (Before and After the Offering)”.

Allotment Criteria

The allotment of Offer Shares to retail investors (natural persons) and institutional investors will be decided afterconsultation with the Joint Bookrunners. The decision ultimately rests with the Company and the Existing Shareholders.Allotments will be made on the basis of the quality of the individual investors and individual orders and other importantallotment criteria to be determined after consultation with the Joint Bookrunners. The allocation to retail investors (naturalpersons) will be compatible with the “Principles for the Allotment of Share Issues to Private Investors” published by theCommission of Stock Exchange Experts (Börsensachverständigenkommission). “Qualified investors” (qualifizierte Anleger)under the German Securities Prospectus Act (Wertpapierprospektgesetz), as well as “professional clients” (professionelleKunden) and “suitable counterparties” (geeignete Gegenparteien) as defined under the German Securities Trading Act(Wertpapierhandelsgesetz), are not viewed as “private investors” (Privatanleger) within the meaning of the allocation rules.

Stabilization Measures, Over-Allotments and Greenshoe Option

In connection with the placement of the Offer Shares, J.P. Morgan or its affiliates, acting for the account of theUnderwriters, will act as the stabilization manager and may, as stabilization manager, and acting in accordance with legalrequirements (Section 20a (3) of the German Securities Trading Act (Wertpapierhandelsgesetz) in conjunction withCommission Regulation (EC) No. 2273/2003 of December 22, 2003), make Over-Allotments and take stabilization measuresto support the market price of the Company’s shares and thereby counteract any selling pressure.

The stabilization manager is under no obligation to take any stabilization measures. Therefore, no assurance can beprovided that any stabilization measures will be taken. Where stabilization measures are taken, these may be terminated at anytime without notice. Such measures may be taken from the date the shares of the Company are listed on the regulated marketof the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and must be terminated no later than 30 calendar days afterthis date (the “Stabilization Period”).

These measures may result in the market price of the Company’s shares being higher than would otherwise havebeen the case. Moreover, the market price may temporarily be at an unsustainable level.

Under the possible stabilization measures, investors may, in addition to the Base Shares, be allocated up to3,350,000 Over-Allotment Shares as part of the allocation of the shares to be placed (“Over-Allotment”). For the purpose ofa possible Over-Allotment, the stabilization manager, for the account of the Underwriters, will be provided with up to3,350,000 Over-Allotment Shares in the form of a securities loan; this number of Over-Allotment Shares will not exceed 10%of the Base Shares. In addition, East AcquiCo will grant the Underwriters an option to acquire up to shares 3,350,000 of theCompany at the offer price less agreed commissions (the “Greenshoe Option”). This option will terminate 30 calendar daysafter the commencement of the stock exchange trading of the Company’s shares.

The stabilization manager, for the account of the Underwriters, is entitled to exercise the Greenshoe Option to theextent Over-Allotments were initially made; the amount of shares is to be reduced by the number of shares held by thestabilization manager as of the date on which the Greenshoe Option is exercised and that were acquired by the stabilizationmanager in the context of stabilization measures.

Once the Stabilization Period has ended, an announcement will be made within one week in various media outletsdistributed across the entire European Economic Area as to whether stabilization measures were taken, when pricestabilization started and finished, and the price range within which stabilization measures were taken; the latter will be madeknown for each occasion on which price stabilization measures were taken. Exercise of the Greenshoe Option, the timing ofits exercise and the number and type of shares concerned will also be announced promptly in the same manner.

Lock-up Agreement, Limitations on Disposal

In the Underwriting Agreement, the Company agreed with each Underwriter that, during the period commencing onOctober 14, 2014 and ending six months after the first day of trading of the Company’s shares on the Frankfurt StockExchange (currently expected to take place on October 24, 2014), to the extent legally permissible, without the prior writtenconsent of the Joint Global Coordinators, which may not be unreasonably withheld or delayed, the Company, or itsmanagement board or its supervisory board will not, and will not agree to:

• cause or approve, directly or indirectly, the announcement, execution or implementation of any increase in theshare capital of the Company or a direct or indirect placement of shares of the Company; or

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• submit a proposal for a capital increase to any shareholders’ meeting for resolution; or

• announce to issue, effect or submit a proposal for the issuance of any securities convertible into shares of theCompany, with option rights for shares of the Company; or

• enter into a transaction or perform any action economically similar to those described in the bullet pointsabove.

The Company may, however, (i) issue or sell any Shares or other securities to employees and members of executivebodies of the Company or its Subsidiaries under management participation plans and (ii) pursue any corporate actionsundertaken by the Company for purposes of the entering into any joint venture or the acquisition of any companies, providedthat the parties to the joint venture or acquiring entity to which such shares will be issued agree to comply with the samerestrictions on the disposal of the shares vis-à-vis the Underwriters that apply to the Company.

For the period commencing on October 14, 2014 until the date which falls six months after the first day of trading ofthe Company’s shares on the Frankfurt Stock Exchange (currently expected to take place on October 24, 2014), East AcquiCoundertook to the Joint Global Coordinators, not to:

• offer, pledge, allot, distribute, sell, contract to sell, sell any option or contract to purchase, purchase any optionto sell, grant any option, right or warrant to purchase, transfer or otherwise dispose of, directly or indirectly anyshares of the Company other than the shares of the Company held by it as of October 14, 2014 (the“Restricted Shares”), including, but not limited to, the issuance or sale of any securities exchangeable intoshares of the Company;

• cause or approve, directly or indirectly, the announcement, execution or implementation of any increase in theshare capital of the Company or a direct or indirect placement of shares of the Company (other than as alreadydisclosed in this Prospectus);

• propose, directly or indirectly, any increase in the share capital of the Company to any shareholders’ meetingfor resolution, or vote in favor of such a proposed capital increase (other than as already disclosed in thisProspectus);

• cause or approve, directly or indirectly, the announcement, execution or proposal of any issuance of financialinstruments constituting options or warrants convertible into shares of the Company; or

• enter into a transaction or perform any action economically similar to those described above, in particular enterinto any swap or other arrangement that transfers to another, in whole or in part, the economic risk ofownership of Restricted Shares, whether any such transaction is to be settled by delivery of Restricted Shares,in cash or otherwise,

in each case without the prior written consent of the Joint Global Coordinators which consent may not beunreasonably withheld or delayed. The foregoing shall not apply to (i) transfers to affiliates of East AcquiCo (ii) futurepledges granted to one or more of the Joint Global Coordinators or their affiliates having been agreed by the Joint GlobalCoordinators and (iii) any transfers of shares to one or more of the Joint Global Coordinators or their affiliates pursuant toenforcement of any pledge entered into in accordance with (ii), provided in each case that such transferee(s) agree to be boundby the same lock-up undertaking.

Admission to the Frankfurt Stock Exchange and Commencement of Trading

The Company expects to apply for admission of its shares to trading on the regulated market segment (regulierterMarkt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and, simultaneously, to the sub-segment thereof withadditional post-admission obligations (Prime Standard) on or about October 15, 2014. The listing approval is expected to beannounced on October 23, 2014. Trading on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) is currentlyexpected to commence on October 24, 2014.

Designated Sponsors

Both J.P. Morgan and UBS have agreed to assume the function of a designated sponsor of the Company’s sharestraded on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) for a period of at least two years. Pursuant to thedesignated sponsor agreement expected to be concluded among each of the designated sponsors and the Company, thedesignated sponsors will, among other things, place limited buy and sell orders for the Company’s shares in the electronictrading system of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) during regular trading hours. This is intendedto achieve greater liquidity in the market for the Company’s shares.

Interests of Parties Participating in the Offering

In connection with the offering and the admission to trading of the Company’s shares, the Underwriters haveformed a contractual relationship with the Company and the Existing Shareholders.

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The Underwriters are acting for the Company and the Existing Shareholders on the offering and coordinating thestructuring and execution of the offering. In addition, both J.P. Morgan and UBS have been appointed to act as designatedsponsors for the Company’s shares and COMMERZBANK has been appointed to act as paying agent. Upon successfulimplementation of the offering, the Underwriters will receive a commission.

The Existing Shareholders will receive the proceeds of the Existing Shares sold in the offering. East AcquiCo willreceive the proceeds of the shares from the exercise of the Greenshoe Option, if any. Assuming full placement of all ExistingShares and Over-Allotment Shares at the mid-point of the Price Range and full exercise of the Greenshoe Option, and afterdeducting fees and expenses to be paid by the Existing Shareholders in connection with the offering, the proceeds to theExisting Shareholders from the offering would amount to approximately €322.0 million, or 74.8% of the total net proceedsfrom the offering (see “Proceeds of the Offering and Costs of the Offering and Listing”). Of these proceeds to the ExistingShareholders, approximately 90.4% would accrue to the benefit of East AcquiCo and approximately 9.6% would accrue to thebenefit of Delpheast (see “Information on the Existing Shareholders”).

Some of the Underwriters or their affiliates have, and may from time to time in the future continue to have, businessrelations with TLG and the Existing Shareholders (including lending activities) or may perform services for TLG or theExisting Shareholders in the ordinary course of business.

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PROCEEDS OF THE OFFERING AND COSTS OF THE OFFERING AND LISTING

At the mid-point of the Price Range, gross proceeds from the offering are expected to total approximately€451.4 million (assuming placement of all Offer Shares). Assuming expenses related to the offering and commissions payableto the Underwriters in a total amount of approximately €20.9 million, the total net proceeds from the offering would amountto approximately €430.5 million at the mid-point of the Price Range.

The Company will receive only the proceeds of the offering resulting from the sale of New Shares. The Companywill not receive any proceeds from the sale of Existing Shares and the shares from the exercise of the Greenshoe Option, ifany.

Assuming that the maximum number of New Shares (9,302,326 shares) is placed, the Company will, at the low end,mid-point and high end of the Price Range, receive gross proceeds of approximately €100.0 million, €114.0 million and€127.9 million, respectively, and estimated net proceeds of approximately €94.8 million, €108.5 million and €122.0 million,respectively. However, the Company reserves the right to only allocate such number of New Shares as to reach its minimumgross proceeds target of €100 million.

At the low end, mid-point and high end of the Price Range, gross proceeds to the Existing Shareholders (assumingplacement of the maximum number of Existing Shares and assuming full exercise of the Greenshoe Option, i.e. in total27,547,674 shares) will amount to approximately €296.1 million, €337.4 million and €378.8 million, respectively, andestimated net proceeds of approximately €281.9 million, €322.0 million and €362.3 million, respectively.

The costs of the Company related to the offering of the Offer Shares and listing of the Company’s entire sharecapital are expected to total approximately €8.5 million (excluding underwriting and placement commissions payable to theUnderwriters); thereof approximately €6.1 million will be borne by the Existing Shareholders, which means that the Companywill ultimately bear approximately €2.4 million thereof. The Existing Shareholders will bear the offering and listing relatedcosts of the Company in the ratio of Existing Shares to Base Shares.

Assuming an offer price at the low end, mid-point and high end of the Price Range and that the maximum numberof Offer Shares is placed (and the Greenshoe Option has been fully exercised) and assuming further payment in full of thediscretionary fee of up to €5.0 million, €5.6 million and €6.3 million, at the low end, mid-point and high end of the PriceRange, respectively; the commission payable to the Underwriters will amount to €10.9 million, €12.4 million and€13.9 million, respectively. Thereof, €2.8 million, €3.1 million and €3.5 million are attributable to the placement of the NewShares and will be borne by the Company; of the remaining €8.1 million, €9.3 million and €10.4 million, respectively,€7.2 million, €8.2 million and €9.1 million, respectively, are attributable to the placement of the Existing Shares and willdirectly be borne by the Existing Shareholders and €1.0 million, €1.1 million and €1.3 million, respectively, are attributable tothe placement of the Over-Allotment Shares and will directly be borne by East AcquiCo.

Neither the Company nor the Existing Shareholders nor the Underwriters will charge expenses to investors.Investors will have to bear customary transaction and handling fees charged by their account-keeping financial institution.

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REASONS FOR THE OFFERING AND LISTING

The Company intends to list its shares on the regulated market segment (regulierter Markt) of the Frankfurt StockExchange (Frankfurter Wertpapierbörse) and, simultaneously, on the sub-segment thereof with additional post-admissionobligations (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) to get access to the capitalmarkets. The Company also intends to pursue the offering to receive the proceeds from the placement of the New Shares.

The Company intends to use the net proceeds of the offering of the New Shares, together with additional debtfinancing, to fund future acquisitions. Such acquisitions could include a retail property in Berlin with a potential acquisitionprice (including ancillary acquisition costs) of approximately €35 million, for which it is in negotiations with the seller, anoffice property in Rostock with a potential acquisition price (including ancillary acquisition costs) of approximately€16 million, for which it is conducting due diligence, and one or more of the other office and retail properties with anaggregate fair value of €20 million and €140 million, respectively, which it is currently reviewing in more detail, or otherproperties. The balance of the proceeds, if any, will be used for general corporate purposes. For more information on theCompany’s planned acquisitions, see “Management’s Discussion and Analysis of Net Assets, Financial Condition and Resultsof Operations—Investments—Investments since June 30, 2014 and Future Investments”.

Assuming that the maximum number of New Shares (9,302,326 shares) is placed, the net proceeds to the Companyare expected to amount to €94.8 million at the low end of the Price Range, to €108.5 million at the mid-point of the PriceRange and to €122.0 million at the high end of the Price Range.

Assuming that the maximum number of Existing Shares is placed and the Greenshoe Option is exercised in full(which means 27,547,674 shares from the holdings of the Existing Shareholders will be placed), net proceeds to the ExistingShareholders at the low end of the Price Range are expected to amount to €281.9 million, at the mid-point of the Price Rangeare expected to amount to €322.0 million and at the high end of the Price Range are expected to amount to €362.3 million.The Existing Shareholders will offer their shares to partially divest their stake in the Company and to ensure a sufficientfreefloat and trading liquidity in the Company’s shares.

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DIVIDEND POLICY; RESULTS AND DIVIDENDS PER SHARE; USE OF PROFITS

General Provisions Relating to Profit Allocation and Dividend Payments

The shareholders’ share of the Company’s profits is determined based on their respective interests in the Company’sshare capital. Being a German stock corporation (Aktiengesellschaft), the distribution of dividends for a given fiscal year, andthe amount and payment date thereof, are resolved by the shareholders’ meeting of the subsequent fiscal year either upon ajoint proposal by the Management Board and the Supervisory Board or upon the Management Board’s or the SupervisoryBoard’s proposal. The shareholders’ meeting must be held within the first eight months of each fiscal year.

Dividends may only be distributed from the distributable profit (Bilanzgewinn) of the Company. The distributableprofit is calculated based on the Company’s unconsolidated financial statements prepared in accordance with the accountingprinciples of German GAAP. Accounting principles set forth in German GAAP differ from IFRS in material respects.

When determining the distributable profit, the net income or loss for the fiscal year (Jahresüberschuss/-fehlbetrag)must be adjusted for profit/loss carry forwards (Gewinn-/Verlustvorträge) from the prior fiscal year and releases of orallocations to reserves. Certain reserves are required to be set up by law, and amounts mandatorily allocated to these reservesin the given fiscal year must be deducted when calculating the distributable profit. The Management Board must prepareunconsolidated financial statements (balance sheet, income statement and notes to the financial statements) and a managementreport for the previous fiscal year by the statutory deadline and present these to the Supervisory Board and the Company’sauditors immediately after preparation. At the same time, the Management Board must present to the Supervisory Board aproposal for the allocation of the Company’s distributable profit pursuant to Section 170 of the German Stock CorporationAct (Aktiengesetz). According to Section 171 of the German Stock Corporation Act (Aktiengesetz), the Supervisory Boardmust review the unconsolidated financial statements, the Management Board’s management report and the proposal for theallocation of the distributable profit and report to the shareholders’ meeting in writing on the results.

The shareholders’ meeting’s resolution on the allocation of the distributable profit requires a simple majority ofvotes to be passed. The shareholders’ meeting may also resolve that the dividends be distributed partially or entirely in kind,for example as a distribution of treasury shares if held by the Company at that time. Dividends resolved by the shareholders’meeting are due and payable immediately after the relevant shareholders’ meeting, unless provided otherwise in the dividendresolution, in compliance with the rules of the respective clearing system. Any dividends not claimed within the past threeyears become time-barred. Once the statute of limitations applies, the dividend payment claim passes to the Company. Sinceall of the Company’s dividend entitlements are evidenced by one global dividend coupon deposited with Clearstream,Clearstream transfers the dividends to the shareholders’ custodian banks for crediting to their accounts. German custodianbanks are under the same obligation to distribute the funds to their customers. Shareholders using a custodian bank locatedoutside Germany must inquire at their respective bank regarding the terms and conditions applicable in their case.Notifications of any distribution of dividends resolved upon are published in the German Federal Gazette (Bundesanzeiger)immediately after the shareholders’ meeting. To the extent dividends can be distributed by the Company in accordance withGerman GAAP and corresponding decisions are taken, there are no restrictions on shareholder rights to receive dividends.Generally, withholding tax (Kapitalertragsteuer) is withheld from dividends paid. For more information on the taxation ofdividends, see “Taxation in the Federal Republic of Germany—Taxation of Shareholders—Taxation of Dividend Income” and“Taxation in the Grand Duchy of Luxembourg—Luxembourg Taxation of Shares of a Non-Resident Company—WithholdingTaxes”.

Dividend Policy and Earnings per Share

The Company intends to pay dividends in the amount of 70-80% of its annual FFO, provided that TLG’s businessperformance remains at least stable. Given that the IPO is scheduled to be completed just two months prior to the end of thecurrent fiscal year, the Company currently plans to pay a dividend in the total amount of €10-15 million for the fiscal year2014.

On January 2, 2013, the Company as the controlled entity and East AcquiCo as the controlling entity entered into adomination agreement (Beherrschungsvertrag) effective as of January 1, 2013 (the “Domination Agreement”). Under theDomination Agreement, the Company was required to carry out its business at the direction of East AcquiCo in accordancewith Section 308 of the German Stock Corporation Act (Aktiengesetz). East AcquiCo was required to cover all losses incurredby the Company and not covered by retained income during the duration of the Domination Agreement in accordance withSection 302 of the German Stock Corporation Act (Aktiengesetz). Following the transformation of the Company into a stockcorporation (Aktiengesellschaft) the Domination Agreement was terminated on September 18, 2014.

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The following table shows the total and per share net income for the fiscal years 2013, 2012 and 2011 attributable tothe Company’s shareholders, as shown in the Company’s audited consolidated financial statements prepared in accordancewith IFRS and the additional requirements of German commercial law pursuant to Section 315a (1) of the GermanCommercial Code (Handelsgesetzbuch (HGB)) for the fiscal years 2013 and 2012 and in accordance with German GAAP forthe fiscal year 2011:

2013 2012 2011IFRS German GAAP

Consolidated net income for the period attributable to the shareholders of the Company(audited and in € million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.1 76.3 18.7

Consolidated net income for the period attributable to the shareholders of the Company pershare (unaudited and in €)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.91 1.47 0.36

(1) The per share figures are calculated assuming that 52,000,000 shares – the number of shares issued and outstanding as of the date of thisProspectus but prior to the issuance of the New Shares – were issued and outstanding during the entire fiscal years 2013, 2012 and 2011.

The following distributions of profits or reserves were made to shareholders of the Company during the fiscal yearsended December 31, 2011, 2012 and 2013 and the six-month period ended June 30, 2014:

• during the fiscal year ended December 31, 2011, a profit distribution in the amount of approximately€73.7 million was recognized (cash payments to shareholders of €20.0 million were made during the fiscal year2011 and of approximately €53.7 million were made during the fiscal year 2012);

• during the fiscal year ended December 31, 2012, a profit distribution in the amount of approximately€18.4 million from current net income and distributions from capital reserves in the amount of approximately€11.6 million were made leading to total profit distributions in the amount of €30 million;

• during the fiscal year ended December 31, 2013, the Company made distributions in the amount ofapproximately €325.2 million by assuming the Acquisition Loan (€199.8 million from capital reserves,€96.4 million from revenue reserves and €29.0 million by way of a distribution of retained earnings and currentnet income); and

• during the six-month period ended June 30, 2014, retained earnings in the amount of approximately€73.6 million and withdrawals from capital reserves (approximately €158.5 million) and retained earnings(approximately €0.8 million) were distributed, leading to total distributions to the Existing Shareholders in theamount of €233.0 million.

28

CAPITALIZATION AND INDEBTEDNESS; STATEMENT ON WORKING CAPITAL

The following tables set forth the consolidated capitalization and indebtedness of TLG as of July 31, 2014 and asadjusted for the completion of the offering as if the offering had taken place as of July 31, 2014 and not considering any taxeffects. Investors should read these tables in conjunction with “Selected Consolidated Financial Information and CompanyInformation,” “Management’s Discussion and Analysis of Net Assets, Financial Condition and Results of Operations” and thecondensed interim consolidated financial statements as of and for the six-month period ended June 30, 2014, including thenotes thereto, which are included in this Prospectus beginning on page F-1.

Capitalization

As of July 31,2014

As adjusted forthe completion of

the offering*(in € million) (in € million)(unaudited) (unaudited)

Total current debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.6 139.6of which secured(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.9 35.9of which guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —of which unguaranteed/unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.7 103.7

Total non-current debt(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805.4 805.4of which secured(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689.6 689.6of which guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —of which unguaranteed/unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.8 115.8

Shareholder’s equity(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623.3 731.8Share capital(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 61.3Legal reserves(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252.8 352.0Other reserves(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318.5 318.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,568.3 1,676.8

* It is assumed that all New Shares are fully placed at the mid-point of the Price Range and generate net proceeds of €108.5 million as ofJuly 31, 2014.

However, the Company reserves the right to only allocate such number of New Shares as to reach its minimum gross proceeds target of€100 million, in which case the net proceeds of the Company would be €13.7 million lower than in case of placing all New Shares at themid-point of the Price Range. In this case, total equity attributable to the Company’s would be correspondingly lower.

(1) Referred to as current liabilities in the Company’s IFRS consolidated financial statements.

(2) Security mainly comprises land charges and shares in affiliates.

(3) Referred to as non-current liabilities in the Company’s IFRS consolidated financial statements.

(4) Referred to as equity in the Company’s IFRS consolidated financial statements.

(5) Referred to as subscribed capital in the Company’s IFRS consolidated financial statements. As adjusted as of July 31, 2014 results fromthe issuance of 9,302,326 New Shares at a nominal amount of €1.00 per share.

(6) Referred to as capital reserves in the Company’s IFRS consolidated financial statements. As adjusted as of July 31, 2014 results from thereceipt of net proceeds amounting to €108.5 million less €9.3 million included in subscribed capital.

(7) Other reserves include retained earnings and other comprehensive income (OCI).

Indebtedness

As of July 31,2014

As adjusted forthe completion of

the offering*(in € million) (in € million)(unaudited) (unaudited)

A. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1B. Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.0 162.5C. Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

D. Liquidity (A)+(B)+(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.1 162.6E. Current financial receivables(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 10.0

F. Current Bank debt(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.9 37.9G. Current portion of non-current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —H. Other current financial debt(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.6 12.6

I. Current financial debt (F)+(G)+(H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.5 50.5

J. Net current financial indebtedness (I)-(E)-(D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13.6) (122.1)K. Non-current Bank loans(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689.6 689.6L. Bonds issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —M. Other non-current loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

N. Non-current financial indebtedness (K)+(L)+(M) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689.6 689.6

O. Net financial indebtedness (J)+(N) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676.0 567.5

29

* It is assumed that all New Shares are fully placed at the mid-point of the Price Range and generated net proceeds of €108.5 million as ofJuly 31, 2014, resulting in a respective increase in cash equivalents on an adjusted basis.

However, the Company reserves the right to only allocate such number of New Shares as to reach its minimum gross proceeds target of€100 million, in which case the net proceeds of the Company would be €13.7 million lower than in case of placing all New Shares at themid-point of the Price Range. In this case, the amount initially held as cash equivalents would be correspondingly lower.

(1) Current financial receivables are comprised of trade receivables as referred to in the Company’s IFRS consolidated financial statements.

(2) Referred to as current liabilities due to financial institutions in the Company’s IFRS consolidated financial statements.

(3) Other current financial debt is referred to as trade payables in the Company’s IFRS consolidated financial statements.

(4) Referred to as non-current liabilities due to financial institutions in the Company’s IFRS consolidated financial statements.

As of July 31, 2014, TLG’s obligations from land charges amounted to €837.2 million. As of the same date, therewere no contingent liabilities under IFRS.

Statement on Working Capital

The Company is of the opinion that TLG is in a position to meet the payment obligations that become due within atleast the next twelve months from the date of this Prospectus.

30

DILUTION

Equity attributable to shareholders of the Company amounted to €621.5 million as of June 30, 2014, and wouldamount to €11.95 per share based on 52,000,000 outstanding shares of the Company immediately before the offering.

The dilutive effect of the offering is illustrated in the table below demonstrating the amount by which the offer priceat the low end, mid-point and high end of the Price Range exceeds the equity attributable to shareholders per share aftercompletion of the offering assuming the below-described steps of the offering had taken place on June 30, 2014. In thisrespect, the equity attributable to shareholders as of June 30, 2014 is adjusted for the effects of the offering, assuming (i) theexecution of the IPO Capital Increase in the maximum number of offered New Shares and (ii) an increase in the equityattributable to shareholders at the low end, mid-point and high end of the Price Range by €94.8 million, €108.5 million and€122.0 million, respectively. The assumed increase is based on the expected net proceeds not considering any tax effects. Theadjusted equity attributable to shareholders is expressed as a per share figure, assuming 61,302,326 outstanding shares of theCompany upon completion of the offering (this per share figure being referred to as the “Post-IPO Equity attributable toShareholders per Share”).

As of June 30, 2014Low End Mid-Point High End

Price per share (in €) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.75 12.25 13.75Equity attributable to shareholders per share (based on 52,000,000 outstanding shares of

the Company before the offering) (net book value)(1) (in €) . . . . . . . . . . . . . . . . . . . . . . . 11.95 11.95 11.95Post-IPO Equity attributable to Shareholders per Share (net book value)(1) (in €) . . . . . . . . 11.68 11.91 12.13Amount by which the price per share exceeds the Post-IPO Equity attributable to

Shareholders per Share (immediate dilution per share) (in €) . . . . . . . . . . . . . . . . . . . . . . (0.93) 0.34 1.62Immediate dilution (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8.7) 2.8 11.8

(1) Net book value refers to the sum of the Company’s total assets minus the sum of its total liabilities and non-controlling interest.

Each of the New Shares will have the same voting rights as the Company’s existing shares. Prior to the offering, theExisting Shareholders held 100% of the voting rights. Upon completion of the offering (including exercise of the GreenshoeOption in full), the voting rights held by the Existing Shareholders would amount to 39.9%.

31

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND COMPANY INFORMATION

The financial information contained in the following tables is taken or derived from the audited consolidatedfinancial statements of the Company as of and for the fiscal years ended December 31, 2011, 2012 and 2013, the unauditedcondensed interim consolidated financial statements of the Company as of and for the six-month period ended June 30, 2014and the Company’s internal reporting system. The consolidated financial statements of the Company as of and for the fiscalyear ended December 31, 2013 were the Company’s first financial statements prepared in accordance with IFRS and theadditional requirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code(Handelsgesetzbuch (HGB)). The consolidated financial statements of the Company as of and for the fiscal years endedDecember 31, 2011 and 2012 have been prepared in accordance with German GAAP. IFRS and German GAAP differ inmaterial ways and are thus not comparable (e.g., property held for generating rental income or for capital appreciation isclassified as investment property in accordance with IAS 40 and measured at fair value under IFRS while it is measured atcost less depreciation under German GAAP). Until December 31, 2011, TLG’s portfolio consisted of commercial andresidential properties. With effect from January 1, 2012, TLG’s residential portfolio was spun-off to TLG WOHNEN GmbH, anew company specifically established for this purpose, whose sole shareholder was the Federal Republic of Germany. Due tothis spin-off, the Company’s consolidated financial statements prepared for the fiscal years ended December 31, 2011 and2012 under German GAAP are not fully comparable given that the residential portfolio represented a significant share ofTLG’s overall portfolio and business in 2011. The unaudited condensed interim consolidated financial statements of theCompany as of and for the six-month period ended June 30, 2014 have been prepared in accordance with IFRS on interimfinancial reporting (IAS 34). Additional information included in this Prospectus has been taken or derived from the auditedunconsolidated financial statements of the Company for the fiscal year ended December 31, 2013, which were prepared inaccordance with German GAAP. Due to the abovementioned switch of the accounting principles for the consolidatedfinancial statements from German GAAP to IFRS, for purposes of the comparison of consolidated financial data as of and forthe fiscal years ended December 31, 2011 and December 31, 2012, consolidated financial data based on German GAAP areused, whereas for a comparison of consolidated financial data as of and for the fiscal years ended December 31, 2012 andDecember 31, 2013 as well as the six month-periods ended June 30, 2013 and June 30, 2014, consolidated financial databased on IFRS are used.

E&Y has audited the Company’s consolidated financial statements as of and for the fiscal years endedDecember 31, 2011, 2012 and 2013, and the unconsolidated financial statements for the fiscal year ended December 31,2013, and issued in each case an unqualified auditor’s report thereon.

Where financial data in the following tables are labelled “audited”, this means that it has been taken from theaudited financial statements mentioned above. The label “unaudited” is used in the following tables to indicate financial datathat have not been taken from the audited financial statements mentioned above but were taken either from the Company’sunaudited condensed interim consolidated financial statements or the Company’s internal reporting system, or calculatedfigures from the abovementioned sources.

All of the financial data presented in the text and tables below are shown in millions of euro (in € million), except asotherwise stated. Certain financial data (including percentages) in the following tables have been rounded according toestablished commercial standards. As a result, the aggregate amounts (sum totals or sub-totals or differences or if numbersare put in relation) in the following tables may not correspond in all cases to the aggregated amounts of the underlying(unrounded) figures appearing elsewhere in this Prospectus. Furthermore, in those tables, these rounded figures may not addup exactly to the totals contained in those tables. Financial information presented in parentheses denotes the negative of suchnumber presented. In respect of financial data set out in this Prospectus, a dash (“—”) signifies that the relevant figure is notavailable, while a zero (“0.0”) signifies that the relevant figure is available but has been rounded to zero.

The following selected financial information should be read together with the section “Management’s Discussionand Analysis of Net Assets, Financial Condition and Results of Operations”, the consolidated financial statements includingthe related notes contained in this Prospectus and additional financial information contained elsewhere in this Prospectus.

32

Selected Consolidated Financial Data Prepared in Accordance with IFRS

Consolidated Statement of Comprehensive Income Data



June 30,2012 2013 2013 2014


Net operating income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.1 106.3 52.7 50.0Income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138.8 141.3 69.6 66.9Expenses related to letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41.6) (35.1) (16.9) (16.9)

Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . 53.1 72.2 34.4 51.3Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . (0.0) 0.5 0.2 0.5Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . 27.4 7.8 5.5 2.3

Proceeds from real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . . 77.5 21.4 14.3 5.9Book value of real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . . . (50.2) (13.6) (8.8) (3.6)

Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 18.7 3.9 3.6Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.9) (23.4) (15.4) (7.7)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) (1.5) (0.7) (0.7)Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8.3) (7.8) (2.3) (2.4)

Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.4 172.8 78.3 96.9Income from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 2.1 2.1 0.0Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.5) (36.0) (18.1) (12.1)Gain/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . (10.0) 6.9 5.4 (2.0)

Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.8 146.4 68.1 83.2Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63.5) (47.3) (22.0) (25.8)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3 99.1 46.1 57.4Other comprehensive income (OCI)

thereof non-recyclingActuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) (0.0) — —

thereof recyclingHedge accounting reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.1) — (4.7)

Total comprehensive income for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.3 99.0 46.1 52.7

33

Consolidated Statement of Financial Position Data

As ofDecember 31, As of June 30,

2012 2013 2014(audited) (unaudited)

(in € million) (in € million)Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,615.2 1,448.1 1,456.6

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511.7 1,414.7 1,423.0Advance payments on investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.7 2.5Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4 17.8 16.4Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 0.9 0.7Investment in joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.1 0.0 0.0Other non-current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1 0.1Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 8.4 8.4Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 3.5 5.4

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.2 187.6 99.3Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 13.4 13.3Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 11.6 13.7Receivables from income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.2 0.3Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0Other current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0 5.0 3.2Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 0.7 2.9Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.5 138.9 24.5Assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 17.8 41.6

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,719.4 1,635.7 1,555.9

Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,006.7 801.0 621.5Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 52.0 52.0Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151.5 410.2 252.5Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804.3 339.9 322.9Other comprehensive income (OCI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) (1.2) (5.9)

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712.6 834.7 934.4Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508.6 630.2 787.2

Non-current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . 392.9 513.0 672.4Pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 6.9 6.8Non-current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.3 18.8 8.7Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 3.4 2.9Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.3 88.1 96.3

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204.0 204.4 147.3Current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.2 113.2 55.6Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.8 14.6 12.2Other current provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 16.2 12.3Tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7 44.3 57.3Current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 0.0 0.0Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.1 16.1 9.9

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,719.4 1,635.7 1,555.9

Consolidated Cash Flow Statement Data



June 30,2012 2013 2013 2014


Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162.9 76.1 26.5 33.4Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.7) (57.0) (33.9) (35.6)Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.7) (5.9) (0.6) (4.5)

Net cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.3 13.8 (7.6) (6.3)Net cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79.0) 220.9 55.1 20.3Net cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28.4) (156.3) (37.1) (128.4)

Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.9 78.4 10.5 (114.4)

34

Additional Key Performance Indicators

The Company believes that the key performance indicators described in this section constitute the most importantindicators for measuring the operating and financial performance of TLG’s business.

TLG expects the key performance indicators rental income, net operating income from letting activities, EBITDA,Adjusted EBITDA, FFO, AFFO, Equity-Ratio, Net LTV-Ratio, interest coverage ratio, EPRA NAV and EPRA Vacancy Rate(the “Key Performance Indicators”) to be of use for potential investors. TLG believes that the Key Performance Indicatorsare useful in evaluating TLG’s operating performance, the net value of TLG’s portfolio, the level of its indebtedness and ofcash flows generated by TLG’s business, because a number of companies, in particular companies in the real estate sector,also publish these figures as key performance indicators.

However, the Key Performance Indicators are not recognized as measures under IFRS and should not be consideredas substitutes for figures on net assets, results before taxes, net earnings, cash flow from operating activities or other data fromthe consolidated statement of comprehensive income, the consolidated cash flow statement or the consolidated statement offinancial position, as determined in accordance with IFRS, or as measures of profitability or liquidity. The Key PerformanceIndicators neither necessarily indicate whether cash flow will be sufficient or available for TLG’s cash requirements, norwhether any such measure is indicative of TLG’s historical operating results. The Key Performance Indicators are not meantto be indicative of future results. Because not all companies calculate these Key Performance Indicators in the same way,TLG’s presentation of the Key Performance Indicators is not necessarily comparable with similarly-titled measures used byother companies.

Performance and Profitability

The following table provides information on TLG’s key performance and profitability measures:



June 30,2012 2013 2013 2014



Rental income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116.1 118.3 59.2 57.0Net operating income from letting activities(2) . . . . . . . . . . . . 97.1 106.3 52.7 50.0EBITDA(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.9 102.0 44.6 46.3Adjusted EBITDA(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.5 90.4 45.8 42.0FFO(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0FFO (per share and in €)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 0.89 0.47 0.50AFFO(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 40.4 22.5 23.8AFFO (per share and in €)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 0.78 0.43 0.46

(1) Rental income refers to income from letting activities without income from recharged utilities and other operating costs and incomefrom other goods and services as reflected in the consolidated statement of comprehensive income for the respective period. Audited forthe years ended December 31, 2012 and 2013.

(2) Net operating income from letting activities refers to income from letting activities less expenses related to letting activities, all asreflected in the consolidated statement of comprehensive income for the respective period. Audited for the years ended December 31,2012 and 2013.

(3) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is defined as consolidated net income or loss for the periodbefore income taxes, interest result, income from joint ventures, gain/loss from the remeasurement of derivatives, depreciation as well asbefore the result from the remeasurement of investment property, all as reflected in the Company’s respective consolidated financialstatements.

(4) “Adjusted EBITDA” is defined as EBITDA adjusted for result from the disposal of investment property, result from the disposal of realestate inventory and one-off items.

35

The following table shows the calculation of EBITDA and Adjusted EBITDA, each starting from EBIT:



June 30,2012 2013 2013 2014

(audited, unlessotherwise specified)

(in € million)

(unaudited)(in € million)

Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.4 172.8 78.3 96.9Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 1.5 0.7 0.7Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . . . . (53.1) (72.2) (34.4) (51.3)EBITDA (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.9 102.0 44.6 46.3Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 (0.5) (0.2) (0.5)Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.4) (7.8) (5.5) (2.3)

Severance Packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6.9 6.9 —Reversal of a provision for real estate transfer taxes in connection with the spin-off of

TLG WOHNEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5.4) — —Reversal of liabilities and provisions from the pass-through of purchase prices and

accrued interest (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (4.8) — —Reversal of a provision for subsidy repayment risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — (2.3)Share based payment obligation (bonus agreements) . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 0.8

Adjusted EBITDA (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.5 90.4 45.8 42.0

(5) Funds from operations post tax (excluding result from disposals) (“FFO”) is a measure of cash generation for real estate companies. TheCompany defines FFO as net income/loss for the period adjusted for the result from the disposal of investment property, the result fromthe disposal of real estate inventory, the result from the remeasurement of investment property, the gain/loss from the remeasurement ofderivatives and other effects, as well as deferred taxes and the tax effects from the result of the disposal of investment property and thedisposal of real estate inventory, as well as the tax effects from the settlement of interest rate swaps.

“AFFO” represents FFO less capex.

The following table shows the calculation of FFO and AFFO for the periods shown:



June 30,2012 2013 2013 2014



(in € million)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3 99.1 46.1 57.4Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . 0.0 (0.5) (0.2) (0.5)Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . (27.4) (7.8) (5.5) (2.3)Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . (53.1) (72.2) (34.4) (51.3)Gain/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . 10.0 (6.9) (5.4) 2.0Other effects(a) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15.4) (6.8) 4.2 (1.7)Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.0 9.8 5.5 8.3Correction of current income taxes due to lump sum calculation for interim

periods(b) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A 0.6 9.5Adjustment for tax effects from the result of the disposal of investment

property and the disposal of real estate inventory as well as tax effects fromthe settlement of interest rate swaps(c) (unaudited) . . . . . . . . . . . . . . . . . . . . 3.2 31.4 13.6 4.6

FFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0FFO (per share(d) and in €) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 0.89 0.47 0.50FFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0Capex(e) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12.6) (5.7) (1.9) (2.2)AFFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 40.4 22.5 23.8AFFO (per share(d) and in €) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 0.78 0.43 0.46

(a) Other effects include:

(i) Depreciation of owner-occupied properties (IAS 16) of €0.3 million for the fiscal year ended December 31, 2012,€0.3 million for the fiscal year ended December 31, 2013, €0.1 million for the six-month period ended June 30, 2013 and€0.1 million for the six-month period ended June 30, 2014;

(ii) Income from the service agreement with TAG Wohnen GmbH (formerly: TLG WOHNEN GmbH) that will expire onDecember 31, 2014 of €2.9 million for the fiscal year ended December 31, 2012, €1.6 million for the fiscal year endedDecember 31, 2013, €0.7 million for the six-month period ended June 30, 2013 and €0.3 million for the six-month periodended June 30, 2014;

(iii) Income from the 33% interest in the joint venture Altmarkt-Galerie Dresden KG (“AGD”), sold in 2013, of €12.9 million forthe fiscal year ended December 31, 2012, €2.1 million for the fiscal year ended December 31, 2013 and €2.1 million for thesix-month period ended June 30, 2013;

36

(iv) Personnel expenses for severance packages in connection with TLG’s reorganization in the amount of €6.9 million for thefiscal year ended December 31, 2013 and €6.9 million for the six-month period ended June 30, 2013 as well as share basedpayment expenses of €0.8 million for the six-month period ended June 30, 2014;

(v) Income from the reversal of provisions for real estate transfer tax, provided for in connection with the spin-off of TLG’sresidential properties to TLG WOHNEN GmbH in 2012, of €5.4 million for the fiscal year ended December 31, 2013; and

(vi) Income from the reversal of liabilities and provisions in connection with purchase price pass-through obligations and accruedinterest which resulted from TLG’s obligation to pass on parts of the purchase price received for the sale of properties whichwere co-owned by TLG, BEDIG AG i.L. and the state of Berlin in the amount of €4.8 million for the fiscal year endedDecember 31, 2013 and income from reversal of a provision for the subsidy repayment risk of €2.3 million for the six-monthperiod ended June 30, 2014.

(b) The current income taxes shown in the six-month periods ended June 30, 2013 in the amount of €16.5 million and 2014 in theamount of €17.5 million were calculated by using the integral method in accordance with IAS 34.30. Due to this calculationmethod a correction in the amount of €0.6 million for the first half year of 2013 and in the amount of €9.5 million for the first halfyear of 2014 is made to show the actually lower current tax expenses for the respective six-month period in the amount of €15.9million for 2013 and of €8.0 million for 2014.

(c) Adjustments of the actual tax effect on current income taxes from the result of the disposal of investment property and real estateinventory amounted to €3.2 million for the fiscal year ended December 31, 2012, €36.8 million for the fiscal year endedDecember 31, 2013, €13.6 million for the six-month period ended June 30, 2013 and €10.9 million for the six-month period endedJune 30, 2014.

Adjustments of the reverse effect from the tax effective settlement of interest rate swaps (originally decreasing tax expense)amounted to €5.5 million for the fiscal year ended December 31, 2013 and €6.4 million for the six-month period ended June 30,2014.

(d) Based on a total of 52,000,000 shares outstanding as of the date of this Prospectus.

(e) Capex refers to capital expenditure excluding cost of acquisitions of properties, cost of project developments and maintenanceexpenses.

Financing and Leverage

As of and for the year endedDecember 31,

As of and for the six-monthperiod ended June 30,

2012 2013 2014(unaudited) (unaudited)

(in %, unless otherwise specified) (in %, unless otherwise specified)Equity Ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.5 49.0 39.9Net LTV-Ratio(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 33.3 47.0Interest coverage ratio (as multiple)(3) . . . . . . . . . . . . . . . 3.7x 2.6x 3.6x

(1) The equity ratio is the ratio of total equity (attributable to shareholders) to total equity and liabilities (the “Equity Ratio”). As ofDecember 31, 2012 the Equity Ratio is derived from dividing equity in an amount of €1,006.7 million by the total equity and liabilitiesin an amount of €1,719.4 million. As of December 31, 2013 the Equity Ratio is derived from dividing equity in an amount of€801.0 million by the total equity and liabilities in an amount of €1,635.7 million. As of June 30, 2014 the Equity Ratio is derived fromdividing equity in an amount of €621.5 million by the total equity and liabilities in an amount of €1,555.9 million.

(2) The net loan to value ratio is the ratio of net debt (sum of non-current and current liabilities due to financial institutions less cash andcash equivalents), to real estate (sum of investment property, owner-occupied properties, prepayments for investment properties, assetsclassified as held for sale and inventories) (the “Net LTV-Ratio”).

The following table shows the calculation of the Net LTV-Ratio as of the dates shown:

As of December 31, As of June 30,2012 2013 2014(audited and in€ million, unless



Non-current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392.9 513.0 672.4Current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.2 113.2 55.6Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60.5) (138.9) (24.5)

Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419.5 487.3 703.5

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511.7 1,414.7 1,423.0Owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.7 16.5 15.1Prepayments for investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.7 2.5Assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 17.8 41.6Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 13.4 13.3

Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,553.7 1,465.1 1,495.5

Net loan to value (Net LTV) (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 33.3 47.0

(3) The interest coverage ratio is the ratio of Adjusted EBITDA to interest result for the respective period and may not correspond tosimiliar terms used for financial covenants in TLG’s credit agreements. The interest coverage ratio for the fiscal year endedDecember 31, 2012 is derived from dividing the Adjusted EBITDA of €79.5 million by the interest result of €21.6 million. The interestcoverage ratio for the fiscal year ended December 31, 2013 is derived from dividing the Adjusted EBITDA of €90.4 million by theinterest result of €35.3 million. The interest coverage ratio for the six-month period ended June 30, 2014 is derived from dividing theAdjusted EBITDA of €42.0 million by the interest result of €11.7 million.

37

EPRA Key Performance Indicators


(audited and in€ million, unless



Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,006.7 801.0 621.5Fair value remeasurement of other non-current assets (IAS 16)(1)

(unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 3.8 2.7Fair value remeasurement of properties in inventories(2) (unaudited) . . . . 4.6 5.3 5.1Fair values of financial derivatives (unaudited) . . . . . . . . . . . . . . . . . . . . . 43.4 18.8 8.7Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.5) (3.5) (5.4)Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.3 88.1 96.3EPRA NAV(3) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,131.7 913.5 728.9EPRA NAV (per share and in €)(4) (unaudited) . . . . . . . . . . . . . . . . . . . 21.76 17.57 14.02EPRA Vacancy Rate (in %)(5) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . 8.7 5.1 5.0

(1) Fair value remeasurement of other non-current assets (IAS 16) means the surplus arising from the remeasurement at fair value ofowner-occupied properties, which are included in the consolidated statement of financial position at the lower of cost less anyaccumulated depreciation and impairments and fair value.

(2) Fair value remeasurement of properties in inventories means the surplus arising from the remeasurement at fair value of tradingproperties, which are recognized under IFRS at the lower of cost and net realizable value and recognized under inventories as stated inthe consolidated statement of financial position.

(3) EPRA NAV is calculated in accordance with the definition recommended by the European Public Real Estate Association (the“EPRA”) and used as an indicator of TLG’s long-term equity and is calculated based on equity (i) plus fair value remeasurement ofother non-current assets (IAS 16) and fair value remeasurement of properties in inventories and (ii) excluding the fair values of financialderivatives, deferred tax assets and deferred tax liabilities (the “EPRA NAV”).

(4) Based on a total of 52,000,000 shares outstanding as of the date of this Prospectus.

(5) The EPRA vacancy rate is the estimated rental value (ERV) of vacant space divided by the estimated rental value of the whole portfolio(“EPRA Vacancy Rate”).

Selected Consolidated Financial Data Prepared in Accordance with German GAAP

For theyear ended

December 31,2011 2012(audited, unless

otherwise specified)(in € million)

Consolidated Income Statement DataSales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247.4 219.7Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 7.1Consolidated net income for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.7 2.5

As ofDecember 31,

2011 2012(audited, unless


Consolidated Balance Sheet DataFixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,795.9 1,339.2Current assets (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108.5 104.6Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 7.3

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,911.5 1,451.1

Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962.7 805.3Negative consolidation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 7.0Special reserve for investment grants and subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.8 16.4Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.2 89.2Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812.3 533.2Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 0.1

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,911.5 1,451.1

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For theyear ended

December 31,2011 2012


(in € million)Consolidated Cash Flow Statement DataCash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.3 142.5Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115.9) (86.6)Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.2 (28.4)

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF NET ASSETS, FINANCIALCONDITION AND RESULTS OF OPERATIONS

Overview

TLG believes it is a leading commercial real estate company for Berlin and eastern Germany. As of June 30, 2014,TLG’s portfolio comprised a total of 509 properties with an aggregate fair value of €1,510 million. The following tableprovides information about TLG’s overall portfolio which it classifies into two categories, core and non-core:

As of June 30, 2014Core Non-core(1) Total

(unaudited)Fair value (in € million)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,338.9 170.8 1,509.7IFRS carrying amount (in € million)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,327.4 165.4 1,492.8Annualized in-place rent (in € million)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.4 14.5 113.9Number of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 188 509Total lettable area (in thousand sqm)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900.1 439.2 1,339.3EPRA Vacancy Rate (in %)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 12.2 5.0WALT (in years)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0 5.5 7.7In-place rent yield (in %)(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 8.6 7.6

Note: Presentation Core Portfolio and non-core portfolio based on classification as of June 30, 2014.

(1) Between June 30, 2014 and September 15, 2014, TLG sold 28 properties with an aggregate fair value of €36.9 million. Furthermore, asof September 15, 2014, it has signed agreements to sell 20 additional properties with an aggregate fair value of €33.7 million. However,the buyer of one property that TLG had agreed to sell for approximately €23.9 million may have the right to withdraw from the purchaseagreement or to considerably reduce the purchase price, and in that case TLG would likely incur a significant non-cash loss.

(2) The difference between fair value of the portfolio and carrying amount under IFRS of €16.9 million is primarily due to rent incentiveswhich are separately presented according to SIC-15 (€8.8 million) and the lower carrying amount of owner-occupied properties(€2.7 million) and inventories (€5.1 million), neither of which is reported at fair value on the consolidated statement of financialposition.

Savills prepared the Valuation Report for 469 properties in TLG’s portfolio and has assessed the aggregate fair value of these propertieswith €1,450 million as of June 30, 2014. The difference between the number and the value of the properties appraised by Savills toTLG’s total portfolio of 509 properties with an aggregate fair value of €1,510 million related to 40 properties with an aggregate fairvalue of €60 million, which were not valued by Savills because for 27 of these properties with an aggregate fair value of €58 million saleand purchase agreements had already been signed as of June 30, 2014. Of the remaining 13 properties, ten properties with an aggregatefair value of €2 million were accounted for under inventories and TLG plans to sell these properties. TLG did not attribute any value tothe other three properties.

(3) Of the IFRS carrying amount, €1,423.0 million are attributable to investment property, €15.1 million to owner-occupied properties,€41.6 million to assets classified as held for sale, €13.3 million to inventories and negative €0.3 million to provisions.

(4) Annualized in-place rent is calculated based on contracted rents as of June 30, 2014, without deduction for any applicable rent freeperiods, multiplied by twelve. In-place rent is not an IFRS measure. Since June 30, 2014, TLG’s contracted rents have been decreasedby terminations and expirations of lease agreements as well as the closing of disposals and increased by new lease agreements and theclosing of acquisitions.

Adjusting for the net effect of these changes as well as for acquisitions and disposals not yet closed, TLG’s annualized in-place rent asof September 15, 2014 amounted to €117.8 million.

(5) Excluding parking space and open space.

(6) The EPRA Vacancy Rate is the estimated market rental value of vacant space divided by the estimated market rental value of the wholeportfolio.

(7) WALT refers to the weighted average lease term, i.e., the remaining average contractual lease term for unexpired leases with acontractually fixed maturity.

(8) In-place rent yield is calculated by dividing annualized in-place rent (including €1.2 million rent from owner-occupied office properties)by fair value.

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TLG’s Core Portfolio which consists of properties it intends to hold for the long term, comprises of 321 office, retailand hotel properties with an aggregate fair value of €1,338.9 million (as of June 30, 2014) located in Berlin and easternGermany (the “Core Portfolio”). The Company believes that these office, retail and hotel properties are located inparticularly attractive macro- and/or micro-locations and will provide attractive returns. With a weighted average lease termfor leases with a contractually fixed maturity (“WALT”) of 8.0 years and an EPRA Vacancy Rate of just 4.0% (both as ofJune 30, 2014), TLG believes that its Core Portfolio is positioned to deliver stable cash flows in the foreseeable future. Thefollowing table provides information about TLG’s Core Portfolio, which is further classified into office, retail and hotelproperties as follows:

As of June 30, 2014Office Retail Hotel

(unaudited)Fair value (in € million)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476.5 667.0 195.4IFRS carrying amount (in € million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473.5 666.7 187.2Annualized in-place rent (in € million)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2 54.9 12.4Number of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 271 5Total lettable area (in thousand sqm)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338.9 485.3 75.9EPRA Vacancy Rate (in %)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 1.0 1.7WALT (in years)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 7.3 16.7In-place rent yield (in %)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0 8.2 6.3


(1) The difference between fair value of the Core Portfolio and carrying amount under IFRS of €11.5 million is primarily due to rentincentives which are separately presented according to SIC-15 (€8.8 million) and the lower carrying amount of owner-occupiedproperties (€2.7 million), neither of which is reported at fair value on the consolidated statement of financial position.

(2) Annualized in-place rent is calculated based on contracted rents as of June 30, 2014, without deduction for any applicable rent freeperiods, multiplied by twelve. In-place rent is not an IFRS measure. Since June 30, 2014, TLG’s contracted rents have been decreasedby terminations and expirations of lease agreements as well as the closing of disposals and increased by new lease agreements and theclosing of acquisitions.


(4) The EPRA Vacancy Rate is the estimated market rental value of vacant space divided by the estimated market rental value of the wholeportfolio.


(6) In-place rent yield is calculated by dividing annualized in-place rent (including €1.2 million rent from owner-occupied office properties)by fair value.

During the six-month period ended June 30, 2014, TLG generated rental income of €57.0 million and net operatingincome from letting activities of €50.0 million, resulting in a net operating income margin from letting activities (netoperating income from letting activities as a percentage of rental income) of 87.7% and for the fiscal year endedDecember 31, 2013, rental income of €118.3 million and net operating income from letting activities of €106.3 million,resulting in a net operating income margin (net operating income from letting activities as a percentage of rental income) fromletting activities of 89.9%. With a Net LTV-Ratio of 47.0% (as of June 30, 2014), TLG considers its financing structure to beparticularly sound and in line with its targeted long-term Net LTV-Ratio of approximately 45-50%.

Historical Background

Disposal of TLG WOHNEN GmbH and Focus on Core Portfolio

Until December 31, 2011, TLG’s portfolio consisted of commercial and residential properties. With effect fromJanuary 1, 2012, TLG’s residential portfolio was spun-off to TLG WOHNEN GmbH, a new company specifically establishedfor this purpose, whose sole shareholder was the Federal Republic of Germany. Due to this spin-off, the Company’sconsolidated financial statements prepared for the fiscal years ended December 31, 2011 and 2012 under German GAAP arenot directly comparable given that the residential portfolio represented a significant share of TLG’s overall portfolio andbusiness in 2011.

In connection with the spin-off of TLG’s residential property portfolio, TLG reviewed the strategic scope of itscommercial real estate portfolio, which consisted of office, retail, hotel, service and business properties as well asundeveloped land for project developments. As a result, TLG identified office, retail and hotel properties located in attractivemacro- and/or micro-locations in Berlin and eastern Germany as strategically “core”. The properties that did not strategicallyfit due to their use or due to their macro-/micro-location, were classified as “non-core”. TLG also classified undeveloped landas non-core. The Company included non-core properties with an aggregate book value of €72.7 million in inventories in itsopening balance sheet prepared in accordance with IFRS as of January 1, 2012. Except for the properties recognized ininventories and those used by TLG itself which are recognized under property, plant and equipment, all other properties were

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included in investment property. Since then, TLG has continuously reviewed its portfolio and has from time to time classifiedadditional properties as non-core, which the Company continues to carry at fair value on its balance sheet. TLG has disposedof most of the properties accounted for in inventories as well as additional properties from its investment portfolio that itclassified as non-core. TLG intends to dispose of its remaining non-core properties in the medium term.

Key Factors Influencing TLG’s Portfolio, Results of Operations and the Comparability of Financial Information

TLG believes that the operating and accounting factors discussed below have contributed to the development of itsportfolio and results of operations and/or have affected the comparability of the financial information for the periods coveredby the financial information presented in this Prospectus.

Operating Factors

Rental Income

Rental income is affected by rent levels, total lettable area and the vacancy rate.

Local Rent Levels

Local rent levels are influenced by numerous demographic, economic and other factors. Given TLG’s portfolio mixof mainly office, retail and hotel properties, the rent levels relevant for TLG are generally affected by the demand for office,retail and hotel space in the respective real estate markets in Berlin and eastern Germany, where TLG’s entire portfolio islocated. The demand for office, retail and hotel space in these regional markets is, among other things, affected by populationgrowth, economic growth, employment, purchasing power, development of tourism and inflation. For more information, see“Markets and Competition”. Other factors that can influence rent levels and demand for office, retail and hotel space in theregional markets relevant for TLG’s business include the micro-location, quality, age of the property and mix of tenants of theparticular properties. General legal and tax conditions as well as the availability and conditions of equity and/or debt financingalso affect local rent levels. Lease agreements usually have longer terms so that changes in local rent levels affect only thoselease agreements, which are up for renewal or are newly concluded.

The table below provides information on the average monthly rent per sqm for TLG’s portfolio excluding imputedrent (kalkulatorische Miete) for space used by TLG.

As of December 31,As of

June 30,2011(1) 2012 2013 2014

(unaudited) (unaudited)(in €) (in €)

Core Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.48 9.55 9.71 9.76Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.78 8.93 8.95 9.05Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.34 9.38 9.54 9.56Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.78 14.93 13.74 13.86

Non-core portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.45 4.50 3.69 3.64

Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.28 7.61 7.92 8.04


(1) As of January 1, 2012.

(2) Average rent per sqm is calculated as in-place rent divided by space rented as of the respective date, future contracts are not considered.

The relatively stable average monthly rent per sqm for TLG’s Core Portfolio reflects the limited exposure of itsportfolio to fluctuations in rent levels due to the long-term nature of the lease agreements relating to the properties in TLG’sCore Portfolio. TLG’s office portfolio shows the largest increase in average rent per sqm between 2011 and the first half of2014, primarily due to the in-place rents and newly negotiated rents with tenants of three properties, which were added to theportfolio over the period. The year-on-year average rent increases in the retail portfolio for the last three-and-a-half yearsamount to less than 1% and are based on indexation of the in-place rent. The hotel properties have lease agreements with thelongest terms. The average monthly rent per sqm in TLG’s hotel portfolio decreased from €14.78 as of December 31, 2011 to€13.86 as of June 30, 2014 due to the lower in-place rent for the three hotel properties developed by TLG, which were addedto the portfolio over the course of this period. The average monthly rent per sqm for the two hotel properties which werealready included in the hotel portfolio in 2011 increased slightly from €14.78 as of December 31, 2011 to €15.07 as ofJune 30, 2014.

Total Lettable Area

The total lettable area is primarily influenced by acquisitions and disposals of properties. It may also be affected byexpansions of the lettable area of existing properties and changes in legal conditions regulating the use of properties.

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The table below provides information on the total lettable area of TLG’s portfolio excluding areas of projectdevelopments that were not operative as of the respective cut-off date.


June 30,2011(1) 2012 2013 2014

(unaudited) (unaudited)(in thousand sqm) (in thousand sqm)

Core Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806.2 830.5 887.7 900.1Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317.5 322.5 322.4 338.9Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441.2 460.7 489.3 485.3Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.4 47.4 76.0 75.9

Non-core portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719.0 640.1 477.5 439.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,525.1 1,470.6 1,365.2 1,339.3



The total lettable area of the Core Portfolio increased by 93.9 thousand sqm from 806.2 thousand sqm as ofDecember 31, 2011 to 900.1 thousand sqm as of June 30, 2014 while the total lettable area of the non-core portfolio decreasedby 279.8 thousand sqm from 719.0 thousand sqm as of December 31, 2011 to 439.2 thousand sqm as of June 30, 2014 due todisposals of non-core properties. In the six-month period ended June 30, 2014, the total lettable area of the office portfolioincreased by 16.5 thousand sqm due to the acquisition of one new office property. The total lettable area of the retail portfolioincreased by 19.5 thousand sqm in 2012 and by 28.6 thousand sqm in 2013 due to acquisitions and completions of projectdevelopments. In 2013, project developments regarding three hotel properties were completed and increased the total lettablearea in the hotel portfolio by 28.6 thousand sqm.

EPRA Vacancy Rate

EPRA Vacancy Rate is defined as the estimated market rental value of vacant space divided by the estimated marketrental value of the whole portfolio. The estimated rental value of the whole portfolio depends on the estimated rent per sqmand the total lettable area of the portfolio. Vacancy rates are primarily influenced by demand for the properties that are offeredfor leasing. Demand for the properties in turn is affected, among other things, by the use, macro- and micro-locations, age,quality and size of the properties. The term of the lease agreements, the ability of the asset manager to market its propertiesand the maintenance and refurbishment work required before a new lease agreement for a property can be concluded alsoinfluence the vacancy rate of a portfolio. The vacancy rate may also be affected if large leases with single tenants are notrenewed or terminated, e.g. due to the tenant’s insolvency or as a result of acquisitions or disposals.

The table below provides information on the EPRA Vacancy Rate of TLG’s portfolio.


June 30,2011(1) 2012 2013 2014

(unaudited) (unaudited)(in %) (in %)

Core Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 4.7 4.4 4.0Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 10.4 8.8 9.2Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.9 1.5 1.0Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0 3.6 4.5 1.7

Non-core portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 20.3 9.7 12.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.9 8.7 5.1 5.0



The decrease in the EPRA Vacancy Rate of the Core Portfolio between December 31, 2011 and June 30, 2014primarily relates to the reduction of the EPRA Vacancy Rate in the office portfolio. At 14.9% TLG’s EPRA Vacancy Rate forits office portfolio as of December 31, 2011 was relatively high because in 2010 and 2011 two major tenants of the propertylocated on Alexanderstraße 1,3,5 in Berlin (the “1alex Property”) did not renew their respective leases. The EPRA VacancyRate for TLG’s office portfolio decreased to 10.4% as of December 31, 2012 and to 8.8% as of December 31, 2013, partiallyas a result of finding new tenants for the 1alex Property. As of June 30, 2014, the EPRA Vacancy Rate of TLG’s officeportfolio amounted to 9.2% (excluding the 1alex Property to 3.7%). The slight increase resulted from the acquisition of the“Kaiserin-Augusta-Allee 104-106” property. TLG’s office EPRA Vacancy Rate may increase in the future as a result of itsacquisition strategy regarding office properties. TLG specifically targets office properties with EPRA Vacancy Rates of up to30%, as TLG believes that it can acquire such properties at a discount and unlock additional value through modernizations,

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refurbishments and active letting management. Retail EPRA Vacancy Rate remained stable at a low level despite the increasesin lettable area reflecting the stable tenant base and policy of acquiring properties that are almost fully let or developing onlyprojects which are let to tenants in advance. The EPRA Vacancy Rate for the hotel portfolio declined by more than 62% from4.5% as of December 31, 2013 to a low 1.7% at the end of the first six months of 2014 despite the significant increase in totallettable area in 2013.

Maintenance and Refurbishment

Driven by TLG’s active asset management and significant investments in its Core Portfolio over the last three-and-a-half years, 84% of TLG’s Core Portfolio has been newly built or fully refurbished since 2000. As a result, the Companybelieves that maintenance and refurbishment expenses are currently overall less significant for TLG than for other commercialreal estate companies with more mature portfolios. However, following TLG’s acquisition strategy, maintenance andrefurbishment expenses can be expected to increase in the future.

Reorganization of TLG

Since the beginning of 2013, TLG has continued to streamline its organizational structure in connection with itsportfolio optimization by transferring further administrative functions such as portfolio management, valuation, coordinationwith the land register, legal and controlling from the regional offices to the Berlin headquarters and, as a result, reduced itsworkforce. As of December 31, 2012, TLG employed 241 employees (including 17 temporary employees), as ofDecember 31, 2013, 197 employees (including twelve temporary employees) and as of June 30, 2014, 168 employees(including ten temporary employees). This corresponds to a 30.3% reduction in TLG’s workforce from December 31, 2012 toJune 30, 2014. Due to this headcount reduction, TLG has reduced its personnel expenses from December 31, 2012 toDecember 31, 2013 by €2.4 million from €18.9 million to €16.5 million excluding expenses for severance packages in anamount of €6.9 million in 2013. For the six-month period ended June 30, 2014 personnel expenses amounted to €7.7 millioncompared to €8.5 million excluding severance packages in an amount of €6.9 million in the first six months of 2013 for thesix-month period ended June 30, 2013, reflecting the additional headcount reductions. TLG plans to complete the majority ofits reorganization by the end of 2014 and to employ 127 employees as of January 1, 2015 (including seven temporaryemployees). The severance package in an amount of €6.9 million recognized in TLG’s personnel expenses for the fiscal yearended December 31, 2013 included estimated severance payments for the headcount reductions in 2013 and 2014. Forseverance payments due after December 31, 2013, a provision has been built in an amount of €5.2 million as of December 31,2013.

Financing Conditions

TLG finances the acquisitions of properties by means of debt and equity instruments. At the time of a newacquisition and of the maturity of a loan, TLG depends to a considerable extent on the availability of financing on reasonableterms and conditions as well as the condition of the capital markets. Financing conditions, in particular interest rates, aresubject to fluctuations and are influenced by a variety of factors, including general economic conditions and marketdevelopments, over which TLG has no control. Adverse changes in financing conditions, and in particular increases in interestrates, could increase TLG’s financing and refinancing costs and thus affect its results of operations.

TLG is currently benefitting from favorable financing conditions, in particular from low interest rates, which mayincrease in the future. TLG was able to reduce its average interest rate to 2.99% as of June 30, 2014 while the average debtmaturity increased to 5.9 years as of June 30, 2014. As of March 31, 2014, TLG settled interest rate swaps resulting in a cashoutflow of €20.6 million. In line with TLG’s strategy, new interest rate hedges were concluded in March and April 2014 forall long-term financial liabilities. Approximately 94% of TLG’s interest rates (based on the value weighted interest rates onthe liabilities due to financial institutions in an amount of €727.9 million as of June 30, 2014) are either fixed or hedged,limiting TLG’s risk from increasing interest reference rates in the future. For more details on the recent refinancing of TLG’sfinancial liabilities see “—Selected Consolidated Statement of Comprehensive Income Data Prepared in Accordance withIFRS—Financial Income and Total Interest and Similar Expenses (Total Interest and Similar Result)—Comparison of the Six-Month Periods Ended June 30, 2013 and June 30, 2014”.

Change in General Tax Conditions

TLG is subject to German corporate and trade taxation. Currently, TLG’s rental income is subject to corporate andtrade tax (Körperschaft- und Gewerbesteuer). Changes to TLG’s taxable income for corporate and/or trade tax law purposescan influence TLG’s results from operations and its cash flow. For example, TLG’s rental income is currently subject to tradetax. If rental income is solely generated from the administration of real estate owned, such rental income can be exemptedfrom trade tax (so-called extended trade tax reduction). For more information on TLG’s tax structure, see “Business—TLG’sStrategy—Further improve its financial and tax structure”.

44

Accounting Factors

First Time Adoption of IFRS

Starting with the fiscal year 2013, the Company has prepared its consolidated financial statements in accordancewith IFRS and the additional requirements of German commercial law pursuant to Section 315a (1) of the GermanCommercial Code (Handelsgesetzbuch (HGB)). The consolidated financial statements for prior years were prepared inaccordance with German GAAP, which differs from IFRS in material ways. To enhance comparability, a reconciliation of the2012 consolidated net profit, equity and cash flow, as recognized in accordance with German GAAP, with the correspondingIFRS figures is provided in the relevant section in “—Reconciliation between German GAAP and IFRS for the Fiscal Year2012” and F-22 et seq.

The transition to IFRS required the Company to prepare an IFRS-compliant opening balance sheet as of January 1,2012. In connection with the preparation of this opening balance sheet, TLG recorded inventories in a total amount of€72.7 million as of January 1, 2012, consisting of 355 properties from its non-core portfolio, including service properties andundeveloped land because it intended to sell those properties in the ordinary course of its business. The remaining propertiesof its non-core portfolio were recorded under investment property together with the properties from the Core Portfolio, exceptfor the residential real estate portfolio and other properties that qualified as assets held for sale in accordance with IFRS 5,which were also presented separately as assets held for sale.

Valuation of Portfolio Properties

In accounting for the value of its real estate portfolio, included in investment property, TLG applies the fair valuemethod pursuant to IAS 40. According to the fair value method, upon its purchase the investment property is initiallymeasured at cost, including ancillary purchase costs. In subsequent reporting periods, investment property is measured at fairvalue. The fair value of property held to earn rentals or for capital appreciation or both is determined using a discounted cashflow method (“DCF”). According to the DCF, the fair value of a property is the sum of the discounted cash flows for aplanning period (e.g., ten years) plus the terminal value of the property at the end of the planning period discounted to thevaluation date. Properties generating no sustainable operating cash flows are valued using their liquidation value. For moreinformation on the valuation method, see “—Significant Accounting Policies—Investment Property (IAS 40)”.

Valuations were conducted by Savills at the end of 2013/beginning of 2014 for the preparation of the openingbalance sheet prepared in accordance with IFRS as of January 1, 2012, the preparation of the audited consolidated financialstatements prepared in accordance with IFRS and the additional requirements of German commercial law pursuant toSection 315a (1) of the German Commercial Code (Handelsgesetzbuch (HGB)) for the fiscal year ended December 31, 2013including 2012 real estate fair values as prior year comparative information and in July/August 2014 for the unauditedcondensed consolidated interim financial statements prepared in accordance with IFRS on interim financial reporting for thesix-month period ended June 30, 2014. TLG will revalue its properties recorded under investment property according to IAS40 on a regular basis. Valuation losses or gains resulting from such valuations are recognized in result from theremeasurement of investment property and affect TLG’s results of operations but have no impact on TLG’s cash flow.

Accounting for Property Disposals

Between January 1, 2012 and June 30, 2014, TLG has sold properties accounted for under investment property andinventories in an aggregate book value of €307.0 million. Differences between the book value of a property and the purchaseprice for which a property has been sold affect TLG’s results from operations if such difference was not previouslyrecognized under result from the remeasurement of investment property.

In respect to properties recognized as investment property, the following accounting treatment applies in the case ofthe sale of a property. With the notarization of the sale and purchase agreement, the respective property is generallyreclassified as an asset held for sale, unless the payment of the purchase price commences in the same period. If the propertyis reclassified as an asset held for sale, the difference between the carrying amount of the property (equaling the fair valueunder IAS 40 as it is recorded) and the purchase price is recognized under result from the remeasurement of investmentproperty. If the payment has been already made, such difference is recognized under result from the disposal of investmentproperty in the relevant period.

In case of the disposal of properties held in inventories, which are carried at cost and have not been subsequentlyfair value adjusted, the difference between the book value of the properties and their purchase price is recognized in resultfrom the disposal of real estate inventory.

Valuation of Financial Derivatives

Financial derivatives are measured at fair value in accordance with IAS 39. TLG revalues its financial derivativeson a regular basis. TLG uses financial derivatives primarily to hedge itself against risks resulting from floating interest rateson its debt. Deviations compared to previous valuations do not have an impact on its cash flow but may lead to a revaluationof loss or profit and thus affect TLG’s gain/loss from the fair value remeasurement of derivatives if no hedge accounting isapplied or the hedge is partially ineffective (for more information, see “—Significant Accounting Policies—FinancialInstruments (IAS 39)”).

45

Selected Consolidated Statement of Comprehensive Income Data Prepared in Accordance with IFRS

The following table provides an overview of TLG’s results of operations for the periods shown in accordance withIFRS:



June 30,2012(1) 2013 2013 2014


Net operating income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . 97.1 106.3 52.7 50.0Income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138.8 141.3 69.6 66.9Expenses related to letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41.6) (35.1) (16.9) (16.9)

Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . 53.1 72.2 34.4 51.3Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . (0.0) 0.5 0.2 0.5Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . 27.4 7.8 5.5 2.3

Proceeds from real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . 77.5 21.4 14.3 5.9Book value of real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . (50.2) (13.6) (8.8) (3.6)

Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 18.7 3.9 3.6Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.9) (23.4) (15.4) (7.7)Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) (1.5) (0.7) (0.7)Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8.3) (7.8) (2.3) (2.4)

Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.4 172.8 78.3 96.9Income from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9 2.1 2.1 0.0Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.5) (36.0) (18.1) (12.1)Gain/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . (10.0) 6.9 5.4 (2.0)

Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.8 146.4 68.1 83.2Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63.5) (47.3) (22.0) (25.8)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3 99.1 46.1 57.4

Other comprehensive income (OCI)thereof non-recycling

Actuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .thereof recycling

(1.0) (0.0) — —

Hedge accounting reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.1) — (4.7)

Total comprehensive income for the period . . . . . . . . . . . . . . . . . . . . . . . . . . 75.3 99.0 46.1 52.7

Note: May not sum up exactly due to rounding.

(1) Figures taken from the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2013including comparative financial information for the fiscal year 2012.

Net Operating Income from Letting Activities

Net operating income from letting activities is the sum of income from letting activities and expenses related toletting activities. Income from letting activities comprises: rental income, income from other goods and services and incomefrom recharged utilities and other operating costs. Expenses related to letting activities comprise utilities and other operatingcosts, maintenance expenses and other expenses.

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The following table provides a breakdown of TLG’s income from and expenses related to letting activities for theperiods presented.



June 30,2012(1) 2013 2013 2014


(IFRS) (IFRS)Income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138.8 141.3 69.6 66.9

Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116.1 118.3 59.2 57.0Income from recharged utilities and other operating costs . . . . . . . . . . . . . . . 20.7 21.6 9.5 9.1Income from other goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 1.4 0.9 0.9

Expenses related to letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41.6) (35.1) (16.9) (16.9)Utilities and other operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28.6) (27.6) (13.5) (12.7)Maintenance expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.3) (5.1) (1.9) (1.9)Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.7) (2.4) (1.6) (2.3)

Net operating income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.1 106.3 52.7 50.0


(1) Figures taken from the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2013,including comparative financial information for the fiscal year 2012.

Comparison of the Six-Month Periods Ended June 30, 2013 and June 30, 2014

Net operating income from letting activities decreased by €2.7 million, or 5.1%, from €52.7 million for the six-month period ended June 30, 2013 to €50.0 million for the six-month period ended June 30, 2014, primarily due to a decreasein income from letting activities. The net operating income margin from letting activities (net operating income from lettingactivities as a percentage of rental income) slightly decreased by 1.3 percentage points from 89.0% for the six-month periodended June 30, 2013 to 87.7% for the six-month period ended June 30, 2014, primarily due to a decrease in rental income.Rental income decreased by €2.2 million, or 3.7%, from €59.2 million for the six-month period ended June 30, 2013 to€57.0 million for the six-month period ended June 30, 2014, primarily due to the sale of non-core properties (mainly nursinghomes) in November 2013. Expenses remained relatively stable despite the disposal of properties due to repair costs causedby fire damage with regard to one property. The associated insurance payment was booked under other operating income.

Comparison of the Fiscal Years Ended December 31, 2012 and 2013

Net operating income from letting activities increased by €9.2 million, or 9.5%, from €97.1 million for the fiscalyear ended December 31, 2012 to €106.3 million for the fiscal year ended December 31, 2013, primarily due to an increase inincome from letting activities and a decrease of expenses related to letting activities. The net operating income margin fromletting activities (net operating income from letting activities as a percentage of rental income) increased by 6.3 percentagepoints from 83.6% for the fiscal year ended December 31, 2012 to 89.9% for the fiscal year ended December 31, 2013,primarily due to an increase in rental income and a decrease of other expenses related to letting activities. Rental incomeincreased by €2.2 million, or 1.9%, from €116.1 million for the fiscal year ended December 31, 2012 to €118.3 million for thefiscal year ended December 31, 2013, primarily due to increased rents and lower vacancy rates. The increase in rental incomewas partially offset by the decrease in rental income from the non-core portfolio due to the sale of non-core properties. Otherexpenses related to letting activities decreased by €5.3 million from €7.7 million for the fiscal year ended December 31, 2012to €2.4 million for the fiscal year ended December 31, 2013, primarily due to the decrease in other service costs.

Result from the Remeasurement of Investment Property

Result from the remeasurement of investment property comprises adjustments in the fair value of the propertiesclassified as investment property. The fair value of a property recorded under investment property is adjusted as a result of theannual remeasurement of the investment property in accordance with IAS 40 or if a property is sold and reclassified as anasset held for sale in accordance with IFRS 5.


Result from the remeasurement of investment property increased by €16.9 million, or 49.1%, from €34.4 million forthe six-month period ended June 30, 2013 to €51.3 million for the six-month period ended June 30, 2014. 74.9%, or€38.4 million, of the gain from the remeasurement of investment property is attributable to properties sold and reclassified asassets held for sale for the six-month period ended June 30, 2014 compared to 7.3%, or €2.5 million, for the six-month periodended June 30, 2013. The remaining 25.1%, or €12.9 million for the six-month period ended June 30, 2014 and the remaining92.7%, or €31.9 million for the six-month period ended June 30, 2013 of the gain from the remeasurement of investmentproperty resulted from fair value adjustments in accordance with IAS 40.

47


Result from the remeasurement of investment property increased by €19.1 million, or 36.0% from €53.1 million forthe fiscal year ended December 31, 2012 to €72.2 million for the fiscal year ended December 31, 2013. 19.7%, or€14.2 million, of the result from the remeasurement of investment property for the year 2013 related to properties that wereclassified as long-term assets held for sale in 2013 compared to €0.0 million in 2012.

Result from the Disposal of Investment Property

Result from the disposal of investment property is recorded if an investment property is sold and the notarization ofthe sale and purchase agreement commences in the same quarter of the respective fiscal year as the closing of the transaction,i.e., the payment of the purchase price.

Result from the disposal of investment property increased by €0.3 million from €0.2 million for the six-monthperiod ended June 30, 2013 to €0.5 million for the six-month period ended June 30, 2014. It increased by €0.5 million fromnegative €45 thousand for the fiscal year ended December 31, 2012 to €0.5 million for the fiscal year endedDecember 31, 2013.

Result from the Disposal of Real Estate Inventory

Result from the disposal of real estate inventory includes the difference between the book value of propertiesaccounted for under inventories and the purchase price for properties sold. Properties recorded under inventories are booked atthe lower of cost and net realizable value as at the reporting date.

Result from the disposal of real estate inventory decreased by €3.2 million, or 58.2%, from €5.5 million for the six-month period ended June 30, 2013 to €2.3 million for the six-month period ended June 30, 2014 mainly due to the relativelylower stock of inventories compared to the previous year.

Result from the disposal of real estate inventory decreased by €19.6 million, or 71.5%, from €27.4 million for thefiscal year ended December 31, 2012 to €7.8 million for the fiscal year ended December 31, 2013 mainly due to the relativelylower stock of inventories compared to the previous year.

As of January 1, 2012, TLG recorded under inventories: (i) land with finished buildings, (ii) land underdevelopment, (iii) other buildings in progress and (iv) undeveloped land that did not strategically fit within TLG’s portfoliodue to their current or potential use in the future. Inventory properties were recorded at acquisition cost without conductingany fair value adjustments if the fair value exceeds the book value in subsequent periods. Since January 1, 2012, no propertieshave been transferred from investment property to inventories. The initial book value of these properties amounted to€72.7 million as of January 1, 2012, and the book value decreased to €22.3 million as of December 31, 2012, to €13.4 millionas of December 31, 2013 and to €13.3 million as of June 30, 2014. The book value of inventories decreased mostly by sales ofproperties but this decrease was partially offset by additions for progress on constructions made on an unfinished buildingwhich was already sold in 2013 but will be transferred following the completion of its construction in 2014.

Other Operating Income

The following table provides a breakdown of TLG’s other operating income.



June 30,2012(1) 2013 2013 2014


(in € million)(IFRS)


(IFRS)Reversal of provisions/liabilities and write-downs . . . . . . . . . . . . . . . . . . . . . . . 1.3 9.5 0.5 1.6Insurance settlement payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 1.0 0.5 0.7TLG WOHNEN/TAG Wohnen business management contract . . . . . . . . . . . . . 2.9 1.6 0.7 0.3Subsidies for environmental remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 0.3 0.1 0.1Miscellaneous other operating income(2) (unaudited) . . . . . . . . . . . . . . . . . . . . . 2.9 6.2 2.1 0.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 18.7 3.9 3.6


(1) Figures taken or derived from the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31,2013, including comparative financial information for the fiscal year 2012.

(2) “Miscellaneous other operating income” includes tenant maintenance contributions, derecognition of liabilities, income related to otherperiods and miscellaneous other income.

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Other operating income decreased by €0.3 million, or 7.7%, from €3.9 million for the six-month period endedJune 30, 2013 to €3.6 million for the six-month period ended June 30, 2014. The decrease in miscellaneous other operatingincome was partially offset by increased reversals for provisions/liabilities and write-downs primarily due to the reversal ofthe write-down of a rent receivable.


Other operating income increased by €9.0 million, or 92.8%, from €9.7 million for the fiscal year endedDecember 31, 2012 to €18.7 million for the fiscal year ended December 31, 2013 mainly due to the higher reversals ofprovisions/liabilities and write-downs. The reversals of provisions, liabilities and write-downs included in particular specialitems such as income from the reversal of real estate transfer taxes amounting to €5.4 million. In addition, as arranged withthe creditor, accrued interest on the liabilities from the pass-through of purchase prices amounting to €3.0 million wasreversed. Liabilities from purchase price forwarding resulted from TLG’s obligation to pass on parts of the purchase pricereceived for the sale of properties which were co-owned by TLG, BEDIG AG i.L. and the state of Berlin.

Personnel Expenses

The following table provides a breakdown of TLG’s personnel expenses for the periods presented.



June 30,2012(1) 2013 2013 2014


(IFRS) (IFRS)Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14.9) (12.8) (6.6) (5.8)Social security contributions and cost of old age pensions . . . . . . . . . . . . . . . . . . (2.7) (2.5) (1.3) (1.0)Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.4) (1.3) (0.6) (0.8)Severance packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (6.9) (6.9) —

Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.9) (23.4) (15.4) (7.7)




Personnel expenses decreased by €7.7 million, or 50.0% from €15.4 million for the six-month period ended June 30,2013 to €7.7 million for the six-month period ended June 30, 2013. This decrease was primarily due to the absence of aone-off item like the severance packages and the decrease in salaries, both resulting from the headcount reduction in thecontext of the reorganization of TLG. For additional information see “—Key Factors Influencing TLG’s Portfolio, Results ofOperations and the Comparability of Financial Information—Reorganization of TLG”.


Personnel expenses increased by €4.5 million, or 23.8%, from €18.9 million for the fiscal year ended December 31,2012 to €23.4 million for the fiscal year ended December 31, 2013 primarily due to severance packages in an amount of€6.9 million that were only partially offset by a decrease in salaries, both resulting from the headcount reduction in the contextof the reorganization of TLG. For additional information, see “—Key Factors Influencing TLG’s Portfolio, Results ofOperations and the Comparability of Financial Information—Reorganization of TLG”.

Depreciation

Depreciation slightly decreased by €41 thousand, or 5.5%, from €742 thousand for the six-month period endedJune 30, 2013 to €701 thousand for the six-month period ended June 30, 2014. Depreciation slightly decreased by€0.1 million, or 6.3%, from €1.6 million for the fiscal year ended December 31, 2012 to €1.5 million for the fiscal year endedDecember, 31 2013. For a discussion of the accounting differences regarding depreciation under IFRS and German GAAP,see “—Key Factors Influencing TLG’s Portfolio, Results of Operations and the Comparability of Financial Information—Accounting Factors—Valuation of Portfolio Properties” and “—Significant Accounting Policies—Investment Property(IAS 40)”.

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Other Operating Expenses

The following table provides a breakdown of TLG’s other operating expenses.



June 30,2012(1) 2013 2013 2014

(audited, unlessotherwise specified) (unaudited)

(in € million) (in € million)(IFRS) (IFRS)

Valuation allowances and impairment losses on receivables . . . . . . . . . . . . . . . . . (3.4) (1.9) (0.4) (0.5)Advising and audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) (2.0) (1.2) (1.2)General IT and administrative costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.8) (2.8) (1.2) (0.9)Advertising and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.2) (0.5) (0.3) (0.2)Miscellaneous other operating expenses(2) (unaudited) . . . . . . . . . . . . . . . . . . . . . (3.6) (4.3) (1.9) (1.7)Reversal of provisions/liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 3.7 2.7 2.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8.3) (7.8) (2.3) (2.4)


(1) Figures taken or derived from the Company’s audited consolidated financial statements as of and for the fiscal year ended December 31,2013, including comparative financial information for the fiscal year 2012.

(2) Miscellaneous other operating expenses includes depreciation of real estate inventory, ancillary costs for business premises, vehicle andtravel expenses, other taxes and other expenses.


Other operating expenses slightly increased by €0.1 million, or 4.3%, from €2.3 million for the six-month periodended June 30, 2013 to €2.4 million for the six-month period ended June 30, 2014. The slight decrease in general IT andadministrative costs was mainly due to reduced expenses for insurance. Reversals of provisions/liabilities decreased by€0.6 million, or 22.2%, from €2.7 million for the six-month period ended June 30, 2013 to €2.1 million for the six-monthperiod ended June 30, 2014.


Other operating expenses decreased slightly by €0.5 million, or 6.0%, from €8.3 million for the fiscal year endedDecember 31, 2012 to €7.8 million for the fiscal year ended December 31, 2013. The increase in advising and audit fees andthe decrease in advertising and marketing are associated with the reorganization of TLG. For additional information, see“—Key Factors Influencing TLG’s Portfolio, Results of Operations and the Comparability of Financial Information—Reorganization of TLG”.

Earnings before Interest and Taxes (EBIT)


EBIT increased by €18.6 million, or 23.8%, from €78.3 million for the six-month period ended June 30, 2013 to€96.9 million for the six-month period ended June 30, 2014, as a result of the increase in the result from the remeasurement ofinvestment property of €16.9 million. The decrease in net operating income from letting activities and result from the disposalof real estate inventory in an amount of €5.9 million was more than offset by the decline in personnel expenses by€7.7 million.


EBIT increased by €14.4 million, or 9.1%, from €158.4 million for the fiscal year ended December 31, 2012 to€172.8 million for the fiscal year ended December 31, 2013, as an increase in net operating income from letting activities andin other operating income was only partially offset by an increase of personnel expenses of €4.5 million in 2013. The increasein the result from the remeasurement of investment property was offset by a decline in result from the disposal of real estateinventory.

Income from Joint Ventures

In the six-month period ended June 30, 2014, TLG generated no income from joint ventures. In the fiscal year endedDecember 31, 2013, the income from joint ventures amounted to €2.1 million and resulted mainly from the disposal of TLG’s33% interest in AGD. It declined from €12.9 million for the fiscal year ended December 31, 2012, which was mainly theresult of the earnings and a gain from the fair value remeasurement of AGD’s property.

50

Total Interest and Similar Income and Total Interest and Similar Expenses (Interest Result)

Interest result is the sum of interest and similar income and interest and similar expenses. The following tableprovides a breakdown of TLG’s interest result.



June 30,2012(1) 2013 2013 2014


(IFRS) (IFRS)Total interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Total interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.5) (36.0) (18.1) (12.1)

Interest expenses for interest rate derivatives . . . . . . . . . . . . . . . . . . . . . . . (8.9) (7.0) (3.7) (2.1)Interest on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12.8) (28.6) (14.2) (8.8)Interest expense on pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3) (0.2) — —Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5) (0.2) (0.2) (1.1)

Interest result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.6) (35.4) (17.7) (11.7)




TLG’s interest result significantly increased by €6.0 million, or 33.9%, from negative €17.7 million for thesix-month period ended June 30, 2013 to negative €11.7 million for the six-month period ended June 30, 2014, primarily dueto lower expenses for interest on loans and lower interest expenses for interest rate derivatives. Expenses for interest on loansdecreased by €5.4 million, or 38.0%, from €14.2 million for the six-month period ended June 30, 2013 to €8.8 million for thesix-month period ended June 30, 2014 although current and non-current liabilities due to financial institutions slightlyincreased by €12.8 million, or 1.8%, from €715.1 million as of June 30, 2013 to €727.9 million as of June 30, 2014. Thisdecrease resulted from an optimized financing structure and the repayment of the remaining amount outstanding of€74.9 million under a loan that TLG assumed from its Existing Shareholders and that was part of the debt financing of theacquisition of TLG at the end of 2012 by its Existing Shareholders (the “Acquisition Loan”) in January and August 2013.The Acquisition Loan carried customary interest for loans that are taken out in the context of an acquisition of a companywhich is higher than the interest on loans for financing an existing real estate portfolio. The interest on the Acquisition Loanreflects the bridge financing character of the loan, its availability within a short period of time and the different securitypackage because initially it was only secured by the shares of the acquired Company.

Interest expenses for interest rate derivatives decreased by €1.6 million, or 43.2%, from €3.7 million for thesix-month period ended June 30, 2013 to €2.1 million for the six-month period ended June 30, 2014 mainly due to thetermination of existing hedge agreements and the conclusion of new hedge agreements with more favorable conditions forTLG in March and April 2014.


TLG’s interest result significantly decreased by €13.8 million, or 63.9%, from negative €21.6 million for the fiscalyear ended December 31, 2012 to negative €35.4 million for the fiscal year ended December 31, 2013 primarily due toincreased expenses for interest on loans. TLG’s expenses for interest on loans increased by €15.8 million, or 123.4%, from€12.8 million for the fiscal year ended December 31, 2013 to €28.6 million for the fiscal year ended December 31, 2013mainly due to the higher amounts of debt outstanding over the course of 2013 and the higher interest rate on the AcquisitionLoan assumed by TLG in January 2013 compared to TLG’s other liabilities due to financial institutions.

In January 2013, TLG assumed €287.3 million of the total amount of €325.2 million of the Acquisition Loan andthe remaining €37.9 million in August 2013. TLG repaid €250.2 million in several installments of €97.3 million in the firsthalf of 2013 and €153.0 million in the second half of 2013 so that the outstanding amount under the Acquisition Loan wasreduced to €74.9 million as of December 31, 2013. The repayment of the Acquisition Loan was funded through new termloans, cash from the disposal of investment and inventory properties as well as from the disposal of TLG’s 33% interest inAGD in 2013. TLG drew loans in a nominal amount of €252.5 million over the course of 2013, of which a substantial amountwas paid out by the end of 2013 resulting in the high amount of cash and cash equivalents at end of period on the consolidatedstatement of financial position. Cash and cash equivalents at end of the period increased by €78.4 million, or 129.6%, from€60.5 million as of December 31, 2012 to €138.9 million as of December 31, 2013. Non-current and current liabilities due tofinancial institutions increased by €146.2 million, or 30.5%, from €480.0 million for the fiscal year ended December 31, 2012to €626.2 million for the fiscal year ended December 31, 2013.

51

Gain/loss from the Remeasurement of Derivatives

TLG uses financial derivatives primarily to hedge itself against risks resulting from floating interest rates on itsdebt. Since March/April 2014, hedge accounting is applied for all derivatives because the old hedges for which no hedgeaccounting was applied for were replaced with new agreements which are subject to hedge accounting.

Gain/loss from the remeasurement of derivatives decreased by €7.4 million from a gain of €5.4 million for thesix-month period ended June 30, 2013 to a loss of €2.0 million for the six-month period ended June 30, 2014, Due to theapplication of hedge accounting, losses from the remeasurement of derivatives related to effective hedges in an amount of€4.7 million were recorded under other comprehensive income (hedge accounting reserve) for the six-month period endedJune 30, 2014.

Gain/loss from the remeasurement of derivatives increased by €16.9 million from a loss of €10.0 million for thefiscal year ended December 31, 2012 to a gain of €6.9 million for the fiscal year ended December 31, 2013, due to an increaseof the yield curve (Zinsstrukturkurve). In 2012 no hedge accounting was applied. In 2013 hedge accounting was only appliedfor derivatives concluded at the end of 2013. Therefore, the changes in the fair value of derivatives were accounted for undergain/loss from the remeasurement of derivatives for derivatives for which the hedge accounting was not applied for.

Income Taxes

The following table provides a breakdown of TLG’s income taxes.



June 30,2012(1) 2013 2013 2014


(IFRS) (IFRS)Current income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.5) (37.5) (16.5) (17.5)Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59.0) (9.8) (5.5) (8.3)

Tax expense/income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63.5) (47.3) (22.0) (25.8)




Tax expenses increased by €3.8 million, or 17.3%, from €22.0 million for the six-month period ended June 30, 2013to €25.8 million for the six-month period ended June 30, 2014 due to slightly increased current income taxes and increaseddeferred taxes. Current income tax increased slightly by €1.0 million, or 6.1%, from €16.5 million for the six-month periodended June 30, 2013 to €17.5 million for the six-month period ended June 30, 2014 due to an increase of EBT by€15.1 million, or 22.2%, from €68.1 million for the six-month period ended June 30, 2013 to €83.2 million for the six-monthperiod ended June 30, 2014. Deferred taxes increased by €2.8 million, or 50.9%, from €5.5 million for the six-month periodended June 30, 2013 to €8.3 million for the six-month period ended June 30, 2014, mainly due to the positive result from theremeasurement of investment property in the same period.


Tax expenses decreased by €16.2 million, or 25.5%, from €63.5 million for the fiscal year ended December 31,2012 to €47.3 million for the fiscal year ended December 31, 2013, mainly due to a significant decrease in deferred taxexpenses, which was partially offset by the increase in current income tax expenses. Current income tax expenses increasedby €33.0 million, from €4.5 million for the fiscal year ended December 31, 2012 to €37.5 million for the fiscal year endedDecember 31, 2013. TLG utilized a tax loss carryforward in an amount of €7.2 million for the fiscal year ended December 31,2012 to reduce its income taxes. Due to the change of ownership of TLG, the remaining tax loss carryforward in an amount of€17.2 million expired and TLG could not reduce its income tax burden for the fiscal year ended December 31, 2013. Deferredtaxes decreased by €49.2 million, or 83.4%, from €59.0 million for the fiscal year ended December 31, 2012 to €9.8 millionfor the fiscal year ended December 31, 2013. The significant amount of deferred taxes for the fiscal year ended December 31,2012 resulted from the first time adoption of IFRS (see “—Reconciliation between German GAAP and IFRS for the FiscalYear 2012—Reconciliation of 2012 Consolidated Total Comprehensive Income and Equity from German GAAP to IFRS”)while the deferred taxes for the fiscal year ended December 31, 2013 primarily related to the positive result from theremeasurement of investment property.

52

Selected Consolidated Income Statement Data Prepared in Accordance with German GAAP

Until December 31, 2012, TLG prepared its consolidated annual accounts in accordance with German GAAP. Theconsolidated income statement was prepared using the total cost method pursuant to Section 298 (1) in connection withSection 275 (2) of the German Commercial Code (Handelsgesetzbuch (HGB)). For a reconciliation between the consolidatednet profit under German GAAP and IFRS for the fiscal year 2012, see “—Reconciliation between German GAAP and IFRSfor the Fiscal Year 2012—Reconciliation of 2012 Consolidated Total Comprehensive Income and Equity from German GAAPto IFRS”. The following table provides an overview of TLG’s results of operations for the periods shown in accordance withGerman GAAP.


2011(1) 2012(audited)

(in € million)(German GAAP)

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247.4 219.7Increase (decrease) in work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 (0.5)Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.1 16.6Cost of materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (103.0) (94.1)

Disposals of real estate portfolio at carrying amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29.3) (48.7)Cost of purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73.7) (45.4)

Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23.4) (19.1)Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20.1) (16.4)Social security, post-employment and other employee benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.3) (2.7)

Amortization, depreciation and write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56.4) (48.5)of intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (55.9) (48.1)of current assets in excess of the corporation’s standard depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5) (0.4)

Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.9) (30.2)Income from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 2.3Other interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 0.9Write-downs of long-term financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.4) (0.0)Interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32.4) (39.9)Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 7.1

Extraordinary expense/extraordinary result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23.1) —Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.1) (4.5)Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2) (0.1)Consolidated net income for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.7 2.5

Accumulated losses brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28.9) (84.0)Profit distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73.7) (18.4)

Consolidated net accumulated loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84.0) (99.9)


(1) Includes TLG’s residential business, which was spun off to TLG WOHNEN GmbH effective as of January 1, 2012.

Sales

Sales decreased by €27.7 million, or 11.2%, from €247.4 million for the fiscal year ended December 31, 2011 to€219.7 million for the fiscal year ended December 31, 2012. Sales from property management decreased by €58.4 million, or30.0%, from €194.6 million for the fiscal year ended December 31, 2011 to €136.2 million for the fiscal year endedDecember 31, 2012, primarily due to the spin-off of TLG’s residential segment effective as of January 1, 2012 to TLGWOHNEN GmbH. Sales from the disposal of properties increased by €27.8 million, or 55.0%, from €50.5 million for thefiscal year ended December 31, 2011 to €78.3 million for the fiscal year ended December 31, 2012 due to the sale ofseventeen properties in the fiscal year ended December 31, 2012 compared to eleven properties in the fiscal year endedDecember 31, 2011. Sales from other services increased by €2.8 million, or 116.7%, from €2.4 million for the fiscal yearended December 31, 2011 to €5.2 million for the fiscal year ended December 31, 2012. This increase resulted from salesgenerated under an agency agreement with TLG WOHNEN GmbH.

53

Cost of Materials

The following table provides a breakdown of TLG’s cost for purchased materials and services.


2011(1) 2012(audited)


Disposals of real estate portfolio at carrying amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29.3) (48.7)Cost of purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73.7) (45.4)

Cost of materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (103.0) (94.1)



Cost of materials decreased by €8.9 million, or 8.6%, from €103.0 million for the fiscal year ended December 31,2011 to €94.1 million for the fiscal year ended December 31, 2012 because the increase in disposals of real estate portfolio atcarrying amounts was more than offset by the decrease in cost of purchased services. Disposals of real estate portfolio atcarrying amounts related to write-downs of carrying amounts due to disposals and increased by €19.4 million, or 66.2%, from€29.3 million for the fiscal year ended December 31, 2011 to €48.7 million for the fiscal year ended December 31, 2012 dueto larger disposals than in the previous year. Of the disposals of real estate portfolio at carrying amounts for the fiscal yearended December 31, 2012, €45.6 million related to properties classified as fixed assets and €3.1 million related to propertiesclassified as current assets. Cost of purchased services significantly decreased by €28.3 million, or 38.4%, from €73.7 millionfor the fiscal year ended December 31, 2011 to €45.4 million for the fiscal year ended December 31, 2012. Cost of purchasedservices for the fiscal year ended December 31, 2012, included €36.9 million of property management expenses and€8.5 million expenses for other purchased services.

Personnel Expenses

The following table provides a breakdown of TLG’s personnel expenses for the periods presented.


2011(1) 2012(audited)


Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20.1) (16.4)Social security, post-employment and other employee benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.3) (2.7)

Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23.4) (19.1)



Personnel expenses declined by €4.3 million, or 18.4%, from €23.4 million for the fiscal year ended December 31,2011 to €19.1 million for the fiscal year ended December 31, 2012 due to the reduction in the number of employees, whowere transferred to TLG WOHNEN GmbH as of January 1, 2012.

Amortization, Depreciation and Write-Downs

Amortization, depreciation and write-downs decreased by €7.9 million, or 14.0%, from €56.4 million for the fiscalyear ended December 31, 2011 to €48.5 million due to the spin-off of TLG’s residential properties to TLG WOHNEN GmbH.Scheduled depreciation of real estate assets decreased by €11.0 million, or 22.4%, from €49.1 million for the fiscal year endedDecember 31, 2011 to €38.1 million for the fiscal year ended December 31, 2012, also due to the spin-off of TLG’sresidential properties. In addition, write-downs to the lower fair value increased by €3.0 million, or 56.6%, from €5.3 millionfor the fiscal year ended December 31, 2011 to €8.3 million for the fiscal year ended December 31, 2012. Write-downs to thelower fair value of a property are necessary if the carrying amount after periodical depreciation of that property is higher thanthe fair value and are of extraordinary nature. These fair value adjustments are totally unrelated to fair value adjustmentsunder IAS 40 which also encompass upside adjustments. Write-downs of current assets in excess of the corporation’s standarddepreciation decreased by €0.1 million, or 20.0%, from €0.5 million for the fiscal year ended December 31, 2011 to€0.4 million for the fiscal year ended December 31, 2012 and related to write-downs to the lower fair value.

54

Other Operating Expenses

Other operating expenses increased by €7.3 million, or 31.9%, from €22.9 million for the fiscal year endedDecember 31, 2011 to €30.2 million for the fiscal year ended December 31, 2012. Other operating expenses for the fiscal yearended December 31, 2012 include €17.8 million in expenses connected with the liquidation or sale of two subsidiaries. Thenegative effect of these additional expenses was only partially offset by a decrease in other operating expense items.

Other Interest and Similar Income and Interest and Similar Expenses (Interest Result)

The following table provides a breakdown of TLG’s interest result.


2011(1) 2012(audited, unless otherwise

specified)(in € million)

(German GAAP)Other interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 0.9Interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32.4) (39.9)

of which interest paid on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.3) (12.9)of which compensatory payments on interest rate hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . (9.8) (9.1)of which provisions for expected losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (17.5)of which other interest expense (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3) (0.4)

Interest result (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31.6) (39.0)



Interest result decreased by €7.4 million, or 23.4%, from negative €31.6 million for the fiscal year endedDecember 31, 2011 to negative €39.0 million for the fiscal year ended December 31, 2012, mainly due to an increase ofprovisions for expected losses in an amount of €17.5 million for the fiscal year ended December 31, 2012 that was onlypartially offset by a decrease of interest paid on loans. Interest paid on loans declined by 9.4 million, or 42.2%, from€22.3 million for the fiscal year ended December 31, 2011 to €12.9 million for the fiscal year ended December 31, 2012,mainly due to the spin-off of TLG’s residential properties to TLG WOHNEN GmbH. The provisions for expected losses in anamount of €17.5 million related to expected higher interest rate hedging costs as two banks exercised their termination rightsbased on the change of control in TLG as of December 31, 2012.

Taxes on Income

Taxes on income decreased by €5.6 million, or 55.4%, from €10.1 million for the fiscal year ended December 31,2011 to €4.5 million for the fiscal year ended December 31, 2012. Advance payment of corporation tax including thesolidarity surcharge and trade tax each slightly decreased by €0.1 million, or 11.1%, and €0.1 million, or 33.3%, from€0.9 million and €0.3 million for the fiscal year ended December 31, 2011 to €0.8 million and €0.2 million for the fiscal yearended December 31, 2012, respectively. Transfer to provisions for corporation tax and trade tax decreased by €2.3 million, or63.9%, and €3.1 million, or 58.5%, from €3.6 million and €5.3 million for the fiscal year ended December 31, 2011 to€1.3 million and €2.2 million for the fiscal year ended December 31, 2012, respectively.

Investment Property

The following table provides an overview of TLG’s investment property as of the dates shown.

As of January 1,As of

December 31, As of June 30,2012(1) 2012(1) 2013 2014



(unaudited)

(in € million) (in € million) (in € million)(IFRS) (IFRS) (IFRS)

Retail properties (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584.9 629.7 680.5 670.7Office properties (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415.9 452.8 447.8 466.7Hotel properties (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.9 119.8 185.6 187.2Other properties (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231.3 236.4 100.8 98.5Project development (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . 34.3 73.1 — —

Investment Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,374.2 1,511.7 1,414.7 1,423.0


(1) Figures taken from TLG’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2013, includingcomparative financial information for the fiscal year 2012.

55

The carrying amount (fair value) of investment property in the six-month period ended June 30, 2014 slightlyincreased by €8.3 million, or 0.6%, from €1,414.7 million as of December 31, 2013 to €1,423.0 million as of June 30, 2014,mainly due to the acquisition of the office property “Kaiserin-Augusta-Allee 104-106”, resulting in an overall increase in thecarrying amount of the office properties by €18.9 million, or 4.2%, from €447.8 million as of December 31, 2013 to€466.7 million as of June 30, 2014. The fair value increase from office properties was partially offset by the fair valuedecrease in retail properties by 9.8 million, or 1.4%, from €680.5 million as of December 31, 2013 to €670.7 million as ofJune 30, 2014. The decrease related to the opportunistic sale of retail properties in Berlin for which a highly attractive pricewas offered. €38.4 million of the gain from the remeasurement of investment property is attributable to these retail assetswhich were sold and reclassified as long-term assets held for sale.

The carrying amount (fair value) of investment property in 2013 decreased by €97.0 million, or 6.4%, from€1,511.7 million as of December 31, 2012 to €1,414.7 million as of December 31, 2013, mainly due to the decrease of otherproperties by €135.6 million, or 57.4%, from €236.4 million as of December 31, 2012 to €100.8 million as of December 31,2013 that resulted from the sale of non-core properties. This negative effect was partially offset by the fair value increase ofthe retail and hotel portfolio by €50.8 million, or 8.1%, and by €65.8 million, or 54.9%, from €629.7 million and€119.8 million as of December 31, 2012 to €680.5 million and €185.6 million as of December 31, 2013, respectively. Theincrease was due to the completion of project developments of retail and hotel properties that reduced the fair value of projectdevelopments from €73.1 million as of December 31, 2012 to zero as of December 31, 2013.

The table below provides a reconciliation between the carrying amounts (fair values) at the beginning and at the endof the respective period.

2012(1) 2013 2014(audited) (unaudited)


Carrying amount as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,374.2 1,511.7 1,414.7Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.1 3.6 20.0Capitalization of construction activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.6 36.4 7.0Reclassifications as assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.8) (209.3) (71.4)Reclassifications from property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 — 1.3Fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.1 72.2 51.3Carrying amount as of December 31, 2012 and 2013 and June 30, 2014 . . . . . . . . . . . 1,511.7 1,414.7 1,423.0



Acquisitions decreased significantly by €24.5 million, or 87.2%, from €28.1 million for twelve properties in thefiscal year ended December 31, 2012 to €3.6 million for two properties in the fiscal year ended December 31, 2013 andincreased by €16.4 million to €20.0 million for one office property in the six-month period ended June 30, 2014. From aninvestment perspective, TLG focused on the finalization of project developments in the fiscal years ended December 31, 2012and 2013, which is reflected by the comparably high amount capitalized for construction activities compared to acquisitions inthe fiscal year ended December 31, 2012 and 2013. Capitalization of construction activities decreased by €18.2 million, or33.3%, from €54.6 million in the fiscal year ended December 31, 2012 to €36.4 million in the fiscal year ended December 31,2013 before it significantly decreased by €29.4 million, or 80.8%, to €7.0 million in the six-month period ended June 30,2014. Reclassifications as assets held for sale increased by €208.5 million from €0.8 million in the fiscal year endedDecember 31,2012 to €209.3 million in the fiscal year ended December 31, 2013 and decreased by €137.9 million, or 65.9%,to €71.4 million in the six-month period ended June 30, 2014. Reclassifications as assets held for sale resulted primarily fromthe disposal of non-core properties including service properties (nursing homes), management intensive properties andundeveloped land that no longer fit TLG’s strategic focus on office, rental and hotel properties. For a discussion of the fairvalue adjustments, see “—Selected Consolidated Statement of Comprehensive Income Data Prepared in Accordance withIFRS—Result from the Remeasurement of Investment Property”.

56

Liquidity and Capital Resources

Cash Flow

The following tables provide a breakdown of TLG’s cash flow.


For the six-month periodended June 30,

2012(1) 2013 2013 2014(audited) (unaudited)


Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162.9 76.1 26.5 33.4Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 0.7 0.4 0.4Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21.7) (57.0) (33.9) (35.6)Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.7) (5.9) (0.6) (4.5)

Net cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.3 13.8 (7.6) (6.3)Net cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79.0) 220.9 55.1 20.3Net cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28.4) (156.3) (37.1) (128.4)

Change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.9 78.4 10.5 (114.4)




2011 2012(audited)


Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.3 142.5Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115.9) (86.6)Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.2 (28.4)

Net change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.6 27.5


Description of Cash Flow during the Six-Month Period Ended June 30, 2013, the Six-Month Period Ended June 30, 2014,the Year Ended December 31, 2012 and the Year Ended December 31, 2013 Prepared in Accordance with IFRS

Cash Flow from Operating Activities

Cash flow from operating activities increased by €6.9 million, or 26.0%, from €26.5 million during the six-monthperiod ended June 30, 2013 to €33.4 million during the six-month period ended June 30, 2014. The increase in cash flow fromoperating activities is mainly the result of the significant reduction in cash outflows from trade payables and other liabilities.The decrease in trade payables and other liabilities amounted to €28.5 million during the six-month period ended June 30,2013 compared to €8.8 million during the six-month period ended June 30, 2014. The cash outflow attributable to tradepayables and other liabilities during the six-month period ended June 30, 2013 resulted primarily from the payment of RETTrelating to the spin-off of TLG’s residential portfolio to TLG WOHNEN GmbH.

Net cash flow from operating activities only slightly increased by €1.3 million from negative €7.6 million during thesix-month period ended June 30, 2013 to negative €6.3 million during the six-month period ended June 30, 2014 because theincrease in cash flow from operating activities was more than offset by the increase in interest paid by €1.7 million, or 5.0%,from €33.9 million during the six-month period ended June 30, 2013 to €35.6 million during the six-month period endedJune 30, 2014 and the increase in income taxes paid by €3.9 million from €0.6 million during the six-month period endedJune 30, 2013 to €4.5 million during the six-month period ended June 30, 2014. The amount of interest paid during the six-month period ended June 30, 2013 and during the six-month period ended June 30, 2014 related to early settlements ofinterest rate hedges.

Cash flow from operating activities decreased by €86.8 million, or 53.3%, from €162.9 million during the fiscalyear ended December 31, 2012 to €76.1 million during the fiscal year ended December 31, 2013. Earnings after elimination ofnon-cash items decreased by €14.3 million, or 12.2%, from €116.3 million during the fiscal year ended December 31, 2012 to

57

€102.0 million during the fiscal year ended December 31, 2013.1 The positive cash effect from a decrease in inventoriesdecreased by €35.6 million, or 80.0%, from €44.5 million during the fiscal year ended December 31, 2012 to €8.9 millionduring the fiscal year ended December 31, 2013 due to fewer disposals of properties held in inventories. In addition, cash flowfrom changes in trade payables and other liabilities decreased by €37.0 million from €3.6 million (increase in trade payablesand other liabilities) during the fiscal year ended December 31, 2012 to negative €33.4 million (decrease in trade payables andother liabilities) during the fiscal year ended December 31, 2013, primarily due to the payment of RETT relating to the spin-off of TLG’s residential portfolio to TLG WOHNEN GmbH.

Net cash flow from operating activities was additionally negatively affected in an amount of €33.6 million,decreasing net cash flow from operating activities in total by €120.5 million, or 89.7%, from €134.3 million during the fiscalyear ended December 31, 2012 to €13.8 million during the fiscal year ended December 31, 2013. The additional negativeeffect on cash flow primarily resulted from additional interest paid. Interest paid increased by €35.3 million, or 162.7%, from€21.7 million during the fiscal year ended December 31, 2012 to €57.0 million during the fiscal year endedDecember 31, 2013 primarily due to the early settlement of interest rate hedges.

Cash Flow from Investing Activities

Net cash flow from investing activities decreased by €34.8 million, or 63.2%, from €55.1 million during the six-month period ended June 30, 2013 to €20.3 million during the six-month period ended June 30, 2014. This significantdecrease was primarily due to the absence of any one-off effects during the six-month period ended June 30, 2014, such as thecash inflow from the disposal of TLG’s 33% interest in the joint venture AGD in an amount of €71.2 million during the six-month period ended June 30, 2013. The net cash effect from acquisitions of properties and disposals from non-core propertiesrecorded in investment property increased by €36.6 million from negative €16.0 million during the six-month period endedJune 30, 2013 to €20.6 million during the six-month period ended June 30, 2014, mainly due to increased cash received fromdisposals of investment property. Cash received from disposals of investment property increased by €46.2 million, from€1.9 million during the six-month period ended June 30, 2013 to €48.1 million during the six-month period ended June 30,2014, primarily due to the sale of non-core properties (nursing homes). Cash paid for acquisitions of investment propertyincreased by €9.6 million, or 53.9%, from €17.8 million during the six-month period ended June 30, 2013 to €27.4 millionduring the six-month period ended June 30, 2014, primarily relating to the acquisition of the office property “Kaiserin-Augusta-Allee 104-106” in an amount of €19.0 million.

Net cash flow from investing activities increased by €299.9 million from negative €79.0 million during the fiscalyear ended December 31, 2012 to €220.9 million during the fiscal year ended December 31, 2013. This significant increasewas primarily due to significant disposals of non-core investment properties resulting in cash received from disposals ofinvestment property of €191.7 million during the fiscal year ended December 31, 2013 compared to only €0.8 million in theprevious year. Cash paid for acquisitions of investment property declined by €40.5 million, or 49.4%, from €82.0 millionduring the fiscal year ended December 31, 2012 to €41.5 million during the fiscal year ended December 31, 2013.Acquisitions of investment property declined by €24.5 million, or 87.2%, from €28.1 million during the fiscal year endedDecember 31, 2012 to €3.6 million during the fiscal year ended December 31, 2013 because TLG in line with its then currentstrategy did not focus on acquisitions in 2013. Capitalization of construction activities declined by €18.2 million, or 33.3%,from €54.6 million during the fiscal year ended December 31, 2012 to €36.4 million during the fiscal year endedDecember 31, 2013 due to reduced project development activity because in line with TLG’s then current strategy onlyexisting project developments were completed but no new project developments started. Cash received from disposals of jointventures increased by €68.0 million from €3.2 million cash that was distributed by AGD to TLG based on its participation inAGD during the fiscal year ended December 31, 2012 to €71.2 million during the fiscal year ended December 31, 2013, dueto the disposal of TLG’s 33% interest in AGD.

Cash Flow from Financing Activities

Net cash flow from financing activities decreased by €91.3 million from negative €37.1 million during thesix-month period ended June 30, 2013 to negative €128.4 million during the six-month period ended June 30, 2014. Thisdecrease was primarily due to cash distributions to the Existing Shareholders in an amount of €233.0 million during the six-month period ended June 30, 2014, which was only partially offset by lower loan repayments and higher cash inflows from

1 Earnings after elimination of non-cash items for the fiscal year ended December 31, 2012 in an amount of €116.3 millionconsists of earnings before taxes (€139.8 million), depreciation (€1.6 million), result from the remeasurement of investmentproperty (€(53.1) million), result from the measurement of derivatives (€10.0 million), change in the scope of consolidation(€9.3 million), results from the measurement of joint ventures (€(10.6) million), results of joint ventures (€(2.3) million),financial income (€(0.9) million) and financial expenses (€22.5 million) and earnings after elimination of non-cash itemsfor the fiscal year ended December 31, 2013 in an amount of €102.0 million consists of earnings before taxes(€146.4 million), depreciation (€1.5 million), result from the remeasurement of investment property (€(72.2) million), resultfrom the remeasurement of derivatives (€(6.9) million), other non-cash expenses/income (€0.0 million), results of jointventures (€(2.1) million), financial income (€(0.7) million) and financial expenses (€36.0 million), all as reflected on theCompany’s consolidated cash flow statement as of and for the fiscal year ended December 31, 2013.

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loans drawn. Repayments of bank loans decreased by €41.3 million, or 32.9%, from €125.6 million during the six-monthperiod ended June 30, 2013, to €84.3 million during the six-month period ended June 30, 2014. Cash received from loansdrawn increased by €115.6 million, or 157.7%, from €73.3 million during the six-month period ended June 30, 2013, to€188.9 million during the six-month period ended June 30, 2014.

Net cash flow from financing activities decreased by €127.9 million from negative €28.4 million during the fiscalyear ended December 31, 2012 to negative €156.3 million during the fiscal year ended December 31, 2013. Such decreasewas primarily due to repayments of bank loans in an amount of €429.3 million during the fiscal year ended December 31,2013 compared to €15.9 million during the fiscal year ended December 31, 2012. The negative impact of the repayment ofbank loans was only partially offset by cash received from bank loans in an amount of €252.5 million during the fiscal yearended December 31, 2013, compared to €71.2 million during the fiscal year ended December 31, 2012, and by cash receivedfrom equity contributions by the shareholder in an amount of €20.5 million. No cash distribution was made to the ExistingShareholders during the fiscal year ended December 31, 2013, while cash distributions of €83.7 million were made to theCompany’s former shareholder the Federal Republic of Germany during the fiscal year ended December 31, 2012. Theassumption of the Acquisition Loan from the Existing Shareholders was not cash effective in 2013.

Description of Cash Flow during the Year Ended December 31, 2011 Compared to the Year Ended December 31, 2012Prepared in Accordance with German GAAP

Cash Flows from Operating Activities

Cash flows from operating activities increased by €18.2 million, or 14.6%, from €124.3 million during the fiscalyear ended December 31, 2011 to €142.5 million during the fiscal year ended December 31, 2012 despite a lowerconsolidated net income/loss during the period of €2.5 million during the fiscal year ended December 31, 2012 compared to€18.7 million during the fiscal year ended December 31, 2011. This increase was primarily due to disposals of real estateportfolio at carrying amount of €45.6 million during the fiscal year ended December 31, 2012 compared to €25.9 millionduring the fiscal year ended December 31, 2011, changes in inventories, trade receivables and other assets as well as in tradepayables, special reserves in accordance with Section 27 (2) of the D-Mark Accounting Act (D-Mark-Bilanzgesetz,“DMBilG”) and other liabilities in an aggregate amount of €19.3 million during the fiscal year ended December 31, 2012compared to €1.7 million during the fiscal year ended December 31, 2011 and a positive effect from a change fromdeconsolidation in an amount of €27.0 million during the fiscal year ended December 31, 2012. A decrease in provisionsreduced cash flow from operating activities by €0.1 million during the fiscal year ended December 31, 2012, while an increasein provisions of €22.2 million during the fiscal year ended December 31, 2011 led to a corresponding increase in cash flowsfrom operating activities. The net effect of the corrections for other non-cash income/expenses decreased by €8.6 million froma correction in an amount of €6.8 million during the fiscal year ended December 31, 2011 to a correction of negative€1.8 million for non-cash income during the fiscal year ended December 31, 2012.

Cash Flows from Investing Activities

Cash flows from investing activities increased by €29.3 million from negative €115.9 million during the fiscal yearended December 31, 2011 to negative €86.6 million during the fiscal year ended December 31, 2012. This increase wasprimarily due to lower purchases of tangible fixed assets of €89.5 million during the fiscal year ended December 31, 2012compared to €115.4 million during the fiscal year ended December 31, 2011.

Cash Flows from Financing Activities

Cash flows from financing activities decreased by €47.6 million from €19.2 million during the fiscal year endedDecember 31, 2011 to negative €28.4 million during the fiscal year ended December 31, 2012. This decrease was primarilydue to cash payments to the Company’s former shareholder, the Federal Republic of Germany, in an amount of €83.7 millionduring the fiscal year ended December 31, 2012 compared to such payments of €20.0 million in the fiscal year endedDecember 31, 2011. The negative effect from the higher distribution to shareholders in 2012 was partially offset by the higherpositive net cash effect from cash proceeds from borrowings and cash repayments of borrowings of €55.3 million during thefiscal year ended December 31, 2012 compared to €39.2 million during the fiscal year ended December 31, 2011.

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FFO

The following table shows the calculation of FFO for the periods shown:



June 30,2012 2013 2013 2014


(unaudited)

(in € million) (in € million)Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3 99.1 46.1 57.4Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . 0.0 (0.5) (0.2) (0.5)Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . (27.4) (7.8) (5.5) (2.3)Result from the remeasurement of investment property . . . . . . . . . . . . . . . . (53.1) (72.2) (34.4) (51.3)Gain/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . 10.0 (6.9) (5.4) 2.0Other effects(1) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15.4) (6.8) 4.2 (1.7)Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.0 9.8 5.5 8.3Correction of current income taxes due to lump sum calculation for interim

periods(2) (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A 0.6 9.5Adjustment for tax effects from the result of the disposal of investment

property and the disposal of real estate inventory as well as tax effectsfrom the settlement of interest rate swaps(3) (unaudited) . . . . . . . . . . . . . . 3.2 31.4 13.6 4.6

FFO (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.6 46.1 24.4 26.0

(1) Other effects include:

(a) Depreciation of owner-occupied properties (IAS 16) of €0.3 million for the fiscal year ended December 31, 2012, €0.3 million forthe fiscal year ended December 31, 2013, €0.1 million for the six-month period ended June 30, 2013 and €0.1 million for the six-month period ended June 30, 2014;

(b) Income from the service agreement with TAG Wohnen GmbH (formerly: TLG WOHNEN GmbH) that will expire onDecember 31, 2014 of €2.9 million for the fiscal year ended December 31, 2012, €1.6 million for the fiscal year endedDecember 31, 2013, €0.7 million for the six-month period ended June 30, 2013 and €0.3 million for the six-month period endedJune 30, 2014;

(c) Income from the 33% interest in the joint venture AGD, sold in 2013, of €12.9 million for the fiscal year ended December 31,2012, €2.1 million for the fiscal year ended December 31, 2013 and €2.1 million for the six-month period ended June 30, 2013;

(d) Personnel expenses for severance packages in connection with TLG’s reorganization in the amount of €6.9 million for the fiscalyear ended December 31, 2013 and €6.9 million for the six-month period ended June 30, 2013 as well as share based paymentexpenses of €0.8 million for the six-month period ended June 30, 2014;

(e) Income from the reversal of provisions for real estate transfer tax, provided for in connection with the spin-off of TLG’s residentialproperties to TLG WOHNEN GmbH in 2012, of €5.4 million for the fiscal year ended December 31, 2013; and

(f) Income from the reversal of liabilities and provisions in connection with purchase price pass-through obligations and accruedinterest which resulted from TLG’s obligation to pass on parts of the purchase price received for the sale of properties which wereco-owned by TLG, BEDIG AG i.L. and the state of Berlin in the amount of €4.8 million for the fiscal year ended December 31,2013 and income from reversal of a provision for the subsidy repayment risk of €2.3 million for the six-month period endedJune 30, 2014.

(2) The current income taxes shown in the six-month periods ended June 30, 2013 in the amount of €16.5 million and 2014 in the amount of€17.5 million were calculated by using the integral method in accordance with IAS 34.30. Due to this calculation method a correction inthe amount of €0.6 million for the first half year of 2013 and in the amount of €9.5 million for the first half year of 2014 is made to showthe actually lower current tax expenses for the respective six-month period in the amount of €15.9 million for 2013 and of €8.0 millionfor 2014.

(3) Adjustments of the actual tax effect on current income taxes from the result of the disposal of investment property and real estateinventory amounted to €3.2 million for the fiscal year ended December 31, 2012, €36.8 million for the fiscal year ended December 31,2013, €13.6 million for the six-month period ended June 30, 2013 and €10.9 million for the six-month period ended June 30, 2014.

Adjustments of the reverse effect from the tax effective settlement of interest rate swaps (originally decreasing tax expense) amounted to€5.5 million for the fiscal year ended December 31, 2013 and €6.4 million for the six-month period ended June 30, 2014.

Description of FFO for the Year Ended December 31, 2012 and the Year Ended December 31, 2013, the Six-Month PeriodEnded June 30, 2013 and the Six-Month Period Ended June 30, 2014

FFO decreased by €6.5 million, or 12.4%, from €52.6 million for the fiscal year ended December 31, 2012 to€46.1 million for the fiscal year ended December 31, 2013. The decrease was primarily due to higher interest expenses forinterest on loans and higher current income taxes, which only partially was offset by the increased income from lettingactivities. TLG’s expenses for interest on loans increased mainly due to the higher amounts of debt outstanding over the courseof 2013 and the higher interest rate on the Acquisition Loan which TLG assumed from the Existing Shareholders compared toTLG’s liabilities due to financial institutions. Tax expenses increased because TLG utilized tax loss carryforwards in the fiscalyear ended December 31, 2012 to reduce its income taxes. Due to the change of ownership of TLG, the remaining tax losscarryforwards expired and TLG could not reduce its income tax burden for the fiscal year ended December 31, 2013.

60

FFO increased by €1.6 million, or 6.6%, from €24.4 million for the six-month period ended June 30, 2013 to€26.0 million for the six-month period ended June 30, 2014, primarily due to lower interest expenses resulting from thecompletion of the Company’s refinancing process, which were only partially offset by lower income from letting activitiesdriven by certain disposals of income generating non-core properties and higher current tax expenses.

Having achieved an FFO of €26.0 million in the first half of the fiscal year 2014, the Company forecasts that FFOfor the full fiscal year 2014 will amount to €50.0 million (for the assumptions underlying this FFO Forecast see “ProfitForecast”).

Based on the annualized in-place rent as of September 15, 2014 and a level of net operating income from lettingactivities margin that has been achieved in the six-month period ended June 30, 2014 as well as taking into accountadministration cost savings from already contractually agreed headcount reductions effective as of January 1, 2015 as well asthe current average financing costs as reflected by the Company’s favorable average interest rate, the Company believes thatstabilized FFO (on a run rate basis) would be a middle single digit Euro million amount higher than its FFO Forecast for thefull fiscal year 2014.

The following table provides further information on the components the Company believes to be relevant forassessing a stabilized FFO (on a run rate basis):

Annualized in-place rent (in € million)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. 118Net operating income from letting activities margin (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. 87%Stabilized administration costs (in € million)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. (18) – c. (19)Financing costs at current average Company interest rate (in € million)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. (23) – c. (24)Estimated cash taxes (in € million)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. (6) – c. (7)

Note: All figures above are unaudited

(1) Annualized in-place rent as of September 15, 2014 excludes in-place rent for signed disposals and includes in-place rent of signedacquisitions and new or renewed lease agreements.

(2) Net operating income from letting activities margin is net operating income from letting activities which refers to income from lettingactivities less expenses related to letting activities, divided by rental income, all as reflected in the consolidated statement ofcomprehensive income for the respective period.

(3) Administration costs after giving effect to the already agreed headcount reductions as of January 1, 2015 reducing TLG’s headcount to127 employees.

(4) TLG’s current average interest rate of 2.99% and financial liabilities due to financial institutions of €727.9 million as of June 30, 2014plus €13.0 million to €14.0 million additional financial liabilities due to financial institutions relating to the acquisition of the K30 officebuilding plus €29.0 million to €30 million additional liabilities due to financial institutions relating to the acquisition of approximately94.9% of the shares in TLG FAB (as defined below).

(5) The Company estimates the cash taxes as follows: In a first step, it deducts from stabilized FFO pre tax (on a run rate basis) thedepreciation which is recognized under tax law in an amount of approximately €40 million. In a second step, it applies on the result ofFFO pre tax (on a run rate basis) minus depreciation its income tax rate of 30.875% (15.825% corporate tax rate including solidaritysurcharge and 15.05% trade tax rate).

Investments

The following table shows the amount of TLG’s investments in the relevant period in accordance with IFRS.


For the six-month periodended June 30,

2012(1) 2013 2013 2014(audited, unless otherwise

specified)(unaudited)


Investments in investment properties(2) (unaudited) . . . . . . . . . . . . . . . . . 82.7 40.0 17.0 27.1Investments in inventory properties(3) (unaudited) . . . . . . . . . . . . . . . . . . 6.5 5.2 1.8 3.7Investments in property, plant and equipment(4) (unaudited) . . . . . . . . . . 0.2 0.2 0.0 0.4Investments in intangible assets(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 0.2 0.1 0.2

Total investments (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89.7 45.6 18.9 31.4


(1) Figures labelled as audited taken from the Company’s audited consolidated financial statements as of and for the fiscal year endedDecember 31, 2013, including comparative financial information for the fiscal year 2012.

(2) Acquisitions of investment property and capitalization of construction activities recognized in the carrying amount (fair value) ofinvestment property.

(3) Refers to the acquistition cost of inventory properties.

(4) Refers to additions (at cost) to owner-occupied properties, technical equipment and machinery and operating and office equipment.

(5) Refers to additions (at cost) to intangible assets in the respective period.

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Investments in Investment Properties

Acquisitions of investment properties amounted to €20.0 million in the six-month period ended June 30, 2014 dueto the acquisition of the office property “Kaiserin-Augusta-Allee 104-106” in Berlin. In accordance with TLG’s strategy toreduce property developments after the completion of the existing developments capitalization of construction costs amountedto €7.0 million in the six-month period ended June 30, 2014 relating to remaining construction work on project developmentsthat became operational as of December 31, 2013.

As part of TLG’s strategy to grow rental income, TLG made investments into its existing investment properties inthe abovementioned amounts. Most of the investments in investment properties related to capitalization of constructionactivities, declining by €18.2 million, or 33.3%, from €54.6 million in the fiscal year ended December 31, 2012 to€36.4 million in the fiscal year ended December 31, 2013. Furthermore, TLG reported acquisitions in an amount of€28.1 million for twelve properties in the fiscal year ended December 31, 2012 and in an amount of €3.6 million for twoproperties in the fiscal year ended December 31, 2013.

Investments in Inventory Properties

Investments in properties held in inventories increased by €1.9 million, or 105.6%, from €1.8 million in the six-month period ended June 30, 2013 to €3.7 million in the six-month period ended June 30, 2014 due to construction work onan unfinished building already sold in 2013 which will be completed and transferred in 2014.

Investments in properties held in inventories decreased by €1.3 million, or 20.0%, from €6.5 million in the fiscalyear ended December 31, 2012 to €5.2 million in the fiscal year ended December 31, 2013 and were related to the unfinishedbuilding mentioned above and another unfinished building, which was sold and transferred in 2013 (see “—SelectedConsolidated Statement of Comprehensive Income Data Prepared in Accordance with IFRS—Result from the Disposal ofInvestment Properties”).

Investments since June 30, 2014 and Future Investments

Since June 30, 2014, TLG has made the following ongoing and future investments:

• Acquisition of the office building Köpenicker Straße 30-31 (K30) in Berlin closed in September 2014 for apurchase price of €23.0 million (including ancillary acquisition costs).

• Acquisition of approximately 94.9% of the shares of TLG FAB S.à r.l., Luxemburg (“TLG FAB”), whichowns the “Forum am Brühl” in Leipzig at Richard-Wagner-Straße 1, 2-3. The purchase price was based on anagreed asset value for the “Forum am Brühl” of €49.5 million (including ancillary acquisition costs), whichwas adjusted with respect to cash and debt of TLG FAB (including the replacement by TLG of the existingdebt financing). The share purchase agreement was signed on September 5, 2014 and the transaction closedeffective October 1, 2014. The purchase price was partially debt financed.

• The following table provides additional information on these two properties:

LocationFair

value(1)

Annualizedin-placerent(2) WALT(3)

Lettablearea(4) Anchor tenant(s)

(As of the respective signing date)(5)

Köpenicker Str. 30-31 . . . . . . . Berlin 22.9 1,344.1 6.5 12,156 ver.di; Deutsche BahnRichard-Wagner-Str. 1, 2-3 . . . Leipzig 49.7 3,297,1 5.1 26,500 Deutsche Bahn, APO-Bank

(1) In € million.

(2) In € thousand. Annualized in-place rent is calculated based on contracted rents as of the respective signing date, withoutdeduction for any applicable rent free periods, multiplied by twelve. In-place rent is not an IFRS measure.

(3) In years. WALT refers to the weighted average lease term, i.e., the remaining average contractual lease term forunexpired leases with a contractually fixed maturity.

(4) In sqm and excluding parking space and open space.

(5) Signing date for Köpenicker Straße 30-31: July 18, 2014. Signing date for Richard-Wagner-Straße 1, 2-3: September 5,2014.

Besides the recent investments above which already closed, the Management and Supervisory Board have made nofirm commitments on any significant future investments.

However, the Company is currently negotiating with the seller of a retail asset in Berlin with a potential acquisitionprice (including ancillary acquisition costs) of approximately €35 million and is currently conducting due diligence withregard to an office asset in Rostock with an acquisition price (including ancillary acquisition costs) of approximately €16million. In addition, the Company is currently reviewing in more detail potential acquisitions of office and retail propertieslocated in Berlin, Dresden/Leipzig, Rostock or the respective surrounding areas and other parts of eastern Germany in whichTLG operates with an aggregate fair value of €20 million and €140 million, respectively.

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The Company plans to finance future acquisitions with debt and equity.

Equity

December 31, 2013 Compared to June 30, 2014 (IFRS)

In the six-month period ended June 30, 2014, TLG’s equity capital decreased by €179.5 million, or 22.4%, from€801.0 million as of December 31, 2013 to €621.5 million as of June 30, 2014. TLG’s equity is fully attributable to itsExisting Shareholders. The decrease was primarily due to distributions to the Existing Shareholders in an amount of€233.0 million from retained earnings in the six-month period ended June 30, 2014, which was only partially offset by netincome in an amount of €57.4 million for the six-month period ended June 30, 2014.

December 31, 2012 Compared to December 31, 2013 (IFRS)

TLG’s equity, which is, in the absence of any minority interest, fully attributable to TLG’s shareholders, decreasedby €205.7 million, or 20.4%, from €1,006.7 million as of December 31, 2012 to €801.0 million as of December 31, 2013. Thesubscribed capital (gezeichnetes Kapital) amounted to €52.0 million as of December 31, 2013 and remained unchangedcompared to December 31, 2012. The capital reserves increased by €258.7 million, or 170.8%, from €151.5 million as ofDecember 31, 2012 to €410.2 million as of December 31, 2013 and the retained earnings decreased significantly by€464.3 million, or 57.7%, from €804.3 million as of December 31, 2012 to €340.0 million as of December 31, 2013. Theincrease of the capital reserves in 2013 in an amount of €258.7 million resulted from an addition to the capital reserves due tothe release of the special reserve in accordance with Section 27 (2) of the DMBilG, previously booked under retained earningsin an amount of €438.1 million, additional shareholder contributions to capital reserves in an amount of €20.5 million by theExisting Shareholders and a transfer from capital reserves in an amount of €199.8 million to retained earnings. The decreaseof the retained earnings by €464.3 million in 2013 resulted from non-cash distributions to the Existing Shareholders in anamount of €325.2 million due to the assumption of the Acquisition Loan by TLG from the Existing Shareholders and therelease of the special reserve to capital reserves in an amount of €438.1 million which was partially offset by the transfer fromcapital reserves to retained earnings in an amount of €199.8 million and consolidated net income for the year 2013 in anamount of €99.1 million. Other comprehensive income, consisting of the hedge accounting reserve and actuarial gains andlosses, decreased slightly by €0.2 million from negative €1.0 million as of December 31, 2012 to negative €1.2 million as ofDecember 31, 2013.

December 31, 2011 Compared to December 31, 2012 (German GAAP)

TLG’s equity decreased by €157.5 million, or 16.4%, from €962.7 million as of December 31, 2011 to€805.2 million as of December 31, 2012. The subscribed capital (gezeichnetes Kapital) amounted to €52.0 million as ofDecember 31, 2012 and remained unchanged compared to December 31, 2011. Capital reserves decreased by €160.3 million,or 44.5%, from €360.3 million as of December 31, 2011 to €200.0 million as of December 31, 2012, due to the spin-off ofTLG’s residential portfolio to TLG WOHNEN GmbH (€148.7 million) which was recorded as a decrease of capital reserves,and distributions in an amount of €30.0 million to the former shareholder, the Federal Republic of Germany, which were in anamount of €11.6 million funded through cash withdrawals from the capital reserves. Consolidated net accumulated lossesincreased by €15.9 million, or 18.9%, from €84.0 million as of December 31, 2011 to €99.9 million as of December 31, 2012,due to the increase from the profit distribution which was not funded from the capital reserves (€18.4 million). Consolidatednet income in an amount of €2.5 million and changes in the reporting entity structure (€18.7 million) had a positive effect onTLG’s equity in the year ended December 31, 2012.

Maturity Profile of Key Liabilities

The following table provides a maturity profile of TLG’s financial liabilities due to financial institutions as ofJune 30, 2014.

As of June 30, 2014

Book Valueamount

Remaining termsup to1 year 1-5 years

more than5 years


(IFRS)Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727.9 55.6 245.3 427.1


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Financial Liabilities

The following table provides a breakdown of TLG’s financial liabilities according to IFRS as of the dates shown.

As of December 31, As of June 30,2012(1) 2013 2014

(audited, unlessotherwise specified) (unaudited)


Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480.0 626.2 727.9Financial derivatives (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.4 18.8 8.7

Financial liabilities (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523.4 645.0 736.6


(1) Figures taken or derived from TLG’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2013,including comparative financial information for the fiscal year 2012.

For more information on the development of financial liabilities due to financial institutions see “—SelectedConsolidated Statement of Comprehensive Income Data Prepared in Accordance with IFRS—Financial Income and TotalInterest and Similar Expenses (Total Interest and Similar Result)”.

The following table provides a breakdown of TLG’s financial liabilities to banks according to German GAAP forthe dates shown.

As of December 31,2011 2012(audited, unless


(German GAAP)Liabilities to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696.8 480.1Financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Financial liabilities (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696.8 480.1


The significant decrease in liabilities to banks by €216.7 million, or 31.1%, from €696.8 million as of December 31,2011 to €480.1 million as of December 31, 2012 was due to the transfer of liabilities to banks to TLG WOHNEN GmbH inconnection with the spin-off of TLG’s residential portfolio to TLG WOHNEN GmbH, whose sole shareholder was theFederal Republic of Germany.

Other Liabilities

The following table provides a composition of other liabilities.



(IFRS) (IFRS)Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.3 19.5 12.9

Liabilities to employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 5.2 4.1Advance payments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 0.5 0.7Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.0 1.6 1.9Liabilities from the pass-through of purchase price . . . . . . . . . . . . . . . . . . . . . . . . . 7.0 5.5 —Investment subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 2.4 2.6Liabilities to tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1.2 1.2Miscellaneous other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 3.1 2.3



December 31, 2013 Compared to June 30, 2014 (IFRS)

Other liabilities decreased by €6.6 million, or 33.8%, from €19.5 million as of December 31, 2013 to €12.9 millionas of June 30, 2014, mainly due to the absence of any liabilities from the pass-through of purchase prices.

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December 31, 2012 Compared to December 31, 2013 (IFRS)

Liabilities to employees increased due to the headcount reductions conducted in 2013 (see “—Key FactorsInfluencing TLG’s Portfolio, Results of Operations and the Comparability of Financial Information—Reorganization of TLG”

Advance payments received decreased by €3.2 million, or 86.5%, from €3.7 million as of December 31, 2012 to€0.5 million as of December 31, 2013. Advance payments received related to the disposal of properties. Other taxes decreasedsignificantly by €16.4 million, or 91.1%, from €18.0 million as of December 31, 2012 to €1.6 million as of December 31,2013, primarily due to the payment of the tax liability from RETT relating to the spin-off of TLG’s residential business toTLG WOHNEN GmbH. Liabilities from the pass-through of purchase price decreased by €1.5 million, or 21.4%, from€7.0 million as of December 31, 2012 to €5.5 million as of December 31, 2013. Liabilities from the pass-through of purchaseprice resulted from TLG’s obligation to pass on parts of the purchase price received for the sale of properties which were co-owned by TLG, BEDIG AG i.L. and the state of Berlin.

Deferred Taxes

Deferred tax assets and deferred tax liabilities resulted from temporary differences between the tax book value andthe fair value of assets. The following table provides an overview of deferred tax assets and deferred tax liabilities:



(IFRS) (IFRS)Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 3.5 5.4Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.3 88.1 96.3



TLG’s deferred tax assets decreased by €1.0 million, or 22.2%, from €4.5 million as of December 31, 2012 to€3.5 million as of December 31, 2013, mainly due to lower book values of financial liabilities and increased by €1.9 million,or 54.3% to €5.4 million as of June 30, 2014, due to lower negative book values of financial instruments.

TLG’s deferred tax liabilities increased by €8.8 million, or 11.1%, from €79.3 million as of December 31, 2012 to€88.1 million as of December 31, 2013 and by €8.2 million, or 9.3%, to €96.3 million as of June 30, 2014, due to valuationgains on investment property.

Provisions

The following table provides a composition of TLG’s pension provisions and other current provisions based onbalance sheet data prepared in accordance with IFRS.

As of December 31, As of June 30,2012(1) 2013 2014(audited, unless



Pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 6.9 6.8Other current provisions(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 16.2 12.3

Total (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.1 23.1 19.1


(1) Figures taken or derived from TLG’s audited consolidated financial statements as of and for the fiscal year ended December 31, 2013,including comparative financial information for the fiscal year 2012.

(2) Other current provisions include provisions for personnel expenses from restructuring plan, provisions for litigation risks and othermiscellaneous provisions.

Pension provisions as of December 31, 2012 and 2013 and as of June 30, 2014 remained relatively stable andamounted to €6.9 million, €6.9 million and €6.8 million, respectively. Other current provisions decreased by €6.0 million, or27.0%, from €22.2 million as of December 31, 2012 to €16.2 million as of December 31, 2013, due to reversals of provisionsfor litigation risks in an amount of €3.5 million and reversals of other miscellaneous provisions. Other current provisions

65

decreased by €3.9 million, or 24.1%, from €16.2 million as of December 31, 2013 to €12.3 million as of June 30, 2014,primarily due to an additional release of provisions for litigation risks. For more information on TLG’s litigation, see“Business––TLG’s Business Operations––Material Litigation”.

Other Financial Obligations

The following table provides a composition of TLG’s other financial obligations based on consolidated statement offinancial position data prepared in accordance with IFRS.

As of December 31,2012(1) 2013

(audited)(in € million)

(IFRS)Other financial obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.9 41.7Future payments (net) for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 0.7Purchase commitment for investment property and property, plant and equipment . . . . . . . . . . . . . . . . . . . 65.3 41.0



Other financial obligations decreased by €24.2 million, or 36.7%, from €65.9 million as of December 31, 2012 to€41.7 million as of December 31, 2013, due to a decrease in purchase commitment for investment property and property,plant and equipment. Purchase commitment for investment property and property, plant and equipment decreased by€24.3 million, or 37.2%, from €65.3 million as of December 31, 2012 to €41.0 million as of December 31, 2013, primarilydue to the reduced volume of project developments. The decrease from reduced project development was partially offset bythe purchase price obligation regarding the office property “Kaiserin-Augusta-Allee 104-106” in Berlin, in 2013. Purchaseprice obligations from acquisitions of properties are recognized if the sale and purchase agreements have been notarized in thereporting period but the transfer of the property commences in a subsequent period.

Additional Information from the Unconsolidated Financial Statements Prepared in Accordance with German GAAPas of and for the Year Ended December 31, 2013

TLG’s 2013 unconsolidated financial statements have been prepared in accordance with German GAAP. Accordingto these financial statements, equity decreased from €806.8 million as of December 31, 2012 to €585.0 million as ofDecember 31, 2013. The decrease by €221.8 million was primarily the result of non-cash distributions from the capitalreserves in an amount of €199.8 million, from the revenue reserves in an amount of €96.4 million and from net income in anamount of €29.0 million to the Existing Shareholders by assuming the Acquisition Loan in a total amount of €325.2 millionfrom the Existing Shareholders. From the remaining revenue reserves an amount of €438.1 million was reclassified to capitalreserves and the Existing Shareholders contributed €20.5 million to the capital reserves. As a result of the distribution and thereclassification, the capital reserve increased from €199.8 million as of December 31, 2012 to €458.6 million as ofDecember 31, 2013 and the revenue reserves decreased from €535.4 million as of December 31, 2012 to €0.8 million as ofDecember 31, 2013. For further information on TLG’s unconsolidated financial statements, see the notes to its unconsolidatedfinancial statements, which are set forth on pages F-116 et seq. of this Prospectus.

Quantitative and Qualitative Disclosure about Market Risk

Default Risk

Default risk is the risk that counterparties – essentially the tenants and acquirers of real properties – will be unableto satisfy their contractual payment obligations and that this will result in a loss for TLG. Credit checks are conducted as partof default risk management.

Trade receivables in particular are exposed to default risk. TLG does not consider itself exposed to any materialcredit risk from any single counterparty. Given TLG’s broad, heterogeneous customer base, the concentration of its credit riskis limited. Default risk is reduced through the careful screening of counterparties. In addition, TLG makes use of standardcollateral instruments such as sureties, liens, guarantees, letters of comfort, withholdings and security deposits. Wherenecessary, valuation allowances are recognized in respect of receivables.

Professional credit checks are performed when screening counterparties, thus minimizing any potential for defaultrisk. Counterparty creditworthiness is subject to continuous monitoring. If a counterparty’s creditworthiness deterioratessignificantly, TLG undertakes efforts to reduce its existing exposure as quickly as possible. New exposures to suchcounterparties are no longer entered into.

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TLG’s balances with banks are fully protected against the risk of a bank default through the deposit protectionschemes in place for German banks. TLG regularly monitors the banks’ membership and amount subject to depositprotection.

The maximum possible default risk is equal to the book value of financial assets, excluding the value of collateralreceived or other risk-mitigating arrangements. Guarantees are not entered into for subsidiaries or equity investments.

Liquidity Risk

Liquidity risk is the risk that a company will not be able to fulfill its payment obligations at the contractuallystipulated time. To safeguard TLG’s liquidity, TLG’s treasury and controlling department constantly monitors and plansTLG’s liquidity needs. Sufficient funds are constantly kept at hand to ensure that TLG is able to satisfy its obligations over acertain period.

TLG has a short-term line of credit of €7.0 million which it may draw down as it needs. The credit line is unsecured.The Company intends to reduce its short-term line of credit to €0.5 million.

The table below presents the contractually stipulated (undiscounted) payments of interest and principal for TLG’sprimary financial liabilities and financial instruments with a negative fair value. Maturities are based on the contractuallystipulated fixed-interest periods for the financial liabilities.

As of December 31, 2013

Carryingamount

Maturities< 1 year 1-5 years > 5 years


(IFRS)Types of liabilitiesFinancial liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 626.2 123.9 261.4 318.1Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.8 6.2 14.4 (0.3)Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.6 14.6 — —Other liabilities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.5 16.1 3.4 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679.1 160.8 279.3 317.8


(1) For more information on other liabilities, see “—Liquidity and Capital Resources—Trade Payables and Other Liabilities”.

The table above includes all instruments held for which payments had already been contractually agreed as ofDecember 31, 2013. Planning figures for future new liabilities are not factored in. The floating interest payments for financialinstruments are calculated on the basis of the interest rates most recently set prior to the reporting date. Financial liabilitieswhich may be called at any time are always reported under the earliest repayment date.

Certain financing agreements stipulate financial covenants (essentially TLG’s equity ratio, Net LTV-Ratio andinterest and capital servicing cover ratio) which, if breached, may grant the bank an extraordinary call right. TLG counteractsthe risk of a breach of covenant through regular monitoring of the covenants and, where necessary, initiates measures aimedto ensure compliance with the covenants. There also exists the option of rendering special payment to remedy a breach ofcovenant. There were no breaches of covenants in 2012 or 2013.

Market Risk

Interest rate movements can also lead to higher financing costs as a result of rising interest rates. TLG counteractsthis interest rate risk by concluding interest rate hedges for floating rate loans and by entering into fixed interest agreementswith multi-year terms. Interest rate derivatives (consisting of interest rate swaps and caps) are used to hedge changes ininterest rates. The use of such interest rate derivatives is governed by a set of guidelines. Under those guidelines, financialinstruments may be used strictly for hedging purposes and not for trading purposes. In general, there exists an economichedge relationship for all floating rate loans. In individual cases, particularly those involving short-term loans, no hedge isconcluded.

Currency risk does not affect TLG since material business transactions are conducted in euros.

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The table below presents the financial instruments held by TLG as of December 31, 2013.

DerivativesFair Value < 1 year



Derivative HfT assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 —of which caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 —

Derivative HfT liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.6) —of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.8) —of which collars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.8) —

Derivatives used in hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2) —of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.2) —

Total (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.8) —

The table below presents the financial instruments held by TLG as of December 31, 2012.

Derivatives(1)

Fair Value < 1 year(audited, unless


(IFRS)Derivative HfT assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 —

of which caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 0.0

Derivative Hft liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43.4) (18.2)of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41.1) (18.2)of which collars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.3) —

Total (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43.4) (18.2)


To the extent the derivatives concluded qualify for hedge accounting, they are used as hedges in accordance withIAS 39. The cash flows from underlying transactions secured in cash flow hedges will flow through the statement ofcomprehensive income in the years from 2014 to 2021.

In 2013, no ineffective portions of hedges were reported in the statement of comprehensive income as part of hedgeaccounting. No hedge accounting was applied in 2012.

The table below shows the amount reported directly in other comprehensive income during the reporting period.That amount corresponds to the effective portion of the fair value hedge.

2012(1) 2013(audited)


As of January 1, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Recognized in equity during the reporting period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.2)Reversed from equity to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

As of December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.2)


Sensitivity Analysis

In accordance with IFRS 7, interest rate risks are presented using sensitivity analyses. These analyses calculate theimpacts a change in market interest rates would have on interest income and expense, trading gains and losses and equity as ofthe reporting date.

The sensitivity analysis examines what effects a parallel shift in the yield curve by +/- 100 basis points (“BP”)would have on TLG’s equity and consolidated statement of comprehensive income. The cash-flow effects of a shift in theyield curve relate solely to interest expenses and income for the subsequent reporting period.

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Based on the financial instruments held or issued by TLG as of December 31, 2013, a hypothetical change –quantified by way of sensitivity analysis – in the interest rates applicable to the relevant instruments would have had thefollowing (pre-tax) effects.

As of December 31, 2013OCI-effect Earnings-effect

+100 BP -100 BP +100 BP -100 BP(audited)


Financial instrumentsFinancial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (3.1) 0.9Financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 (4.3) 7.0 (6.8)

Based on the financial instruments held or issued by TLG as of December 31, 2012, a hypothetical change –quantified by way of sensitivity analysis – in the interest rates applicable to the relevant instruments would have had thefollowing (pre-tax) effects.

As of December 31, 2012(1)

OCI-effect Earnings-effect+100 BP -100 BP +100 BP -100 BP


(IFRS)Financial instrumentsFinancial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2.6) 0.5Financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 13.3 (13.8)


Significant Accounting Policies

The preparation of TLG’s consolidated financial statements in accordance with IFRS and the additionalrequirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code (Handelsgesetzbuch(HGB)) requires management to make judgments, estimates and assumptions that affect the reported amounts of income orrevenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period.However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to thecarrying amount of the asset or liability affected in future periods.

Significant accounting policies are those that require the most complex or subjective judgments, often as a result ofthe need to make estimates about the effects of matters that are inherently uncertain.

Investment Property (IAS 40)

Under investment property, TLG reports the properties that are held to generate rental income or for capitalappreciation and not held for own use or sale in the ordinary course of business.

In individual instances, TLG has properties that are partially owner occupied and partially for use by third parties,i.e., rented. These mixed-use properties are reported separately provided that a legal option exists for dividing thecorresponding property and that neither the part occupied by TLG nor the part occupied by a third party is immaterial.

If a change in use occurs that is documented by the start of owner occupancy or the start of development with theintent to sell, properties are transferred out of the inventory of investment property.

Investment property is recognized at cost as of the date of acquisition. After recognition, investment property ismeasured at fair value according to the option provided in IAS 40. Fair value is determined in accordance with IFRS 13. Inaccordance with IFRS 13.9, fair value is defined as the price that would be received for the sale of an asset or paid fortransferring a liability in an orderly transaction between market participants at the measurement date. Fair value alwaysassumes the sale of an asset (exit price). It corresponds to the price to be paid to the seller in the event of a hypothetical sale ofa property on the measurement date, regardless of a company-specific intent or the ability to sell the asset.

Fair value is calculated on the basis of the highest and best use of the property (IFRS 13.27 et seq.). This impliesmaximizing the use and value of the property if this is physically possible, legally permissible and financially feasible.

All fair value changes of the investment property are recognized in profit or loss for the current period. Determiningfair value for the investment property is based on a real estate appraisal conducted by Savills at the end of 2013/early 2014 forthe dates January 1, 2012, December 31, 2012 and December 31, 2013.

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Project developments are recognized as investment property with their fair value if the fair value is reliablydeterminable. The fair value is generally reliably determinable when the building permit has been received.

The fair value of the property held for generating rental income or for capital appreciation over the long term wasdetermined in accordance with international standards by means of DCF. Using this method, the fair value of a property is thesum of the discounted cash flows for a ten-year planning period – consistent with standard practice – plus the residual value ofthe property at the end of the planning period discounted to the measurement date, calculated on the basis of the sustainablecash inflows from letting activities. Properties with negative cash inflows (including permanently vacant properties) werevalued using the liquidation method (land value less demolition costs, plus residual net income, if applicable).

Due to the limited availability of data and measurement parameters directly observable on the market, thecomplexity of real estate appraisal as well as the degree of specificity of the property, fair value measurement of theinvestment property is classified as level three under the measurement hierarchy of IFRS 13.86 (Measurement on the basis ofsignificant, unobservable inputs).

In particular, the following unobservable input factors were used for measurement:

• Future rental income based on the individual property location, type, size and quality, taking into account theterms of existing rental agreements, other contracts or external indicators such as rents customary for themarket for comparable properties;

• Estimations of vacancy rates based on current and expected future market conditions after the expiration ofexisting rental agreements;

• Discount rates for the ten-year planning period reflecting the current market assessment with respect to theuncertainty in terms of the amount and timing of future payment flows;

• Capitalization rates based on the individual property location, type, size and quality, taking into account themarket information available on the reporting date; and

• Residual values, particularly those based on assumptions of future maintenance and reinvestment costs,vacancy rates and rents and growth rates customary for the market.

Financial Instruments (IAS 39)

Within TLG, financial instruments are entered into in order to hedge interest rate risks of real estate finance.Financial instruments are recognized at fair value. Fair value changes of the derivatives are reported in profit or loss if a hedgein accordance with the provisions of IAS 39 does not exist.

Derivatives accounted for as hedging instruments serve to hedge future, uncertain payment flows. A risk regardingthe amount of future cash flows exists for TLG, in particular from financial liabilities with variable interest rates. Fair valuechanges are divided into an effective and an ineffective part. The dollar offset method is used to determine effectiveness. Theeffective part is the portion of the measurement result representing an effective hedge against the cash flow risk from anaccounting perspective. The effective part is disclosed outside profit or loss in cumulative other reserves (othercomprehensive income, OCI) net of deferred taxes.

The ineffective part of the measurement result is recognized in the statement of comprehensive income and reportedunder net interest income. The amounts recognized in other comprehensive income are recycled through profit or loss whenthe gains or losses arising in connection with the underlying transaction affect income (recognized under net interest income).In the event that a hedge is terminated prematurely, the amounts previously recognized in other comprehensive income arerecycled through profit or loss when the gains or losses arising in connection with the still existing underlying transactionaffect income. If the underlying transaction no longer exists, amounts still remaining in OCI are immediately recycled throughprofit or loss.

The fair value of the financial instruments is determined on the basis of corresponding market values ormeasurement methods. For cash and other current primary financial instruments, the fair values are approximately equal to thecarrying amounts recognized on the respective reporting dates.

For non-current receivables, other assets and liabilities, fair value is calculated on the basis of expected paymentflows using the reference interest rates applicable on the reporting date. The fair values of financial instruments aredetermined on the basis of the reference interest rates on the reporting date plus the own or counterparty risk.

For the financial instruments to be recognized at fair value, fair value is always calculated using the correspondingmarket or stock exchange prices. If there are no market or stock exchange prices, measurement is based on marketmeasurement methods customary for the market using market parameters specific to the instrument. Fair value is determinedusing the DCF method, while individual credit ratings and other market conditions are used to calculate present value in theform of credit ratings or liquidity spreads customary for the market.

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For the fair value measurement of financial instruments, the measurement model uses relevant market prices andinterest rates observable on the reporting date obtained from external sources as inputs.

Reconciliation between German GAAP and IFRS for the Fiscal Year 2012

Reconciliation of 2012 Consolidated Total Comprehensive Income and Equity from German GAAP to IFRS

The changes in total comprehensive income were attributable to the following effects:

For the year endedDecember 31, 2012


Net income for the period in accordance with German GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5Recognition of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1)Fair value recognition of investment property and owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . 95.3Recognition of deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59.0)Adjustments to pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3)Adjustment to other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4Adjustment of the carrying amount of the investment in AGD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.6Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4Correction for effect of deconsolidation based on exercise of option granted under German GAAP . . . . . . 17.7Other effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8

Net income for the period in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.3

Change due to amounts recognized directly to equity (actuarial gains/losses) . . . . . . . . . . . . . . . . . . . . . . . (1.0)

Total comprehensive income in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.3


The changes in consolidated equity were attributable to the following effects:

As ofJanuary 1, 2012

As ofDecember 31, 2012


Consolidated equity in accordance with German GAAP . . . . . . . . . . . . . . . . . . . . . . 962.7 805.3Recognition of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2 0.1Recognition of investment property and owner-occupied property at fair value . . . . . . 198.1 255.9Recognition of deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.3) (74.8)Adjustments to pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 0.0Adjustment to other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 1.8Negative consolidation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 7.0Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43.5) (25.9)Offsetting special reserve TLG WOHNEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 —Adjustment to the carrying amount of the investment in AGD . . . . . . . . . . . . . . . . . . . . 25.1 35.7Other effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.1) 1.7

Consolidated equity in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,158.6 1,006.7


The main differences between German GAAP and IFRS, including their effects on TLG’s net profit/loss for thefiscal year ended December 31, 2012 and on TLG’s consolidated equity in accordance with IFRS as of January 1, 2012 andDecember 31, 2012, relate to the following items in particular:

• Under IAS 39.43, loans made available to TLG for financing must be recognized at fair value on the date theloans were granted, which is equivalent to the present value of future payment obligations on the basis of acorresponding market interest rate including transaction costs and discounts. The loans are measured atamortized cost for subsequent measurement. In accordance with German GAAP, the loans are recognized intheir repayment amount. Any material transaction costs or discounts were capitalized and reversed over thefixed-interest periods of the respective loans. Transaction costs or discounts not considered material wereexpensed immediately.

• Property held for generating rental income or for capital appreciation is classified as investment property inaccordance with IAS 40 and recognized at fair value in TLG in accordance with the option set forth inIAS 40. Such property is recognized at amortized cost in the German GAAP consolidated financial statements.

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• The owner-occupied properties in property, plant, and equipment were also remeasured once on the date offirst-time adoption of IFRS due to the fact that the option pursuant to IFRS 1.D.5-D.7 was exercised. Thisresulted in a fair value of €19.5 million being recognized. Remeasurement effects on equity amounted to€5.7 million.

• The differences between the carrying amounts in accordance with German GAAP as compared with the IFRSfigures, in particular for investment property, resulted in the recognition of deferred tax liabilities. In addition,in preparing its consolidated financial statements in accordance with German GAAP, TLG exercised the optionset forth under Section 274 (1) of the German Commercial Code (Handelsgesetzbuch (HGB)) to not recognizedeferred tax assets; this option does not exist under IFRS.

• Pension provisions were recognized at the settlement amount in the German GAAP consolidated financialstatements. The average interest rate of the last seven years – set by the Deutsche Bundesbank – is always usedto discount pension provisions. Pursuant to IFRS, an interest rate for high-quality corporate bonds is to be usedfor discounting pension provisions.

• Under IAS 37, reserves are only recognized if an external obligation exists, its occurrence is probable and theamount can be reliably determined. In such cases, the most probable amount is recognized. By contrast,provisions in the German GAAP consolidated financial statements were recognized in accordance with prudentbusiness judgement. In addition, there were reconciliation effects resulting from provisions for maintenanceexpenses under German GAAP not being recognized. Additional effects arose from the fact that provisionswere discounted under IFRS using the risk-free interest rate, while discounting under German GAAP uses theaverage interest rate of the last seven years which is set by the Deutsche Bundesbank.

• A negative consolidation difference (negative goodwill) resulted from the purchase price allocation frombusiness combinations which was recognized as a liability under German GAAP and expensed over theremaining useful life of the asset acquired. The negative goodwill does not meet the criteria for recognitionunder IFRS and will be recorded under retained earnings.

• In accordance with IAS 39, derivatives are recognized as a liability or as an asset in the statement of financialposition and measured at fair value. Under German GAAP, only provisions for expected losses in the amountof the negative market value were recognized for derivatives, to the extent no hedge accounting was applied.Derivatives constituting a hedge relationship were not recognized. In most cases, TLG applied hedgeaccounting for derivatives under German GAAP while this was not done under IFRS as at the openingstatement of financial position date.

• The special reserve for investment grants and subsidies, recognized in accordance with German GAAP toaccount for the residential properties to be spun off to TLG WOHNEN GmbH, does not constitute a liabilitydue to the absence of existing commitments to third parties and was therefore eliminated from the IFRSopening statement of financial position; this effectively increased equity by €22.1 million.

• The carrying amount of the investment in AGD, under the equity method was adjusted to the extent thatuniform IFRS accounting policies were applied, impacting the valuation of properties, in particular. Therecognition of deferred taxes resulted in offsetting effects.

• In its German GAAP consolidated financial statements for previous years, the Company applied capitalconsolidation in accordance with German GAAP, and exercised the options set forth under Sections 301 and309 of the German Commercial Code (Handelsgesetzbuch (HGB)). Under those provisions, any goodwillarising upon the first-time inclusion of the subsidiary in the consolidated financial statements was offsetoutside of profit or loss against retained earnings. The amount of goodwill originally offset was added back todetermine any disposal gains under German GAAP upon deconsolidation. By contrast, in the consolidatedfinancial statements in accordance with IFRS, disposal gains under German GAAP upon deconsolidation aredetermined exclusively as the difference between TLG’s share in the subsidiary’s net assets at disposal andselling price less the costs to sell. Accordingly, comprehensive income in accordance with IFRS was€17.7 million greater in the fiscal year 2012. This did not result in any effects on equity.

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Reconciliation of 2012 Consolidated Cash Flow Statement from German GAAP to IFRS

German GAAPcash flow

statement for theyear ended

December 31,2012 Note Reconciliation

IFRScash flow

statement for theyear ended

December 31,2012


Cash inflow (outflow) from operating activities . . . . . . . . . . . . 142.4 b) (8.1) 134.3Cash inflow (outflow) from investing activities . . . . . . . . . . . . . (86.6) b) 7.6 (79.0)Cash inflow (outflow) from financing activities . . . . . . . . . . . . (28.4) — — (28.4)

Net increase (decrease) in cash and cash equivalents . . . . . . 27.4 (0.5) 26.9

Cash and cash equivalents at beginning of period . . . . . . . . . 42.5 a) (9.0) 33.6

Cash and cash equivalents at end of period . . . . . . . . . . . . . . 69.9 a) (9.4) 60.5


a) In the German GAAP consolidated financial statements, restricted funds were reported as a part of cash, while under IFRS, they are nowreported as a component of other (current) financial assets (€9.0 million).

b) Due to the fact that recognition requirements differ between German GAAP and IFRS, a portion of the modernization measures reportedunder German GAAP as maintenance expenses may be capitalized under IFRS. These capitalized modernization measures are presentedunder IFRS as cash outflows from investing activities, while under German GAAP they are reported under cash flows from operatingactivities. The reclassification of properties accounted for as property, plant and equipment (tangible fixed assets) under German GAAPas inventories under IFRS offset this effect. Payments for investments in these properties are no longer presented as outflows frominvesting activities under IFRS, but rather represent a component of outflows from operating activities.

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PROFIT FORECAST

Forecast of Funds from Operations (“FFO”) Post Tax (Excluding Results of Disposals) for the Fiscal Year 2014 forTLG IMMOBILIEN AG

The forecast of funds from operations for the fiscal year 2014 of TLG IMMOBILIEN AG (the “Company”)described in this section applies to its FFO post tax and excluding results of disposals on a consolidated basis (the “FFOForecast”). The FFO Forecast is not a statement of fact and should not be interpreted as such by potential investors. Rather, itreflects the forward-looking expectations of the management board of the Company with respect to the development of FFOof the Company. Potential investors should not place undue reliance on this FFO Forecast.

For the FFO Forecast, the Company defines FFO as follows:

The net income/loss for the year adjusted for the result from the disposal of investment property, the result from thedisposal of real estate inventory, the result from the remeasurement of investment property, the gain/loss from theremeasurement of derivatives and other effects, as well as before deferred taxes, tax effects from the result from the disposalof investment property and the disposal from real estate inventory, as well as the tax effects from the settlement of interest rateswaps and from IPO costs.

The FFO Forecast is based on the following assumptions made by the management of the Company. Theseassumptions relate to factors outside of the Company’s influence or factors that the Company can only influence to a limitedextent. Even though the Company considers the assumptions of its management to be reasonable at the time of the publicationof the FFO Forecast, they may prove in retrospect to be incorrect or unfunded. Should one or more of these assumptions proveto be incorrect or unfounded, the Company’s actual FFO could differ materially from its FFO Forecast.

FFO Forecast for the Current Fiscal Year 2014 for the Company

Based on the trends of the fiscal year 2014, the Company’s management anticipates FFO of €50 million for thefiscal year 2014.

Explanatory Notes to the FFO Forecast

Principles of Evaluation

The FFO Forecast for the current fiscal year 2014 was prepared in accordance with the principles of the Institute ofPublic Auditors in Germany (Institut der Wirtschaftsprüfer in Deutschland e.V., “IDW”) IDW Accounting Practice Statement:Preparation of Profit Forecasts and Estimates in Accordance With the Specific Requirements of the Regulation onProspectuses and Profit Estimates on the basis of Preliminary Figures (IDW AcPS HFA 2.003) (IDWRechnungslegungshinweis: Erstellung von Gewinnprognosen und -schätzungen nach den besonderen Anforderungen derProspektverordnung sowie Gewinnschätzungen auf Basis vorläufiger Zahlen (IDW RH HFA 2.003)).

The FFO Forecast was prepared on the basis of the accounting principles of International Financial ReportingStandards (IFRS), as adopted by the European Union. The applied methods of disclosure, accounting and valuation arepresented in the notes to the consolidated financial statements of the Company as of and for the year ended December 31,2013.

For the purpose of this FFO Forecast, gross acquisition costs of approximately €73 million in the second half of2014 were calculated, which will contribute rent for up to three months, respectively. An acquisition of an additional propertywith a value of approximately €19 million, which was already acquired in February 2014, is also considered.

The FFO Forecast for the current fiscal year 2014 is influenced by a range of factors and is based on certainassumptions made by the Company’s management.

Factors and Assumptions

Factors outside the Company’s influence

The FFO Forecast for the current fiscal year 2014 is subject to factors over which the Company has no influence.These factors and the related assumptions of the Company are described below:

Factor: Unforeseen events such as “force majeure”

When preparing the FFO Forecast, the Company assumes that no material unforeseeable events will occur thatcould result in material or lasting constraints on the ongoing operations of the entities of the group, such as force majeure (forexample fires, floods, hurricanes, storms, earthquakes or terrorist attacks), strikes, extraordinary macroeconomic events orwar.

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Factor: Legislative and other regulatory measures

When preparing the FFO Forecast, the Company assumes that there will be no or only insignificant changes to thecurrent legal and regulatory framework and no material legal and regulatory changes (e.g. pertaining to tenancy and tax law).

Factor: Economic development in the real estate industry

For the purpose of the FFO Forecast, the Company assumes that:

• there will be no financial crisis that affects Europe and especially Germany;

• there will be no negative economic developments in Germany; and

• there will be no negative developments in the real estate industry, especially in Germany, and the Companywill be able to retain its current competitive position.

Factor: Interest rate development

When preparing the FFO Forecast, the Company assumes that current interest rate levels will remain stable. Giventhat the Company has hedged for a significant portion of its floating rate liabilities due to financial institutions, the Companyanticipates no significant negative effects on the financing costs.

Factors that can be influenced by the Company to a limited extent

Other factors, over which the Company has limited influence, may also influence the forecasted FFO for the groupfor the fiscal year 2014. The relevant assumptions are described below:

Factor: Income from letting activities

Income from letting activities comprises in-place gross rent less rent deductions (rental income), income fromrecharged utilities and other operating costs and income from other goods and services. For the purpose of the FFO Forecast,the Company assumes income from letting activities will amount to approximately €135 million for the fiscal year 2014 basedon the current contracted rents (plus recharged costs). Due to the disposal of non-core properties from the portfolio, incomefrom letting activities will decrease by approximately €6 million compared to the previous year.

In the planning period for the second half of 2014, the Company expects that expiring leases will be primarilycompensated by new leases or renewals of existing leases. Furthermore, the Company assumes for the purpose of the FFOForecast, that the EPRA Vacancy Rate for investment properties will remain stable at the end of fiscal year 2014 compared toJune 30, 2014 (5%).

Factor: Expenses related to letting activities

Expenses related to letting activities include all costs related to letting activities, such as maintenance, non-recoverable and other property-related costs. For the purpose of the FFO Forecast, the Company anticipates that the ratio ofexpenses related to letting activities to income from letting activities will slightly increase for the fiscal year 2014 comparedto the fiscal year 2013.

Factor: Other operating income

In the FFO Forecast the Company anticipates that other operating income – before adjustment for other effects – infiscal year 2014 will be higher than in fiscal year 2013.

Factor: Personnel expenses and other operating expenses

For the purpose of the FFO Forecast, the Company assumes that personnel expenses will decrease compared tofiscal year 2013, due to personnel reorganization measures. The Company further assumes that other operating expenses willbe higher than in the previous year due to consulting expenses and the implementation of new IT-software.

Factor: Finance expense

The Company assumes that

• the debt ratio of the real estate portfolio will increase for the fiscal year 2014 compared to the previous year, inorder to achieve an efficient and market standard financing structure;

• all covenants under financing agreements (especially financial covenants) will be complied with;

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• the interest rate risk will remain low, because the Company believes that the hedging instruments (interest rateswaps) will be effective in fiscal year 2014;

• the liquidity risk will remain low, because the Company believes that sufficient liquidity remains available, andthat the average financing conditions for the Company relating to the current financing agreements can bemaintained in case of the conclusion of new or extension of existing financing agreements; and

• in the second half of 2014 the scheduled acquisitions of properties with gross acquisition costs ofapproximately €73 million can be financed with 60% debt.

Factor: Current income tax expense

The Company expects stable corporate and trade tax rates, and that there will be no further changes in the taxenvironment or in tax laws in the current fiscal year 2014. The relevant current income taxes adjusted for the purpose of theFFO Forecast for the tax effects from the result from the disposal of investment property and the disposal of real estateinventory, as well as the tax effects from the settlement of interest rate swaps and from IPO costs will amount to €7 million.

Factor: Other effects

The FFO Forecast excludes material non-recurring and miscellaneous effects which, contrary to 2013, will increaseFFO in 2014.

Factors that can be influenced by the Company

In the event of tenant fluctuations, the Company can determine what amount should be invested in new tenants, inorder to raise the rent potential of the rental space. The amount of the incurred expenses impacts the rent of new tenants andnew leases, and if applicable, the previous vacancy period. The Company has made object-specific assumptions about thevacancy period and the costs resulting from a change of tenants.

Other Explanatory Notes

The FFO Forecast does not include any extraordinary items or results from non-recurring activities within themeaning of the IDW Accounting Practice Statement IDW AcPS HFA 2.003 (IDW RH HFA 2.003).

The FFO Forecast for the current fiscal year 2014 was prepared on October 8, 2014. As the FFO Forecast relates toa period not yet completed and has been prepared on the basis of assumptions about future uncertain events and actions, itnaturally entails substantial uncertainties. Because of these uncertainties, it is possible that the group’s actual FFO for thecurrent fiscal year 2014 may differ materially from the FFO Forecast.

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Auditor’s Report on the Funds from Operations (FFO) Post Tax (Excluding Results of Disposals) (FFO Forecast) ofTLG IMMOBILIEN AG

Translation from the German language

Auditor’s Report

To TLG IMMOBILIEN AG, Berlin

We have audited whether the forecast of the funds from operations excluding disposals on a consolidated basis(“FFO”) of TLG IMMOBILIEN AG for the period from January 1, 2014 to December 31, 2014, defined as net income/lossfor the year adjusted for the result from the disposal of investment property, the result from the disposal of real estateinventory, the result from the remeasurement of investment property, the gain/loss from the remeasurement of derivatives andother effects, as well as before deferred taxes, the tax effects from the result from the disposal of investment property and thedisposal from real estate inventory, as well as the tax effects from the settlement of interest rate swaps and from IPO costs,prepared by TLG IMMOBILIEN AG, Berlin, (the “FFO Forecast”) has been properly compiled on the basis stated in theexplanatory notes to the forecast of the FFO and whether this basis is consistent with the accounting policies of the company.The FFO Forecast comprises the forecast of the FFO of TLG IMMOBILIEN AG for the period from January 1, 2014 toDecember 31, 2014 and explanatory notes to the forecast of the FFO.

The preparation of the FFO Forecast including the factors and assumptions presented in the explanatory notes to theforecast of the FFO is the responsibility of the company’s management.

Our responsibility is to express an opinion based on our audit on whether the forecast of the FFO has been properlycompiled on the basis stated in the explanatory notes to the forecast of the FFO and whether this basis is consistent with theaccounting policies of the company. Our engagement does not include an audit of the factors and assumptions identified bythe company underlying the forecast of the FFO.

We conducted our audit in accordance with IDW Prüfungshinweis: Prüfung von Gewinnprognosen und schätzungeni.S.v. IDW RH 2.003 und Bestätigung zu Gewinnschätzungen auf Basis vorläufiger Zahlen (IDW PH 9.960.3) (IDW AuditingPractice Statement: The Audit of Profit Forecasts and Estimates in accordance with IDW AcPS HFA 2.003 and Confirmationregarding Profit Estimates on the basis of Preliminary Figures (IDW AuPS 9.960.3)) issued by the Institut derWirtschaftsprüfer in Deutschland e.V. (Institute of Public Auditors in Germany) (IDW). Those standards require that we planand perform the audit such that material errors in the compilation of the forecast of the FFO on the basis stated in theexplanatory notes to the forecast of the FFO and in the compilation of this basis in accordance with the accounting policies ofthe company are detected with reasonable assurance.

As the FFO Forecast relates to a period not yet completed and is prepared on the basis of assumptions about futureuncertain events and actions, it naturally entails substantial uncertainties. Because of the uncertainties it is possible that theactual FFO of TLG IMMOBILIEN AG for the period from January 1, 2014 to December 31, 2014 may differ materially fromthe forecast of the FFO.

We believe that our audit provides a reasonable basis for our opinion.

In our opinion, based on the findings of our audit, the forecast of the FFO has been properly compiled on the basisstated in the explanatory notes to the forecast of the FFO. This basis is consistent with the accounting policies of the company.

Berlin, October 8, 2014Ernst & Young GmbHWirtschaftsprüfungsgesellschaft

[Signed] [Signed]Plett KrügerWirtschaftsprüfer Wirtschaftsprüfer(German Public Auditor) (German Public Auditor)

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MARKETS AND COMPETITION

Markets

TLG’s business activities are influenced by numerous demographic, economic and political factors. TLG is mostsignificantly affected by developments in, and related to, the commercial real estate market in Germany, particularly in Berlinand eastern Germany (Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia), where TLG’sentire portfolio is located. Its portfolio mainly comprises office, retail and hotel properties. Given this focus, TLG is affected,in general, by developments in macro-economic indicators such as population growth, economic growth, employment,purchasing power and the consumer price index. More particularly, TLG is closely affected by trends in micro-economicindicators, such as rent levels and vacancy rates, in the regions and commercial sectors where TLG operates.

General Demographic and Economic Developments in Germany and Eastern Germany

Germany

Germany is Europe’s largest economy. With a gross domestic product (“GDP”) per capita of €33,343 in 2013, itsproductivity clearly exceeded the European average by 31%. Furthermore, Germany’s economy has proven to be relativelyresilient throughout the recent financial crisis compared to other major European countries. From 2009 to 2013, German GDPgrew by a compounded annual growth rate (“CAGR”) of 2.2%, compared to 1.2% in France and the United Kingdom and0.9% for the European Union overall. Despite this above average growth in the past and already high productivity levels, GDPper capita growth in Germany from 2014 to 2019 is expected to continue at a CAGR of 1.8%, thereby outpacing expectedoverall growth in the European Union with a CAGR of 1.6% (from 2014 to 2018). This strong economic performancecorresponds to a low unemployment rate of 5.3% in 2013, compared to 7.5% in the United Kingdom, 10.3% in France and10.8% in the European Union overall (Source: Federal Foreign Office; Economist Intelligence Unit, GDP Historicals;Eurostat, Unemployment Rate).

This has made Germany a perceived “safe haven” for investors, leading to lower yields on Germany’s governmentdebt and strong demand for German assets. The following table shows the 2013 yield on German government debt comparedto other major countries in Europe:

0.9%

2.4%

1.3%

2.5% 2.3% 2.1%(1)

Germany UK France Italy Spain EU

10 year goverment yield Government debt (2013, % of GDP)

78% 91% 91% 133% 94% 88%

(Source: Economist Intelligence Unit, Government Debt; Bloomberg as of September 02, 2014)

(1) Based on EU 21 average.

Eastern Germany

While eastern Germany’s unemployment rate of 9.4% as of July 2014 was still higher than unemployment of 5.9%in western Germany, eastern Germany has seen a faster decrease of unemployment levels. From 2009 to 2013, unemploymentin Berlin and the five eastern German states fell in each state, with the decline ranging from 3.5% to 1.8% in individual states,compared to a decline of just 0.9% for western Germany. Also, parts of eastern Germany have already reached westernGerman levels, with unemployment in Saxony in July 2014 amounting to 8.4%, on par with Germany’s biggest state NorthRhine-Westphalia, while Thuringia actually recorded an even lower unemployment rate of just 7.5%. (Source: FederalUnemployment Agency; Federal Statistical Office, Unemployment Rate).

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This decline of unemployment rates corresponds to an overall increase in purchasing power, which has evenoutpaced western German growth levels. The following graphic shows the high increase in purchasing power in easternGermany from 2008 to 2013:

Change in purchasing power 2008-2013 (national index for Germany = 100)Absolute purchasing power growth 2008 to 2013 in % per annum

Above 120 (14)110 to 120 (38)

105 to 110 (48)100 to 105 (59) 90 to 95 (64)

95 to 100 (88)

(Source: Bulwiengesa, Food Retail Properties in Germany 2014)

This improvement of the overall economy has been fueled by a state-of-the-art-infrastructure built since thereunification and the fact that more and more blue chips and strong small and medium sized entities have expanded theiroperations to eastern Germany, attracted by lower wages compared to western Germany and public funding.

One of the challenges eastern Germany faces is a continuous population decline in certain areas. Since thereunification, its overall population has shrunk by 11.4%, meaning a loss of more than two million inhabitants. However,population shifts from eastern Germany to western Germany almost came to a standstill in 2012 for the first time since thereunification, with a net migration shift of just 2,000 people towards western Germany. Eastern Germany’s overall populationis nevertheless expected to decrease by another 11.7% (approximately 1.9 million inhabitants) by 2030 (Source: CommercialPortfolio TLG).

However, the cities of Berlin, Dresden, Leipzig and Rostock are all among the top 20 cities in terms of dynamicdevelopment in all of Germany. The following graph shows the ranking of these cities:

66.7 63.257.3 56.8 56.3 55.4 55.3 54.9 54.8 54.0 54.0 53.4 53.0 52.4

Wolfsburg Ingolstadt Erlangen Regensburg Leipzig Würzburg Braunsch-weig

Berlin Kassel Oldenburg Dresden Munich Hamburg Rostock

West Germany East Germany

1 2 3 4 5 6 7 8 9 10 11 15 16Rank

City

19

TLG core region

The ranking and the corresponding numbers are based on a comprehensive list of factors (e.g., residential rent levels, life expectancy, crimerates, indebtedness, unemployment rates of women, GDP etc.).

(Source: Immobilienscout24 and WirtschaftsWoche)

German and Eastern German Commercial Real Estate Markets

Germany

German commercial real estate is currently in very high demand, with investment volumes during the six-monthperiod ended June 30, 2014, totaling almost €17 billion, up by 27% compared to the same period in 2013 (Source:Commercial Portfolio TLG).

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The stable development of the food retail industry has also made food retail properties an attractive investment.While yields have seen steady declines, they still remained close to or above 6% in 2013. Furthermore, yields for food retailproperties in eastern Germany, particularly in smaller- and medium-sized cities, have been the highest for all food retailproperties in Germany (Source: Bulwiengesa, Food Retail Properties in Germany 2014).

The following table provides an overview for the yield development for food retail properties in Berlin as well aseastern and western Germany from 2008 to 2013:

5.5

6.0

6.5

7.0

7.5

8.0

2008 2009 2010 2011 2012 2013

Mean value Net ini�al yield in retail trade in peripheral loca�ons (%)EASTEAST primary/secondary ci�es WEST

EAST medium-sized/smaller ci�es

Berlin

(Source: Bulwiengesa, Food Retail Properties in Germany 2014)

Hotel Real Estate Market

Following negative developments in the wake of the financial crisis in 2009, the number of overnight stays inGermany increased during 2013 for the fourth year in a row to 411 million, up by 1.1% compared to 2012. During the sametime span, the number of beds grew by 3% to approximately 3.6 million. Also in 2013, occupancy rates for hotel roomsincreased to 68.2% and occupancy rates for hotel beds to 34.8%, the latter marking a six-year high in the German hotelmarket. This also had a positive impact on revenue per available room (“RevPAR”), which increased 1.0% during 2013 to€65.50. At the same time, the average rate per room (“ARR”) decreased by 0.3% to €96.00 in 2013. As a result of the overallpositive development of the hotel industry, transaction volumes have been rising from €370 million in 2009 to €1.3 billion in2013. During the six-month period ended June 30, 2014, this amount was already exceeded by an overall investment volumeof €1.8 billion and in 2014 volumes are expected to reach an all-time high (Source: Commercial Portfolio TLG; CBRE).

Berlin

Overnight stays in Berlin reached an all-time high of 26.9 million in 2013, making Berlin the number onedestination in all of Germany and placing the city in competition with other tourism magnets, such as London and Paris. It isexpected that overnight stays will surpass 30 million per year prior to the year 2020. This increase in overnight stays is fuelednot only by a growing tourism industry, but also by a higher number of business travelers. Strong demand has also led to anincrease in the overall number of hotel beds from 69,100 in 2003 to 131,200 in 2013. Nevertheless, the occupancy rate forhotel beds has improved continuously between 2009 and 2012 from 48.8% to 53.2%. In 2013, RevPAR increased by 1.7% to€63.21 and ARR amounted to €87.60 in 2013 (Source: TLG Real Estate in Berlin and Eastern Germany).

Dresden

Dresden recorded over four million overnight stays in 2013. The occupancy rate for hotel beds in Dresden reached64% in 2013, with RevPAR and ARR reaching €46.32 and €66.70, respectively, during the same year (Source: Handelsblatt;TLG Real Estate in Berlin and Eastern Germany).

Rostock

In 2013, the number of overnight stays surpassed 1.8 million. During the same year, the occupancy rate for hotelbeds in Rostock reached 69.2%. The city’s hotel market has seen a 25% increase of RevPAR between 2008 and 2013, withRevPAR reaching €64.24 in 2013. During the same year, the ARR amounted to €92.81 (Source: Handelsblatt; TLG RealEstate in Berlin and Eastern Germany).

Competition

TLG faces competition for tenants when letting its existing portfolio, for attractive properties when trying to acquirenew properties matching TLG’s target criteria and for buyers when disposing of properties.

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Acquisition Activities

TLG regularly competes with other local and international investors to acquire portfolios and properties. Thecompetitive situation frequently depends on the investment volume and the characteristics of the property or portfolio ingeneral, but most of these competitors do not specifically target eastern Germany. As a general rule, there are no significantbarriers to entry to invest in real estate other than the availability of capital, real estate expertise and access to acquisitionoffers.

Due to the heterogeneous competitive environment in the commercial real estate market in Germany, a precisestatement regarding the competitive position of TLG as compared to its competitors cannot be made. In particular,international investment funds with different investment strategies and risk profiles, private equity firms as well as foreign anddomestic publicly listed property companies and to a certain extent family offices compete for properties and portfolios.However, the Company believes that due to its long-standing expertise, close local relationships and clear focus on specificsegments of the commercial real estate market, TLG has obtained an excellent position allowing it to effectively competeagainst even the most sophisticated competitors.

Letting Activities

TLG regularly competes for solvent tenants willing to pay what TLG considers to be attractive rent levels. Giventhat the majority of TLG’s retail properties are situated in attractive micro locations where prospective tenants will find littleor no comparable retail space available in the respective catchment area, TLG faces the fiercest competition when letting itsoffice and hotel properties. Here, TLG’s competition is even more fragmented than competition for the acquisition ofproperties, although TLG generally faces the same competitors (i.e., international investment funds with different investmentstrategies and risk profiles, private equity firms as well as foreign and domestic publicly listed property companies and to acertain extent family offices).

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BUSINESS

Overview

TLG believes it is a leading commercial real estate company for Berlin and eastern Germany. As of June 30, 2014,TLG’s portfolio comprised a total of 509 properties with an aggregate fair value of €1,510 million. With a WALT of 8.0 yearsand an EPRA Vacancy Rate of just 4.0% (excluding non-core properties), the Company believes that this portfolio is wellpositioned to generate stable cash flows for the foreseeable future. TLG is headquartered in Berlin and operates five localoffices in Dresden, Leipzig, Rostock, Erfurt and Chemnitz.

TLG’s Core Portfolio accounts for approximately 89% of the overall portfolio. Approximately 72% of this CorePortfolio is located within the city limits of Berlin, Dresden, Leipzig and Rostock, with Berlin accounting for the largestportion of these holdings (approximately 46% of the Core Portfolio). These cities and eastern Germany have seen increaseddemand for commercial real estate. From 2009 to 2012, investment volumes for commercial real estate in Berlin and easternGermany increased from €1.22 billion to €3.48 billion and from €0.3 billion to €1.36 billion, respectively (Source:Commercial Portfolio TLG). Given investment volumes of approximately €1.3 billion in Berlin and €1.37 billion in easternGermany during the six-month period ended June 30, 2014 (Source: Commercial Portfolio TLG), the Company believes thatthis trend will continue and that rental income, letting and overall vacancies for the Core Portfolio should be positivelyaffected as a result.

Office properties, most of them situated in good or very good locations in city centers in Berlin, Dresden, Leipzigand Rostock, accounted for 36% of TLG’s Core Portfolio (based on fair value as of June 30, 2014). The tenant base for thisoffice portfolio includes “blue chip” companies and their subsidiaries such as Daimler Real Estate GmbH andSAP Deutschland AG & Co. KG, government related entities and agencies such as Ostseesparkasse Rostock and the FederalAgency for Real Estate (Bundesanstalt für Immobilienaufgaben) as well as small and medium sized enterprises. TLG plans togrow its office portfolio through additional acquisitions. The Company believes that this will further improve its marketposition in what it considers to be a very dynamic office market in eastern Germany.

Retail properties, the majority of which are located in attractive micro-locations in Berlin and eastern Germangrowth regions, accounted for approximately 50% of TLG’s Core Portfolio (based on fair value as of June 30, 2014). Themicro-locations in which TLG’s retail properties are located are particularly attractive for food retailers and other sellers ofessential consumer goods because they are located in areas that allow the tenant to be a significant, in some cases even thesole, retailer of the relevant consumer goods in the catchment area. As of June 30, 2014, approximately 35% of the annualizedin-place rent from TLG’s Core Portfolio related to lease agreements with major supermarket and discounter chains, includinglarge supermarket chains “EDEKA”, “REWE” and “Kaiser’s” and discounters “Aldi”, “Lidl”, “Netto” and “Penny” withwhich TLG maintains longstanding and close business relationships. With a WALT of 7.3 years and an EPRA Vacancy Rateof just 1.0% (each as of June 30, 2014), TLG’s retail portfolio was virtually fully-let and offers stable and secure rentalincome. This makes tenant relationships with food retailers the backbone of TLG’s business. TLG also intends to grow itsretail portfolio through selected accretive acquisitions.

Five hotel properties located in the city centers of Berlin, Dresden and Rostock accounted for the remaining 15% ofTLG’s Core Portfolio (based on fair value as of June 30, 2014). The tenant base for these properties includes the well-knownhotel chains “Steigenberger”, “Motel One” and “Ramada”. With an EPRA Vacancy Rate of just 1.7%, these properties werevirtually fully-let and the long-term commitment of TLG’s tenants was evidenced by a WALT of 16.7 years (both as ofJune 30, 2014). Lease agreements for TLG’s hotel properties generally provide for fixed lease payments, limiting TLG’sdependence on the performance of hotel operators. Stable cash flows and a focus on dynamic markets make TLG’s hotelportfolio a fitting complement for its office and retail portfolio.

TLG traces its origins back to several subsidiaries of the state owned privatization agency (Treuhandanstalt) thatwere tasked with administrating and privatizing the real estate holdings of the former German Democratic Republic (DeutscheDemokratische Republik). Between 1990 and 2012, TLG and its legal predecessors sold, restituted or municipalized over100,000 properties in Berlin and eastern Germany, while investing more than €1.3 billion in commercial real estate during thelast ten years. With effect from January 1, 2012, TLG demerged substantially all of its residential real estate into a separateentity TLG WOHNEN GmbH, which was subsequently privatized and with which TLG is no longer related. In 2012, theCompany was privatized through a sale to the Existing Shareholders. Since then, TLG has further streamlined its portfolio andoperations, focusing on what the Company believes to be the most attractive segments of the commercial real estate marketsin Berlin and eastern Germany. For further information on the Company’s history, see “General Information on the Companyand the Group—History and Development”.

TLG has classified 188 properties with an aggregate fair value of €171 million as of June 30, 2014 as non-core andplans to divest the majority of this non-core portfolio in the medium term. As of June 30, 2014, the WALT for TLG’s non-core properties was 5.5 years and the EPRA Vacancy Rate amounted to 12.2%. Through September 15, 2014, TLG sold, orsigned agreements to sell, 48 non-core properties with an aggregate fair value of €70.6 million. However, the buyer of oneproperty that TLG had agreed to sell for approximately €23.9 million may have the right to withdraw from the purchaseagreement or to considerably reduce the purchase price, and in that case, TLG would likely incur a significant non-cash loss.

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During the six-month period ended June 30, 2014, TLG generated rental income of €57.0 million and net operatingincome from letting activities of €50.0 million. For the fiscal year ended 2013, TLG generated rental income of €118 millionand Adjusted EBITDA of €90.4 million. With a Net LTV-Ratio of 47.0% (as of June 30, 2014), TLG considers its financingstructure to be particularly sound and targets a long-term Net LTV-Ratio of 45-50%.

TLG’s Strengths

The Company believes that the following competitive strengths have been the primary drivers of TLG’s success inthe past and will continue to set it apart from its competitors in the future:

Market Leading Platform

TLG possesses strong local connectivity throughout Berlin and eastern Germany with more than 20 years ofregional focus and experience. The Company believes that its tenants particularly value TLG’s deep understanding ofcommercial real estate markets in Berlin and eastern Germany and its approachability and high responsiveness to their needs,and that this has made TLG a trusted and reliable partner for its key tenants. Furthermore, such strong local connectivitythrough its six branch offices provides TLG with excellent access to information on potential acquisitions complementing itsCore Portfolio and the ability to properly value such acquisition targets as well as the respective local market dynamics andletting market, which allows TLG to effectively manage its portfolio and identify market opportunities early on.

TLG’s top management has a broad transaction and integration track record, led by board members Niclas Karoffand Peter Finkbeiner. Its internal structures cover major parts of the real estate value chain, focusing on those aspects that theCompany considers particularly value enhancing, in particular acquisitions and disposals as well as tenant management.While TLG does not currently engage in any significant development activities, it retained the experience and capacity forvalue enhancing (re-)developments and may choose to do so selectively if it can identify suitably attractive opportunitieswithin the current portfolio. The Company believes that, for the time being, its current platform also bears the capacity tomanage further acquisitions at only marginal incremental overhead costs.

Regional Focus on Berlin and Growth Regions in Eastern Germany

The German economy has shown consistent strong performance, with GDP growth from 2009 to 2013 exceedingthe European average and this outperformance is expected to continue between 2014 and 2019 (Source: EconomistIntelligence Unit, GDP Historicals). This has positively affected demand for commercial real estate in Germany in general,and Berlin and eastern Germany in particular, with investment volumes increasing strongly between 2009 and 2013 andcontinuing on a high level during the six-month period ended June 30, 2014 (Source: Commercial Portfolio TLG).

The Company believes that the Core Portfolio covers particularly attractive segments in these commercial realestate markets. TLG has long been a market leader for office properties in excellent locations in Berlin and economicallystrong eastern German cities such as Dresden, Leipzig and Rostock. Particularly in Berlin, locations of such quality are veryrare, which limits the potential for construction of competing office and hotel properties. The Company believes that thesedynamic market developments will help to further increase the demand for TLG’s office and hotel properties.

TLG’s regionally diversified retail portfolio generally profits from excellent micro-locations, which offercompetitive advantages for many of its tenants and stable rental income for TLG. Demand for food retail space, whichaccounts for the majority of retail properties in TLG’s Core Portfolio, has been particularly strong in eastern Germany, withrent developments from 2005 to 2014 clearly outpacing rent developments for food retail space in western Germany (Source:Bulwiengesa, Food Retail Properties in Germany 2014). The Company believes that the positioning of its retail properties inBerlin and eastern Germany combined with the attractive micro-locations of these properties allows TLG to capitalize on suchfavorable developments.

TLG’s focus on clearly defined segments of the commercial real estate market ensures optimal use of its long-termlocal expertise as well as risk diversification through a combination of growth potential from TLG’s office portfolio, stablerental income from its retail portfolio, and a combination of both from the hotel portfolio. Furthermore, the Company believesthat a diversified property structure, tenant base and regional spread, combined with a high WALT for TLG’s Core Portfolioof 8.0 years and a low EPRA Vacancy Rate of 4.0% (both as of June 30, 2014), will provide for particular resilience tonegative economic developments.

High-Quality Portfolio with Significant Share of Newly Built or Refurbished Properties

TLG’s Core Portfolio had a fair value of €1,338.9 million as of June 30, 2014. Approximately 84% of this CorePortfolio has been newly built or fully-refurbished since 2000. The Company believes that there are currently no materialmaintenance backlogs regarding its Core Portfolio. This makes properties in TLG’s Core Portfolio particularly attractive tolong-term oriented tenants. This has resulted in an EPRA Vacancy Rate of just 4.0% and a WALT of 8.0 years for TLG’sCore Portfolio (both as of June 30, 2014), and the Company believes that these performance indicators evidence the highattractiveness of its office, retail and hotel properties.

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Strong Operating Cash Flows

TLG possesses strong operating cash flows. Particularly the retail properties of TLG’s Core Portfolio, whichaccount for approximately 50% of the fair value of this Core Portfolio, with a WALT of 7.3 years and 54% of leaseagreements expiring after 2020 (each as of June 30, 2014) contribute steady rental income. Furthermore, as of June 30, 2014,31% of annualized in-place rent for office properties in TLG’s Core Portfolio was attributable to government related tenantsand TLG believes that default risks associated with government related tenants are particularly low. The Company expectsthat the aforementioned factors will lead to strong operating cash flows from its Core Portfolio and allow it to pay dividendsin the amount of 70-80% of its annual FFO.

Conservative Financing Structure

The Company believes TLG’s financing structure to be relatively conservative. Its moderate Net LTV-Ratio of47.0 % as of June 30, 2014, leaves headroom to fund additional growth and makes TLG less dependent on changes in theavailability or terms of debt financing. TLG’s conservative capital structure is evidenced by average debt maturities of 5.9years with an annual average amortization of 2.2% and low average interest rates of 2.99% (all as of June 30, 2014).Approximately 94% of TLG’s interest rates (based on the value weighted interest rates on the liabilities due to financialinstitutions in an amount of €727.9 million as of June 30, 2014) are either fixed or hedged, limiting TLG’s risk fromincreasing interest reference rates in the future. The Company believes that this provides a sustainable funding base for TLG’scurrent and future operations. The vast majority of its loans are fixed or hedged through hedging instruments, reducing TLG’sdependency on short-term economic changes.

TLG’s Strategy

Unlock tangible future growth through selected accretive acquisitions with a focus on larger properties

By classifying a total of 321 of TLG’s properties as its Core Portfolio, TLG has identified those properties that bestfit its geographic and property type focus and which it expects to provide particularly attractive long-term returns. TLG aimsto use the proceeds from the offering as well as other sources of equity and debt funding to acquire attractive propertiescomplementing TLG’s Core Portfolio. TLG’s acquisitions mainly focus on office properties in the city centers of Berlin andmajor eastern German cities with favorable economic developments, especially Dresden, Leipzig and Rostock, as well asretail properties in the same areas or particularly attractive micro-locations throughout eastern Germany.

TLG intends to use its extensive local network and close business relationships with existing tenants to identifyattractive acquisition targets. Lower fair values compared to selected commercial real estate markets in western Germanyallow TLG to acquire properties – especially outside of Berlin – with an attractive rental income at a comparably low pricelevel. TLG applies a rigid selection process that includes four stages in order to identify the most attractive properties amongthe numerous proposals it generally receives during the course of any given year. Between June 30, 2014 and the date of thisProspectus, TLG has already acquired one office property located in Berlin with a fair value of €23 million and by way of ashare deal another office property located in Leipzig with a fair value of €50 million.

TLG aims to identify mainly multi-tenant office properties, particularly in Berlin, Dresden, Leipzig and Rostock, aswell as retail properties and portfolios in attractive micro-locations, preferably with a minimum transaction value of €10million. For office properties, TLG particularly targets properties with a vacancy rate of up to 30% in order to unlock valuethrough actively managing such properties. The Company believes, especially with reference to office properties, thatmanaging a smaller number of larger properties will require fewer asset and property management resources and therebyprovide more attractive returns. TLG’s long-term plan is to further reduce the number of properties while at the same timeincreasing the overall fair value and hence the average size of the properties included in its Core Portfolio. TLG plans tocontinue to grow in line with its strategic positioning and aims to increase the value of its Core Portfolio to approximately€2.0 billion in the medium term.

Create additional value by investing in existing properties

TLG constantly aims to identify properties that can be upgraded through value enhancing modernizations and/orexpansions. TLG maintains close contacts with its tenants to ensure that it can meet their expectations and desires foradditional space requirements. Particularly with its retail portfolio, TLG has followed and assisted the expansions of some ofits major tenants in Berlin and eastern Germany over the last two decades and plans to continue to maintain such close linksby being a reliable partner. This allows TLG in various cases to extend existing lease agreements significantly ahead of thescheduled expiry dates. TLG plans to further upgrade its Core Portfolio through value enhancing modernizations and/orexpansions.

Active portfolio management to unlock funds for future acquisitions

TLG has streamlined its portfolio by considerably reducing the total number of properties and only classifyingproperties from the office, retail and hotel sector as belonging to the Core Portfolio. It intends to continue with this strategy byfurther divesting non-core properties and fully disposing of its non-core portfolio in the medium term. Given that the majority

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of TLG’s non-core properties are generating a net cash inflow (i.e., rents exceed the costs associated with letting andmaintaining these properties) or can be operated at little operating costs, TLG intends to wait for what it considers to besufficiently attractive prices before disposing of any properties. The Company believes that it will be able to use the proceedscreated from the disposal of non-core properties to grow the fair value of its Core Portfolio.

Focus asset management on individual property performance

By continuously streamlining its portfolio, TLG is able to free up management capacities that it can re-allocate tointensify its asset management efforts. TLG plans to increase the micro-management of individual properties by institutingadditional reporting processes and expanding the number of performance indicators available through IT-based reportingtools. In general, it intends to further optimize its IT-infrastructure in order to allow for an even more sophisticated monitoringof its portfolio and corporate processes. The Company expects that these efforts will allow TLG to better monitor its existingportfolio and thereby identify additional opportunities for value creation.

Further improve its financial and tax structure

TLG plans to further improve its financial structure by streamlining the consortium of banks that provide thefinancing for its portfolio. As of June 30, 2014, TLG received financing from 20 banks. It plans to focus on a smaller numberof core relationships with selected banks to allow for an easier processing of individual loans and to further improve theimmediate availability of credit. TLG also plans to maintain its stable and attractive financing base, targeting a long-term NetLTV-Ratio of 45-50%. In addition, the Company intends to further analyze opportunities to improve its tax structure,especially with regards to its trade tax, which accounts for approximately 50% of TLG’s overall tax burden.

TLG’s Portfolio

As of June 30, 2014, TLG’s portfolio comprised 509 properties with an aggregate fair value of €1,510 million. 89%of these properties were part of the Core Portfolio (measured by fair value as of June 30, 2014). TLG’s portfolio is splitbetween the Core Portfolio and its non-core portfolio as follows:

As of June 30, 2014Core Non-core(1) Total

Fair value (in € million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,338.9 170.8 1,509.7Annualized in-place rent (in € million)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.4 14.5 113.9Number of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 188 509Total lettable area (in thousand sqm)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900.1 439.2 1,339.3EPRA Vacancy Rate (in %)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 12.2 5.0WALT (in years)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0 5.5 7.7

(1) Between June 30, 2014 and September 15, 2014, TLG sold 28 properties with an aggregate fair value of €36.9 million. Furthermore, asof September 15, 2014, it has signed agreements to sell 20 additional properties with an aggregate fair value of €33.7 million. However,the buyer of one property that TLG had agreed to sell for approximately €23.9 million may have the right to withdraw from the purchaseagreement or to considerably reduce the purchase price, and in that case, TLG would likely incur a significant non-cash loss.

(2) Annualized in-place rent is calculated based on contracted rents as of June 30, 2014, without deduction for any applicable rent freeperiods, multiplied by twelve. In-place rent is not an IFRS measure. Since June 30, 2014, TLG’s contracted rents have been decreasedby terminations and expirations of lease agreements as well as disposals and increased by new lease agreements and acquisitions.Adjusting for the net effect of these changes, TLG’s annualized in-place rent as of September 15, 2014, amounted to €117.8 million.


(4) The EPRA vacancy rate is the estimated market rental value of vacant space divided by the estimated market rental value of the wholeportfolio.


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Core Portfolio

Overview

TLG’s Core Portfolio comprised 321 properties with an aggregate fair value of €1,339 million as of June 30, 2014.The Company believes that these office, retail and hotel properties are located in particularly attractive macro- and/or micro-locations and will provide above average returns. TLG’s Core Portfolio is split between office, retail and hotel properties asfollows:

As of June 30, 2014Office Retail Hotel

(unaudited)Fair value (in € million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476.5 667.0 195.4Annualized in-place rent (in € million)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2 54.9 12.4Number of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 271 5Total lettable area (in thousand sqm)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338.9 485.3 75.9EPRA Vacancy Rate (in %)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 1.0 1.7WALT (in years)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 7.3 16.7

(1) Annualized in-place rent is calculated based on contracted rents as of June 30, 2014, without deduction for any applicable rent freeperiods, multiplied by twelve. In-place rent is not an IFRS measure.


(3) The EPRA Vacancy Rate is the estimated rental value of vacant space divided by the estimated rental value of the whole portfolio.


Office Portfolio

TLG’s office portfolio is part of the Core Portfolio and comprised 45 properties as of June 30, 2014. Based on anaggregate fair value of €477 million as of June 30, 2014, the office portfolio represented the second largest portion of TLG’sreal estate holdings (approximately 36% of the Core Portfolio and 32% of TLG’s overall portfolio) and TLG plans to furtherincrease this share. The following table provides an overview of office properties in TLG’s Core Portfolio:

As of June 30, 2014

BerlinLeipzig/Dresden Rostock Other

(unaudited)Fair value (in € million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277.0 55.0 86.0 58.4Annualized in-place rent (in € million)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 4.0 6.2 5.8Number of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 6 12 17Total lettable area (in thousand sqm)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149.3 56.0 50.9 82.7EPRA Vacancy Rate (in %)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.9 2.3 3.5 3.5WALT (in years)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 3.5 13.2 4.8





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For its office portfolio, TLG focuses on properties located in the city centers of Berlin and economically strongeastern German cities such as Dresden, Leipzig and Rostock. 58% of TLG’s office portfolio in the Core Portfolio is located inBerlin, while the remainder is located in Dresden and Leipzig (12%), Rostock (18%) and other large eastern German citieswith favorable economic developments. The following graphic shows the clear focus of office properties in TLG’s CorePortfolio on Berlin and what the Company believes to be the most attractive cities for office investments in eastern Germany:

Based on fair value of office properties in TLG’s Core Portfolio as of June 30, 2014.

Office properties in TLG’s Core Portfolio are generally of a high quality. Based on the fair value of these properties,61% were newly built or fully-refurbished since 2000. Dynamic developments in the cities where TLG’s office properties arelocated and TLG’s active portfolio management approach have led to an increase of the fair value per sqm for officeproperties in TLG’s Core Portfolio from €1,217 as of December 31, 2011 to €1,406 as of June 30, 2014 (up by 15.5%). At thesame time, average rent per sqm has also increased from €8.78 as of December 31, 2011 to €9.05 as of June 30, 2014 (up by3.1%).

Through a mix of disposals, modernizations and refurbishments as well as intensified letting efforts, TLG has beenable to consistently reduce the EPRA Vacancy Rate for office properties in its Core Portfolio. Starting by 14.9% in 2011 andalready declining to 10.4% in 2012, the EPRA Vacancy Rate has significantly decreased to 8.8% in 2013 and now stands at9.2% as of June 30, 2014. TLG’s high EPRA Vacancy Rate in 2011 was primarily due to the 1alex Property, which saw asteep increase in vacancies due to the move-out of the Federal Ministry for Families, Senior Citizens, Women and Youths andthe Federal Ministry for Environment, Environmental Protection, Building Security and Reactor Security in 2010 and 2011,respectively. Since then, TLG has been able to reduce the EPRA Vacancy Rate for the 1alex Property from 67% to 37% as ofJune 30, 2014 and won attractive tenants such as ADAC e.V. and Deutsche Bank AG. Excluding the 1alex Property,TLG’s EPRA Vacancy Rate for office properties in the Core Portfolio amounted to just 3.7% as of June 30, 2014.

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In the process of setting-up its office portfolio, TLG has also been able to create a high quality tenant structure,including “blue chip” companies and their subsidiaries such as Daimler Real Estate GmbH and SAP Deutschland AG & Co.KG, government related entities and agencies such as Ostseesparkasse Rostock and the Federal Agency for Real Estate(Bundesanstalt für Immobilienaufgaben) and small and medium sized enterprises. The following table shows TLG’s top tentenants for office properties in its Core Portfolio:

As of June 30, 2014

Annualizedin-place rent(1)

Share ofannualized

in-place rent(2) WALT(3)

(unaudited)Daimler Real Estate GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 13.9 5.3Ostseesparkasse Rostock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 12.2 16.4Bundesanstalt für Immobilienaufgaben . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 5.6 2.1SAP Deutschland AG & Co. KG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 4.6 2.5Freistaat Thüringen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 3.9 3.7Landeshauptstadt Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 2.6 5.2VHV Holding AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 2.5 5.5Greater Union Filmpalast GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 2.3 3.8Deutsche Bank AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 1.9 4.6BARMER GEK Hauptverwaltung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 1.8 9.8Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.4 51.1 7.2

(1) In € million. Annualized in-place rent is calculated based on contracted rents as of June 30, 2014, without deduction for any applicablerent free periods, multiplied by twelve. In-place rent is not an IFRS measure.

(2) In %. The calculation of the share of annualized in-place rent only takes into account in-place rent for office properties in TLG’s CorePortfolio and excludes in-place rent of office space used by TLG.

(3) In years. WALT refers to the weighted average lease term, i.e., the remaining average contractual lease term for unexpired leases with acontractually fixed maturity.

TLG’s fifteen most valuable office properties represent 84% of the office portfolio within TLG’s Core Portfolio,with the top five representing 55%. The following table provides additional information on TLG’s top fifteen officeproperties:

As of June 30, 2014

LocationFair

value(1)



1alex Property(5) . . . . . . . . . . . . . . . . . . Berlin 60.8 3,445.7 3.1 43,441 Deutsche Bank, BarmerGEK Hauptverwaltung

Englische Str. 27, 28, 30 . . . . . . . . . . . . Berlin 56.4 4,456.1 5.3 17,815 Daimler Real Estate GmbHSchönhauser Allee 36; Ecke Sredzki-

und Knaakstr. 97(5) . . . . . . . . . . . . . . Berlin 54.3 3,486.4 4.3 31,331Greater Union Filmpalast

GmbHAm Vögenteich 23 . . . . . . . . . . . . . . . . Rostock 47.6 3,120.0 18.4 19,470 Ostseesparkasse RostockKarl-Liebknecht Str. 31, 33; Kleine

Alexanderstr. . . . . . . . . . . . . . . . . . . . Berlin 43.8 1,803.5 1.4 24,376Bundesanstalt für

ImmobilienaufgabenPostplatz 1; Wilsdruffer Str. 24(5) . . . . . Dresden 29.5 1,979.7 2.7 10,537 SAP Deutschland AG &

Co. KGHausvogteiplatz 12(5) . . . . . . . . . . . . . . Berlin 21.3 400.4 2.6 8,204 TLG Immobilien GmbHKaiserin-Augusta-Allee 104-106 . . . . . Berlin 19.2 1,368.3 4.5 14,828 VHV Holding AGHermann-Drechsler Str. 1 . . . . . . . . . . . Gera 15.1 1,505.8 4.2 28,044 Freistaat Thüringen –

ThüringerLiegenschaftsmanagement

Warnowallee 26-29 . . . . . . . . . . . . . . . . Rostock 11.7 959.3 7.6 6,329 Ostseesparkasse RostockGrunaer Str. 2/St.

Petersburger-Str. 9 . . . . . . . . . . . . . . Dresden 11.3 981.0 4.6 18,123 Landeshauptstadt DresdenBudapester Str. 3, 5 . . . . . . . . . . . . . . . . Dresden 8.7 576.0 4.9 6,727 BARMER GEK

HauptverwaltungMünzstraße 18/Max-Beer-Straße 3 . . . Berlin 8.2 408.5 4.0 2,467 MCO Conversestore

GmbHLutherplatz 3 . . . . . . . . . . . . . . . . . . . . . Jena 6.5 439.3 12.8 2,684 Stadt Jena Eigenbetrieb

Kommunale ImmobilienJena

Brüderstr. 2/Große Steinstr. 82-85 . . . . Halle 6.4 533.4 3.5 4,001 KKH KaufmännischeKrankenkasse

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.8 25,463.3 6.1 238,378

(1) In € million.

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Retail Portfolio

TLG’s retail portfolio is part of the Core Portfolio and comprised 271 properties as of June 30, 2014. Based on anaggregate fair value of €667 million as of June 30, 2014, the retail portfolio made up the largest portion of TLG’s real estateholdings (50% of the Core Portfolio and 44% of TLG’s overall portfolio). The following table provides an overview of retailproperties in TLG’s Core Portfolio:

As of June 30, 2014

BerlinBranden-

burg

Mecklenburg-Western

Pomerania SaxonySaxony-Anhalt Thuringia

(unaudited)Fair value (in € million) . . . . . . . . . . . . . . . . . . . . . . . . . . 232.6 38.3 97.3 199.1 61.1 38.6Annualized in-place rent (in € million)(1) . . . . . . . . . . . . . 16.4 3.3 7.7 18.0 6.1 3.4Number of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 14 36 120 44 25Total lettable area (in thousand sqm)(2) . . . . . . . . . . . . . . . 157.5 24.2 61.3 154.2 57.9 30.2EPRA Vacancy Rate (in %)(3) . . . . . . . . . . . . . . . . . . . . . . 0.2 0.1 4.9 0.6 0.4 0.0WALT (in years)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 7.6 7.6 5.9 6.5 8.8





Based on fair value as of June 30, 2014, 52.9% of retail properties in TLG’s Core Portfolio are located in Berlin,Dresden, Leipzig and Rostock, ensuring that TLG is not overly dependent on developments in any one state, region or citywhile at the same time allowing TLG to benefit from positive macro-economic developments in these growth areas. Themicro-locations in which TLG’s retail properties are located are particularly attractive for food retailers and other sellers ofessential consumer goods because they enable the tenant to be a significant, in many cases even the dominant, retailer of therelevant consumer goods in the relevant catchment area. The following graphic illustrates the regional focus of retailproperties in TLG’s Core Portfolio:

Based on fair value of retail properties in TLG’s Core Portfolio as of June 30, 2014.

For retail properties, TLG focuses on market leading food retailers as tenants such as supermarket chains operatingunder the “EDEKA”, “REWE” and “Kaiser’s” brands and discounter chains operating under the “Aldi”, “Lidl”, “Netto” and

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“Penny” brands. Furthermore, a do-it-yourself chain operating under the “Hellweg” brand is a significant tenant for of TLG’sretail properties. While being only a smaller competitor, Hellweg, in 2012, showed the fastest growth in terms of floor spaceand revenues among major German do-it-yourself chains (Source: Hahn Group, Retail Real Estate Report Germany 8th

Edition).

TLG considers itself one of the most important regional landlords for some of its food retail tenants, particularly in Berlinand eastern Germany. The Company believes that this offers certain negotiation power when dealing with these tenants. Thefollowing chart illustrates the focus of retail properties in TLG’s Core Portfolio on major supermarket and discounter chains:

As of June 30, 2014Annualized in-place

rent(1)Share of annualized

in-place rent(2)

(unaudited)Major supermarket and discounter chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.2 62.3Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.7 37.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.9 100.0


(2) In %. The calculation of the share of annualized in-place rent only takes into account in-place rent from retail properties in TLG’s CorePortfolio.

TLG has followed the expansions of some of these tenants in Berlin and eastern Germany for over two decades.These long-standing relationships help TLG lease new retail space quickly and have made it a go-to landlord for such tenantsin Berlin and eastern Germany. The Company believes that its tenants particularly value TLG’s approachability, local rootsand expertise and the long-standing trust developed between TLG as the lessor and major supermarket and discounter chainsas the tenants. As of June 30, 2014, TLG’s top seven tenants for retail properties accounted for approximately 65% ofannualized in-place rent from retail properties in the Core Portfolio. The following chart provides an overview of the topseven tenants for TLG’s retail properties:

As of June 30, 2014Annualized in-place

rent(1)Share of annualized

in-place rent(2) WALT(3)

(unaudited)Netto Marken-Discount AG & Co. KG . . . . . . . . . . . . . . . . . . . . . . . . . . 13.8 25.1 7.1REWE Markt GmbH Zweigniederlassung Ost . . . . . . . . . . . . . . . . . . . . 6.1 11.0 8.5Hellweg Die Profibaumärkte GmbH & Co. KG . . . . . . . . . . . . . . . . . . . 4.0 7.3 10.5Penny-Markt GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 7.0 7.5EDEKA(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 6.1 8.4Kaiser’s Tengelmann GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 5.0 8.9Lidl Vertriebs-GmbH & Co. KG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 3.3 5.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.5 64.8 7.9


(2) In %. The calculation of the share of annualized in-place rent only takes into account in-place rent from retail properties in TLG’s CorePortfolio.

(3) In years. WALT refers to the weighted average lease term, i.e., the remaining average contractual lease term for unexpired leases with acontractually fixed maturity.

(4) Includes EDEKA Grundstückgsgesellschaft Nordbayern-Sachsen-Thüringen mbH, EDEKA Handelsgesellschaft Nord mbH andEDEKA-MIHA Immobilien-Service GmbH.

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TLG’s hotel properties are all of mixed use (i.e., parts of the hotel property are also leased as offices, retail space orfor other uses), allowing for risk diversification within the individual property. As of June 30, 2014, the EPRA Vacancy Rateof TLG’s hotel portfolio amounted to just 1.7%. Lease agreements for TLG’s hotel properties generally provide for fixedlease payments, limiting TLG’s dependence on the performance of hotel operators. One contract provides for TLG to receiveadditional rent payments if the hotel operations prove to be particularly profitable (i.e., TLG only shares in the upside of thishotel property). At the same time, only little effort is required by TLG to manage its hotel portfolio given that smallerrefurbishments and repairs will generally be handled by the hotel operators themselves. With a WALT of 16.7 years (as ofJune 30, 2014), TLG’s hotel portfolio allows for particular long-term stability and planning. Situated in good or very goodlocations in Berlin, Dresden and Rostock, it also shares in the upside potential of positive developments of fair values in thesedynamic cities.

Non-Core Portfolio

As of June 30, 2014, TLG has classified a total of 188 properties with an aggregate fair value of €171 million asnon-core. These properties do not meet TLG’s Core Portfolio criteria given their location and/or use. The non-core portfoliomakes up only 11% of TLG’s entire portfolio. While they do not meet TLG’s Core Portfolio criteria, the majority of theproperties in TLG’s non-core portfolio either generate a net cash inflow (i.e., rents exceed the costs associated with letting andmaintaining these properties) or can be operated at little to no operating costs. Therefore, the non-core portfolio does not havea negative impact on TLG’s cash flows.

TLG nevertheless intends to sell the majority of its non-core properties in the medium term, aiming for sales at orabove fair value, in order to invest the proceeds to further enhance the size and quality of its Core Portfolio. Between June 30,2014 and September 15, 2014, TLG sold 28 properties with an aggregate fair value of €36.9 million. Furthermore, as ofSeptember 15, 2014, it has signed agreements to sell 20 additional properties with an aggregate fair value of €33.7 million.However, the buyer of one property that TLG had agreed to sell for approximately €23.9 million may have the right towithdraw from the purchase agreement or to considerably reduce the purchase price, and in that case, TLG would likely incura significant non-cash loss.

The Company currently expects that the aggregate fair value of the non-core portfolio will amount to €97.3 millionby the end of the fiscal year 2014.

TLG’s Business Operations

Acquisitions and Disposals

TLG considers itself to be an active asset manager. It constantly aims to identify attractive opportunities to acquireadditional properties and dispose of its non-core portfolio at attractive prices. While TLG’s portfolio management is centrallyoperated from its Berlin based headquarters, its local branches have a team of employees, which – together with the head ofthe branch – are responsible for providing local market expertise and executing individual acquisitions and disposals. Thedisposal and acquisition process will be centrally coordinated and supervised by the portfolio management department as wellas the member of the Management Board responsible for TLG’s portfolio management.

Acquisitions

Acquisitions of new attractive office and retail properties meeting its Core Portfolio criteria are a key part of TLG’sstrategy. TLG focuses its acquisition efforts on office properties in the city centers of Berlin and major eastern German citieswith favorable economic developments, especially Dresden, Leipzig and Rostock and retail properties in these same cities,their respective surrounding areas as well as other attractive micro locations in different regions of eastern Germany. TLGspecifically targets the following types of acquisitions:

• Office properties, mainly located in established secondary locations of Berlin (1B-Lagen) and good or verygood locations in the city centers of Dresden, Leipzig and Rostock. TLG typically targets single multi-tenantproperties (i.e., properties, parts of which are also rented as retail space or for other uses), preferably with a fairvalue exceeding €10 million. Furthermore, TLG specifically targets properties with EPRA Vacancy Rates ofup to 30%, as the Company believes that it can acquire such properties at a discount and unlock additionalvalue potentials through modernizations, refurbishments and active letting management. The Company plans toacquire office properties for an acquisition multiple in the range of approximately 13 to 16 times gross rentalincome of the property to be acquired; and

• Larger food retail properties, preferably with a value exceeding €10 million, or portfolios of smaller propertiesin attractive micro locations (i.e., lack of competition within the relevant catchment area and therefore higherattractiveness to food retailers) in Berlin and eastern German growth regions, suitable for supermarkets anddiscounters which are fully-let or almost fully-let. In selected instances TLG may also acquire other retailproperties such as specialty markets (Fachmärkte) suitable for do-it-yourself chains or similar tenants. TheCompany plans to acquire retail properties for an acquisition multiple in the range of approximately 11 to15 times gross rental income of the property to be acquired.

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TLG’s acquisition process generally follows a four-stage approach: TLG will first review any proposals received bythe seller, conduct a first screening, a site-visit and pre-calculate how a particular acquisition could complement its overallportfolio, hand in an indicative bid and prepare the financing of a potential acquisition and finally proceed to negotiate thepurchase agreement and conduct a thorough due diligence. TLG generally only acquires properties that it considerssufficiently attractive after completion of its four-stage acquisition process.

Within approximately eighteen months from the date of this Prospectus, TLG aims to deploy the proceeds from theoffering as well as additional credit financing and existing reserves to acquire office and food retail properties with anaggregate fair value of €185.4 million until the end of the first quarter of 2016 if it can identify sufficiently attractiveopportunities, in addition to the aggregate €72.5 million it spent on the acquisition of the office building KöpenickerStraße 30-31 (K30) in Berlin and the acquisition of approximately 94.9% of the shares of TLG FAB, which owns the “Forumam Brühl” in Leipzig at Richard-Wagner-Straße 1, 2-3. The purchase price for the acquisitions was partially debt financed atan interest rate of 2.3%, which is considerably below the already low average interest rate of 2.99%. In the current marketenvironment, TLG expects that debt financing for the acquisition of retail properties would be available at a similar rate ofapproximately 2.5%. Besides the recent investments above which already closed, the Management and Supervisory Boardhave made no firm commitments on any significant future investments. However, the Company is currently negotiating withthe seller of a retail asset in Berlin with a potential acquisition price (including ancillary acquisition costs) of approximately€35 million and is currently conducting due diligence with regard to an office asset in Rostock with an acquisition price(including ancillary acquisition costs) of approximately €16 million. In addition, the Company is currently reviewing in moredetail potential acquisitions of office and retail properties located in Berlin, Dresden/Leipzig, Rostock or the respectivesurrounding areas and other parts of eastern Germany in which TLG operates with an aggregate fair value of €20 million and€140 million, respectively.

TLG does not currently plan any acquisitions of hotel properties or project developments, but may do either/both onan opportunistic basis.

Disposals

Disposals are generally made from properties in the non-core portfolio. TLG’s management decides on the disposalof properties on a property-for-property basis, taking into account a property’s fair value as well as overall and local markettrends and developments. The Company believes that it will be able to divest the majority of the remaining properties in thenon-core portfolio in the medium term.

In selected cases, TLG’s management may also decide to sell properties from the Core Portfolio, if it believes thatthe offered price is particularly attractive and allows for a realization of proceeds above a property’s fair value. As part of itslong-term focus on a portfolio with a smaller number of more valuable properties, TLG may intensify such efforts in thefuture.

Between June 30, 2014 and September 15, 2014, TLG sold 28 properties with an aggregate fair value of €36.9million. Furthermore, as of September 15, 2014, it has signed agreements to sell 20 additional properties with an aggregatefair value of €33.7 million.

However, the buyer of one property that TLG had agreed to sell for approximately €23.9 million may have the rightto withdraw from the purchase agreement or to considerably reduce the purchase price due to the fact that the outline buildingpermit (Bauvorbescheid) will likely only allow for a more limited development than previously expected. While TLG wouldlikely incur a significant non-cash loss after the date of this Prospectus in connection with a reduction of the purchase price orwithdrawal of the buyer, TLG had previously recorded a gain from the remeasurement of investment property ofapproximately €19.2 million during the six-month period ended June 30, 2014 due to the attractive purchase price it had beenable to negotiate. Based on a recent revaluation of the respective property, this gain exceeds any loss that TLG would incur insubsequent periods in connection with a reduction of the purchase price or termination of the purchase agreement.

Tenant Management

TLG’s tenant management includes relationship management with its existing tenants, searches for prospectivetenants, maintenance, repair and value-enhancing investments in TLG’s portfolio and the contracting of third-party facilitymanagement service providers. Such activities are organized locally. TLG’s headquarters nevertheless provide guidelines forlocal operations and constantly monitor performance and compliance with these guidelines.

The offices in Berlin and Rostock form the northern branch of TLG’s tenant management, while the offices inDresden, Leipzig, Erfurt and Chemnitz comprise the southern branch. As of June 30, 2014, a total of 50 employees wereresponsible for TLG’s local tenant management. TLG’s extensive property database (Liegenschaftsdatenbank) is used to trackland register (Grundbuch) information and Wodis Sigma is used to provide information on individual lease agreements andrent payments thereunder as well as for the processing of such contractual relationships. Local offices are also responsible forhandling the title register process for TLG’s properties.

Relationships with Existing Tenants

All property-specific aspects relating to existing tenants are handled by TLG’s local offices and representatives.This process includes regular meetings with representatives of TLG’s main tenants. The Company believes that maintaining

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close business relationships with its tenants allows TLG to act proactively and responsively with regards to the demands of itskey tenants. Property performance is reviewed on a regular basis and property-by-property business plans are reviewed inorder to analyze the following items:

• Potential value enhancements identified since the last business plan review;

• Potential cost reductions identified since the last business plan review;

• Property performance compared to the underwriting process; and

• Potential risks associated with the property and measures taken to control those risks.

Furthermore, TLG conducts regular credit rating checks on its existing tenants to ensure that it has the relevantinformation on the creditworthiness of its tenant base.

Letting Activities

TLG’s letting activities are also organized locally. All discussions relating to lease agreements are handled by theheads of the local offices and/or the letting managers responsible for the respective tenant. TLG uses a wide array of sourcesto find suitable tenants including contacts with its existing tenants, market knowledge of its local offices and real estateagents. However, it will at all times retain control of the letting process and decide for itself whether a tenant is suitable forthe respective property. Prior to agreeing on any lease agreements, TLG will conduct a credit rating check on the prospectivetenant.

Property Investments

By monitoring individual properties and maintaining close business relationships with its tenants, TLG identifies thepotential and need for modernizations and expansions. Such opportunities are discussed between local property managementand TLG’s Berlin headquarters.

Any decision to make investments that have not been accounted for in TLG’s strategy planning and any investmentsthat have been accounted for exceeding €150,000 require approval from TLG’s headquarters. Investments exceeding€250,000 require separate approval from the Management Board while investments exceeding €30 million require approvalfrom the Supervisory Board. Actual modernizations and repair works are outsourced to experienced third-party providers.

Facility Management

TLG does not perform any actual facility management tasks itself. However, it does hire and supervise a number ofexperienced and well-known service providers such as Gegenbauer Holding SE & Co. KG and Dussmann ServiceDeutschland GmbH to render such services and to ensure that TLG’s properties comply with all applicable building andsecurity regulations.

Employees

As experience and in-depth local market knowledge are fundamental for consistent performance in the commercialreal estate industry, TLG’s success depends on its ability to attract, train, retain and motivate qualified personnel. TLGparticularly aims to recruit young, qualified trainees and has therefore instituted a bachelor program, which allows suchtrainees to gain both valuable practical experience as well as a bachelor of arts.

Nevertheless, TLG has recently reduced the number of its employees as part of its streamlining process and focusedon a portfolio comprising fewer properties with a reduced administrative exposure. TLG’s workforce has been reduced from297 permanent and 15 temporary employees as of December 31, 2011, to 224 permanent and 17 temporary employees as ofDecember 31, 2012, 185 permanent and 12 temporary employees as of December 31, 2013 and 158 permanent and10 temporary employees as of June 30, 2014. As of the date of this Prospectus, TLG’s workforce amounted to 140 permanentand 10 temporary employees. The Company expects this process to be completed by 2015 (for additional information onTLG’s reorganization of its workforce, see “Management’s Discussion and Analysis of Net Assets, Financial Condition andResults of Operations—Key Factors Influencing TLG’s Portfolio, Results of Operations and the Comparability of FinancialInformation—Reorganization of TLG”).

Information Technology

TLG uses both proprietary and external software systems. It uses mostly three different software systems, which areto a certain degree interlinked.

Wodis Sigma

Wodis Sigma is a real estate software solution developed by Aareon. Wodis Sigma is mainly used by TLG’saccounting department and also includes information used by property managers (e.g., in-depth information on leaseagreements, rent payments etc.).

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Property Database

TLG’s property database (Liegenschaftsdatenbank) is based on proprietary software and includes property specificinformation on land register records (Grundbuchauszüge) of individual properties as well as other legal (e.g., buildingpermits, contracts etc.) and non-legal (e.g., construction dates, acquisition dates etc.) data. TLG’s property database is alsoused to coordinate insurance policies, contracts with third-party service providers and billing.

REVC

TLG’s latest software system, the Real Estate Value Creator (“REVC”), is a software solution designed by IRMManagement Network GmbH, which helps to improve the depth and quality of TLG’s controlling and portfolio management.The REVC not only allows TLG to assess key performance indicators of individual properties and entire portfolios, but alsooffers simulations of how acquisitions or disposals of certain properties would affect TLG’s overall portfolio and certain KeyPerformance Indicators (e.g., rental income, EBITDA, FFO etc.). Data required by the REVC is automatically provided byWodis Sigma and the property database (Liegenschaftsdatenbank) by an interface. The results of the REVC simulations aresubject to plausibility checks.

Material Agreements

The following section provides a summary of any material agreements to which TLG is a party:

Financing Agreements

As of June 30, 2014, TLG had (consolidated) financial indebtedness (liabilities due to financial institutions) in theamount of approximately €727.9 million (including accrued interest and liabilities under hedges). On this date, land-chargesecured loans from 20 banks with nominal amounts of up to €80.2 million were outstanding. The table below provides asummary of loan agreements with a volume of more than €25 million:

BankNominal loan amount in accordance

with IFRS(1)Expiration of fixed

interest rate(2)

Westfälische Landschaft Bodenkreditbank AG . . . . . . . . . . . . . . . . . 31.5 2017Landesbank Hessen-Thüringen Girozentrale . . . . . . . . . . . . . . . . . . . 80.2 2018Bayerische Landesbank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.5 2019HSH Nordbank AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.9 2020Berlin Hyp AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.8 2020UniCredit Bank AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.6 2021Deutsche Pfandbriefbank AG(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.2 2020Deutsche Pfandbriefbank AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.3 2024Berliner Sparkassse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.9 2024

(1) As of June 30, 2014 and in € million.

(2) After the expiration of the fixed interest rate, TLG can terminate the loan if it does not want to accept the adjusted interest rate proposedby the lender.

(3) Includes an option for TLG to extend the loan until 2022 under certain circumstances.

The volume-weighted average remaining term of the land-charge secured loans is 5.9 years and the loans maturebetween 2014 and 2024.

The loans bear interest at fixed rates or at variable rates of three-month EURIBOR plus margin. 94 % of theoutstanding floating-rate loan amount is currently hedged by fixed-for-floating swaps. Taking into consideration the hedginginstruments, the interest rates of the individual loans range from 1.015% per annum to 5.21% per annum. The rates depend,among other things, on the quality of the properties securing the loan, the market conditions at the time the loan was raised,the term and the financial leverage in respect of the financed properties. The interest rate can increase if extraordinary eventsoccur.

The terms provide for regular repayments of the loans during their respective terms, up to 5% per annum of theinitial loan amount. The loan agreements contain different repayment provisions including fixed amortization rates andannuities.

Land charges have been granted over the properties as security. The loans are typically also secured by pledges orassignments of the claims under interest hedging instruments and assignments of rent revenues, purchase price and insuranceclaims. Some loan agreements also provide for pledges of the rent collection accounts as well as of special purpose accounts.

The loan agreements contain financial covenants customary for real estate borrowing, in particular with respect tothe LTV-Ratio. Most loan agreements require certain maximum LTV-Ratios, calculated as the quotient of the outstanding

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loan amount (including senior-ranking loans) and the value of the borrowers’ properties. The value of the individual portfolioswas determined before the first utilization and will be determined again during the term of the loan. The maximum LTV-Ratios allowed depend on the quality and size of the financed properties, the market conditions at the time the loan wasprovided and the lender, and range from 55% to 80%. Many loan agreements also contain liquidity-related financial covenantssuch as minimum interest or debt-service cover ratios or maximum debt-to-rent ratios. The breach of financial covenantsusually allows the bank to terminate the respective loan and claim early repayment of the entire loan unless the breach iscured by a (partial) repayment, or, as the case may be, the granting of additional security interest. At the date of thisProspectus, TLG is not in breach of any financial covenants.

The loan agreements contain representations, information, corporate and property-related undertakings andtermination rights customary for real estate borrowing. There is no indication that any representations or materialundertakings have been breached. Termination rights exist if (interest, amortization or other) payments are not made whendue, financial covenants are not complied with, the borrower becomes insolvent or defaults on other financial liabilities,representations or warranties turn out to have been incorrect, information obligations are violated by TLG or (other) materialcontractual obligations are not complied with (unless the respective violation can be and is cured within a contractuallyspecified period). In addition, some of the loan agreements contain termination rights of the respective bank if the control overthe Company changes. In most cases, loan agreements also incorporate the respective bank’s general terms and conditions thatcontain very broad termination rights, in particular the right to terminate the loan if there is or threatens to be a substantialdeterioration in the financial circumstances of the respective borrower or in the value of a security granted as a result of whichthe repayment of the loan is jeopardized even if the security is realized.

Other Material Agreements

i. Restitution Agreement

TLG has been and may in the future be subject to third-party claims in connection with restitution and compensationclaims. Under the German Asset Act (Vermögensgesetz (VermG)) former owners of assets that were dispossessed either bythe national socialist government between January 30, 1933 and May 8, 1945 or by the former German Democratic Republic(Deutsche Demokratische Republik) can demand the restitution of such assets. If returning the assets is impossible due to avalid sale to a third party the former owners have compensation claims under the German Investment Priority Act(Investitionsvorranggesetz (InVorG)). The German Asset Allocation Law (Vermögenszuordnungsgesetz (VZOG)) provides forsimilar regulations.

In order to ensure that such third-party claims would not prevent a privatization of TLG, the Federal Institute forSpecial Tasks Arising from Unification (Bundesanstalt für vereinigungsbedingte Sonderaufgaben) (“BVS”) and TLG onDecember 20, 2007 entered into an agreement for the cumulative assumption of liabilities regarding restitution claims broughtagainst TLG (the “Restitution Agreement”). The BVS is a federal office of Germany and the successor of Treuhandanstalt(“THA”). Under the Restitution Agreement, the BVS will indemnify and hold harmless TLG against claims arising out of orin connection with the aforementioned restitution laws. Thus, any claims brought against TLG in connection with theaforementioned restitution laws will be fulfilled by Germany. As of the date of this Prospectus, a total of 11 of TLG’sproperties are subject to claims under the aforementioned restitution laws.

ii. Demerger Agreement relating to TLG WOHNEN GmbH

By demerger agreement (Abspaltungs- und Übernahmevertrag) dated December 29, 2011, TLG transferred the vastmajority of its residential real estate holdings to TLG WOHNEN GmbH with effect from January 1, 2012. TLG WOHNENGmbH was subsequently privatized in 2012. Pursuant to Section 133 (1) of the German Reorganization and TransformationAct (Umwandlungsgesetz), the Company and TLG WOHNEN GmbH are jointly and severally liable for any claims arisingagainst TLG prior to the demerger of TLG’s residential real estate (i.e., until January 1, 2017).

The Federal Republic of Germany has provided the Company with an indemnity from claims arising out of theGerman Reorganization and Transformation Act in connection with the demerger of TLG WOHNEN GmbH. In return, theCompany has transferred any compensation claims it might have against TLG WOHNEN GmbH in connection with theGerman Reorganization and Transformation Act to the Federal Republic of Germany.

iii. Social Charter

In connection with its privatization, TLG has assumed an obligation to adhere to the social charter (Sozialcharta)agreed between the Existing Shareholders and the Federal Republic of Germany on December 12/13, 2012, and relating toapproximately 330 residential tenants in TLG’s non-core portfolio as of the date of this Prospectus.

The social charter provides special protection for elderly and disabled tenants as well as their legal successors bylimiting TLG’s ability to terminate lease agreements with these tenants and prohibiting TLG from increasing rents for so-called luxury modernizations (Luxusrenovierungen) (i.e., modernization measures after which the respective property appealsto a target group of tenants differing from the pre-modernization tenant structure). Furthermore, when disposing of residentialproperties protected by the social charter TLG must ensure that the buyer of the respective property assumes TLG’sobligations under the social charter. Failure to comply with the obligations under the social charter would force TLG to pay acontractual penalty of at least €100,000.

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Material Litigation

In the course of TLG’s business activities, the Company and its subsidiaries are regularly parties to legal disputes,including rental and warranty disputes. The following paragraphs describe any material legal proceedings with a valueexceeding €1 million that TLG is currently involved in:

• TLG has filed an appeal against the revocation of subsidies granted by Sächsische Aufbaubank, a governmententity owned by the state of Saxony (“SAB”), in connection with a property located at Am Fuchsloch 10 inMochau. SAB is demanding the repayment of subsidies granted to Signet Solar GmbH, a former tenant ofTLG, which were partly transferred to TLG on behalf of Signet Solar GmbH in order to lower Signet SolarGmbH’s leasing rates. The revocation was issued due to the insolvency of Signet Solar GmbH. The total valueof these proceedings amounts to approximately €3.6 million (excluding interest claims) as of the date of thisProspectus;

• TLG has filed an appeal against the revocation of subsidies granted by SAB in connection with the secondphase of building (2. Bauabschnitt) for a property located at Philipp-Reis-Straße 1 in Bautzen. SAB isdemanding the repayment of subsidies granted to Sphairon Access Systems GmbH, a former tenant of TLG,which were partly transferred to TLG on behalf of Sphairon Access Systems GmbH in order to lower SphaironAccess Systems GmbH’s leasing rates. The revocation was issued due to the insolvency of Sphairon AccessSystems GmbH. The total value of these proceedings amounts to approximately €1.7 million (excludinginterest claims) as of the date of this Prospectus; and

• TLG is being sued by the state of Saxony in connection for repayment of subsidies granted by SAB inconnection with the first phase of building (1. Bauabschnitt) for a property located at Philipp-Reis-Straße 1 inBautzen. The state of Saxony is demanding the repayment of subsidies granted to Sphairon Access SystemsGmbH, a former tenant of TLG, which were partly transferred to TLG on behalf of Sphairon Access SystemsGmbH in order to lower Sphairon Access Systems GmbH’s leasing rates. The revocation was issued due to theinsolvency of Sphairon Access Systems GmbH. The total value of these proceedings amounts to approximately€1.1 million (excluding interest claims) as of the date of this Prospectus.

As of June 30, 2014, the aggregate amount of claims brought against TLG amounted to €10.2 million and theaggregate amount of claims brought by TLG to €2.6 million (both excluding interest claims). Approximately €9.5 million ofclaims (including interest claims) brought against TLG were related to litigation in connection with subsidies granted by SAB.The Company expects that it will settle all disputes with SAB within the foreseeable future and has already made provisionsfor the claims brought by SAB. Furthermore, as of June 30, 2014, TLG had made provisions in the amount of €0.5 million forother legal disputes and €0.3 million for litigation related costs.

During the last twelve months, TLG was involved in ten other material legal proceedings with a value exceeding€0.3 million (excluding interest claims) with an aggregate value of approximately €8.7 million (excluding interest claims).

Apart from the legal proceedings described above, TLG is not and has not been party to any governmental, legal orarbitration proceedings (including any pending or threatened proceedings) during the last twelve months, which may have, orhave had, significant effects on TLG’s financial position or profitability.

Intellectual Property

Given the nature of its business, intellectual property rights are of no special significance to TLG. It does notdepend on any patents or licenses.

Among others, the trademarks “TLG” and “TLG IMMOBILIEN” have been registered on behalf of the Companywith the German Patent and Trade Mark Office (Deutsches Patent- und Markenamt (DPMA)) and the Office forHarmonization in the Internal Market. TLG predominantly uses the internet domain www.tlg.de, which is registered in theCompany’s name.

Insurance

TLG is covered through an all-risk building insurance that insures against fire, water main breaks, storms, hail andcertain other losses or damages, including loss of rent for a period of up to 24 months. In addition, TLG is covered throughthird-party liability insurance, which provides insurance coverage for personal injury and damage to property. TLG has alsoobtained insurance coverage against losses or damages from acts of terrorism, including loss of rent for a period of 24 monthsresulting therefrom. Such insurance coverage against losses or damages from acts of terrorism is limited to an aggregateamount of €25 million annually. TLG’s insurance policies contain market-standard exclusions and deductibles.

TLG regularly reviews the adequacy of its insurance coverage. The Company believes that TLG’s insurancecoverage is in line with market standards in the commercial real estate industry. However, there is no guarantee that it will notsuffer any losses for which no insurance coverage is available, or that the losses will not exceed the amount of insurancecoverage under existing insurance policies.

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REGULATORY ENVIRONMENT

TLG’s real estate portfolio is subject to a variety of laws and regulations in Germany. If TLG fails to comply withany of these laws and regulations, it may be subject to civil liability, administrative orders, fines, or even criminal sanctions.

The following provides a brief overview of select federal regulations and the state regulations of Berlin,Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia that are applicable to TLG’s businessoperations.

Tenancy Law for Commercial Properties

Unlike tenancy law for residential properties, German tenancy laws for commercial properties generally providelandlords and tenants with far-reaching decisions in how they structure lease agreements. Also, general terms and conditions(Allgemeine Geschäftsbedingungen (AGB)) used between entrepreneurs are only subject to a less strict review. There are,however, certain areas, in which legal restrictions may limit a landlord’s negotiating power:

Strict Written Form Requirements

German tenancy law generally requires that lease agreements with a term of more than one year must be concludedin written form. The requirements to comply with the written form have been specified by comprehensive case law. However,lease agreements that do not comply with written form requirements are not automatically invalid. Rather, it is deemed tohave been concluded for an indefinite period with the consequence that it can be terminated at the earliest at the end of oneyear after handover of the leased property to the tenant in accordance with the statutory notice period (i.e. notice oftermination is admissible at the latest on the third working day of a calendar quarter towards the end of the next calendarquarter). Against the background of evolving case law on the formal invalidity of lease agreements, there is a risk that leaseagreements that were originally compliant with strict written form requirements may no longer satisfy the requirementscurrently applicable and – regardless of the agreed fixed term – could be terminated at short notice.

Operating Costs

In the area of the operating costs of commercial tenancies, most of the ongoing costs of the property accruing to thelandlord may essentially be apportioned to the tenants. However, this requires a clause in the lease agreement stipulatingexplicitly and specifically which operating costs shall be borne by the tenant. These clauses have to be even more specific andtransparent in case that they form part of the general terms and conditions used by the landlord. With respect to heating costs,further legal provisions are contained in the Heating Costs Ordinance (Heizkostenverordnung (HeizkostenV)), banning lump-sum cost indemnification clauses and restricting the landlord’s leeway in apportioning heating costs among tenants.Furthermore, costs that do not adhere to the landlord’s statutory obligation to take a cost-effectiveness approach(Wirtschafltichkeitsgebot) may also not be apportioned to tenants and may even result in liability for damages.

Maintenance Costs, Cosmetic Repairs, Final Decorative Repairs

Lease agreements for commercial properties may generally transfer responsibility for the maintenance and repair oflet properties to tenants. This general principle is limited to the extent that the costs of maintenance and repairs to the roof andstructures and of areas located in the let property used by several tenants may not be fully transferred to tenants by use ofgeneral terms and conditions. Instead, case law on general terms and conditions requires a contractual limitation on theamount apportioned.

Expenses for cosmetic repairs (Schönheitsreparaturen) may, in principle, be allocated to tenants, provided that theobligation to carry out ongoing cosmetic repairs is not combined with an undertaking to perform initial and/or final decorativerepairs. However, general terms and conditions may not allocate costs for cosmetic repairs to tenants if the execution of suchrepairs is fixed to set deadlines or if the tenant is otherwise unfairly disadvantaged.

There is a trend in the case law of the German Federal Supreme Court (Bundesgerichtshof) to the effect thatrestrictions originally developed for residential tenancy law are increasingly being applied to lease agreements for commercialproperties. This may result in provisions contained in commercial lease agreements no longer being valid in the future andthus increasing costs to be borne by the landlord.

Land-use Regulations

German Planning Law

Under German planning law, municipal planning authorities have a considerable amount of discretion in exercisingtheir planning competence. They are, however, required by law to respect the land owners’ property rights as well as to pursuea number of prescribed objectives, the most important of which include sustainable urban development and the protection ofthe natural foundations of human life. Formal planning by municipalities takes a two-tiered approach.

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On the first level, each municipality can issue a zoning plan (Flächennutzungsplan) that represents, with respect tothe entire municipal territory, a basic classification of land uses according to urban development objectives and the needs ofthe community. A zoning plan may restrict the use of land to special types of use or impose restrictions with respect toenvironmental standards, but does not create or modify individual rights.

On the second level, development plans (Bebauungspläne) may determine the use of land in designated areas. Adevelopment plan has to comply with the applicable zoning plan. A development plan establishes the applicable standardswith respect to such matters as the size of plots and the height, density and specific use of buildings erected on a plot and mayalso designate land as being reserved for public purposes, social housing, infrastructure, open spaces, and protected areas.Where there is no development plan or only a development with limited standards, permissible planning generally depends onthe location of the property (i.e., within or outside of urban areas) and the existing buildings in the surrounding area.

Urban Restructuring Planning

Communities may designate certain areas as restructuring areas (Sanierungsgebiete) and undertake comprehensivemodernization efforts regarding the infrastructure in such areas. While this may improve the value of properties located inrestructuring areas, being located in a restructuring area also imposes certain limitations on the affected properties (e.g., thesale, encumbrance and letting of such properties, as well as reconstruction and refurbishment measures, are generally subjectto special consent by the competent municipal authorities). Most importantly, such properties may only be sold at pricesapproved by the competent municipal authorities and approval is generally only granted if the proposed price excludes anyvalue gains from restructuring measures. Property owners may, however, negotiate the lifting of such limitations, which isusually granted in exchange for compensatory payments.

Building Regulations

German building laws and regulations are quite comprehensive and address a number of issues, including, but notlimited to, permissible types of buildings, building materials, statics, proper workmanship, heating, fire safety, means ofwarning and escape in case of emergency, access and facilities for the fire service, hazardous and offensive substances, noiseprotection, ventilation and access and facilities for disabled people.

Protection of Existing Buildings

Owners of buildings that have been erected in compliance with applicable laws and regulations and have received abuilding permit (Baugenehmigung) in principle enjoy constitutional protection of property with respect to such buildings.Nevertheless, as an exception to this general rule, the competent authority may, under certain circumstances, demandalterations to buildings on grounds of safety (e.g., fire safety) or health risks from a property. While mere non-compliancewith prevailing regulations generally does not warrant such orders, the occurrence of concrete safety or health risks withrespect to users of the building or the general public allows the competent authority to demand immediate action from theowner. Relevant risks in this regard include fire risks, traffic risks, risks of collapse and health risks from injurious buildingmaterials such as asbestos. To TLG’s knowledge, there are at the moment no official orders demanding any alterations toexisting buildings owned by TLG. The protection of existing buildings does not cover any alterations to such buildings orchanges in the type of use. A change of use may require a construction permit if the intended use differs from the useclassified in the development plan (Zweckentfremdung) or the intended use is subject to special regulations. Thus, forexample, the conversion of office or retail space into residential space or vice versa may require a construction permit.

Energy Saving Regulation

Sellers and landlords of commercial buildings are required to provide potential buyers or tenants with a specialcertificate that discloses the property’s energy efficiency before any sale or new rentals. An energy certificate must beprepared if an engineering assessment of the entire building’s energy consumption is performed in the course ofmodernization measures, which allows for the certificate to be prepared at a reasonable cost. The energy certificate isgenerally valid for ten years. The Energy Saving Act (Energieeinsparungsgesetz (EnEG)) reinforces the energy certificate(e.g., by requiring that real estate advertisements in commercial media cite the heat transfer coefficient or U-value of theproperty). The Energy Saving Ordinance (Energieeinsparverordnung (EnEV)), which enacts the Energy Saving Act, includesvarious regulations regarding reconstruction works designed to improve energy efficiency. In general, the owner of acommercial property must ensure that modernization measures and expansions of existing properties comply with regulationsunder the Energy Saving Ordinance, remedy certain deficiencies and regularly inspect the energy efficiency of coolingsystems with cooling power in excess of twelve kilowatt hours. Furthermore, owners of buildings with more than 500 sqm ofusable area and regular public traffic (starker Publikumsverkehr) have to display the respective building’s energy certificate ina visible place. Failure to comply with the Energy Saving Ordinance can be sanctioned as an administrative offense.

Monument Protection

Monument protection is generally regulated on the federal level and applies with different decrees of limitations. Asof June 30, 2014, 73 of TLG’s properties were subject to some form of monumental protection. Thereof, 29 properties weresubject to individual protection, meaning that parts of such properties (e.g., roofs, facades, installations etc.) are considered tobe of cultural value and may only be altered, modernized or demolished with prior written approval from the competent

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authorities, if at all. 28 properties were subject to ensemble protection, whereby whole ensembles of buildings are consideredof cultural value. Alterations to the appearance of such buildings may only be made with prior written approval from thecompetent authorities. A further 16 properties were subject to ground monument protection given that they coverarchaeological sites (e.g., ancient foundations, burial sites etc.). Such ground monumental protection generally does not affectthe use of buildings situated on these properties. Major earthworks on such properties may however be delayed or prohibitedto preserve ground monuments.

Regulation Relating to Environmental Damage, Contamination and Property Maintenance

In addition to German tenancy law, TLG’s commercial real estate portfolio is subject to various rules andregulations relating to the remediation of environmental damage and contamination.

Soil Contamination

Pursuant to the German Federal Soil Protection Act (Bundesbodenschutzgesetz), the responsibility for residualpollution and harmful changes to soil (“Contamination”) lies with, among others, the perpetrator of the Contamination, suchperpetrator’s universal successor, the current owner of the property, the party in actual control of the property and, if the titlewas transferred after March 1999, the previous owner of the property if he knew or must have known about theContamination. There is no general statutory ranking as to which of the aforementioned parties is primarily liable. Rather, thisdecision is made at the discretion of the relevant local authority who will take into account the effectiveness of remediation asa prevailing factor. Thus, the current owner of the contaminated property is usually the first party to be held responsiblebecause the owner is generally in the best position to undertake the necessary remediation work. However, a former ownermay be ordered to carry out remediation work if the current owner’s financial condition appears to be unsound. Otherresponsible parties are required to indemnify the party that carried out the remediation work on a pro rata basis, regardless ofwhich party is held liable by the relevant local authority. The indemnity obligation can be waived or transferred by way of anexpress contractual agreement. Furthermore, liability is not based on fault; thus the German Federal Soil Protection Act(Bundesbodenschutzgesetz) does not require the relevant local authority to prove negligence or intent on the part of the liableparties.

Administrative powers arising from the German Federal Soil Protection Act (Bundesbodenschutzgesetz) authorizethe relevant local authority to require risk inspections, investigations, remedial measures and other measures necessary for theprevention of residual pollution or harmful changes in the soil.

Civil law liability for Contaminations can arise from contractual warranty provisions or statutory law. Warrantyobligations can generally be waived or can be limited by contract. According to statutory provisions, the perpetrator of theContamination can be held liable for damages or for the remediation of the Contamination and its consequences. TLG couldbe subject to such liability if a property that TLG currently owns or formerly owned is detrimentally affecting the property ofone or more third parties. This civil liability exists independent of official action taken under the German Federal SoilProtection Act (Bundesbodenschutzgesetz).

Asbestos Regulation

German law imposes obligations to remediate asbestos contamination under certain circumstances. Under theasbestos guidelines (Asbest-Richtlinien) of the German federal states, the standard for determining a remediation obligation isthe presence of any health threat. The law distinguishes between friable asbestos, which is capable of releasing asbestos fibersinto the air as it ages or breaks, and non-friable asbestos, from which asbestos fibers are not usually released and whichtherefore poses a limited risk to human health. Except in the event of structural alterations, there is generally no obligation toremove non-friable asbestos under the asbestos guidelines.

Friable asbestos is generally found in construction materials that provide fire safety, noise abatement, moistureprotection, heat insulation and thermal protection. The asbestos guidelines set out criteria used in assessing the urgency ofremedying contamination, ranging from immediate action (including demolition, removal or coating of the asbestos) to riskassessments at intervals of no more than five years. In the case of asbestos contamination, a tenant may also assert a right ofrent reduction or, in extreme circumstances, termination for good cause. German courts have held that a landlord may bepresumed to be in breach of its statutory obligations if the existence of a health threat cannot be excluded. Accordingly, thecourts have granted the right to rent reduction even in cases where the asbestos guidelines do not require immediateremediation. Tenants may also claim compensatory damages if the defect was present at the time the contract was concludedand they may claim compensation for personal suffering (Schmerzensgeld). Finally, tenants also have the right, subject tocertain conditions, to remedy the defect on their own and require that their reasonable expenses be reimbursed.

Regulation Relating to Polychlorinated Biphenyl (“PCB”), Dichlorodiphenyltrichloroethane (“DDT”), Pentachlorophenol(“PCP”) and Lindane

Since PCB may cause fetal damage in pregnant women and is suspected to have carcinogenic effects, its productionwas prohibited in Germany in 1983. However, PCB may still exist in buildings, such as in wood preservatives, synthetic

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materials, insulations or joints. DDT and Lindane are synthetic pesticides, which were also used in wood preservatives. DDTis suspected to cause cancer and be genotoxic, while Lindane is suspected to harm the nervous system and may cause cancer.PCP was used as a fungicide against mold and is also suspected to negatively affect human health.

Under various legal provisions, the owner of a building may be required to remedy PCB sources through theelimination or sealing of construction elements that contain PCB. In particular, remediation measures may become necessaryif the PCB concentration in rooms that are designed for human use exceeds 300 nanograms per 1 cubic meter of air. Theexistence of DDT, PCP and Lindane in buildings may, under certain circumstances, entitle the tenant to reduce the rent or toclaim damages. Moreover, the remediation of rooms or buildings may be required where DDT, PCP or Lindaneconcentrations exceed certain thresholds.

Protection of Groundwater and Maintenance of Sewage Systems

Pursuant to the German Federal Water Management Act (Wasserhaushaltsgesetz), all sewage systems must beconstructed, operated and maintained according to the generally accepted Rules of Technology (annerkannte Regeln derTechnik). Property owners are required to check, among other things, for the sewage system’s condition, operability,maintenance and the amount and quality of wastewater and the substances contained therein. In the case of deficiencies,property owners must repair the sewage system. The German Federal Water Management Act (Wasserhaushaltsgesetz)authorizes the German Federal Government (Bundesregierung), with approval of the Second Chamber of the GermanParliament (Bundesrat), to enact an ordinance specifying the abovementioned obligations concerning sewage systems. OnJanuary 3, 2012, the German Federal Government (Bundesregierung) announced that no set date can currently be foreseen forthe enactment of such an ordinance.

Until an ordinance by the German Federal Government (Bundesregierung) is enacted, the federal state governmentsmay enact their own ordinances regarding the aforementioned obligations. Required testing intervals under such ordinancesvary from state to state and sometimes between different zones within one state.

Legionella Testing

Pursuant to the Federal Drinking Water Ordinance (Trinkwasserverordnung—TrinkwV 2001) as last amended onAugust 7, 2013, the owners of specified centralized heated water supply facilities for use in commercially used multi-familybuildings are required to analyze stored heated water for the concentration of legionella (a pathogenic bacterium) byDecember 31, 2013 at the latest and to repeat this test at least once every three years. Competent authorities may orderadditional testing.

The analysis must be carried out by laboratories specified by the respective federal state. The existence ofappropriate sample extraction points (Probeentnahmestellen) must be ensured by the owner of the building. If specific limitsare exceeded, the competent authority will regularly adopt measures to improve the water quality.

German Law on Property Purchases

Purchasers of real estate located in Germany are required to bear certain costs. It is market practice that thepurchaser of real estate is required to pay the Real Estate Transfer Tax (“RETT”) (Grunderwerbsteuer). RETT in Berlincurrently amounts to 6.0%, in Brandenburg, Mecklenburg-Western Pomerania, Saxony-Anhalt and Thuringia to 5.0% and inSaxony to 3.5% of the purchase value of the property. Additional costs, amounting to approximately 1.5% of the purchasevalue, are incurred for notary fees and land registry office (Grundbuchamt) fees, depending on the value of the transaction.These additional costs are usually also paid by the purchaser. While the RETT tax rate is determined on the state level, thestatutory RETT framework falls within the competency of the federal lawmakers.

Under the current tax laws, the acquisition of a participation in an entity that owns German real estate exceeding95% is subject to RETT. Before June 6, 2013, the tax could be avoided by way of a share deal in which up to 94.9% of sharesin a property-owning entity and up to 94.9% of shares in an interim vehicle owning the remaining 5.1% in the property-owning entity were acquired. An acquirer could thereby hold almost all of the shares in a property holding entity withoutbeing subject to RETT. Following the Act for the Implementation of the EU-Directive on Mutual Assistance(Amtshilferichtlinie- Umsetzungsgesetz), RETT is now also triggered if an acquisition or transaction results in an entityholding an economic participation of at least 95% of an entity that owns a piece of German real property, regardless ofwhether this is held (partly) directly or (partly) indirectly. The economic participation shall equal the sum of direct or indirectparticipations in the respective entity’s capital or assets. To determine participations, the percentages of participations in thecapital or assets of the entities have to be multiplied. Thus, RETT is triggered if the overall effective ownership, taking intoaccount direct and indirect participation (economic ownership), is or exceeds 95% when accumulation is determined based oneconomic interest calculated on a look-through basis.

Capital Investments Act (Kapitalanlagegesetzbuch)

The Capital Investments Act (Kapitalanlagegesetzbuch (KAGB)) regarding the regulation of capital investments,implementing the European Directive 2011/61/EU on the administration of alternative investment funds and last amended inJune 13, 2014, regulates the administration of alternative investment funds. In June 2013, the BaFin published an

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interpretative letter specifying the bill’s scope. According to this letter, only funds that, among others, follow a fixedinvestment strategy (festgelegte Anlagestrategie) opposed to a general business strategy (Unternehmensstrategie), are subjectto the Capital Investments Act. According to the BaFin, such a fixed investment strategy is characterized by the detailedregulation of the investment criteria and a restriction of the investment discretion in the by-laws, statutes or other bindingdocumentation. Given that the Company’s statutory purpose leaves the Management Board with wide entrepreneurialdiscretion and full managerial flexibility, TLG believes that under this guidance, neither the Company nor any of its currentasset-holding subsidiaries qualify as an alternative investment fund.

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INFORMATION ON THE EXISTING SHAREHOLDERS

Shareholder Structure (Before and After the Offering)

The shareholders of TLG IMMOBILIEN AG are LSREF II East AcquiCo S.à r.l., Luxemburg, a limited liabilitycompany (société à responsibilité limitée), registered with the commercial and company register of Luxembourg (Registre deCommerce et des Socieétés Luxembourg) under the company number B 173323, having its registered office at 33, rue du PuitsRomain, L-8070 Bertrange, Luxembourg, (“East AcquiCo”), which holds 94.9% of the shares in both the Company andDelpheast Beteiligungs GmbH & Co. KG, a limited partnership with a limited liability company as general partner, registeredwith the commercial register of the local court (Amtsgericht) of Frankfurt am Main, Germany, under the docket numberHRA 47217, having its registered office at Hamburger Allee 14, 60486 Frankfurt am Main, Germany, (“Delpheast” and,together with East AcquiCo, the “Existing Shareholders”) which holds 5.1% of the shares in the Company.

The following table sets forth the shareholdings and voting rights of the Existing Shareholders immediately prior tothe offering, and their expected shareholding, together with the expected shareholding of the public float, upon completion ofthe offering.

Actual (direct) ownership of, andvoting rights in, TLG IMMOBILIEN AG (in %)

Shareholderimmediately prior

to the offering

upon completion of theoffering (assuming noexercise of GreenshoeOption and issuance

of New Shares in full)

upon completion of theoffering (assuming fullexercise of GreenshoeOption and issuance

of New Shares in full)

East AcquiCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.9 45.4 39.9Delpheast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 0.0 0.0Public float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 54.6 60.1

The 94.9% limited partner of Delpheast is East AcquiCo. The remaining 5.1% limited partnership interest inDelpheast is held by Delpheast L.P. Beteiligungs-GmbH, a limited liability company held by a third party not affiliated withEast AcquiCo. The general partner of Delpheast is Delpheast Verwaltungs-GmbH. East AcquiCo holds all of the shares inDelpheast Verwaltungs-GmbH.

The Company is controlled by East AcquiCo due to East AcquiCo’s direct ownership of 94.9% of the voting rightsin the Company and the fact that East AcquiCo via its shareholdings in Delpheast and Delpheast Verwaltungs-GmbH alsoindirectly controls the voting rights with respect to the shares in the Company held by Delpheast.

LSREF II East Lux GP SCA, a partnership limited by shares (société en commandite par actions), registered withthe commercial and company register of Luxembourg (Registre de Commerce et des Socieétés Luxembourg) under thecompany number B 173601, having its registered office at 33, rue du Puits Romain, L-8070 Bertrange, Luxembourg(“LS SCA”), is the sole shareholder of East AcquiCo.

LSREF II East Lux GP S.à r.l., a limited liability company (société à responsabilité limitée), registered with thecommercial and company register of Luxembourg (Registre de Commerce et des Socieétés Luxembourg) under the companynumber B 171344, having its registered office at 33, rue du Puits Romain, L-8070 Bertrange, Luxembourg, is the generalpartner of LS SCA.

LSREF II Delphi S.à r.l., a limited liability company (société à responsabilité limitée), registered with thecommercial and company register of Luxembourg (Registre de Commerce et des Socieétés Luxembourg) under the companynumber B 165282, having its registered office at 33, rue du Puits Romain, L-8070 Bertrange, Luxembourg, is the sole limitedpartner of LS SCA, holding the limited partner shares of LS SCA.

LSREF II Delphi LP S.à r.l. is a 100% subsidiary of Lone Star Capital Investments S.à r.l. (“LSCI”), registered withthe commercial and company register of Luxembourg (Registre de Commerce et des Socieétés Luxembourg) under thecompany number B 91796, having its registered office at 33, rue du Puits Romain, L-8070 Bertrange, Luxembourg.

LSCI is not controlled by any of its shareholders and each current shareholder holds less than 50% of the votingrights in LSCI.(1)

(1) Shareholding disclosure obligations under the German Securities Trading Act (Wertpapierhandelsgesetz) end at this level.

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The following chart sets forth the entities holding participations, directly or indirectly, in the Existing Shareholdersas described above:

LSREF II DelphiL.P. S.à r.l. (Luxembourg)

Delpheast Verwaltungs-GmbH (Germany)

Delpheast BeteiligungsGmbH & Co. KG

LSREF II East AcquiCoS.à r.l.

Lone Star CapitalInvestments S.à r.l.

(Luxembourg)

LSREF II East Lux GP

SCA

LSREF II East Lux GP S.à r.l.(Luxembourg)

Limited Partner

100 %

100 %

General Partner

94.9 %

5.1 %

General Partner 94.9 %

100 %

Company

A majority of the indirect economic interest in the Company is ultimately held by Lone Star Real Estate Fund II(U.S.), L.P. (Delaware) and Lone Star Real Estate Fund II (Bermuda), L.P. (Bermuda).

For information on selling restrictions applicable to the Existing Shareholders relating to the sale of shares in theCompany see “Underwriting—Selling Restrictions”.

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GENERAL INFORMATION ON THE COMPANY AND THE GROUP

Formation, Incorporation, Commercial Name, Fiscal Year and Registered Office

The Company was formed as a limited liability company (Gesellschaft mit beschränkter Haftung) under Germanlaw by memorandum of association dated June 18, 1991. Its legal name was “DUHO Verwaltungs-Gesellschaft mbH” with itsregistered office in Berlin, Germany, and registered with the commercial register of the local court (Amtsgericht) ofCharlottenburg under the docket number HRB 38419 (“DUHO”).

By merger agreement dated August 14, 1996, TLG Treuhand Liegenschaftsgesellschaft mbH and a number of otherentities were merged onto DUHO and the Company changed its legal name into TLG Treuhand LiegenschaftsgesellschaftmbH. The merger and the change in legal name were registered with the commercial register on August 30, 1996. By decisionof the Company’s general meeting dated July 26, 2002, the Company changed its legal name to TLG Immobilien GmbH. Thechange in legal name was registered with the commercial register on August 21, 2002. On September 5, 2014, the Company’sshareholders’ meeting approved a resolution to change the Company’s legal form to a German stock corporation(Aktiengesellschaft) and its legal name to TLG IMMOBILIEN AG. The change in legal form and name was registered withthe commercial register on September 10, 2014. The Company is the parent company of TLG and operates under thecommercial name “TLG IMMOBILIEN”. The Company’s fiscal year is the calendar year.

The Company’s registered office is at Hausvogteiplatz 12, 10117 Berlin, Germany (tel. +49 (0) 30-2470-50).

History and Development

The Company traces its roots back to two former subsidiaries of THA, a state agency tasked with administratingbusinesses owned by the former German Democratic Republic (Deutsche Demokratische Republik).

DUHO Verwaltungs-Gesellschaft mbH

DUHO was formed by memorandum of association dated June 18, 1991. Its formation was registered with thecommercial register of the local court (Amtsgericht) of Charlottenburg on June 24, 1991. DUHO’s capital was created throughspin-off mergers (verschmelzende Aufspaltungen) of 139 other legal entities owned by THA. 129 of these split-ups wereactually registered with the commercial register. DUHO’s articles of association were subsequently amended to reflect thedecreased number of split-ups. This company set-up through multiple spin-off mergers (verschmelzende Aufspaltungen) was avery innovative, but not uncontested corporate measure; this process facilitated the bringing together of various assets in onesingle transaction.

DUHO was tasked with the privatization of certain commercial real estate owned by trade organizations of theformer German Democratic Republic (Deutsche Demokratische Republik). On September 29, 1994, the shareholders’ meetingdecided to dissolve DUHO. The decision was registered with the commercial register on November 11, 1994. On June 31,1996, the share capital of DUHO was transferred to the Federal Republic of Germany. On July 18, 1996 the shareholders’meeting decided to continue DUHO’s business. The decision was registered with the commercial register on July 26, 1996.

Liegenschaftendienst für die Treuhandanstalt GmbH

Liegenschaftendienst für die Treuhandanstalt GmbH was founded by memorandum of association datedNovember 12, 1990 and registered with the commercial register of the local court (Amtsgericht) of Charlottenburg under thedocket number HRB 36064 on December 10, 1990. It was rebranded Liegenschaftsgesellschaft der Treuhandanstalt mbH onMarch 18, 1991 and tasked with the privatization of the real estate holdings of the former German Democratic Republic(Deutsche Demokratische Republik). Until the end of 1994, Liegenschaftsgesellschaft der Treuhandanstalt mbH soldapproximately 37,000 properties from the holdings of THA for a total consideration of approximately €8.9 billion.Approximately 11,000 other properties were restituted or municipalized.

In 1994, Liegenschaftsgesellschaft der Treuhandanstalt mbH was rebranded TLG TreuhandLiegenschaftsgesellschaft mbH and the Federal Republic of Germany became the owner of its entire share capital.Subsequently, TLG Treuhand Liegenschaftsgesellschaft mbH acquired over 100,000 properties from THA.

Merger and Privatization

TLG Treuhand Liegenschaftsgesellschaft mbH was then merged onto DUHO by merger agreement datedAugust 14, 1996, and DUHO was rebranded TLG Treuhand Liegenschaftsgesellschaft mbH. Thus, the actual legalpredecessor of the Company is DUHO. Between 1995 and 2000, more than 75,000 properties were sold, restituted ormunicipalized by TLG Treuhand Liegenschaftsgesellschaft mbH, DUHO and the Company.

In 2000, the Company began to pursue a new strategy of active portfolio management. On July 26, 2002, theshareholders’ meeting decided to change the Company’s legal name to TLG Immobilien GmbH. The change was registeredwith the commercial register on August 21, 2002. Between 2000 and the end of 2011, the portfolio and property managementprocesses were professionalized and the organization was streamlined, e.g. subsidiaries were merged or otherwise integrated,

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Significant Subsidiaries

The following table provides an overview of the Company’s significant subsidiaries as of June 30, 2014. Theshareholdings reflect TLG’s direct and indirect economic interest in the respective entity. This means that shares held by therespective company itself are not taken into account when computing the percentage of participation. As of June 30, 2014, noamount was outstanding under the issued shares for each of the below listed subsidiaries.

Name and registered office

Companyshare ofcapital(1)

Issuedcapital as of

June 30,2014

Capitalreserves asof June 30,

2014

Net income/lossfor the fiscalyear 2013(2)

Payables tothe

Company asof June 30,

2014

Receivablesfrom the

Company asof June 30,

2014(in € million unless otherwise specified)

(in accordance with German GAAP)Hotel de Saxe an der Frauenkirche

GmbH, Dresden(3) . . . . . . . . . . . . . . . . 100 25.0 26.2 1.4 2.2 3.7TLG Gewerbepark Grimma, GmbH,

Grimma . . . . . . . . . . . . . . . . . . . . . . . 100 60.0 1.6 (6.6) 0.0 1.4

(1) In %. directly or indirectly held as of June 30, 2014.

(2) In € thousand.

(3) The property “Hotel de Saxe” was previously held through a limited partnership structure (Kommanditgesellschaft) with a limitedliability company as general partner before it was changed to its current structure with a limited liability company owning the property.The previous general partner in the limited partnership structure, Verwaltungsgesellschaft an der Frauenkirche GmbH i.L, Dresden, was,after the change in structure, no longer necessary and is therefore in liquidation.

Statutory Auditor

Ernst & Young Wirtschaftsprüfungsgesellschaft GmbH, Stuttgart, office Berlin, Friedrichstraße 140, 10117 Berlin,Germany, (“E&Y”) was appointed as the statutory auditor of the Company for the fiscal years 2011, 2012 and 2013. E&Yaudited the consolidated financial statements for the Company prepared in accordance with IFRS and the additionalrequirements of German commercial law pursuant to Section 315a (1) of the German Commercial Code (Handelsgesetzbuch(HGB)) for the fiscal year 2013, the consolidated financial statements for the Company prepared in accordance with GermanGAAP for the fiscal years 2011 and 2012 and the Company’s unconsolidated financial statements prepared in accordancewith German GAAP for the fiscal year 2013 in accordance with Section 317 of the German Commercial Code(Handelsgesetzbuch (HGB)) and generally accepted standards for the audit of financial statements promulgated by theInstitute of Public Auditors in Germany (Institut der Wirtschaftsprüfer in Deutschland e.V., “IDW”) and issued in each casean unqualified auditor’s report (uneingeschränkter Bestätigungsvermerk). E&Y is a member of the Chamber of PublicAccountants (Wirtschaftsprüferkammer), Rauchstraße 26, 10787 Berlin, Germany.

Notifications, Paying Agent

In accordance with Section 3 (1) of the Articles of Association, the Company’s notifications are published in theGerman Federal Gazette (Bundesanzeiger), unless mandatory statutes provide otherwise.

In accordance with the German Securities Prospectus Act (Wertpapierprospektgesetz), notifications in connectionwith the approval of this Prospectus or any supplements thereto will be published in the manner of publication provided for inthis Prospectus, that is, through publication on the Company’s website, www.tlg.de, and the provision of printed copies at theCompany’s office at TLG IMMOBILIEN AG, Hausvogteiplatz 12, 10117 Berlin, Germany (tel. +49 (0) 30-2470-50).

The paying agent is COMMERZBANK. The mailing address of the paying agent is COMMERZBANKAktiengesellschaft, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany.

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DESCRIPTION OF SHARE CAPITAL OF TLG IMMOBILIEN AGAND APPLICABLE REGULATIONS

Current Share Capital; Shares

The Company’s share capital currently amounts to €52,000,000.00. It is divided into 52,000,000 bearer shares withno par value (Stückaktien), each such share with a notional value of €1.00. The share capital has been fully paid up. Theshares were created pursuant to German law.

Development of the Share Capital since the Company’s Foundation

The share capital of the Company has developed as follows:

On June 18, 1991, the Company, which was incorporated at that time in the legal form of a limited liabilitycompany (Gesellschaft mit beschränkter Haftung), had a share capital of DM 50,000.00. By merger agreement datedAugust 14, 1996, the Company was merged with TLG Treuhand Liegenschaftsgesellschaft and the share capital was increasedby DM 99,950,000.00 to DM 100,000,000.00. The merger was registered with the commercial register on August 30, 1996.By resolution of the shareholders’ meeting of the Company held on July 26, 2002, the Company’s share capital wasredenominated into euro and increased from €51,129,188.12 by €870,811.88 to €52,000,000.00. The capital increase wasregistered with the commercial register on August 21, 2002.

Additionally, by resolution of the extraordinary shareholders’ meeting expected to be held on October 22, 2014, theCompany’s share capital is expected to be increased by up to €9,302,326.00 (the “IPO Capital Increase”). The ExistingShareholders are expected to waive their subscription rights. It is anticipated that the IPO Capital Increase will be registeredwith the commercial register on or about October 23, 2014.

Authorized Capital

The Company currently has an authorized capital of €26,000,000.00. The Company intends to cancel the existingauthorization to issue authorized capital and to create a new authorized capital equaling 50% of the stated capital after theregistration of the IPO Capital Increase. The required resolutions are expected to be adopted by the extraordinaryshareholders’ meeting of the Company expected to be held on October 22, 2014 in connection with the IPO Capital Increase.The exact amount of the increase in authorized capital will depend on the amount of the IPO Capital Increase. The increase ofthe authorized capital will become effective at the time when it is registered with the commercial register. The application forregistration of the increase of the authorized capital is expected to be filed on or about October 22, 2014, and the Companyexpects that the authorized capital will be registered on or about October 23, 2014 in the course of normal register traffic.

Under the current authorized capital (Section 6 of the Articles of Association), the Management Board is authorized,with the consent of the Supervisory Board, to increase the share capital of the Company in the period until September 24,2019 in an amount of up to €26,000,000.00, once or in several instances, by issuing up to 26,000,000 new no-par value bearershares (Stückaktien) against contributions in cash and/or in kind. Under the new authorized capital to be created in connectionwith the IPO Capital Increase, the Management Board is expected to be authorized, subject to the consent of the SupervisoryBoard, to increase the Company’s share capital by up to 50% of the share capital after the IPO Capital Increase through one ormore issuances before October 21, 2014, by issuing new no-par value shares (Stückaktien) against cash contributions and/orcontributions in kind. Under the existing and the new authorized capital shareholders are to be granted subscription rights.However, the Management Board is authorized, with the consent of the Supervisory Board, to exclude the subscription rightsof the shareholders for one or more capital increases from the authorized capital: (i) in order to exclude fractional amountsfrom subscription rights; (ii) if necessary, in order to grant holders of conversion or option rights or creditors of mandatoryconvertible bonds or profit-sharing rights or bonds with conversion rights or warrants which are, or are to be, issued by theCompany or a direct or indirect subsidiary, subscription rights to newly issued no-par value bearer shares (Stückaktien) of theCompany to the extent they would be entitled thereto upon exercise of their conversion or option rights or upon fulfillment ofany mandatory conversion or to the extent the Company may elect to grant shares instead of the payment of a due amountunder such bonds or rights; (iii) for the issuance of shares against cash contributions, if the issuing price of the new shares isnot significantly below the market price of the shares already listed on a stock exchange (within the meaning of Section 203(1) and (2) and Section 186 (3) sentence 4 of the German Stock Corporation Act (Aktiengesetz)) and the portion of the sharecapital attributable to the new shares issued with an exclusion of subscription rights does not exceed a total of 10% of theshare capital, neither at the time when the authorization takes effect nor at the time when the authorized share capital isutilized or (iv) for the issuance of shares against contributions in kind, including for, but not limited to, the purpose ofacquiring (also indirectly) businesses, parts of businesses or participations in businesses or other assets in connection with anacquisition project, real properties and real estate portfolios, or for the fulfillment of convertible bonds or bonds with warrantsas well as profit-sharing rights or bonds with conversion rights or warrants or a combination of these instruments that areissued against contribution in kind.

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Conditional Capital

According to Section 7 of the Articles of Association, the capital stock of the Company is conditionally increasedby up to €26,000,000.00 through the issuance up to 26,000,000 new no par value bearer shares (Stückaktien). The conditionalcapital increase is only to be effected insofar as the holders or creditors, as the case may be, of conversion rights or options, orparties required to exercise conversion rights or profit-sharing rights or bonds with conversion rights or warrants (or acombination thereof) which have been issued or guaranteed until September 24, 2019 on the basis of the authorization by thegeneral meeting held on September 25, 2014, by the Company or a direct or indirect subsidiary, exercise their conversionrights or options or fulfill their conversion obligations, or to the extent the Company exercises an election right to delivershares in lieu of payment of due amounts.

The Management Board is authorized, with consent of the Supervisory Board, to issue convertible bonds or bondswith warrants or profit-sharing rights or bonds with conversion rights or warrants up to a total nominal value of€500,000,000.00 and with conversion rights or warrants for up to 26,000,000 shares. The shareholders have subscriptionrights for such bonds or rights. However, the subscription rights can be excluded (i) in order to exclude fractional amounts,(ii) for the issuance of such bonds/rights against contribution in cash if the issue price is not substantially below its valuedetermined in line with accepted methods of financial mathematics in particular and does not provide for conversion rights orwarrants for more than 10% of the share capital at the time of the authorization in September 2014 or (iii) for the issuanceagainst contribution in kind.

Purchase of Own Shares

The Company does not currently hold any of its own shares, nor does a third party on behalf or for account of theCompany.

The Company’s extraordinary shareholders’ meeting held on September 25, 2014 authorized the ManagementBoard through September 24, 2019, provided it complies with the legal requirement of equal treatment, to purchase theCompany’s own shares, up to a total of 10% of the Company’s share capital, (including share capital already held orattributable pursuant to law). The Management Board may make use of this authorization immediately following thecommencement of trading. The shares may be purchased (i) on the stock exchange, (ii) by a public offer to all shareholders(iii) by the issuance of tender rights (Andienungsrechte) on a pro rata basis to the shareholders, or (iv) by means ofderivatives, or a combination thereof. The shares may not be used for trading on the market. The Management Board isexpected to be authorized to cancel (einziehen) the shares or to use them with the Supervisory Board’s consent as follows:(i) by selling the purchased shares against cash consideration, if the consideration does not significantly fall short of themarket price at the time of the sale, provided that the purchased shares so sold do not exceed 10% of the share capital of theCompany at the time of the adoption of the share purchase resolution, and (ii) by using the purchased shares as considerationin kind, and (iii) by offering the purchased shares to, among others, employees of TLG as well as to executive directors ofTLG. This includes the authorization to transfer the shares free of charge or at preferential terms in connection with employeestock participation programs and the transfer of the shares to a financial institution with the obligation to offer such shares tothe employees under the stock participation programs.

In addition, the Supervisory Board is authorized to use the purchased shares under exclusion of subscription rightsof existing shareholders to satisfy the rights of members of the Management Board to receive shares of the Company as partof the compensation of such members set by the Supervisory Board. Also, if the purchased shares are sold in an offering to allshareholders, the subscription rights of the existing shareholders may be excluded with the consent of the Supervisory Boardwith respect to fractional shares.

General Provisions Governing a Liquidation of the Company

Apart from liquidation as a result of insolvency proceedings, the Company may be liquidated only with a vote of75% or more of the share capital represented at the shareholders’ meeting at which such a vote is taken. Pursuant to theGerman Stock Corporation Act (Aktiengesetz), in the event of the Company’s liquidation, any assets remaining after all of theCompany’s liabilities have been settled will be distributed among the shareholders in proportion to their shareholdings. TheGerman Stock Corporation Act (Aktiengesetz) provides certain protections for creditors which must be observed in the eventof liquidation.

General Provisions Governing a Change in the Share Capital

Under the German Stock Corporation Act (Aktiengesetz), a German stock corporation requires a shareholders’meeting resolution passed by a majority of at least 75% of the share capital represented at the vote to increase its share capital.Shareholders can also create authorized capital. This requires a resolution passed by a majority of at least 75% of the sharecapital represented at the vote, authorizing the management board to issue a specific quantity of shares within a period notexceeding five years. The nominal amount may not exceed half of the share capital existing at the time the authorization isgranted.

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In addition, shareholders can create contingent capital by a resolution passed with a majority of at least 75% of theshare capital represented at the vote for the purposes of (i) issuing shares to holders of convertible bonds or other securitiesgranting a right to subscribe for shares; (ii) issuing shares as consideration in a merger with another company; or (iii) issuingshares offered to managers and employees. The nominal amount of contingent capital may not exceed 10% of the sharecapital at the time the resolution is passed in cases where it is being created to issue shares to managers and employees, andmay not exceed 50% in all other cases. Resolutions to reduce share capital require a 75% majority of the share capitalrepresented at the vote.

General Provisions Governing Subscription Rights

In principle, the German Stock Corporation Act (Aktiengesetz) grants all shareholders the right to subscribe for newshares to be issued in a capital increase. The same applies to convertible bonds, bonds with warrants, profit participation rightsand participating bonds. Subscription rights are freely transferable and may be traded on German stock exchanges for aprescribed period before the deadline for subscription expires. However, shareholders do not have a right to request admissionto trading of subscription rights. The shareholders’ meeting may, subject to a majority of at least 75% of the share capitalrepresented at the vote, resolve to exclude subscription rights. Exclusion of shareholders’ subscription rights also requires areport from the Management Board, which must justify and demonstrate that the company’s interest in excluding subscriptionrights outweighs the interest of the shareholders in being granted subscription rights. Excluding shareholders’ subscriptionrights when new shares are issued is specifically permissible where:

• the company is increasing share capital against cash contributions;

• the amount of the capital increase does not exceed 10% of the share capital at issue; and

• the price at which the new shares are being issued is not materially lower than the stock exchange price.

Exclusion of Minority Shareholders

Under Section 327a et seq. of the German Stock Corporation Act (Aktiengesetz), which governs the so-called“squeeze-out under stock corporation law,” upon the request of a shareholder holding 95% of the share capital (“MajorityShareholder”), the shareholders’ meeting of a stock corporation may resolve to transfer the shares of minority shareholders tothe Majority Shareholder against payment of adequate compensation in cash. The amount of the cash payment that must beoffered to minority shareholders has to reflect “the circumstances of the Company” at the time the shareholders’ meetingpasses the resolution. The amount of the cash payment is based on the full value of the company, which is generallydetermined using the capitalized earnings method. The minority shareholders are entitled to file for a valuation proceeding(Spruchverfahren), in the course of which the appropriateness of the cash payment is reviewed.

Under Sections 39a and 39b of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- undÜbernahmegesetz), in the case of a so-called “squeeze-out under takeover law,” an offeror holding at least 95% of the votingshare capital of a target company (as defined in the German Securities Acquisition and Takeover Act) after a takeover bid ormandatory offer, may, within three months of the expiry of the deadline for acceptances, petition the Regional Court(Landgericht) of Frankfurt am Main for a court order transferring the remaining voting shares to it against the payment ofadequate compensation. A resolution passed by the shareholders’ meeting is not required. The consideration paid inconnection with a takeover or a mandatory bid is considered adequate if the offeror has obtained at least 90% of the sharecapital that was subject to the offer. The nature of the compensation must be the same as the consideration paid under thetakeover bid or mandatory offer; a cash alternative must always be offered. In addition, after a takeover bid or mandatoryoffer, shareholders in a target company who have not accepted the offer may do so up to three months after the deadline foracceptances has expired, provided the offeror is entitled to petition for the transfer of the outstanding voting shares inaccordance with Section 39a of the German Securities Acquisition and Takeover Act (Section 39c of the German SecuritiesAcquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz)). The provisions for a squeeze-out under stockcorporation law cease to apply once an offeror has petitioned for a squeeze-out under takeover law, and only apply againwhen these proceedings have been definitively completed.

In addition, under the provisions of Section 62 (5) of the German Reorganization and Transformation Act(Umwandlungsgesetz), within three months after the conclusion of a merger agreement, the shareholders’ meeting of atransferring company may pass a resolution according to Section 327a (1) sentence 1 of the German Stock Corporation Act(Aktiengesetz), i.e., a resolution on the transfer of the shares held by the remaining shareholders (minority interests) to thetransferee company (Majority Shareholder) in exchange for an adequate cash settlement if the Majority Shareholder has atleast 90% of the share capital. The result of this “squeeze-out under reorganization law” is the exclusion of the minorityshareholders in the transferring company. The entitlement to consideration is based on the provisions of Section 327a et seq.of the German Stock Corporation Act (Aktiengesetz).

Under Section 319 et seq. of the German Stock Corporation Act (Aktiengesetz), the shareholders’ meeting of a stockcorporation may vote for integration (Eingliederung) with another stock corporation that has its registered office in Germany,provided the prospective parent company holds at least 95% of the shares of the company to be integrated. The formershareholders of the integrated company are entitled to adequate compensation, which must generally be provided in the form

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of shares in the parent company. Where the compensation takes the form of own shares in the parent company, it isconsidered appropriate if the shares are issued in the same proportion as shares of the parent company would have been issuedper share in the company integrated if a merger had taken place. Fractional amounts may be paid out in cash.

Shareholder Notification Requirements; Mandatory Takeover Bids; Directors’ Dealings

After the Company’s shares have been admitted to official trading on the Frankfurt Stock Exchange (FrankfurterWertpapierbörse), the Company, as a listed company, will be subject to the provisions of the German Securities Trading Act(Wertpapierhandelsgesetz) governing disclosure requirements for shareholdings and the provisions of the German SecuritiesAcquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz).

The German Securities Trading Act (Wertpapierhandelsgesetz) requires that anyone who acquires, sells or whoseshareholding in any other way reaches, exceeds or falls below 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of thevoting rights in an issuer whose country of origin is Germany and whose shares are admitted to trading on an organizedmarket must immediately, and no later than within four trading days of such fact, notify the issuer and at the same time theBaFin. The notice can be drafted in either German or English and sent either in writing or via fax.

The notice must include the address of the individual or entity, the share of voting rights held and the date ofreaching, exceeding, or falling below the respective threshold. As a domestic issuer, the Company must publish such noticesimmediately, but no later than within three trading days after receiving them, via media outlets or outlets where it can beassumed that the notice will be disseminated in the non-European Union parties to the agreement on the European EconomicArea. The Company must also transmit the notice to the BaFin and to the German Company Register (Unternehmensregister)for storage. There are certain exceptions to the notice requirements.

In connection with these requirements, the German Securities Trading Act (Wertpapierhandelsgesetz) containsvarious rules that require the attribution of voting rights of certain persons associated with a shareholder or acting togetherwith a shareholder. For example, shares belonging to a third company are attributed to a company if the latter controls theformer; similarly shares held by a third company for the account of another company are attributed to the latter. Shares orfinancial instruments held for trading by a securities services company are not taken into account for determining thenotification obligation if it is ensured that the voting rights held by them are not exercised and that they amount to no morethan 5% of the voting shares, or do not grant the right to purchase more than 5% of the voting shares.

Since the implementation of the German Risk Limitation Act (Risikobegrenzungsgesetz), any cooperation amongshareholders that is designed to effect a permanent and material change in the business strategy of the Company can result inan attribution (Zurechnung) of voting rights, that is, the cooperation does not necessarily have to be specifically about theexercise of voting rights. Coordination in individual cases, however, will not trigger the attribution (Zurechnung) of votingrights.

If a shareholder willfully fails to file a notice or provides false information, the shareholder is excluded fromexercising the dividend rights attached to his or her shares for the duration of the failure. If a shareholder fails to disclose thenumber of voting rights held and the shareholder acted willfully or was grossly negligent, the shareholder is generally notpermitted to exercise the administrative (voting) rights attached to his or her shares for a period of six months after he or shefiles the necessary notification. In addition, a fine may be imposed for failure to comply with the notification obligation.

Except for the 3% threshold, similar notification obligations exist for the Company and BaFin for reaching,exceeding or falling below the aforementioned thresholds when holding other financial instruments entitling their holder tounilaterally acquire existing shares of the Company carrying voting rights by binding legal agreement. The Act onStrengthening Investor Protection and Improving the Functionality of the Capital Market (Gesetz zur Stärkung desAnlegerschutzes und Verbesserung der Funktionsfähigkeit des Kapitalmarkts), the relevant part of which came into effect onFebruary 1, 2012, extended this obligation to “other instruments” that grant the holder the right to acquire unilaterally, basedon a legally binding agreement, existing shares of the Company carrying voting rights that do not qualify as “financialinstruments” within the meaning of the German Securities Trading Act (Wertpapierhandelsgesetz), for example, securitieslending agreements or sales and repurchase agreements.

In addition, the Act on Strengthening Investor Protection and Improving the Functionality of the Capital Market(Gesetz zur Stärkung des Anlegerschutzes und Verbesserung der Funktionsfähigkeit des Kapitalmarkts) led to the addition ofthe new Section 25a of the German Securities Trading Act (Wertpapierhandelsgesetz). Pursuant to this provision, any personwho directly or indirectly holds financial instruments or other instruments that are not covered by Section 25 of the GermanSecurities Trading Act (Wertpapierhandelsgesetz), instruments that merely enable the holder to acquire existing sharescarrying voting rights of an issuer whose home country is Germany, must notify the issuer and, simultaneously, the BaFinimmediately, and within four trading days at the latest, when reaching, exceeding or falling below 5%, 10%, 15%, 20%, 25%,30%, 50% or 75%. Accordingly, such financial or other instruments do not necessarily entitle the holder to claim delivery ofthe shares. A notification requirement can be triggered if an acquisition of voting rights is only possible under the economicsof the instrument, for instance, if the counterparty to such financial or other instrument can reduce or mitigate its risk byacquiring the relevant shares. Therefore, cash-settled equity swaps and contracts for the payment of price differences willbecome subject to the notification requirement.

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A shareholder who reaches or exceeds the threshold of 10% of the voting rights, or a higher threshold, is obligatedto notify the issuer within 20 trading days regarding the objective being pursued through the acquisition of voting rights, aswell as regarding the source of the funds used for the purchase. Changes in those objectives must also be reported within20 trading days. The Articles of Association have not made use of the option to release shareholders from this disclosureobligation. In calculating whether the 10% threshold has been reached or exceeded, the attribution rules mentioned aboveapply.

Furthermore, pursuant to the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- undÜbernahmegesetz), every person whose share of voting rights reaches or exceeds 30% of the voting rights of the Company isobligated to publish this fact, including the percentage of its voting rights, within seven calendar days by publication on theInternet and by means of an electronically operated system for disseminating financial information and subsequently, unlessan exemption from this obligation has been granted by the BaFin, to submit a mandatory public tender offer to all holders ofshares in the Company. The German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz)contains a series of provisions intended to ensure the attribution of shareholdings to the person who actually controls thevoting rights connected with the shares. If the shareholder fails to give notice of reaching or exceeding the 30% threshold orfails to submit the mandatory tender offer, the shareholder is barred from exercising the rights associated with these shares(including voting rights and, in case of willful failure to send the notice and failure to subsequently send the notice in a timelyfashion, the right to dividends) for the duration of the delinquency. A fine may also be imposed in such cases.

Executives of an issuer with “managerial responsibilities” within the meaning of the German Securities Trading Act(Wertpapierhandelsgesetz) have to notify the issuer and the BaFin within five working days of transactions (so-calleddirectors’ dealings) undertaken for their own account relating to the shares of such issuer or to financial instruments based onsuch shares. This also applies to persons who are “closely related to such executives” within the meaning of the GermanSecurities Trading Act (Wertpapierhandelsgesetz).

EU Short Selling Regulation (Ban on Naked Short-Selling)

Regulation (EU) No 236/2012 of the European Parliament and of the Council of March 14, 2012 on short sellingand certain aspects of credit default swaps (the “EU Short Selling Regulation”), the European Commission’s delegatedregulation for the purposes of detailing it, and the German EU Short Selling Implementation Act (EU-Leerverkaufs-Ausführungsgesetz) of November 15, 2012 only permits the short selling of shares when specific criteria are met. Under theprovisions of the EU Short Selling Regulation, significant net short selling positions in shares must be reported to the BaFinand also published if they exceed a specific percentage. The reporting and publication process is detailed in the GermanRegulation on Net-Short Positions (Netto-Leerverkaufspositionsverordnung) of December 17, 2012. The net short sellingpositions are calculated by offsetting the short positions a natural person or legal entity has in the shares issued by the issuerconcerned with the long positions it has in this capital. The details are regulated in the EU Short Selling Regulation and theother regulations the European Commission enacted on short-selling to specify it. In certain situations described in detail inthe EU Short Selling Regulation, the BaFin may restrict short selling and comparable transactions.

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DESCRIPTION OF THE GOVERNING BODIES OF TLG IMMOBILIEN AG

Overview

The Company’s corporate bodies are the Management Board, the Supervisory Board and the shareholders’ meeting.The powers and responsibilities of these corporate bodies are governed by the German Stock Corporation Act (Aktiengesetz),the Articles of Association and the bylaws of the Management Board and the Supervisory Board.

The Management Board conducts the Company’s business in accordance with the law, the Articles of Associationand the bylaws of the Management Board, taking into account the resolutions of the shareholders’ meeting. The ManagementBoard represents the Company in its dealings with third parties. The Management Board is required to introduce and maintainappropriate risk management and risk controlling measures, in particular setting up a monitoring system in order to ensurethat any developments potentially endangering the continued existence of the Company may be identified early. Furthermore,the Management Board must report regularly to the Supervisory Board of the performance and the operations of theCompany. In addition, the Management Board is required to present to the Supervisory Board, no later than at the lastSupervisory Board meeting of each fiscal year, certain matters of business planning (including financial investment andpersonnel planning) for the following fiscal year for approval by the Supervisory Board. Furthermore, as regards all matters ofparticular significance to the Company, each member of the Management Board who becomes aware of such matters mustimmediately report these matters, verbally or in writing, to the chairman and the vice chairman of the Supervisory Board or toall members of the Supervisory Board. Significant matters also include any development or event at an affiliated company ofwhich the Management Board has become aware and that could have a material influence on the Company’s position.

The Supervisory Board appoints the members of the Management Board and has the right to remove them for goodcause. Simultaneous membership on the Management Board and the Supervisory Board is prohibited. The Supervisory Boardadvises the Management Board in the management of the Company and monitors its management activities. The ManagementBoard may not transfer management tasks to the Supervisory Board. However, pursuant to the bylaws of the ManagementBoard, the Management Board must obtain the consent of the Supervisory Board for certain transactions or measures, inparticular transactions or measures that entail fundamental changes to the Company’s net assets, financial position or resultsfrom operation.

The members of the Management Board and of the Supervisory Board owe duties of loyalty and due care to theCompany. In discharging these duties, the members of the governing bodies have to take into account a broad range ofinterests, in particular those of the Company, its shareholders, employees and creditors. The Management Board must alsotake into account the rights of shareholders to equal treatment and equal information. If the members of the ManagementBoard or Supervisory Board fail to discharge their duties, they are jointly and severally liable for damages to the Company. Adirectors’ and officers’ (“D&O”) insurance policy, which provides for a deductible, protects the Management Board andSupervisory Board members against claims for damages.

Under German stock corporation law (Aktiengesetz), neither individual shareholders nor any other person may useits influence on the Company to cause a member of the Management Board or Supervisory Board to act in a manner thatwould be detrimental to the Company. People using their influence to cause a member of the Management Board orSupervisory Board, a holder of a general commercial power of attorney or an authorized agent to act in a manner causingdamage to the Company or its shareholders, are liable to compensate the Company for any resulting losses if they have actedin violation of their obligation to use due care. Moreover, in this case, the members of the Management Board andSupervisory Board are jointly and severally liable in addition to the person using its influence if they have acted in breach oftheir obligations towards the Company.

Generally, an individual shareholder may not take court action against members of the Management Board orSupervisory Board if he believes that they have acted in breach of their duties to the Company and, as a result, the Companyhas suffered losses. Claims of the Company for damages against the members of the Management Board or SupervisoryBoard may generally only be pursued by the Company itself; in the case of claims against members of the Supervisory Board,the Company is represented by the Management Board, and in case of claims against members of the Management Board, it isrepresented by the Supervisory Board. Pursuant to a ruling by the German Federal Court of Justice (Bundesgerichtshof), theSupervisory Board must bring claims that are likely to succeed against Management Board members unless significantconsiderations of the Company’s well-being, which outweigh or are at least equivalent to those in favor of such claim, rendersuch a claim inadvisable. If the representative body in question decides against pursuing the claim, claims against theManagement Board or Supervisory Board must be asserted if the general meeting adopts a resolution to this effect by a simplemajority.

Shareholders whose joint holdings equal or exceed 10% of the share capital or the pro-rata amount of €1.0 millionmay petition the court to appoint a representative to pursue their claims for damages. Furthermore, shareholders whose jointholdings equal or exceed 1% of the share capital or a proportionate interest of €100,000 at the time the petition is submittedmay petition in their own name for a claim for damages to be heard by the regional court (Landgericht) where the Companyhas its registered office. For such a claim to be heard, the Company must have failed to make a claim when called on to do soby the general meeting within an appropriate deadline set by them, and facts must have come to light justifying the suspicion

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that the Company has sustained damages as a consequence of dishonesty or of a flagrant breach of the law or of the Articlesof Association and there are no significant grounds relating to the welfare of the Company outweighing such claim. TheCompany is entitled to bring a claim for damages itself at any time, and any pending application or claim on the part of theshareholders is barred once the Company does so.

The Company may only waive or settle a claim for damages against board members if at least three years haveelapsed since the vesting of the claim, so long as the shareholders’ meeting approves the waiver or settlement by a simplemajority and provided that no minority of shareholders whose aggregate shareholdings amount to at least one-tenth of theshare capital records an objection to such resolution in the minutes of the shareholders’ meeting.

Management Board

Current Composition of the Management Board

Pursuant to Section 8 (1) and (2) of the Articles of Association, the Management Board must consist of at least twopersons and the Supervisory Board determines the exact number of the members of the Management Board. The SupervisoryBoard may appoint a Management Board member as chairman of the Management Board and another member as deputychairman. Currently, the Management Board consists of two members.

Reappointment or extension, each for a maximum period of up to five years, is permissible. The Supervisory Boardmay revoke the appointment of a Management Board member prior to the expiration of his or her term for good cause, such asa gross breach of fiduciary duty, or if the shareholders’ meeting passes a vote of no confidence with respect to such member,unless the no-confidence vote was clearly unreasonable. The Supervisory Board is also responsible for entering into,amending and terminating employment agreements with Management Board members and, in general, for representing theCompany in and out of court against the Management Board.

Pursuant to Section 10 of the Articles of Association, the Company is represented vis-à-vis third parties and in courtproceedings by two members of the Management Board or a member of the Management Board jointly with an authorizedsignatory (Prokurist). The Supervisory Board may determine that all or specific members of the Management Board areauthorized to represent the Company individually.

The table below lists the current members of the Management Board.

Name Age Member since Appointed until Responsibilities

Peter Finkbeiner . . . . . . . . . . . . . . . . . . . . 45 2013 2018 Finance, Controlling, Accounting,Investor Relations, Legal, IT, HumanResources, Internal Audit

Niclas Karoff . . . . . . . . . . . . . . . . . . . . . . 43 2010 2018 Portfolio and Asset Management,Acquisitions and Sales, OperatingBranches, Marketing, Public Relations,Internal Audit

The following description provides summaries of the curricula vitae of the current members of the ManagementBoard and indicates their principal activities outside TLG to the extent that those activities are significant with respect toTLG.

Peter Finkbeiner was born October 25, 1968 in Stuttgart.

Mr. Finkbeiner previously headed European asset management at Hudson Advisors. Prior to 2005, he workedseveral years in banking, corporate finance and private equity with Deutsche Bank, KPMG and DZ Equity Partner.Mr. Finkbeiner obtained a masters degree in economics (Diplom-Ökonom).

Alongside his office as a member of the Management Board, Mr. Finkbeiner is, or has been within the last fiveyears, a member of the administrative, management or supervisory bodies of and/or a partner in the following companies andpartnerships outside TLG:

Previously:

• MIFA Mitteldeutsche Fahrradwerke AG (member of the supervisory board).

Niclas Karoff was born February 7, 1971 in Berlin.

Mr. Karoff was previously a board member of HSH Real Estate AG. Prior to 2008, he worked several years inM&A and corporate finance, including with accounting and consulting firm BDO. Mr. Karoff obtained a masters degree inbusiness administration (Diplom-Kaufmann (FH)).

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Alongside his office as a member of the Management Board, Mr. Karoff is also the Speaker for the Regional Boardof German Property Federation ZIA for East Germany (including Berlin). Additionally, Mr. Karoff has during the past fiveyears held seats on the supervisory board and/or the shareholder board in a number of other companies. Each of these othercompanies was part of the HSH Real Estate group of companies, ultimately owned in whole or in part by HSH Real EstateAG and none of these other companies is, in the Company’s view, material for an assessment of TLG or the Offer Shares.

The members of the Management Board may be reached at the Company’s office at Hausvogteiplatz 12,10117 Berlin, Germany (tel. +49 (0) 30-2470-50).

Management Service Agreements

New service agreements between the Company and the two members of the Management Board, Mr. Finkbeinerand Mr. Karoff, were concluded on September 19/22, 2014 replacing the existing service agreements. If the initial publicoffering and trading of the Company’s shares on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) will not haveoccurred on or before May 30, 2015, the former service agreements shall come into effect again.

The management service agreements have a term until December 31, 2018 and may generally only be terminated bymutual agreement or by termination for due cause. If the appointment of a member of the Management Board is revoked, eachparty can terminate the management service agreement with six months’ prior notice. The Company can release a member ofthe Management Board from its duties under the respective service agreement for the remaining term of the serviceagreement, provided it continues to pay the compensation, if (i) such service agreement has been terminated or (ii) suchmember whose appointment to the Management Board has been revoked, is removed from the Management Board, regardlessof the service agreement’s termination. In case of an early termination of the management service agreements, the respectivemember of the Management Board is entitled to a severance payment, except in case of a termination due to a severe breachof duties. Severance payments may not exceed the lower of (a) two years’ compensation including Short-Term Incentives andLong-Term Incentives (in each case as defined below) (the “Severance Payment Cap”), or (b) the amount of the paymentsthat will become due and payable for the remaining term of the service agreement, except for a Change of Control (as definedbelow). Both service agreements provide for a Change of Control clause. If a third party were to directly or indirectly acquiremore than 50% of the Company’s shares, or if the Company becomes an affiliated company due to an affiliation inaccordance with Section 319 et seq. of the German Stock Corporation Act (Aktiengesetz) (“Change of Control”) and theChange of Control materially affects the services or position of the respective member of the Management Board, the memberof the Management Board can terminate its service agreement by giving two months’ prior notice and would be entitled to aseverance payment in an amount of 150% of the Severance Payment Cap.

Compensation and Other Benefits of the Management Board Members

The compensation paid to former and current members of the Management Board for the periods indicated and theprovisions for pension obligations to former members of the Management Board as of the respective balance sheet date are setforth in the following table:

Management Board(1)

2011GermanGAAP

(audited)

2012(2)

IFRS(audited)

2013IFRS


Fixed remuneration components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 0.5 0.5Variable remuneration components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.7 0.3Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.5Provisions for pension obligations to former members of management as of

December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 2.8 2.7

(1) Refers to the managing directors of TLG Immobilien GmbH.


For the fiscal year ended December 31, 2014, the Company expects that the aggregate compensation of themembers of the Management Board will amount to €900,000. The compensation for each member of the Management Boardconsists of a base salary of €300,000, payable in twelve equal monthly installments in arrears and a variable bonus in aminimum amount of €150,000. The amount of the variable bonus for the fiscal year 2014 was agreed upon between eachmember of the Management Board and the Company under new service agreements, dated September 19/22, 2014.

In addition, the Company provided and will provide benefits in kind such as company cars, mobile phones andcontributions to health insurance, own-occupation disability insurance (Berufsunfähigkeitsversicherung), disability insurance(Invaliditätsversicherung) or under pension plans (the “Ancillary Benefits”).

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Under the service agreements, the total maximum annual target compensation (excluding Ancillary Benefits) is€750,000 per fiscal year (of which €450,000 is variable) for Mr. Finkbeiner and €750,000 per fiscal year (of which €450,000is variable for Mr. Karoff, assuming target achievement of 100% for the Short-Term Incentive and the Long-Term Incentive(both as defined below). The variable part of €250,000 attributable to the first Long-Term Incentive payment (assuming targetachievement of 100%) for the first four-year period between January 1, 2015 and December 31, 2018, will be paid out in thefirst half of 2019. The following table provides more information on the compensation of the members of the ManagementBoard assuming 100% target achievement for the Short-Term Incentive and the Long-Term Incentive (both as defined below)under the service agreements.

Name Base Salary (in €) Short-Term Incentive (in €) Long-Term Incentive (in €)(1)

Finkbeiner, Peter . . . . . . . . . . . €300,000 €200,000 €250,000Karoff, Niclas . . . . . . . . . . . . . €300,000 €200,000 €250,000

(1) The Long-Term Incentive is payable for the first time after four years and thereafter for each following year on a (prior) four year rollingbasis.

Both of the service agreements include an annual base salary in an amount of €300,000, payable in twelve equalmonthly installments in arrears (the “Base Salary”).

The Short-Term Incentive is an annual payment dependent upon achievement of individual targets stipulated in anannual shared target agreement between the Supervisory Board and Mr. Finkbeiner and Mr. Karoff, and measured by theSupervisory Board in the first half of the following fiscal year (the “Short-Term Incentive”). Under the service agreementsthe Short-Term Incentive targets have to be achieved at least with 70% to trigger any Short-Term Incentive payment. TheShort-Term Incentive targets can be outperformed but the amount of the payment under the Short-Term Incentive is capped at130%. Assuming the Short-Term Incentive targets are fully met (100% performance), the Short-Term Incentive amounts to€200,000 per annum for Mr. Finkbeiner and €200,000 per annum for Mr. Karoff.

The service agreements of the members of the Management Board also include a Long-Term Incentive, which willbe measured against the long-term incentive targets at the end of each four-year period (the “Long-Term Incentive”). TheLong-Term Incentive is payable for the first time after four years, i.e., after expiry of the first four-year period from January 1,2015 until December 31, 2018, and thereafter for each following year on a (prior) four years rolling basis. The Long-TermIncentive targets are (i) the development of the EPRA NAV (per share) and (ii) the development of the Company’s share pricein relation to the FTSE EPRA/NAREIT Europe index (or any successor index) both measured over the four-year period fromJanuary 1 of the first year until December 31 of the fourth year. Each of the Long-Term Incentive targets is weighted with50%. After each four-year period, the Supervisory Board will measure and determine the Long-Term Incentive payment basedon the performance of each Long-Term Incentive target. Both long-term financial targets are indexed to their initial amountand relative amount, respectively, with 100%. This means, for example, if the EPRA NAV per share of the Company does notincrease but the share of the Company develops in line with the FTSE EPRA/NAREIT Europe index over the four-year periodthe target will be deemed to be achieved by 100%. The outperformance of each of the long-term financial targets is capped at250% while underperformance will be recognized on a pro rata basis. Assuming the aforementioned performance targets arefully met (100% performance), the Long-Term Incentive amounts to €250,000 for Mr. Finkbeiner and €250,000 forMr. Karoff, payable for the first time in the fiscal year 2019 for the first four-year period from January 1, 2015 untilDecember 31, 2018. The Long-Term Incentive is settled in cash, but the Supervisory Board may also decide on a full orpartial settlement in shares of the Company.

The Company provides a D&O insurance policy for both members of the Management Board that includes underthe service agreements a deductible amounting to 10% of the Base Salary for each insured event and coverage cap of one-and-a-half times the individual Management Board member’s Base Salary.

Exit Bonus Agreement

On September 8/18, 2014, the members of the Management Board and the Existing Shareholders canceled theirincentive agreements relating to a potential exit of the Existing Shareholders, which were concluded on April 11/30, 2014 andsigned new incentive agreements relating to a potential exit of the Existing Shareholders (the “Exit Bonus Agreement”). Ifthe Existing Shareholders partially divest shares of the Company in connection with the offering and the closing of theoffering occurs on or before May 31, 2015, the Existing Shareholders will pay each of the two members of the ManagementBoard a cash bonus in an amount of €1,050,000 and grant shares of the Company in an amount of €300,000 (the “ShareBonus I”). In addition, the Existing Shareholders will grant shares of the Company in an amount of €850,000 to each memberof the Management Board (the “Share Bonus II” and together with the Share Bonus I, the “Share Bonuses”) for the fulldivestment, directly or indirectly, in shares of the Company. For each partial divestment each member of the ManagementBoard is entitled to such fraction of the Share Bonus II as corresponds to the ratio that the shares divested bears to theRemaining Shares. The remaining shares are the fixed number of shares held by the Existing Shareholders for the members ofthe Management Board after the placement of their shares in connection with the offering but before any subsequentdivestments (the “Remaining Shares”). The number of shares of the Company for the Share Bonuses is calculated bydividing the number of the Share Bonuses by the offer price. The Existing Shareholders will hold the shares of the Company

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for the Share Bonus II on behalf of the respective member of the Management Board. Each transfer of shares of the Companyunder the Share Bonuses is subject to an unterminated service agreement between the member of the Management Board andthe Company, whereas any termination by the Company which is not based on a gross breach of duties by the respectiveManagement Board member will be disregarded for this purpose. Each bonus will become due and payable after the closingof the respective event triggering the bonus payment. Each Existing Shareholder owes the bonus payments to each member ofthe Management Board in an amount corresponding to the ratio of its respective shareholding to the total shareholding of theExisting Shareholders in the Company.

Shareholdings of the Management Board Members

Currently, no member of the Management Board directly or indirectly holds any shares in the Company or optionson shares in the Company. The members of the Management Board will each hold shares of the Company after receiving theShare Bonus I that will be paid if the closing of the offering occurs. The members of the Management Board may holdadditional shares of the Company after receiving the Share Bonus II in part or in full.

Under the new management service agreements, each member of the Management Board is required to hold aminimum number of shares of the Company equal to the result of dividing two times such member’s Base Salary by the offerprice of the Offer Shares as long as such member serves on the Management Board (the “Minimum Shareholding”). Theshares of the Company held on behalf of the respective Management Board member under the Share Bonus II are deemed tobe held by the respective member of the Management Board when assessing whether the Minimum Shareholding obligationof the respective Management Board member is fulfilled.

Supervisory Board

Pursuant to Section 11 (1) of the Articles of Association, the Supervisory Board consists of six members. It is notsubject to employee codetermination as provided by the German One-Third Employee Representation Act(Drittelbeteiligungsgesetz) or the German Codetermination Act (Mitbestimmungsgesetz). Therefore, the members of theSupervisory Board are all elected by the shareholders’ meeting as representatives of the shareholders. The members of theSupervisory Board are generally elected for a fixed term of approximately five years. Reelection, including repeatedreelection, is permissible.

For each member of the Supervisory Board, the shareholders may, at the same time the respective member iselected, appoint substitute members. These substitute members will replace the elected Supervisory Board member in theevent of his premature departure in an order that was defined at the time of the appointment. The term of office of thesubstitute member replacing the departing member terminates if a successor is elected at the next shareholders’ meeting or thefollowing one, at the close of the shareholders’ meeting, otherwise on the expiry of the term of office of the departed memberof the Supervisory Board. Members of the Supervisory Board who were elected by the shareholders’ meeting may bedismissed at any time during their term of office by a resolution of the shareholders’ meeting adopted by 75% of the votescast. In accordance with the Articles of Association, any member or substitute member of the Supervisory Board may resignat any time, even without providing a reason, by giving two weeks’ notice of his resignation in writing. This does not affectthe right to resign with immediate effect for good cause.

Pursuant to Section 107 (1) of the German Stock Corporation Act (Aktiengesetz), the Supervisory Board elects itschairman and vice chairman from among its members. Currently, Michael Zahn has been elected chairman of the SupervisoryBoard and Alexander Hesse as vice chairman.

The German Stock Corporation Act (Aktiengesetz) stipulates that a quorum of the Supervisory Board is present if atleast three members, and at least one-half of the members of the Supervisory Board as mandated by law or the Articles ofAssociation, participate in the voting. The resolutions of the Supervisory Board are passed with a simple majority, unlessotherwise mandated by law. In the event of a parity of votes, the chairman or, if he or she is unable to vote, the vice chairman,has the deciding vote.

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Members of the Company’s Supervisory Board

The table below lists the current members of the Supervisory Board.

Name Age Member since Appointed until(1) Principal occupation outside of TLG

Michael Zahn (chairman) . . . . . . . . . . . 51 2014 2019 Chief Executive Officer and member ofthe management board at DeutscheWohnen AG; Chief Executive Officerand member of the management board atGSW Immobilien AG;

Alexander Hesse (vice chairman) . . . . . 44 2014 2019 Senior Managing Director and Co-HeadEuropean Real Estate Investments atLone Star Germany Acquisitions GmbH.

Dr. Michael Bütter . . . . . . . . . . . . . . . . 44 2014 2019 Chief Legal Officer, Chief InvestmentOfficer and member of the executiveboard at Ferrostaal GmbH.

Dr. Claus Nolting . . . . . . . . . . . . . . . . . 63 2014 2019 Lawyer and consultant.

Axel Salzmann . . . . . . . . . . . . . . . . . . . 56 2014 2019 Chief Financial Officer and member ofthe management board at ProSiebenSat.1Media AG.

Elisabeth Talma Stheeman . . . . . . . . . . 50 2014 2019 Former Global Chief Operating Officerat LaSalle Investment Management.

(1) In each case until the end of the general shareholders’ meeting.

The following description provides summaries of the curricula vitae of the current members of the SupervisoryBoard and indicates their principal activities outside TLG to the extent those activities are significant with respect to TLG.

Michael Zahn was born June 28, 1963 in Stuttgart.

Mr. Zahn received his master’s degree in economics from the Albert-Ludwigs University in Freiburg im Breisgau,Germany, in 1992. He later completed postgraduate courses in 2000 at the European Business School in Oestrich-Winkel,Germany in conjunction with his professional career to become a corporate real estate manager and chartered surveyor. In1993, Mr. Zahn started working at the association of Berlin-Brandenburg housing enterprises (Verband Berlin-Brandenburgischer Wohnungsunternehmen), Domus AG, in Berlin, Germany. After a brief period as deputy managingdirector at GEWOBA GmbH in 1996, he joined GEHAG AG (now GEHAG GmbH), where he worked in variousmanagement roles between 1997 and 2007. From 2007 to June 2009, he was also chief financial officer ofKATHARINENHOF, a subsidiary of GEHAG. Mr. Zahn was first appointed to the management board of Deutsche WohnenAG in 2007 (as chief operating officer). Since 2008, Mr. Zahn has been the chairman of the management board of DeutscheWohnen AG. He was appointed after the successful integration of GEHAG in 2008. After the acquisition of 91.05% of theshares (based on the share capital at the time) of GSW Immobilien AG in 2013, Mr. Zahn was also appointed chairman of themanagement board of GSW Immobilien AG in January 2014.

Alongside his office as chairman of the Supervisory Board, Mr. Zahn is, or has been within the last five years, amember of the administrative, management or supervisory bodies of and/or a partner in the following companies andpartnerships outside TLG:

Currently:

• Deutsche Wohnen AG (chairman of the management board; CEO);

• GSW Immobilien AG (chairman of the management board; CEO);

• GEHAG GmbH (chairman of the supervisory board);

• KATHARINENHOF Seniorenwohn- und Pflegeanlagen Betriebs-GmbH (chairman of the supervisory board);

• Eisenbahn-Siedlungs-Gesellschaft Berlin GmbH (chairman of the supervisory board);

• Funk Schadensmanagement GmbH (member of the advisory board); and

• G+D Gesellschaft für Energiemanagement mbH (chairman of the advisory board).

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Previously:

• Deutsche Corporate Real Estate (managing director);

• Deutsche Wohnen Management- und Servicegesellschaft mbH (managing director);

• GEHAG Zweite Beteiligungs GmbH (managing director);

• GEHAG GmbH (managing director);

• Sanierungs- und Gewerbe Bau AG (member of the supervisory board);

• Haus und Heim Wohnungsbau Aktiengesellschaft (member of the supervisory board); and

• Rhein-Pfalz Wohnen GmbH (managing director).

Alexander Hesse was born October 24, 1969 in Cologne.

As a senior managing director and co-head European real estate investments at Lone Star, Mr. Hesse is in charge ofreal estate and real estate debt investments in Germany, Austria and Eastern Europe. Mr. Hesse is chairman of the supervisoryboard of Globe Trade Center S.A, Warsaw and was chairman of the advisory board of TLG Immobilien GmbH, Berlin. Priorto joining Lone Star, between 2002 and 2007, he was the head of real estate of Hudson Advisors Germany, responsible forreal estate asset management and underwriting of Lone Star real estate and debt investments in Germany. Prior to this,Mr. Hesse was a managing director at a listed German real estate company. Mr. Hesse graduated from WHU Otto BeisheimSchool of Management and successfully participated in MBA programs at Penn State University and Instituto TecnolóAutónomo de México (ITAM).

Alongside his office as vice chairman of the Supervisory Board, Mr. Hesse is, or has been within the last five years,a member of the administrative, management or supervisory bodies of and/or a partner in the following companies andpartnerships outside TLG:

Currently:

• Lone Star Germany Acquisitions GmbH (senior managing director and co-head european real estateinvestments);

• Lone Star Spain Acquisitions SL (director); and

• Globe Trade Center S.A. (chairman of the supervisory board).

Previously:

• Lone Star Germany Acquisitions GmbH (managing director real estate).

Dr. Michael Bütter, M.St. (Oxford), MRICS, was born March 19, 1970 in Hamburg.

Dr. Bütter passed both his first legal state exam (1996) and his second legal state exam (2000) in Hamburg andholds post graduate degrees in economics and law from Oxford University (M.St.) and University of Hamburg (Dr. iur),respectively. Dr. Bütter began his professional career as an associate at CMS Hasche Sigle and then worked as a seniorassociate and team leader at Weil, Gotshal & Manges LLP before he joined Lovells LLP (now Hogan Lovells InternationalLLP). As partner and head of real estate and private equity at Lovells LLP (Hamburg) he advised on large-volume real estatetransactions and portfolio refinancings until he joined Deutsche Annington Immobilien SE (“Deutsche Annington”) in 2008as a member of the executive committee, chief compliance officer and group general counsel. After completing e.g. DeutscheAnnington’s GRAND refinancing and Deutsche Annington’s initial public offering in 2013, he became a member of theexecutive board of Ferrostaal GmbH in Essen as chief legal officer/chief investment officer, responsible for, among others, theareas of mergers and acquisitions, legal, compliance and operational excellence. Dr. Bütter was admitted as a member of theRoyal Institution of Chartered Surveyors (MRICS) in 2013.

Alongside his office as a member of the Supervisory Board, Dr. Bütter is, or has been within the last five years, amember of the administrative, management or supervisory bodies of and/or a partner in the following companies andpartnerships outside TLG:

Currently:

• Ferrostaal GmbH, Essen (chief legal officer/chief investment officer and member of the executive board).

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Previously:

• Deutsche Annington Immobilien SE (group general counsel, CCO and member of the executive committee);

• Joint Board of the German Railway Associations (Gemeinsamer Ausschluss des Bundeseisenbahnvermögens(EWG)) (member of the supervisory board); and

• Verband der Wohnungs- und Immobilienwirtschaft (VdW) Rheinland Westfalen e.V. (member of thesupervisory board).

Dr. Claus Nolting was born June 9, 1951 in Wolfsburg.

Following the completion of his legal studies and subsequent doctorate (Dr. iur.) at the universities of Marburg andBonn, Dr. Claus Nolting worked as a lawyer in Bonn and Cologne. In 1989, Dr. Nolting moved from the Association ofGerman Pfandbrief Banks (today Verband deutscher Pfandbriefbanken (VDP)) to the then Bayerische Vereinsbank in Munich(now Unicredit Bank AG), where as a member of the management board he was jointly responsible for the real estatefinancing business until his retirement in 2002.

Between 2003 and 2006, Dr. Nolting held the position of senior advisor for the private equity investor Cerberus. Hethen assumed the position of chairman of the management board at COREALCREDIT BANK AG, an affiliate of the privateequity investor Lone Star. After the sale of the bank Dr. Nolting resigned from his position at the bank effective as ofMarch 31, 2014, and has since worked as a lawyer and consultant.

Alongside his office as a member of the Supervisory Board, Dr. Nolting is, or has been within the last five years, amember of the administrative, management or supervisory bodies of and/or a partner in the following companies andpartnerships outside TLG:

Currently:

• IKB Deutsche Industriebank AG (member of the supervisory board).

Previously:

• COREALCREDIT BANK AG (CEO).

Axel Salzmann was born September 19, 1958 in Oldenburg/Holstein.

Mr. Salzmann was appointed to ProSiebenSat.1 Media AG’s executive board as CFO, effective July 2008. From2002 to 2007, he was CFO and Vice CEO at O2 Germany. From 1996 to 2001, Mr. Salzmann was Vice President, ChiefFinancial Officer and Head of IT at Philips Medical Systems Germany and Eastern Europe. Mr. Salzmann held various officeswith the Philips Group from 1987 to 2001. In 1994, he was appointed CFO and Head of Human Resources of a homeappliance subsidiary, Philips Elektro Hausgeräte. Mr. Salzmann has a degree in industrial engineering from the University ofHamburg.

Alongside his office as chairman of the Audit Committee of the Supervisory Board, Mr. Salzmann is, or has beenwithin the last five years, a member of the administrative, management or supervisory bodies of and/or a partner in thefollowing companies and partnerships outside TLG:

Currently:

• ProSiebenSat.1 Media AG (CFO); and

• Salzmann Consulting oHG (partner).

Previously:

• O2 Germany (CFO, Deputy CEO); and

• Deutsches Rechnungslegungs Standards Committee e.V. (member of the administrative board).

Elisabeth Talma Stheeman was born January 24, 1964 in Hamburg.

Ms. Stheeman received her bachelor’s degree in business administration from the Hamburg School of Business in1985 and her diploma in business studies from the London School of Economics and Political Science in 1988. She began herprofessional career at Vereins- und Westbank AG, moving from her initial position as trainee in 1982 to project manager and

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assistant to department head/board member, before joining Morgan Stanley in 1988. There, Ms. Stheeman worked incorporate finance, capital markets and private equity and became the chief operating officer of investment banking/real estateinvesting in 2007. Subsequently, she was then promoted in 2011 to chief operating officer of investment banking/naturalresources and real estate banking. In 2013, she became global chief operating officer of LaSalle Investment Management.

Alongside her office as a member of the Supervisory Board, Ms. Stheeman is, or has been within the last five years,a member of the administrative, management or supervisory bodies of and/or a partner in the following companies andpartnerships outside TLG:

Currently:

• London School of Economics and Political Science (member of the Court of Governors); and

• London School of Economics and Political Science (member of the Audit Committee).

Previously:

• LaSalle Investment Management (member of Global Management Committee and JLL Global OperatingCommittee);

• Morgan Stanley, Investment Banking Division (Executive Director/COO of real estate and natural resources,investment banking); and

• Morgan Stanley, Investment Management Division/Merchant Banking (Executive Director/COO of global realestate investing and merchant banking; member of global operating committee).

The members of the Supervisory Board can be reached at the Company’s office at Hausvogteiplatz 12,10117 Berlin, Germany (tel. +49 (0) 30-2470-50).

Supervisory Board Committees

Pursuant to Section 12 (2) of the Articles of Association, the Supervisory Board may form committees from amongits members. The Supervisory Board’s decision-making authority may be delegated to these committees to the extentpermitted by law. The following committees have been established by the Supervisory Board:

The Audit Committee (Prüfungsausschuss) is concerned, in particular, with the oversight of the Company’saccounting process and the effectiveness of its internal control system, internal auditing system, as well as the audit of theannual financial statements including required independence of the auditor and additional services provided by the auditor, theconclusion of audit agreements with the auditor, setting focus points for the audit and agreeing audit fees and - unless anothercommittee is entrusted therewith – compliance. It shall prepare the Supervisory Board’s resolutions on the annual financialstatements (including consolidated financial statements) and the Supervisory Board’s proposal to the general shareholders’meeting upon the election of the auditor, and the instruction of the auditor. The chairman of the audit committee shall havespecialist knowledge and experience in the application of accounting standards and internal control processes. Furthermore,the chairman of the audit committee shall be independent and may not be a former member of the Management Board whoseappointment ended less than two years prior to his appointment as chairman of the audit committee.

The current members of the audit committee are:

Name Responsibilities

Axel Salzmann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ChairmanMichael Zahn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberElisabeth Talma Stheemann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Member

Section 107 (4) of the German Stock Corporation Act (Aktiengesetz) requires the Company to have at least oneindependent member of the audit committee with expertise in the fields of accounting or auditing in the meaning ofSection 100 (5) of the German Stock Corporation Act (Aktiengesetz). Members of the Supervisory Board and the auditcommittee are considered to be independent if such members have no business or personal relations with the Company, itsManagement Board, controlling shareholders or related parties which could cause a substantial and not merely temporaryconflict of interest. As concerns the Supervisory Board and audit committee of the Company, Mr. Salzmann is considered topossess the respective expertise and independence.

The Executive and Nomination Committee (Präsidial- und Nominierungsausschuss) shall debate key issues andmake proposals to the Supervisory Board with respect to the appointment and revocation of members of the ManagementBoard and with respect to their respective compensation and reductions in compensation. They make recommendations to theSupervisory Board for Supervisory Board proposals to the shareholders’ meeting with respect to the election of Supervisory

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Board members. Furthermore, the executive and nomination committee is responsible for the establishment or materialamendment of existing employee participation and incentive programs. The executive and nomination committee shall consistof the chairman of the Supervisory Board, the deputy chairman of the Supervisory Board and one additional member to beelected by the Supervisory Board. The chairman of the Supervisory Board shall be the chairman of the executive committeeand nomination committee.

The current members of the executive and nomination committee are:

Name Responsibilities

Michael Zahn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ChairmanAlexander Hesse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MemberDr. Michael Bütter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Member

Compensation of the Members of the Supervisory Board

The compensation of the Supervisory Board members is provided for in Section 13 of the Articles of Association.The Supervisory Board members’ compensation takes into account the responsibilities and scope of their activities. Themembers of the Supervisory Board receive an annual fixed payment of €30,000. The chairman of the Supervisory Boardreceives twice the amount and the deputy chairman of the Supervisory Board receives one and a half times this amount. Inaddition, membership in committees is compensated as follows: €5,000 per annum for the membership in each of the auditcommittee or the executive and nomination committee and €3,000 per annum for the membership in any other committee; thechairman of any committee shall receive twice the respective amount. Attendance fees for face-to-face meetings shall be€1,500 per day. The total compensation payable to a member of the Supervisory Board (including any compensation for themembership in supervisory boards and similar controlling bodies within TLG) is capped at €80,000 per member of theSupervisory Board and calendar year.

Members of the Supervisory Board are also reimbursed for their out-of-pocket expenses and VAT, and a D&Oinsurance shall be taken out for the members of the Supervisory Board.

Shareholdings of the Supervisory Board Members

Currently, no member of the Supervisory Board directly or indirectly holds any shares in the Company or optionson shares in the Company.

Share Participation Plan and Employee Offering

The Company currently does not have a share participation plan in place and does not plan to introduce such a planwithin the foreseeable future.

Certain Information Regarding the Members of the Management Board and Supervisory Board

In the last five years, no member of the Management Board or the Supervisory Board has been convicted offraudulent offences. In the last five years, no member of the Management Board or the Supervisory Board has been associatedwith any bankruptcy, receivership or liquidation acting in its capacity as a member of any administrative, management orsupervisory body or as a senior manager. In the last five years, no official public incriminations and/or sanctions have beenmade by statutory or legal authorities (including designated professional bodies) against the members of the ManagementBoard or the Supervisory Board, nor have sanctions been imposed by the aforementioned authorities. No court has everdisqualified any of the members of the Management Board or the Supervisory Board from acting as a member of theadministrative, management or supervisory body of an issuer, or from acting in the management or conduct of the affairs ofany issuer for at least the previous five years.

Mr Hesse is employed by Lone Star Germany Acquisitions GmbH which is an advisor to affiliates of the ExistingShareholders. If the interests of the Existing Shareholders should diverge from those of the Company, conflicts of interest mayarise for Mr. Hesse. Apart from this, there are no conflicts of interest or potential conflicts of interest between the members ofthe Management Board and Supervisory Board vis-`a-vis the Company and their private interests, membership in governingbodies of companies, or other obligations.

No member of the Management Board or the Supervisory Board has entered into a service agreement with acompany of TLG that provides for special benefits, such as severance pay, at the end of the business relationship (other thanpensions or compensation in the case of an early termination of the service agreement, which is determined on the basis of theremaining term of the agreement and the contractually agreed compensation). The members of the Management Board are notbound by restrictive covenants and may therefore engage in competing activities following the end of their office.

There are no family relationships between the members of the Management Board and those of the SupervisoryBoard, either among themselves or in relation to the members of the other body.

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Shareholders’ Meeting

Pursuant to Section 175 of the German Stock Corporation Act (Aktiengesetz), the annual shareholders’ meetingtakes place within the first eight months of each fiscal year and must be held, as the convening body shall decide, at theCompany’s registered office or in a German city with a stock exchange. Except where other persons are authorized to do soby law or by the Articles of Association, the shareholders’ meeting shall be convened by the Management Board. Notice mustbe issued in the German Federal Gazette (Bundesanzeiger) at least 30 days before the day of the shareholders’ meeting; theday of the meeting itself and the day of the receipt of the notice not being included when calculating this period.

A shareholders’ meeting may also be convened by the Management Board, the Supervisory Board, or shareholderswhose shares collectively make up 5% of the capital stock of the Company. Shareholders or shareholder associations maysolicit other shareholders to make such a request, jointly or by proxy, in the shareholders’ forum of the German FederalGazette (Bundesanzeiger), which is also accessible via the website of the German Company Register (Unternehmensregister).

Prior to the shareholders’ meeting, shareholders are required to register in order to be entitled to participate in theshareholders’ meeting and to exercise voting rights and have to provide evidence of their shareholding in form of aconfirmation by the depository institute for the beginning of the twenty-first day before the shareholders’ meeting.

Each share entitles its holder to one vote at the shareholders’ meeting. Unless otherwise stipulated by mandatorystatutory provisions or provisions of the Articles of Association, resolutions of the shareholders’ meeting are adopted by asimple majority of the votes cast or, if a capital majority is required, by a simple majority of the registered share capitalrepresented at the meeting.

According to the current version of the German Stock Corporation Act (Aktiengesetz), resolutions of fundamentalimportance (grundlegende Bedeutung) require both a majority of votes cast and a majority of at least 75% of the registeredshare capital represented at the vote on the resolution. Resolutions of fundamental importance include:

• amendments, other than editorial amendments, to the Articles of Association;

• approval of contracts within the meaning of Section 179a of the German Stock Corporation Act (Aktiengesetz)(transfer of the entire assets of the company) and management actions of special significance that require theapproval of the shareholders’ meeting in compliance with legal precedents;

• capital increases, including the creation of conditional or authorized capital;

• the issuance of, or authorization to issue, convertible and profit-sharing certificates and other profit-sharingrights;

• exclusion of subscription rights as part of an authorization on the use of treasury stock;

• capital reductions, including the withdrawal of shares pursuant to Section 237(3) to (5) of the German StockCorporation Act (Aktiengesetz);

• withdrawal of shares pursuant to Section 237 (2) of the German Stock Corporation Act (Aktiengesetz);

• liquidation of the company;

• continuation of the liquidated company after the resolution on liquidation or expiry of the time period;

• approval to conclude, amend or terminate affiliation agreements (Unternehmensverträge);

• integration of a stock corporation into another stock corporation and squeeze-out of the minority shareholders;and

• action within the meaning of the German Reorganization and Transformation Act (Umwandlungsgesetz).

Neither German law nor the Articles of Association limit the right of foreign shareholders or shareholders notdomiciled in Germany to hold shares of the Company or exercise the voting rights associated therewith.

Corporate Governance

The German Corporate Governance Code as amended on May 13, 2013 (the “Code”) contains recommendationsand suggestions for the management and supervision of German companies listed on a stock exchange. The Code incorporatesnationally and internationally recognized standards of good and responsible corporate governance. The purpose of the Code is

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to make the German system of corporate governance and supervision transparent for investors. The Code includesrecommendations and suggestions for management and supervision with regard to shareholders and shareholders’ meetings,management and supervisory boards, transparency, accounting and auditing.

There is no obligation to comply with the recommendations or suggestions of the Code. However, the GermanStock Corporation Act (Aktiengesetz) requires that the management board and supervisory board of a German listed companydeclare, every year, either that the recommendations have been or will be applied, or which recommendations have not beenor will not be applied and explain why the management board and the supervisory board do not/will not apply therecommendations that have not been or will not be applied. This declaration is to be made permanently accessible toshareholders. However, deviations from the suggestions contained in the Code need not be disclosed.

Prior to the listing of the shares of the Company, the Company is not obligated to issue a declaration relating to theCode.

As of the date of this Prospectus, the Company complies with, and after the listing of the Company’s shares, intendsto further comply with all recommendations in the Code apart from the following:

• No “chairman” or “spokesman” of the Management Board (Section 4.2.1 sentence 1 of the Code).

According to Section 4.2.1 sentence 1 of the Code, the Management Board shall be comprised of severalpersons and have a chairman or spokesman. The Management Board consists of two members. Due to thesmall size of the Management Board, good and close cooperation between the members of the board is ensuredand the Company believes there is no need for a chairman or spokesman of the Management Board.

• No “fast close” of the consolidated financial statements and of the interim reports (Section 7.1.2 sentence 4 ofthe Code).

Pursuant to Section 7.1.2, sentence 4 of the Code, consolidated financial statements shall be publicallyaccessible within 90 days of the end of the fiscal year and interim reports shall be publically accessible within45 days of the end of the reporting period. The Company’s consolidated financial statements will be preparedand made publically accessible within four months and the Company’s interim reports will be prepared andpublicly accessible within two months, each after the end of the reporting period. Due to the time required for athorough preparation of the consolidated financial statements and interim reports, it is anticipated that theCompany may not comply with the fast close recommendation of Section 7.1.2, sentence 4 of the Code.

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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

In accordance with IAS 24, transactions with persons or companies which are, inter alia, members of the samegroup as the Company or which are in control of or controlled by the Company must be disclosed, unless they are alreadyincluded as consolidated companies in the Company’s audited consolidated financial statements. Control exists if ashareholder owns more than one half of the voting rights in the Company or, by virtue of an agreement, has the power tocontrol the financial and operating policies of the Company’s management. The disclosure requirements under IAS 24 alsoextend to transactions with associated companies (including joint ventures) as well as transactions with persons who havesignificant influence on the Company’s financial and operating policies, including close family members and intermediateentities. This includes the members of the Management Board and Supervisory Board (or the members of the correspondinggoverning bodies of TLG Immobilien GmbH) and close members of their families, as well as those entities over which themembers of the Management Board and Supervisory Board or their close family members are able to exercise a significantinfluence or in which they hold a significant share of the voting rights.

Set forth below is a summary of such transactions with related parties for the fiscal years ended December 31,2011, 2012 and 2013 up to and including the date of this Prospectus. Further information, including quantitative amounts, ofrelated party transactions are contained in the notes to the Company’s audited consolidated financial statements for the fiscalyears ended December 31, 2011, 2012 and 2013 and in the notes to the Company’s unaudited condensed consolidated interimfinancial statements for the six-month period ended June 30, 2014, which are all included in the section “FinancialInformation” of this Prospectus on page F-1 et seq. Business relationships between companies of TLG are not included. Thecompanies which are directly or indirectly controlled by the Company are listed under section F-85 et seq, F-70 et seq andF-21 et seq of the notes to the Company’s audited consolidated financial statements for the fiscal years ended December 31,2011, 2012 and 2013.

Relationships with the Existing Shareholders

Distributions

For an overview of distributions to the Existing Shareholders see “Dividend Policy; Results and Dividends perShare; Use of Profits—Dividend Policy and Earnings per Share”.

Domination Agreement

Under the Domination Agreement, the Company was required to carry out its business at the direction of EastAcquiCo in accordance with Section 308 of the German Stock Corporation Act (Aktiengesetz). East AcquiCo was required tocover all losses incurred by the Company and not covered by retained income during the duration of the DominationAgreement in accordance with Section 302 of the German Stock Corporation Act (Aktiengesetz). Given that the Company didnot incur a loss during the fiscal year 2013, no losses had to be covered by East AcquiCo. Following the transformation of theCompany into a stock corporation (Aktiengesellschaft) the Domination Agreement was terminated on September 18, 2014. Noprofit transfers were required or made under the Domination Agreement.

Acquisition Loan

In January 2013, TLG assumed €287.3 million of the total amount of €325.2 million of the Acquisition Loan thatwas part of the debt financing of the acquisition of TLG at the end of 2012 by its Existing Shareholders and the remaining€37.9 million in August 2013. TLG repaid €250.2 million in several installments over the course of 2013 and the remaining€74.9 million in March 2014. The Acquisition Loan carried customary interest for loans that are taken out in the context of anacquisition of a company which is higher than the interest on loans for financing an existing real estate portfolio. The intereston the Acquisition Loan reflected the bridge financing character of the loan, its availability within a short period of time andthe different security package because initially it was only secured by the shares of the acquired company.

Shareholder Loan

On the basis of a loan agreement dated March 22, 2013, East AcquiCo granted a loan in the amount of €11.0 millionto the Company until April 30, 2013 for general business purposes. The loan was repaid before the final maturity on April 18,2013. The interest rate was 6% per annum; the interest expense amounted to approximately €46 thousand for the period fromMarch 22, 2013 to April 18, 2013.

Indemnification and Cost Reimbursement Agreement

On October 13, 2014, the Existing Shareholders and the Company entered into an agreement regarding theircooperation regarding the preparation of the offering. As required by law, the Existing Shareholders will reimburse theCompany for all external costs that are incurred in connection with the preparation and the execution of the offering pursuantto this agreement on a pro rata basis calculated according to the ratio of the number of Existing Shares to the Offer Sharesplaced in the offering. The costs to be reimbursed on such basis include, in particular, legal, auditor and other advisor fees,underwriters’ commissions and costs of the offering. The cost reimbursement obligation of the Existing Shareholders remainsunaffected if the offering is postponed or cancelled. As required by law, the Existing Shareholders further agreed to indemnify

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the Company from all liability risks in connection with the offering on a pro rata basis, including the pro rata share of allreasonable legal costs. In addition, the Company has agreed, upon indemnification by the Existing Shareholders and to theextent legally permissible, to assign certain claims that the Company may have against board members of the Company orthird parties to the Existing Shareholders.

Relationships with Members of the Management Board

Exit Bonus Agreement

Under the Exit Bonus Agreement, the members of the Management Board may receive cash and share bonuses fromthe Existing Shareholders in case of an exit in full or in part by the Existing Shareholders. For further information on the ExitBonus Agreement, see “Description of the Governing Bodies of TLG IMMOBILIEN AG—Management Board—Exit BonusAgreement”.

Relationships with Members of the Supervisory Board

Mr. Hesse is covered for his mandate as a member of the Supervisory Board through a D&O group insurance policyprovided and paid for by an affiliate of the Existing Shareholders.

Apart from the relationships stated above, the Company did not have any other significant business relationshipswith related parties.

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UNDERWRITING

General

On October 14, 2014, the Company, the Existing Shareholders and the Underwriters entered into the UnderwritingAgreement relating to the offer and sale of the Offer Shares in connection with the offering.

The offering consists of 36,850,000 bearer shares with no par value (Stückaktien), each representing a share of€1.00 in the Company’s share capital and with full dividend rights as of January 1, 2014, comprising 9,302,326 New Sharesfrom the IPO Capital Increase against contribution in cash, 21,545,674 Existing Shares from the holdings of East AcquiCo,2,652,000 Existing Shares from the holdings of Delpheast and 3,350,000 Over-Allotment Shares from the holdings of EastAcquiCo made available to the stabilization manager on behalf of the Underwriters by way of a share loan to cover potentialOver-Allotments. 9,302,326 of the Offer Shares are New Shares and 24,197,674 of the Offer Shares are Existing Shares.

The offering consists of a public offering of the Offer Shares in Germany and Luxembourg and private placementsof the Offer Shares in certain jurisdictions outside Germany and Luxembourg. The Offer Period is expected to begin onOctober 15, 2014 and is expected to end on October 23, 2014. In the United States, the Offer Shares will be offered for sale bythe Underwriters to qualified institutional buyers in reliance on Rule 144A. Outside the United States, the Offer Shares will beoffered and sold to professional and institutional investors in reliance on Regulation S. Any offer and sale of the Offer Sharesin the United States in reliance on Rule 144A will be made by broker-dealers who are registered as such under the U.S.Securities Exchange Act of 1934.

The offer price for each Offer Share is expected to be determined jointly by the Company, the Existing Shareholdersand the Joint Bookrunners on or about October 23, 2014 on the basis of an order book prepared during the bookbuildingprocess.

Under the terms of the Underwriting Agreement and subject to certain conditions, each Underwriter will be obligedto acquire the number of Offer Shares set forth below opposite the Underwriter’s name:

Underwriters

Number of OfferShares to beacquired(1)

Percentage ofUnderwrittenOffer Shares

J.P. Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,791,999 32.0%UBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,791,999 32.0%Kempen & Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,738,500 21.0%COMMERZBANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,763,751 7.5%HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,763,751 7.5%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,850,000 100.0%

(1) Assuming exercise of Greenshoe Option and issuance of all New Shares in full.

In connection with the offering, each of the Underwriters and any of their respective affiliates, acting as an investorfor its own account, may take up Offer Shares in the offering and in that capacity may retain, purchase or sell for its ownaccount such securities and any Offer Shares or related investments and may offer or sell such Offer Shares or otherinvestments otherwise than in connection with the offering. Accordingly, references in this Prospectus to Offer Shares beingoffered or placed should be read as including any offering or placement of Offer Shares to any of the Underwriters or any oftheir respective affiliates acting in such capacity. None of the Underwriters intend to disclose the extent of any suchinvestment or transactions otherwise than in accordance with any legal or regulatory obligation to do so. In addition certain ofthe Underwriters or their affiliates may enter into financing arrangements (including swaps with investors) in connection withwhich such Underwriters (or their affiliates) may from time to time acquire, hold or dispose of Offer Shares.

The mailing addresses of the Underwriters are as follows:

• J.P. Morgan Securities plc, 25 Bank Street, Canary Wharf, London E14 5JP, United Kingdom;

• UBS Limited, 1 Finsbury Avenue, London EC2M 2PP, United Kingdom;

• COMMERZBANK Aktiengesellschaft, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany;

• Kempen & Co N.V., Beethovenstraaat 300, 1077 WZ Amsterdam, the Netherlands; and

• HSBC Trinkaus & Burkhardt AG, Königsallee 21/23, 40212 Dusseldorf, Germany.

Underwriting Agreement

In the Underwriting Agreement, dated October 14, 2014, the Underwriters agreed to underwrite and purchase theOffer Shares with a view to offering them to investors in this offering. The Underwriters agreed to remit to the Company thepurchase price of the New Shares (less agreed commissions and expenses), at the time the shares are delivered, which isexpected to be two bank working days after admission to trading. The Underwriters further agreed to acquire 24,197,674

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Existing Shares (as well as up to 3,350,000 additional shares of the Company with regard to a possible Over-Allotment) fromthe Existing Shareholders and to sell such shares as part of the offering. The Underwriters agreed to remit the purchase price(less agreed commissions and expenses) of the Existing Shares to the Existing Shareholders and the purchase price (lessagreed commissions and expenses) of the shares from the exercise of the Greenshoe Option, if any, to East AcquiCo at thetime the shares are delivered.

The obligations of the Underwriters are subject to various conditions, including, but not limited to, (i) the absence ofa material event, e.g. a material adverse change in or affecting the business, prospects, management, consolidated financialposition, shareholders’ equity or results of operations of TLG, or a suspension or material limitation in trading in securitiesgenerally on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse), the London Stock Exchange or the New YorkStock Exchange, (ii) receipt of customary certificates, legal opinions, auditor letters, and (iii) the introduction of theCompany’s shares to trading on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse). The Underwriters haveprovided and may in the future provide services to TLG and the Existing Shareholders in the ordinary course of business andmay extend credit to and have regular business dealings with TLG and the Existing Shareholders in their capacity as financialinstitutions. For a more detailed description of the interests of the Underwriters in the offering, see “The Offering—Interests ofParties Participating in the Offering”.

Commission

The Underwriters will offer the Offer Shares at the offer price. The Company (for the New Shares) and the ExistingShareholders (for the Existing Shares, but not for the Over-Allotment Shares, if any) will pay the Underwriters a basiccommission of 1.50% of their respective gross proceeds from the offering. In addition to this base commission, the Companyand the Existing Shareholders may pay the Underwriters an additional discretionary fee of up to 1.25% of their respectivegross proceeds from the offering (excluding a potential Over-Allotment), payable entirely at the sole discretion of theCompany and the Existing Shareholders. The decision to pay any performance fee and its amount are within the solediscretion of the Company and the Existing Shareholders, and such distribution is to be made within 35 days after thesettlement date of the offering. The Company and the Existing Shareholders will also agree to reimburse the Underwriters forcertain expenses incurred by them in connection with the offering. In addition, East AcquiCo will pay the Underwriters aselling concession of 1.50% of the offer price for each share from the Greenshoe Option that is purchased at the offer price.This selling concession will become payable upon payment of the offer price of the respective share from the GreenshoeOption to East AcquiCo.

Greenshoe Option and Securities Loan

For the purpose of a possible Over-Allotment, the stabilization manager, for the account of the Underwriters, will beprovided with up to 3,350,000 Over-Allotment Shares in the form of a securities loan free of charge from East AcquiCo; thisnumber of Over-Allotment Shares will not exceed 10% of the Base Shares. The stabilization manager, for the account of theUnderwriters, is entitled to exercise the Greenshoe Option to the extent Over-Allotments were initially made; the amount ofshares is to be reduced by the number of shares held by the stabilization manager as of the date on which the GreenshoeOption is exercised and that were acquired by the stabilization manager in the context of stabilization measures. TheGreenshoe Option will terminate 30 calendar days after the settlement date.

Termination/Indemnification

The Underwriting Agreement provides that the Underwriters may, under certain circumstances, terminate theUnderwriting Agreement, including after the shares have been allotted and listed, up to delivery and settlement. Grounds fortermination include, in particular, if:

• there has been any adverse change, or any development involving a prospective adverse change, in or affectingthe business, prospects, management, consolidated financial position, shareholders’ equity or results ofoperations of TLG;

• the Company or TLG has incurred any liability or obligation, direct or contingent, or entered into any materialtransaction not in the ordinary course of business, other than in each case as set forth or contemplated in thisProspectus, the effect of which, in any such case, is in the reasonable judgment of the Underwriters so materialand adverse as to make it impractical or inadvisable to proceed with the offering or the delivery of the OfferedShares on the terms and in the manner contemplated in this Prospectus;

• a suspension or material limitation in trading on the Frankfurt, London or New York stock exchange (otherthan for technical reasons) develops;

• a general moratorium is imposed on commercial banking activities in Frankfurt am Main, London or NewYork by the responsible authorities;

• a material, not only temporary, disruption takes place in commercial banking or securities settlement orclearance services in Germany, the United Kingdom, or the United States;

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• a change or development occurs involving a prospective change in German taxation affecting the Company,the Shares or the transfer thereof or the imposition of exchange controls by Germany, the United Kingdom orthe United States; or

• an outbreak or escalation of hostilities or war, or the occurrence of acts of terrorism or other calamity or crisishas a material adverse impact on the financial markets in Germany, the United Kingdom or the United States.

If the Underwriting Agreement is terminated, the offering will not take place, in which case any allotments alreadymade to investors will be invalidated and investors will have no claim for delivery. Claims with respect to subscription feesalready paid and costs incurred by an investor in connection with the subscription will be governed solely by the legalrelationship between the investor and the financial intermediary to which the investor submitted its purchase order. Investorswho engage in short-selling bear the risk of being unable to satisfy their delivery obligations.

The Company and the Existing Shareholders have agreed in the Underwriting Agreement to indemnify theUnderwriters against certain liabilities that may arise in connection with the offering, including liabilities under applicablesecurities laws.

Selling Restrictions

The distribution of this Prospectus and the sale of the Offer Shares may be restricted by law in certain jurisdictions.No action has been or will be taken by the Company, the Existing Shareholders or the Underwriters to permit a public offeringof the Offers Shares anywhere other than Germany and Luxembourg or the possession or distribution of this document in anyother jurisdiction, where action for that purpose may be required.

The Offer Shares are not and will not be registered pursuant to the provisions of the Securities Act or with thesecurities regulators of the individual states of the United States. The Offer Shares may not be offered, sold or delivered,directly or indirectly, in or into the United States except pursuant to an exemption from the registration and reportingrequirements of the United States securities laws and in compliance with all other applicable United States legal regulations.In the Underwriting Agreement, the Underwriters will represent and warrant that they have not offered or sold and will refrainfrom offering or selling the Offer Shares in or into the United States except to persons they reasonably believe to be qualifiedinstitutional buyers within the meaning of Rule 144A, and outside the United States except in accordance with Rule 903 ofRegulation S and in compliance with other U.S. legal regulations, and that neither they nor any third party acting on theirbehalf have undertaken or will undertake (i) “direct selling efforts” as defined in Regulation S or (ii) “general advertising” or“general solicitation”, each as defined in Regulation D under the Securities Act in relation to the Offer Shares.

The Company does not intend to register either the offering or any portion of the offering in the United States or toconduct a public offering of shares in the United States. This Prospectus has been approved solely by the BaFin.

Accordingly, neither this document nor any advertisement or any other offering material may be distributed orpublished in any jurisdiction other than Germany and Luxembourg except under circumstances that will result in compliancewith any applicable laws and regulations. Persons into whose possession this Prospectus comes are required to informthemselves about and observe any such restrictions, including those set out in the preceding paragraphs. Any failure to complywith these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Sales in the United Kingdom are also subject to restrictions. Each of the Underwriters has represented andwarranted to the Company and the Existing Shareholders that:

(i) it has only communicated or caused to be communicated and will only communicate or cause to becommunicated any invitation or inducement to engage in investment activity within the meaning ofSection 21 of the Financial Services and Markets Act 2000 (the “FSMA”) received by it in connectionwith the sale of any Offer Shares in circumstances in which Section 21 (1) of the FSMA does not apply tothe Company; and

(ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything doneby it in relation to the Offer Shares in, from or otherwise involving the United Kingdom.

The Underwriters have further represented and warranted in the Underwriting Agreement that they have not andwill not publicly offer the Offer Shares in any of the member states of the European Economic Area that have implementedDirective 2003/71/EC as amended (the “Prospectus Directive”) from the date of the implementation of the ProspectusDirective, unless (i) a prospectus for the Offer Shares has been previously published that has been approved by the competentauthority in such member state or has been approved in another member state of the European Economic Area that hasimplemented the Prospectus Directive, and the competent authority in the member state in which the offer takes place hasbeen informed thereof in compliance with the Prospectus Directive; (ii) the offer is exclusively intended for so-calledqualified investors within the meaning of the Prospectus Directive; or (iii) the offering takes place under other circumstancesin which the publication of a prospectus by the Company is not required under Article 3 of the Prospectus Directive, to theextent that this exemption has been implemented in the respective member state.

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TAXATION IN THE FEDERAL REPUBLIC OF GERMANY

The following section outlines certain key German tax principles that may be relevant with respect to theacquisition, holding or transfer of shares. This summary does not purport to be a comprehensive or exhaustive description ofall German tax considerations that may be relevant to shareholders. This presentation is based upon domestic German taxlaws in effect as of the date of this Prospectus and the provisions of double taxation treaties currently in force betweenGermany and other countries. It is important to note that the legal situation may change, possibly with retroactive effect.

This section does not replace the need for individual shareholders to seek personal tax advice. It is thereforerecommended that shareholders consult their own tax advisors regarding the tax implications of acquiring, holding ortransferring shares and what procedures are necessary to secure the repayment of German withholding tax (capital gainstax), if possible. Only qualified tax advisors are in the position to adequately consider the particular tax situation ofindividual shareholders.

Taxation of the Company

The Company’s taxable income, whether distributed or retained, is generally subject to German corporate incometax at a uniform rate of 15% plus the solidarity surcharge of 5.5% thereon, resulting in a total tax rate of 15.825%.

Dividends and other shares in profits the Company receives from domestic and foreign corporations are notgenerally subject to corporate income tax; however, 5% of each type of income is deemed to be a non-deductible businessexpense. The same applies to profits earned by the Company from the sale of shares in another domestic or foreigncorporation. Different rules apply to free floating dividends, i.e., dividends earned on direct shareholdings in a distributingcorporation equal to less than 10% of its share capital at the start of the calendar year. Such free floating dividends are fullytaxed at the corporate income tax rate. The acquisition of a shareholding of at least 10% is deemed to have occurred at thestart of the calendar year. Losses incurred from the sale of such shares are not deductible for tax purposes, regardless of theamount of shareholding.

In addition, the Company is subject to a trade tax with respect to its taxable trade profits from its permanentestablishments in Germany. When determining the amount on which to assess the trade tax, 25% of the tax-deductible interestexpenses will be added to the trade tax basis to the extent that the sum of all trade taxable add-back items exceeds €100,000.

The trade tax rate depends on the local municipalities in which the Company maintains its permanentestablishments. For the Company, it currently amounts to between approximately 14% and 16% of the taxable trade profit,depending on the local trade tax multiplier.

For trade tax purposes dividends received from domestic and foreign corporations and capital gains from the sale ofshares in other corporations are treated in principle in the same manner as for corporate income tax purposes. However, sharesin profits received from domestic and foreign corporations are effectively 95% exempt from trade tax only if the Companyheld and continues to hold at least 15% (10% in the case of companies resident for tax purposes in EU member states otherthan Germany) of the registered share capital of the distributing corporation at the beginning or – in the case of foreigncorporations – since the beginning of the relevant tax assessment period. Additional limitations apply with respect to shares inprofits received from foreign non-EU corporations.

The provisions of the interest barrier restrict the extent to which interest expenses are tax deductible. Under theserules, net interest expense (the interest expense minus the interest income in a fiscal year) are generally only deductible up to30% of the taxable EBITDA (taxable earnings adjusted for interest costs, interest income, and certain depreciation andamortization), although there are certain exceptions to this rule. Interest expense that is not deductible in a given year may becarried forward to subsequent fiscal years of the Company (interest carry-forward) and will increase the interest expense inthose subsequent years. Under certain conditions, non-offsettable EBITDA can also be carried forward to subsequent years(EBITDA carry-forward).

Any remaining losses of the Company can be carried forward in subsequent years and used to fully offset taxableincome for corporate income tax and trade tax purposes only up to an amount of €1 million. If the taxable income for the yearor taxable profit subject to trade taxation exceeds this threshold, only up to 60% of the amount exceeding the threshold maybe offset by tax-loss carry-forwards. The remaining 40% is subject to tax (minimum taxation). The rules also provide for a taxcarry-back to the previous year in regard to corporate income tax. Unused tax carry-forwards can generally continue to becarried forward without time limitation.

If more than 50% of the subscribed capital, the membership interests, equity interests or voting rights is transferredto an acquiring party within five years directly or indirectly, all tax-loss carry-forwards and interest carry-forwards areforfeited. A group of acquirers with aligned interests is also considered to be an acquiring party for these purposes. Inaddition, any current year losses incurred prior to the acquisition will not be deductible. If between 25% and 50% of thesubscribed capital, membership interests, equity interests or voting rights of the Company is transferred, a proportionalamount of tax-loss carry forwards, the unused losses and interest carry-forwards is forfeited. Tax-loss carry-forwards, unusedlosses and interest carry-forwards taxable in Germany will not expire to the extent that they are covered by hidden reservestaxable in Germany at the time of such acquisition.

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Taxation of Shareholders

Shareholders are taxed particularly in connection with the holding of shares (taxation of dividend income), upon thesale of shares (taxation of capital gains) and the gratuitous transfer of shares (inheritance and gift tax).

Taxation of Dividend Income

In the future, the Company may pay dividends out of a tax-recognized contribution account. To the extent that theCompany does pay dividends from this account, the dividends are not subject to tax. However, dividends paid out of a tax-recognized contribution account lower the acquisition costs of the shares, which may result in a greater amount of taxablecapital gain upon the shareholder’s sale of the shares. To the extent that dividends from the tax-recognized contributionaccount exceed the then lowered acquisition costs of the shares, a capital gain is recognized by the shareholder, which may besubject to tax in accordance with the provisions regarding the disposal of shares outlined below.

Withholding Tax

The dividends distributed by the Company are subject to a deduction at source (withholding tax) at a 25% rate ondividends distributed by the Company plus a solidarity surcharge of 5.5% on the amount of withholding tax (amounting intotal to a rate of 26.375%). The basis for determining the dividend withholding tax is the dividend approved for distributionby the Company’s general meeting.

Dividend withholding tax is withheld regardless of whether and, if so, to what extent the shareholder must report thedividend for tax purposes and regardless of whether the shareholder is a resident of Germany or of a foreign country.

As the Company’s shares are admitted to be held in collective safe custody (Sammelverwahrung) with a centralsecurities depository (Wertpapiersammelbank) and are entrusted to such central securities depository for collective safecustody in Germany, the Company is not responsible for withholding the withholding tax; rather, it is, for the account of theshareholders, the responsibility of one of the following entities in Germany authorized to collect withholding tax do so andremit it to the relevant tax authority: (i) a domestic bank or financial service institute, a domestic securities trading companyor a domestic securities trading bank (including the domestic branches of foreign banks) that holds the shares in custody orthat manages them and pays out or credits the shareholders’ investment income or that pays the investment income to aforeign entity, or (ii) the securities depository holding the collective deposit shares in custody if it pays the investment incometo a foreign entity.

Where dividends are distributed to a company resident in another member state of the European Union within themeaning of article 2 of the Parent-Subsidiary Directive (EC Directive 2011/96/EU of November 30, 2011, as amended, the“Parent-Subsidiary Directive”), the withholding of the dividend withholding tax may not be required, upon application,provided that additional requirements are met (withholding tax exemption). This also applies to dividends distributed to apermanent establishment located in another EU member state of such a parent company or of a parent company that is a taxresident in Germany if the interest in the dividend-paying subsidiary is part of the respective permanent establishment’sbusiness assets. An important prerequisite for the exemption from withholding at source under the Parent-Subsidiary Directiveis that the shareholder has directly held at least 10% of the company’s registered capital continuously for one year and that theGerman tax authorities (Bundeszentralamt für Steuern, Hauptdienstsitz Bonn-Beuel, An der Küppe 1, D-53225 Bonn) have,based upon an application filed by the creditor on the officially prescribed form, certified to him that the prerequisites forexemption have been met.

The dividend withholding tax rate for dividends paid to other shareholders without a tax domicile in Germany willbe reduced in accordance with the applicable double taxation treaty, if any, between Germany and the shareholder’s countryof residence, provided that the shares are neither held as part of the business assets of a permanent establishment or a fixedbase in Germany nor as part of the business assets for which a permanent representative in Germany has been appointed. Thereduction in the dividend withholding tax is generally obtained by applying to the Federal Central Office of Taxation(Bundeszentralamt für Steuern, with its registered office in Bonn-Beuel, An der Küppe 1, D-53225 Bonn, Germany) for arefund of the difference between the dividend withholding tax withheld, including the solidarity surcharge, and the amount ofwithholding tax actually owed under the applicable double taxation treaty, which is usually 5-15%. Forms for the refundprocedure may be obtained from the Federal Central Office of Taxation (http://www.bzst.bund.de), as well as Germanembassies and consulates.

Corporations that are not tax residents in Germany will receive a refund of two-fifths of the dividend withholdingtax that was withheld and remitted to the tax authorities. This applies regardless of any further reduction or exemptionprovided under the Parent-Subsidiary Directive or a double taxation treaty.

Foreign corporations will generally have to meet certain substance criteria defined by statute in order to receive anexemption from or (partial) refund of German dividend withholding tax.

The Company assumes liability for the withholding of taxes at the source on distributions. This does not apply tochurch tax. The Company is released from liability for the violation of its legal obligation to withhold and transfer the taxes atthe source if it provides evidence that it has not breached its duties intentionally or grossly negligently.

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Taxation of Dividends of Shareholders with a Tax Domicile in Germany

Individuals who Hold the Shares as Private Assets

For individuals who are tax residents in Germany (generally, individuals whose domicile or usual residence islocated in Germany) and who hold the shares as private assets, the withholding tax will generally serve as a final tax. In otherwords, once deducted, the shareholder’s income tax liability on the dividends will be settled, and he or she will no longer haveto declare them on his or her annual tax return (the “Flat Tax”).

The purpose of the Flat Tax is to provide for separate and final taxation of capital investment income earned; inother words, taxation that is irrespective of the individual’s personal income tax rate. Shareholders may apply to have theircapital investment income assessed in accordance with the general rules and with an individual’s personal income tax rate ifthis would result in a lower tax burden. In this case, the base for taxation would be the gross dividend income less the savers’allowance of €801 (€1,602 for married couples filing jointly). Any tax and solidarity surcharge already withheld would becredited against the income tax and solidarity surcharge so determined and any overpayment refunded. Income-relatedexpenses cannot be deducted from capital gains in either case.

If the individual owns (i) at least 1% of the shares in the Company and works for the Company or (ii) at least 25%of the shares, the tax authorities may approve upon application that the dividends are treated under the partial-income method(see below “—Sole Proprietors (Individuals)”).

Through 2014, shareholders who pay church tax and hold shares as private assets may request the Domestic PayingAgent that pays out their capital investment income to withhold their church tax according to the church tax legislation oftheir state and remit it to the relevant tax authority. Starting in 2015, entities required to collect withholding taxes on capitalinvestment income are required to likewise withhold the church tax on shareholders who pay church taxes, unless theshareholder objects in writing to the German tax authorities sharing his private information regarding his affiliation with adenomination. If church tax is withheld and remitted to the tax authority as part of the withholding tax deduction, then thechurch tax on the dividends is also deemed to be discharged when it is deducted. The withheld church tax cannot be deductedin the tax assessment as a special expense; however, 26.375% of the church tax withheld on the dividends is deducted fromthe withholding tax (including the solidarity surcharge) withheld by the Company. If no church taxes are withheld along withthe withholding of capital gains tax, the shareholder who pays church tax is required to report his dividends in his income taxreturn. The church tax on the dividends will then be imposed during the assessment.

Shares Held as Business Assets

The Flat Tax does not apply to the dividends from shares held as business assets of shareholders who are taxresident in Germany. The taxation is based on whether the shareholder is a corporation, an individual or a partnership. Thecapital gains tax withheld and paid to the tax authorities, including the solidarity surcharge, is credited against the income orcorporate income tax and the solidarity surcharge of the shareholder and any overpayment will be refunded.

Corporations

Dividends received by corporations resident in Germany are generally 95% exempt from corporate income tax andsolidarity surcharge, irrespective of the stake represented by the shares and the length of time the shares are held. Theremaining 5% is treated as a nondeductible business expense and, as such, is subject to corporate income tax (plus thesolidarity surcharge) with a total tax rate of 15.825%.

Different rules apply to free-floating dividends, i.e., dividends earned on direct shareholdings in the Company equalto less than 10% of its share capital at the start of the calendar year. Such free floating dividends are fully taxed at thecorporate income tax rate. The acquisition of a shareholding of at least 10% is deemed to have occurred at the start of thecalendar year.

Business expenses actually incurred and having a direct business relationship to the dividends may be fullydeducted.

The amount of any dividends (after deducting business expenses related to the dividends) is fully subject to tradetax, unless the corporation held at least 15% of the Company’s registered share capital at the beginning of the relevant taxassessment period, entitling it to an intercorporate privilege for trade tax purposes. In the latter case, the aforementionedexemption of 95% of the dividend income applies analogously for trade tax purposes, but the business expenses directlyrelated to the dividends (for example, financing costs) are not deductible unless they exceed the amount of dividend incomeexempted.

Sole Proprietors (Individuals)

If the shares are held as part of the business assets of a sole proprietor (individual) with his tax domicile inGermany, 40% of the dividend is tax exempt (so-called partial-income method). Only 60% of the expenses economicallyrelated to the dividends are tax deductible. The partial-income method will also apply when individuals hold the shares

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indirectly through a partnership (with the exception of personal investors who hold their shares through an asset managementpartnership). If the shares are held as business assets of a domestic commercial permanent establishment, the full amount ofthe dividend income (after deducting business expenses that are economically related to the dividends) is also subject to tradetax, unless the taxpayer held at least 15% of the Company’s registered share capital at the beginning of the relevant taxassessment period. In the latter case, the net dividends (after deducting directly related expenses) are exempt from the tradetax. However, trade tax is generally credited – fully or in part – as a lump sum against the shareholder’s personal income taxliability.

Partnerships

If the shareholder is a trading, or deemed to be a trading, partnership with its tax domicile in Germany, the personalincome tax or corporate income tax, as the case may be, and the solidarity surcharge are levied at the level of each partnerrather than at the level of the partnership. The taxation of each partner depends upon whether the partner is a corporation or anindividual. If the partner is a corporation, then the dividend is generally 95% tax exempt; however, dividends from a directshareholding representing less than 10% of the share capital are fully subject to taxation (see above “—Corporations”). If thepartner is an individual, only 60% of the dividend income is subject to income tax (see above “—Sole Proprietors(Individuals)”).

Additionally, if the shares are held as business assets of a domestic commercial permanent establishment or deemedto be a trading partnership, the full amount of the dividend income is also subject to trade tax at the level of the partnership. Inthe case of partners who are individuals, the trade tax that the partnership pays on his or her proportion of the partnership’sincome is generally credited as a lump sum – fully or in part – against the individual’s personal income tax liability. If thepartnership held at least 15% of the Company’s registered share capital at the beginning of the relevant tax assessment period,the dividends are not subject to trade tax. The business expenses directly related to the dividends (for example, financingcosts) are not deductible unless they exceed the amount of dividend income exempted. However, if the partners arecorporations, the 5% of the dividend income treated as nondeductible business expenses and will be subject to trade tax.

Financial and Insurance Sector

Special rules apply to companies operating in the financial and insurance sector (see below “—Special Treatment ofCompanies in the Financial and Insurance Sectors and Pension Funds”).

Taxation of Dividends of Shareholders without a Tax Domicile in Germany

The dividends paid to shareholders (individuals and corporations) without a tax domicile in Germany are taxed inGermany, provided that the shares are held as part of the business assets of a permanent establishment or a fixed base inGermany or as part of the business assets for which a permanent representative in Germany has been appointed. Thewithholding tax (including solidarity surcharge) withheld and remitted to the German tax authorities is credited against therespective shareholder’s personal income tax or corporate income tax liability, and any overpayment will be refunded. Thesame applies to the solidarity surcharge. These shareholders are essentially subject to the same rules applicable to residentshareholders, as discussed above.

In all other cases, the withholding of the dividend withholding tax discharges any tax liability of the shareholder inGermany. A refund or exemption is granted only as discussed in the section on dividend withholding tax above (see above“—Taxation of the Company”).

Taxation of Capital Gains

Taxation of Capital Gains of Shareholders with a Tax Domicile in Germany

Shares Held as Private Assets

Gains on the sale of shares that are held as private assets by shareholders with a tax domicile in Germany, andwhich were acquired after December 31, 2008, are generally taxable regardless of the length of time held. The tax rate is auniform 25% plus the 5.5% solidarity surcharge thereon (as well as any church tax).

The taxable capital gains are the difference between (a) the sales gains after deducting the direct sales costs and(b) the acquisition cost of the shares. Under certain conditions, prior payments from the tax-recognized contribution accountmay lead to reduced acquisition costs of the shares held as personal assets and, as a consequence, increase the taxable salesgain. Losses on the sale of shares may only be netted against gains on the sale of shares.

If a domestic bank or financial service provider, a domestic securities trading company or a domestic securitiestrading bank (the “Domestic Paying Agent”) sells the shares and pays out or credits the capital gains, said Domestic PayingAgent withholds a withholding tax of 25% (plus 5.5% solidarity surcharge and any church tax) and remits this to the taxauthority, then the tax on the capital gain will generally be discharged. If the shares were held in safekeeping or administeredby the respective Domestic Paying Agent after acquisition, the amount of tax withheld is generally based on the differencebetween the proceeds from the sale, after deducting expenses directly related to the sale, and the amount paid to acquire the

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shares. However, the withholding tax rate of 25% (plus the 5.5% solidarity surcharge thereon and any church tax) will beapplied to 30% of the gross sales proceeds if the shares were not administered by the same custodian bank since acquisitionand the original cost of the shares cannot be verified or such verification is not admissible. In this case, the shareholder isentitled to verify the original costs of the shares in his annual Flat Tax.

Through 2014, shareholders who pay church tax and hold shares as private assets may request the Domestic PayingAgent that pays out their capital investment income to withhold their church tax on the capital gain according to the churchtax legislation of their state and remit it to the relevant tax authority. Starting in 2015, entities required to collect withholdingtaxes on capital investment income are required to likewise withhold the church tax on shareholders who pay church taxes,unless the shareholder objects in writing to the German tax authorities sharing his private information regarding his affiliationwith a denomination. If church tax is withheld and remitted to the tax authority as part of the withholding tax deduction, thenthe church tax on the capital gain is also deemed to be discharged when it is deducted. The withheld church tax cannot bededucted in the tax assessment as a special expense; however, 26.375% of the church tax withheld on the capital gain isdeducted from the withholding tax (including the solidarity surcharge) withheld by the Company.

A shareholder may request that all his items of capital investment income, along with his other taxable income, besubject to the progressive income tax rate instead of the uniform tax rate for private capital investment income if this lowershis tax burden. The base for taxation would be the gross income less the savers’ allowance of €801 (€1,602 for marriedcouples filing jointly). The prohibition on deducting income-related costs and the restrictions on offsetting losses also apply totax assessments based on the progressive income tax rate. Any tax already withheld would be credited against the income taxso determined and any overpayment refunded.

One exception to this rule is that a shareholder’s capital gains are subject to the partial-income method and not theFlat Tax. Consequently, 60% of the proceeds from the sale of shares are subject to the individual income tax rate, if theshareholder, or his legal predecessor in case of acquisition without consideration, has directly or indirectly held shares equalto at least 1% of the Company’s share capital at any time during the previous five years (“Qualified Participation”). Of theexpenses economically related to the proceeds of the sale of shares, 60% is tax deductible.

In the case of a Qualified Participation, withholding tax (including the solidarity surcharge) is also withheld by theDomestic Paying Agent. The tax withheld, however, is not treated as a final tax. Hence, the shareholder is obligated to declarethe gain on the sale on his income tax return. The withholding tax (including solidarity surcharge) withheld and remitted tothe German tax authorities is credited against the respective shareholder’s personal income tax or corporate income taxliability in the tax assessment, and any overpayment will be refunded.

Shares Held as Business Assets

The Flat Tax does not apply to proceeds from the sale of shares held as business assets by shareholders domiciled inGermany. If the shares form part of a shareholder’s business assets, taxation of the capital gains realized will then dependupon whether the shareholder is a corporation, sole proprietor or partnership.

• Corporations: In general, capital gains earned on the sale of shares by corporations domiciled in Germany are95% exempt from corporate income tax (including the solidarity surcharge) and trade tax, irrespective of thestake represented by the shares and the length of time the shares are held. However, 5% of the capital gains istreated as a nondeductible business expense and, as such, is subject to corporate income tax (plus the solidaritysurcharge) and to trade tax. Losses from the sale of shares and any connected reductions in profit do not qualifyas tax-deductible business expenses.

• Sole proprietors (individuals): If the shares were acquired after December 31, 2008 and form part of thebusiness assets of a sole proprietor (individual) who is a tax resident of Germany, 60% of the capital gains ontheir sale is subject to the individual’s tax bracket plus the solidarity surcharge (partial-income method).Correspondingly, only 60% of losses from such sales and 60% of expenses economically related to such salesare deductible. For church tax, if applicable, the partial-income method also applies. If the shares are held asbusiness assets of a commercial permanent establishment located in Germany, 60% of the capital gains are alsosubject to trade tax. The trade tax is fully or partially credited as a lump sum against the shareholder’s personalincome tax liability.

• Partnerships: If the shareholder is a trading, or deemed to be a trading, partnership, personal income tax orcorporate income tax, as the case may be, is assessed at the level of each partner rather than at the level of thepartnership. The taxation of each partner depends upon whether the respective partner is a corporation or anindividual. If the partner is a corporation, the tax principles applying to capital gains that are outlined insubsection 1 apply. If the partner is an individual, the tax principles applying to capital gains which areoutlined in subsection 2 apply. Upon application and provided that additional prerequisites are met, anindividual who is a partner can obtain a reduction of his personal income tax rate for profits not withdrawnfrom the partnership. In addition, capital gains from the sale of shares attributable to a permanent establishmentmaintained in Germany by a trading partnership are subject to trade tax at the level of the partnership. As arule, only 60% of the gains in this case are subject to trade tax if the partners in the partnership are individuals,while 5% are subject to trade tax if the partners are corporations and shares are sold. Under the principles

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discussed under 1 and 2 above, losses on sales and other reductions in profit related to the shares sold aregenerally not deductible, or only partially deductible, if the partner is a corporation. If the partner is anindividual, the trade tax the partnership pays on his or her share of the partnership’s income is generallycredited as a lump sum – fully or in part – against his or her personal income tax liability, depending on the taxrate imposed by the local municipality and certain individual tax-relevant circumstances of the taxpayer.

Special rules apply to capital gains realized by companies active in the financial and insurance sectors, as well aspension funds (see below “—Special Treatment of Companies in the Financial and Insurance Sectors and Pension Funds”).

When a Domestic Paying Agent is concerned, the proceeds from the sale of shares held in business assets aregenerally subject to the same withholding tax rate as those of shareholders whose shares are held as private assets (see“—Taxation of Capital Gains of Shareholders with a Tax Domicile in Germany—Shares Held as Private Assets”). However,the Domestic Paying Agent may refrain from withholding the withholding tax if (i) the shareholder is a corporation,association or estate with its tax domicile in Germany, or (ii) the shares form part of the shareholder’s domestic businessassets, and the shareholder informs the paying agent of this on the officially prescribed form and meets certain additionalprerequisites. If the Domestic Paying Agent nevertheless withholds taxes, the withholding tax withheld and remitted(including the solidarity surcharge) will be credited against the shareholder’s income tax or corporate income tax liability andany excess amount will be refunded.

Taxation of Capital Gains of Shareholders without a Tax Domicile in Germany

Capital gains realized by a shareholder with no tax domicile in Germany are subject to German income tax only ifthe selling shareholder holds a Qualified Participation or if the shares form part of the business assets of a permanentestablishment in Germany or of business assets for which a permanent representative is appointed.

Most double taxation treaties provide for an exemption from German taxes and assign the right of taxation to theshareholder’s country of domicile in the former case. However, certain double taxation treaties contain special provisions forshareholdings in a real estate company. In the latter case the taxation of capital gains is governed by the same rules that applyto shareholders resident in Germany.

Special Treatment of Companies in the Financial and Insurance Sectors and Pension Funds

If financial institutions or financial services providers hold or sell shares that are allocable to their trading bookpursuant to Section 1a of the German Banking Act (Gesetz über das Kreditwesen), they will neither be able to use the partial-income method nor have 60% of their gains exempted from taxation nor be entitled to the 95% exemption from corporateincome tax plus the solidarity surcharge and any applicable trade tax. Thus, dividend income and capital gains are fullytaxable. The same applies to shares acquired by financial enterprises (Finanzunternehmen) in the meaning of the GermanBanking Act for the purpose of generating profits from short-term proprietary trading. The preceding sentence appliesaccordingly for shares held in a permanent establishment in Germany by financial institutions, financial service providers andfinance companies domiciled in another member state of the European Union or in other signatory states of the agreement onthe European Economic Area. Likewise, the tax exemption described earlier afforded to corporations for dividend income andcapital gains from the sale of shares does not apply to shares that qualify as a capital investment in the case of life insuranceand health insurance companies, or those which are held by pension funds.

However, an exemption to the foregoing, and thus a 95% effective tax exemption, applies to dividends obtained bythe aforementioned companies, to which the Parent-Subsidiary Directive applies.

Inheritance and Gift Tax

The transfer of shares to another person by will or gift is generally subject to German inheritance and gift tax only if

1. the decedent, donor, heir, beneficiary or other transferee maintained his or her domicile or habitual abodein Germany, or had its place of management or registered office in Germany at the time of the transfer, oris a German citizen who has spent no more than five consecutive years outside Germany withoutmaintaining a residence in Germany (special rules apply to certain former German citizens who neithermaintain their domicile nor have their habitual abode in Germany);

2. the shares were held by the decedent or donor as part of business assets for which a permanentestablishment was maintained in Germany or for which a permanent representative in Germany had beenappointed; or

3. the decedent or donor with place of management or registered office in Germany, either individually orcollectively with related parties, held, directly or indirectly, at least 10% of the Company’s registeredshare capital at the time of the inheritance or gift.

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The fair value represents the tax assessment base. In general that is the stock exchange price. A special discount onthis amount applies to direct shareholdings of more than 25% in the Company depending on the composition of the businessassets and future business figures, if, inter alia, the heir or beneficiary meets a five-year holding period. Depending on thedegree of relationship between decedent or donor and recipient, different tax free allowances and tax rates apply.

The few German double taxation treaties relating to inheritance tax and gift tax currently in force usually providethat the German inheritance tax or gift tax can only be levied in the cases of (1.) above, and also with certain restrictions incase of (2.) above. Special provisions apply to certain German nationals living outside of Germany and former Germannationals.

Other Taxes

No German transfer tax, value-added tax, stamp duty or similar taxes are assessed on the purchase, sale or othertransfer of shares. Provided that certain requirements are met, an entrepreneur may, however, opt for the payment of value-added tax on transactions that are otherwise tax exempt. Net wealth tax is currently not imposed in Germany.

On January 22, 2013, the Council of the European Union approved the resolution of the ministers of finance fromeleven EU member states (including Germany) to introduce a financial transaction tax within the framework of enhancedcooperation. On February 14, 2013, the European Commission accepted the proposal for a Council Directive implementingenhanced cooperation in the area of financial transaction tax. The plan focuses on levying a financial transaction tax of 0.1%(0.01% for derivatives) on the purchase and sale of financial instruments.

A joint statement issued in May 2014 by ten of the eleven participating member states indicated an intention toimplement the financial transaction tax progressively, such that it would initially apply to shares and certain derivatives, withthis initial implementation occurring by January 1, 2016. However, full details are not available. Therefore it is not known towhat extent the elements of the European Commission’s proposal outlined in the preceding paragraph will be followed inrelation to the taxation of shares. The financial transaction tax proposal remains subject to negotiation between theparticipating member states and is the subject of legal challenge. It may therefore be altered prior to any implementation, thetiming of which remains unclear. Additional EU member states may decide to participate. Prospective holders of theCompany’s shares are advised to seek their own professional advice in relation to the financial transaction tax.

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TAXATION IN THE GRAND DUCHY OF LUXEMBOURG

The following information is of a general nature only and is based on the laws in force in Luxembourg as of the dateof this Prospectus. It does not purport to be a comprehensive description of all the tax considerations that might be relevant toan investment decision. It is included herein solely for preliminary information purposes. It is not intended to be, nor should itbe construed to be, legal or tax advice. It is a description of the essential material Luxembourg tax consequences with respectto the offering and may not include tax considerations that arise from rules of general application or that are generallyassumed to be known to shareholders. This summary is based on the laws in force in Luxembourg on the date of thisProspectus and is subject to any change in law that may take effect after such date. Prospective shareholders should consulttheir professional advisors with respect to particular circumstances, the effects of state, local or foreign laws to which theymay be subject, and as to their tax position. Please be aware that the residence concept used under the respective headingsapplies for Luxembourg income tax assessment purposes only. Any reference in the present section to a tax, duty, levy impostor other charge or withholding of a similar nature refers to Luxembourg tax law and/or concepts only. Also, please note that areference to Luxembourg income tax generally encompasses corporate income tax (impôt sur le revenu des collectivités),municipal business tax (impôt commercial communal), a solidarity surcharge (contribution au fonds pour l’emploi), as well aspersonal income tax (impôt sur le revenu). Corporate shareholders may further be subject to net wealth tax (impôt sur lafortune) as well as other duties, levies or taxes. Corporate income tax, municipal business tax as well as the solidaritysurcharge invariably apply to most corporate taxpayers resident in Luxembourg for tax purposes. Individual taxpayers aregenerally subject to personal income tax and the solidarity surcharge. Under certain circumstances, where an individualtaxpayer acts in the course of the management of a professional or business undertaking, municipal business tax may apply aswell.

Luxembourg Taxation of Shares of a Non-Resident Company

Withholding Taxes

Dividend payments made to shareholders by a non-resident company, such as the Company, as well as liquidationproceeds and capital gains derived therefrom are not subject to a withholding tax in Luxembourg. Therefore, the Companydoes not assume liability for withholding taxes at the source.

Income Tax

Taxation of Income Derived From Shares and Capital Gains Realized On Shares by Luxembourg Residents

Taxation of dividend income

Dividends and other payments derived from the shares of the Company by resident individual shareholders and non-resident individual shareholders having a permanent establishment or permanent representative in Luxembourg to which orwhom such shares are attributable, will in principle be subject to tax at the ordinary rates on the dividends received from theCompany. A tax credit may under certain conditions be granted for foreign withholding taxes against Luxembourg income taxdue on these dividends, without exceeding in any case Luxembourg tax on such income. Under current Luxembourg tax law,50% of the gross amount of dividends received by resident individual shareholders may be tax exempt at the level of theseshareholders.

Dividends derived from the Company’s shares by fully-taxable Luxembourg resident companies are subject toincome taxes, unless the conditions of the participation exemption regime are satisfied.

Under the participation exemption regime, dividends derived from the shares of the Company may be exempt fromincome tax at the level of the shareholder if cumulatively (a) the shareholder receiving the dividends is either (i) a fully-taxable Luxembourg resident company, (ii) a domestic permanent establishment of an EU resident company falling underarticle 2 of the EU Parent-Subsidiary Directive, (iii) a domestic permanent establishment of a company limited by shares(société de capitaux) that is resident in a state with which Luxembourg has concluded a double tax treaty, or (iv) a domesticpermanent establishment of a company limited by shares (société de capitaux) or of a cooperative company which is aresident of a European Economic Area member state (other than a EU member state); and at the date on which the income ismade available, (b) the distributing company is a qualified subsidiary (“Qualified Subsidiary”), (c) the shareholder holds orcommits to hold directly (or even indirectly through certain entities) for an uninterrupted period of at least twelve months aqualified shareholding (“Qualified Shareholding”). A Qualified Subsidiary means (a) a fully-taxable Luxembourg residentcompany limited by share capital (société de capitaux), (b) a company covered by Article 2 of the amended EU Parent-Subsidiary Directive or (c) a non-resident company limited by share capital (société de capitaux) liable to a tax correspondingto Luxembourg corporate income tax. A Qualified Shareholding means shares representing a direct participation of at least10% in the share capital of the Qualified Subsidiary or a direct participation in the Qualified Subsidiary of an acquisition priceof at least €1.2 million (or an equivalent amount in another currency). Liquidation proceeds are assimilated to a receiveddividend and may be exempt under the same conditions. Shares held through a tax transparent entity are considered as being adirect participation proportionally to the percentage held in the net assets of the transparent entity. If the participationexemption does not apply, dividends may benefit from the 50% exemption under the relevant conditions set out above.

Any shareholder which is a Luxembourg resident entity governed by the law of December 17, 2010 on undertakingsfor collective investment, as amended, by the law of February 13, 2007 on specialized investment funds, as amended, or by

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the law of May 11, 2007 on the family estate management company, as amended, or by the law of June 15, 2004 on venturecapital vehicles, as amended, is not subject to any Luxembourg corporation taxes in respect of dividends received from theCompany. No tax credit is then available for Luxembourg withholding tax on dividends received from the Company.

Non-resident shareholders (not having a permanent establishment or permanent representative in Luxembourg towhich or whom the shares of the Company are attributable) will in principle not be subject to Luxembourg income tax on thedividends received from the Company.

Taxation of capital gains

(a) Luxembourg resident Shareholders

Capital gains realized on the disposal of the shares of the Company by resident individual shareholders, who act inthe course of the management of their private wealth, are not subject to income tax, unless said capital gains qualify either asspeculative gains or as gains on a substantial participation (“Substantial Participation”). Capital gains are deemed to bespeculative and are subject to income tax at ordinary rates if the shares of the Company are disposed of within six monthsafter their acquisition or if their disposal precedes their acquisition. A participation is deemed to be substantial where aresident individual shareholder holds, either alone or together with his spouse or partner and/or minor children, directly orindirectly at any time within the five years preceding the disposal, more than 10% of the share capital of the Company. Ashareholder is also deemed to transfer a Substantial Participation if he acquired free of charge, within the five years precedingthe transfer, a participation that was constituting a Substantial Participation in the hands of the transferor (or the transferors incase of successive transfers free of charge within the same five-year period). Capital gains realized on a SubstantialParticipation are subject to Luxembourg income tax according to the half-global rate method (i.e., the average rate applicableto the total income is calculated according to progressive income tax rates and half of the average rate is applied to the capitalgains realized on a Substantial Participation). A disposal may include a sale, an exchange, a contribution or any other kind ofalienation of the shares of the Company.

Capital gains realized on the disposal of the Company’s shares by resident individual Shareholders, who act in thecourse of their professional/business activity, are subject to income tax at ordinary rates. Taxable gains are determined asbeing the difference between the price for which the Company’s shares have been disposed of and the lower of their cost orbook value.

Capital gains realized by (a) a fully-taxable Luxembourg resident company or (b) the Luxembourg permanentestablishment of a non-resident foreign company on the shares of the Company are subject to income tax at the maximumglobal rate of 29.22% (in Luxembourg City in 2014), unless the conditions of the participation exemption regime, asdescribed above, are satisfied except that the acquisition price must be of at least €6 million for capital gain exemptionpurposes. Shares held through a tax transparent entity are considered as a direct participation holding proportionally to thepercentage held in the assets of the transparent entity. To the extent that expenses related to the (exempt) shareholding havereduced the shareholder’s taxable profits (during the year of the sale or in prior years), these deductions will be recaptured atthe time the relevant shareholding is sold. Consequently, the capital gain realized will become taxable up to the amount of theaggregate expenses and write-downs deducted during the respective and previous years in relation to the participation.

Taxable gains are determined to be the difference between the price for which the Company’s shares have beendisposed of and the lower of their cost or book value.

The shareholder which is a Luxembourg resident entity governed by the law of December 17, 2010 on undertakingsfor collective investment, as amended, by the law of February 13, 2007 on specialized investment funds, as amended, or bythe law of May 11, 2007 on the family estate management company, as amended, or by the law of June 15, 2004 on venturecapital vehicles, as amended, is not subject to any Luxembourg corporation taxes in respect of capital gains realized upondisposal of its shares.

(b) Non-resident Shareholders

Under Luxembourg tax laws currently in force (subject to the provisions of double taxation treaties), capital gainsrealized on the disposal of the Company’s shares by a non-resident shareholder holding the shares of the Company through aLuxembourg permanent establishment or through a Luxembourg permanent representative to which or whom the shares areattributable are subject to income tax at ordinary rates. Taxable gains are determined as being the difference between the pricefor which the shares have been disposed of and the lower of their cost or book value.

Net Wealth Tax

Luxembourg resident shareholders, as well as non-resident shareholders who have a permanent establishment or apermanent representative in Luxembourg to which or whom the shares of the Company are attributable, are subject toLuxembourg net wealth tax at the rate of 0.5% applied on its net assets as determined for net wealth tax purposes on the netwealth tax assessment date, except if the shareholder is (i) a resident or non-resident individual, (ii) or governed by the

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amended law of May 11, 2007 on family estate management companies, (iii) by the amended law of December 17, 2010 onundertakings for collective investment, (iv) by the law of February 13, 2007 on specialized investment funds, as amended, or(v) is a securitization company governed by the law of March 22, 2004 on securitization, as amended, or (vi) is a capitalcompany governed by the law of June 15, 2004 on venture capital vehicles, as amended.

Furthermore, in the case the shareholder is a fully-taxable Luxembourg resident collective entity (or (i) a domesticpermanent establishment of an EU resident company covered by Article 2 of the amended EU Parent-Subsidiary Directive, or(ii) a domestic permanent establishment of a company limited by shares (société de capitaux) that is resident in a state withwhich Luxembourg has concluded a double tax treaty, or (iii) a domestic permanent establishment of a company limited byshares (société de capitaux) or of a cooperative company which is a resident of a European Economic Area member state(other than a EU member state), the shares of the Company may be exempt for a given year, if the shares represent at the endof the previous year a participation of at least 10% in the share capital of the Company or a participation of an acquisitionprice of at least €1.2 million. The net wealth tax charge for a given year can be reduced if a specific reserve, equal to fivetimes the net wealth tax to save, is created before the end of the subsequent tax year and maintained during the five followingtax years.

Other Taxes

Under current Luxembourg tax laws, no registration tax or similar tax is in principle payable by the shareholderupon the acquisition, holding or disposal of the Company’s shares. However, a fixed registration duty of €12 may be due uponregistration of the Company’s shares in Luxembourg in the case of legal proceedings before Luxembourg courts, in case theshares must be produced before an official Luxembourg authority, or in the case of a registration of the shares on a voluntarybasis.

Under current Luxembourg tax law, where an individual shareholder is a resident of Luxembourg for inheritance taxpurposes at the time of his/her death, the shares are included in his or her taxable basis for inheritance tax purposes.

Gift tax may be due on a gift or donation of the Company’s shares if the gift is recorded in a Luxembourg notarialdeed or otherwise registered in Luxembourg.

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FINANCIAL INFORMATION

The following English-language condensed consolidated interim financial statements prepared in accordance withIFRS on interim financial reporting (IAS 34) as of and for the six month-period ended June 30, 2014 (F-1 – F-15), theconsolidated financial statements prepared in accordance with IFRS as of and for the fiscal year ended December 31, 2013(F-16 – F-63), the consolidated financial statements prepared in accordance with German GAAP as of and for the fiscalyears ended December 31. 2012 and December 31, 2011 (F-65 – F-78 and F-80 – F-93) and the unconsolidated financialstatements prepared in accordance with German GAAP as of and for the fiscal year ended December 31, 2013(F-95 – F-105), of TLG IMMOBILIEN GmbH, Berlin, are translations of the respective German-language unauditedcondensed consolidated interim financial statements, the respective German-language audited consolidated financialstatements and the respective German-language audited unconsolidated financial statements.

TLG Immobilien GmbH, Berlin, Germany: Unaudited Condensed Consolidated Interim FinancialStatements (Prepared in Accordance with IFRS on Interim Financial Reporting) of TLG ImmobilienGmbH as of and for the Six-Month Period Ended June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7

TLG Immobilien GmbH, Berlin, Germany: Audited Consolidated Financial Statements (Prepared inAccordance with IFRS) of TLG Immobilien GmbH as of and for the Fiscal Year Ended December 31,2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16

Consolidated Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17

Consolidated Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-18



Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-21

Auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-64

TLG Immobilien GmbH, Berlin, Germany: Audited Consolidated Financial Statements (Prepared inAccordance with German GAAP) of TLG Immobilien GmbH as of and for the Fiscal Year EndedDecember 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-65

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-66

Consolidated Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-67



Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-70

Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-79

TLG Immobilien GmbH, Berlin, Germany: Audited Consolidated Financial Statements (Prepared inAccordance with German GAAP) of TLG Immobilien GmbH as of and for the Fiscal Year EndedDecember 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-80

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-81

Consolidated Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-82



Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-85

Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-94

TLG Immobilien GmbH, Berlin, Germany: Audited Unconsolidated Financial Statements (Prepared inAccordance with German GAAP) of TLG Immobilien GmbH as of and for the Fiscal Year EndedDecember 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-95

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-96

Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-97

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-98

Auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-106

F-1

TLG Immobilien GmbH, Berlin, Germany: Unaudited Condensed Consolidated InterimFinancial Statements (Prepared in Accordance with IFRS on Interim Financial

Reporting) of TLG Immobilien GmbH as of and for the Six-Month Period EndedJune 30, 2014

F-2

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30/06/2014 31/12/2013EUR ’000unaudited

EUR ’000

A) Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,456,592 1,448,127Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423,028 1,414,691Advance payments on investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,482 2,707Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,449 17,762Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655 872Investment in joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0Other non-current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 124Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,407 8,423Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,447 3,548

B) Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,344 187,568Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,318 13,385Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,665 11,567Receivables from income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 194Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 15Other current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,157 4,953Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,854 707Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,540 138,930Assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,557 17,817

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,555,936 1,635,695

A) Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621,512 801,036Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000 52,000Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252,497 410,249Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322,894 339,939Other comprehensive income (OCI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5,879 -1,152Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0

B) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 934,424 834,659I.) Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787,152 630,245

Non-current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 672,375 513,002Pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,815 6,931Non-current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,744 18,788Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,942 3,384Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,276 88,140

II.) Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,272 204,414Current liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,574 113,225Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,188 14,573Payables due to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0Other current provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,329 16,193Tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,266 44,287Current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,915 16,136Liabilities included in disposal groups classified as held for sale . . . . . . . . . . . . . . . . . . . . . 0 0

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,555,936 1,635,695

F-3

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

01/01/2014 –30/06/2014

01/01/2013 –30/06/2013

EUR ’000unaudited

EUR ’000unaudited

Net operating income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,021 52,700Income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,903 69,636a) Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,997 59,216b) Income from recharged utilities and other operating costs . . . . . . . . . . . . . . . . . . . . . . . . . 9,053 9,472c) Income from other goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853 948Expenses related to letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,882 16,936d) Utilities and other operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,690 13,463e) Maintenance expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,903 1,865f) Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,289 1,608

Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,330 34,382Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 228Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,289 5,483a) Proceeds from real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,901 14,262b) Book value of real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,612 8,779Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,633 3,878Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,658 15,380Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701 742Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,423 2,289

Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,949 78,260

Income from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 2,137Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379 359Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,094 18,088Gain (-) / loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,011 -5,422

Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,222 68,089

Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,817 21,991

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,405 46,098

Other comprehensive income (OCI)thereof non-recyclingActuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0thereof recyclingHedge accounting reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4,727 0

Total comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,678 46,098

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F-5

CONSOLIDATED CASH FLOW STATEMENT

01/01/2014 –30/06/2014

01/01/2013 –30/06/2013

EUR ’000unaudited

EUR ’000unaudited

1. Cash flow from operating activitiesEarnings before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,225 68,091Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 742Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -51,330 -34,382Result from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,012 -5,422Increase/decrease (–) in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,980 -171Other non-cash expenses/income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 795 0Results of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 -2,137Gain (–)/loss on disposal of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 38Increase (–)/decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 6,781Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -379 -359Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,094 18,088Increase (–)/decrease in trade receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . -994 3,782Increase/decrease (–) in trade payables and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . -8,813 -28,507

Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,397 26,544

Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 361Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -35,557 -33,901Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4,490 -555

Net cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6,289 -7,551

2. Cash flow from investing activitiesCash received from disposals of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,107 1,868Cash received from disposals of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . 0 0Cash paid for acquisitions of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -27,446 -17,839Cash paid for acquisitions of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . -189 -16Cash paid for investments in intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -149 -82Cash received from disposals of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 71,214

Net cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,323 55,145

3. Cash flow from financing activitiesCash received from equity contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 15,200Cash distribution to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -233,000 0Cash received from bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,868 73,326Repayments of bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -84,293 -125,617

Net cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -128,424 -37,091

4. Cash and cash equivalents at end of periodChange in cash and cash equivalents (subtotal of 1 to 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -114,390 10,503Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,930 60,527

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,540 71,030

5. Composition of cash and cash equivalentsCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,540 71,030

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,540 71,030

F-6

NOTES

A. SELECTED NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF TLGIMMOBILIEN GMBH AS AT 30 JUNE 2014

1. Company information

TLG IMMOBILIEN GmbH, Berlin (TLG IMMOBILIEN), a German limited liability company (Gesellschaft mitbeschränkter Haftung, “GmbH”) domiciled in 10117 Berlin, Hausvogteiplatz 12, entered into the Berlin commercial registerunder no. HRB 38419 B, together with its subsidiaries (TLG Group), is among the largest commercial real estate companiesin Berlin and eastern Germany.

The main activities of the Parent Company and its subsidiaries are the commercial exploitation, management,development and acquisition of land and buildings.

2. Group accounting principles

The interim consolidated financial statements of the TLG Group were prepared in accordance with IAS 34.10(Interim Financial Reporting) in condensed form and in accordance with the International Financial Reporting Standards(IFRS) adopted and published by the International Accounting Standards Board (IASB), as adopted by the European Union.The interim consolidated financial statements were prepared in accordance with the provisions of Regulation (EC)No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 concerning the application of internationalaccounting standards in conjunction with section 315a (3) of the German Commercial Code (Handelsgesetzbuch, “HGB”),taking into account the supplementary commercial regulations. The requirements of IAS 34 (Interim Financial Reporting)have been complied with.

These interim consolidated financial statements do not include a separate presentation of the quarter from 1 April2014 to 30 June 2014 because this is not a quarterly report, but rather a set of interim financial statements to be prepared onceannually on special grounds.

The interim consolidated financial statements comprise the consolidated statement of financial position, theconsolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated cash flowstatement and the notes to the consolidated financial statements.

The interim consolidated financial statements have been prepared in euros.

Unless otherwise stated, all amounts are rounded to thousands of euros. Due to rounding, the figures reported intables and cross-references may deviate from their exact values as calculated.

The principal activities of the TLG Group are essentially unaffected by seasonal influences. The letting, sale andpurchase of commercial real estate is impacted by economic influences, however.

3. Accounting policies

The accounting policies applied in these interim consolidated financial statements are essentially identical to thoseapplied in the consolidated financial statements prepared in accordance with IFRSs. These interim consolidated financialstatements should therefore be read in conjunction with the consolidated financial statements of TLG as at 31 December 2013.

The TLG Group has applied all new mandatory standards and interpretations as at 1 January 2014. The followingstandards and interpretations which were mandatory as at 1 January 2014 did not have any or no significant impact on theTLG Group’s interim consolidated financial statements:

• IFRS 11, published by the IASB in May 2011, replaces IAS 31 and SIC-13.

• IFRS 12 “Disclosure of Interests in Other Entities” stipulates the disclosures required in the notes for interestsin other entities with respect to risk and significance on the net assets, financial position and results ofoperations.

• The amendments to transitional provisions of IFRS 10, IFRS 11 and IFRS 12 are mainly limited to the figuresfrom the prior year in the event of changes due to the application of the new standards to a comparison year.

• The IASB issued the revised IAS 27 in May 2011. With the publication of IFRS 10 and IFRS 12, the scope ofapplication for IAS 27 was limited to accounting for investments in subsidiaries, associates and joint venturesin the separate financial statements of an entity.

F-7

• The interpretation of IFRIC 21 published in May 2013 clarifies at which time an entity recognises a liability fora levy imposed by a government.

• IFRS 10 “Consolidated Financial Statements” focuses in particular on the possibility of de facto control inconsolidation issues.

• The new IAS 28 “Investments in Associates and Joint Ventures” addresses the accounting for shares inassociates and joint ventures.

• The amendment of IAS 32 clarifies the requirements for offsetting financial instruments. In particular, ithighlights the significance of the current legal right to offset. This is currently not expected to impact TLG.

• The amendment of IAS 39 permits the continuation of hedge accounting after novation of an over-the-counter(OTC) derivative as a hedging instrument. This is currently not expected to impact TLG.

The TLG Group applied IFRS 2 “Share-based Payment” for the first time in financial year 2014 due to the launch ofa management share option programme in the course of financial year 2014.

4. Fair value measurement

All assets, equity instruments and liabilities measured at fair value on the basis of other standards (excluding IAS 17“Leases” and IFRS 2 “Share-based Payment”) are measured uniformly in accordance with IFRS 13. IFRS 13.9 defines fairvalue as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date.

The fair value of the financial instruments is determined on the basis of corresponding market values ormeasurement methods. For cash and other current primary financial instruments, the fair values are approximately equal to thecarrying amounts recognised on the respective reporting dates.

For non-current receivables, other assets and liabilities, fair value is calculated on the basis of expected paymentflows using the reference interest rates applicable on the reporting date. The fair values of financial instruments aredetermined on the basis of the reference interest rates on the reporting date plus the own or counterparty risk.

For the financial instruments to be recognised at fair value, fair value is always calculated using the correspondingmarket or stock exchange prices.

If there are no market or stock exchange prices, measurement is based on market measurement methods customaryfor the market using market parameters specific to the instrument. Fair value is determined using the discounted cash flowmethod, while individual credit ratings and other market conditions are used to calculate present value in the form of creditratings or liquidity spreads customary for the market.

For the fair value measurement of financial instruments, the measurement model uses relevant market prices andinterest rates observable on the reporting date obtained from external sources as inputs.

Investment property is measured at fair value. Fair value measurement of the investment property is classified asLevel 3 under the fair value hierarchy of IFRS 13.86 (measurement on the basis of unobservable inputs).

The market value of the property held for generating rental income or for capital appreciation over the long term isdetermined by means of the discounted cash flow method (DCF). Properties with negative cash inflows (includingpermanently vacant properties) are valued using the liquidation method (land value less demolition costs, plus residual netincome, if applicable). Appraisal of undeveloped land is conducted using the comparative value method taking into accountstandard land values of the local committees for property values.

Given that the investment property was measured in the same manner as in the 2013 consolidated financialstatements, the detailed explanations relating to fair value measurement provided in the consolidated financial statements shallcontinue to apply

In summary, the fair value hierarchy as of 30 June 2014 is as follows:

Fair value hierarchy Level 1 Level 2 Level 3

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423,028Derivatives with positive market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0Financial liabilities* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,949Derivatives with negative market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,744

* Fair value is determined solely for informational purposes in the notes.

F-8

And the fair value hierarchy as of 31 December 2013 is as follows:



* Fair value is determined solely for informational purposes in the notes.

There were no transfers between levels of the fair value hierarchy during the first half of 2014.

5. Changes to the scope of consolidation

There have been no changes in the group of consolidated companies since 31 December 2013.

6. Significant judgements and estimates

The preparation of the interim consolidated financial statements in accordance with IFRSs requires the managementto make assumptions and use estimates which have an impact on the carrying amounts reported for assets, liabilities, incomeand expenses, as well as on the disclosure of contingent liabilities. These assumptions and estimates relate in particular to themeasurement of investment property, the recognition and measurement of assets and liabilities held for sale, the recognitionand measurement of pension provisions, the recognition and measurement of other provisions, the measurement of financialliabilities and the recognition of deferred tax assets.

Although the management believes that the assumptions made and estimates used are appropriate, any unforeseenchanges in these assumptions may influence the TLG Group’s financial position and performance.

7. Segment reporting

There have been no changes to the segment reporting as compared to the information provided by the managementin the consolidated financial statements as at 31 December 2013. Accordingly, there is still only one single reporting segmentin accordance with IFRS 8; this segment encompasses the TLG Group’s operating activities and the chief operating decisionmakers receive regular reports on this segment.

8. Selected notes to the consolidated statement of financial position

In financial year 2013 and through to the reporting date for the 2014 interim consolidated financial statements,investment property as defined in IAS 40, including reclassifications as assets held for sale as defined in IFRS 5, developedas follows:

01/01/2014 –30/06/2014

01/01/2013 –31/12/2013

EUR ’000Carrying amount as at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,414,691 1,511,726

Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,028 3,591Capitalisation of construction activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,031 36,396Reclassification as assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (71,389) (209,259)Reclassification from property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,335 —Fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,330 72,237

Carrying amount as at 30/06 and 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423,028 1,414,691

TLG’s portfolio strategy intends for a concentration on the retail and office asset classes, as well as on hotels withlong-term leases in certain prime inner-city locations, particularly in Berlin and Dresden. While the office portfolio isintended to be largely limited to Berlin, Dresden, Leipzig and Rostock, the retail portfolio—which is currently dominated byfood retail properties in the retail foodstuffs sector—is more broadly distributed. Decisions pertaining to acquisitions anddisposals of properties and to necessary investments are subject to the aforementioned principles of portfolio strategy.

In the first half of 2014, the Berlin office portfolio added an attractive office property. After all project developmentproperties were reclassified during the previous year as under management as at 31 December 2013, further expansion workwas performed during the first half of 2014. The decline in project development activities is reflected in the amountcapitalised for construction activities: (EUR 7,031 thousand; full year 2013: EUR 36,396 thousand).

EUR 71,389 thousand was reclassified as assets held for sale to reflect disposals in keeping with the portfoliostrategy.

F-9

As in 2013, consistently favourable market conditions made it possible in particular to sell a number of inner-citydevelopment plots at attractive prices in the first half of 2014 as well, with the result that the EUR 51,330 thousand fair valueadjustment in H1 2014 related to 75% of the assets held for sale. Properties reclassified as assets held for sale also included allsales conducted during the year, which had first been reclassified as assets held for sale and then sold off.

In addition to the aforementioned favourable market conditions, the declined EPRA vacancy rate of 4.9%(2013: 5.6%) in the first half year 2014 led to an increased fair value of the investment property.

The fair values of investment property were as follows, broken down by measurement approach and by asset classas at 30 June 2014:

Table 1:

30/06/2014Investmentproperties Discount rate Capitalisation rate

EUR ’000 Min. Max.

Weightedaverage(rated

accordingto grosspresentvalue) Min. Max.


accordingto net sales

price)

Valuation method = Discounted-Cashflow (DCF)Retail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662,037 5.00% 15.00% 6.26% 5.50% 33.00% 8.13%Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466,463 4.00% 12.00% 5.53% 4.00% 15.00% 7.03%Hotel properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,163 5.00% 6.25% 5.60% 6.25% 6.75% 6.48%Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,146 3.75% 14.00% 7.23% 4.00% 25.00% 10.94%Total (DCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,394,810 3.75% 15.00% 5.98% 4.00% 33.00% 7.67%

Valuation method = Liquidation methodRetail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,620 3.00% 5.00% 4.14% — — —Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 7.50% 7.50% 7.50% — — —Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,368 5.00% 9.50% 5.49% — — —Total (liquidation method) . . . . . . . . . . . . . . . . . . . . 28,218 3.00% 9.50% 5.07% — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423,028

Multiplier net rental . . . . . . . . . . . . . . . . . . . . . . . . . . 12.59

The following values were reported as at 31 December 2013:







price)

Valuation method = Discounted-Cashflow (DCF)Retail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655,994 5.00% 15.00% 6.25% 5.50% 25.00% 8.16%Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447,308 4.00% 12.00% 5.54% 4.00% 20.00% 7.12%Hotel properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,611 5.00% 6.25% 5.61% 6.25% 6.75% 6.48%Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,698 5.00% 14.00% 7.86% 6.00% 30.00% 11.46%Total (DCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362,610 4.00% 15.00% 6.01% 4.00% 30.00% 7.76%

Valuation method = Liquidation methodRetail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,500 5.00% 7.50% 5.78% — — —Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 7.50% 7.50% 7.50% — — —Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,131 3.00% 8.00% 5.07% — — —Total (liquidation method) . . . . . . . . . . . . . . . . . . . . 52,081 3.00% 8.00% 5.43% — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,414,691

Multiplier net rental . . . . . . . . . . . . . . . . . . . . . . . . . . 12.68

Other financial assets included EUR 2,621 thousand in restricted funds as at 30 June 2014.

Cash and cash equivalents essentially consisted of bank balances. These included EUR 3,611 thousand inrestricted funds as at 30 June 2014. The decrease resulted primarily from distributions to shareholders.

F-10

The change in the components of Group equity can be taken from the consolidated statement of changes in equity.In the first half of 2014, the distribution to the shareholders amounted to EUR 233,000 thousand. Of that amount,EUR 158,547 thousand was distributed from capital reserves, EUR 843 thousand from revenue reserves andEUR 73,610 thousand from retained earnings.

Liabilities due to financial institutions are broken down as follows:

30/06/2014 31/12/2013EUR ’000

Liabilities to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,949 626,227

30/06/2014 31/12/2013EUR ’000

Remaining term up to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,574 113,225Remaining term longer than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 672,375 513,002

The increase in liabilities to banks resulted from the regular payments of principal, as well as from the draw-downof tranches from existing and new loans amounting to EUR 188,868 thousand. In addition, EUR 75,409 thousand in old loanswas repaid.

Net leverage was calculated as follows as at 30 June 2014 and in comparison with the same period of the previousyear:

30/06/2014 31/12/2013EUR ’000

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423,028 1,414,691Prepayments for investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,482 2,707Owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,139 16,464Non-current assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,558 17,817Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,318 13,385

Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,495,524 1,465,064

Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,949 626,227Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,540 138,930

Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703,409 487,298

Net Loan to Value (Net LTV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.0% 33.3%

The Group’s Net LTV increased as at the end of the reporting period as a result of the increase in liabilities to banksthrough the draw-down of existing and new loan tranches and the decrease in cash.

Other provisions changed as follows:

As at01/01/2014 Additions Utilisations Reversals

As at30/06/2014

EUR ’000Provisions for personnel expenses from restructuring plan . . . . 2,845 — (2,614) — 231Provisions for litigation risks . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,871 842 (42) (2,284) 11,387Other miscellaneous provisions . . . . . . . . . . . . . . . . . . . . . . . . . 477 386 (150) (3) 711

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,193 1,228 (2,806) (2,287) 12,329

The provisions for litigation costs were reversed in part due to a litigation victory.

9. Selected notes to the consolidated statement of comprehensive income

Net operating income from letting activities declined as a result of the strategically driven portfolio optimisation.

Income from letting activities, which was lower in comparison to the same period of the previous year, resultedprimarily from the sale of a portfolio of nursing home properties in November 2013.

Expenses related to letting activities experienced a relatively less sharp decrease because expenses were higher inrelation to one property as a result of fire damage. This was offset by a corresponding insurance settlement payment,recognised under other operating income.

F-11

The result from remeasurement of investment property included EUR 38,439 thousand (half year 2013:EUR 2,466 thousand) for properties classified as long-term assets held for sale.

Personnel expenses developed as follows:

01/01/2014 –30/06/2014

01/01/2013 –30/06/2013

EUR ’000Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,839 6,636Social security contributions and cost of old age pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,041 1,261Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 778 628Severance packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6,855

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,658 15,380

The Company initiated significant restructuring measures in the beginning of 2013. Over the course of the year, theactivities carried out by branch offices were integrated with the central office, thus concentrating operating activities there.Additionally, the workforce was streamlined. This streamlining goes hand-in-hand with the strategic objectives of theproperty portfolio.

TLG IMMOBILIEN is conscious of its social responsibility and on 7 March 2013 adopted measures for areconciliation of interests on the basis of the social plan dated 1 November 2011. In this context, the Company has incurredexpenses relating to severance packages.

The decrease in expenses for salaries and social security contributions was attributable primarily to the decline inthe employee headcount in connection with the restructuring measures.

The interest result can be broken down as follows:

01/01/2014 –30/06/2014

01/01/2013 –30/06/2013

EUR ’000Interest income from bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (199) (195)Interest income from default interest and deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (174) (161)Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (3)

Total interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (379) (359)

Interest expenses for interest rate derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,140 3,734Interest on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,816 14,177Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,138 177

Total interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,094 18,088

Interest result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,715 17,729

Despite the overall increase in liabilities due to financial institutions, the decrease in interest on loans was due to theoptimisation of the Group’s financing structure. Moreover, in the previous year a loan liability taken over by the shareholdersincreased liabilities. That loan was repaid in March 2014.

The interest expense for interest rate hedges was lower, particularly due to the fact that in March 2014 existinginterest rate hedges were unwound and then replaced by hedges at more favourable conditions.

The tax expense/income can be broken down as follows:

01/01/2014 –30/06/2014

01/01/2013 –30/06/2013

EUR ’000Current income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,469 16,450Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,348 5,541

Tax expense/income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,817 21,991

Prior-period income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2

F-12

10. Additional disclosures relating to financial instruments

The table below presents the carrying amounts and fair values of financial instruments by class and measurementcategory:

30/06/2014

Measurementcategory inaccordancewith IAS 39

Measured atamortised cost

Measuredat fairvalue

Nomeasurement

category inaccordancewith IAS 39

No financialinstruments

in accordancewith IAS 32

Total itemsin statementof financial

positionCarryingamount

Fairvalue

Carryingamount

Carryingamount

Carryingamount

Carryingamount

EUR ’000Other non-current financial

assets . . . . . . . . . . . . . . . . . AfS 124 n/a 124Trade receivables . . . . . . . . . LaR 13,665 13,665 13,665Other non-current financial

assets . . . . . . . . . . . . . . . . . LaR 3,157 3,157 3,157Financial derivatives1) . . . . . . FAHfT 0 0Cash and cash equivalents . . . LaR 24,540 24,540 24,540

Total financial assets . . . . . . 41,486 41,361 0 0 0 41,486

Liabilities due to financialinstitutions2) . . . . . . . . . . . . FLaC 727,949 768,078 727,949

Trade payables . . . . . . . . . . . FLaC 12,188 12,188 12,188Financial derivatives1) . . . . . . FLHfT 0 8,744 8,744Other liabilities . . . . . . . . . . . FLaC 12,857 5,466 7,391 12,857

Total financial liabilities . . . 752,993 785,731 0 8,744 7,391 761,737

Categorisation of underlying inputs for fair value measurement in accordance with IFRS 13.93(b) and IFRS 13.97:1) Derivatives: Level 2 within the fair value hierarchy (measured on the basis of observable inputs/market data).2) Liabilities to banks: Level 2 within the fair value hierarchy (measured on the basis of observable inputs/market data).

31/12/2013




Nomeasurement






Fairvalue

Carryingamount

Carryingamount

Carryingamount

Carryingamount

EUR ’000Other financial assets . . . . . . AfS 124 n/a 124Trade receivables . . . . . . . . . LaR 11,567 11,567 11,567Other financial assets . . . . . . LaR 4,953 4,953 4,953Financial derivatives1) . . . . . . FAHfT 15 15Cash and cash equivalents . . . LaR 138,930 138,930 138,930

Total financial assets . . . . . . 155,574 155,449 15 0 0 155,589

Liabilities due to financialinstitutions2) . . . . . . . . . . . . FLaC 626,227 640,477 626,227

Trade payables . . . . . . . . . . . FLaC 14,573 14,573 14,573Financial derivatives1) . . . . . . FLHfT 18,608 180 18,788Other liabilities . . . . . . . . . . . FLaC 19,520 11,983 7,537 19,520

Total financial liabilities . . . 660,321 667,033 18,608 180 7,537 679,109


LaR = Loans and ReceivablesHfT = Held for TradingAfS = Available for SaleFLaC = Financial Liabilities at CostFAHfT = Financial Assets Held for TradingFLHfT = Financial Liabilities Held for Trading

F-13

The “Other financial assets” class includes AfS financial instruments amounting to EUR 124 thousand(31 December 2013: EUR 124 thousand). These are shares in entities which are not fully consolidated or measured inaccordance with the equity method. The instruments are carried at amortised cost since there is no quoted price available forthem on an active market and it is not possible to reliably determine their fair value.

The carrying amounts of cash and cash equivalents, trade and other receivables, other financial assets, trade andother payables and other liabilities for the most part have short remaining terms and approximated the fair values as at thereporting date.

11. Related parties

Related parties are defined as companies or persons which have the ability to control or exercise a materialinfluence over the TLG Group, or which the TLG Group controls or exercises a material influence over.

Accordingly, the members and immediate relatives of the management and Advisory Board of TLG IMMOBILIENGmbH are considered related parties, as are members of management who exercise key executive functions, as well as theTLG Group’s subsidiaries and joint ventures.

In addition, LSREF II EAST ACQUICO S.à r.l. and Delpheast Beteiligungs GmbH & Co. KG and their relatedparties are considered related parties of TLG.

Related companies

In the first half of 2014, TLG distributed EUR 158,547 thousand from capital reserves, EUR 843 thousand fromrevenue reserves and EUR 73,610 thousand from retained earnings to shareholders.

Receivables from and liabilities to related companies in the first half of 2014 amounted to:

30/06/2014 30/12/2013EUR ’000

Statement of financial position and statement of comprehensive incomeLiabilities to other related companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 87

In the first half of 2014, income and expenses from related companies amounted to:

01/01/2014 –30/06/2014

01/01/2013 –30/06/2013

EUR ’000Statement of comprehensive incomeExpenses for other related companies (interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 215Expenses for other related companies (guarantee commissions) . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 0

Related persons

On 11 April 2014, the management of TLG IMMOBILIEN GmbH entered into a bilateral bonus agreement with thedirect shareholders of the Company. Under the agreement, any future realised appreciation in the value of the Company willbe passed on to the beneficiaries in the form of a cash bonus payment.

The amount of the bonus to be paid will be determined on the basis of a reference value which is designed to reflectthe appreciation of shareholders’ invested equity over the term of their investment. The reference value is determined as thetotal of distributions to the shareholders less contributions made by the shareholders into the investment. The bonus paymentis based on a percentage of the reference value, linked to a 0.4% cap.

The bonus payment by the shareholders falls due if several cumulative requirements have been meet.

• Occurrence of an exit or partial exit event: neither the direct shareholders nor their associates continue to hold adirect or indirect interest in TLG IMMOBILIEN GmbH or the amount of their interest falls below the total oftheir current interest.

• Distributions must exceed contributions paid by the shareholders by more than 50%.

• At the (partial) exit date, the managing directors of TLG IMMOBILIEN GmbH must continue to be regularlyemployed by the Company.

F-14

The incentive programme stipulates a direct payment from the shareholders to the managing directors. The TLGGroup is not obligated to make these payments. The bonus programme described is therefore accounted for analogously toshare-based payments granted to the management of TLG IMMOBILIEN GmbH in accordance with IFRS 2. This is offset byan additional contribution by the shareholders into capital reserves.

Based on the assessment of the management of TLG IMMOBILIEN GmbH as to the likelihood of theaforementioned conditions being satisfied, a bonus payment can be considered likely. The bonus will vest over a total of18 months after the agreement of the bonus arrangement.

As at 30 June 2014, TLG IMMOBILIEN GmbH recognised EUR 795 thousand as an expense in accordance withthe provisions of IFRS 2.

An expense of EUR 2,217 thousand is expected for the remaining vesting period.

12. Contingent liabilities

There has been no change in contingent liabilities as compared to 31 December 2013.

13. Executive Board and Advisory Board

As at 30 June 2014, the composition of the Executive and Advisory Board has not changed since 31 December2013.

14. Events after the reporting date

In July 2014, TLG had a purchase agreement notarised relating to a property with a volume ofEUR 21,500 thousand. The transfer of benefits and risks of ownership is planned for September 2014.

Berlin, 29 August 2014

The Management

[Signed]

F-15

TLG Immobilien GmbH, Berlin, Germany: Audited Consolidated Financial Statements(Prepared in Accordance with IFRS) of TLG Immobilien GmbH as of and for the Fiscal

Year Ended December 31, 2013

F-16

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Reference 31/12/2013 31/12/2012 01/01/2012TEUR TEUR TEUR

A) Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,448,127 1,615,158 1,480,514Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.1 1,414,691 1,511,726 1,374,231Advance payments on investment property . . . . . . . . . . . . . . . . . . . . . . F.1 2,707 3,016 5,325Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.2 17,762 18,442 21,617Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.2 872 1,466 1,901Investment in joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.3 0 69,077 59,377Other non-current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.4 124 128 132Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.6 8,423 6,850 5,390Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.14 3,548 4,453 12,540

B) Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,568 104,213 638,270Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.7 13,385 22,260 72,742Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.5 11,567 9,578 19,065Receivables from income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.14 194 167 263Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I.1 15 6 49Other current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.4 4,953 10,042 9,497Receivables and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.6 707 1,633 1,037Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.8 138,930 60,527 33,590Assets classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.9 17,817 0 502,027

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,635,695 1,719,371 2,118,784

A) Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.10 801,036 1,006,734 1,158,572Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000 52,000 52,000Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,249 151,461 360,316Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339,939 804,278 746,254Other comprehensive income (OCI) . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,152 -1,005 0Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2

B) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834,659 712,637 960,212I.) Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630,245 508,592 480,148

Non-current liabilities due to financial institutions . . . . . . . . . . . . F.11 513,002 392,865 407,267Pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.12 6,931 6,888 5,377Non-current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . I.1 18,788 25,272 33,523Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.15 3,384 4,266 5,149Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.14 88,140 79,300 28,832

II.) Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204,414 204,045 480,064Current liabilities due to financial institutions . . . . . . . . . . . . . . . . F.11 113,225 87,176 16,793Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.15 14,573 29,818 19,727Payables due to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.15 0 0 53,748Other current provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.13 16,193 22,162 27,682Tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,287 12,678 15,901Current financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I.1 0 18,158 0Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.15 16,136 34,051 41,435Liabilities included in disposal groups classified as held for

sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.9 0 0 304,779

Total equity and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,635,695 1,719,371 2,118,784

F-17

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Reference 2013 2012EUR’000 EUR’000

Net operating income from letting activites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.1 106,250 97,142Income from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,326 138,771a) Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,321 116,093b) Income from recharged utilities and other operating costs . . . . . . . . . . . . . . . . . . . . 21,637 20,670c) Income from other goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,368 2,008Expenses related to letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,076 41,629d) Utilities and other operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,638 28,612e) Maintenance expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,052 5,283f) Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,386 7,734

Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . . . . G.2 72,237 53,061Result from the disposal of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494 -45Result from the disposal of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,777 27,395a) Proceeds from real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,391 77,549b) Book value of real estate inventory disposed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,614 50,154Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.3 18,687 9,691Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.4 23,394 18,948Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.5 1,461 1,573Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.6 7,812 8,290

Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,778 158,433

Income from joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.7 2,134 12,883Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.8 652 893Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.8 36,039 22,481Gain (-)/loss from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.9 -6,899 9,951

Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,423 139,776

Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.10 47,291 63,512

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,132 76,264

Other comprehensive income (OCI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.10thereof non-recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Actuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23 -1,005thereof recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Hedge accounting reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -124 0

Total comprehensive income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,985 75,259

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F-19


Reference 2013 2012EUR ’000 EUR ’000

1. Cash flow from operating activitiesEarnings before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,423 139,776Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.5 1,461 1,573Result from the remeasurement of investment property . . . . . . . . . . . . . . . . . . . . . . . . G.2 -72,237 -53,061Result from the remeasurement of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.9 -6,899 9,950Increase/decrease (–) in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.13 -5,959 -5,463Change in the scope of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 9,300Other non-cash expenses/income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 0Results from measurement of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.7 0 -10,556Results of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.7 -2,134 -2,331Gain (–)/loss on disposal of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . 144 40Increase (–)/decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.7 8,875 44,458Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.8 -652 -893Financial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.8 36,039 22,481Increase (–)/decrease in trade receivables and other assets . . . . . . . . . . . . . . . . . . . . . F.5 4,463 4,111Increase/decrease (–) in trade payables and other liabilities . . . . . . . . . . . . . . . . . . . . . F.15 -33,447 3,564

Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,079 162,949

Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 650 858Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -57,019 -21,747Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5,871 -7,728

Net cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,839 134,332

2. Cash flow from investing activitiesCash received from disposals of investment property . . . . . . . . . . . . . . . . . . . . . . . . . 191,651 779Cash received from disposals of property, plant and equipment . . . . . . . . . . . . . . . . . 20 5Cash paid for acquisitions of investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41,496 -82,048Cash paid for acquisitions of property, plant and equipment . . . . . . . . . . . . . . . . . . . . -304 -555Cash paid for investments in intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -193 -321Cash received from disposals of joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,214 3,187

Net cash flow from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,892 -78,953

3. Cash flow from financing activitiesCash received from equity contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.10 20,493 0Cash distribution to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 -83,748Cash received from bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.11 252,511 71,200Repayments of bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -429,333 -15,893

Net cash flow from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -156,328 -28,442

4. Cash and cash equivalents at end of periodChange in cash and cash equivalents (subtotal of 1 to 3) . . . . . . . . . . . . . . . . . . . . . . . 78,403 26,937Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,527 33,590

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,930 60,527

5. Composition of cash and cash equivalentsCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,930 60,527

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,930 60,527

F-20

NOTES

A. GENERAL DISCLOSURES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF TLG IMMOBILIENGMBH

1. Company information

The consolidated financial statements prepared for the 2013 financial year are based on the annual financialstatements of TLG IMMOBILIEN GmbH, Berlin (TLG IMMOBILIEN or the Parent Company), a limited liability companylocated in Germany with headquarters in 10117 Berlin, Hausvogteiplatz 12, entered in the commercial register of Berlin underHRB no. 38419 B, and its fully consolidated subsidiaries. The consolidated financial statements were prepared by themanagement until 28 August 2014 and will be presented shortly to the shareholders for approval.

Due to the size relationships between the consolidated companies and the Parent Company, the consolidatedfinancial statements prepared are influenced primarily by the Parent Company.

TLG IMMOBILIEN GmbH was wholly owned by the Federal Republic of Germany until 31 December 2012.Pursuant to the agreement dated 19 December 2012, the Federal Republic of Germany sold its 100% interest in the ParentCompany. Buyers were LSREF II East AcquiCo S.à.r.l., Luxembourg, with a share of 94.9% and Delpheast BeteiligungsGmbH & Co. KG, Frankfurt a.M., with a share of 5.1%. The benefits and risks of ownership were transferred in accordancewith the contractual provisions on 31 December 2012.

Since 31 December 2012, its new parent company is LSREF II East AcquiCo S.à.r.l., Luxembourg. Its ultimateparent company is LSREF II East Lux GP S.à.r.l., Luxembourg. TLG IMMOBILIEN entered into a control agreement on2 January 2013 with LSREF II East AcquiCo S.à.r.l., Luxembourg.

The main activities of the Parent Company and its subsidiaries are the commercial exploitation, management,development and acquisition of land and buildings.

2. Group accounting principles

The consolidated financial statements of the TLG Group were prepared in accordance with International FinancialReporting Standards (IFRS) adopted and published by the International Accounting Standards Board (IASB), as adopted bythe European Union. The consolidated financial statements were prepared in accordance with the provisions of Regulation(EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 concerning the application ofinternational accounting standards in conjunction with section 315a (3) of the German Commercial Code (Handelsgesetzbuch,“HGB”), taking into account the supplementary commercial regulations.

The consolidated financial statements comprise the consolidated statement of financial position, the consolidatedstatement of comprehensive income, the consolidated statement of changes in equity, the consolidated cash flow statementand the notes to the consolidated financial statements. The individual items are explained in the notes.

The consolidated financial statements have been prepared in euros.

Unless otherwise stated, all amounts are rounded to thousands of euros. Due to rounding, the figures reported intables and cross-references may deviate from their exact values as calculated.

The financial year of TLG IMMOBILIEN GmbH and the consolidated subsidiaries is the calendar year. Thefinancial statements of the subsidiaries are included in the consolidated financial statements using uniform accounting policiesand prepared as at the same reporting date as the financial statements of the Parent Company.

Preparation of the consolidated financial statements is always on the basis of recognition of assets and liabilities atamortised cost. The exceptions to this are investment property, securities held for sale and financial instruments recognised atfair value on the reporting date.

The consolidated financial statements and Group management report are published in the German Federal Gazette.

B. FIRST-TIME ADOPTION OF IFRS

1. Simplification rules and exemptions

IFRS 1 “First-time adoption of International Financial Reporting Standards” was used for the preparation of the firstIFRS financial statements. The opening IFRS statement of financial position was prepared as at 1 January 2012. For this, allassets and liabilities were stated in accordance with the IFRS rules as at 31 December 2013. All changes resulting fromconverting the accounts were offset directly against retained earnings in the opening IFRS statement of financial position.

F-21

The TLG Group uses the following simplification options under IFRS 1:

• Under IFRS 1.D5 - D7, owner-occupied property is measured using the deemed cost method as at 1 January2012. The fair value of the property as at 1 January 2012 is recognised as the deemed cost.

• In accordance with IFRS 1.B10, government loans are recognised at the carrying amount as at 1 January 2012,reported under the accounting method used previously (HGB).

2. Reconciliation of consolidated total comprehensive income and consolidated equity from HGB to IFRS

TLG IMMOBILIEN GmbH prepared the consolidated financial statements in accordance with commercial lawprovisions for the last time for the 2012 financial year. In this respect, the effects of the first-time adoption of IFRS to TLGGroup equity on 1 January 2012, and on 31 December 2012, and to the consolidated net income for the 2012 financial yearare shown below.

Changes to total comprehensive income result from the following effects:

2012EUR ’000

Net income for the period in accordance with HGB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,526

Differences increasing (decreasing) the result:Recognition of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (82)Fair value recognition of investment property and owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . . . 95,324Recognition of deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59,004)Adjustments to pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (282)Adjustment to other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383Adjustment to the carrying amount of the investment in AGD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,556Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,367Correction for effect of deconsolidation based on exercise of option afforded under HGB . . . . . . . . . . . . . . . 17,678Other effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,798

Net income for the period in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,264

Change due to amounts taken directly to equity:Cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —Actuarial gains/losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,005)

Total comprehensive income in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,259

The changes in consolidated equity on the reporting dates result from the following effects:

31/12/2012 01/01/2012EUR ’000

Consolidated equity in accordance with HGB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805,250 962,718

Differences increasing (decreasing) the Group equity:Recognition of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 151Recognition of investment property and owner-occupied properties at fair value . . . . . . . . . . . . 255,943 198,128Recognition of deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (74,848) (16,292)Adjustments to pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1,740Adjustment to other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,820 1,437Negative consolidation difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,029 7,936Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,920) (43,452)Offsetting special reserve TLG Wohnen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 22,173Adjustment to the value of the investment in AGD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,659 25,103Other effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,729 (1,071)

Consolidated equity in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,006,734 1,158,571

The main differences in the accounting policies under HGB and IFRS affect the following matters in particular:

• Under IAS 39.43, loans made available to the TLG Group for financing must be recognised at fair value on thedate the loans were granted, which is equivalent to the present value of future payment obligations on the basisof a corresponding market interest rate including transaction costs and discounts. The loans are measured atamortised cost for subsequent measurement. In accordance with HGB, the loans are recognised in theirrepayment amount. Any material transaction costs or discounts were capitalised and reversed over the fixed-interest periods of the respective loans. Transaction costs or discounts not considered material were expensedimmediately.

F-22

• Property held for generating rental income or for capital appreciation is classified as investment property inaccordance with IAS 40 and recognised at fair value in the TLG Group in accordance with the option set forthin IAS 40. Such property is recognised at amortised cost in the HGB consolidated financial statements. Pleaserefer to section E.1 for more detailed information. The owner-occupied properties in property, plant, andequipment were also remeasured once on the date of first-time adoption of IFRSs due to the fact that the optionpursuant to IFRS 1.D.5-D.7 was exercised. This resulted in a fair value of EUR 19,526 thousand beingrecognised. Remeasurement effects on equity amounted to EUR 5,696 thousand.

• The differences between the carrying amounts in accordance with HGB as compared with the IFRS figures, inparticular for investment property, resulted in the recognition of deferred tax liabilities. In addition, inpreparing its consolidated financial statements in accordance with HGB, the TLG Group exercised the optionset forth under section 274 (1) HGB to not recognise deferred tax assets; this option does not exist underIFRSs.

• Pension provisions were recognised at the settlement amount in the HGB consolidated financial statements.The average interest rate of the last seven years—set by the Deutsche Bundesbank—is always used to discountpension provisions. Pursuant to IFRS, an interest rate for high-quality corporate bonds is to be used fordiscounting pension provisions.

• Under IAS 37, reserves are only recognised if an external obligation exists, its occurrence is probable and theamount can be reliably determined. In such cases, the most probable amount is recognised. By contrast,provisions in the HGB consolidated financial statements were recognised in accordance with prudent businessjudgement. In addition, there were reconciliation effects resulting from provisions for maintenance expensesunder HGB not being recognised. Additional effects arose from the fact that provisions were discounted underIFRSs using the risk-free interest rate, while discounting under HGB uses the average interest rate of the lastseven years which is set by the Deutsche Bundesbank.

• A negative consolidation difference (negative goodwill) resulted from the purchase price allocation frombusiness combinations which was recognised as a liability under commercial law and expensed over theremaining useful life of the asset acquired. The negative goodwill does not meet the criteria for recognitionunder IFRS and will be recorded under retained earnings.

• In accordance with IAS 39, derivatives are recognised as a liability or as an asset in the statement of financialposition and measured at fair value. Under HGB, only provisions for expected losses in the amount of thenegative market value were recognised for derivatives, to the extent no hedge accounting was applied.Derivatives constituting a hedge relationship were not recognised. In most cases, TLG applied hedgeaccounting for derivatives under HGB while this was not done under IFRSs as at the opening statement offinancial position date.

• The special reserve for investment grants and subsidies, recognised in accordance with HGB to account for theresidential properties to be spun off from TLG IMMOBILIEN (see also section F.9), does not constitute aliability due to the absence of existing commitments to third parties and was therefore eliminated from theIFRS opening statement of financial position; this effectively increased equity by EUR 22,173 thousand.

• The carrying amount of the investment in Altmarktgalerie Dresden KG, Hamburg (AGD), under the equitymethod was adjusted to the extent that uniform IFRS accounting policies were applied, impacting the valuationof properties, in particular. The recognition of deferred taxes resulted in offsetting effects.

• In its HGB consolidated financial statements for previous years, the Company applied capital consolidation inaccordance with the provisions of German commercial law, and exercised the options set forth under sections301 and 309 HGB. Under those provisions, any goodwill arising upon the first-time inclusion of the subsidiaryin the consolidated financial statements was offset outside of profit or loss against retained earnings. Theamount of goodwill originally offset was added back to determine any disposal gains under local GAAP upondeconsolidation (see also section D.2). By contrast, in the consolidated financial statements in accordance withIFRSs, disposal gains under local GAAP upon deconsolidation are determined exclusively as the differencebetween the Group’s share in the subsidiary’s net assets at disposal and selling price less the costs to sell.Accordingly, comprehensive income in accordance with IFRSs was EUR 17,678 thousand greater in financialyear 2012. This did not result in any effects on equity.

F-23

3. Reconciliation of consolidated statement of cash flows from HGB to IFRS

2012HGB CFS Reconciliation Explanation

2012IFRS CFS

EUR ’000Cash inflow (outflow) from operating activities . . . . . . . . . . . . . . . . . . 142,422 -8,090 b) 134,332Cash inflow (outflow) from investing activities . . . . . . . . . . . . . . . . . . -86,591 7,638 b) -78,953Cash inflow (outflow) from financing activities . . . . . . . . . . . . . . . . . . -28,441 0 — -28,441Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . 27,390 -452 26,938Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . 42,543 -8,953 a) 33,590Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . 69,933 -9,405 a) 60,528

The material changes resulted from the following items:

a) In the HGB consolidated financial statements, restricted funds were reported as a part of cash, while underIFRSs, they are now reported as a component of other current financial assets (EUR 8,953 thousand).

b) Due to the fact that recognition requirements differ between HGB and IFRSs, a portion of themodernisation measures reported under HGB as maintenance expenses may be capitalised under IFRSs.These capitalised modernisation measures are presented under IFRSs as cash outflows from investingactivities, while under HGB they are reported under cash flow from operating activities. Thereclassification of properties accounted for as property, plant and equipment (“tangible fixed assets”)under HGB as inventories under IFRSs offset this effect. Payments for investments in these properties areno longer presented as outflows from investing activities under IFRSs, but rather represent a componentof outflows from operating activities.

C. NEW ACCOUNTING STANDARDS

1. Published but not yet mandatory International Financial Reporting Standards (IFRSs) and Interpretations(IFRICs)

Standard/Interpretation ContentsApplicable for

financial years beginning

IAS 16, IAS 38 “Amendment to IAS 16 and IAS 38: Acceptable methods ofdepreciation and amortisation”

1 January 2016 (not yetendorsed)

IAS 16, IAS 41 “Amendment to IAS 16 and IAS 41: Bearer plants” 1 January 2016 (not yetendorsed)

IAS 19 “IAS 19 Amendment: Employee Contributions to Defined BenefitPlans”

1 July 2014 (not yetendorsed)

IAS 27 “Separate Financial Statements (as amended in May 2011)” 1 January 2014IAS 28 “Investments in Associates and Joint Ventures (as amended in

May 2011)”1 January 2014

IAS 32 “IAS 32 Amendment, Financial Instruments: Presentation: OffsettingFinancial Assets and Financial Liabilities”

1 January 2014

IAS 36 “IAS 36 Amendment: Recoverable Amount Disclosures for Non-Financial Assets”

1 January 2014

IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” 1 January 2014IFRS 10 “Consolidated Financial Statements” 1 January 2014IFRS 11 “Joint Arrangements” 1 January 2014IFRS 11 “IFRS 11 Amendment: Accounting for acquisitions of interests in

joint operations”1 January 2016 (not yetendorsed)

IFRS 12 “Disclosure of Interests in Other Entities” 1 January 2014IFRS 10, 11 and 12 “Amendment of Transitional Provisions of IFRS 10, IFRS 11 and

IFRS 12 (June 2012)”1 January 2014

IAS 27, IFRS 10, IFRS 12 “Amendment of IFRS 10, Consolidated Financial Statements,IFRS 12, Disclosure of Interests in Other Entities, and IAS 27,Separate Financial Statements—Investment Entities”

1 January 2014

IFRS 9 Financial Instruments: Classification and Measurement: FinancialAssets (November 2009), Financial Liabilities (October 2010),Financial Instruments: Hedge Accounting, amendment of IFRS 7 andIFRS 9: Mandatory application date and transition information

No earlier than1 January 2018 (not yetendorsed)

IFRS 14 Regulatory Deferral Accounts 1 January 2016 (not yetendorsed)

IFRS 15 “Revenue from Contracts with Customers” 1 January 2017 (not yetendorsed)

IFRIC 21 Disclosures 17 June 2014Annual Improvements “Improvements to International Financial Reporting Standards, Cycle

2010-2012 (December 2013)”1 July 2014 (not yetendorsed)

Annual Improvements “Improvements to International Financial Reporting Standards, Cycle2011-2013 (December 2013)”

1 July 2014 (not yetendorsed)

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• The amendments to IAS 16 and IAS 38 published in May 2014 clarify in particular that a depreciation methodthat is based on revenue generated by an activity that includes the use of an asset is not appropriate. This alsogenerally applies to amortisation, albeit in these cases as a rebuttable presumption. In addition, it is alsoclarified that a decline in the selling price of goods and services can serve as an indication for their economicobsolescence, thus indicating a decrease in the economic potential for use of the assets needed in theirproduction. This is currently not expected to impact TLG.

• The amendments to IAS 16 and IAS 41, relating to the accounting treatment of bearer plants, clarify that thoseplants which are used in the production or supply of agricultural produce—analogously to internally generatedproperty, plant and equipment—are to be initially recognised at cost, and subsequently accounted for either atcost or their lower fair value in accordance with the provisions of IAS 16. This is currently not expected toimpact TLG.

• The amendment of IAS 19 in November 2013 provided clarification of IAS 19.93 with respect to the treatmentof employee benefits for defined benefit plans. These changes are not expected to impact the pensionobligations of TLG.

• The new IAS 27 was amended so that it now only governs accounting for separate financial statements. This iscurrently not expected to impact TLG.

• The new IAS 28 “Investments in Associates and Joint Ventures” addresses the accounting for shares inassociates and joint ventures. The standard is to be applied by all companies with joint control or significantinfluence over an investee. This is currently not expected to impact TLG.

• The amendment of IAS 32 clarifies the requirements for offsetting financial instruments. In particular, ithighlights the significance of the current legal right to offset. This is currently not expected to impact TLG.

• The amendment of IAS 36 aimed to clarify the disclosures in the notes with respect to the measurement of arecoverable amount of an impaired asset. This is currently not expected to impact TLG.

• The amendment of IAS 39 permits the continuation of hedge accounting after novation of an over-the-counter(OTC) derivative as a hedging instrument. This is currently not expected to impact TLG.

• IFRS 10 “Consolidated Financial Statements” focuses in particular on the possibility of de facto control inconsolidation issues. The principle of control is defined and set as a basis for consolidation. This definition issupported by comprehensive application guidance demonstrating the various ways a reporting entity canexercise control over another entity. The accounting requirements are presented. This is not expected to resultin any changes to the scope of consolidation at TLG.

• IFRS 11, published by the IASB in May 2011, replaces IAS 31 and SIC-13. This is currently not expected toimpact TLG.

• IFRS 12 “Disclosure of Interests in Other Entities” stipulates the disclosures required in the notes for interestsin other entities with respect to risk and significance on the net assets, financial position and results ofoperations. Additional disclosures in the notes are anticipated to result for TLG.

• The amendment to IFRS 11 published in May 2014 clarifies that both the first-time and the subsequentacquisition of shares in a joint operation, which represents an operating unit, must be accounted for inaccordance with the provisions governing the accounting for business combinations in IFRS 3 and otherrelevant standards, unless these contradict the provisions of IFRS 11. It is furthermore clarified that sharesalready held in a joint operation shall not be remeasured in the case of the acquisition of additional shares ifjoint control is maintained. This is currently not expected to impact TLG.

• The amendments to transitional provisions of IFRS 10, IFRS 11 and IFRS 12 are mainly limited to the figuresfrom the prior year in the event of changes due to the application of the new standards to a comparison year.This is currently not expected to impact TLG.

• The IASB issued the revised IAS 27 in May 2011. With the publication of IFRS 10 and IFRS 12, the scope ofapplication for IAS 27 was limited to accounting for investments in subsidiaries, associates and joint venturesin the separate financial statements of an entity. This is currently not expected to impact TLG.

• IFRS 9 redefines the classification and measurement of financial assets. There will only be two measurementcategories (amortised cost and fair value). The part added in October 2010 governs the classification andmeasurement of financial liabilities. Mainly the existing requirements of IAS 39 were taken over. There is achange for financial liabilities measured at fair value. The amendments adopted in November 2013 relate to theinclusion of a new general model for hedge accounting, which expands the scope of possible hedge and

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underlying transactions and introduces new regulations for the measurement of effectiveness. The date ofinitial application is expected to be 1 January 2018 at the earliest. The application of IFRS 9 is expected toaffect accounting for financial instruments in the TLG Group.

• Under IFRS 14, an entity adopting IFRS for the first time is permitted, with some restrictions, to continue torecognise regulatory deferral accounts which it initially presented in its financial statements prepared under itsprevious GAAP accounting policies. This applies both to the first-time IFRS financial statements as well assubsequent financial statements. Regulatory deferral accounts and changes in them must be disclosedseparately in the statement of financial position and in profit or loss or in other comprehensive income. Inaddition, certain disclosures are required. This is currently not expected to impact TLG.

• IFRS 15 “Revenue from Contracts with Customers” specifies when and in what amount an IFRS reporter willrecognise future revenue from contracts with customers. The core principle of the standard is that an entity willrecognise revenue to depict the transfer of promised goods or services to customers in an amount that reflectsthe consideration to which the entity expects to be entitled in exchange for those goods or services. This coreprinciple is delivered in a five-step model framework. Under that framework, the contract(s) with a customerare identified as well as the individual performance obligations in the contract. The transaction price is thendetermined, representing the consideration expected by the entity for its services. The transaction price is thenallocated to the performance obligations in the contract. Finally, the entity recognises revenue when (or as) itsatisfies its performance obligations. The TLG Group is currently still analysing the potential impacts onrevenue recognition arising from the application of IFRS 15.

• The interpretation of IFRIC 21 published in May 2013 clarifies at which time an entity recognises a liability fora levy imposed by a government. This is currently not expected to impact TLG.

• In December 2012, the IASB published “Annual Improvements to IFRS 2010-2012 Cycle”. They represent thefifth collection of amendments to six existing IFRS standards. This is currently not expected to impact TLG.

• In December 2013, the IASB published “Annual Improvements to IFRS 2011-2013 Cycle”. They represent thesixth collection of amendments to four existing IFRS standards. This is currently not expected to impact TLG.

D. CONSOLIDATION PRINCIPLES

1. Consolidation methods

Subsidiaries

The consolidated financial statements of the TLG Group include TLG IMMOBILIEN GmbH and all materialsubsidiaries over which TLG IMMOBILIEN GmbH has direct or indirect control of their financial and operating policies.Subsidiaries are included for the first time from the date on which TLG IMMOBILIEN GmbH gains control. Control of thesubsidiaries is based on TLG IMMOBILIEN GmbH directly or indirectly holding the majority of voting rights.Deconsolidation occurs as soon as control is no longer held by TLG.

The financial statements of the subsidiaries are included using uniform accounting policies and prepared as at thesame reporting date as the financial statements of TLG IMMOBILIEN GmbH.

Capital consolidation is accomplished using the purchase method under which the acquisition cost is offset againstthe pro rata equity on the acquisition date. Using the purchase method, the equity of the acquired subsidiaries is determined ontheir acquisition date by taking into account the fair value of the identifiable assets, liabilities and contingent liabilities,deferred taxes and any goodwill on this date.

Non-controlling interests represent the portion of the net result and net assets not attributable to the shareholders ofTLG IMMOBILIEN GmbH. Non-controlling interests are shown separately in the consolidated statement of comprehensiveincome and in the consolidated statement of financial position. They are reported under equity in the consolidated statementof financial position, separately from the equity attributable to the shareholders of the Parent Company.

All intercompany receivables and liabilities, income and expenses, and profit and loss from intercompanytransactions are eliminated.

Associates and joint ventures

Associates are investments in which the TLG Group can exercise significant influence over the financial andoperating policies. The significant influence is regularly based on TLG IMMOBILIEN GmbH directly or indirectly holding20 to 50 percent of the voting rights in the company which thus qualifies as an associate. At the reporting date, no associateswere included in the TLG Group’s consolidated financial statements. Joint ventures are entities directly or indirectly managedby the TLG Group jointly with another party.

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Joint ventures are included in accordance with the equity method. Otherwise, they are measured in accordance withIFRS 5 if the shares are classified as held for sale.

Under equity valuation, the shares in joint ventures are initially carried in the consolidated financial statements atacquisition cost adjusted by the Group’s share in the changes in net assets of the joint venture and by any impairment lossesfrom potential decreases in value.

TLG IMMOBILIEN GmbH included a joint venture, Altmarktgalerie Dresden KG, in its consolidated financialstatements until it was disposed of in financial year 2013. Furthermore, two joint ventures were measured at fair value or, ifthis cannot be reliably measured for equity instruments that do not have a quoted price, at acquisition cost due to their minorimportance for the Group’s net assets, financial position and results of operations and reported under other non-currentfinancial assets.

Please refer to section I.7 for the list of shareholdings.

2. Changes to the Group

Number of consolidated subsidiaries 2013 2012

As at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2As at 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4

Number of joint ventures accounted for using the equity method 2013 2012

As at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 —As at 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1

The liquidation and, by the date the consolidated financial statements were prepared, deletion from the commercialregister of TLG Technologiepark Ilmenau GmbH i. L., Ilmenau, previously included in the scope of consolidation, and thesale of TLG Gewerbepark Simson GmbH, Suhl, took place in the 2012 financial year.

Accordingly, the aforementioned companies were deconsolidated in the 2012 financial year.

Please refer to section I.7 for the list of shareholdings.

E. EXPLANATION OF ACCOUNTING POLICIES

1. Investment property

Under investment property, TLG reports the properties that are held to generate rental income or for capitalappreciation and not held for own use or sale in the ordinary course of business.

In individual instances, TLG has properties that are partially owner occupied and partially for use by third parties,i.e., rented. These mixed-use properties are reported separately provided that a legal option exists for dividing thecorresponding property and that neither the part occupied by the company nor the part occupied by a third party is immaterial.

If a change in use occurs which is documented by the start of owner occupancy or the start of development with theintent to sell, properties are transferred out of the inventory of investment property.

Investment property is recognised at cost as at the date of acquisition. After recognition, the properties arerecognised at fair value in accordance with the option provided for in IAS 40 in conjunction with IFRS 13. In accordance withIFRS 13.9, fair value is defined as the price that would be received for the sale of an asset or paid for transferring a liability inan orderly transaction between market participants at the measurement date. Fair value always assumes the sale of an asset(exit price). It corresponds (theoretically) to the price to be paid to the seller in the event of a (hypothetical) sale of a propertyon the measurement date, regardless of a company-specific intent or the ability to sell the asset.

Fair value is calculated on the basis of the highest and best use of the property (IFRS 13.27 et seq.). This impliesmaximizing the use and value of the property if this is physically possible, legally permissible and financially feasible.

All fair value changes of the investment property are recognised in profit or loss for the current period.

Determining fair value for the investment property is based on a real estate appraisal conducted by Savills AdvisoryServices GmbH at the end of 2013/early 2014 for the dates 31 December 2013, 31 December 2012 and 1 January 2012.

Project development is recognised as investment property at fair value, to the extent it is possible to reliablydetermine fair value. The fair value of properties is generally determinable at the time construction permits are obtained.

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The market value of the property held for generating rental income or for capital appreciation over the long termwas determined in accordance with international standards by means of the discounted cash flow method (DCF). Using thismethod, the fair value of a property is the sum of discounted cash flows of a planning period of 10 years—consistent withstandard practice—plus the residual value of the property at the end of the planning period discounted to the measurementdate, calculated on the basis of the sustainable cash inflows from letting activities. Properties with negative cash inflows(including permanently vacant properties) were valued using the liquidation method (land value less demolition costs, plusresidual net income, if applicable).

Appraisal of undeveloped land (reported under F.1 asset class “Other”) was conducted using the comparative valueprocedure taking into account standard land values of the local committees for property values. If necessary, the residual valuemethod was applied to verify the plausibility of the land value.

Due to the limited availability of data and measurement parameters directly observable on the market, thecomplexity of real estate appraisal as well as the degree of specificity of the property, fair value measurement of theinvestment property is classified as level 3 under the measurement hierarchy of IFRS 13.86 (Measurement on the basis ofsignificant, unobservable inputs).

In particular, the following material unobservable input factors were used for measurement:

• Future rental income based on the individual property location, type, size and quality, taking into account theterms of existing rental agreements, other contracts or external indicators such as rents customary for themarket for comparable properties;

• Estimations of vacancy rates based on current and expected future market conditions after the expiration ofexisting rental agreements;

• Discount rates for the 10-year planning period reflecting the current market assessment with respect to theuncertainty in terms of the amount and timing of future cash flows;

• Capitalisation rates based on the individual property location, type, size and quality, taking into account themarket information available on the reporting date;

• Residual values, particularly those based on assumptions of future maintenance and reinvestment costs,vacancy rates and rents and growth rates customary for the market.

2. Property, plant and equipment

Property, plant and equipment are capitalised at cost and depreciated using the straight-line method over theexpected economic useful life. Costs are subsequently capitalised if they will increase the value in use of the property, plantand equipment. Like any residual values, useful lives are also reviewed annually and adjusted, if necessary.

Grants received are deducted in determining acquisition cost.

Depreciation is applied consistently throughout the Group over the following useful lives:

Useful lives of property, plant and equipment in years 2013 2012

Owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50-70 50-70Plants and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-13 8-13Other operating and office equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13 3-13

The carrying amounts of property, plant and equipment are assessed for impairment as soon as there are indicatorsthat the carrying amount of an asset exceeds its recoverable amount. An item of property, plant and equipment is eitherderecognised upon disposal or when no future economic benefit is expected from its use or disposal. The gains or lossesresulting from derecognition of the asset are recognised in profit or loss in the consolidated statement of comprehensiveincome.

In accordance with tax regulations on the depreciation of low-value assets introduced in January 2010, low-valueassets up to a net amount of EUR 150 are written off in full in their year of acquisition. Assets between EUR 150.01 andEUR 1,000 net are assigned to pools annually and depreciated over five years using the straight-line method. Deviations fromthe economic useful life are considered immaterial.

3. Intangible assets

Purchased intangible assets are recognised at cost. The purchased intangible assets are software licenses with acertain useful life. The software licenses are amortised using the straight-line method beginning on the date they are providedover an expected economic useful life of three to five years.

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4. Impairment of non-financial assets

The Group conducts impairment testing for intangible assets and property, plant and equipment in accordance withIAS 36 on an annual basis. In doing so, it determines whether there are indications of potential impairment. If such indicationsexist, the recoverable amount is determined for the corresponding asset. This is equivalent to the higher of fair value less coststo sell or value in use.

A market interest rate before taxes is used for discounting. During the financial year, there was no need to conductan impairment test as no triggering events occurred for property, plant and equipment and intangible assets.

Due to its recognition at fair value, investment property is not subjected to impairment testing under IAS 36.

If an asset’s realisable amount is lower than the carrying amount, the carrying amount of the asset is immediatelywritten down by recognising an impairment loss to profit or loss.

5. Other financial assets

Within the Group, financial assets are always recognised on the day of trading. Under IAS 39, affiliates which arenot consolidated for reasons of materiality are classified in the category “Financial assets available for sale” for measurementpurposes. Financial assets available for sale are recognised at the present value on the reporting date or, if present valuecannot be determined reliably, at acquisition cost. Shares in companies not fully consolidated or accounted for using theequity method are not quoted on a stock exchange. The present value of these instruments cannot be determined withsufficient reliability due to the significant fluctuation range and the lack of an active market; as a result, they are recognised atcost.

6. Recognition of lease relationships as lessee

Leased assets over which the TLG Group retains beneficial ownership (finance leases in accordance with IAS 17)are capitalised as an asset at the present value of the lease payments or, if lower, at the leased object’s fair value anddepreciated using the straight-line method. The depreciation period is the shorter of the term of the lease agreement and theeconomic useful life. In cases where the ownership of the asset transfers to TLG at the end of the lease term, the depreciationperiod is equivalent to the economic useful life. A liability is recognised in the amount of the present value of the obligationarising from future lease payments. In subsequent periods, the amount is reduced by the share of principal payment includedin the lease payments.

Lease agreements under which beneficial ownership is not attributable to the TLG Group are classified as operatingleases. The expenses arising from these agreements are recognised through profit or loss at the time the corresponding leasedobject is used.

7. Recognition of lease relationships as lessor

Rental agreements for property are to be classified as operating leases under IAS 17 as the significant risks andrewards of the property remain in the TLG Group.

Income from operating lease agreements is recognised in the consolidated statement of comprehensive incomeunder income from letting activities over the term of the corresponding agreements using the straight line method.

8. Inventories

Inventories include land and buildings available for sale in the course of ordinary business. This may require aperiod longer than twelve months to occur. They are initially recognised at cost. They are measured at the lower of cost andnet realisable value at the reporting date. Net realisable value is the estimated selling price in the ordinary course of businessless the estimated costs of completion and the estimated costs necessary to make the sale.

Please refer to section E.21 for treatment of borrowing costs.

9. Receivables and other assets

Trade and other receivables and other assets are initially recognised at their fair value plus transaction costs.Subsequent measurement is at amortised cost.

Based on experience and individual risk assessments, potential default risks are accounted for by recognisingappropriate impairment losses under consideration of the expected net incoming payments.

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10. Cash and cash equivalents

Cash and cash equivalents comprise cash, demand deposits, other current, highly liquid financial assets with anoriginal maturity of no more than three months and overdraft facilities. Utilised overdraft facilities are shown as currentliabilities due to financial institutions in the statement of financial position. To the extent restricted funds do not meet thecriteria for classification as cash and cash equivalents, they are reported as financial assets.

11. Assets and liabilities held for sale

In addition to individual non-current assets, the balance sheet item “assets held for sale” can also comprise groupsof assets (disposal groups) or components of an entity (discontinued operation) if a sale within the next twelve months isconsidered highly probable. The assets continue to be classified in accordance with IFRS 5 only if the assets can be soldimmediately in their current state and at terms that are usual and customary for sales of such assets. In practice, these criteriaare considered to be met for individual investment properties if there is already a notarised purchase agreement on thereporting date although the transfer of benefits and risks of ownership will take place in a subsequent period.

Liabilities sold as part of the planned sale are a component of the disposal group or of the discontinued operationand are also disclosed separately.

Assets held for sale are measured in accordance with IFRS 5 at the lower of carrying amount and fair value.Investment property reported under assets held for sale is measured at fair value in accordance with IAS 40.

Assets and liabilities held for sale are reported in the same manner as those non-current assets or disposal groupsclassified as held for distribution to owners.

Please also refer to the explanations in section F.9.

12. Liabilities due to financial institutions

First time recognition of liabilities due to financial institutions is at present value taking into account any transactioncosts as well as premiums and discounts. The present value on the date the loans were granted is equivalent to the presentvalue of future payment obligations on the basis of a market interest rate applicable for the maturity and risk.

Subsequent measurement is at amortised cost using the effective interest method. The effective interest rate isdetermined on the date the financial liability was incurred. Changes in the terms with respect to the amount or the date ofinterest and repayments result in the carrying amount of the liability being recalculated in the amount of the present value andon the basis of the originally determined effective interest rate. Differences to the previously recognised carrying amount ofthe liability are recognised through profit or loss. If changes in terms lead to substantially different contractual terms underIAS 39.AG 62, the original liability is treated in accordance with IAS 39.40 as if it had been completely repaid. A newliability is then recognised at fair value.

13. Pension obligations

Pension obligations are the result of obligations to employees. Obligations from defined benefit plans are measuredusing the projected unit credit method. This method takes into account pensions and vested benefits known on the closing dateas well as expected future increases of salaries and pensions. The 2005 G tables by Dr Klaus Heubeck serve as the biometricalbasis.

Company pensions within the Group are formulated as both defined contribution plans and defined benefit plans.For defined benefit plans, the amount of the promised benefits is based on the qualifying period of employment and thepension component stipulated.

The regulatory framework in Germany is provided by the German company pension law (Betriebsrentengesetz);accordingly, pension increases correspond to the inflation rate. In some instances, commitments guarantee an interest rate of1 percent p.a., and then no further trends is applied. TLG bears the actuarial risks such as the longevity risk, interest rate riskand inflation risk. There are no further plan-related risks at TLG.

The revaluation component in connection with the defined benefit plans, including actuarial gains and losses fromexperience-based adjustments and changes of actuarial assumptions, are recognised directly in equity under cumulative otherreserves (other comprehensive income, OCI) in the period in which they are incurred.

There were no past service costs in the reporting year or in the previous year.

The interest rate effect included in pension expenses is reported in the consolidated statement of comprehensiveincome under interest expense. Service costs are reported under personnel expenses.

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14. Other provisions

Other provisions are recognised when the TLG Group has a legal or constructive obligation from a past event, itsfulfilment is probable and the amount can be reliably measured. The provision is recognised in the amount of the expectedsettlement.

Long-term provisions are reported at the settlement amount discounted to the present value on the reporting dateusing a corresponding risk-free interest rate applicable for the maturity, if the amount is material.

In accordance with IAS 1.35, gains and losses on a large number of similar transactions must be reported net in theconsolidated statement of comprehensive income. Only material individual transactions are reported separately in otheroperating income under IAS 1.35 and IAS 1.97.

15. Financial instruments

Within the TLG Group, financial instruments are entered into in order to hedge interest rate risks of real estatefinancing. Financial instruments are recognised at fair value. Fair value changes of the derivatives are reported in profit or lossif a hedge in accordance with the provisions of IAS 39 does not exist.

Derivatives accounted for as hedging instruments serve to hedge future, uncertain cash flows. A risk regarding theamount of future cash flows exists for the TLG Group, in particular from liabilities due to financial institutions with variableinterest rates. Fair value changes are divided into an effective and an ineffective part. The dollar offset method is used todetermine effectiveness. The effective part is the portion of the measurement result representing an effective hedge against thecash flow risk from an accounting perspective. The effective part is disclosed outside profit or loss in cumulative otherreserves (other comprehensive income, OCI) net of deferred taxes.

The ineffective part of the measurement result is recognised in the consolidated statement of comprehensive incomeand reported under net interest income. The amounts recognised in equity are always taken to the consolidated statement ofcomprehensive income when the gains or losses arising in connection with the underlying transaction affect income(recognised under net interest income). In the event that a hedge is terminated prematurely, the amounts recognised in equityare recognised in profit or loss when the gains or losses arising in connection with the still existing underlying transactionaffect income. If the underlying transaction no longer exists, amounts still remaining in other comprehensive income (OCI)are immediately posted to profit or loss.

16. Fair value of financial instruments

The fair value of the financial instruments is determined on the basis of corresponding market values ormeasurement methods. For cash and other current primary financial instruments, the fair values are approximately equal to thecarrying amounts recognised on the respective reporting dates.

For non-current receivables, other assets and liabilities, fair value is calculated on the basis of expected cash flowsusing the reference interest rates applicable on the reporting date. The fair values of financial instruments are determined onthe basis of the reference interest rates on the reporting date plus the own or counterparty risk.

For the financial instruments to be recognised at fair value, fair value is always calculated using the correspondingmarket or stock exchange prices. If there are no market or stock exchange prices, measurement is based on marketmeasurement methods customary for the market using market parameters specific to the instrument. Fair value is determinedusing the discounted cash flow method, while individual credit ratings and other market conditions are used to calculatepresent value in the form of credit ratings or liquidity spreads customary for the market.

For the fair value measurement of financial instruments, the measurement model uses relevant market prices andinterest rates observable on the reporting date obtained from recognized external sources as inputs. Accordingly, thederivatives are classified as Level 2 in the fair value hierarchy within the meaning of IFRS 13.72 et seq. (measurement on thebasis of observable inputs). Please also refer to section I.1.

17. Determining fair value

In accordance with the provisions of IFRS 13, fair value represents the price that would be received to sell an assetor paid to transfer a liability on the principal (or in the adsence of a principal market the most advantageous) market. Fairvalue must be measured by using the measurement parameters which best reflect market conditions as inputs. The fair valuehierarchy organises the inputs used in measurement into three levels of descending priority depending on their ability toreflect market conditions:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can accessat the measurement date.

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• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,either directly (i.e., price) or indirectly (i.e., can be derived from the price).

• Level 3: Unobservable inputs for the asset or liability.

Where various measurement inputs are relevant, the fair value measurement is categorised in the same level of thefair value hierarchy as the lowest level input that is significant to the entire measurement.

Transfers between the individual levels are reviewed at the end of each financial year. There were no transfersbetween the individual input levels in financial year 2013.

All assets, equity instruments and liabilities measured at fair value on the basis of other standards (excluding IAS 17“Leases” and IFRS 2 “Share-based Payment”) are measured uniformly in accordance with IFRS 13. IFRS 13.9 defines fairvalue as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date. Fair value always assumes the sale of an asset (exit price). This also applies if thecompany does not have the intent or the capacity to sell the asset as at the measurement date or to transfer the liability at thistime. The concept of the highest and best use (IFRS 13.27 et seq.) is applied in determining the fair value of non-financialassets. This implies maximizing the use and value of the asset if this is physically possible, legally permissible and financiallyfeasible. Fair value measurement of the investment property is classified as Level 3 under the fair value hierarchy ofIFRS 13.86 (measurement on the basis of unobservable inputs). For the measurement of investment property, please refer tothe explanations in section E.1 and F.1. For the measurement of financial instruments, see section E.15 and I.1.

In summary, the fair value hierarchy for the 2013 financial year is as follows:



* The fair value of liabilities due to financial institutions is determined solely for informational purposes in the notes.

And the fair value hierarchy for the 2012 financial year is as follows:



* The fair value of liabilities due to financial institutions is determined solely for informational purposes in the notes.

Explanations of the individual steps in the fair value hierarchy can be found in section I.1.—Other disclosures.

18. Recognition of income and expenses

Income from letting activities for which the corresponding rental and lease agreements are classified as operatingleases is recognised over the term of the agreement using the straight-line method. Lease incentives are included in the totalincome from letting activities, with the effect of reducing income, over the term of the rental or lease agreement.

In addition, the result from letting activities includes income from recharged utilities and other operating costs if thecosts and the amount of the proceeds can be reliably determined and the services have been performed.

Proceeds from the sale of property are recorded when the significant risks and rewards of the property have beentransferred to the buyer. The transfer of beneficial ownership can be assumed when the title and rights of use as well as theeffective control of the property have passed to the buyer. Revenue recognition does not occur as long as the buyer still hassignificant obligations, guarantees of return or rights of return.

Operating expenses are recognised as expenses upon use of the service or on the date of its causation.

Interest is recorded as income or expense in the proper period.

Dividends are recognised on the distribution date, whereby the period of distribution is normally the period in whicha legal entitlement is constituted.

F-32

19. Government grants

Government grants are recognised if there is reasonable assurance that the grants will be awarded and that thecompany meets the associated conditions. They are to be recognised as income over the course of the periods necessary tomatch them with the corresponding expenses that the government grants are intended to compensate.

Investment grants are grants to purchase or produce an asset. In the TLG Group, they are deducted from thecapitalised cost for the asset. Grants are recognised proportionally by applying a reduced depreciation amount over the usefullives of the assets if they are subject to depreciation.

Ongoing subsidies in the form of maintenance, rental and expense allowances are recognised through profit or loss.They are reported under other operating income.

Improvement loans and loans granted at favourable interest rates are property loans and are disclosed as liabilitiesdue to financial institutions. Compared to loans customary for the market, both have advantages such as low interest orinterest-free and payment-free periods. They are generally recognised at the present value on the basis of the market interestrate applicable on the date they are taken out. The difference is transferred to an accrued item which is written down using thestraight-line method over residual maturity of the loan to reduce the expenses from amortizing the loan. Please refer tosection B.1 for special rules applicable to the first-time adoption of IFRSs in accordance with IFRS 1.B10.

20. Current and deferred taxes

The income tax expense represents the sum of the ongoing tax expense and deferred taxes.

Current tax expense is determined on the basis of the taxable income for the year. Taxable income differs from theprofit for the year as shown in the consolidated statement of comprehensive income due to expenses and income that will betax deductible in later years or those that will never become taxable or tax deductible. Liabilities and provisions of the Groupfor current taxes are calculated using applicable tax rates.

Deferred taxes are recognised for the differences between the carrying amounts of assets and liabilities in theconsolidated financial statements and the corresponding tax law valuation for the calculation of taxable income. Deferred taxliabilities are recorded, in general, on all taxable temporary differences; deferred tax assets are recorded when it is probablethat taxable profits will be available against which the deductible temporary differences can be offset. Deferred tax assetscomprise tax reductions arising from the expected use of existing tax loss carryforwards (or comparable circumstances) insubsequent years and the realisation of which is assured with sufficient probability. Deferred taxes are also recognised foroutside basis differences if the requirements for this have been met.

Deferred tax liabilities and tax assets are determined on the basis of expected tax rates (and tax laws) that willpresumably apply on the date the debt is settled or the asset is realised. The tax regulations applicable or approved by theGerman Bundestag and, if applicable, Bundesrat as at the closing date apply for this. The measurement of deferred tax assetsand liabilities reflects the tax consequences that would result from the manner in which the Group expects to settle the debt orrealise the asset as at the closing date.

Current or deferred taxes are recognised in profit or loss unless they are directly related to items recognised either inother comprehensive income or directly in equity. In this case, the current or deferred tax is also recognised in othercomprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are netted if the Group has an enforceable legal right to offset actualtax refund claims against its actual tax liabilities, and if the deferred tax assets and liabilities are related to income taxescollected by the same tax authority and concern the same tax subject.

21. Borrowing costs

If so-called qualified assets exist, interest on borrowings is capitalised if material.

22. Significant judgements and estimates

The application of the accounting policies requires the management to exercise judgement and use estimates whichmay have an impact on the carrying amounts reported for assets, liabilities, income and expenses, as well as on the disclosureof contingent liabilities.

However, the inherent uncertainty of these assumptions and estimates may produce results which by their naturenecessitate future adjustments to the carrying amounts of assets and liabilities.

F-33

This applies in particular for the following items:

• Measurement of investment property: specifically, expected cash flows, the assumed vacancy rate and thediscount and capitalisation rates represent key measurement parameters for this item. This item is measuredusing the DCF method, which discounts future cash flows to the reporting date. These estimates includeassumptions about future events. In light of the large number and geographical distribution of the properties inquestion, individual measurement uncertainties are generally statistically insignificant. The value of theproperties is determined by an external appraiser on the basis of publicly available market data (e.g., propertymarket reports published by local valuation committees, data provided by inwis, etc.) and on the basis of theTLG Group’s extensive expertise in the individual regional sub-markets.

Please refer to section F.1 for further information.

In addition, the following assumptions and estimates are of lower significance:

• The management must determine whether assets intended for sale may be sold in their present condition andwhether the sale can be considered highly probable within the meaning of IFRS 5. If this is the case, the assetsand any related liabilities must be reported and measured as assets and liabilities held for sale.

• Real property must be classified either under inventories or as investment property, depending on the intendeduse of the property.

• Buildings which are owner-occupied and leased to third parties must generally be accounted for as separateassets in accordance with IAS 16 and IAS 40, unless the owner-occupied or leased portion of the property isimmaterial.

• Accounting for pension provisions: Provisions for pensions and similar obligations are measured on the basisof actuarial calculations. They are measured based on assumptions as to interest rates, mortality tables andfuture pension increases.

• Accounting for other provisions: The accounting for other provisions is subject to uncertainty with respect tofuture price increases and the amount, timing and probability of utilisation of the relevant provisions.

• Recognition of deferred tax assets: Deferred tax assets are recognised if future tax benefits are likely to berealisable. The actual tax situation in future financial years, and thus the actual ability to realise deferred taxassets, may deviate from the estimates made at the time the deferred taxes were recognised.

Further disclosures as to the assumptions and estimates made are included in the notes to the individual elements ofthe financial statements. All assumptions and estimates were based on the prevailing conditions and assessments made as atthe end of the reporting period.

Furthermore, the management’s assessment of the future business development also relied on assumptionsconcerning the future economic environment in the sectors and regions in which the TLG Group operates, which themanagement considered realistic as at the reporting date. Although the management believes that the assumptions made andestimates used are appropriate, any unforeseen changes in these assumptions could influence the Group’s net assets, financialposition and results of operations.

23. Capital management

The objective of the TLG Group’s capital management activities is to secure the Group’s ability to continue as agoing concern, as well as to generate a return for its shareholders. In addition, capital management serves to ensure that allother stakeholders in the TLG Group receive the benefits to which they are entitled. In general, the intention is to increase thevalue of the overall Group. This holistic capital management strategy has not changed since the previous year.

In conjunction with the TLG Group’s increased efforts to operate in line with standard market practice, capitalmanagement is monitored using the net leverage ratio, as is customary within the industry. Net leverage describes the ratio ofnet debt to the fair value of the investment property. Net debt is calculated as liabilities due to financial institutions minus cashand cash equivalents.

As in the previous year, one of the Group’s objectives for the current financial year was to ensure continued accessto lending at economically appropriate financing costs by ensuring that an appropriate level of debt is not exceeded.

F-34

Net leverage was calculated as follows as at 31 December 2013 and in the previous year:

31/12/2013 31/12/2012EUR ’000

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,414,691 1,511,726Prepayments for investment properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,707 3,016Owner-occupied properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,464 16,697Non-current assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,817 0Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,385 22,260

Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,465,064 1,553,699

Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626,227 480,041Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,930 60,527

Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487,298 419,514

Net Loan to Value (Net LTV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.3% 27.0%

In the table above, assets held for sale relate exclusively to investment property.

The Net Loan to Value (Net LTV) for the Group was 33.3%, thus representing an increase of 6.3 percentage pointssince the previous year.

The Group’s capital management objectives were achieved during the year.

24. Segment reporting

TLG’s business activities are centred on the letting and management of its own commercial real estate. Activitiesalso include leveraging market conditions through the acquisition and disposal of real properties in order to optimise theproperty portfolio.

For internal reporting purposes, these activities are classified under the segment for letting and managing theGroup’s own commercial real estate.

In accordance with IFRS 8, therefore, a separate reporting segment has been identified which encompasses theGroup’s operating activities. The chief operating decision makers receive regular reports on this segment. They determine theallocation of resources only for this one segment and are responsible for monitoring their profitability. TLG’s management isthe chief operating decision maker.

Revenue is generated through a large number of tenants. Revenue amounting to greater than 10% of overall revenueis generated through one single customer. EUR 17,539 thousand (previous year: EUR 17,569 thousand) of total revenue wasattributable to this customer.

F. NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

1. Investment property

The carrying amount of the investment property changed as follows in financial years 2013 and 2012:

2013 2012EUR ’000

Carrying amount as at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511,726 1,374,231

Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,591 28,082Capitalisation of construction activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,396 54,592Reclassification as assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (209,259) (804)Reclassification from property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,564Fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,237 53,061

Carrying amount as at 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,414,691 1,511,726

TLG’s portfolio strategy calls for a concentration on the retail and office asset classes, as well as on hotels withlong-term leases in certain prime inner-city locations, particularly in Berlin and Dresden. While the office portfolio isintended to be largely limited to Berlin, Dresden, Leipzig and Rostock, the retail portfolio—which is currently dominated byconvenience store properties in the retail foodstuffs sector—is more broadly distributed. Decisions pertaining to acquisitionsand disposals of properties and to necessary investments are subject to the aforementioned principles of portfolio strategy.

Acquisitions in 2013 amounted to EUR 3,591 thousand (2 properties), and were significantly lower than in theprevious year (EUR 28,082 thousand; 12 properties). As in the previous year, investment centred on the completion of projectdevelopment properties. This is reflected in the amount capitalised for construction activities: EUR 36,396 thousand; previousyear: EUR 54,592 thousand.

F-35

EUR 209,259 thousand (2012: EUR 804 thousand) was reclassified as assets held for sale to reflect disposals inkeeping with the portfolio strategy. In addition to the nursing care properties, management-intensive properties in particularand undeveloped land were reclassified. Properties reclassified as assets held for sale also included all sales conducted duringthe year, which had first been reclassified as assets held for sale and then sold off.

Thanks to favourable market conditions, a number of inner-city development plots in particular were disposed of atattractive prices, with the result that the EUR 72,237 thousand fair value adjustment in 2013 (previous year: EUR 53,061thousand) related to 20% of the assets held for sale. The properties held in the portfolio as at 1 January and 31 December 2013(current portfolio excluding acquisitions and reclassifications) accounted for 80% of the fair value adjustment. Fair valueswere adjusted as a result of the measurement of investment property in the concolidated statement of comprehensive income.

The fair values of investment property were as follows, broken down by measurement approach and by asset classas at 31 December 2013. Advance payments made for these properties are not included in this calculation but are recognisedseparately in the statement of financial position.

Table 1:







price)

Valuation method = Discounted-Cashflow (DCF)Retail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655,994 5.00% 15.00% 6.25% 5.50% 25.00% 8.16%Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447,308 4.00% 12.00% 5.54% 4.00% 20.00% 7.12%Hotel properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,611 5.00% 6.25% 5.61% 6.25% 6.75% 6.48%Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,698 5.00% 14.00% 7.86% 6.00% 30.00% 11.46%Total (DCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362,610 4.00% 15.00% 6.01% 4.00% 30.00% 7.76%

Valuation method = Liquidation methodRetail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,500 5.00% 7.50% 5.78% — — —Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 7.50% 7.50% 7.50% — — —Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,131 3.00% 8.00% 5.07% — — —Total (liquidation method) . . . . . . . . . . . . . . . . . . . 52,081 3.00% 8.00% 5.43% — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,414,691

Multiplier net rental (without projectdevelopment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.68








price)

Valuation method = Discounted-Cashflow (DCF)Retail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 598,266 3.05% 15.00% 6.87% 3.75% 25.00% 8.22%Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452,337 4.10% 12.45% 6.34% 4.00% 20.00% 6.94%Hotel properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119,759 6.55% 6.95% 6.67% 6.50% 6.50% 6.50%Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,200 5.00% 14.00% 7.29% 6.00% 30.00% 9.77%Project development . . . . . . . . . . . . . . . . . . . . . . . . . 73,100 5.90% 7.00% 6.32% 6.00% 7.25% 6.33%Total (DCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,429,662 3.05% 15.00% 6.71% 3.75% 30.00% 7.66%


Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,511,726

Total (without project development) . . . . . . . . . . . . . 1,438,626Multiplier net rental (without project

development) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.62

F-36

The following values were reported as at 1 January 2012:







price)

Valuation method = Discounted-Cashflow (DCF)Retail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553,770 3.50% 15.00% 7.32% 3.75% 25.00% 8.32%Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415,354 4.50% 12.95% 6.96% 4.00% 20.00% 6.95%Hotel properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,932 7.70% 7.75% 7.73% 6.50% 6.50% 6.50%Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181,280 5.00% 15.00% 7.75% 6.00% 30.00% 9.92%Project development . . . . . . . . . . . . . . . . . . . . . . . . . 34,260 5.85% 8.25% 7.04% 6.00% 7.25% 6.37%Total (DCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,292,597 3.50% 15.00% 7.29% 3.75% 30.00% 7.69%


Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,374,231

Total (without project development) . . . . . . . . . . . . . 1,339,971Multiplier net rental (without project

development) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.20

The fair value of investment property totalled EUR 1,414,691 thousand as at 31 December 2013 (31 December2012: EUR 1,511,726 thousand; 1 January 2012: EUR 1,374,231 thousand). Properties excluding project developmentproperties held in the portfolio as at 1 January and 31 December 2013 (current portfolio excluding acquisitions andreclassifications) amounted to EUR 1,303,858 thousand and accounted for 92% of total properties as at 31 December 2013.

The value of the properties excluding project development properties held in the portfolio as at 1 January and31 December 2013 (current portfolio) increased by 4.4% and 3.5% as compared to 31 December 2012 and 1 January 2012,respectively, based on a positive two-year market trend, in particular in Berlin, as well as on a reduction in the EPRA vacancyrate and a constant increase in actual rents. While the segment of the portfolio managed in line with the portfolio strategy—accounting for approximately 90% (2012: 77%) of the properties neither acquired, disposed of or reclassified—increased invalue by 5.3% (2012: 4.7%), the value of segment of the portfolio not managed in line with the portfolio strategy was adjustedby -1.2% (2012: -0.2%). Value adjustments related in particular to commercial properties intended for sale in the short-term.

The fair value of the investment properties under development was determined in particular by factoring in theproject stage as at the reporting date, estimated future development costs and expected time horizon until completion.

Properties which were under management as at the reporting date were no longer included under developmentprojects. The fair value of investment properties under construction as at the reporting date 31 December 2012 amounted toEUR 34,260 thousand. As at 31 December 2012, the fair value amounted to EUR 73,100 thousand, whereby three propertieswhich had still been under construction during the previous year with a fair value of EUR 15,273 thousand were reclassifiedas under management. One construction project with a fair value of EUR 2,970 thousand was launched in 2012. As at themeasurement date 31 December 2013, all development projects were reclassified as under management. The fair value ofthese project development properties now under management represented EUR 108,944 thousand of total fair value as at thereporting date 31 December 2013.

With fair value at EUR 1,362,610 thousand as at 31 December 2013 (31 December 2012: EUR 1,429,662 thousand;1 January 2012: EUR 1,292,597 thousand), 96.3% of properties were measured in accordance with the DCF method(31 December 2012: 94.6%; 1 January 2012: 94.1%).

In the overviews above, the fair value of the undeveloped plots of land as measured in accordance with theliquidation approach is included under the “Other” asset class. The fair value of undeveloped land as at 31 December 2013was EUR 17,894 thousand (31 December 2012: EUR 40,412 thousand; 1 January 2012: EUR 40,409 thousand), representing1.3% (31 December 2012: 2.7%; 1 January 2012: 2.9%) of the total investment property.

The fair value of properties (excluding undeveloped land) measured in accordance with the liquidation approachamounted to EUR 34,187 thousand as at 31 December 2013 (31 December 2012: EUR 41,652 thousand; 1 January 2012:EUR 41,225 thousand), representing 2.4% (31 December 2012: 2.8%; 1 January 2012: 3.0%) of the total.

No significant changes were made to the valuation methods and models during the period under review.

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The independent appraiser’s calculation of fair value was based on the following letting data as at the relevantreporting dates:

Table 2:

31/12/2013Investmentproperties

EPRA-vacancy

ratesAverage

net rental*

Share oftemporary

rentalcontract

Walttemporary

rentalcontracts

EUR ’000 % EUR/Sqm % yearsValuation method = Discounted-Cashflow (DCF)Retail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655,994 1.6% 9.55 97.7% 7.7Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447,308 9.4% 8.59 89.8% 5.7Hotel properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,611 4.5% 13.74 99.9% 17.4Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,698 13.6% 3.25 75.5% 5.0Total (DCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362,610 5.7% 7.92 93.3% 8.0

Valuation method = Liquidation methodRetail properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,500 0.0% 4.46 100.0% 3.9Office properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 0.0% 0.00 1.2% 0.0Other properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,131 0.0% 2.32 72.0% 1.8Total (liquidation method) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,081 0.0% 3.63 90.3% 3.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,414,691 5.6% 7.81 93.2% 8.0

* Net rental per square meter—rented space as of closing date; without future rental contracts.


EPRA-vacancy

ratesAverage

net rental*

Share oftemporary

rentalcontract

Walttemporary

rentalcontracts



Total (without project development) . . . . . . . . . . . . . . . . . . . . 1,438,626 8.8% 7.62 92.4% 8.9

Project development** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,100 21.1% 9.94 100.0% 17.8

* Net rental per square meter—rented space as of closing date; without future rental contracts (excluding project development).** Project development in construction; Agreed pre-rental of closed rental contracts.


EPRA-vacancy

ratesAverage

net rental*

Share oftemporary

rentalcontract

Walttemporary

rentalcontracts



Total (without project development) . . . . . . . . . . . . . . . . . . . . 1,339,971 9.8% 7.42 92.6% 9.5

Project development** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,260 26.1% 11.46 100.0% 18.6

* Net rental per square meter—rented space as of closing date; without future rental contracts (excluding project development).** Project development in construction; Agreed pre-rental of closed rental contracts.

Please refer to www.epra.com for the definition of the EPRA vacancy rate.

F-38

As at the reporting date, 31 December 2013, investment property had an average EPRA vacancy rate of 5.6%(31 December 2012, excl. project development properties: 8.8%; 1 January 2012, excl. project development properties: 9.8%).The EPRA vacancy rate for project development properties now under management was 14.3% as at the reporting date. Thefurther trend with respect to the EPRA vacancy rate depends on the location and characteristics of the individual properties. Ingeneral, the vacancy rate for retail and hotel properties is expected to remain low, as it was at 31 December 2013. The EPRAvacancy rate is expected to decline for office properties, and no significant change is expected for the other properties.

The average actual rent amounted to EUR 7.81/m2 (31 December 2012, excl. project development properties:EUR 7.62/m2; 1 January 2012, excl. project development properties: EUR 7.42/m2), representing a 2.5% increase. The WALT(weighted-average lease term) was 8.0 years, down as compared to the 8.9 years for the previous year (1 January 2012:9.5 years). This figure, reported as at the reporting date, does not factor in leases already entered into whose termscommenced after the reporting date. The continued trend for rents was forecasted on the basis of individual assumptions madefor the planning period. A distinction was drawn between rents from existing leases and from new leases based on aforecasted rate of fluctuation. Market rents increased each year during the detailed planning phase by a rate of increasedetermined individually. Overall, a moderate increase in rents was assumed for the planning period.

As at the reporting date, TLG continues to assume that future fluctuations in fair value will result for the most partfrom factors outside of TLG’s control. These factors include in particular the discount and capitalisation rates used to measurethe value of the properties.

In addition to the fair value measurement, a sensitivity analysis was conducted to assess the impact of changes in thediscount and capitalisation rates used. Assuming the discount and capitalisation rates underlying the valuation of theproperties were to rise or fall by 0.5 percentage points, the following changes would have occurred as at 31 December 2013:

Table 3:

31/12/2013Investmentproperties -0.5%

Discount rate0.0% +0.5%

EUR ’000Valuation method = Discounted-Cashflow (DCF)

-0.5% 1,473,730 1,419,610 1,368,450Capitalisation rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0% 1,413,660 1,362,610 1,314,110

+0.5% 1,362,360 1,313,590 1,267,110Valuation method = Liquidation method

Capitalisation rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0% 53,110 52,081 51,650

Total*-0.5% 1,526,840 1,471,691 1,420,100

Capitalisation rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0% 1,466,770 1,414,691 1,365,760+0.5% 1,415,470 1,365,671 1,318,760

* The sensitivity analysis is not applicable for the capitalisation rate using the liquidation method.





-0.5% 1,550,352 1,488,562 1,430,202Capitalisation rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0% 1,488,282 1,429,662 1,374,122



Total*-0.5% 1,633,602 1,570,626 1,511,732



F-39

The following values were reported as at 1 January 2012:




–0.5% 1,404,397 1,343,567 1,285,337Capitalisation rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0% 1,350,567 1,292,597 1,237,367



Total*–0.5% 1,487,337 1,425,201 1,366,227



With respect to changes in the further significant inputs and their impact on fair value, there were the followingqualitative sensitivities: an increase in rental income results in an increase in the value of investment property. Additionally,an increase in the residual value results in an increase in the value of the property. An increase in the EPRA vacancy rateresults in a decline in the value of the properties.

The following payment claims arising under the minimum lease rates are expected over the next years on the basisof the leases existing as at 31 December 2013:

Remainingterm up to

1 year

Remainingterm between1 and 5 years

Remainingterm more

than 5 years TotalEUR ’000

31/12/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,849 330,256 418,930 854,03531/12/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,522 361,664 556,154 1,025,34001/01/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,617 341,271 546,716 990,603

EUR 247 thousand in contingent rent payments were collected in financial year 2013 (previous year:EUR 283 thousand).

The majority of investment property has been encumbered with collateral for loans. The properties are in principlefreely available to be sold. As a rule, collateral has been provided for financed properties in the form of land rights and theassignment of rights and claims from sale agreements. In the event a property is sold, the financing is redeemed by specialpayment.

2. Property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets have developed as follows:

Owner-occupied

properties

Technicalequipment

andmachinery

Operatingand officeequipment

Intangibleassets Total

EUR ’000Costas at 01/01/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,040 2,749 7,124 12,745 39,658Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 40 61 193 356Reclassifications in accordance with IAS 40 . . . . . . . . . . . . . . . . . —Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 61 1.416 17 1.494as at 31/12/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,103 2,728 5,769 12,920 38,520

Cumulative depreciation, amortisation and write-downsas at 01/01/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 1,933 6,196 11,279 19,750Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 125 253 787 1,461Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 1,273 17 1,325as at 31/12/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 639 2,023 5,175 12,049 19,886

Net carrying amount as at 31/12/2013 . . . . . . . . . . . . . . . . . . . . . 16,464 705 593 872 18,634

F-40

Owner-occupied

properties

Technicalequipment

andmachinery

Operatingand officeequipment

Intangibleassets Total

EUR ’000Costas at 01/01/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,526 4,059 7,858 12,795 44,237Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 — 155 321 554Reclassifications in accordance with IAS 40 . . . . . . . . . . . . . . . . . (2,565) — — — (2,565)Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,310 888 371 2,569as at 31/12/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,040 2,749 7,124 12,745 39,658

Cumulative depreciation, amortisation and write-downsas at 01/01/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3,074 6,745 10,893 20,711Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 137 337 756 1,573Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,278 886 371 2,534as at 31/12/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343 1,933 6,196 11,279 19,750

Net carrying amount as at 31/12/2012 . . . . . . . . . . . . . . . . . . . . . 16,697 816 928 1,466 19,908

The Group’s owner-occupied properties measured in accordance with IAS 16 were reclassified as investmentproperty due to a decrease in owner-occupied space in 2012.

The decrease in the carrying amounts for technical equipment and machinery, operating and office equipment andintangible assets was due primarily to depreciation and amortisation.

3. Investments in joint ventures

The tables below contain a summary of information relating to the company accounted for in accordance with theequity method, Altmarkt-Galerie Dresden KG:

Companies accounted for in accordance with the equity method 31/12/2013 31/12/2012 01/01/2012EUR ’000

Assets1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 401,552 356,287Liabilities1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 239,791 223,921Equity attributable to the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 69,077 59,377

1) corresponds to 100% interest.

Companies accounted for in accordance with the equity method 2013 2012EUR ’000

Revenue1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 24,038Profit/(loss)1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 7,064Net income for the period attributable to the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,331

1) corresponds to 100% interest.

The equity investment reported under this line item was disposed of with effect from 30 April 2013. The disposalgain is reported under income from joint ventures (section G.7).

4. Other financial assets

Other financial assets were broken down as follows:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Shares in non-consolidated entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 128 132Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 41 38Receivables from claims for damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 228 53Restricted funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,236 9,406 8,952Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 646 367 453

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,077 10,170 9,629

Restricted funds relate to term deposits which have essentially been pledged for guarantees and interest rate hedges.

Other financial assets are with respect to shares in non-consolidated entities non-current; the remainder is current.

F-41

5. Trade and other receivables

The table below provides an overview of the Group’s trade and other receivables:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Trade receivables, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,586 17,964 27,714Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,019) (8,386) (8,649)Total trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,567 9,578 19,065

of which from letting activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,079 5,591 6,690of which from the disposal of properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,219 2,225 10,214of which other trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,269 1,763 2,161

All trade and other receivables are current.

Valuation allowances relate primarily to receivables originating prior to 1 January 2012.

Please refer to section I.1 for changes in write-downs and changes in collateral received.

6. Other receivables and assets

Other receivables and assets are broken down as follows:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 164 245Receivables from other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 924 26Advance payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 20 26Receivables from letting incentives granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,423 6,850 5,390Miscellaneous other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 492 525 740

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,129 8,484 6,428

Letting incentives granted essentially consist of rent-free periods and subsidies for the initial fitting-out of hotels.

Other receivables and assets amounting to EUR 707 thousand (previous year: EUR 1,633 thousand; 1 January 2012:EUR 1,037 thousand) are current; the remainder non-current.

7. Inventories

Inventories were broken down as follows:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Land with finished buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,724 8,124 46,534Undeveloped land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,981 8,871 19,801Land under development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 920 3,750Other buildings in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,680 4,346 2,657

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,385 22,260 72,742

The table below provides further information pertaining to inventories:

2013 2012EUR ’000

Amount of inventories recorded as expenses during the reporting period . . . . . . . . . . . . . . . . . . . . . . . 13,660 50,348Amount of inventories carried for longer than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,582 9,513

The increase in other buildings in progress was due to the construction progress made on a property which hasalready been sold and which is scheduled to be completed in 2014; the benefits and risks of ownership will transfer to theacquirer upon completion.

The reason for the decline in the remainder of the items is rooted in the Group’s strategy of divesting propertieswhich do not fit with the Group’s strategy. As at 31 December 2013, the portfolio essentially includes undeveloped landwhich is suitable for residential properties.

Please refer to section G.6 for the amount of write-downs on inventories recognised as an expense during the period.

At 31 December 2013, EUR 6,680 thousand was pledged as collateral for loans (previous year: EUR 0 thousand).

F-42

8. Cash and cash equivalents

Cash and cash equivalents broke down as follows as at the relevant reporting dates:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,909 60,515 33,568Cash-in-hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 12 23

Total cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,930 60,527 33,590

Bank balances bear interest at floating interest rates for daily callable balances. Short-term deposits are made forvarious terms of up to three months.

9. Assets and liabilities held for sale

In accordance with the Spin-off Agreement dated 29 December 2011 and in preparation for the plannedprivatisation of the Company, virtually all residential properties were spun off with effect from 1 January 2012 and transferredto TLG WOHNEN GmbH, an entity formed specifically for that purpose on 28 November 2011. These properties and theassociated liabilities and assets were reported as held for sale as at 1 January 2012, directly prior to the spin-off. Given that thespin-off occurred directly on 1 January 2012, it had no impact on the consolidated statement of comprehensive income or thestatement of cash flows; rather, the EUR 197,248 thousand decrease in net assets is only evident in the capital reserves.Therefore, the assets and liabilities included in the relevant line items are presented in the following:

01/01/2012EUR ’000

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484,043Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,665Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,311Total assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502,026

Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272,631Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,092Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,372

Total liabilities included in disposal groups classified as held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304,779

In accordance with IFRS 5, only those assets are reported as held for sale as at the reporting dates 1 January 2012,31 December 2012 and 31 December 2013 if the decision to sell had been taken as at the relevant reporting date, if theconclusion of the sale within twelve months following the decision to sell was considered highly probable and if active effortsto market the properties have been initiated.

31/12/2013 31/12/2012 01/01/2012EUR ’000

Investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,817 — —

Total assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,817 — —

* Excl. TLG WOHNEN GmbH spin-off.

The carrying amount of the assets held for sale and associated liabilities changed as follows:

2013 2012EUR ’000

Carrying amount as at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 197,247Reclassifications from investment property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209,259 804Disposals due to sale of land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (191,442) (804)Disposal of TLG Wohnen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (197,247)

Carrying amount as at 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,817 —

The results from the sale of assets held for sale are reported in the consolidated statement of comprehensive incomeunder result from the disposal of investment property.

F-43

10. Equity

Pursuant to the agreement dated 19 December 2012, the Federal Republic of Germany sold its 100% interest to thecurrent shareholders, with the benefits and risks of ownership transferring as at 31 December 2012. Non-controlling interestsno longer exist as at the reporting date (31 December 2012: EUR 0 thousand; 1 January 2012: EUR 2 thousand).

The subscribed capital of the Company was unchanged and amounted to EUR 52,000 thousand.

The capital reserves amounted to EUR 410,249 thousand (31 December 2012: EUR 151,461 thousand). Thechanges (EUR 258,787 thousand) resulted from a EUR 438,071 thousand addition to capital reserves due to the reversal of thespecial reserve in accordance with section 27 (2) of the D-Mark Accounting Act (D-Mark-Bilanzgesetz, “DMBilG”), aEUR 199,776 thousand transfer to retained earnings and EUR 20,493 thousand in additional shareholder contributions to thecapital reserves.

The Group’s retained earnings decreased by EUR 464,339 thousand to EUR 339,939 thousand (31 December 2012:EUR 804,278 thousand) as a result of distributions to shareholders amounting to EUR 325,177 thousand, resulting from thereversal of the EUR 438,071 thousand special reserve in accordance with section 27 (2) DMBilG. By contrast, the transfer ofEUR 199,776 thousand from capital reserves to retained earnings and the EUR 99,132 thousand consolidated net income forthe year had a positive effect on retained earnings.

Where distributions to the shareholder were concerned, rather than making a cash payment to the shareholder, theCompany assumed, with discharging effect, the shareholder’s loan liabilities amounting to EUR 325,177 thousand.

Other comprehensive income primarily contains actuarial gains and losses of EUR 1,028 thousand (31 December2012: EUR 1,005 thousand) as well as cumulative adjustments to the fair value of derivatives included in cash flow hedges ofEUR 124 thousand (31 December 2012: EUR 0 thousand).

Deferred taxes are distributed to the items of other comprehensive income as follows:

01/01 – 31/12/2013Before

deferredtaxes

Deferredtaxes

Afterdeferred

taxesEUR ’000

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,942 (9,810) 99,132Changes in fair values of interest rate derivatives used as cash flow hedges . . . . . . . . . . . . . . . (180) 56 (124)Actuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33) 10 (23)

Consolidated total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,729 (9,744) 98,985

01/01 – 31/12/2012Before

deferredtaxes

Deferredtaxes

Afterdeferred

taxesEUR ’000

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,268 (59,005) 76,264Changes in fair values of interest rate derivatives used as cash flow hedges . . . . . . . . . . . . . . . — — —Actuarial gains and losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,454) 449 (1,005)

Consolidated total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133,814 (58,556) 75,259

11. Liabilities due to financial institutions

In addition to regular and unscheduled repayments of principal, the following factors have resulted in changes toliabilities to banks in connection with financing activities:

In the context of distributions to shareholders in financial year 2013 (see also section I.4), the Company assumed,with discharging effect, the shareholder’s loan liabilities amounting to EUR 325,177 thousand. The principal on this loan wasreduced by EUR 250,247 thousand to EUR 74,929 thousand as at the reporting date through repayments. In addition,EUR 252,511 thousand in loans were disbursed in financial year 2013 (previous year: EUR 71,200 thousand). All loans weretaken out by TLG IMMOBILIEN GmbH.

The loans were collateralised in general through the granting of corresponding liens, the assignment of rights arisingfrom the lease agreements and the pledge of shares. The vast majority of the portfolio properties generally serve as collateral.

As at 31 December 2013, the loan assumed from the shareholder amounting to EUR 74,929 thousand, projectfinance of EUR 16,065 thousand and the principal repayments falling due in 2014 were reported as falling due withinone year.

F-44

Liabilities to banks have the following remaining maturities:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Remaining term up to 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,225 87,176 16,793Remaining term longer than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513,002 392,865 407,267

12. Pension provisions

The Group has made pension commitments to (former) executives and former managing directors who had begunworking for the Company between 1991 and 2001.

In 2013, current pensions were paid to 11 employees or former managing directors from within this group (2012: 10employees or former managing directors). 15 eligible persons have accrued vested pension benefits. The average term of thecommitments was 11.54 years for the managing directors and 14.92 years for the general staff. Payments from pension plansare expected to amount to EUR 280 thousand in 2014.

Pension provisions for defined benefit pension plans are calculated on the basis of actuarial assumptions inaccordance with IAS 19. The following parameters were applied in the respective financial years:

2013 2012in %

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10% 3.10%Pension trend*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00% 2.00%

*) In some instances, commitments guarantee an interest rate of 1 percent p.a., and then no further trend is applied.

Biometric assumptions are made on the basis of the 2005G mortality tables published by Dr. Klaus Heubeck.

Expenses for the defined benefit pension plans were broken down as follows in the respective financial years:

2013 2012EUR ’000

Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 24Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 261

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244 285

The present value of the pension obligations developed as follows in the respective periods:

2013 2012EUR ’000

Present value of obligations as at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,888 5,377Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 24Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 261Benefits paid directly by employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (234) (228)Actuarial gains/losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 1,454

Present value of obligations as at 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,931 6888

The actuarial gains/losses incurred in the past financial year were recognised outside profit or loss under othercomprehensive income. EUR 33 thousand (2012: EUR 4 thousand) in gains/losses resulted from experience-basedadjustments and EUR 0 thousand (2012: EUR 1,450 thousand) resulted in changes in financial assumptions. Overall, othercomprehensive income included EUR 33 thousand in actuarial losses (2012: EUR 1,454 thousand).

Expenses for defined contribution plans amounted to EUR 994 thousand in the current year (2012: EUR 1,149thousand). These related primarily to contributions to the statutory pension system.

Based on the commitments accounted for as at the reporting dates, a change in the individual parameters wouldhave had the following impact on the present value of the obligation, assuming all other assumptions remained constant.

Sensitivity analysis for 2013:

Change inassumption

Increase inassumption

Reduction inassumption

EUR ’000Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50% 6,496 7,412Pension trend*) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50% 7,084 6,789

*) In some instances, commitments guarantee an interest rate of 1 percent p.a., and then no further trend is applied.

Increases and decreases in the discount rate, pension trend, wage and salary trend or mortality do not have the sameabsolute impact on the calculation of pension obligations. If several assumptions were to change at the same time, the change

F-45

in the amount of total obligations need not necessarily correspond to the sum of individual effects caused by the changes inthe assumptions. It should further be noted that the sensitivities to a change in pension obligations merely reflect themagnitude of the specific change in the relevant assumptions (e.g., 0.5%). If the change in the assumptions takes a differentorder of magnitude, this will not necessarily have a linear effect on the change in the amount of the pension provisions.

13. Other provisions

Other provisions changed as follows during the financial year:

As at01/01/2012

As at01/01/2013 Additions Utilisations Reversals

As at31/12/2013

EUR ’000Provisions for personnel expenses from

restructuring plan . . . . . . . . . . . . . . . . . . . . . . . . 1,256 424 2,845 (424) — 2,845Provisions for litigation risks . . . . . . . . . . . . . . . . . 22,809 18,217 711 (2,589) (3,468) 12,871Other miscellaneous provisions . . . . . . . . . . . . . . . 3,617 3,522 55 (94) (3,006) 477

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,682 22,162 3,611 (3,107) (6,474) 16,192

Provisions for personnel expenses after reconciliation of interests have been recognised due to the restructuringmeasures resolved by the Company in 2013 and an associated workforce reduction in 2013 and 2014.

TLG has recognised provisions to account for the risk of losing pending proceedings before the courts; theprovisions were recognised in the amount of the expected utilisation. The court proceedings relate primarily to legal disputesin connection with a public lending institution’s claim for the repayment of subsidies. The reversal of provisions in financialyear 2013 related primarily to provisions for interest on liabilities arising from the pass-through of purchase prices, whichwere reversed in agreement with the creditor.

14. Deferred taxes

Deferred tax assets and liabilities result from temporary differences and tax loss carryforwards as follows:

31/12/2013 31/12/2012 01/01/2012Deferred

taxassets

Deferredtax

liabilities

Deferredtax

assets

Deferredtax

liabilities

Deferredtax

assets

Deferredtax

liabilitiesEUR ’000

Investment property and owner-occupied properties . . . . . 2,167 89,000 3,027 74,733 3,137 35,074Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . 628 — 719 — 702 —Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 — 66 — — —Financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 12,698 — 7,766Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 937 4,468 1,074 6,330 3,360 17,446Pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 — 786 — 341 —Liabilities to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 21 — 43Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,801 860 13,409 — 13,798 —Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,710 2,191 3,843 3,988 3,801 5,498

Total temporary differences . . . . . . . . . . . . . . . . . . . . . . 11,927 96,519 22,923 97,771 25,138 65,827Loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 24,413 —OBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 16

Total deferred taxes before netting . . . . . . . . . . . . . . . . . 11,927 96,519 22,923 97,771 49,551 65,843Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,379 8,379 18,470 18,470 37,011 37,011

Carrying amount after netting . . . . . . . . . . . . . . . . . . . . 3,548 88,139 4,453 79,300 12,540 28,832

Deferred tax assets and liabilities (before netting) are expected to be realised as follows:

2013 2012 2011EUR ’000

Deferred tax assets—Realised after more than 12 months Realised after more than 12 months . . . . . . . . . . 3,480 4,598 4,180—Realised within 12 months Realised within 12 months . . . . . . . . . . . . . . . . . . . . . . . . . 8,447 18,325 45,371

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,927 22,923 49,551

Deferred tax liabilities—Realised after more than 12 months Realised after more than 12 months . . . . . . . . . . 89,000 74,754 35,117—Realised within 12 months Realised within 12 months . . . . . . . . . . . . . . . . . . . . . . . . . 7,519 23,016 30,726

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,519 97,771 65,843

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The sum of temporary differences associated with shares in subsidiaries and joint ventures which are not expectedto reverse in the foreseeable future in accordance with IAS 12.29 and for which no corresponding deferred taxes wererecognised amounted to EUR 7,205 thousand (2012: EUR 7,437 thousand). As in the previous year, no outside basisdifferences were reported in financial year 2013.

15. Liabilities

Liabilities were broken down as follows:

31/12/2013 31/12/2012 01/01/2012EUR ’000

Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,573 29,818 19,727Payables due to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 53,748Total other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,520 38,318 46,584

Liabilities to employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,206 2,178 2,482Advance payments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 3,696 884Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,620 17,955 24,450Liabilities from the pass-through of purchase prices . . . . . . . . . . . . . . . . . . . . . . . . . 5,522 6,987 9,621Investment subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,418 2,848 3,278Liabilities to tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200 1,129 1,160Miscellaneous other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,088 3,525 4,709

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,093 68,135 120,059

Liabilities have the following remaining maturities:

up to 1 year 1 – 5 yearsmore than

5 yearsEUR ’000

31/12/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,709 3,384 031/12/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,869 4,266 001/01/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,910 5,111 38

The decline in payables was due in particular to the decrease in payments still outstanding in connection with theTLG WOHNEN GmbH spin-off and to declining investing activities in development projects.

Payables due to shareholders as at 1 January 2012 were due entirely to the former shareholder, the Federal Republicof Germany, represented by the Federal Ministry of Finance.

The increase in liabilities to employees was due to the severance measures resolved in 2013.

Advances received relate to the disposal of properties.

The decline in other taxes was attributable to the payment of the land transfer tax in connection with the spin-off ofTLG WOHNEN GmbH; this cost was borne in full by TLG on the basis of contractual provisions.

Liabilities from the pass-through of purchase prices include purchase prices received for properties sold byTLG IMMOBILIEN GmbH on behalf of the co-owners BEDIG AG i.L. and the State of BERLIN.

Investment subsidies include grants received, which are reversed to profit or loss pro rata temporis over the term ofthe lease agreements.

Liabilities to tenants include balances resulting from the end-of-year operating costs and utilities statements andexcess advance payments by tenants.

G. NOTES TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1. Net operating income from letting activities

Income from letting activities increased despite a declining properties inventory. The held properties saw anincrease in revenue due in particular to higher actual rents and a lower vacancy rate. Property sales had a counter effect. As noor only minor revenue were earned on many of the disposed properties, or they were not sold until the end of the year, theoverall result was a slight increase in revenue.

The decline in expenses for letting activities is attributable primarily to the decrease in other services. The subsidiescollected for environmental remediation and restoring contaminated sites recognised under other operating income offset theexpenses from costs of environmental cleanup.

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It is not possible to disclose the expenses for individual properties which have not been let because thecorresponding information is not provided for all cost types at the individual property level in the TLG Group’s costaccounting.

2. Result from remeasurement of investment property

The result from the remeasurement of investment property was again positive in financial year 2013, due primarilyto consistently favourable market conditions. The change in the value of the properties was driven primarily by the positivemarket trend over the past two years, the reduction of the ERPA vacancy rate and the continuous increase in actual rents.

The result from the remeasurement of investment property included EUR 14,180 thousand (previous year:EUR 0 thousand) for properties classified as long-term assets held for sale.

Please refer to section F.1 for further information.

3. Other operating income

Other operating income developed as follows in the 2013 and 2012 reporting periods:

2013 2012EUR ’000

Reversal of provisions/liabilities and write-downs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,525) (1,279)Insurance settlement payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,013) (1,330)TLG WOHNEN business management contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,629) (2,878)Tenant maintenance contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (677) (345)Subsidies for environmental remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (279) (1,336)Derecognition of liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,765) (2)Income related to other periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,453) (973)Miscellaneous other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,345) (1,547)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,687) (9,691)

The reversals of provisions, liabilities and write-downs includes in particular special items such as income from thereversal of real estate transfer taxes amounting to EUR 5,403 thousand. In addition, as arranged with the creditor, accruedinterest on the liabilities from the pass-through of purchase prices amounting to EUR 2,993 thousand was reversed.

Income from subsidies for environmental remediation related to refunds by government institutions of expensesincurred by the Group.

4. Personnel expenses

Personnel expenses were as follows in financial years 2012 and 2013:

2013 2012EUR ’000

Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,777 14,905Social security contributions and cost of old age pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,482 2,691Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,279 1,352Severance packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,856 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,394 18,948

The Company initiated significant restructuring measures in the beginning of 2013. Over the course of the year, theactivities carried out by branch offices were integrated with the central office, thus concentrating operating activities there.Additionally, the workforce was streamlined. This streamlining goes hand-in-hand with the strategic objectives of theproperty portfolio.

TLG IMMOBILIEN is conscious of its social responsibility and on 7 March 2013 adopted measures for areconciliation of interests on the basis of the social plan dated 1 November 2011. In this context, the Company has incurredexpenses relating to severance packages.

The decrease in expenses for salaries, bonus payments and social security contributions was attributable primarily tothe decline in the employee headcount in connection with the restructuring measures.

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5. Depreciation, amortisation and write-downs

Depreciation, amortisation and write-downs developed as follows during the financial year and in the prior-yearcomparative period:

2013 2012EUR ’000

Amortisation of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787 756Depreciation of land and land rights with buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 343Depreciation of technical equipment and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 137Depreciation of other factory and office equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 337

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,461 1,573

Depreciation on land and land rights with buildings relate to owner-occupied properties. Please refer to section F.2for further information.

6. Other operating expenses

Other operating expenses developed as follows in the 2013 and 2012 financial years:

2013 2012EUR ’000

Valuation allowances and impairment losses on receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,883 3,417Advising and audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,998 961General IT and administrative costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,836 2,841Depreciation of real estate inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 840 541Ancillary costs for business premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 852 826Advertising and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525 1,152Vehicle and travel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452 566Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 92Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,043 1,622Reversal of provisions/liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,748) (3,727)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,812 8,290

The increase in advising fees was related to the Group’s restructuring.

The decrease in the expenses for advertising and marketing was attributable to the realisation of savings potential inconnection with the Group’s restructuring programme.

The “Other” line item primarily contains losses on disposals of property, plant and equipment, expenses forcontinuing education and expenses for the liquidation of assets.

The amounts reversed for provisions and liabilities include amounts from prior-period invoices and provisions fromthe previous year for other expenses; these provisions did not match the amounts invoiced.

7. Income from joint ventures

Income from joint ventures resulted primarily from the change in the equity investment in Altmarkt-GalerieDresden KG, Hamburg (AGD) in the previous year. This was due primarily to the Group’s share of the prior-period profit andthe result from the fair value adjustment for AGD’s properties, less deferred taxes. During the reporting year, this itemconsisted primarily of the gain on the disposal of the equity interest.

8. Interest result

The interest result can be broken down as follows:

2013 2012EUR ’000

Interest income from bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (465) (588)Interest income from default interest and deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (175) (258)Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) (47)

Total interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (652) (893)

Interest expenses for interest rate derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,996 8,879Interest on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,620 12,808Interest expense on pension provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 261Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 533

Total interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,039 22,481

Interest result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,387 21,588

F-49

The increase in interest on loans resulted in the assumption of a loan liability from the shareholder, which waslargely repaid during the course of the year, (see also section F.11) and an overall increase in financial liabilities.

The interest expense for interest rate hedges was lower, particularly due to the fact that in January 2013 interest ratehedges were unwound without novation in 2013.

9. Gain/loss from the remeasurement of derivatives

In financial year 2013, the Company recorded a gain on the fair value remeasurement of derivatives amounting toEUR 6,899 thousand (financial year 2012: loss of EUR 9,951 thousand). The reduction of the negative effects from the fairvalue remeasurement of interest rate derivatives was attributable primarily to an increase in the yield curve as compared to31 December 2013. There were no ineffective portions of derivatives used for hedging purposes in financial year 2013. Nohedge accounting was applied in financial year 2012.

10. Income taxes

The tax expense/income can be broken down as follows:

2013 2012EUR ’000

Current income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,480) (4,507)Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,810) (59,005)

Tax expense/income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47,290) (63,512)

Prior-period income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (260) (16)

The expected (notional) income tax expense is reconciled to the income tax reported in the consolidated statementof comprehensive income as follows:

2013 2012EUR ’000

Earnings before taxes in accordance with IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,423 139,776

Group tax rate in % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.88% 30.88%

Expected income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45,215) (43,163)

Trade tax additions and deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (671) 137Differences in tax rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (351)Prior-year tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (260) (16)Tax-free income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (759) (692)Non-deductible operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (409) (38)Expiry of loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (17,152)Other tax effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 (2,237)

Effective income taxes in accordance with the statement of comprehensive income . . . . . . . . . . . (47,290) (63,512)

Effective tax rate in % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.30% 45.44%

Deferred tax assets on loss carryforwards were capitalised for the first time as at 1 January 2012 in the amountof EUR 24,413 thousand. No deferred tax assets were recognised for trade and corporation tax losses amounting toEUR 831,975 thousand. The loss carryforward was partially utilised in financial year 2012. The elimination of the deferredtax assets on the remaining loss carryforwards amounting to EUR 17,152 thousand resulted from a change in shareholders atTLG IMMOBILIEN at the end of financial year 2012. Following the elimination of the entirety of the remaining trade tax losscarryforwards totalling EUR 418,693 thousand and the elimination of the remaining corporation tax loss carryforwardstotalling EUR 445,333 thousand, no deferred taxes on loss carryforwards have been recognised since 31 December 2012.

The tax rate used to calculate the notional income tax reflects the currently applicable tax rates as well as expectedfuture rates based on current tax law; the rates used are: 15% for corporation tax (2012: 15%) plus the solidarity surcharge of5.5% (2012: 5.5%) of adjusted net income. The weighted multiplier for municipal trade taxes for the City of Berlin and themunicipalities in which TLG maintains business premises was 430.32% in the financial year (2012: 428.76%). Factoring inthe multiplier and the base rate for trade tax of 3.5% (2012: 3.5%), the trade tax rate was thus 15.06% (2012: 15.01%).

The domestic tax rate used as a basis for calculating deferred taxes and the expected (notional) tax expense of theGroup was thus 30.875% during the reporting year (2012: 30.875%).

F-50

Deferred tax assets and liabilities before balancing developed as follows as at the reporting date:

2013 2012EUR ’000

Deferred tax assets at beginning of reporting year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,923 49,551Changes recognised in profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,062) (27,077)Changes recognised in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 449

Deferred tax assets at end of reporting year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,927 22,923

Deferred tax liabilities at beginning of reporting year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,771 65,843Changes recognised in profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,252) 31,928Changes recognised in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —

Deferred tax liabilities at end of reporting year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,519 97,771

Deferred tax assets, which are recognised in equity, result from actuarial losses relating to pension obligations andreserves for hedge accounting.

H. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

The consolidated statement of cash flows presents the changes in cash and cash equivalents as reported in thestatement of financial position resulting from inflows and outflows in accordance with the requirements of IAS 7.

Cash flows are classified as resulting from operating activities, investing activities or financing activities. Cashflows from operating activities are derived using the indirect method in accordance with IAS 7.18 (b), starting from earningsbefore taxes. Cash flows from investing activities and financing activities are calculated on a cash basis.

Cash and cash equivalents includes cash-in-hand and bank balances. Please refer to section E.10 for furtherinformation.

The Group held EUR 138,930 thousand in cash and cash equivalents as at 31 December 2013 (31 December 2012:EUR 60,527 thousand; 1 January 2012: EUR 33,590 thousand), which was not subject to any restrictions.

Earnings before taxes, the starting point for calculating cash flows from operating activities, remained relativelyconstant. Overall, cash flows from operating activities fell by EUR 120,493 thousand. In particular, material items affectingthis figure included the decline of the reduction in inventories by EUR 35,583 thousand as a result of the disposals in line withthe corporate strategy and a EUR 37,011 thousand reduction in trade and other liabilities. This development resulted inparticular from the settlement of the real estate transfer tax resulting from the spin-off of the residential portfolio. In addition,interest paid increased by EUR 35,272 thousand as compared to the previous year due to the early reversal of interest ratehedges, increased liabilities due to financial institutions and higher interests on loans due to the acquisition financing.

Cash flow from investing activities comprises cash investments and disposals. These items increased byEUR 299,845 thousand to EUR 220,892 thousand in financial year 2013. This change was based primarily on proceeds fromdisposals of property, plant and equipment and non-current financial assets, which were significantly higher than in financialyear 2012 and less acquisitions of investment property.

Cash flows from financing activities consisted primarily of repayments of principle on existing loans (2013:EUR 429,333 thousand; 2012: EUR 15,893 thousand) as well as proceeds from new borrowings (2013:EUR 252,511 thousand; 2012: EUR 71,200 thousand). The assumption of the shareholder’s loan liability had no effect oncash (section F.10).

Section B.5 contains notes on the reconciliation of the 2012 HGB and IFRS consolidated statements of cash flows.

F-51

I. OTHER DISCLOSURES

1. Disclosures relating to financial instruments

Presentation of measurement categories and classes

The table below presents the financial assets and financial liabilities by measurement category and class. Thepresentation also includes derivatives used in hedges, although they do not belong to any measurement category underIAS 39. In addition, the non-financial liabilities are presented for the purposes of reconciliation to the statement of financialposition, although these do not fall within the scope of IFRS 7:

31/12/2013




Nomeasurement






Fairvalue

Carryingamount

Carryingamount

Carryingamount

Carryingamount

EUR ’000Other non-current financial

assets . . . . . . . . . . . . . . . . . . . . . . AfS 124 n/a 124Trade receivables . . . . . . . . . . . . . . LaR 11,567 11,567 11,567Other non-current financial

assets . . . . . . . . . . . . . . . . . . . . . . LaR 4,953 4,953 4,953Financial derivatives1) . . . . . . . . . . FAHfT 15 15Cash and cash equivalents . . . . . . . LaR 138,930 138,930 138,930

Total financial assets . . . . . . . . . . 155,574 155,449 15 0 0 155,589

Liabilities due to financialinstitutions2) . . . . . . . . . . . . . . . . FLaC 626,227 640,477 626,227

Trade payables . . . . . . . . . . . . . . . . FLaC 14,573 14,573 14,573Financial derivatives1) . . . . . . . . . . FLHfT 18,608 180 18,788Other liabilities . . . . . . . . . . . . . . . . FLaC 19,520 11,983 7,537 19,520

Total financial liabilities . . . . . . . . 660,321 667,033 18,608 180 7,537 679,109


31/12/2012




Nomeasurement






Fairvalue

Carryingamount

Carryingamount

Carryingamount

Carryingamount

EUR ’000Other financial assets . . . . . . . . . . . AfS 128 n/a 128Trade receivables . . . . . . . . . . . . . . LaR 9,578 9,578 9,578Other financial assets . . . . . . . . . . . LaR 10,042 10,042 10,042Financial derivatives1) . . . . . . . . . . . FAHfT 6 6Cash and cash equivalents . . . . . . . LaR 60,527 60,527 60,527

Total financial assets . . . . . . . . . . . 80,275 80,147 6 0 0 80,280


Trade payables . . . . . . . . . . . . . . . . FLaC 29,818 29,818 29,818Financial derivatives1) . . . . . . . . . . . FLHfT 43,431 43,431Other liabilities . . . . . . . . . . . . . . . . FLaC 38,318 10,160 28,158 38,318



F-52

01/01/2012




Nomeasurement






Fairvalue

Carryingamount

Carryingamount

Carryingamount

Carryingamount

EUR ’000Other financial assets . . . . . . . . . . . AfS 132 n/a 132Trade receivables . . . . . . . . . . . . . . LaR 19,065 19,065 19,065Other financial assets . . . . . . . . . . . LaR 9,497 9,497 9,497Financial derivatives1) . . . . . . . . . . FAHfT 49 49Cash and cash equivalents . . . . . . . LaR 33,590 33,590 33,590

Total financial assets . . . . . . . . . . 62,284 62,152 49 0 0 62,333


Trade payables . . . . . . . . . . . . . . . . FLaC 19,727 19,727 19,727Payables due to shareholders . . . . . FLaC 53,748 53,748 53,748Financial derivatives1) . . . . . . . . . . FLHfT 33,523 33,523Other liabilities . . . . . . . . . . . . . . . . FLaC 46,584 2,085 44,498 46,584



LaR = Loans and ReceivablesHfT = Held for TradingAfS = Available for SaleFLaC = Financial Liabilities at CostFAHfT = Financial Assets Held for TradingFLHfT = Financial Liabilities Held for Trading

The “Other financial assets” class includes AfS financial instruments amounting to EUR 124 thousand(31 December 2012: EUR 128 thousand). These are shares in entities which are not fully consolidated. The instruments arecarried at amortised cost since there is no quoted price available for them on an active market and it is not possible to reliablydetermine their fair value.

The carrying amounts of cash and cash equivalents, trade receivables, other financial assets, trade payables andother liabilities for the most part have short remaining terms and approximate the fair values as at the reporting date.

Net results by measurement category

In accordance with IFRS 7.20 (a), net gains or net losses on financial instruments must be disclosed for everymeasurement category set out in IAS 39. This does not include gains or losses from derivatives used in hedges since these areaccounted for in accordance with special provisions and therefore not allocated to any of the measurement categories set outin IAS 39.

The net results from financial instruments, broken down by individual measurement categories under IAS 39, wereas follows:

2013 2012EUR ’000

Loans extended and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LaR (30) 1,586Available-for-sale financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AfS 3 3Financial assets held for trading (at FV through profit or loss) . . . . . . . . . . . . . . . . . . . . . . FAHFT 218 43Financial liabilities held for trading (at FV through profit or loss) . . . . . . . . . . . . . . . . . . . FLHfT (121) 18,787Financial liabilities at amortised cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FLaC 28,833 13,341

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,903 33,761

The net result from the Loans and Receivables measurement category includes interest income arising from cash,write-downs and reversals of write-downs in relation to the reversal of valuation allowances on rent receivables and the write-offs of rent receivables. Of that amount, EUR 652 thousand (previous year: EUR 893 thousand) was included in interestincome.

F-53

The net result from the Financial Assets Held for Trading measurement category includes interest expenses andincome for financial instruments not used in effective hedges and the measurement gains and losses from marking thesederivatives to market.

The net result from the Financial Liabilities at Cost measurement category includes interest expenses for currentdebt servicing and the result from the amortisation of loans, which is also included in the interest expense.

Principles of financial risk management

In the course of conducting its business activities, the TLG Group is exposed to various financial risks. Specifically,these are interest rate risk, liquidity risk and default risk in the context of sales and lease agreements. These risks are separaterisk types which are constantly and systematically monitored under the existing risk management system. Executives fromoperating areas are responsible for identifying, monitoring, communicating, managing and controlling the various risksaffecting the areas for which they are assigned responsibility. In this way, the Group ensures that the risk types are managedby the appropriate risk owners. The basic principles for identifying, monitoring, communicating, managing and controllingthese and other entrepreneurial risks are laid out in a risk manual which is constantly updated. Risk management is an integralfunction of corporate financial controlling.

Default risk

Default risk is the risk that counterparties—essentially the tenants and acquirers of real properties—will be unableto satisfy their contractual payment obligations and that this will result in a loss for the TLG Group. Credit checks areconducted as part of default risk management.

Trade receivables in particular are exposed to default risk. The TLG Group does not consider itself exposed to anymaterial credit risk from any single counterparty. Given the Group’s broad, heterogeneous customer base, the concentration ofits credit risk is limited. Default risk is reduced through the careful screening of counterparties by way of professional creditchecks. In addition, the Group makes use of standard collateral instruments such as sureties, liens, guarantees, letters ofcomfort, withholdings and security deposits. Where necessary, valuation allowances are recognised in respect of receivables.

Counterparty creditworthiness is subject to continuous monitoring. If a counterparty’s creditworthiness deterioratessignificantly, the Company undertakes efforts to reduce its existing exposure as quickly as possible. New exposures to suchcounterparties are no longer entered into.

TLG IMMOBILIEN GmbH’s balances with banks are fully protected against the risk of a bank default through thedeposit protection schemes in place for German banks. TLG IMMOBILIEN GmbH regularly monitors the banks’membership and amount subject to deposit protection.

The maximum possible default risk is equal to the book value of financial assets, excluding the value of collateralreceived or other risk-minimising arrangements. Sureties are not entered into for subsidiaries or equity investments.

The table below presents the financial assets for which write-downs were recognised as at the reporting date:

31/12/2013

Carryingamount prior

toimpairment Write downs

Residualcarryingamount

EUR ’000Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,586 (7,019) 11,567Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,134 (57) 5,077

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,720 (7,076) 16,644

31/12/2012




EUR ’000Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,964 (8,386) 9,578Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,221 (52) 10,170

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,186 (8,438) 19,748

01/01/2012




EUR ’000Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,714 (8,649) 19,065Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,860 (2,232) 9,629

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,574 (10,880) 28,694

F-54

Gross trade receivables have been secured with collateral (primarily security deposits amounting to EUR 4.6million; previous year: EUR 3.9 million), which may be used to settle outstanding receivables provided that the legalrequirements to do so have been satisfied.

Write-downs developed as follows in financial year 2013:

2013 As at 01/01 Additions Utilisations Reversals As at 31/12EUR ’000

Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,386 1,621 (1,862) (1,127) 7,019Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 7 (0) (2) 57

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,438 1,628 (1,862) (1,129) 7,076

Write-downs developed as follows in financial year 2012:

2012 As at 01/01 Additions Utilisations Reversals As at 31/12EUR ’000

Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,649 2,563 (1,756) (1,069) 8,386Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,232 39 (2,008) (210) 52

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,880 2,601 (3,764) (1,279) 8,438

In addition, the table below presents the age structure of financial assets which were overdue as at the reporting datebut which had not been written down.

31/12/2013Carryingamount

Neitherimpaired noroverdue as at

reportingdate

Of which overdue but not impairedas at the reporting date

<90 days 90-180 days > 180 daysEUR ’000

Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,567 2,022 143 34 865Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,077 159 26 6 19Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . 138,930 143,165 — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,574 145,346 169 40 884


Of whichneither

impaired noroverdue as at

reportingdate


<90 days 90-180 days > > 180 daysEUR ’000

Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,578 1,415 1,097 36 172Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,170 172 6 15 28Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . 60,527 69,933 — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,275 71,520 1,103 51 200


Neitherimpaired noroverdue as at

reportingdate


<90 days 90-180 days > 180 daysEUR ’000

Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,065 9,859 179 709 599Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,629 125 25 5 19Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . 33,590 33,590 — — —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,284 43,574 204 714 618

Receivables which are neither impaired nor overdue are considered to be recoverable.

F-55

Offsetting financial assets and financial liabilities

The following financial assets and financial obligations are offset against each other:

Financial assets31/12/2013

Gross carryingamount of

financial assets


financial liabilitieswhich were offsetin the statement offinancial position

Net carryingamount of

financial assetsreported in the

statement offinancial position

EUR ’000Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,289 (16,665) 2,39531/12/2012Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,334 (16,291) 2,27301/01/2012Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,088 (34,820) 1,311

Financial liabilities31/12/2013


financial liabilitieswhich were offsetin the statement offinancial position


financial assets

Net carryingamount of

financial assetsreported in the

statement offinancial position

EUR ’000Advance payments (utilities and other operating costs) . . . . . . . . . . . . (16,665) 17,289 (1,771)31/12/2012Advance payments (utilities and other operating costs) . . . . . . . . . . . . (16,291) 16,334 (2,230)01/01/2012Advance payments (utilities and other operating costs) . . . . . . . . . . . . (34,820) 34,088 (1,972)

Tenants’ advance payments of utilities and other operating costs are offset against corresponding receivables arisingfrom utilities and other operating costs for each tenant.

Liquidity risk

Liquidity risk is the risk that a company will not be able to fulfil its payment obligations at the contractuallystipulated time.

To safeguard the Group’s liquidity, Group Treasury constantly monitors and plans the Group’s liquidity needs.Sufficient funds are constantly kept at hand to ensure that the Group is able to satisfy its obligations over a certain period.

In addition, the Group has a short-term line of credit for EUR 7,000 thousand which it may draw down as it needs.The credit line is unsecured.

The table below presents the contractually stipulated (undiscounted) payments of interest and principal for the TLGGroup’s primary financial liabilities and financial instruments with a negative fair value. Maturities are based on thecontractually stipulated fixed-interest periods for the financial liabilities.



EUR ’000Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626,227 123,890 261,447 318,064Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,788 6,234 14,431 -279Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,573 14,573 0 0Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,520 16,136 3,384 0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679,109 160,833 279,261 317,786



EUR ’000Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480,041 103,856 200,619 224,894Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,431 9,734 30,835 5,093Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,818 29,818 0 0Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,318 34,051 4,266 0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591,607 177,459 235,720 229,988

F-56



EUR ’000Liabilities due to financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424,060 26,942 181,498 284,196Financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,523 7,955 24,384 5,290Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,727 19,727 0 0Payables due to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,748 53,748 0 0Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,584 41,435 5,111 38

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577,642 149,807 210,993 289,525

The table includes all instruments held, for which payments had already been contractually agreed as at thereporting date. Planning figures for future new liabilities are not factored in. The floating interest payments for financialinstruments are calculated on the basis of the interest rates most recently set prior to the reporting date. Financial liabilitieswhich may be called at any time are always reported under the earliest repayment date.

Certain financing agreements stipulate financial covenants (essentially the Group’s equity ratio, loan-to-value andinterest and capital servicing cover ratio) which, if breached, may grant the bank an extraordinary call right. The Companycounteracts the risk of a breach of covenant through regular monitoring of the covenants and, where necessary, initiatesmeasures aimed to ensure compliance with the covenants. There also exists the option of rendering special payment to remedya breach of covenant. There were no breaches of covenant in 2013 or 2012. Nor are any covenants expected to be breached inthe future.

Market risk (interest rate risk + currency risk)

Interest rate movements can also lead to higher financing costs as a result of rising interest rates. The Companycounteracts this interest rate risk by concluding interest rate hedges for floating-rate loans and by entering into fixed-interestagreements with multi-year terms. Interest rate derivatives (consisting of interest rate swaps and caps) are used to hedgechanges in interest rates. The use of such interest rate derivatives is governed by a set of guidelines. Under those guidelines,financial instruments may be used strictly for hedging purposes and not for trading purposes. In general, there exists aneconomic hedge relationship for all floating-rate loans. In individual cases, particularly those involving short-term loans, nohedge is concluded.

Currency risk does not affect the TLG Group since material business transactions are conducted in euros.

As at 31 December 2013, the following financial instruments were held by the Group, with maturities presented asat the balance sheet date. Please refer also to section I.10.

Derivatives31/12/2013 Fair value < 1 year

EUR ’000Derivative HfT assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 —of which caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 15Derivative HfT liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18,608 —of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16,835 —of which collars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,773 —Derivatives used in hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -180 —of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -180 —

The following financial instruments were held by the Group as at 31 December 2012:


EUR ’000Derivative HfT assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 —of which caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6Derivative HfT liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -43,431 -18,158of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -41,103 -18,158of which collars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,328 —

The following financial instruments were held by the Group as at 01 January 2012:


EUR ’000Derivative HfT assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 —of which caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 —Derivative HfT liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33,523 —of which interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -31,696 —of which collars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,827 —

F-57

To the extent the derivatives concluded qualify for hedge accounting, they are used as hedges in accordance withIAS 39. The cash flows from underlying transactions secured in cash flow hedges will flow through the consolidatedstatement of comprehensive income in the years from 2014 to 2021.

In 2013, as in the previous year, no ineffective portions of hedges were reported in the consolidated statement ofcomprehensive income as part of hedge accounting.

The table below shows the amount reported directly in other comprehensive income during the reporting period.That amount corresponds to the effective portion of the fair value hedge.

2013 2012EUR ’000

As at 01/01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0Recognised in equity during reporting period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -180 0Reversed from equity to income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0

As at 31/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -180 0

Sensitivity analysis

In accordance with IFRS 7, interest rate risks are presented using sensitivity analyses. These analyses calculate theimpacts of a change in market interest rates would have on interest income and expense, trading gains and losses and equity asat the reporting date.

The sensitivity analysis examines what effects a parallel shift in the yield curve by +/- 100 basis points would haveon the TLG Group’s equity and consolidated statement of comprehensive income. A -100 bp shift in the yield curve wouldresult in a reduction of the interest rate by a maximum of 0%. The cash-flow effects of a shift in the yield curve relate solelyto interest expenses and income for the subsequent reporting period.

Based on the financial instruments held or issued by TLG as at the reporting date, a hypotheticalchange—quantified by way of sensitivity analysis—in the interest rates applicable to the relevant instruments would have hadthe following (pre-tax) effects as at the reporting date.

Financial Instruments31.12.2013in EUR ’000

OCI - effect Earnings - effect+ 100 BP – 100 BP + 100 BP – 100 BP

Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 -3,088 886Financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,973 -4,340 7,009 -6,784



Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 -2,572 506Financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 13,259 -13,846



Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 -2,499 2,499Financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 14,389 -15,559

2. Number of employees

As at 31 December 2013, the Company employed 197 people (31 December 2012: 241).

31/12/2013

Averagenumber of

employees in2013 31/12/2012

Averagenumber of

employees in2012

Permanent employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 205 223 225Temporary employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 13 17 19

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 219 240 244

1.8% of the employees worked part-time as at 31 December 2013. For that reason, the number of employees is notdepicted in FTEs.

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3. Total auditors’ fees

The following fees have been expensed for the services rendered by the auditor during the financial year:

2013 2012EUR ’000

Audit services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 128Other assurance services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 18Tax advisory services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0Other services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 12

Total fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275 158

Other assurance services primarily consist of enquiries and examinations in connection with the separate andaggregate balance sheets to be prepared by TLG IMMOBILIEN GmbH as at the specified date as well as specific schedules tobe prepared pursuant to section 5 of the purchase agreement dated 19 December 2012.

Other services related primarily to services rendered in connection with the project “Supporting the efficiencyenhancement through process evaluation”.

4. Related parties

Related parties are defined as companies or persons which have the ability to control or exercise a materialinfluence over the TLG Group, or which the TLG Group controls or exercises a material influence over.

Accordingly, the members and immediate relatives of the management, Supervisory Board and Advisory Board ofTLG IMMOBILIEN GmbH are considered related parties, as are members of management who exercise key executivefunctions, as well as the TLG Group’s subsidiaries, associates and joint ventures.

As a result of the change in shareholders with effect from 31 December 2012, TLG’s related parties included theFederal Republic of Germany, represented by the Federal Ministry of Finance, until that date, as well as LSREF II EASTACQUICO S.à r.l. and Delpheast Beteiligungs GmbH & Co. KG and their respective related parties beginning from that date.

The members of the Company’s Supervisory Board, which had existed prior to the change in shareholders, resignedwith effect from 26 December 2012 due to the change in shareholders at the end of 2012.

By resolution dated 30 January 2013, the new shareholders have formed an Advisory Board for the Company,comprising a chairman and two members.

Related companies

a) Related companies prior to the change in shareholders as at 31 December 2012

Prior to 31 December 2012, the German federal government and the companies which it controlled or had theability to exercise a material influence over were considered related companies to TLG. TLG’s business relationships aremaintained directly between the Company and the individual companies, authorities and other government agencies as partieswhich are independent of each other.

EUR 83.7 million was distributed to the former shareholder in financial year 2012. That distribution comprised thecorresponding net retained profits from the previous year (EUR 18.4 million), the reversal of the capital reserves(EUR 11.6 million) and liabilities as at 1 January 2012 from the prior-year profit.

Transactions conducted in financial year 2012 with German state-owned enterprises within the meaning of IAS 24related for the most part to the operating division and, unless stated otherwise below, were insignificant on the whole forTLG.

Revenue

In financial year 2012, TLG generated revenue from German state-owned enterprises. A significant portion of thatrevenue was attributable to Germany’s Federal Office for Real Estate Management (Bundesanstalt für Immobilienaufgaben).

Service and agency agreements

Subsequently to the spin-off of TLG WOHNEN GmbH (see also section F.9) from TLG IMMOBILIEN GmbH asat 1 January 2012, the two companies entered into an agency agreement. Under that agreement, TLG IMMOBILIEN assumeda variety of services for TLG WOHNEN. The agreement covered a volume of EUR 2,878 thousand in 2012.

F-59

In the context of the sale of its shares at the end of 2012, the previous shareholder of TLG IMMOBILIEN, theFederal Republic of Germany, decided to engage the Federal Office for Real Estate Management (Bundesanstalt fürImmobilienaufgaben) as an agent to carry out certain tasks from TLG IMMOBILIEN’s “prior business” in conjunction withthe sale (particularly in the 1990s) of a number of plots of land. This agency agreement has a term until the end of 2027 andwas entered into at the end of 2012; the services will be rendered free of charge to TLG IMMOBILIEN on the basis of itscurrent shareholder structure.

Restitution risk

TLG IMMOBILIEN faces the risk of claims from former owners or their successors for the return of property(in rem restitution) or claims for disbursement of the purchase price of properties sold or the disbursement of the market valueof the properties (financial restitution). The basis for such claims lies in the special legal situation stemming from Germany’sreunification.

On the basis of an agreement between TLG IMMOBILIEN and the Federal Agency for Unification-related SpecialTasks (Bundesanstalt für vereinigungsbedingte Sonderaufgaben, BvS), all risks of TLG IMMOBILIEN and its subsidiariesarising from financial restitution had been transferred to the BvS as at 1 January 2008. With respect to the (residual) risk ofrem restitution of properties, TLG IMMOBILIEN and its subsidiaries have had the right since 1 January 2012 to assert aclaim for full and complete compensation from the BvS. In 2012, the BvS disbursed approximately EUR 1,200 thousand tothird parties on behalf of TLG IMMOBILIEN.

b) Related companies subsequent to the change in shareholders as at 31 December 2012

In financial year 2013, TLG distributed EUR 199.8 million from capital reserves, EUR 96.4 million from retainedearnings and EUR 29.0 million from current net income to shareholders. In place of a cash distribution, the shareholders’ loanliabilities (EUR 325.2 million) were assumed with discharging effect.

In addition, EUR 20.5 million was paid into capital reserves.

Receivables and liabilities as at the reporting date, as well as expenses and income for the financial year attributableto related companies following the change in shareholders are presented in the tables below.

2013 2012EUR ’000

Statement of financial position and statement of comprehensive incomeLiabilities to other related companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 19,599Expenses for other related companies (interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547 0Expenses for other related companies (guarantee commissions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 0

Income from joint ventures is reported separately in the consolidated statement of comprehensive income.

Related persons

In 2012 and 2013, the remuneration of the managing directors of TLG was structured as follows:

The total remuneration for the management amounted to EUR 1.3 million in 2013 (2012: EUR 1.2 million). Of thatamount, EUR 0.5 million (2012: EUR 0.5 million) related to fixed components and EUR 0.3 million (2012: EUR 0.7 million)to variable components. In addition, in 2013 EUR 0.5 million in termination benefits were paid. Moreover, individualmanaging directors were employed by Hudson Advisors Germany GmbH in financial year 2013 and received their salariesfrom there.

Remuneration of former members of the management amounted to EUR 0.15 million in 2013 (2012: EUR 0.15million). In 2013, EUR 2.7 million was set aside as provisions for pension obligations to former members of the management(2012: EUR 2.8 million).

The total remuneration for the Supervisory Board amounted to EUR 0.1 million in 2012. The Supervisory Boardceased its activities at the end of the year 2012 and the members either resigned or were recalled.


Contingent liabilities relate to items for which the Group has issued guarantees to various counterparties, and wereas follows:

31/12/2013 31/12/2012EUR ’000

Land charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623,175 474,541Negative pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 806

623,253 475,347

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6. Other financial obligations

The Group’s other financial obligations as at the reporting date consisted of future payments (net) for operatingleases amounting to EUR 691 thousand (2012: EUR 603 thousand) and a purchase commitment for investment property andproperty, plant and equipment amounting to EUR 41,005 thousand (2012: EUR 65,278 thousand).

The Company is party to a variety of service agreements for IT services, cleaning, reception and security services,as well as vehicle leases for the Company’s vehicle fleet. The notice periods for terminating the leases and service agreementsare in 2014. The advantage of these operating leases is that they facilitate current operations without necessitating investmentand the corresponding outflows of cash. No risks have been identified in this context.

The obligations from future minimum lease payments arising from non-cancellable operating leases fall due asfollows:

Remainingterm up to

1 year

Remainingterm up to

2 years

Remainingterm up to

3 years TotalEUR ’000

31/12/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 65 37 24731/12/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 26 0 129

Moreover, there exist future payment obligations under service agreements amounting to EUR 444 thousand(previous year: EUR 474 thousand).

The expense for minimum lease payments in 2013 amounted to EUR 577 thousand (2012: EUR 766 thousand).

7. List of equity investments

As in the previous year, TLG IMMOBILIEN GmbH held a 100% equity interest in the following fully consolidatedcompanies as at 31 December 2013:

Name and domicile of companyEquity as at31/12/2013

Net income/lossfor financial

year 2013EUR ’000 EUR ’000

TLG Gewerbepark Grimma GmbH, Grimma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,248 -6,623TLG Vermögensverwaltungs GmbH, Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 -10Hotel de Saxe an der Frauenkirche GmbH, Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,428 1,370Verwaltungsgesellschaft an der Frauenkirche mbH, Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 -8

Until they were deconsolidated in financial year 2012, TLG Gewerbepark Simson GmbH, Suhl and TLGTechnologiepark Ilmenau GmbH, Ilmenau, had been fully consolidated.

In addition, in 2012 and 2013, the Parent held equity interests in the following companies, which for reasons ofimmateriality were reported at cost as part of the Group’s non-current financial assets:

Name and domicile of company InterestEquity as at31/12/2013

Net income/lossfor financial

year 2013EUR ’000 EUR ’000

InvestitionsgesellschaftHausvogteiplatz 11 Verwaltung mbH, Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50% 23 1InvestitionsgesellschaftHausvogteiplatz 11 mbH & Co. KG, Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50% 267 43

The Group’s shareholdings changed as compared to 31 December 2012 only as a result of the disposal of Altmarkt-Galerie Dresden KG, Hamburg (AGD) in which TLG still held a 33% interest as at the end of the preceding financial year,which was previously accounted for in accordance with the equity method.

Management

The management team of TLG IMMOBILIEN GmbH consists/consisted of the following members:

Mr Jochen-Konrad Fromme (until 10 June 2013)

Mr Niclas Karoff

Mr Peter Finkbeiner (since 2 January 2013)

Dr Michael Damnitz (from 2 January 2013 to 30 January 2013)

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Supervisory Board/Advisory Board

The Advisory Board of the Company has been composed of the following members since 30 January 2013:

Mr Alexander HesseChairman

Mr Olivier Brahin

Mr Philippe Couturier

The members of the Supervisory Board which was in place prior to the change in shareholders resigned with effectfrom 28 December 2012 or were recalled as at 2 January 2013. The Supervisory Board was composed of the followingmembers until then:

Ms Barbara A. KnoflachChairwomanuntil 26 December 2012

Dr Bruno KahlDeputy Chairmanuntil 26 December 2012

Mr Peter Alltschekowuntil 26 December 2012

Ms Annegret Austuntil 26 December 2012

Mr Jörg Carstensenuntil 31 August 2012

Mr Jürgen Ehrlichuntil 26 December 2012

Mr Hansjörg Königuntil 26 December 2012

Dr Eugen von Lackumuntil 26 December 2012

Ms Beate Lippoldfrom 31 August 2012until 26 December 2012

Prof. Wolfgang Pelzluntil 26 December 2012

Events after the reporting date

As at 31 March 2014, the Company called interest hedging instruments early. This resulted in an outflow ofEUR 20,573 thousand. In keeping with the Company’s strategy, interest rate hedges were concluded in March and April forall loans with the exception of one, which is classified as short term.

Further tranches amounting to EUR 188,868 thousand from already existing and new loan agreements were drawndown after 31 December 2013, and EUR 75,409 thousand was repaid on existing loans.

TLG purchased or had a notarised agreement for two properties with a volume of EUR 40,500 thousand in 2014.The transfer of benefits and risks of ownership for one property occurred on 8 February 2014. The transfer of benefits andrisks of ownership for the second property is planned for September 2014.

As part of the further strategic portfolio adjustment, sales of 91 properties with a disposal volume ofEUR 78,906 thousand were notarised by 30 June 2014.

F-62

Distributions totalling EUR 233,000 thousand were made to the shareholders in May and June 2014.

On 11 April 2014, the management of TLG IMMOBILIEN GmbH entered into a bilateral bonus agreement with theshareholders of the Company. Under the agreement, an appreciation in the value of the Company realised through a potentialexit or partial exit will be passed on to the beneficiaries in the form of a cash bonus payment.

The amount of the bonus to be paid will be determined on the basis of a reference value which is designed to reflectthe appreciation of shareholders’ invested equity over the term of their investment. The reference value is determined as thetotal of distributions to the shareholders less contributions made by the shareholders into the investment. The bonus paymentis based on a percentage of the reference value, linked to a 0.4% cap.

The bonus payment by the shareholders falls due if several cumulative requirements have been meet.

• Occurrence of an exit or partial exit event: neither the direct shareholders nor their associates continue to hold adirect or indirect interest in TLG IMMOBILIEN GmbH or the amount of their interest falls below the total oftheir current interest.

• Distributions must exceed contributions paid by the shareholders by more than 50%.

• At the (partial) exit date, the managing directors of TLG IMMOBILIEN GmbH must continue to be regularlyemployed by the Company.

The incentive programme stipulates a direct payment from the shareholders to the managing directors. The TLGGroup is not obligated to make these payments. The bonus programme described is therefore accounted for analogously toshare-based payments granted to the management of TLG IMMOBILIEN GmbH in accordance with IFRS 2. This is offset byan additional contribution by the shareholders into capital reserves.

Based on the assessment of the management of TLG IMMOBILIEN GmbH as to the likelihood of theaforementioned conditions being satisfied, a bonus payment is to be expected. The bonus will vest over a total of 18 monthsafter the agreement of the bonus arrangement.


The Management

[Signed]

F-63

The following English-language translation of the German-language auditor’s report refers to the consolidated financialstatements of TLG IMMOBILIEN GmbH, Berlin, prepared in accordance with International Financial Reporting Standards(IFRS), as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB(“Handelsgesetzbuch”: “German Commercial Code”) as well as the group management report, prepared on the basis ofGerman commercial law (HGB) for the fiscal year ended December 31, 2013 as a whole and not solely to the consolidatedfinancial statements presented in this Prospectus on the preceding pages.

AUDITOR’S REPORT

We have audited the consolidated financial statements prepared by TLG IMMOBILIEN GmbH, Berlin, comprising thestatement of financial position, the statement of comprehensive income, the statement of changes in equity, the cash flowstatement and the notes to the consolidated financial statements, together with the group management report for the fiscal yearfrom 1 January to 31 December 2013. The preparation of the consolidated financial statements and the group managementreport in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuantto Sec. 315a (1) HGB (“Handelsgesetzbuch”: “German Commercial Code”) are the responsibility of the parent company’smanagement. Our responsibility is to express an opinion on the consolidated financial statements and on the groupmanagement report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with Sec. 317 HGB and German generallyaccepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of PublicAuditors in Germany) (IDW). Those standards require that we plan and perform the audit such that misstatements materiallyaffecting the presentation of the net assets, financial position and results of operations in the consolidated financial statementsin accordance with the applicable financial reporting framework and in the group management report are detected withreasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group andexpectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness ofthe accounting-related internal control system and the evidence supporting the disclosures in the consolidated financialstatements and the group management report are examined primarily on a test basis within the framework of the audit. Theaudit includes assessing the annual financial statements of those entities included in consolidation, the determination ofentities to be included in consolidation, the accounting and consolidation principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements and the groupmanagement report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs as adopted by theEU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB and give a true and fair view ofthe net assets, financial position and results of operations of the Group in accordance with these requirements. The groupmanagement report is consistent with the consolidated financial statements and as a whole provides a suitable view of theGroup’s position and suitably presents the opportunities and risks of future development.


Ernst & Young GmbHWirtschaftsprüfungsgesellschaft

(signed) (signed)Plett PfeifferWirtschaftsprüfer Wirtschaftsprüferin(German Public Auditor) (German Public Auditor)

F-64

TLG Immobilien GmbH, Berlin, Germany: Audited Consolidated Financial Statements(Prepared in Accordance with German GAAP) of TLG Immobilien GmbH as of and for

the Fiscal Year Ended December 31, 2012

F-65

CONSOLIDATED BALANCE SHEET

ASSETS EUR EUR31/12/2011EUR ’000

A. FIXED ASSETS

I. Intangible fixed assetsPurchased software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,466,094.89 1,901

II. Tangible fixed assets1. Land, land rights and buildings, including buildings on third-party land . . . . 1,220,477,316.15 1,705,8962. Technical equipment and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 816,301.15 9863. Other equipment, operating and office equipment . . . . . . . . . . . . . . . . . . . . . . 3,454,102.58 3,8164. Prepayments and assets under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,453,325.13 48,879

1,304,201,045.01 1,759,577III. Long-term financial assets1. Shares in affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,550.95 1322. Shares in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,418,330.16 34,274

33,545,881.11 34,406

B. CURRENT ASSETS

I. Inventories1. Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,796,914.67 11,4672. Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,333,865.02 34,088

24,130,779.69 45,555II. Receivables and other assets1. Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,480,592.28 16,9602. Receivables from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,058.76 93. Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,956,482.80 3,400

10,446,133.84 20,369III. Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,587.66 38IV. Cash-in hand, bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,933,491.49 42,543C. PREPAID EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,319,264.09 7,112

1,451,083,277.78 1,911,501

EQUITY AND LIABILITIESA. EQUITY

I. Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000,000.00 52,000II. Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199,977,118.80 360,316III. Revenue reserves1. Special reserve in accordance with section 27 (2) of the D-Mark Accounting

Act (D-Mark-Bilanzgesetz, “DMBilG”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479,180,638.17 479,1812. Special reserve in accordance with section 17 (4) of the D-Mark Accounting

Act (D-Mark-Bilanzgesetz, “DMBilG”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,514,521.86 58,5683. Other revenue reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,451,612.27 96,657

653,146,772.30 634,406IV. Consolidated net accumulated losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,873,976.70 84,006V. Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 2

805,249,914.40 962,718B. NEGATIVE CONSOLIDATION DIFFERENCE . . . . . . . . . . . . . . . . . . . 7,028,937.04 7,936C. SPECIAL RESERVE FOR INVESTMENT GRANTS AND

SUBSIDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,368,431.61 35,800D. PROVISIONS1. Provisions for pensions and similar obligations . . . . . . . . . . . . . . . . . . . . . . . . 6,887,723.19 7,1172. Provisions for taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,779,393.10 39,4243. Provisions for restitutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 94. Other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,492,736.02 45,621

89,159,852.31 92,171E. LIABILITIES1. Liabilities to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480,110,272.45 696,8302. Payments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,986,728.41 35,7043. Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,132,235.53 7,0354. Liabilities to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 53,7485. Other liabilities

thereof taxes EUR 323,458.07 (PY: EUR 1,468 thousand)thereof social security EUR 150,714.15 (PY: EUR 11 thousand) . . . . . . . . . . 13,945,630.35 18,975

533,174,866.74 812,292F. DEFERRED INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,275.68 584

1,451,083,277.78 1,911,501

F-66

CONSOLIDATED INCOME STATEMENT

EUR EUR2011

EUR ’000

1. Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,675,422.60 247,4202. Decrease (PY: increase) in work in progress . . . . . . . . . . . . . . . . . . . . . . . 526,895.56 2,7203. Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,616,032.45 39,076

235,764,559.49 289,2164. Cost of materials

a) Disposals of real estate portfolio at carrying amounts . . . . . . . . . . . . 48,687,160.11 29,291b) Cost of purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,389,186.97 73,713

5. Personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,076,347.08 103,004a) Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,432,528.89 20,136b) Social security, post-employment and other employee benefit costs

thereof for pensions EUR 223,135.93(PY: EUR 266 thousand) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,668,715.46 3,293

6. Amortisation, depreciation and write-downs . . . . . . . . . . . . . . . . . . . . . . . 19,101,244.35 23,429a) of intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . 48,130,313.72 55,878b) of current assets in excess of the corporation’s standard

depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396,772.40 502

48,527,086.12 56,3807. Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,229,450.82 22,864

191,934,128.37 205,6778. Income from participations thereof from affiliated companies

EUR 2,331,265.52 (PY: EUR 471 thousand) . . . . . . . . . . . . . . . . . . . . . . . 2,331,265.52 4719. Other interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893,099.51 75810. Write-downs of long-term financial assets . . . . . . . . . . . . . . . . . . . . . . . . . 3,486.65 38511. Interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,926,159.17 32,364

-36,705,280.79 -31,520

12. Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,125,150.33 52,01913. Extraordinary expense/Extraordinary result . . . . . . . . . . . . . . . . . . . . . . . . 0.00 -23,12614. Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,507,424.36 10,06015. Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,937.12 177

16. Consolidated net income for the financial year . . . . . . . . . . . . . . . . . . . . . . 2,525,788.85 18,65617. Accumulated losses brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,005,631.73 28,91418. Profit distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,394,133.82 73,748

19. Consolidated net accumulated loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,873,976.70 84,006

F-67


2012 2011EUR million EUR million

1. Cash flows from operating activitiesNet income/loss for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 18.7Depreciation, amortisation and write-downs of intangible and tangible fixed assets/reversalsof write-downs of intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.3 48.9Decrease (PY: increase) in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.1 22.2Other non-cash income/expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.8 6.8Disposals of real estate portfolio at carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.6 25.9Decrease (PY: increase) in inventories, trade receivables and other assets . . . . . . . . . . . . . . . 7.9 -3.3Increase in trade payables, special reserves in accordance with section 27 (2) of the D-MarkAccounting Act (D-Mark-Bilanzgesetz, “DMBilG”) and other liabilities . . . . . . . . . . . . . . . . 11.4 5.0Change from deconsolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0 0.0Increase in special reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7 0.1

Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.5 124.3

2. Cash flows from investing activitiesProceeds from disposal of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 2.6Purchase of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -89.5 -115.4Purchase of intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.3 -1.2Purchase of long-term financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 -1.9

Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -86.6 -115.9

3. Cash flows from financing activitiesCash proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.2 107.3Cash repayments of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15.9 -68.1Cash payments to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -83.7 -20.0

Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -28.4 19.2

4. Cash and cash equivalents at end of periodNet change in cash and cash equivalents(Subtotals 1 – 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.5 27.6Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.5 14.9

Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.0 42.5

5. Composition of cash and cash equivalentsCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70.0 42.5


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F-69

NOTES

1. General

The consolidated financial statements for financial year 2012 were prepared on the basis of the annual financialstatements of TLG IMMOBILIEN GmbH, Berlin (“TLG IMMOBILIEN” or the “Parent”), and of 4 (PY: 6) of its fully-consolidated subsidiaries. The annual financial statements for each of the consolidated companies were prepared as at thesame balance sheet date as for the consolidated financial statements.

The consolidated financial statements prepared in accordance with the statutory provisions set forth insections 297 et seq. of the German Commercial Code (Handelsgesetzbuch, “HGB”) are materially influenced by the Parent,given its size in relation to the consolidated subsidiaries.

To date, the Federal Republic of Germany has been the sole owner of TLG IMMOBILIEN GmbH. The FederalRepublic of Germany sold 100% of its shares under an agreement dated 19 December 2012. LSREF II East AcquiCo S.à.r.l.,Luxembourg, acquired a 94.9% equity interest, and Delpheast Beteiligungs GmbH & Co. KG, Frankfurt/M, acquired 5.1% ofthe shares. The benefits and risks of ownership were transferred in accordance with the contractual provisions on31 December 2012.

2. Basis of consolidation

In accordance with section 294 (1) HGB, the following companies—each of which being wholly owned by theParent—were included with TLG IMMOBILIEN GmbH in the consolidated financial statements:

TLG Gewerbepark Grimma GmbH, Grimma

TLG Vermögensverwaltungs GmbH, Berlin

Hotel de Saxe an der Frauenkirche GmbH, Dresden, (renamed in financial year 2012, formerly Hotel de Saxe an derFrauenkirche GmbH & Co. KG, Dresden)

Verwaltungsgesellschaft an der Frauenkirche mbH, Dresden

TLG IMMOBILIEN has owned 100% (PY: 94%) of the shares in Verwaltungsgesellschaft an der FrauenkirchembH, Dresden, since financial year 2012. It acquired the remaining 6% of the shares from the former shareholder, Baywobau.

Altmarkt-Galerie Dresden KG, Hamburg, in which TLG IMMOBILIEN holds a 33% equity interest, was includedin the consolidated financial statements in accordance with the equity method (book value method) pursuant tosection 312 HGB. The object of the company is to acquire, develop, rent out and lease real estate—including in particular thereal estate set aside for the development of the Altmarkt-Galerie in Dresden—and to transact any and all business in relationthereto.

There are no longer any insignificant subsidiaries (section 296 (2) HGB) which are wholly owned by TLGIMMOBILIEN and which are not included in the basis of consolidation.

The changes in reporting entity structure stem from the liquidation of TLG Technologiepark Ilmenau GmbH i. L.,Ilmenau, and the sale of TLG Gewerbepark Simson GmbH, Suhl, in financial year 2012.

Furthermore, TLG IMMOBILIEN holds 50% of shares in the following companies, which are carried in theconsolidated financial statements at cost because they are insignificant in accordance with section 311 (2) HGB:

Investitionsgesellschaft Hausvogteiplatz 11 Verwaltung mbH, Berlin

Investitionsgesellschaft Hausvogteiplatz 11 mbH & Co. KG, Berlin

3. Consolidation principles

In accordance with section 301 (1) sentence 2 no. 1 HGB (old version), acquisitions are accounted for in accordancewith the book value method, whereby the carrying amount of the investment is eliminated against the proportionate amountthat the shares represent in the equity of the subsidiary as at the date of initial consolidation.

The carrying amount recognised upon the initial consolidation of one company which was still included in the basisof consolidation as at 31 December 2012 was lower than the Parent’s share of the equity, resulting in a negative consolidationdifference of EUR 7.0 million (PY: EUR 7.9 million). This negative consolidation difference is reported separately in equity.The Parent does not exercise the option set forth under section 309 (2) HGB. Disposals are not recognised until thedeconsolidation or liquidation date.

F-70

In accordance with section 303 HGB, the consolidation of intercompany balances entails the elimination ofreceivables and liabilities between the companies included in the consolidated financial statements.


The consolidated financial statements were prepared on the basis of the following accounting policies:

Purchased intangible fixed assets are recognised at cost and, if finite-lived, are amortised over their expected usefullives (3 to 5 years, straight-line method).

Tangible fixed assets are measured at cost or, if permanently impaired, the lower fair value, and depreciated on astraight-line basis over their standard useful lives. Borrowing costs are not capitalised.

Land, land rights and buildings which are intended for use in business operations on a permanent basis are measuredat cost and, if finite-lived, are depreciated on a straight-line basis over their standard useful lives.

Low-value assets with a net value of less than EUR 150.00 (prior to 31 December 2007: EUR 410.00) are writtenoff or expensed in full in the year in which they are acquired, with their immediate disposal being assumed. In the interest ofsimplification, the pooled item which is to be recognised for tax purposes each year for assets acquired after 31 December2007 at a cost of more than EUR 150.00 and less than EUR 1,000.00 has been included in the financial statements and issubjected to lump-sum depreciation by 20 percent p.a. in the year of acquisition and over the next four years.

Long-term financial assets are measured at the lower of cost or fair value and recognised in accordance with theequity method under shares in associates.

The remainder of the real estate assets are recognised as current assets since these properties are intended to beutilised. They are also recognised at the lower of cost or fair value.

Work in progress result in particular from the recognition of operating costs not yet invoiced, less discounts forvacancies and default risks.

Receivables and other assets are generally carried at their nominal amounts. Specific and global valuationallowances have been recognised to account for identified risks.

Securities are measured in accordance with the principle of lower of cost or market value.

The special reserve for investment grants and subsidies is reversed in accordance with the useful lives of thesubsidised assets.

Provisions for pensions and similar obligations are recognised in accordance with the projected unit credit methodusing the 2005 G mortality tables. The discount rate applied across the board represents the average market rate of interest foran expected residual term of 15 years at 5.06% (PY: 5.14%) in accordance with the German Regulation on the Discounting ofProvisions (Rückstellungsabzinsungsverordnung) dated 18 November 2009. As expected, salary increases and staff turnoverwere not factored into the calculation. Expected pension increases were factored in at 1% (PY: 1%). The option to retainpension provisions which is set forth under Article 67 (1) sentence 2 of the Introductory Act to the German Commercial Code(Einführungsgesetz zum Handelsgesetzbuch, “EGHGB”) is exercised to the extent that the EUR 1.5 million to be reversedupon revaluation as at the balance sheet date must be added back during the transition period ending on 31 December 2024.

Provisions for taxes and other provisions are recognised in respect of all uncertain liabilities and expected lossesfrom executory contracts. They are recognised at the settlement amount dictated by prudent business judgment (i.e., includingfuture cost and price increases). Provisions are by definition short-term and are thus not amortised.

Liabilities are carried at their settlement amount.

In order to calculate deferred taxes on the basis of temporary or quasi-permanent differences between the carryingamounts of assets, liabilities, prepaid expenses and deferred income in the financial accounts as compared to the tax accountsor on the basis of tax loss carryforwards, the amount of the arising tax burden or relief is calculated using the individualcompanies’ tax rates upon the reversal of the differences and is not discounted. Deferred tax assets are eliminated againstdeferred tax liabilities, resulting in deferred tax assets for TLG IMMOBILIEN. In accordance with the recognition optionprovided under section 274 (1) HGB, deferred taxes are not recognised. There are no material differences resulting fromconsolidation adjustments in accordance with sections 300 to 307 HGB. Accordingly, no deferred tax assets or liabilities arerecognised for consolidation adjustments.

F-71

To the extent that micro hedges in accordance with section 254 HGB are recognised, the following accountingpolicy is applied:

Economic hedges are accounted for through the recognition of micro hedges, whereby the net positive and negativechanges in the value of the hedged risk are reported outside the income statement (net hedge presentation method).

5. Notes to the consolidated financial statements

Assets

The statement of changes in fixed assets is included in the appendix to the notes to the consolidated financialstatements.

After depreciation and write-downs, land, land rights and buildings, including buildings on third-party landamounted to EUR 1,220.5 million.

Long-term financial assets (EUR 33.5 million) included EUR 0.1 million in shares in two joint ventures which werenot consolidated, as well as EUR 33.4 million for shares in an associate. The EUR 0.9 million write-down on the shares in theassociate, Altmarkt-Galerie Dresden KG, Hamburg, was due on balance to the collection of the 2012 profit (EUR 2.3 million)and the withdrawal of the cash surplus for 2012 (EUR 3.2 million) by TLG IMMOBILIEN.

In addition to the usual utilisations throughout the financial year, the values of properties held as current assets werewritten down by EUR 0.4 million to their lower fair value and EUR 0.1 million in write-downs were reversed. Accordingly,the carrying amount in the balance sheet was EUR 7.8 million.

Work in progress includes operating and heating costs not yet invoiced (EUR 16.3 million).

Trade receivables (EUR 6.5 million) comprise receivables from the sale of real property (EUR 2.2 million), leasereceivables (EUR 3.3 million) and other receivables (EUR 1.0 million). Of the trade receivables, EUR 0.1 million have aremaining maturity of more than one year (PY: EUR 0.4 million more than one year).

Receivables from affiliated companies (EUR 9 thousand) relate to a receivable from InvestitionsgesellschaftHausvogteiplatz 11 mbH & Co. KG, Berlin, which was not included in the consolidated financial statements. Receivablesfrom affiliated companies have a remaining maturity of less than one year, as in the previous year.

Other assets (EUR 4.0 million) primarily consist of the claim asserted by Hotel de Saxe an der FrauenkircheGmbH & Co. KG, Dresden, for the extension of the lease pursuant to the lease agreement between the company andSteigenberger Hotels AG, Frankfurt am Main (EUR 2.1 million), and tax receivables from the tax office (EUR 1.1 million).EUR 2.1 million of the other assets (PY: EUR 1.9 million) have a remaining maturity of more than one year.

Cash-in-hand, bank balances (EUR 69.9 million) were held primarily in current accounts (EUR 44.2 million) andterm deposit balances (EUR 25.7 million). Of that amount, EUR 5.1 million was pledged to DKB as collateral,EUR 3.9 million was pledged to HSBC and EUR 0.4 million was pledged to Volks- und Raiffeisenbank Muldental; thus,those amounts are not available to TLG IMMOBILIEN to dispose over. Business ties with HSBC were terminated in January2013 and the corresponding assigned bank balances were utilised for compensatory payments on interest rate hedges.

Prepaid expenses amounted to EUR 7.3 million and related primarily to subsidies paid in advance by TLGIMMOBILIEN in relation to two hotel projects as well as to fees paid in advance for extended loans.

Deferred tax assets resulted from the following items:

31/12/2012EUR ’000

Deferred tax assets relating to differencesProvisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,082Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 874of carrying amounts for trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,489

The deferred taxes relating to consolidation adjustments are immaterial and therefore not presented.

The calculation was based on a tax rate of 30.875%, which factors in the currently applicable statutory tax rates andbases, as well as an average multiplier for municipal taxes of 430%.

As of this financial year, no tax loss carryforwards were disclosed in the notes because they were derecognised as aresult of the change in shareholders at TLG IMMOBILIEN.

The option to refrain from recognising deferred tax assets was exercised.

F-72

Equity and liabilities

The TLG IMMOBILIEN Group’s subscribed capital amounts to EUR 52.0 million.

Capital reserves amounted to EUR 200.0 million. The decrease was attributable to the spin-off of the residentialportfolio into a new company with effect from 1 January 2012 (EUR 148.7 million) and cash withdrawals for a distribution tothe former shareholder of TLG IMMOBILIEN (EUR 11.6 million).

The Group’s revenue reserves increased by EUR 18.7 million to EUR 653.1 million. This resulted from the reversalof the positive consolidation differences eliminated against revenue reserves following the liquidation of TLGTechnologiepark Ilmenau GmbH i. L., Ilmenau, and the sale of TLG Gewerbepark Simson GmbH, Suhl. Factoring in theEUR 84.0 million loss carried forward, the distribution in 2012 of the Parent’s net retained profits as at 31 December 2011amounting to EUR 30.0 million and the consolidated net income for financial year 2012 of EUR 2.5 million, equity amountedto EUR 805.2 million in total.

In financial year 2012, minority interests reported under equity for shares held by outside shareholders decreased byEUR 2 thousand to EUR 0 thousand after TLG IMMOBILIEN acquired 6% of the shares held by outside shareholders inVerwaltungsgesellschaft an der Frauenkirche mbH, Dresden.

The TLG IMMOBILIEN Group’s special reserve for investment grants and subsidies amounted toEUR 16.4 million as a result of additional contributions of EUR 3.6 million, EUR 0.8 million in reversals reflecting thedepreciation, amortisation and write-downs of assets, and the EUR 22.2 million spin-off of the residential portfolio.

The negative consolidation difference decreased by EUR 0.9 million to EUR 7.0 million due to the sale of asubsidiary.

The EUR 6.9 million in provisions for pensions and similar obligations were calculated on the basis of expertappraisals. The EUR 0.2 million decrease resulted from utilisations in financial year 2012. The exercise of the option to retainpension provisions which is set forth under Article 67 (1) sentence 2 EGHGB resulted in an overfunding by EUR 1.5 millionas at the balance sheet date.

Provisions for taxes amounted to EUR 30.8 million and related primarily to the provision for land transfer taxresulting from the spin-off of TLG IMMOBILIEN’s residential portfolio into a new company with effect from 1 January 2012(EUR 17.5 million), corporation tax (EUR 5.5 million), trade tax (EUR 7.2 million) and other taxes (EUR 0.6 million) for theyears 2012 and prior.

Other provisions amounted to EUR 51.5 million and related primarily to expected losses for interest rate hedges(EUR 17.5 million), the repayment of investment grants and subsidies (EUR 9.1 million), litigation risks (EUR 7.8 million),construction costs not yet incurred (EUR 5.6 million), personnel expenses (EUR 2.6 million), property management(EUR 1.5 million), outstanding invoices (EUR 1.1 million) and interest expenses (EUR 3.0 million).


31/12/2012 31/12/2011Liabilities Total Remaining maturity Total

up to 1 year 1-5 yearsmore than

5 years up to 1 yearEUR million EUR million EUR million EUR million EUR million EUR million

to banks . . . . . . . . . . . . . . . . . . . . . 480.1 87.2 155.7 237.2 696.8 30.0relating to payments received . . . . . 20.0 20.0 — — 35.7 35.7relating to trade payables . . . . . . . . 19.1 18.5 0.6 — 7.0 5.6to shareholders . . . . . . . . . . . . . . . . — — — — 53.8 53.8to affiliated companies . . . . . . . . . . — — — — — —other liabilities . . . . . . . . . . . . . . . . 14.0 9.5 0.7 3.8 19.0 14.3

Total . . . . . . . . . . . . . . . . . . . . . . . . 533.2 135.2 157.0 241.0 812.3 139.4

Liabilities to banks amounted to EUR 480.1 million and were primarily attributable to TLG IMMOBILIEN(EUR 479.9 million), mainly in relation to loans from Unicredit Bank AG (HypoVereinsbank AG: EUR 74.5 million),Westfälische Landschaft Bodenkreditbank AG (EUR 65.7 million) and Deutsche Genossenschafts-Hypothekenbank AG(EUR 41.4 million). Furthermore, loans from Kreditanstalt für Wiederaufbau, Berlin, which were disbursed to TLGIMMOBILIEN via Landesbank Berlin, Deutsche Kreditbank AG, Bremer Landesbank and Sächsische Aufbaubank(EUR 56.1 million), were drawn down. In total, EUR 475.4 million is collateralised through land charges andEUR 0.8 million through negative pledges.

Payments received amounted to EUR 20.0 million and related primarily to advance payments for operating costspaid by tenants (EUR 16.3 million). Other payments received related to purchase agreements which had been negotiated in thecourse of the property sale but which had not yet entered into force (EUR 3.7 million).

F-73

Trade payables amounted to EUR 19.1 million and related primarily to liabilities incurred in connection with sitedevelopment (EUR 8.9 million), liabilities from the retention of guarantees (EUR 1.5 million), liabilities from propertymanagement (EUR 0.4 million), liabilities from general business operations (EUR 7.5 million), liabilities from the acquisitionof properties (EUR 0.6 million) and liabilities from payments received but not yet allocated (EUR 0.2 million).

Other liabilities amounted to EUR 14.0 million and included EUR 7.0 million for obligations to transfer purchaseprice payments collected on behalf of third parties and EUR 4.7 million for subsidies for leased properties which must bepassed on the lessees in the form of reduced lease rates over the term of the lease. This item also includes EUR 0.3 million fortax liabilities.

Liabilities other than liabilities to banks are not collateralised.

Deferred income amounted to EUR 0.1 million and related primarily to advance payments of rent and ground rent.

Contingent liabilities

TLG IMMOBILIEN has pledged EUR 9.4 million as collateral. This figure includes amounts pledged forderivatives with HSBC (EUR 3.9 million), to which the bank has recourse if TLG IMMOBILIEN fails to satisfy its paymentobligations under the interest rate hedges concluded. The interest rate hedges with HSBC were terminated in January 2013and settled for a compensatory payment. In addition, in a guarantee facility agreement with DKB (Deutsche Kreditbank), TLGIMMOBILIEN has undertaken to indemnify the bank for guarantees issued which do not expire until the end of the term ofthe guarantee facility. EUR 5.1 million in balances has been pledged to DKB as collateral. To date, TLG IMMOBILIEN hasduly satisfied its obligations and no collateral has been realised. It is therefore considered unlikely that DKB will assert anyclaims. In addition, EUR 0.4 million has been pledged to Volks- und Raiffeisenbank Muldental as collateral for adevelopment loan from the Sächsische Aufbaubank, which was granted to the subsidiary, TLG Gewerbepark Grimma. Therisk that the pledged balances will be realised is considered low given that the subsidiary’s financial position is sufficientlysound.

Material off-balance sheet transactions and other financial obligations

Material off-balance sheet transactions

Aside from the agreements and outstanding measures reported under other financial obligations, there were nomaterial off-balance sheet transactions which could materially influence the future financial position of the Group.

Spin-off agreement: TAG Wohnen GmbH, Hamburg (formerly TLG WOHNEN GmbH, Berlin)

Pursuant to the Spin-off and Transfer Agreement dated 29 December 2011, TLG IMMOBILIEN transferred, as thetransferring company, its Residential Properties division to TAG Wohnen as the absorbing company in the course of the spin-off and absorption pursuant to section 123 (2) no. 1 of the German Reorganisation Act (Umwandlungsgesetz, “UmwG”). Thetransferring company will continue to exist following the transfer and no shares in the absorbing company were granted to theshareholder of the transferring company. The spin-off date was 1 January 2012. The transfer date for tax purposes was31 December 2011. TLG IMMOBILIEN bears all costs and taxes.

Other financial obligations

The TLG IMMOBILIEN Group has entered into various lease agreements for administration buildings, warehouses,parking places and cellars. In addition, there are leases for vehicles in the Group’s vehicle fleet and service agreements for ITservices, cleaning, reception and security. The notice periods for terminating the leases and service agreements are in 2013.

The advantage of these operating leases is that they facilitate current operations without necessitating investmentand the corresponding outflows of cash. No risks have been identified in this context.

Due to existing agreements that could not be terminated as at the balance sheet date, the amounts payable in thefollowing years are as follows:

EUR ’000

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5772014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

603

EUR 32 thousand related to rental agreements, EUR 474 thousand to service agreements and EUR 97 thousand toleases.

F-74

Purchase commitments amounting to EUR 88.1 million have been entered into for investments in TLGIMMOBILIEN’s property portfolio which have already been approved but not yet implemented. Furthermore, there exists anadditional purchase commitment of standard scope and size.

The urban development agreement concerning the “Wohnpark Karlshorst” resulted in obligations to implementpublic and private development measures and to make plots of land available for the public development infrastructure. Themeasures and conditions stipulated in the urban development agreement must be satisfied depending on the marketing of theindividual construction phases; the profitability must be documented for each construction phase. An agreement to amend theurban development agreement was entered into on 19/29 October 2012. It established that “The obligation stipulated in theurban development agreement had since been largely fulfilled. […] TLG is released in full from the obligation stipulated insection 7 of the urban development agreement on the condition precedent that TLG actually assumes the operation of the daycare centre and that it submits a declaration in writing to that effect to the Lichtenberg municipal district office (Bezirksamt)of Berlin”. A notice confirming that operations at the day care centre had commenced was submitted on 16 November 2012.Confirmation of the centre’s completion is expected in the first quarter of 2013.

Derivative financial instruments

(excluding interest-linked transactions of TLG IMMOBILIEN)

Type (number)

Amountas at

31/12/2012 Term Fair valueBook value

(if available)

Balance sheet item(if recognised inbalance sheet)

EUR million EUR million EUR millionInterest rate swap with cap . . . . . 8.8 30/06/2006 – 30/06/2016 -0.4 0.0 n/aForward swap . . . . . . . . . . . . . . . 8.8 30/11/2006 – 30/11/2016 -1.0 0.0 n/aForward swap (5) . . . . . . . . . . . . . 28.9 30/11/2007 – 30/11/2017 -5.2 0.0 n/aForward swap (3) . . . . . . . . . . . . . 13.2 29/02/2008 – 28/02/2018 -2.2 0.0 n/aForward swap (3) . . . . . . . . . . . . . 12.0 30/06/2008 – 30/06/2018 -2.1 0.0 n/aForward swap (2) . . . . . . . . . . . . . 7.2 30/09/2008 – 28/09/2018 -1.5 0.0 n/aForward swap (2) . . . . . . . . . . . . . 1.8 30/06/2009 – 28/09/2018 -0.4 0.0 n/aCollar (2) . . . . . . . . . . . . . . . . . . . 10.5 30/06/2009 – 29/06/2019 -2.4 0.0 n/aForward swap (1) . . . . . . . . . . . . . 2.8 30/09/2009 – 30/09/2019 -0.6 0.0 n/aForward swap (4) . . . . . . . . . . . . . 24.1 31/03/2010 – 31/03/2020 -4.7 0.0 n/aForward swap (3) . . . . . . . . . . . . . 18.7 30/06/2010 – 30/06/2020 -3.3 0.0 n/aForward swap (3) . . . . . . . . . . . . . 12.4 31/03/2011 – 31/03/2021 -1.4 0.0 n/aForward swap (2) . . . . . . . . . . . . . 5.5 30/06/2011 – 31/03/2021 -1.1 0.0 n/aForward swap (2) . . . . . . . . . . . . . 9.6 28/09/2012 – 30/06/2021 -1.4 0.0 n/a

Subtotal ∑ . . . . . . . . . . . . . . . . . . 164.3 ∑ 0.0

Type (number)

Amountas at


(if available)


EUR million EUR million EUR millionCAP (2) . . . . . . . . . . . . . . . . . . . . 8.8 30/06/2006 – 11/01/2013 0.0 0.0 n/aForward swap (1) . . . . . . . . . . . . . 4.8 30/06/2011 – 11/01/2013 -0.7 -0.7 Provision for

expected lossesForward swap (3) . . . . . . . . . . . . . 8.9 30/09/2008 – 11/01/2013 -1.8 -1.8 Provision for









expected losses

Subtotal ∑ . . . . . . . . . . . . . . . . . . 105.5 ∑ 17.5

Total . . . . . . . . . . . . . . . . . . . . . . . 269.8 17.5

F-75

Interest rate derivatives serve to hedge against changing interest rates for loans already taken out or loans to betaken out in the future. They are marked to market.

The following hedging relationships have been created:

Underlying/hedge Risk/Type of hedge Amount involved Amount of hedged risk

Loan to banks/interest rate derivatives Interest rate risk/portfolio hedge EUR 164.3 million EUR 164.3 million

The opposing cash flows from the underlying and the hedge are expected to offset each other almost in full over theterm of the hedge because in accordance with the Group’s risk policies, risk exposures (underlyings) must be hedgedimmediately using interest rate hedges upon inception in the amount, currency and term matching the underlying transaction.As at the balance sheet date, the opposing cash flows from the underlying and the hedge have offset each other almost in full.The critical terms match method is used to measure hedge effectiveness.

Related-party transactions

No related party transactions were engaged in under non-standard market terms.

Income

Sales amounted to EUR 219.7 million (PY: EUR 247.5 million) and included EUR 136.2 million(PY: EUR 194.6 million) from property management, EUR 78.3 million (PY: EUR 50.5 million) from the disposal ofproperties and EUR 5.2 million (PY: EUR 2.4 million) from other services. Of the sales from the disposal of properties,EUR 73.6 million was attributable to properties classified as fixed assets and EUR 4.7 million to properties classified ascurrent assets.

The EUR -0.5 million change in inventories was due to the relatively higher amount of operating costs not yetinvoiced following the spin-off to TAG Wohnen GmbH, Hamburg, as compared to in the previous year.

Other operating income amounted to EUR 16.6 million and included EUR 1.0 million in prior-period income, ofwhich EUR 0.9 million resulted from property management income. Other operating income also included EUR 7.6 millionfrom the reversal of provisions, EUR 1.4 million from the reversal of impairments on receivables, EUR 1.3 million from theUA receivable, EUR 0.9 million from reversals of write-downs on the carrying amounts of real property, EUR 0.8 millionfrom the reversal of the special reserve for investment grants and subsidies and EUR 1.4 million from insurance payouts.

Income from long-term equity investments (EUR 2.3 million) resulted from the profit transfer from Altmarkt-Galerie Dresden KG, Hamburg.

Other interest and similar income (EUR 0.9 million) consisted primarily of interest income in connection with short-term investment of cash (EUR 0.6 million).

Expenses

Cost of materials amounted to EUR 94.1 million, consisting of EUR 48.7 million from disposals of real estateportfolio at carrying amounts, EUR 36.9 million in property management expenses and EUR 8.5 million in expenses for otherpurchased services. Of the disposals of real estate portfolio at carrying amounts, EUR 45.6 million related to propertiesclassified as fixed assets and EUR 3.1 million for properties classified as current assets.

Personnel expenses amounted to EUR 19.1 million and related to an average of 225 permanent and an average of19 temporary employees. In addition, the Group employed on average 20 trainees and 2 employees on maternity leave.

Depreciation and amortisation amounted to EUR 39.8 million. In addition, EUR 8.3 million in write-downs to thelower fair value were recognised due to permanent impairments.

Write-downs of current assets in excess of the corporation’s standard depreciation relate to write-downs to the lowerfair value resulting from falling prices on local real estate markets (EUR 0.4 million).

Other operating expenses amounted to EUR 30.2 million and included valuation allowances and write-downs onreceivables and other assets (EUR 3.9 million), transfers to provisions for litigation risks (EUR 0.9 million) and prior-periodexpenses resulting from subsequent corrections in income recognised in prior years (EUR 0.3 million). This also includesEUR 17.8 million in expenses connected with the liquidation or sale of two subsidiaries.

Interest and similar expenses (EUR 39.9 million) resulted primarily from interest paid on loans (EUR 12.9 million)and for compensatory payments on interest rate hedges (EUR 9.1 million) and provisions for expected losses(EUR 17.5 million).

F-76

Taxes on income (EUR 4.5 million) related to the advance payment of corporation tax including the solidaritysurcharge (EUR 0.8 million) and trade tax (EUR 0.2 million), as well as the transfer to provisions for corporation tax(EUR 1.3 million) and trade tax (EUR 2.2 million) for the current financial year.

6. Assets in trust

The TLG IMMOBILIEN Group holds EUR 3.9 million (PY: EUR 8.7 million) in rental deposits in trust.

7. Auditors’ fees

The EUR 156 thousand in auditors’ fees are included in other operating expenses. Of that amount,EUR 128 thousand related to audit services, EUR 17 thousand to assurance services and EUR 11 thousand to other services.

8. Other disclosures

The total remuneration for the management of the TLG IMMOBILIEN Group amounted to EUR 1,366,718.58 in2012. The pension provisions for former members of the management amounted to EUR 2,807,469.27 as at 31 December2012.

The remuneration for the Supervisory Board—which was still active during the year—of TLG IMMOBILIENamounted to EUR 110,699.00 in 2012.

Berlin, 10 April 2013

The Management

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F-78

The following English-language translation of the German-language auditor’s report (Bestätigungsvermerk) refers to theconsolidated financial statements and the group management report of TLG IMMOBILIEN GmbH, Berlin, prepared on thebasis of German commercial law (HGB) (“Handelsgesetzbuch”, German Commercial Code), for the fiscal year endedDecember 31, 2012 as a whole and not solely to the consolidated financial statements presented in this Prospectus on thepreceding pages.

AUDITOR’S REPORT

We have audited the consolidated financial statements prepared by TLG IMMOBILIEN GmbH, Berlin, comprising thebalance sheet, the income statement, the notes to the consolidated financial statements, the cash flow statement, and thestatement of changes in equity, together with the group management report for the fiscal year from 1 January to 31 December2012. The preparation of the consolidated financial statements and the group management report in accordance with Germancommercial law is the responsibility of the Company’s management. Our responsibility is to express an opinion on theconsolidated financial statements and the group management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with Sec. 317 HGB (“Handelsgesetzbuch”:German Commercial Code) and German generally accepted standards for the audit of financial statements promulgated by theInstitut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan andperform the audit such that misstatements materially affecting the presentation of the net assets, financial position and resultsof operations in the consolidated financial statements in accordance with German principles of proper accounting and in thegroup management report are detected with reasonable assurance. Knowledge of the business activities and the economic andlegal environment of the Group and expectations as to possible misstatements are taken into account in the determination ofaudit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting thedisclosures in the consolidated financial statements and the group management report are examined primarily on a test basiswithin the framework of the audit. The audit includes assessing the annual financial statements of those entities included inconsolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles usedand significant estimates made by management, as well as evaluating the overall presentation of the consolidated financialstatements and the group management report. We believe that our audit provides a reasonable basis for our opinion.


In our opinion, based on the findings of our audit, the consolidated financial statements comply with the legal requirementsand give a true and fair view of the net assets, financial position and results of operations of the Group in accordance withGerman principles of proper accounting. The group management report is consistent with the consolidated financialstatements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risksrelating to future development.

Berlin, 11 April 2013


(signed) (signed)Plett SchmidtWirtschaftsprüfer Wirtschaftsprüfer(German Public Auditor) (German Public Auditor)

F-79

TLG Immobilien GmbH, Berlin, Germany: Audited Consolidated Financial Statements(Prepared in Accordance with German GAAP) of TLG Immobilien GmbH as of and for

the Fiscal Year Ended December 31, 2011

F-80

CONSOLIDATED BALANCE SHEET

ASSETS EUR EUR31/12/2010EUR ’000

A. FIXED ASSETS

I. Intangible fixed assetsPurchased software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,901,267.73 1,421

II. Tangible fixed assets1. Land, land rights and buildings, including buildings on third-party land . . . . . . . 1,705,896,159.25 1,635,5722. Technical equipment and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 985,872.06 1,1353. Other equipment, operating and office equipment . . . . . . . . . . . . . . . . . . . . . . . . 3,816,222.36 4,0904. Prepayments and assets under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,879,342.09 83,882

1,759,577,595.76 1,724,679III. Long-term financial assets1. Shares in affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,660.34 5182. Shares in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,273,734.21 35,028

34,405,394.55 35,546

B. CURRENT ASSETS

I. Inventories1. Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,466,659.67 14,8542. Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,087,793.38 31,368

45,554,453.05 46,222II. Receivables and other assets1. Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,959,472.67 15,4452. Receivables from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,058.76 93. Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,163.93 3,738

20,368,695.36 19,192III. Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,257.69 41IV. Cash-in-hand, bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,542,768.62 14,887C. PREPAID EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,112,269.59 4,287

1,911,500,702.35 1,846,275


I. Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000,000.00 52,000II. Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,315,548.18 357,478III. Revenue reserves1. Special reserve in accordance with section 27 (2) of the D-Mark Accounting

Act (D-Mark-Bilanzgesetz, “DMBilG”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479,180,638.17 479,1812. Special reserve in accordance with section 17 (4) of the D-Mark Accounting

Act (D-Mark-Bilanzgesetz, “DMBilG”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,568,433.36 58,5683. Other revenue reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,657,483.88 96,657

634,406,555.41 634,406IV. Consolidated net accumulated loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,005,631.73 28,914V. Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,889.64 683

962,718,361.50 1,015,653B. NEGATIVE CONSOLIDATION DIFFERENCE . . . . . . . . . . . . . . . . . . . . . . 7,936,115.79 7,936C. SPECIAL RESERVE FOR INVESTMENT GRANTS AND

SUBSIDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,799,874.47 35,702D. PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1. Provisions for pensions and similar obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 7,117,209.20 7,3352. Provisions for taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,423,645.97 7,2623. Provisions for restitutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,619.89 10,1694. Other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,621,095.28 48,020

92,170,570.34E. LIABILITIES1. Liabilities to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696,829,982.06 657,7722. Payments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,703,506.25 35,9093. Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,035,264.77 4,4104. Liabilities to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,748,094.515. Other liabilities thereof taxes EUR 1,468,066.62 (PY: EUR 327 thousand)

thereof social security EUR 10,783.41 (PY: EUR 3 thousand) . . . . . . . . . . . . . . 18,974,730.46 15,375

812,291,578.05 713,466F. DEFERRED INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584,202.20 732

1,911,500,702.35 1,846,275

F-81

CONSOLIDATED INCOME STATEMENT

EUR EUR2010

EUR ’000

1. Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247,420,566.26 245,1802. Increase (PY: decrease) in work in progress . . . . . . . . . . . . . . . . . . . . . . . . 2,719,903.97 -3,2853. Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,075,782.57 26,735


a) Disposals of real estate portfolio at carrying amounts . . . . . . . . . . . . 29,290,966.06 33,453b) Cost of purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,712,654.81 73,356

103,003,620.87 106,8095. Personnel expenses

a) Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,136,182.65 20,791b) Social security, post-employment and other employee benefit costs

thereof for pensions EUR 266,022.46 (PY: EUR 298 thousand) . . . . 3,292,400.04 3,397

23,428,582.69 24,1886. Amortisation, depreciation and write-downs

a) of intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . 55,877,965.95 64,100b) of current assets in excess of the corporation’s standard

depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502,407.26 531

56,380,373.21 64,6317. Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,863,851.94 22,342

205,676,428.71 217,9708. Income from participations thereof from affiliated companies

EUR 471,483.81 (PY: EUR 174 thousand) . . . . . . . . . . . . . . . . . . . . . . . . . 471,483.81 1749. Other interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 758,044.68 80510. Write-downs of long-term financial assets . . . . . . . . . . . . . . . . . . . . . . . . . 385,337.20 33311. Interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,364,508.79 29,63012. Expenses relating to associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 628

-31,520,317.50 -29,612

13. Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,019,506.59 21,04814. Extraordinary expense/Extraordinary result . . . . . . . . . . . . . . . . . . . . . . . . -23,126,000.00 015. Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,059,762.68 2,01416. Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,089.60 20

17. Consolidated net income for the financial year . . . . . . . . . . . . . . . . . . . . . . 18,656,654.31 19,01418. Accumulated loss brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,914,187.19 37,83419. Profit distribution/Credit to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 73,748,094.51 10,00020. Profit attributable to minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.34 94

21. Consolidated net accumulated loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,005,631.73 28,914

F-82


2011 2010EUR million EUR million

1. Cash flows from operating activitiesNet income/loss for the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.7 19.0Depreciation, amortisation and write-downs of intangible and tangible fixed assets/reversals

of write-downs of intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.9 60.1Increase in provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 8.5Other non-cash income/expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 2.7Disposals of real estate portfolio at carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.9 30.6Increase (PY: decrease) in inventories, trade receivables and other assets . . . . . . . . . . . . . . . -3.3 9.3Increase (PY: decrease) in trade payables, special reserves in accordance with

section 27 (2) of the D-Mark Accounting Act (D-Mark-Bilanzgesetz, “DMBilG”) andother liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0 -7.8

Increase (PY: decrease) in the special reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 -1.9

Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.3 120.5

2. Cash flows from investing activitiesProceeds from disposal of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 1.7Purchase of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -115.4 -169.6Purchase of intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.2 -0.7Purchase of long-term financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.9 -11.5

Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -115.9 -180.1

3. Cash flows from financing activitiesCash proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.3 107.6Cash repayments of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -68.1 -36.9Cash payments to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20.0 -10.0

Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.2 60.7

4. Cash and cash equivalents at end of periodNet change in cash and cash equivalents (Subtotals 1 – 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.6 1.1Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 13.8


5. Composition of cash and cash equivalentsCash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.5 14.9


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F-84

NOTES

1. General

The consolidated financial statements for financial year 2011 were prepared on the basis of the annual financialstatements of TLG IMMOBILIEN GmbH, Berlin (“TLG IMMOBILIEN” or the “Parent”), and of 7 (PY: 7) of itssubsidiaries. The annual financial statements for each of the consolidated companies were prepared as at the same balancesheet date as for the consolidated financial statements.

The consolidated financial statements prepared in accordance with the statutory provisions set forth in sections 297et seq. of the German Commercial Code (Handelsgesetzbuch, “HGB”) are materially influenced by the Parent, given its sizein relation to the consolidated subsidiaries.

2. Basis of consolidation

In accordance with section 294 (1) HGB, the following companies—each thereof being wholly owned by theParent—were included with TLG IMMOBILIEN GmbH in the consolidated financial statements:

TLG Technologiepark Ilmenau GmbH i. L., Ilmenau

TLG Gewerbepark Grimma GmbH, Grimma

TLG Gewerbepark Simson GmbH, Suhl

TLG Vermögensverwaltungs GmbH, Berlin

Hotel de Saxe an der Frauenkirche GmbH & Co. KG, Dresden

TLG IMMOBILIEN has owned 100% (PY: 94%) of the shares in Hotel de Saxe an der Frauenkirche GmbH &Co. KG, Dresden, since financial year 2011.

Furthermore, the following company, in which TLG IMMOBILIEN holds a 94% equity interest, has been includedin the consolidated financial statements since 2006.

Verwaltungsgesellschaft an der Frauenkirche mbH, Dresden

Altmarkt-Galerie Dresden KG, Hamburg, in which TLG IMMOBILIEN holds a 33% equity interest, was includedin the consolidated financial statements in accordance with the equity method (book value method) pursuant tosection 312 HGB. The object of the company is to acquire, develop, rent out and lease real estate—including in particular thereal estate set aside for the development of the Altmarkt-Galerie in Dresden—and to transact any and all business in relationthereto.

There are no longer any insignificant subsidiaries (section 296 (2) HGB) which are wholly owned byTLG IMMOBILIEN and which are not included in the basis of consolidation.

Furthermore, TLG IMMOBILIEN holds 50% of shares in the following companies, which are carried in theconsolidated financial statements at cost because they are insignificant in accordance with section 311 (2) HGB:

Investitionsgesellschaft Hausvogteiplatz 11 Verwaltung mbH, Berlin

Investitionsgesellschaft Hausvogteiplatz 11 mbH & Co. KG, Berlin

3. Consolidation principles

In accordance with section 301 (1) sentence 2 no. 1 HGB, acquisitions are accounted for in accordance with thebook value method, whereby the carrying amount of the investment is eliminated against the proportionate amount that theshares represent in the equity of the subsidiary as at the date of initial consolidation.

The carrying amounts recognised upon the initial consolidation of two companies which were still included in thebasis of consolidation as at 31 December 2011 were lower than the Parent’s share of the equity, resulting in a negativeconsolidation difference of EUR 7.9 million (PY: EUR 7.9 million). This negative consolidation difference is reportedseparately in equity. The Parent does not exercise the option set forth under section 309 (2) HGB. Disposals are notrecognised until the deconsolidation or liquidation date.

In accordance with section 303 HGB, the consolidation of intercompany balances entails the elimination ofreceivables and liabilities between the companies included in the consolidated financial statements.

F-85


The consolidated financial statements were prepared on the basis of the following accounting policies:




Low-value assets with a net value of less than EUR 150.00 (prior to 31 December 2007: EUR 410.00) are writtenoff or expensed in full in the year in which they are acquired, with their immediate disposal being assumed. In the interest ofsimplification, the pooled item which is to be recognised for tax purposes each year for assets acquired after 31 December2007 at a cost of more than EUR 150.00 and less than EUR 1,000.00 has been included in the financial statements and issubjected to lump-sum depreciation by 20 percent p.a. in the year of acquisition and over the next four years.

Long-term financial assets are measured at the lower of cost or fair value and recognised in accordance with theequity method under shares in associates.



Receivables and other assets are generally carried at their nominal amounts. Specific and general valuationallowances have been recognised to account for identified risks.

Securities are measured in accordance with the principle of lower of cost or market value.


Provisions for pensions and similar obligations are recognised in accordance with the projected unit credit methodusing the 2005 G mortality tables published by Prof. Klaus Heubeck. The discount rate applied across the board represents theaverage market rate of interest for a residual term of 15 years at 5.14% (PY: 5.15%) in accordance with the GermanRegulation on the Discounting of Provisions (Rückstellungsabzinsungsverordnung) dated 18 November 2009. As expected,salary increases and staff turnover were not factored into the calculation. Expected pension increases were factored in at 1%(PY: 2%). The option to retain pension provisions which is set forth under Article 67 (1) sentence 2 of the Introductory Act tothe German Commercial Code (Einführungsgesetz zum Handelsgesetzbuch, “EGHGB”) is exercised to the extent that theEUR 1.9 million to be reversed upon revaluation in accordance with the German Accounting Law Modernisation Act(“Bilanzrechtsmodernisierungsgesetz”, BilMoG) as at the balance sheet date must be added back during the transition periodending on 31 December 2024.



In order to calculate deferred taxes on the basis of temporary or quasi-permanent differences between the carryingamounts of assets, liabilities, prepaid expenses and deferred income in the financial accounts as compared to the tax accountsor on the basis of tax loss carryforwards, the amount of the arising tax burden or relief is calculated using the individualcompanies’ tax rates upon the reversal of the differences and undiscounted deferred tax assets are eliminated againstundiscounted deferred tax liabilities, resulting in deferred tax assets for TLG IMMOBILIEN. In accordance with therecognition option provided under section 274 (1) HGB, deferred taxes are not recognised. There are no material differencesresulting from consolidation adjustments in accordance with sections 300 to 307 HGB. Accordingly, no deferred tax assets orliabilities are recognised for consolidation adjustments.



F-86

5. Notes to the consolidated financial statements

Assets

The statement of changes in fixed assets is included in the appendix to the notes to the consolidated financialstatements.


Long-term financial assets (EUR 34.4 million) included EUR 0.1 million in shares in two joint ventures which werenot consolidated, as well as EUR 34.3 million for shares in an associate. A EUR 0.4 million write-down to the lower fair valuewas recognised in relation to the shares in the investment company HVP 11 mbH & Co. KG, Berlin. The EUR 0.7 millionwrite-down on the shares in the associate, Altmarkt-Galerie Dresden KG, Hamburg, was due on balance to additional capitalcontributions (EUR 1.7 million), the collection of the 2011 profit (EUR 0.2 million) and the withdrawal of the cash surplus for2011 (EUR 2.6 million) by TLG IMMOBILIEN.


Work in progress include operating and heating costs not yet invoiced (EUR 34.1 million).


Receivables from affiliated companies (EUR 9 thousand) relate to a receivable from InvestitionsgesellschaftHausvogteiplatz 11 mbH & Co. KG, Berlin, which was not included in the consolidated financial statements. Receivablesfrom affiliated companies have a remaining maturity of less than one year, as in the previous year.

Other assets (EUR 3.4 million) primarily consist of the claim asserted by Hotel de Saxe an der FrauenkircheGmbH & Co. KG, Dresden, for the extension of the lease pursuant to the lease agreement between the company andSteigenberger Hotels AG, Frankfurt am Main (EUR 1.9 million), and tax receivables from the tax office (EUR 0.3 million).EUR 1.9 million of the other assets (PY: EUR 1.6 million) have a remaining maturity of more than one year.

Cash-in-hand and bank balances (EUR 42.5 million) were held primarily in current accounts (EUR 8.5 million) andterm deposit balances (EUR 34.0 million). Of that amount, EUR 5.0 million was pledged to DKB as collateral,EUR 3.5 million was pledged to HSBC and EUR 0.4 million was pledged to Volks- und Raiffeisenbank Muldental; thus,those amounts are not available to TLG IMMOBILIEN to dispose over.

Prepaid expenses amounted to EUR 7.1 million and related primarily to subsidies paid in advance byTLG IMMOBILIEN in relation to the Berlin hotel project at Karl-Liebknecht-Str. 32 as well as to fees paid in advance forextended loans.


31/12/2011EUR ’000

Deferred tax assets relating to differencesProvisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,763Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,151

Deferred tax assets relating to loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,229

76,143

Deferred tax liabilities relating to differences of carrying amounts for trade receivables . . . . . . . . . . . . . . . . . . . . . 792


The deferred taxes relating to consolidation adjustments are immaterial and therefore not presented.

The calculation was based on a tax rate of 30.875%, which factors in the currently applicable statutory tax rates andbases, as well as an average multiplier for municipal taxes of 430%. Deferred tax assets were recognised in relation tocorporation and trade tax loss carryforwards amounting to EUR 230 million. In addition, corporation tax loss carryforwardsamounting to EUR 457 million and trade tax loss carryforwards amounting to EUR 390 million were recognised for which notax relief is expected within the next five years.


F-87

Equity and liabilities

The TLG IMMOBILIEN Group’s subscribed capital amounts to EUR 52.0 million.

Capital reserves amounted to EUR 360.3 million, representing an increase of EUR 2.8 million as the result of theassumption by the Federal Agency for Unification-related Special Tasks (Bundesanstalt für vereinigungsbedingteSonderaufgaben) of risks arising from the distribution of rental proceeds from the Parent’s properties subject to restitution.

As in the previous year, the Group’s revenue reserves amounted to EUR 634.4 million. Factoring in theEUR 28.9 million loss carried forward, the distribution in 2011 of the Parent’s net retained profits as at 31 December 2010amounting to EUR 73.7 million and the consolidated net income for financial year 2011 of EUR 18.7 million, equityamounted to EUR 962.7 million in total.

In accordance with section 307 HGB, a special reserve for minority interests is reported under equity in order toaccount for shares in the Group’s net assets held by outside shareholders. These minority interests relate to 6% forVerwaltungsgesellschaft mbH, Dresden, and were reduced by EUR 0.7 million to EUR 2 thousand as a result of theacquisition of minority interests of 6% in Hotel de Saxe an der Frauenkirche GmbH & Co. KG, Dresden, byTLG IMMOBILIEN as at 31 December 2011.

The TLG IMMOBILIEN Group’s special reserve for investment grants and subsidies amounted toEUR 35.8 million as a result of additional contributions of EUR 0.9 million and subsidies of EUR 0.7 million, as well asEUR 1.5 million in reversals reflecting the depreciation, amortisation and write-downs of assets. EUR 0.4 million inadditional contributions were recognised immediately through profit or loss.

As in the previous year, the negative consolidation difference amounted to EUR 7.9 million.


Provisions for taxes amounted to EUR 39.4 million and related primarily to the provision for land transfer taxresulting from the spin-off of TLG IMMOBILIEN’s residential portfolio into a new company with effect from 1 January 2012(EUR 23.1 million), corporation tax (EUR 6.6 million), trade tax (EUR 9.3 million) and other taxes (EUR 0.4 million) for theyears 2011 and prior.

Other provisions amounted to EUR 45.6 million and related primarily to the repayment of investment grants andsubsidies (EUR 10.3 million), litigation risks (EUR 8.2 million), construction costs not yet incurred (EUR 4.4 million),personnel expenses (EUR 4.0 million), property management (EUR 4.0 million), outstanding invoices (EUR 3.4 million),interest expenses (EUR 3.0 million) and expected losses for interest rate hedges (EUR 1.4 million).


31/12/2011 31/12/2010Liabilities Total Remaining maturity Total


5 years up to 1 yearEUR million EUR million EUR million EUR million EUR million EUR million

to banks . . . . . . . . . . . . . . . . . . . . . . . . 696.8 30.0 136.7 530.1 657.8 62.4relating to payments received . . . . . . . 35.7 35.7 — — 35.9 35.9relating to trade payables . . . . . . . . . . 7.0 5.6 1.2 0.2 4.4 3.1to shareholders . . . . . . . . . . . . . . . . . . 53.8 53.8 — — — —to affiliated companies . . . . . . . . . . . . — — — — — —other liabilities . . . . . . . . . . . . . . . . . . 19.0 14.3 0.7 4.0 15.4 10.6Total . . . . . . . . . . . . . . . . . . . . . . . . . . 812.3 139.4 138.6 534.3 713.5 112.0

Liabilities to banks amounted to EUR 696.8 million and were primarily attributable to TLG IMMOBILIEN(EUR 696.5 million), mainly in relation to loans from the Kreditanstalt für Wiederaufbau, Berlin, which were disbursed toTLG IMMOBILIEN via Landesbank Berlin, Deutsche Kreditbank AG, Bremer Landesbank and Sächsische Aufbaubank(EUR 197.1 million). In total, EUR 624.3 million is collateralised through land charges and EUR 68.2 million throughnegative pledges.

Payments received amounted to EUR 35.7 million and related primarily to advance payments for operating costspaid by tenants (EUR 34.8 million). Other payments received related to purchase agreements which had been negotiated in thecourse of managing properties but which had not yet entered into force (EUR 0.9 million).

F-88

Trade payables amounted to EUR 7.0 million and related primarily to liabilities incurred in connection with sitedevelopment (EUR 2.0 million), liabilities from the retention of guarantees (EUR 2.5 million), liabilities from generalbusiness operations (EUR 0.8 million), liabilities from the acquisition of properties (EUR 0.6 million) and liabilities frompayments received but not yet allocated (EUR 0.4 million).

Liabilities to shareholders (EUR 53.8 million) related to the distribution—not yet effected as of the balance sheetdate—of the remainder of TLG IMMOBILIEN’s net retained profits from financial year 2010. The distribution took place inJanuary 2012.



Deferred income amounted to EUR 0.6 million and related primarily to advance payments of rent and ground rent.

Contingent liabilities

TLG IMMOBILIEN has pledged EUR 8.9 million as collateral for loans granted. This figure includes amountspledged for derivatives with HSBC Trinkaus & Burkhardt AG (EUR 3.5 million), to which HSBC has recourse ifTLG IMMOBILIEN fails to satisfy its payment obligations under the interest rate hedges concluded. This is considered highlyunlikely. In addition, in a guarantee facility agreement with DKB (Deutsche Kreditbank), TLG IMMOBILIEN has undertakento indemnify the bank for guarantees issued which do not expire until the end of the term of the guarantee facility.EUR 5.0 million in balances has been pledged to DKB as collateral. To date, TLG IMMOBILIEN has duly satisfied itsobligations and no collateral has been realised. It is therefore considered unlikely that DKB will assert any claims. In addition,EUR 0.4 million has been pledged to Volks- und Raiffeisenbank Muldental as collateral for a development loan from theSächsische Aufbaubank, which was granted to the subsidiary, TLG Gewerbepark Grimma. The risk that the pledged balanceswill be realised is considered low given that the subsidiary’s financial position is sufficiently sound.

Material off-balance sheet transactions and other financial obligations



TLG WOHNEN spin-off agreement

Pursuant to the Spin-off and Transfer Agreement dated 29 December 2011, TLG IMMOBILIEN transferred, as thetransferring company, its Residential Properties division to TLG WOHNEN as the absorbing company in the course of thespin-off and absorption pursuant to section 123 (2) no. 1 of the German Reorganisation Act (Umwandlungsgesetz, “UmwG”).The transferring company will continue to exist following the transfer and no shares in the absorbing company were grantedto the shareholder of the transferring company. The spin-off date is 1 January 2012. The transfer date for tax purposes is31 December 2011. TLG IMMOBILIEN bears all costs and taxes.


The TLG IMMOBILIEN Group has entered into various lease agreements for administration buildings, warehouses,parking places and cellars. In addition, there are leases for vehicles in the Group’s vehicle fleet and service agreements forIT services, cleaning, reception and security. The notice periods for terminating the leases and service agreements are between2012 and 2013.


EUR 1 thousand related to rental agreements, EUR 623 thousand to service agreements and EUR 142 thousand toleases.

Purchase commitments amounting to EUR 88.1 million have been entered into for investments inTLG IMMOBILIEN’s property portfolio which have already been approved but not yet implemented. Furthermore, thereexists an additional purchase commitment of standard scope and size.

F-89

The urban development agreement concerning the “Wohnpark Karlshorst” resulted in obligations to implementpublic and private development measures and to make plots of land available for the public development infrastructure. Themeasures and conditions stipulated in the urban development agreement must be satisfied depending on the marketing of theindividual construction phases; the profitability must be documented for each construction phase. More than 60 percent ofspace has been leased as at 31 December 2011. Development measures have already been conducted for spaces which havealready been marketed, or provisions have been recognised to that effect. To the extent the remaining spaces are marketed,there exist under certain conditions future obligations arising from the committed development measures as at the time therisks and benefits of ownership of the marketed spaces has been transferred. Two partial spaces were sold in 2011 for whichthe risks and rewards of ownership will be transferred in 2012, giving rise to such obligations beginning in financial year2012, amounting to EUR 3 million.

Derivative financial instruments(excluding interest-linked transactions of TLG IMMOBILIEN)

Type (number)

Amountas at


(if available)


EUR million EUR million EUR millionInterest rate cap (2) . . . . . . . . . . . 9.0 30/06/2006 – 30/06/2016 0.2 0.0 n/aInterest rate swap with cap . . . . . 9.0 30/06/2006 – 30/06/2016 -0.4 0.0 n/aForward swap . . . . . . . . . . . . . . . 9.0 31/08/2006 – 31/08/2016 -0.8 0.0 n/aForward swap . . . . . . . . . . . . . . . 9.0 30/11/2006 – 30/11/2016 -0.8 0.0 n/aForward swap (3) . . . . . . . . . . . . . 17.6 31/01/2007 – 31/01/2017 -2.2 0.0 n/aForward swap (3) . . . . . . . . . . . . . 24.8 30/06/2007 – 30/06/2017 -3.3 0.0 n/aForward swap (15) . . . . . . . . . . . . 61.2 30/11/2007 – 30/11/2017 -9.4 0.0 n/aForward swap (3) . . . . . . . . . . . . . 13.6 29/02/2008 – 28/02/2018 -1.8 0.0 n/aForward swap (5) . . . . . . . . . . . . . 27.4 30/06/2008 – 30/06/2018 -3.9 0.0 n/aForward swap (5) . . . . . . . . . . . . . 16.5 30/09/2008 – 28/09/2018 -2.8 0.0 n/aForward swap (7) . . . . . . . . . . . . . 27.9 31/03/2009 – 29/03/2019 -4.8 0.0 n/aForward swap . . . . . . . . . . . . . . . 0.9 30/06/2009 – 28/09/2018 -0.2 0.0 n/aCollar (3) . . . . . . . . . . . . . . . . . . . 14.1 30/06/2009 – 29/06/2019 -2.4 0.0 n/aForward swap (3) . . . . . . . . . . . . . 18.9 30/09/2009 – 30/09/2019 -3.1 0.0 n/aForward swap (4) . . . . . . . . . . . . . 25.2 31/03/2010 – 31/03/2020 -3.6 0.0 n/aForward swap (3) . . . . . . . . . . . . . 19.3 30/06/2010 – 30/06/2020 -2.2 0.0 n/aForward swap (4) . . . . . . . . . . . . . 14.7 31/03/2011 – 31/03/2021 -1.2 0.0 n/aForward swap (2) . . . . . . . . . . . . . 9.3 30/06/2011 – 31/03/2021 -1.3 0.0 n/aForward swap (2) . . . . . . . . . . . . . 9.9 30/06/2011 – 30/06/2021 -0.8 0.0 n/aForward swap . . . . . . . . . . . . . . . 0.9 30/06/2009 – 28/09/2018 -0.2 -0.2 Provision for

expected lossesForward swap . . . . . . . . . . . . . . . 0.5 30/06/2011 – 31/03/2021 -0.1 -0.1 Provision for



expected losses

∑353.6 ∑-1.4

Interest rate derivatives serve to hedge against changing interest rates for loans already taken out or loans to betaken out in the future. They are marked to market. The interest rate caps are simply eliminated over their term. Provisions forexpected losses from executory contracts amounting to EUR 1.4 million have been recognised for forward swaps with anegative market value which thus far had not been allocated to an underlying transaction or which are currently in run-up.




The opposing cash flows from the underlying and the hedge are expected to offset each other in full over the term ofthe hedge because in accordance with the Group’s risk policies, risk exposures (underlyings) must be hedged immediatelyusing interest rate hedges upon inception in the amount, currency and term matching the underlying transaction. As at thebalance sheet date, the opposing cash flows from the underlying and the hedge have offset each other almost in full. Thecritical terms match method is used to measure hedge effectiveness.

Related-party transactions


F-90

Income

Sales amounted to EUR 247.5 million (PY: EUR 245.2 million) and included EUR 194.6 million(PY: EUR 190.0 million) from property management, EUR 50.5 million (PY: EUR 52.3 million) from the disposal ofproperties and EUR 2.4 million (PY: EUR 2.9 million) from other services. Of the sales from the disposal of properties,EUR 43.0 million was attributable to properties classified as fixed assets and EUR 7.5 million to properties classified ascurrent assets.

The EUR 2.7 million change in inventories was due to the relatively higher amount of operating costs not yetinvoiced as compared to in the previous year.

Other operating income amounted to EUR 39.1 million and included EUR 4.3 million in prior-period income,thereof EUR 3.9 million resulted from property management income. Other operating income also included EUR 14.1 millionfrom the reversal of provisions, EUR 2.1 million from the reversal of impairments on receivables, EUR 7.5 million fromreversals of write-downs on the carrying amounts of real property, EUR 1.5 million from the reversal of the special reserve forinvestment grants and subsidies and EUR 0.4 million from the immediate collection of investment grants and EUR 1.5 millionfrom insurance payouts.

Income from long-term equity investments (EUR 0.5 million) resulted primarily from the distribution from theequity of a non-consolidated subsidiary and from the transfer of the profit from the associate, Altmarkt-Galerie Dresden KG,Hamburg, amounting to EUR 0.2 million.

Other interest and similar income (EUR 0.8 million) consisted primarily of interest income in connection withshort-term investment of cash (EUR 0.5 million).

Expenses

Cost of materials amounted to EUR 103.0 million, consisting of EUR 29.3 million from disposals of real estateportfolio at carrying amounts due to disposals, EUR 63.8 million in property management expenses and EUR 9.9 million inexpenses for other purchased services. Of the disposals of real estate portfolio at carrying amounts, EUR 25.9 million relatedto properties classified as fixed assets and EUR 3.4 million for properties classified as current assets.

Personnel expenses amounted to EUR 23.4 million and related to an average of 303 permanent and an average of19 temporary employees. In addition, the Group employed on average 24 trainees, 5 employees on maternity leave and3 employees in the retirement phase of the partial and early retirement scheme.



Other operating expenses amounted to EUR 22.9 million and included valuation allowances and write-downs onreceivables and other assets (EUR 3.4 million), transfers to provisions for other uncertain liabilities (EUR 5.0 million),transfers to provisions for real property restitution (EUR 1.4 million), transfers to provisions for expected losses for interestrate hedges (EUR 1.4 million), transfers to provisions for litigation risks (EUR 1.6 million), and prior-period expensesresulting from subsequent corrections in income recognised in prior years (EUR 1.6 million).

Write-downs of long-term financial assets amounted to EUR 0.4 million during the financial year. Write-downswere recognised as a result of revaluations relating to a subsidiary which is not included in the consolidated financialstatements.

Interest and similar expenses (EUR 32.4 million) resulted primarily from interest paid on loans (EUR 22.3 million)and for compensatory payments on interest rate hedges (EUR 9.8 million).

Extraordinary expenses of EUR 23.1 million were recognised this financial year in relation to the provision for landtransfer tax incurred due to the transfer of residential properties to TLG WOHNEN under the spin-off agreement.

Taxes on income (EUR 10.1 million) related to the advance payment of corporation tax (EUR 0.9 million) and tradetax (EUR 0.3 million), as well as the transfer to provisions for corporation tax (EUR 3.6 million) and trade tax(EUR 5.3 million) for the current financial year. Corporation tax of EUR 1.4 million was levied in relation to ordinaryoperations and EUR 3.1 million for extraordinary items.

Trade tax of EUR 2.6 million was levied in relation to ordinary operations and EUR 3.0 million for extraordinaryitems resulting from the spin-off of TLG IMMOBILIEN’s residential property portfolio to TLG WOHNEN GmbH with31 December 2011 as the effective date for taxation purposes.

F-91

6. Assets in trust

The TLG IMMOBILIEN Group holds EUR 8.7 million (PY: EUR 7.3 million) in rental deposits in trust.

7. Auditors’ fees

The EUR 193 thousand in auditors’ fees are included in other operating expenses. Of that amount,EUR 185 thousand related to audit services and EUR 8 thousand to other services.

8. Other disclosures

The total remuneration for the management of TLG IMMOBILIEN amounted to EUR 573,919.13 in 2011. Thepension provisions for former members of the management amounted to EUR 2,956,323.36 as at 31 December 2011.

The remuneration for the Supervisory Board of TLG IMMOBILIEN amounted to EUR 104,842.20 in 2011.

Berlin, 28 March 2012

The Management

F-92

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F-93

The following English-language translation of the German-language auditor’s report (Bestätigungsvermerk) refers to theconsolidated financial statements and the group management report of TLG IMMOBILIEN GmbH, Berlin, prepared on thebasis of German commercial law (HGB) (“Handelsgesetzbuch”, German Commercial Code), for the fiscal year endedDecember 31, 2011 as a whole and not solely to the consolidated financial statements presented in this Prospectus on thepreceding pages.

AUDITOR’S REPORT

We have audited the consolidated financial statements prepared by TLG IMMOBILIEN GmbH, Berlin, comprising thebalance sheet, the income statement, the notes to the consolidated financial statements, the cash flow statement, and thestatement of changes in equity, together with the group management report for the fiscal year from 1 January to 31 December2011. The preparation of the consolidated financial statements and the group management report in accordance with Germancommercial law is the responsibility of the Company’s management. Our responsibility is to express an opinion on theconsolidated financial statements and the group management report based on our audit.

We conducted our audit of the consolidated financial statements in accordance with Sec. 317 HGB (“Handelsgesetzbuch”:German Commercial Code) and German generally accepted standards for the audit of financial statements promulgated by theInstitut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan andperform the audit such that misstatements materially affecting the presentation of the net assets, financial position and resultsof operations in the consolidated financial statements in accordance with German principles of proper accounting and in thegroup management report are detected with reasonable assurance. Knowledge of the business activities and the economic andlegal environment of the Group and expectations as to possible misstatements are taken into account in the determination ofaudit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting thedisclosures in the consolidated financial statements and the group management report are examined primarily on a test basiswithin the framework of the audit. The audit includes assessing the annual financial statements of those entities included inconsolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles usedand significant estimates made by management, as well as evaluating the overall presentation of the consolidated financialstatements and the group management report. We believe that our audit provides a reasonable basis for our opinion.


In our opinion, based on the findings of our audit, the consolidated financial statements comply with the legal requirementsand give a true and fair view of the net assets, financial position and results of operations of the Group in accordance withGerman principles of proper accounting. The group management report is consistent with the consolidated financialstatements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risksrelating to future development.



(signed) (signed)Plett KrügerWirtschaftsprüfer Wirtschaftsprüfer(German Public Auditor) (German Public Auditor)

F-94

TLG Immobilien GmbH, Berlin, Germany: Audited Unconsolidated FinancialStatements (Prepared in Accordance with German GAAP) of TLG Immobilien GmbH

as of and for the Fiscal Year Ended December 31, 2013

F-95

BALANCE SHEET

ASSETS EUR31/12/2013

EUR31/12/2012EUR ’000

A. FIXED ASSETS

I. Intangible fixed assetsPurchased software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 871,871.00 1,466

871,871.00 1,466

II. Tangible fixed assets1. Land, land rights and buildings, including buildings on third-party land . . . . . . . . 1,074,414,096.52 1,178,8402. Technical equipment and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473,936.55 5593. Other equipment, operating and office equipment . . . . . . . . . . . . . . . . . . . . . . . . . 286,535.07 5534. Prepayments and assets under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,767,415.43 78,988

1,123,941,983.57 1,258,940

III. Long-term financial assets1. Shares in affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,124,995.59 46,4492. Long-term equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 32,315

45,124,995.59 78,764

B. CURRENT ASSETS

I. Inventories1. Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,979,931.51 7,1092. Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,885,474.20 15,937

18,865,405.71 23,046II. Receivables and other assets1. Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,161,412.21 6,0042. Receivables from affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,417,751.10 93. Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676,986.45 1,654

9,256,149.76 7,667III. Cash-in-hand, bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,055,236.04 69,859C. PREPAID EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,507,183.68 7,319

1,348,622,825.35 1,447,061


I. Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,000,000.00 52,000II. Capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458,563,654.28 199,776III. Revenue reserves1. Special reserve in accordance with section 27 (2) of the D-Mark Accounting Act

(D-Mark-Bilanzgesetz, “DMBilG”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 476,0012. Special reserve in accordance with section 17 (4) of the D-Mark Accounting Act

(D-Mark-Bilanzgesetz, “DMBilG”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 58,5153. Other revenue reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843,266.41 843

843,266.41 535,359IV. Net retained profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,610,016.30 19,689

585,016,936.99 806,824B. SPECIAL RESERVE FOR INVESTMENT GRANTS AND

SUBSIDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,773,774.25 16,369C. PROVISIONS1. Provisions for pensions and similar obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,655,049.67 6,8882. Provisions for taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,098,313.18 30,4873. Other provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,490,979.03 51,092

79,244,341.88 88,467D. LIABILITIES1. Liabilities to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629,011,267.07 479,8702. Payments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,831,924.11 19,6973. Trade payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,825,119.26 18,6334. Liabilities to affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,175,767.63 3,4565. Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,484,033.57 13,662

thereof taxes EUR 1,546,620.70 (PY: EUR 320 thousand)thereof social security EUR 832.00 (PY: EUR 143 thousand)

668,328,111.64 535,318E. DEFERRED INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259,660.59 83

1,348,622,825.35 1,447,061

F-96

INCOME STATEMENT

2013 2012EUR EUR EUR ’000

1. Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345,600,219.55 211,5952. Increase (PY: decrease) in work in progress . . . . . . . . . . . . . . . . . . . . . . . 948,969.07 -5193. Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,498,490.62 16,354


a) Disposals of real estate portfolio at carrying amounts . . . . . . . . . . . 133,282,803.84 48,622b) Cost of purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,374,014.26 42,029

169,656,818.10 90,6515. Personnel expenses

a) Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,070,519.69 15,780Social security, post-employment and other employee benefit coststhereof for pensions EUR 280,347.32 (PY: EUR 246 thousand) . . . 2,334,117.01 2,540

22,404,636.70 18,3206. Amortisation, depreciation and write-downs

a) of intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . 69,432,462.31 44,475b) of current assets in excess of the corporation’s standard

depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680,117.39 397

70,112,579.70 44,8727. Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,054,649.57 11,985

154,818,995.17 61,6028. Income from participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,781,265.52 1,455

thereof from affiliated companies EUR 4,781,265.52 (PY: EUR 1,455thousand)

9. Other interest and similar income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652,047.54 89310. Write-downs of long-term financial assets . . . . . . . . . . . . . . . . . . . . . . . . 1,324,007.79 411. Interest and similar expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,072,439.61 40,090

thereof to affiliated companies EUR 26,009.28 (PY: EUR 177 thousand)-34,963,134.34 -37,746

12. Result from ordinary activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119,855,860.83 23,85613. Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,920,096.40 4,15814. Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,260.68 9

15. Net income for the financial year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,876,503.75 19,68916. Retained profits brought forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,688,820.52 18,39417. Withdrawals from capital reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199,776,431.93 11,60618. Withdrawals from revenue reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,444,777.64 019. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,176,517.54 30,000

20. Net retained profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,610,016.30 19,689

F-97

NOTES

1. General

The annual financial statements for financial year 2013 were prepared in accordance with the provisions of theGerman Commercial Code (Handelsgesetzbuch, “HGB”) for large corporations, the provisions of the German Act on LimitedLiability Companies (GmbH-Gesetz, “GmbHG”), the provisions of the D-Mark Accounting Act (D-Mark-Bilanzgesetz,“DMBilG”), and the provisions of the German ordinance regulating the forms for the classification of accounts in the annualfinancial statements of residential real estate companies (Verordnung über Formblätter für die Gliederung desJahresabschlusses von Wohnungsunternehmen). The income statement was prepared using the total cost method.

LSREF II East AcquiCo S.à.r.l., Luxembourg, (94.9%) and Delpheast Beteiligungs GmbH & Co. KG, Frankfurt/M,(5.1%) have been the shareholders of TLG IMMOBILIEN GmbH, Berlin (hereinafter “TLG IMMOBILIEN”) since31 December 2012.

As at 31 December 2013, TLG IMMOBILIEN GmbH holds 100% of the shares of the following companies:

Company name and domicileEquity as at31/12/2013

Result infinancialyear 2013

EUR ’000 EUR ’000TLG Gewerbepark Grimma GmbH, Grimma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,248 -6,623TLG Vermögensverwaltungs GmbH, Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 -10Hotel de Saxe an der Frauenkirche GmbH, Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,428 1,370Verwaltungsgesellschaft an der Frauenkirche mbH, Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 -8

In addition, it has long-term equity investments in the following companies:

Company name and domicile ShareholdingEquity as at31/12/2013

Result infinancialyear 2013

EUR ’000 EUR ’000Investitionsgesellschaft Hausvogteiplatz 11 Verwaltung mbH, Berlin* . . . . . . . . . . . 50% 23 1Investitionsgesellschaft Hausvogteiplatz 11 mbH & Co. KG, Berlin* . . . . . . . . . . . . 50% 267 43

* Figures based on preliminary unaudited annual financial statements as at 31 December 2013


The balance sheet and income statement were prepared on the basis of the following accounting policies:




Low-value assets with a net value of less than EUR 150 (prior to 31 December 2007: EUR 410) are written off orexpensed in full in the year in which they are acquired, with their immediate disposal being assumed. In the interest ofsimplification, the pooled item which is to be recognised for tax purposes each year for assets acquired after 31 December2007 at a cost of more than EUR 150 and less than EUR 1,000 has been included in the financial statements and is subjectedto lump-sum depreciation by 20 percent p.a. in the year of acquisition and over the next four years.

Long-term financial assets are recognised at the lower of cost or fair value.



Receivables and other assets are generally carried at their nominal amounts. Specific valuation allowances havebeen recognised to account for identified risks.

F-98


Provisions for pensions and similar obligations are recognised in accordance with the projected unit credit methodusing the Heubeck 2005 G mortality tables. The discount rate applied across the board represents the average market rate ofinterest for an expected residual term of 15 years at 4.9% (PY: 5.06%) in accordance with the German Regulation on theDiscounting of Provisions (Rückstellungsabzinsungsverordnung) dated 18 November 2009.

As expected, salary increases and staff turnover were not factored into the calculation. Expected pension increaseswere factored in at 1% (PY: 1%) for executives and at 2% (PY: 2%) for management. The option to retain pension provisionswhich is set forth under Article 67 (1) sentence 2 of the Introductory Act to the German Commercial Code (Einführungsgesetzzum Handelsgesetzbuch, “EGHGB”) is exercised to the extent that the EUR 1.1 million to be reversed upon revaluation as atthe balance sheet date must be added back during the transition period ending on 31 December 2024.



In order to calculate deferred taxes on the basis of temporary or quasi-permanent differences between the carryingamounts of assets, liabilities, prepaid expenses and deferred income in the financial accounts as compared to the tax accountsor on the basis of tax loss carryforwards, the amount of the arising tax burden or relief is calculated using the individualcompanies’ tax rates upon the reversal of the differences and is not discounted. Deferred tax assets are eliminated againstdeferred tax liabilities, resulting in deferred tax assets. In accordance with the recognition option provided under section 274(1) HGB, deferred taxes are not recognised.



3. Assets

The statement of changes in fixed assets is included as an appendix.


Long-term financial assets (EUR 45.1 million) included shares in four subsidiaries and two associates. Due to anexisting impairment, the share in TLG Gewerbepark Grimma GmbH, Grimma, was written down in the amount ofEUR 1.3 million. The EUR 34.6 million disposal resulted from the sale of the long-term equity investment in Altmarkt-Galerie Dresden KG, Hamburg.


Work in progress include operating and heating costs not yet invoiced (EUR 16.9 million).


Receivables from affiliated companies (EUR 1.4 million) relate primarily to a receivable from Hotel de Saxe an derFrauenkirche GmbH, Dresden, from the advance distribution for the 2013 financial year and fall due within one year.

Other assets (EUR 0.7 million) consist primarily of loan receivables from third parties (EUR 0.3 million) and taxassets (EUR 0.2 million). Of the other assets, EUR 0.3 million have a remaining maturity of more than one year (PY: EUR 0.0million more than one year).

Cash-in-hand, bank balances (EUR 143.1 million) were held primarily in current accounts (EUR 139.5 million) andterm deposit balances (EUR 3.6 million). Of that amount, EUR 3.1 million was pledged to DKB as collateral,EUR 0.7 million was pledged to LBBW and EUR 0.4 million was pledged to Volks- und Raiffeisenbank Muldental; thus,those amounts are not available to the company to dispose over.

F-99


31/12/2013EUR ’000

Deferred tax assets relating to differences for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 644Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,032Shares in affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903


The calculation was based on a tax rate of 30.875%, which factors in the currently applicable statutory tax rates andbases, as well as an average multiplier for municipal taxes of 430%.

No tax loss carryforwards were disclosed because they were derecognised as a result of the change in shareholdersas at 31 December 2012.


4. Equity and liabilities

The company’s subscribed capital remained unchanged at EUR 52.0 million.

Capital reserves amounted to EUR 458.6 million. The change (EUR 258.8 million) resulted from a distribution ofEUR 199.8 million to shareholders, an increase of EUR 438.1 million from the reclassification of revenue reserves, andshareholder contributions of EUR 20.5 million to capital reserves.

Revenue reserves decreased by EUR 534.5 million to EUR 0.8 million due to withdrawals for the distribution(EUR 96.4 million) and withdrawals for the reclassification to capital reserves (EUR 438.1 million).

Factoring in net income for 2013 (EUR 82.9 million), retained profits brought forward (EUR 19.7 million),withdrawals from capital/revenue reserves used for the distribution (EUR 296.2 million) and the actual advance distribution(EUR 325.2 million), net retained profits amounted to EUR 73.6 million and equity totalled EUR 585.0 million.

The special reserve for investment grants amounted to EUR 10.5 million as a result of EUR 0.4 million in reversalsreflecting the depreciation, amortisation and write-downs of assets. The special reserve for subsidies totalled EUR 5.3 millionas a result of an additional EUR 0.2 million in reversals reflecting the depreciation, amortisation and write-downs of assets.


Provisions for taxes amounted to EUR 44.1 million and related primarily to the provision for corporation tax(EUR 20.2 million), trade tax (EUR 23.6 million) and other taxes (EUR 0.3 million) for the years 2013 and prior.

Other provisions amounted to EUR 28.5 million and related primarily to the repayment of investment grants andsubsidies (EUR 9.3 million), restructuring expenses (EUR 6.2 million), litigation risks (EUR 3.5 million), personnel expenses(EUR 1.7 million), property management (EUR 1.4 million) and outstanding invoices (EUR 1.0 million).


31/12/2013 31/12/2012Total Remaining maturity Total


5 years up to 1 yearLiabilities EUR million EUR million EUR million EUR million EUR million EUR million

to banks . . . . . . . . . . . . . . . . . . . . . . . . 629.0 116.0 83.0 430.0 479.9 87.0relating to payments received . . . . . . . 16.8 16.8 — — 19.7 19.7relating to trade payables . . . . . . . . . . 5.8 4.7 1.1 — 18.6 18.0to affiliated companies . . . . . . . . . . . . 5.2 5.2 — — 3.4 3.4to shareholders . . . . . . . . . . . . . . . . . . 0.0 0.0 — — 0.0 0.0other liabilities . . . . . . . . . . . . . . . . . . 11.5 9.4 1.2 0.9 13.7 9.2Total . . . . . . . . . . . . . . . . . . . . . . . . . . 668.3 152.1 85.3 430.9 535.3 137.3

F-100

Liabilities to banks amounted to EUR 629.0 million and were primarily attributable to loans from LandesbankHessen-Thüringen (EUR 100.4 million), Citibank International PLC (EUR 74.9 million), Unicredit Bank—HypoVereinsbankAG (EUR 71.7 million) and Deutsche Genossenschafts-Hypothekenbank AG (EUR 66.0 million). In total, EUR 622.8 millionis collateralised through land charges.

Payments received amounted to EUR 16.8 million and related primarily to advance payments for operating costspaid by tenants (EUR 16.4 million). Other payments received related to purchase agreements which had been negotiated in thecourse of the property sale but which had not yet entered into force (EUR 0.4 million).

Trade payables amounted to EUR 5.8 million and related primarily to liabilities incurred in connection with sitedevelopment (EUR 2.3 million), liabilities from the retention of guarantees (EUR 1.8 million), liabilities from propertymanagement (EUR 1.0 million), liabilities from general business operations (EUR 0.4 million) liabilities from the acquisitionof properties (EUR 0.1 million).

Liabilities to affiliated companies (EUR 5.2 million) consist primarily to claims by subsidiaries pertaining to TLGIMMOBILIEN’s cash management pool.



Deferred income amounted to EUR 260 thousand and related primarily to advance payments of rent.


TLG IMMOBILIEN has pledged EUR 4.2 million as collateral. The amounts pledged serve as additional collateralfor derivatives with Landesbank Baden-Württemberg (EUR 0.7 million), to which the bank has recourse if TLGIMMOBILIEN fails to satisfy its payment obligations under the interest rate hedges concluded. In addition, in a guaranteefacility agreement with DKB (Deutsche Kreditbank), TLG IMMOBILIEN has undertaken to indemnify the bank forguarantees issued which do not expire until the end of the term of the guarantee facility. EUR 3.1 million in balances has beenpledged to DKB as collateral. To date, TLG IMMOBILIEN has duly satisfied its obligations and no collateral has beenrealised. It is therefore considered unlikely that DKB will assert any claims. In addition, EUR 0.4 million has been pledged toVolks- und Raiffeisenbank Muldental as collateral for a development loan from the Sächsische Aufbaubank, which wasgranted to the subsidiary, TLG Gewerbepark Grimma GmbH. There is no risk that the pledged balances will be realisedbecause the relevant loan was repaid in January 2014 and the collateral released.

6. Material off-balance sheet transactions and other financial obligations




Rental, lease and service agreements

The company has various service agreements for IT services, cleaning, and reception and security as well as leasesfor vehicles in the company’s vehicle fleet. The notice periods for terminating the leases and service agreements are in 2014.


F-101

Due to existing agreements that could not be terminated as at the balance sheet date, the amounts payable in thefollowing years are as follows:

EUR ’000

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5892015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

691

Of the total amount, EUR 444 thousand related to service agreements and EUR 247 thousand to leases.

Purchase commitments amounting to EUR 21.1 million have been entered into for investments in the propertyportfolio which have already been approved but not yet implemented. Furthermore, there exists an additional purchasecommitment of standard scope and size.

7. Derivative financial instruments(excluding interest-rate transactions)

Type (number)

Amountas at


(if available)


EUR million EUR million EUR millionInterest rate swap with cap . . . . . . . . . . 8.6 30/06/2006 – 30/06/2016 -0.4 0.0 n/aForward swap . . . . . . . . . . . . . . . . . . . . 8.6 30/11/2006 – 30/11/2016 -0.7 0.0 n/aForward swap (5) . . . . . . . . . . . . . . . . . 28.1 30/11/2007 – 30/11/2017 -3.9 0.0 n/aForward swap (3) . . . . . . . . . . . . . . . . . 12.8 29/02/2008 – 28/02/2018 -1.7 0.0 n/aForward swap (3) . . . . . . . . . . . . . . . . . 11.6 30/06/2008 – 30/06/2018 -1.6 0.0 n/aForward swap (1) . . . . . . . . . . . . . . . . . 0.9 30/06/2009 – 28/09/2018 -0.1 0.0 n/aCollar (2) . . . . . . . . . . . . . . . . . . . . . . . 10.2 30/06/2009 – 29/06/2019 -1.8 0.0 n/aForward swap (1) . . . . . . . . . . . . . . . . . 2.7 30/09/2009 – 30/09/2019 -0.4 0.0 n/aForward swap (4) . . . . . . . . . . . . . . . . . 23.1 31/03/2010 – 31/03/2020 -3.5 0.0 n/aForward swap (3) . . . . . . . . . . . . . . . . . 18.2 30/06/2010 – 30/06/2020 -2.4 0.0 n/aForward swap (2) . . . . . . . . . . . . . . . . . 7.5 31/03/2011 – 31/03/2021 -0.9 0.0 n/aForward swap (2) . . . . . . . . . . . . . . . . . 5.4 30/06/2011 – 31/03/2021 -0.8 0.0 n/aForward swap (2) . . . . . . . . . . . . . . . . . 9.4 28/09/2012 – 30/06/2021 -0.9 0.0 n/aForward swap (1) . . . . . . . . . . . . . . . . . 42.3 23/12/2013 – 30/12/2020 -0.1 0.0 n/aForward swap (1) . . . . . . . . . . . . . . . . . 20.0 30/12/2013 – 31/03/2021 -0.1 0.0 n/aForward swap (1) . . . . . . . . . . . . . . . . . 400.0 15/01/2013 – 28/12/2015 0.0 0.0 n/a

Subtotal ∑ . . . . . . . . . . . . . . . . . . . 609.3 ∑ 0.0Forward swap (1) . . . . . . . . . . . . . . . . . 4.7 31/03/2011 – 31/03/2021 -0.1 -0.1 Provision

for expectedlosses

Forward swap (1) . . . . . . . . . . . . . . . . . 5.7 30/06/2014 – 30/12/2020 0.0 0.0

Subtotal ∑ . . . . . . . . . . . . . . . . . . . 10.4 ∑ -0.1

Total . . . . . . . . . . . . . . . . . . . . . . . 619.7 -0.1

Interest rate derivatives serve to hedge against changing interest rates for loans already taken out or loans to betaken out in the future. They are marked to market.




The opposing cash flows from the underlying and the hedge are expected to offset each other almost in full over theterm of the hedge because in accordance with the Group’s risk policies, risk exposures (underlyings) must be hedgedimmediately using interest rate hedges upon inception in the amount, currency and term matching the underlying transaction.As at the balance sheet date, the opposing cash flows from the underlying and the hedge have offset each other almost in full.The critical terms match method is used to measure hedge effectiveness.

8. Related-party transactions


F-102

9. Income

Sales amounted to EUR 345.6 million (PY: EUR 211.6 million) and included EUR 129.0 million (PY: EUR 128.1million) from property management, EUR 213.0 million (PY: EUR 78.3 million) from the disposal of properties andEUR 3.6 million (PY: EUR 5.2 million) from other services. Of the sales from the disposal of properties, EUR 206.3 millionwas attributable to properties classified as fixed assets and EUR 6.7 million to properties classified as current assets.

The EUR 0.9 million change in inventories was due to the relatively higher amount of operating costs not yetinvoiced as compared to in the previous year.

Other operating income (EUR 81.5 million) included EUR 36.6 million from the sale of the long-term equityinvestments in Altmarkt-Galerie Dresden KG, Hamburg, EUR 15.5 million from the reversal of provisions, EUR 1.2 millionfrom the reversal of write-downs on receivables and EUR 0.6 million from the reversal of the special reserve for investmentgrants and subsidies. This item also included EUR 1.4 million in prior-period income, of which EUR 1.3 million wasattributable to income from property management.

Income from long-term equity investments (EUR 4.8 million) resulted from profit distributions and/or withdrawalsfrom subsidiaries.

Other interest and similar income (EUR 0.7 million) consisted primarily of interest income in connection with short-term investment of cash (EUR 0.5 million).

10. Expenses

Cost of materials amounted to EUR 169.7 million, consisting of EUR 133.3 million from disposals of real estateportfolio at carrying amounts, EUR 31.9 million in property management expenses and EUR 4.5 million in expenses for otherpurchased services. Of the disposals of real estate portfolio at carrying amounts, EUR 128.3 million related to propertiesclassified as fixed assets and EUR 5.0 million for properties classified as current assets.

Personnel expenses amounted to EUR 22.4 million and related to an average of 196 permanent and an average of13 temporary employees. In addition, the Group employed on average 17 trainees and 2 employees on maternity leave.



Other operating expenses amounted to EUR 11.1 million and included valuation allowances and write-downs onreceivables and other assets (EUR 1.8 million), expenses in connection with the restructuring (EUR 1.7 million) and prior-period expenses resulting from subsequent corrections in income recognised in prior years (EUR 0.1 million).

Interest and similar expenses (EUR 39.1 million) resulted primarily from interest paid on loans (EUR 30.8 million)and for compensatory payments on interest rate hedges (EUR 7.4 million).

Taxes on income (EUR 36.9 million) related to the advance payment of corporation tax including the solidaritysurcharge (EUR 2.2 million), provisions for corporation tax including the solidarity surcharge (EUR 16.1 million) and tradetax (EUR 18.3 million) for the current financial year. This item also includes EUR 0.3 million in additional expenses forcorporation tax in 2012.

11. Assets in trust

TLG IMMOBILIEN holds EUR 4.6 million (PY: EUR 3.9 million) in rental deposits in trust.

12. Auditors’ fees

Please refer to the summary disclosures provided in TLG IMMOBILIEN’s consolidated financial statements—available in the electronic commercial register (elektronischer Handelsregister)—for information regarding the auditors’ fees.

F-103

13. The Management

Managing directors:

Peter Finkbeiner (since 2 January 2013)Niclas Karoff

The managing director positions are full-time positions.

The company also had the following temporary managing directors during financial year 2013:

Jochen-Konrad Fromme (until 10 June 2013)Dr Michael Damnitz (from 2 January 2013 until 30 January 2013)

The total remuneration for the management amounted to EUR 1,298,104.31 in 2013. The pension provisions for formermembers of the management amounted to EUR 2,658,152.99 as at 31 December 2013.

14. Group membership

TLG IMMOBILIEN GmbH prepares its own consolidated financial statements, which are available in the electronic FederalGazette.


The Management

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F-105

The following English-language translation of the German-language auditor’s report (Bestätigungsvermerk) refers to theannual financial statements and the management report of TLG IMMOBILIEN GmbH, Berlin, prepared on the basis ofGerman commercial law (HGB) (“Handelsgesetzbuch”, German Commercial Code), as of and for the fiscal year endedDecember 31, 2013 as a whole and not solely to the annual financial statements presented in this Prospectus on the precedingpages.

AUDITOR’S REPORT

We have audited the annual financial statements, comprising the balance sheet, the income statement and the notes to thefinancial statements, together with the bookkeeping system, and the management report of TLG IMMOBILIEN GmbH,Berlin, for the fiscal year from 1 January to 31 December 2013. The maintenance of the books and records and the preparationof the annual financial statements and management report in accordance with German commercial law are the responsibilityof the Company’s management. Our responsibility is to express an opinion on the annual financial statements, together withthe bookkeeping system, and the management report based on our audit.

We conducted our audit of the annual financial statements in accordance with Sec. 317 HGB (“Handelsgesetzbuch”: GermanCommercial Code) and German generally accepted standards for the audit of financial statements promulgated by the Institutder Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform theaudit such that misstatements materially affecting the presentation of the net assets, financial position and results of operationsin the annual financial statements in accordance with German principles of proper accounting and in the management reportare detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of theCompany and expectations as to possible misstatements are taken into account in the determination of audit procedures. Theeffectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the books andrecords, the annual financial statements and the management report are examined primarily on a test basis within theframework of the audit. The audit includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the annual financial statements and management report. Webelieve that our audit provides a reasonable basis for our opinion.


In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and givea true and fair view of the net assets, financial position and results of operations of the Company in accordance with Germanprinciples of proper accounting. The management report is consistent with the annual financial statements and as a wholeprovides a suitable view of the Company’s position and suitably presents the opportunities and risks relating to futuredevelopment.



(signed) (signed)Plett PfeifferWirtschaftsprüfer Wirtschaftsprüferin(German Public Auditor) (German Public Auditor)

F-106

“TLG IMMOBILIEN AG”

Opinion of Market Value

as at

30 June 2014

on behalf of:

TLG IMMOBILIEN GmbH

(now converted into TLG IMMOBILIEN AG)

Hausvogteiplatz 12

10117 Berlin

Germany

prepared by:

Savills Advisory Services GmbH

Taunusanlage 19

60325 Frankfurt am Main

Germany

Date of Report: 29 September 2014

V-1

Date of Valuation

30 June 2014

Valuation Report

In the form of a condensed valuation report (hereinafter referred to as “Valuation Report”) for the determination ofMarket Value carried out by Savills Advisory Services GmbH in accordance with the RICS Valuation—ProfessionalStandards (January 2014) of the Royal Institution of Chartered Surveyors (“Red Book”) and the International Standards forthe Valuation of Real Estate for Investment Purposes (“International Valuation Standards”), in connection with the initialpublic offering by TLG IMMOBILIEN AG, of the portfolio of 469 assets, comprising:

Portfolio overview by use

No.Properties

LettableArea

VacancyRate

(Area)

VacancyRate

(EPRA) Current Rent WAULT

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 431,503 2.0% 0.4% 46,345,247 7.1Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 271,639 10.4% 10.2% 26,742,697 6.1Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 75,852 1.9% 1.7% 12,371,095 16.6Retail—Mixed Use . . . . . . . . . . . . . . . . . . . . . . . . . . 17 68,969 5.0% 4.4% 8,625,573 8.2Office—Mixed Use . . . . . . . . . . . . . . . . . . . . . . . . . . 13 87,269 8.4% 6.3% 7,476,524 4.6Mixed Use—Others . . . . . . . . . . . . . . . . . . . . . . . . . 50 311,624 26.3% 13.4% 9,901,282 4.5Undeveloped Land . . . . . . . . . . . . . . . . . . . . . . . . . . 73 — — — 91,653 45.3Industrial-/Storage-/Logistics . . . . . . . . . . . . . . . . . . 9 69,224 21.2% 3.5% 1,391,071 4.7Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 11,058 2.8% 2.8% 623,955 0.9Misc. (Social-/Sport-/Leisure) . . . . . . . . . . . . . . . . . 3 9,492 — — 273,453 8.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 1,336,632 10.9% 4.9% 113,842,551 7.8

The Market Value is consistent with the Fair Value in accordance with IFRS 13 of the International FinancialReporting Standards (IFRS) published by the International Accounting Standards Board (IASB).

Summary of Valuation Results

Upon the assumption that, after reasonable due diligence enquiries in respect of the portfolio, there are no onerousrestrictions or unusual outgoings of which we have no knowledge and based on the specific comments and assumptionsset out in this Valuation Report, we are of the opinion that the aggregate of the individual Market Value of thefreehold / leasehold interests of the subject properties in the portfolio of TLG, rounded at asset level, as at 30 June 2014, is:

EUR 1,449,648,000

(ONE BILLION FOUR HUNDRED AND FORTY-NINE MILLION SIX HUNDRED ANDFORTY-EIGHT THOUSAND EURO)

Gross Present Value in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,551,260,845Assumed Purchase Costs Total in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,612,845

Thereof Real Estate Transfer Tax in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,881,285Thereof Notary Fees in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,865,780Thereof Agency Fees in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,865,780

V-2

The following table shows aggregated data of the 380 properties with a sustainable cash-flow (excluding89 Liquidation Properties) which represent 98.1% of the total Market Value

Market Value in EUR per sq m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,090Gross Multiplier on Current Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.57xGross Multiplier on Market Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.46xNet Initial Yield (NIY) on Current Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5%Net Yield (NY) on Market Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7%

The portfolio Market Value reported is the aggregate total of the individual properties and not necessarily a figurethat could be achieved if the portfolio were to be sold as a whole.

V-3

Breakdown of Market Value by Type of Use


No.Properties

LettableArea

VacancyRate

(Area)

VacancyRate

(EPRA) Current Rent Market Value

MarketValue

(Share ofTotal)

MarketValue per

sq m

GrossMultiplier onCurrent Rent

GrossMultiplier onMarket Rent

NIY onCurrent

Rent

NIY onMarket

Rent WAULT

sq m % % EUR p.a. EUR % EUR per sq m x x yearsRetail . . . . . . . . . . . . 256 431,503 2.0% 0.4% 46,345,247 550,860,000 38.0% 1,277 11.89 12.35 7.0% 6.7% 7.1Office . . . . . . . . . . . . 40 271,639 10.4% 10.2% 26,742,697 371,150,000 25.6% 1,366 13.88 13.14 6.0% 6.4% 6.1Hotel . . . . . . . . . . . . . 5 75,852 1.9% 1.7% 12,371,095 195,400,000 13.5% 2,576 15.79 15.70 5.6% 5.6% 16.6Retail—Mixed

Use . . . . . . . . . . . . 17 68,969 5.0% 4.4% 8,625,573 120,080,000 8.3% 1,741 13.92 13.34 6.1% 6.4% 8.2Office—Mixed

Use . . . . . . . . . . . . 13 87,269 8.4% 6.3% 7,476,524 113,630,000 7.8% 1,302 15.20 13.22 5.4% 6.3% 4.6Mixed

Use—Others . . . . . 50 311,624 26.3% 13.4% 9,901,282 69,133,000 4.8% 222 6.98 7.19 9.8% 9.9% 4.5Undeveloped

Land . . . . . . . . . . . 73 — — — 91,653 15,195,000 1.0% — 165.79 441.04 0.4% 0.0% 45.3Industrial-/Storage-/

Logistics . . . . . . . . 9 69,224 21.2% 3.5% 1,391,071 5,890,000 0.4% 85 4.23 4.75 16.3% 13.8% 4.7Residential . . . . . . . . 3 11,058 2.8% 2.8% 623,955 4,710,000 0.3% 426 7.55 7.07 9.7% 10.6% 0.9Misc. (Social-/Sport-/

Leisure) . . . . . . . . . 3 9,492 — — 273,453 3,600,000 0.2% 379 13.16 13.17 5.8% 5.8% 8.7

Total . . . . . . . . . . . . . 469 1,336,632 10.9% 4.9% 113,842,551 1,449,648,000 1,085 12.73 12.63 6.5% 6.6% 7.8

The above shown overview also contains the undeveloped plots with a total land area of 760,868 sq m. Some ofthese also produce rental income, which amounts to a total rent of EUR 91,653 p.a. and reflects a Market Value ofEUR 15,195,000.

Breakdown of Market Value by Core / None-Core Classification

Portfolio overview by Core / Non-Core

No.Properties

LettableArea

VacancyRate

(Area)

VacancyRate


MarketValue

(Share ofTotal)

MarketValue per

sq m



NIY onCurrent

Rent

NIY onMarket

Rent WAULT

sq m % % EUR p.a. EUR % EUR per sq m x x yearsCore . . . . . . . . . 321 912,269 4.8% 4.0% 100,420,349 1,338,870,000 92.4% 1,468 13.33 13.19 6.3% 6.4% 8.0

Office . . . . 45 339,115 9.1% 9.2% 33,194,523 476,480,000 32.9% 1,405 14.35 13.32 5.8% 6.3% 5.9Retail . . . . 271 497,302 2.2% 1.0% 54,854,731 666,990,000 46.0% 1,341 12.16 12.51 6.9% 6.7% 7.3Hotel . . . . 5 75,852 1.9% 1.7% 12,371,095 195,400,000 13.5% 2,576 15.79 15.70 5.6% 5.6% 16.6

Non-Core . . . . . 148 424,363 24.2% 11.8% 13,422,203 110,778,000 7.6% 261 8.25 8.40 8.5% 8.6% 4.6

Total . . . . . . . . 469 1,336,632 113,842,551 1,449,648,000 1,085 12.73 12.63 6.5% 6.6% 7.8

Breakdown of Market Value by Municipalities

Geographical Portfolio Distribution by Market Value

No.Properties

LettableArea

VacancyRate

(Area)

VacancyRate


MarketValue

(Share ofTotal)

MarketValue per

sq m



NIY onCurrent

Rent

NIY onMarket

Rent WAULT

sq m % % EUR p.a. EUR % EUR per sq m x x yearsBerlin . . . . . . . . . . . . 48 355,534 7.9% 6.8% 40,604,476 635,640,000 43.8% 1,788 15.65 14.40 5.3% 5.9% 7.96Dresden . . . . . . . . . . 57 178,191 5.1% 2.0% 17,545,840 238,140,000 16.4% 1,336 13.57 13.85 6.4% 6.3% 9.62Rostock . . . . . . . . . . 23 80,280 5.9% 2.9% 9,351,358 129,590,000 8.9% 1,614 13.86 15.42 6.0% 5.4% 12.18Stralsund . . . . . . . . . 9 19,914 18.6% 14.3% 2,684,290 38,166,000 2.6% 1,916 14.22 12.57 5.8% 6.8% 7.98Chemnitz . . . . . . . . . 17 125,667 20.7% 10.2% 5,178,258 29,656,000 2.0% 236 5.73 5.62 12.7% 13.4% 3.61Leipzig . . . . . . . . . . . 22 23,156 3.5% 1.4% 2,152,155 26,686,000 1.8% 1,152 12.40 12.40 6.7% 6.8% 6.93Gera . . . . . . . . . . . . . 7 35,001 2.5% 2.4% 2,163,285 22,770,000 1.6% 651 10.53 11.01 7.7% 7.4% 5.57Halle (Saale) . . . . . . 7 14,589 — — 1,609,629 19,730,000 1.4% 1,352 12.26 12.49 6.9% 6.8% 8.07Potsdam . . . . . . . . . . 5 11,389 0.2% 0.3% 1,614,683 18,850,000 1.3% 1,655 11.67 12.44 7.3% 6.8% 7.51Magdeburg . . . . . . . . 15 35,756 37.0% 3.1% 1,744,469 15,338,000 1.1% 429 8.79 9.66 8.4% 7.5% 4.84Remaining

Municipalities . . . 259 457,154 13.1% 3.3% 29,194,108 275,082,000 19.0% 602 9.42 9.90 8.5% 8.1% 6.11

Total . . . . . . . . . . . . 469 1,336,632 10.9% 4.9% 113,842,551 1,449,648,000 1,085 12.73 12.63 6.5% 6.6% 7.8

V-4

Breakdown of Market Value by Tenure

Portfolio overview by Tenure

LettableArea

VacancyRate

(Area)

VacancyRate


MarketValue

(Share ofTotal)

MarketValue per

sq m



NIY onCurrent

Rent

NIY onMarket

Rent WAULT

sq m % % EUR p.a. EUR % EUR per sq m x x yearsFreehold . . . . . . . . 464 1,323,689 10.8% 4.8% 113,422,314 1,444,618,000 99.7% 1,091 12.74 12.66 6.5% 6.6% 7.75Leasehold . . . . . . . 5 12,943 24.4% 20.2% 420,237 5,030,000 0.3% 389 11.97 8.50 4.7% 8.5% 9.88

Total . . . . . . . . . . . 469 1,336,632 10.9% 4.9% 113,842,551 1,449,648,000 1,085 12.73 12.63 6.5% 6.6% 7.8

Breakdown of Market Value by Ratio

Within the Subject Portfolio there is only one subject property with a Market Value share of more than 5.0%compared to the overall portfolio Market Value. This refers to Property ID: 485479 (Karl-Liebknecht-Straße 32, 32A 32B in10178 Berlin), which is a hotel/office building (“Die Welle Mitte”) in the inner city of Berlin, with a ratio of the Market Valuecompared to the portfolio Market Value of 6.4% (EUR 92,000,000).

The total lettable area of the fully let subject property amounts to some 33,942 sq m, the remaining WAULTamounts to 14.4 years. Based on the annual current rent of EUR 6,022,118 the multiple on current rent is at 15.28-fold,corresponding to a net initial yield of 5.6%.

Breakdown of Market Value by Method of Valuation

Portfolio overview by Method of Valuation

LettableArea

VacancyRate

(Area)

VacancyRate


MarketValue

(Share ofTotal)

MarketValue per

sq m



NIY onCurrent

Rent

NIY onMarket

Rent WAULT

sq m % % EUR p.a. EUR % EUR per sq m x x yearsDiscounted Cashflow . . . . 380 1,303,624 10.4% 4.9% 113,110,589 1,421,430,000 98.1% 1,090 12.57 12.46 6.5% 6.7% 7.78Liquidation Value . . . . . . . 89 33,008 33.1% — 731,962 28,218,000 1.9% 855 — — — — —

Total . . . . . . . . . . . . . . . . . 469 1,336,632 10.9% 4.9% 113,842,551 1,449,648,000 1,085 12.73 12.63 6.5% 6.6% 7.8

Breakdown of Market Value by Value (Positive/Negative)

In our valuation of the portfolio we assessed 12 properties to have a negative calculatory value. The following tableshows a breakdown of the 12 properties which have a negative calculatory value of EUR -1,093,654 in total.

However, as negative Market Values are rather fictitious, we assumed that those 12 properties cannot be sold andtherefore considered them with no Market Value in the total portfolio value.

Portfolio overview by positive/ negative Values

LettableArea

VacancyRate

(Area)

VacancyRate

(EPRA) Current Rent ValueValue per

sq m



NIY onCurrent

Rent

NIY onMarket

Rent WAULT

sq m % % EUR p.a. EUR EUR per sq m x x yearsPositive Market Values . . . . . . . . . . 457 1,302,365 9.8% 4.7% 113,525,597 1,449,648,000 1,113 12.77 12.67 6.5% 6.6% 7.77Negative Calculatory Values . . . . . . 12 34,267 53.3% 44.5% 316,955 -1,093,654 -32 -3.45 -2.99 — — 2.16—thereof

34980—Magdeburg . . . . . . . . . — — — -190,000 — — — — — 0.0035954—Dresden . . . . . . . . . . . — — 161 -10,000 — -61.93 — — — 0.00482011—Apolda . . . . . . . . . . . — — — -90,000 — — — — — 0.00482014—Apolda . . . . . . . . . . . — — — -110,000 — — — — — 0.00484565—Apolda . . . . . . . . . . . — — — -50,000 — — — — — 0.00484567—Apolda . . . . . . . . . . . — — — -10,000 — — — — — 0.00485043—Bautzen . . . . . . . . . . 3,156 100.0% — -46,219 -15 — -0.39 — — 0.00485165—Schwerin . . . . . . . . . 5,408 100.0% 136,318 -46,008 -9 -0.34 -0.57 — — 0.56485412—Merseburg . . . . . . . . 2,471 100.0% 24,164 -40,000 -16 -1.66 — — — 0.29485796—Werdau . . . . . . . . . . . — — 180 -50,000 — -277.78 — — — 0.00486022—Sömmerda . . . . . . . . 7,551 100.0% 54,514 -435,973 -58 -8.00 -6.39 — — 2.70486221—Grimma . . . . . . . . . . 15,682 100.0% 101,617 -15,453 -1 -0.15 -0.16 — — 7.39

V-5

Table of Contents

A. Instructions and Sources of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7

I. Scope of Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7

II. Sources of Information and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

B. Portfolio Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12

C. Valuation Considerations and Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-17

I. Method of Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-17

II. Portfolio Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-17

III. Individual Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-22

IV. Basic Cash Flow Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-23

D. Valuation Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-29

I. Opinion of Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-29

E. Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-30

F. General Valuation Assumptions and Applied Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-34

I. General Valuation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-34

II. Rents, Income and Vacancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-36

III. Values and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-38

IV. Yields and Multipliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-41

G. Overview of Main Assets (Office, Retail, Hotel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-42

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A. Instructions and Sources of Information

I. Scope of Instruction

Preamble

This Valuation Report has been prepared pursuant to an agreement dated 2 December 2013 / 28 November 2013between TLG Immobilien GmbH and Savills Advisory Services GmbH, as amended by way of supplemental agreement dated1 August 2014 (together the “Appointment Agreement”).

Savills hereby confirms that as at the date of this Valuation Report there is no existing or potential conflict ofinterest in relation to TLG with regard to the preparation of this Valuation Report.

Valuer


Taunusanlage 19

60325 Frankfurt am Main

Germany

(Hereinafter referred to as “Savills”)

Report Date

The report date is 29 September 2014. The Valuation Report refers to the position as at the date it was originallyissued and Savills has taken no action, nor is it obliged to take any action, to review or to update the Valuation Report sincethe date it was originally issued.

Instruction

Savills carried out a determination of Market Value of the respective freehold and leasehold interests of theproperties in the TLG portfolio (as defined below). For the purposes of this Valuation Report references to a “subjectproperty” or “subject properties” shall mean a reference to any property or properties within the TLG portfolio.

The valuation is in accordance with the RICS Valuation—Professional Standards (January 2014) of the RoyalInstitution of Chartered Surveyors (“Red Book”) and the International Standards for the Valuation of Real Estate forInvestment Purposes (“International Valuation Standards”)

Instructing Party

TLG Immobilien GmbH

(now converted to TLG IMMOBILIEN AG)

Hausvogteiplatz 12

10117 Berlin

Germany

(Hereinafter referred to as “TLG”)

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Addressees

The Valuation Report shall be addressed to the following parties (all parties named below hereinafter referred to asthe “Addressees”):

TLG Immobilien GmbH

(now converted to TLG IMMOBILIEN AG)

Hausvogteiplatz 12

10117 Berlin

Germany

In addition, the Valuation Report shall be addressed to the following parties in accordance with and subject to theterms of the Appointment Agreement:

• LSREF II East AcquiCo S.à.r.l., Luxemburg,

• Delpheast Beteiligungs GmbH & Co. KG, Frankfurt am Main,

• J.P. Morgan Securities plc, London,

• UBS Limited, London,

• COMMERZBANK Aktiengesellschaft, Frankfurt am Main,

• Kempen & Co N.V., Amsterdam and

• HSBC Trinkaus & Burkhardt AG, Düsseldorf.

Purpose of Valuation

This Valuation Report is for inclusion in a prospectus in connection with the initial public offering of shares of TLGIMMOBILIEN AG (the “IPO”). For the avoidance of doubt, Savills accepts responsibility for this Valuation Report only andfor no other part or parts of the prospectus issued in connection with the IPO.

Date of Valuation

Reference date of valuation is 30 June 2014.

Subject Portfolio

The Subject Portfolio consists of 469 mainly commercial properties, which are located all over Eastern Germany. Adetailed overview of the Subject Portfolio is set out in Chapter B “Portfolio Overview” of this Valuation Report.

Interest Valued / Tenure

With the exception of 5 subject properties which are leasehold properties, all of the other subject properties are heldon the German equivalent of a freehold title.

Currency

The relevant currency for this valuation will be EUR (€).

Publication / Disclosure

Savills acknowledges and agrees that this Valuation Report will appear in the prospectus for the initial publicoffering (“IPO”) of shares of TLG IMMOBILIEN AG (“Prospectus”) and that it will be used for:

1. The admission to trading of shares in TLG IMMOBILIEN AG to the regulated market segment(regulierter Markt) of the Frankfurt Stock Exchange with simultaneous admission to the sub-segmentthereof with additional post admission obligations (Prime Standard);

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2. The public offer and sale of shares in TLG IMMOBILIEN AG in Germany; and

3. The international offering circular for the offer and sale of the shares in TLG IMMOBILIEN AG toinstitutional investors outside Germany.

With the exception of the above, neither the whole nor any part of our Valuation Report nor any reference thereto(except references used in documents and presentations prepared in the context of the IPO of TLG) may be included in anypublished document, circular statement nor published in any way without our prior written approval of the form and context inwhich it will appear, which approval shall not be unreasonably withheld.

The Valuation Report may be disclosed by the Addressees on a strictly non-reliance and without liability to theirlegal advisors, to their consultants who are bound by professional codes of conduct, to any legal consultants of the InstructingParty, to banks in connection with a current or intended financing in relation to the Subject Portfolio, to rating agencies inconnection with the IPO, to authorities (i.e. the BaFin) as well as to other pre-named parties to whom disclosure is required inconnection with the IPO.

Nature and Source of Information relied on

The valuation has been substantially and mainly based upon the information supplied to us by the TLG. Please referto Section II “Sources of Information and Inspection” for a more detailed list of the information Savills has relied upon for thepurposes of preparing this Valuation Report.

Definition of Value

We have been instructed to value the subject properties on the basis of Market Value in accordance with VPS 4.1.2of the RICS Valuation Professional Standards 2014 (the “Red Book”) which is defined as follows:

“The estimated amount for which an asset or liability should exchange on the valuation date between a willingbuyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each actedknowledgeably, prudently and without compulsion.”

The “Market Value” is consistent with the “Fair Value” in accordance with IFRS 13 of the International FinancialReporting Standards (IFRS) published by the International Accounting Standards Board (IASB), which is defined as follows:

“The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date:”

The assessment of Market Value has been carried out by Savills in accordance with the guidelines of theInternational Financial Reporting Standards (IFRS), the International Standards for the Valuation of Real Estate forInvestment Purposes (International Valuation Standards), the Valuation Standards of the Royal Institution of CharteredSurveyors (Red Book) and in accordance with the relevant prospectus regulations applicable in Germany, including the CESRrecommendations for the consistent implementation of the Committee of European Securities Regulators on prospectus20 March 2013 (ESMA Update of the CESR recommendations).

For the avoidance of doubt, a valuation complying with the “Red Book” requirements is ipso facto compliant withthe International Valuation Standards (IVS) and the Market Value pursuant to § 194 BauGB (German Building Code).

We confirm that we have sufficient current local and national knowledge of the particular property market involvedand have the skills and understanding to undertake the valuation competently.

Place of Performance

German law applies. The place of performance and jurisdiction is Frankfurt/Main, Germany.

Assignment of Rights

The Addressees of this Valuation Report are not entitled to assign their rights under or in respect of theAppointment Agreement and this Valuation Report—either whole or in parts—to any third parties.

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Declaration of Independence & Status of Valuer

Savills hereby confirms to the best of its knowledge and belief that it has carried out the determination of the MarketValue in its capacity as external valuer and independent expert.

We further confirm that Savills is not aware of any actual or potential conflict of interest that might have influencedits independent status. This declaration also includes all activities by the Savills’ Agency department in Germany with regardto the subject properties, which might be performed in addition to the valuation works of Savills.

The total fees, earned by Savills from the Client (or other companies forming part of the same group of companies),is less than 5% of the total German revenues earned by Savills in the financial year 2013.

Material Changes

Savills hereby confirms that as at the date of this Valuation Report:

• Savills is not aware (after having made reasonable enquiries of TLG) of any material change in circumstancesbetween 30 June 2014 and the date of this Valuation Report which in Savills’ reasonable opinion is likely havea material effect on the Market Value of the subject properties as at the date of this Valuation Report; and

• In relation to market conditions and movements in the real estate markets in which the subject properties arelocated, based on observed transactions involving comparable properties which have occurred and independentdata published, in each case, since 30 June 2014, we do not consider that the movement in respect of thesubject properties constitutes material change.

II. Sources of Information and Inspection

Information Sources

For the purpose of this Valuation Report we have relied on the following information, provided to us by TLG:

• Overview of non-recoverable operating costs 2010 – 2013 as Excel-file as at 31 December 2013, available onlyfor the most relevant retail properties (164 out of 256)

• Tenancy schedule as at 30 June 2014. Furthermore, individual leases were made available upon request.Random samples were verified against provided lease agreements, a full verification of all entries in thetenancy schedule was not performed (as per instruction),

• Property database as at valuation date 30 June 2014 (incl. years of construction, property descriptions, photosetc.),

• Estimations regarding maintenance backlog (Capex), demolition costs, development costs and compensationamounts with regard to redevelopment areas,

• Soil and building contamination incl. cost estimations and probability of occurrence,

• Remaining construction costs of properties still under development,

• Purchase options with regard to the “leasing properties” (please see page 25),

• Property related assessment of retail locations and rents by BulwienGesa,

• Property related assessment regarding tenant satisfaction and, if applicable, regarding potential lease options bythe local TLG offices,

• Information regarding existing purchase price offers of individual properties, which currently are in the processof disposal.

• Furthermore, at property level generally following documents were made available:

- Land register excerpts,

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- Cadastral maps,

- Excerpts regarding public easements,

- Building permissions,

- Information regarding planning law,

- Excerpts regarding site contamination,

- Information regarding development charges,

- Public limitations and contracts (e.g. monumental protection, statutes regarding redevelopment areas),

- Private-law agreements (e.g. neighbourhood agreements),

We have also included the following sources into our valuation:

• Savills Research

• Gutachterausschuss (Land Valuation Board) of the respective municipalities

• Geoport—Competition Analysis of Retailers

• WiGeoGis

• IDN ImmoDaten GmbH Online-Database

• RDM-IVD Preisspiegel (1990-2012)

• RIWIS Online-Database

Inspection

Since August 2013 all subject properties have been inspected by Savills.

175 subject properties were fully inspected in November 2013, February 2014, April 2014 and June 2014, coveringc. 76% of the overall Market Value. The remaining 293 subject properties (covering c. 24% of the overall Market Value) wereinspected on an external basis (“drive-by”) in August and October 2013, as well as June 2014.

All conclusions made by Savills with regard to the condition and the actual characteristics of the land and buildingshave been based on our inspection of the subject properties and on the documents and information provided (please see aboveparagraph).

For the avoidance of doubt, Savills did not carry out any building or structural surveys of the subject properties nordid it test any of the electrical, heating or other services or installations at any of the subject properties.

The properties were not measured as part of Savills’ inspection.

All of Savills’ conclusions resulting from its inspections are based purely on visual inspections without anyverification as to their accuracy or completeness.

Furthermore, inspections that might cause damage to the subject properties have not been carried out. Statementsabout parts of the structure or materials which at the time of Savills inspection were covered or otherwise inaccessible arebased on the information or documents provided to Savills by TLG (or on assumptions as more particularly set out in thisValuation Report).

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B. Portfolio Overview

Short Portfolio Profile

As at the valuation date 30 June 2014 the Commercial Portfolio of TLG comprises 469 subject properties, which aresolely located in the newly-formed German states (incl. Berlin). Overall the Commercial Portfolio of TLG comprises:


No.Properties

LettableArea

VacancyRate

(Area)

VacancyRate

(EPRA)Current

Rent WAULT

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 431,503 2.0% 0.4% 46,345,247 7.1Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 271,639 10.4% 10.2% 26,742,697 6.1Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 75,852 1.9% 1.7% 12,371,095 16.6Retail—Mixed Use . . . . . . . . . . . . . . . . . . . . . . . . . . 17 68,969 5.0% 4.4% 8,625,573 8.2Office—Mixed Use . . . . . . . . . . . . . . . . . . . . . . . . . . 13 87,269 8.4% 6.3% 7,476,524 4.6Mixed Use—Others . . . . . . . . . . . . . . . . . . . . . . . . . . 50 311,624 26.3% 13.4% 9,901,282 4.5Undeveloped Land . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 — — — 91,653 45.3Industrial-/Storage-/Logistics . . . . . . . . . . . . . . . . . . 9 69,224 21.2% 3.5% 1,391,071 4.7Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 11,058 2.8% 2.8% 623,955 0.9Misc. (Social-/Sport-/Leisure) . . . . . . . . . . . . . . . . . . 3 9,492 — — 273,453 8.7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469 1,336,632 10.9% 4.9% 113,842,551 7.8

380 of the 469 properties have a sustainable rental income situation. The remaining properties (89) are eitherundeveloped plots (73) or properties with non-sustainable rental income (16) respectively in need of development.

As at the valuation date six project developments have not yet been completed, furthermore three properties weresubject to extensive redevelopment measures.

Tenure

Only five properties are held under the German equivalent of leasehold. The annual ground rent for this amounts toEUR 51,269. The remaining 463 properties are fully owned by TLG.

V-12

Location Analysis

The city of Berlin and the East German major cities of Dresden, Rostock, Chemnitz and Magdeburg account forcirca two thirds of the current rental income (65%) respectively for more than half of the rental area (58%).

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Portfolio Composition as at Valuation Date

Almost 75% of the current rental income is allotted to retail and office use.


Lettable areaVacancy

(area)

Currentrentalincome

Averageremaininglease term

Currentrental

income withlease expiry

Share oftotal current

rentalincome

sq m EUR p.a. years %Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445,102 1.2% 52,193,885 7.0 98.9% 45.8%Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356,775 12.8% 32,544,785 6.1 89.0% 28.6%Commercial . . . . . . . . . . . . . . . . . . . . . . . . 229,843 23.3% 6,511,200 4.4 73.5% 5.7%Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,442 28.3% 2,626,428 7.7 67.9% 2.3%Residential . . . . . . . . . . . . . . . . . . . . . . . . . 28,720 7.2% 1,990,617 0.1 2.4% 1.7%Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . 72,018 0.2% 10,278,911 17.8 99.6% 9.0%Nursing home . . . . . . . . . . . . . . . . . . . . . . . 12,566 2.5% 1,161,991 15.2 100.0% 1.0%Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,961 — 150,104 1.9 90.3% 0.1%Other area . . . . . . . . . . . . . . . . . . . . . . . . . . 59,666 10.8% 3,731,180 5.5 99.0% 3.3%Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,540 11.9% 185,615 6.3 77.1% 0.2%

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,336,632 10.9% 111,374,718 7. 7 92.1% 97.8%

Lettable unitsVacancy

(area)

Currentrentalincome

Averageremaininglease term

Currentrental

income withlease expiry

Share oftotal income

number EUR p.a. years %Internal Parking . . . . . . . . . . . . . . . . . . . . . 2,393 5.4% 1,391,177 9.9 79.1% 1.2%External Parking . . . . . . . . . . . . . . . . . . . . . 23,048 3.4% 480,011 4.1 34.0% 0.4%Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . 530 25.3% 596,646 12.6 53.0% 0.5%

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,971 4.0% 2,467,833 9. 9 64.0% 2.2%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,842,551 7. 8 91.5% 100.0%

The average unexpired lease term in the Subject Portfolio is 7.8 years, with 91.5% of the rental income beingcovered by tenancies which are subject to fixed lease terms. 8.5% of the rental income results from tenancies with indefinitelease terms and therefore remain unconsidered in the calculation of the average lease term.

Retail and office areas account for 60% of the lettable space in the Subject Portfolio.

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C. Valuation Considerations and Parameters

In this chapter we comment on our assumptions and considerations in order to arrive with our opinion of MarketValue.

Please note that our opinion of Market Value is carried out on the basis of a number of assumptions. In the absenceof any information to the contrary in the Report, our Opinion of Value is based on our General Valuation Assumptionsenclosed in Chapter F “General Valuation Assumptions and Applied Definitions”.

Our General Valuation Assumptions will be amended by our individual considerations, including underlyingassumptions, as described in the following sections. Our individual considerations are based on additional assumptions whichwere adopted specifically with respect to the Opinion of Value of the assets which are subject to this Report.

In case of any discrepancies with our General Valuation Assumptions, our individual valuation assumptions asdescribed in the following do prevail. If any of the aforementioned assumptions (General or individual valuation assumptionsor other) are subsequently found to be incorrect or invalid, our Opinion of Value may need to be reconsidered.

I. Method of Valuation

General Valuation Procedure

The valuation has been carried out on a single property basis. Each property has been valued individually.

Valuation Models

For the long-term income-based properties we have used a Discounted Cash Flow (DCF) model.

Properties with buildings in a very bad technical condition that do not allow for sustainable revenue generation,have been valued according to a liquidation value method (land value less demolition costs and, if applicable, includingremaining net operating income).

The valuation of undeveloped properties (land) has been carried out by means of the comparative value methodunder consideration of land values by the local land valuation boards. If necessary, a residual method has also used to checkthe plausibility of these land values.

For more details about the model or the underlying definitions of the key parameters, please refer to Chapter F“General Valuation Assumptions and Applied Definitions” of this Valuation Report.

II. Portfolio Considerations

1. Constituents of the Subject Properties

Fixtures in the subject properties, such as passenger and goods lifts, other conveyor installations, central heatinginstallations and other technical installations have been regarded as integral parts of the subject properties and have, therefore,been reflected in our determination of Market Value. Tenant’s fixtures and fittings that would normally be the property of thetenant have not been reflected in our valuation.

2. Legal Aspects

Land Register

With regard to legal matters, we relied on the information and documents mentioned under A.II—Sources ofInformation and Inspection. As far as a property related impact on value in the legal documents has been identified, this hasbeen reflected accordingly in our calculation of the Market Value.

According to these documents there are several entries in the respective Section II of the individual land registerexcerpts, like pipe way-leaves, rights of way etc. For the purpose of our valuation we assumed no impact on value resultinghereof.

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With regard to 5 subject properties, the respective land register excerpts contain encumbrances regarding leaseholdtitles and ground rent payments, which we have reflected accordingly in our valuation. These are as follows:

Property ID Address ZIP-Code Municipality TenureGround Rent(Erbbauzins)

LeaseholdExpiry

EUR p. a. Date34980 . . . . . . . . . . . . . . . . . Wilhelm-Kobelt-Str. 31 39108 Magdeburg Leasehold 25,565 n.a.482028 . . . . . . . . . . . . . . . . Eichenweg 2 01468 Moritzburg Leasehold 0 11/06/2043484139 . . . . . . . . . . . . . . . . Nikolaus-Otto-Str. 6 02625 Bautzen Leasehold 7,200 31/12/2045485043 . . . . . . . . . . . . . . . . Philipp-Reis-Str. 2 02625 Bautzen Leasehold 0 31/07/2048486020 . . . . . . . . . . . . . . . . Jan-Maat-Weg 24-27 18055 Rostock Leasehold 18,504 31/12/2070

Total 51,269

According to provided information there are no ground rent payments by TLG concerning the two subject propertiesin Moritzburg (482028) and Bautzen (485043).

With regard to the subject property in Moritzburg (482028) the tenant/lessee is contractually obliged to pay theground rent directly to the lessor, so that there are no financial obligations in this regard concerning TLG.

Concerning the subject property in Bautzen (485043), according to information available no ground rent paymentsare agreed as long as the lease agreement with the tenant/lessee is in place. After expiry of the lease a ground rent then has tobe negotiated. Due to the current insolvency situation of the tenant/lessee, a legal action is ongoing to clarify the existingleasehold resp. ground rent situation. So far we have not received any current status regarding the legal action. It is ourunderstanding though that TLG could fully acquire the plot for a total amount of EUR 80,000, which we have consideredaccordingly in our valuation.

Further Legal Aspects

We were also provided with information / documents regarding following legal issues:

• Public encumbrances

• Planning law, zoning specification

• Building Permits

• Historical listings

According to these documents 80 subject properties are subject to matters related to monumental protection, whichwe have considered in our valuation accordingly.

Apart from that no further issues with impact on value regarding the above-mentioned issues could be identified.

3. Technical Aspects

In case that during site inspections obvious damages were identified, we were provided with specific cost estimatesfor remediation of damages (Capex) by TLG. In addition to these cost estimates we have also received an overview of repaircosts (Capex) from TLG for the subject properties which were only inspected externally.

According to information provided by TLG, the total estimated repair costs amount to some EUR 16,108,230.Please note that this Capex figure considers repair costs over a projection period of up to ten years.

Out of the above mentioned amount for Capex EUR 12,605,900 (78%) refer to the following three properties:

• TLG Nr. 486150 (Chemnitz): EUR 5,105,900 assumed for renewal of infrastructure (pipe ways, streets) androof repairs over the next ten years.

• TLG Nr. 46903 (Berlin): EUR 3,750,000 assumed for intense refurbishment works of a supermarket afterexpiry of current lease contract in 2015.

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• TLG Nr. 441356 (Berlin): EUR 3,750,000 assumed for an intense refurbishment of a supermarket after expiryof current lease contract in 2016.

All repair costs (Capex) have been considered accordingly in our valuation.

Please note that Savills has not been instructed to perform any technical due diligence and does not possess thenecessary detailed technical information. Therefore, no reliance can be given with regard to the accuracy and completeness ofthe above-mentioned provided repair costs (Capex).

4. Environmental Aspects

With regard to soil and building contamination we have been provided with respective information regardingremediation costs on property level by the TLG.

Costs above a materiality threshold of EUR 20,000 EUR were considered in our valuation. According to the TLG,marginal cost items are only substitutions for investigations regarding suspected cases, which usually can be covered by thebudget for the regular ongoing maintenance.

In our valuation only those costs have been considered, which are not covered by an indemnity by the FederalRepublic of Germany. As a former federal company, TLG is exempt (to a certain extent) from incurring remediation costs, i.e.the federal government bears a certain portion of these costs.

The total relevant costs for contamination amount to 5,001,600 EUR.

In addition to the above-mentioned cost estimates a probability of occurrence was assessed by TLG (high, medium,low). Where there is a direct action necessary, a high probability is given, whereas a low probability means that there arecertain contaminations but that the current use of the respective subject property is not affected.

According to the provided information 69% of the above mentioned costs refer to a low probability, 20% to amedium probability and 11% to a high probability.

In our valuation we have considered the respective remediation costs with a high probability of occurrence directlyat the beginning of the cash flow, costs with a medium probability after 5 years and costs with low probability after 10 years.

Due to discounting effects, costs with a low probability of occurrence therefore have only a minor impact on thebudget compared to more probable cost items. Thus, in a sale scenario, costs with a high probability of occurrence would bededucted directly from the purchase price, while costs at medium or low probability of occurrence would only partially bededucted.

The remediation costs for soil and buildings are (as far as available) reflected accordingly in our calculation of theMarket Value.

Please note that Savills has not been instructed to perform any environmental due diligence and does not possess thenecessary detailed technical information. Therefore, no reliance can be given with regard to the accuracy and completeness ofthe above-mentioned remediation costs for soil and buildings.

5. Tenancy Aspects

Tenancy Schedule

Our valuation is based on the tenancy schedule as at 30 June 2014 which was provided by TLG (“DatenpoolMietobjekte”). Random samples of this tenancy schedule were verified by Savills with existing lease agreements. Deviationswere identified primarily with regard to lease extensions (options), indexations and stepped rents, which were then verifiedand corrected by TLG.

A full verification of the provided tenancy schedule and the available lease agreements was not part of the scope ofthis instruction; Savills therefore assumes that the provided document reflects the status quo of all tenancies as at the valuationdate 30 June 2014 to a true and comprehensive extent. Please note that we cannot accept any reliance on the accuracy nor thecompleteness of the provided information of tenancies.

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Overdue rent payments

Savills has not checked the status of contractually agreed rent payments as at the date of valuation. Provided thatSavills had no information to the contrary, we have assumed that there are no overdue rent payments.

Tenant Solvency

Our assessment of tenant solvency is based on the information provided by the credit rating service ‘Creditreform’which expresses the ability to service debt in terms of the so-called ‘Credit-Standing Index’. This index takes into account acompany’s asset situation/turnover/liquidity with 25%, structural risks with 10-15% as well as business sector risk with10-15%, the mode of payment with 20-25% and, finally, the credit verdict with 25-30%. The result is an individual rankingfigure in a range from 100 (Best grade, “1”) to 600 (Default grade, “6”). We retrieved the solvency information of the maintenants on the basis of the provided rent roll and lease contracts.

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Please see the following table for the result of the solvency assessment of the 10 main tenants:

Solvency of Top Tenants

TopTenant No. Tenant

CurrentRental Income

Share of TotalCurrent Rental

Income

Credit-Standing IndexRanking Figureas at July 2014 Descriptions

(by incomecontribution)

EUR p.a.

1 Netto Marken-Discount AG& Co. KG IndustrieparkPonholz 1, 93142 Maxhütte-Haidhof

13,787,467 12% 207 Good credit standing(Default probability* 0.33%)

2 REWE Markt GmbHDomstraße 20, 50668 Köln

6,356,615 6% 192 Very good credit standing(Default probability* 0.24%)

3 THR Hotel amAlexanderplatz BerlinBetriebs- und ManagementGmbH Chausseestraße 118-120, 10115 Berlin

4,706,400 4% 500 Default / Insolvency(Default probability* 81.77%)

4 Daimler Real Estate GmbHLinkstraße 2, 10785 Berlin

4,456,058 4% 264 Moderate credit standing(Default probability* 1.15%)

5 HELLWEG Die Profi-Bamärkte GmbH & Co. KGZeche Oespel 15,44149 Dortmund


6 Penny-Markt GmbHDomstraße 20, 50668 Köln


7 OstseeSparkasse RostockAm Vögenteich 23,18057 Rostock


8 Bundesanstalt fürImmobilienaufgabenSophienstraße 6,80333 München


9 Kaiser’s TengelmannGmbHWissolstraße 5-43,45478 Mülheim


10 Steigenberger HotelsAktiengesellschaftLyoner Straße 40,60528 Frankfurt


Weighted average ranking(Top 10 tenants)

49,801,686 43% 233 Good Credit Standing(Default probability* 1.66%)

* Note: The German average of the default probability of an enterprise is currently 1.83% (as at March 2014).

As shown above, we retrieved solvency information for the top tenants in the Subject Portfolio, which contribute tocirca 43% to the current total rental income.

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Apart from “THR Hotel am Alexanderplatz Berlin Betriebs- und Management GmbH”, the assessed top tenantsprovide predominantly very good to good financial security according to the ‘Creditreform’ ranking. Weighted by the tenants’contribution to income, the overall credit standing can be evaluated as “Good” under consideration of ‘Creditreform’measures.

With regard to the tenant “THR Hotel am Alexanderplatz Berlin Betriebs- und Management GmbH” we havecontacted TLG for confirmation concerning their experience. According to an email dated 29 July 2014, TLG was and isaware of the solvency situation of the tenant, especially as it is not constant and is fluctuating. TLG also confirms that sincethe lease start in February 2011 there were no problems with the rental payments (e.g. no rental arrears) and therefore a failureresp. a default of the tenant is considered rather unlikely. Due to this information by TLG, the very good macro and microlocation of the hotel operated by the tenant (city centre of Berlin) as well as the provided information regarding the highaverage occupancy levels (above 90%) of the hotel, for the purpose of this valuation we therefore have assumed that thetenant “THR Hotel am Alexanderplatz Berlin Betriebs- und Management GmbH” will fulfil their obligations regarding thelease agreement until January 2031. However, in case the current tenant goes insolvent, we are of the opinion that due toquality of property and due to the high occupancy level of the hotel in the past a new tenant under comparable leasingconditions can be found.

Finally, we have been informed that the parent company “IHB Internationale Hotelbeteiligungsgesellschaft mbh”has signed a comfort letter for “THR Hotel am Alexanderplatz Berlin Betriebs- und Management GmbH. According toCreditreform Berlin information from 3 September 2014 the parent company “IHB InternationaleHotelbeteiligungsgesellschaft mbh” has a good credit standing with an index of 219 and default probability of 0.4%.

Please note that, apart from the above mentioned, a more detailed financial investigation of the tenants is outside thescope of this report. We are not financial specialists and Savills comments above reflect how we believe the investmentmarket would perceive the strength of the tenants.

III. Individual Considerations

1. Leasing Properties

In Germany “Leasing Properties” are custom built and usually fully equipped properties that are leased for a longterm to a single tenant. Furthermore, there usually are agreements with regard to purchase options for the tenant.

Within the Subject Portfolio there are three subject properties, where TLG operates as a leasing provider resp.lessor:

• TLG-Nr. 484332: Porsche Zentrum Dresden, Großenhainer Str. 3 in Dresden

• TLG-Nr. 482837: Commercial property—Microelectronic Packaging Dresden (MPD), Grenzstraße 22 inDresden

• TLG-Nr. 484918: Commercial property—Plastic Logic, An der Bartlake 5 in Dresden

For these subject properties in our valuation it was reflected that the ongoing maintenance is borne by the lessees,furthermore the potential purchase options by the lessees are reflected as well.

2. Properties subject to Development/Redevelopment Measures

As at the valuation date, six subject properties were still in development resp. the constructions were not completedyet. In our valuation we have considered the projected and already completed areas, the future lease agreements as well as theremaining construction costs. Regarding the remaining construction costs we were provided with the following information byTLG:

• TLG-Nr. 49004: Retail location—Kaiser’s, Frankfurter Allee 144 in Berlin; remaining construction costs in theamount of EUR 838,000,

• TLG-Nr. 485747: Hotel development “Motel One”, Schröderplatz 2/Schröderstr. 25/Am Vögenteich 24 inRostock; remaining construction costs in the amount of EUR 949,000,

• TLG-Nr. 485784: Hotel/Office “Motel One”, Postplatz 5,6 /Schweriner Straße 1 in Dresden; remainingconstruction costs in the amount of EUR 1,698,000,

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• TLG-Nr. 485801: Retail location—Rewe, Scheffelstr. 34 / Karl-Liebknecht- / Arno-Nitsche-Str. in Leipzig;remaining construction costs in the amount of EUR 513,000,

• TLG-Nr. 485756: Mixed-use (commercial/residential) “Quartier 17”, Ossenreyerstraße 52/ Heilgeiststraße 83,84 in Stralsund; remaining construction costs in the amount of EUR 60,000,

• TLG-Nr. 485924: Development space “Quartier 17”, Ossenreyerstr. 53-61, Badenstr. 3-6, Kleinschmiedstr. inStralsund, remaining construction costs in the amount of EUR 7,106,000.

Furthermore, in the following subject properties major redevelopment respectively refurbishment measures have notyet been completed as at the valuation date:

• TLG-Nr. 484876. Kulturbrauerei, Schönhauser Allee 36/Ecke Sredzki- und Knaakstr. 97 in Berlin; remainingconstruction costs in the amount of EUR 34,000,

• TLG-Nr. 485858: Office, Hermann-Drechsler-Straße 1 in Gera; remaining construction costs in the amount ofEUR 73,000,

• TLG-Nr. 483299: Office “Margonhaus”, Budapester Str. 3, 5 in Dresden; remaining construction costs in theamount of EUR 221,000.

All listed remaining construction costs have been deducted by the first month of the respective cash flow.

As far as available, the remaining construction costs are reflected in the short property summaries in Appendix II.

Please note that Savills has not been instructed to perform any technical due diligence and does not possess thenecessary, detailed technical information. Therefore, no reliance can be given with regard to the accuracy and completeness ofthe above-mentioned provided remaining construction costs.

3. Properties subject to Liquidation

As mentioned above, 89 out of the 469 subject properties (circa. 1.9% of the total portfolio value) do not have asustainable rental income situation or the underlying land value exceeds the value of the properties in their current use. Forthese properties therefore the land value, less any assumed demolition costs for the existing buildings, is determined.

In case of existing lease agreements in these subject properties, the assumed liquidation takes place after expiry ofthe last lease agreement. Up to this point the net operating income from the buildings is discounted and finally added to thediscounted future liquidation value.

IV. Basic Cash Flow Considerations

The following summaries of the valuation assumptions and parameters only relate exclusively to the 380 subjectproperties with a sustainable rental income situation and that have been valued using the Discounted Cash Flow (DCF)method.

In the following section we seek to comment on all input parameters in our valuation model. Besides a generaldescription of each parameter, the applied ranges of those parameters will be stated, too. For more detailed information on aproperty level please refer to Appendix II “Detailed Valuation Overview”. The considered parameters result in a value of theindividual properties, which were verified by means of appropriate comparable transactions.

The remaining 89 liquidation properties have not been considered in the following description, in order not to distortthe information.

Estimated Rental Value (ERV) Market Rent

Estimated rental values (“market rents”) indicated in this report are those which have been adopted by us asappropriate in assessing the capital value or the letting potential of the property, being subject to market conditions that areeither current or are expected in the short term. They are based on our experience of the markets and our knowledge of actualcomparable market activity.

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For the purpose of comparison, we considered market evidence by assessment of actual lettings of units with thesame or a comparable use, where applicable and available. The average ERV in the TLG portfolio has been estimated asfollows:

Market rent

Average* Average*EUR persq m p.m.

EUR persq m p.m.

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.69 Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.35 Other area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.65Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.91 Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.74Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.42 Internal Parking . . . . . . . . . . . . . . . . . . . . . . . . . 52.91Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.97 External Parking . . . . . . . . . . . . . . . . . . . . . . . . . 2.07Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . . . . . . . 12.20 Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89.96Nursing home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.77

* weighted by lettable area /units

Non-Recoverable Ancillary Costs

Ancillary costs of a property are generally costs of

• service of the property (“service charges”, “costs of operation”),

• management,

• ongoing maintenance.

These costs can generally be allocated to the responsibility of tenants in commercial leases (with a few restrictions),whereas there are much stricter regulations for residential leases. Residential tenants may only be obliged to bear servicescharges as defined in the Ordinance of Services Charges (“Betriebskostenverordnung”) but must never—by law—be maderesponsible for costs of maintenance or management.

With regard to service charges we received actual non-recoverable costs for most of the retail properties by theTLG. Those costs were verified and taken into consideration accordingly for those properties. For the remaining retailproperties, where such figures could not be provided, we have considered 4.0% of the market rental income as non-recoverable service charges, which is in line with the average of the above-mentioned provided non-recoverable servicecharges for the major retail properties. For non-retail properties, where we did not receive any information of the amount ofnon-recoverable service charges, we assumed that all service charges will be borne by the tenants.

We have allowed management costs as a percentage of the annual market rent. Generally we have allowed thefollowing amounts, depending on the type, rent level and complexity of the respective asset:

Management costs

Average* Average*% of Market

RentEUR per unit

p.a.Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.82% Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23%Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02% Other area . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.99%Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.83% Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00%Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.29% Internal Parking . . . . . . . . . . . . . . . . . . . . . . . 3.88%Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.78% External Parking . . . . . . . . . . . . . . . . . . . . . . 8.61%Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . . . . 1.97% Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.56%Nursing home . . . . . . . . . . . . . . . . . . . . . . . . . . 2.71%

* weighted by market rent

This approach is also to reflect a common level of management costs that we assume the assets require maintaininga ‘normal’ management effort. All costs include annual inflation which will be adjusted each year of the DCF term.

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For costs of ongoing maintenance we assumed the following for the respective types of use.

Maintenance

Average* Average*EUR persq m p.a.

EUR persq m p.m.

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.48 Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.70Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.98 Other area . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.49 Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.50 Internal Parking . . . . . . . . . . . . . . . . . . . . . . 50.09Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.25 External Parking . . . . . . . . . . . . . . . . . . . . . 29.43Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . . . 7.67 Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . 8.53Nursing home . . . . . . . . . . . . . . . . . . . . . . . . . 7.82

* weighted by sq m /units

All costs include annual inflation which will be adjusted each year of the DCF term.

Non-Recoverable Costs on Vacancy

These are generally non-recoverable service charges, for example any operational costs, which may need to beborne by the landlord should a tenant become unable to pay for any reason (e.g. insolvency) or in the general case of vacancy.These costs are incurred in addition to the regular non-recoverable ancillary costs as explained above.

In the absence of more detailed information of actual non-recoverable costs in the case of vacancy, we considerednon-recoverable ancillary costs per sq m p.m. for vacant areas as follows:

Vacancy costs

Average* Average*EUR persq m p.m.

EUR persq m p.m.

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00 Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05 Other area . . . . . . . . . . . . . . . . . . . . . . . . . . 0.42Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.81 Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.38Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.48 Internal Parking . . . . . . . . . . . . . . . . . . . . . —Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.99 External Parking . . . . . . . . . . . . . . . . . . . . . —Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . . . 1.01 Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . —Nursing home . . . . . . . . . . . . . . . . . . . . . . . . . 0.98

* weighted by lettable area /units

Please note that these costs will only be applied for the assumed duration of vacancy.

Void Periods for Current Vacancy and Void Periods after Expiry of Leases

Voids generally represent the time period between the expiry of a lease and the start date of a new lease.

We considered ‘Void Periods after Expiry of Leases’ for all cases where leases expire in the future and during theupcoming DCF term of 10 years. This can be actual lease agreements in place as well as modelled leases assumed for currentvacancy. Those units which are currently let and which become vacant in the future will only be subject to the ‘Void Periodsafter Expiry of Leases’.

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Void period of current vacancy Void Period after expiry of leases

Average* Average*months months

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.54 Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.04Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.76 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.62Commercial . . . . . . . . . . . . . . . . . . . . . . . . . 24.15 Commercial . . . . . . . . . . . . . . . . . . . . . . . 10.84Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.32 Storage . . . . . . . . . . . . . . . . . . . . . . . . . . 7.53Residential . . . . . . . . . . . . . . . . . . . . . . . . . . 5.49 Residential . . . . . . . . . . . . . . . . . . . . . . . 3.30Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . Hotel / Restaurant . . . . . . . . . . . . . . . . . . 5.37Nursing home . . . . . . . . . . . . . . . . . . . . . . . 12.00 Nursing home . . . . . . . . . . . . . . . . . . . . . 6.12Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . Logistics . . . . . . . . . . . . . . . . . . . . . . . . . 6.23Other area . . . . . . . . . . . . . . . . . . . . . . . . . . 6.78 Other area . . . . . . . . . . . . . . . . . . . . . . . . 6.90Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . 9.21Internal Parking . . . . . . . . . . . . . . . . . . . . . . 7.66 Internal Parking . . . . . . . . . . . . . . . . . . . 5.29External Parking . . . . . . . . . . . . . . . . . . . . . 11.81 External Parking . . . . . . . . . . . . . . . . . . . 7.94Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . 6.19 Other unit . . . . . . . . . . . . . . . . . . . . . . . . 6.11

* weighted by market rent * weighted by market rent

Leasing Commissions

German law does not restrict the charging of agency fees on lettings for commercial properties. In the event that theadministration is not able to recover some of the letting costs, book allowances have been made at this level to reflect themanagement expenses incurred in letting, e.g. meetings to negotiate lease terms, newspaper adverts etc.

For the purpose of this valuation, we have assumed letting fees equivalent to up to 3 months’ rent for commercialunits (except for the spaces for technical use and for parking spaces) and 2 months’ rent for residential units.

However, letting fees have only been applied if we are of the opinion that the current tenant may leave the property.If a prolongation of the lease contract with the existing tenant is the most likely case, no leasing commissions are deducted.

Costs of Rental Unit Refurbishment (“Tenant Improvements”)

It is frequently the tenant’s responsibility to redecorate and to carry out at least minor repairs. When there is a tenantrollover, however, additional expenses for basic repairs and a more comprehensive renovation of the unit must normally beallowed for in order to assist marketing and re-letting.

In our DCF model, we differentiate between costs of “First-time Refurbishment Costs” and those of “ContinuingRefurbishment”. First-time refurbishment costs will be applied to units which are currently vacant and to units which are nowlet but will become vacant for the first time during the applied DCF term. Here, we considered the following:

First-time refurbishment costs Continuing refurbishment costs

Average* Average*EUR per sqm EUR per sq m

Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Commercial . . . . . . . . . . . . . . . . . . . . . . . . . 21 Commercial . . . . . . . . . . . . . . . . . . . . . . . 14Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Storage . . . . . . . . . . . . . . . . . . . . . . . . . . 9Residential . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Residential . . . . . . . . . . . . . . . . . . . . . . . 38Hotel / Restaurant . . . . . . . . . . . . . . . . . . . . 24 Hotel / Restaurant . . . . . . . . . . . . . . . . . . 30Nursing home . . . . . . . . . . . . . . . . . . . . . . . 48 Nursing home . . . . . . . . . . . . . . . . . . . . . 34Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Logistics . . . . . . . . . . . . . . . . . . . . . . . . . 10Other area . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Other area . . . . . . . . . . . . . . . . . . . . . . . . 19Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Leisure . . . . . . . . . . . . . . . . . . . . . . . . . . 6Internal Parking . . . . . . . . . . . . . . . . . . . . . . — Internal Parking . . . . . . . . . . . . . . . . . . . —External Parking . . . . . . . . . . . . . . . . . . . . . — External Parking . . . . . . . . . . . . . . . . . . . —Other unit . . . . . . . . . . . . . . . . . . . . . . . . . . — Other unit . . . . . . . . . . . . . . . . . . . . . . . . —

* weighted by sq m /units

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“Continuing refurbishment costs” will accordingly be applied to remaining cases, i.e. units where there is a secondlease expiration during the applied DCF term:

Our DCF model generally considers costs of refurbishment at the end of the assumed letting void.

Average Lease Term for new Lettings

Commercial tenancies in Germany are usually agreed for a fixed period of 3 to 10 years, sometimes longer.

For the purpose of this valuation and based on our experience with properties of this nature, we have applied 5 yearsfor commercial use.

Structural Vacancy

Due to the property-specific condition of refurbishment as well as the respective market environment, we assumethat a major portion (c. 88,775 sq m resp. 6.6% of the lettable area) of the currently vacant space of 147,951 sq m (vacancyrate: 11.1%) can be considered as structural vacancy. This structural vacancy can primarily be explained by simple office,storage and commercial space in difficult micro locations, e.g. commercial park Grimma (Gewerbepark Grimma).

Applied Growth Assumptions

We have applied the following growth parameters in our DCF calculations:

• Annual inflation (year 1-4): 1.6 to 2.0% (source: Focus Economics),

• Annual inflation (year 5 onwards): 2.0%,

• Rental growth (current rent): according to annual inflation, under consideration of actual indexation clausesbased on underlying inflation resp. under consideration of agreed stepped rents.

Regarding the considered market rents, we have assumed that these evolve according to a proportionate ratiocompared to the above-mentioned growth assumption. Therefore, depending on the quality of the individual subject propertiesand the respective macro and micro locations, we have applied a market rental growth between 0 and 100% of the respectiveinflation rate.

Rates in DCF Calculations

We applied the following rates in our valuation:

Internal yields and rates

Minimum Maximum Average*

Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8% 15.0% 6.0%Exit Capitalisation Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0% 33.0% 7.7%

* Discount Rate weighted by Gross Present ValueExit Capitalisation Rate weighted by Exit Value

Please note that Discount Rates and Exit Cap Rates are related to the underlying cash-flow assumptions made foreach property. To backup our valuation results we have considered transaction comparables and/or market databases.

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The following table shows an analysis of estimated Market Value per sq m against the individually selectedtransaction comparables on property level. In total, we selected 1,970 comparables from our internal data pool of investmentcomparables (offers and deals) to backup our results on a per property basis.

Analysis Investment Comparables

Comparable TypeNumber of

Comparbales

Average Deviation oflowest Comparables

to Market Value

Average Deviation ofComparables Average

to Market Value

Average Deviation ofhighest Comparables

to Market Value

Asking (Offers) . . . . . . . . . . . . . . . . . . . . 369 -9.4% 11.7% 34.1%Transaction (Deals) . . . . . . . . . . . . . . . . . 1601 -11.5% 5.3% 22.7%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1970 -11.0% 6.6% 25.1%

The table above reads as follows: on average the identified comparables are 6.6% higher than the correspondingproperty Market Value on a value per sq m basis. The lowest identified comparables are on average 11.0% lower than therespective Market Values and the highest comparables exceed the Market Value on average by 25.1%.

Furthermore, we also compared our results for retail and office core assets in the three top locations against themarket data of Bulwien Gesa (Riwis).

Analysis Net Initial Yields (NIY)—Core Office Properties

RIWIS—NIYfor centrallocations

RIWIS—NIYfor decentral

locationsTLG—Average NIY

on Potential Rent

Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8% 7.1% 6.1%Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2% 8.4% 6.4%Rostock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5% 8.6% 6.3%

Analysis Net Initial Yields (NIY)—Core Retail Properties

RIWIS—NIYfor centrallocations

RIWIS—NIYfor decentral

locationsTLG—Average NIY

on Potential Rent

Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4% 6.5% 5.9%Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6% 7.1% 6.8%Rostock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2% 8.4% 6.5%

The average NIY on Potential Rent is generally in line with the RIWIS market data base published of Bulwien forthe year 2013.

In Rostock our average NIY is slightly below the ranges for retail and office assets as stated by RIWIS. For officeproperties this deviation is driven by a large asset with very long lease term with a very tenant covenant (“Ostseesparkasse”).The deviation for retail assets is in line with our market perception for this asset class.

Costs of Transaction

For our opinion of value, we applied costs of transaction as follows:

• Real Estate Transfer Tax: 3.5-6.0% depending on the federal state

• Notary fees: 1.0%

• Agency fees: 1.0%

These costs are chosen as they are common in ordinary course of business, i.e. in an asset deal, and for the subjecttype of properties. Costs of transaction may, however, differ in the actual individual case—depending on the type oftransaction.

V-28

D. Valuation Results

I. Opinion of Market Value

Total Secured Rental Income (“Current Rent”)

According to the provided tenancy schedule, the current rental income as at 30 June 2014 amounts to:

EUR 113,842,551p.a.

(ONE HUNDRED AND THIRTEEN MILLION EIGHT HUNDRED AND FORTY-TWO THOUSANDFIVE HUNDRED AND FIFTY-ONE EURO)

Opinion of Market Rent (“Market Rent”)

The estimated Market Rent as at 30 June 2014 amounts to:

EUR 114,738,648p.a.

(ONE HUNDRED AND FOURTEEN MILLION SEVEN HUNDRED AND THIRTY-EIGHT THOUSANDSIX HUNDRED AND FORTY-EIGHT EURO)

Opinion of Market Value

We are of the opinion that the Market Value of the subject properties as at 30 June 2014 is:

EUR 1,449,648,000

(ONE BILLION FOUR HUNDRED AND FORTY-NINE MILLION SIX HUNDRED AND FORTY-EIGHTTHOUSAND EURO)

Gross Present Value in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,551,260,845Assumed Purchase Costs Total in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101,612,845

Thereof Real Estate Transfer Tax in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,881,285Thereof Notary Fees in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,865,780Thereof Agency Fees in EUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,865,780

The following table shows aggregated data of the 380 properties with a sustainable cash-flow (excluding89 Liquidation Properties) which represent 98.1% of the total Market Value:

Market Value in EUR per sq m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,090Gross Multiplier on Current Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.57xGross Multiplier on Market Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.46xNet Initial Yield (NIY) on Current Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5%Net Yield (NY) on Market Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7%

The total valuation figure reported is the aggregate total of the individual properties and not necessarily a figure thatcould be achieved if the portfolio were to be sold as a single holding. Each valuation reflects the costs of acquisition but notrealisation.

For and on behalf of


Draženko Grahovac Klaus Trautner

MRICS MRICS, CIS HypZert (F)

V-29

E. Market Overview

Introduction

Generally, the German economy—one of the main drivers of the local real estate markets—seems in a ratherhealthy condition. The national GDP grew by a modest 0.4% last year, meaning the fourth successive year of economicgrowth (source: Statistisches Bundesamt, www.destatis.de). In Q1-2014, GDP increased by even 0.8% quarter-on-quarter(source: Statistisches Bundesamt, press release nr. 180 from 23rd May 2014). The strong economic growth was mainly fuelledby domestic demand. This is not least a result of the robust labour market. The unemployment rate dropped to 6.5% in June2014 (source: Bundesagentur für Arbeit, press release nr. 022 from 1st July 2014). Contrary to the development of the actualeconomic figures, the ifo business indicator as one of the most important economic early indicators decreased in May andJune, mainly due to subdued expectations for the export industry (source: CESifo, press release from 24th June 2014).However, since the properties of the TLG Immobilien portfolio are located in East Germany, the following paragraphs willfocus on East Germany including Berlin.

Socio-demographic and economic framework

Since reunification, eastern Germany, comprising the federal states Berlin, Brandenburg, Mecklenburg-WesternPomerania, Saxony, Saxony-Anhalt, and Thuringia, has lost more than two million inhabitants, or 11.4% of its population(source: Statistisches Bundesamt, population as of 2012). By 2030, the population is expected to shrink by a further approx.1.9 million inhabitants, or 11.7%. In the remaining federal states the number of inhabitants is expected to decrease by ca. 3%in the same period of time (source: Statistisches Bundesamt, 12. koordinierte Bevölkerungsprognose). While migration fromeastern to western Germany was the main reason for the population decrease during the past decades, out-migration haslargely come to an end with regard to the latest figures. For the first time since reunification, the migration balance betweenboth parts of Germany was close to zero in 2012. On balance, only 2,000 people left East Germany in favour of the westernpart of the republic—in the years 2000 to 2005 East Germany suffered from a net migration loss of 66,000 persons per year(source: Bundesministerium des Innern, Jahresbericht der Bundesregierung zum Stand der Deutschen Einheit 2013). Thus, theexpected population loss in the coming decades is rather a consequence of the demographic change than of emigration.

Although the economic figures converged over the past decades, there is still a significant gap between West andEast Germany. Average tax revenue in eastern Germany is still far below the western average. Economic strength, measuredby GDP per inhabitant is only 71 percent and wages at around 80 percent of the western average. In some regions,unemployment is still in double digits. Pensions have also not yet aligned between the two sides of the country. Not one of the100 largest companies in Germany is headquartered in an East German city except for Berlin (source: Bundesministerium desInnern, Jahresbericht der Bundesregierung zum Stand der Deutschen Einheit 2013). However, eastern Germany did benefitfrom the general favourable development of the German economy as a whole. By way of example, the GDP increased bymore than 23% between 2001 and 2011. Likewise, the unemployment rate developed positively in the last ten years. While itranged between 16.7% and 20.5% in the new federal states ten years ago, it decreased significantly since then and reached alevel between 8.2% and 11.7% at the end of 2013 (source: Bundesagentur für Arbeit). Both factors—the increase in GDP andthe decrease in unemployment—contributed to a significantly higher per capita income in 2011 compared to ten years before.The increase amounted to 23% and resulted in a per capita income of approx. €17,400 at the end of 2011 (source:Bulwiengesa, Riwis online database).

Real estate markets

The socio-demographic and economic situation in Germany forms the grounding for the development of the localreal estate markets. This is reflected in a renowned ranking provided by DekaBank annually, assessing the attractiveness of39 major German property markets (see DekaBank, Immobilien Research Spezial, issue 4/2013). The results for 2013 showthat prospering cities like Munich (rank 1) and Frankfurt (rank 2) are also very attractive with regard to their real estatemarkets. Cities suffering from a shrinking population and above-average unemployment rate, on the other hand, findthemselves at the bottom of the ranking. Amongst those are Halle (Saale) (rank 38) and Gelsenkirchen (rank 39). Generally,most of the cities in eastern Germany are in the lower half of the ranking. However, the ranking also shows that some of theEast German cities caught up significantly over the past years and are on a par with their West German counterparts. The bestranked city in eastern Germany is Dresden which takes rank 18, in between Hannover and Aachen.

V-30

Special market in Berlin

Approximately 36% of the portfolio’s gross rental income is generated by properties located in Berlin. Whenlooking at the key real estate market figures, it becomes evident that Berlin plays in another league compared to the other EastGerman cities. Berlin is one of the top 5 German real estate markets with very high office, retail and logistics rents and take-up figures. With a total office stock of around 18.6 million sq m, Berlin is Germany’s largest office market. The vacancycreated by the high number of speculative buildings constructed between 1995 and 1999 has successively been reduced since2004. Berlin’s most important demand groups have traditionally been the public sector and related groups (e.g. lobbyists), andincreasingly companies offering business services, such as law firms and auditors. From an international perspective, Berlin’soffice rents are rather low, particularly for a European capital city.

The prime rent for offices stood at €22.50 per sq m/month at the end of 2013. The retail sector in Berlin is definedby its history and the fact that the city has two established retail hot spots, one being the “City West” aroundKurfürstendamm / Tauentzienstraße in the western part of the town with the flagship KaDeWe, the other being “Mitte”including Friedrichstraße, Alexanderplatz, and Potsdamer Platz in the eastern part. Then as now, the prime rent level is mostnotably achieved on the Kurfürstendamm / Tauentzienstraße submarket. At the same time, the district of “Mitte” has alsodeveloped briskly, specifically Alexanderplatz and Potsdamer Platz, which both attract tourists as well as inhabitants.

The tourists are also an important factor for the hotel market. Berlin is amongst the top European touristdestinations. In 2013, more than 11.3 million visitors came to visit the German capital. This marks the 11th consecutive yearin a row with an increasing number of visitors. Since 2002, the number of tourists increased by approx. 58%. Likewise, thenumber of available beds increased by 49% to almost 130,000 during the same period of time. In 2013, the occupancy ratereached 56.4% (2009: 49.5%).

Berlin is also one of the five major German logistics markets, yet it is exclusively limited to its regionally orientedrole within the conurbation. The greater Berlin area is home to a total of four freight centres, only one of them being locatedwithin the city borders. The three freight centres on the periphery of Berlin are counted among the most successful inGermany. Nearly 100 freight carriers, retail logistics firms, transport companies, companies with transportation-dependentproduction, service providers and companies from all sorts of sectors, providing a total of 7,000 jobs, reside on a total area of250 hectares. Among the renowned logistics and freight companies here are Schenker Deutschland AG, Kühne & Nagel,DHL, as well as large non-logistics enterprises with a strong logistics orientation, such as Siemens, Bayer Schering AG, andBerlin Chemie (source: Bulwiengesa, Riwis online database).

V-31

Key occupier market figures 2013 (change against 2008 in brackets)

Office stock Vacancy rate Prime office rent Prime retail rent Prime logistics rentCity (m sq m) offices (%) (€/sq m/month) (€/sq m/month) (€/sq m/month)

Berlin . . . . . . . . . . . . . . . . . . . . . . . . . 18.63 5.5 22.50 270.00 4.90(+2.3%) (-250bps.) (+2.3%) (+25.6%) (+8.9%)

Brandenburg (Havel) . . . . . . . . . . . . . 0.22 21.8 6.90 21.00 2.50(+3.4%) (-20bps) (-1.4%) (+16.7%) (-3.8%)

Chemnitz . . . . . . . . . . . . . . . . . . . . . . . 1.29 12.8 9.00 55.00 3.50(+2.4%) (-80bps.) (+9.8%) (+22.2%) (-12.5%)

Cottbus . . . . . . . . . . . . . . . . . . . . . . . . 0.61 21.4 8.20 36.00 3.30(+3.4%) (+130bps.) (+1.2%) (+9.1%) (+3.1%)

Dessau . . . . . . . . . . . . . . . . . . . . . . . . . 0.31 10.3 7.20 20.00 2.00(+0.6%) (-100bps.) (+7.5%) (+/-0.0%) (+14.3%)

Dresden . . . . . . . . . . . . . . . . . . . . . . . . 2.70 9.9 11.90 105.00 4.70(+1.5%) (-120bps.) (+19.0%) (+7.1%) (+2.2%)

Eisenach . . . . . . . . . . . . . . . . . . . . . . . 0.14 11.2 6.60 37.00 2.90(+/-0.0%) (+0bps.) (+1.5%) (+23.3%) (+16.0%)

Erfurt . . . . . . . . . . . . . . . . . . . . . . . . . . 1.60 15.9 10.00 90.00 3.60(+2.1%) (-140bps.) (+5.3%) (+12.5%) (+2.9%)

Frankfurt (Oder) . . . . . . . . . . . . . . . . . 0.38 12.2 8.20 23.00 2.70(+0.9%) (-10bps.) (-1.2%) (+4.5%) (-6.9%)

Gera . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.38 4.7 7.30 42.50 3.00(+0.1%) (-30bps.) (-2.7%) (-5.6%) (+20.0%)

Greifswald . . . . . . . . . . . . . . . . . . . . . . 0.20 9.4 8.75 33.00 2.90(+2.6%) (-20bps.) (+/-0.0%) (+6.5%) (+3.6%)

Görlitz . . . . . . . . . . . . . . . . . . . . . . . . . 0.15 25.9 6.10 22.00 2.30(+2.6%) (-60bps.) (+1.7%) (+12.8%) (-4.2%)

Halberstadt . . . . . . . . . . . . . . . . . . . . . 0.18 13.0 6.00 20.00 2.50(+0.5%) (-70bps.) (+/-0.0%) (+/-0.0%) (+/-0.0%)

Halle (Saale) . . . . . . . . . . . . . . . . . . . . 1.24 10.9 8.40 72.00 3.50(-0.1%) (-100bps.) (+2.4%) (+20.0%) (+6.1%)

Jena . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.48 10.7 9.70 47.00 4.00(+3.4%) (-80bps.) (+2.1%) (+4.4%) (+/-0.0%)

Leipzig . . . . . . . . . . . . . . . . . . . . . . . . 2.79 15.8 12.25 125.00 4.90(+1.4%) (-1,000bps.) (+13.4%) (+8.7%) (+2.1%)

Magdeburg . . . . . . . . . . . . . . . . . . . . . 1.43 9.8 10.60 50.00 3.80(+1.4%) (-160bps.) -0.01 (+4.2%) (-2.6%)

Neubrandenburg . . . . . . . . . . . . . . . . . 0.34 13.3 8.00 19.00 2.50(+/-0.0%) (+180bps.) (-2.4%) (-5.0%) (+/-0.0%)

Plauen . . . . . . . . . . . . . . . . . . . . . . . . . 0.22 4.3 6.60 23.50 2.60(+2.2%) (-70bps.) (+1.5%) (-4.1%) (+10.6%)

Potsdam . . . . . . . . . . . . . . . . . . . . . . . . 1.32 4.0 12.50 75.00 4.50(+2.8%) (-90bps.) (+13.6%) (+7.1%) (+2.3%)

Rostock . . . . . . . . . . . . . . . . . . . . . . . . 0.98 7.8 11.60 80.00 3.80(+2.3%) (-160bps.) (+16.0%) (+33.3%) (+8.6%)

Schwerin . . . . . . . . . . . . . . . . . . . . . . . 0.72 11.7 8.00 30.00 3.00(+2.1%) (-80bps.) (+14.3%) (+3.4%) (-6.3%)

Stralsund . . . . . . . . . . . . . . . . . . . . . . . 0.21 14.5 7.00 42.00 2.50(+1.4%) (+230bps.) (+4.5%) (+23.5%) (-3.8%)

Suhl . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20 22.0 5.80 22.00 2.00(+/-0.0%) (+0bps.) (-7.2%) (+/-0.0%) (-4.8%)

Weimar . . . . . . . . . . . . . . . . . . . . . . . . 0.25 8.5 8.10 48.00 3.20(+1.1%) (-10bps.) (+15.7%) (+29.7%) (+/-0.0%)

Zwickau . . . . . . . . . . . . . . . . . . . . . . . 0.36 18.4 8.20 49.00 2.50(+2.2%) (-40bps.) (+6.5%) (+8.9%) (+25.0%)

Source: Bulwiengesa, Riwis online database as at 25/07/14

V-32

As with Berlin, almost all other major real estate markets also developed positively in the last five years. Whenlooking at the key occupier market figures in the table above, vacancy rates (only available for the office markets) decreasedalmost across the board while office, retail and logistics rents predominantly showed an upward tendency since 2008. Thereare of course regional disparities but the overall development can be described as healthy. Only very few cities saw anincrease in office vacancy (e.g. Stralsund) and/or decreasing rents in one of the three sectors (e.g. Gera and Neubrandenburg).

Prime market yields 2013 (change against 2008 in brackets)*

City Office Retail Logistics

Berlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8% (-70bps.) 4.4% (-40bps.) 7.5% (-50bps.)Brandenburg (Havel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9% (-10bps.) 8.2% (-10bps.) 10.0% (+/-0bps.)Chemnitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0% (-50bps.) 7.9% (-20bps.) 10.7% (+20bps.)Cottbus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9% (-10bps.) 7.9% (-10bps.) 10.0% (-20bps.)Dessau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7% (-10bps.) 7.9% (+10bps.) 10.9% (-10bps.)Dresden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2% (-50bps.) 5.6% (-30bps.) 7.9% (-40bps.)Eisenach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% (+/-0bps.) 8.1% (-20bps.) 9.8% (+/-0bps.)Erfurt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9% (-10bps.) 6.0% (+/-0bps.) 8.2% (-40bps.)Frankfurt (Oder) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6% (+10bps.) 7.2% (+/-0bps.) 9.6% (+10bps.)Gera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7% (+10bps.) 8.5% (+/-0bps.) 9.7% (-30bps.)Greifswald . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% (+/-0bps.) 7.4% (+/-0bps.) 10.0% (+/-0bps.)Görlitz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9% (+10bps.) 9.5% (+/-0bps.) 10.6% (+10bps.)Halberstadt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% (+20bps.) 7.2% (+/-0bps.) 10.0% (+/-0bps.)Halle (Saale) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1% (+/-0bps.) 7.9% (-30bps.) 8.2% (-30bps.)Jena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2% (+20bps.) 7.0% (-10bps.) 9.5% (+/-0bps.)Leipzig . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1% (-30bps.) 5.7% (-40bps.) 7.4% (-20bps.)Magdeburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8% (-20bps.) 7.3% (-30bps.) 10.0% (+/-0bps.)Neubrandenburg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0% (+/-0bps.) 8.0% (+/-0bps.) 10.0% (+/-0bps.)Plauen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0% (+/-0bps.) 8.3% (+/-0bps.) 9.5% (-30bps.)Potsdam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4% (-30bps.) 6.1% (+/-0bps.) 9.2% (-20bps.)Rostock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5% (-20bps.) 7.2% (-40bps.) 9.8% (-20bps.)Schwerin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4% (-10bps.) 6.9% (-10bps.) 10.5% (+10bps.)Stralsund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5% (+/-0bps.) 7.2% (+/-0bps.) 9.9% (-10bps.)Suhl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1% (-10bps.) 8.2% (+20bps.) 11.8% (-20bps.)Weimar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7% (+/-0bps.) 7.5% (+/-0bps.) 10.5% (+/-0bps.)Zwickau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6% (+10bps.) 7.5% (+/-0bps.) 9.9% (-20bps.)

Source: Bulwiengesa. Riwis online database as at 25/07/14 / * Prime market yields reflect the average achievable yields in the top marketsegment (e.g. Grade A offices in central locations) and therefore yields for individual properties can be lower

The rather favourable trends in the fundamentals on the one hand and the decreasing risk averseness of real estateinvestors on the other hand led to a higher level of activity in the East German real estate investment markets over the pastyears. While only approx. €320m was invested in commercial real estate in the five eastern German federal states excludingBerlin in 2009, the volume steadily increased to about €1.87bn in 2012. After dropping to €1.36bn in 2013 it increased to€1.37bn in the first half of 2014. The development was similar in Berlin, albeit on a higher level. The transaction volumeincreased from €1.22bn in 2009 to €4.36bn in 2012 and decreased to €3.48bn in 2013, mainly due to a lack of supply. Sincethe lack of supply was still a limiting factor in the first half of 2014, the transaction volume declined by 12% year-on-year toapprox. 1.3bn (source: Savills database). The increased activity and investors’ demand is also reflected in the development ofyields. They decreased significantly in Berlin over the past five years and hardened slightly in a number of the other easternGerman cities (see table above). An increase in yields was the exception (e.g. offices in Jena and logistics in Chemnitz).

V-33

F. General Valuation Assumptions and Applied Definitions

In the following chapter we comment on the applied method in arriving at our opinion of value as defined in thescope of this instruction.

I. General Valuation Assumptions

This Valuation Report of Savills has been carried out on the basis of the following General Assumptions (the“General Assumptions”). If any of these assumptions are subsequently found to be incorrect or invalid, the valuationresult(s) in our Report may need to be reconsidered.

In the absence of any information to the contrary in the Report (in particular in a section containing our individualvaluation assumptions and considerations probably included in the Report), the valuations are based in particular on thefollowing assumptions:

1. Information of TLG

The Instructing Party (and any third parties acting on request of the Instructing Party) has provided Savills withcomplete, correct and current information and documents as requested by Savills or which are reasonably relevant to Savillsin carrying out the agreed Services (in particular the preparation of the Valuation). The Instructing Party did not retain anymaterial facts which may impact the valuation of the real estate (ground) and buildings valued in our Valuation (collectivelythe “Properties”, each a “Property”). Unless otherwise stated in the Valuation, Savills has not verified the informationsubmitted. Savills has not requested any information from public authorities, registers or courts.

Unless otherwise stated in the Report, Savills’ has performed an external inspection of the Properties. For theavoidance of doubt, Savills does not carry out any building or structural surveys of the Properties nor test any of the electrical,heating or other services or installations.

2. Title

Unless otherwise stated in the Report, we have valued the freehold interest of the Properties and have assumed thatin particular that they are not subject to leasehold agreements.

It is assumed that the freehold interest is not subject to any restrictions and encumbrances contained in Section II ofthe land register and that no claims or obligations are present in this regard.

Further, the Valuation of Savills does not consider any mortgages or land charges contained in Section III of theland register.

3. Buildings

The buildings are structurally sound. There are no structural (latent or other) material defects (including rot) whichmay have influence on the valuation.

In the construction or alteration of the building(s) no use was made of any deleterious or hazardous materials ortechniques, such as high alumina cement, calcium chloride additives, wood wool slabs used as permanent shuttering orcomparable materials. There are no dangers to health of occupants or tenants resulting from the actual condition of thebuildings (for example resulting from contamination with asbestos or mould). Savills has not carried out any investigationsconcerning these matters.

4. Land

Savills assumes that the site is appropriate and has load bearing capacity suitable for the realised or anticipated formof development, that no abnormal ground conditions exist and no additional or unusual expenditure on, for example,foundations or drainage systems are required. The ground does not contain any archaeological remains. There are nounderground mineral or other workings, noxious substances or any other matters that may cause additional costs or delay.

5. Services

The Properties are connected, or capable of being connected, without undue expense, to the public services of gas,electricity, water, telecommunications, sewerage and district heat, where available.

V-34

6. Contamination of Land and Buildings

The Properties (land and buildings) are not contaminated, and each Property is not and never has been subject to anycontaminating or potentially contaminating uses, nor is it likely to become contaminated in the foreseeable future.

Savills has not carried out any investigations with respect to potentially existing environmental contaminations or inorder to identify any such contamination.

7. Legal Matters

The buildings were erected in accordance with construction permits, and every building complies with all statutoryor local authority requirements. All necessary consents and authorisations for the use of the Properties and the processescarried out at the Properties (in particular to be issued by public authorities, neighbours or other third parties) are in existence,will continue to subsist and are not subject to any onerous conditions.

It is assumed that there are no unusual restrictions with respect to the occupation of the Properties or the level ofrent.

8. Lease Agreements; Other Agreements

The tenants are creditworthy and capable of meeting their obligations. There are no arrears of rent or breaches ofcovenants. It is assumed by Savills that lease agreements and any other agreements provided to Savills are valid, and no factsdo exist which would entitle a party to terminate or cancel such agreements prior to expiry of the agreed term, e.g. by earlytermination, rescission or likewise.

9. Taxes, Public Contributions, Development Charges

Unless otherwise stated in this report, all public taxes, charges and contributions levied by public authorities withrespect to the site development, have entirely been levied and paid as at the date of valuation. In particular it is assumed thatno public infrastructure contributions or similar contributions will be levied in the future.

10. Public Encumbrances; Monumental Protection; (Re)Development Areas and likewise

The Properties are not subject to any public encumbrances which may give reason for a reduction of the valuation.

None of the Properties to be valued is subject to monumental protection.

None of the Properties is located in a redevelopment area pursuant to Sec. 136 et seq. of the German FederalBuilding Code.

It is assumed that none of the Properties is adversely affected, nor is it likely to become adversely affected, by anyhighway, town planning or other schemes or proposals.

Savills did not undertake any investigations (for example local searches, enquiries or review of any statutorynotices) in order to identify matters adversely affecting the present or future value of the Properties.

11. Subsidies

Unless otherwise stated in this report, all valuations are given without consideration of subsidies or grants, receivedor potentially receivable, and any obligations or limitations in this coherence which could influence the value of theProperties.

12. Statements by Officials

Oral statements by public officials, particularly involving factual information, cannot be regarded as legally binding.Savills assumes such oral statements to be correct; however, Savills is unable to accept any liability for the application of anysuch statements or information in the Report.

V-35

13. Insurance

The Properties are covered by a valid adequate and appropriate insurance policy as regards the sum assured and thetypes of potential loss covered.

14. Taxation

Unless otherwise stated in the Report, no allowance has been made for expenses or taxation that might arise on adisposal. Exceptions may result from standardised valuation methods.

Further, our valuations are exclusive of VAT.

15. Fixtures and Fittings

Excluded from our valuations is any additional value attributable to goodwill, or to fixtures and fittings which areonly of value in situ to the present/future occupiers.

16. Valuation of Portfolios (Aggregation)

Unless otherwise stated in the Report, each Property—even if it is part of a portfolio—has been valued individually.

17. Insolvency

Savills does not take account of any possible effect that the appointment of either an insolvency administrator or anadministrative receiver or a compulsory auction might have on the perception of the properties in the market and theirsubsequent valuation, or the ability to realise the value of the properties in either of these scenarios

II. Rents, Income and Vacancy

1. Current Rent

Definition

In our valuations the current rental income (or current rent) is defined as the rent passing as at the date of valuation.It reflects the rental payments after deducting recoverable costs (e.g. costs for heating, electricity) but before deducting non-recoverable costs. Also, the current rent is excluding VAT.

Method of Determination

If not stated otherwise in the report we have considered the current rent for each lettable unit as stated in the rent rollprovided by the instructing party or its advisors.

The rent roll has been checked with the original lease contracts on a sample basis. However, in accordance with theinstruction, Savills did not carry out full commercial due diligence.

2. Estimated Rental Value (ERV) / Market Rent

Definition

Our opinion of Market Rent is equivalent to the Market Rent as defined in the Valuation Practice Statement VPS4.1.3 of the RICS Valuation Professional Standards 2014 (the “Red Book”), published by the Royal Institution of CharteredSurveyors (RICS), London, which was effective from January 2014.

“The estimated amount for which an interest in real property should be leased on the valuation date between awilling lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing andwhere the parties had each acted knowledgeably, prudently and without compulsion.”

The market rent is excluding VAT.

V-36


We research comparable rents by taking into consideration key aspects such as property location, condition and thefit-out standard of rental units as well as common marketing incentives by the landlords (e.g. tenant improvements or rent freeperiods).

With our in-house database we analyse comparable lease transactions and currently-available offers of space to rent.Furthermore, we analyse all leases which were recently closed in the subject asset(s) (“recent lease agreements”).

Based on this procedure, we estimate rental values with reference to the individual asset, which are then revised inconsultations with our agents and under consideration of third-party research, where reliable, appropriate and possible.

3. Potential Rent

Definition

The potential rent expresses the rent that should be achievable in a short time period by leasing vacant areas at ouropinion of Market Rent. The potential rent is excluding VAT.


The potential rent as displayed in our valuations is a “mixed” figure which considerers the current rent for all unitslet and the market rent for all units currently vacant but potentially lettable.

4. Net Operating Income (NOI)

Definition

The net operating income (NOI) is defined as the passing rent after deducting all non-recoverable costs. It is the netcash-flow generated by a property at a point in time or in a time period.


Generally, the following periodical non-recoverable costs will be deducted from the passing rent:

• Management Costs

• Maintenance Costs

• Ground Rents (if applicable)

Furthermore, the following event related non-recoverable costs will be deducted from the passing rent within thecash-flow term:

• Costs for Tenant Improvements (if applicable)

• Capex for Deferred Maintenance (if applicable)

• Vacancy Costs (if applicable)

• Leasing Commissions (if applicable)

5. Vacancy Rates

In this report two following different vacancy rates are displayed:

• The area vacancy rate is defined by vacant space (in sq m) divided by the total lettable space (in sq m).

V-37

• The EPRA vacancy rate is expressed as a percentage being the estimated rental value (in EUR) of vacant spacedivided by the estimated rental value ERV of the whole property.

III. Values and Results

1. Market Value

Definition

Our opinion of market value is equivalent to the Market Value as defined in the Valuation Practice StatementVPS 4.1.2 of the RICS Valuation Professional Standards 2014 (the “Red Book”), published by the Royal Institution ofChartered Surveyors (RICS), London, which was effective from January 2014.

“The estimated amount for which an asset or liability should exchange on the valuation date between a willingbuyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each actedknowledgeably, prudently and without compulsion.”

For the avoidance of doubt, a valuation complying with the “Red Book” is ipso facto compliant with theInternational Valuation Standards (IVS) and the market value pursuant to § 194 BauGB (German Building Code).

Market Evidence

In our valuation each property has been valued individually and the valuation of each property is based on marketevidence. Generally, investment comparables and asking prices for similar properties are researched. Also, local agents andinternal as well as external market databases have been consulted to arrive at our valuation results.

Method of Calculation: Discounted Cash Flow (DCF)

For the valuation of long-term income-based properties we have applied a DCF approach.

The DCF method is a two-stage financial mathematical model to determine the cash value of the future yield of theproperties, which is viewed as its present value. In this coherence, a detailed forecast computation of the revenue andexpenditures for a “holding period” of usually 10 years is compiled.

Accordingly, our DCF model involves a period-by-period estimation of gross income, i.e. rental income, and of anyexpenditure which shall not be recovered by third parties. Any estimation for the aforementioned will be explicitly taking intoaccount a range of variables. For example, the estimation of income is substantially and mainly based on the existingcontractual agreements as well as market development forecasts. Expenditures, on the other hand, may occur regularly in eachperiod, i.e. costs of management, ongoing maintenance and non-recoverable service charges. However, one-off costs foranticipated renovations as well as costs during periods of vacancy will also be deducted but considering a specified scheduledtime of expenditure in the future.

As a result, the net operating income (NOI) will be calculated for each period, reflecting the anticipateddevelopment of the properties over the applied time period.

Secondly, the hypothetical sales price at the assumed time of exit will be calculated. Generally, the sales price willbe based upon the NOI at market level of the future year after the holding period. Hence, the NOI at market level will becapitalised with the exit capitalisation rate in perpetuity in order to derive the Gross Exit Value. However, if fixed leasesexpire after the holding period, the Gross Exit Value will be adjusted by the capital value of a (potential) over-/underrentedsituation. Please note that in our model those capital value adjustments will be displayed as adjustments to the NOI (calculatedin perpetuity). Finally, transaction costs will be deducted from the Gross Exit Value to arrive at the Net Exit Value / salesprice.

Finally, both main results of the two-step calculation, i.e. the sum of all NOI and the hypothetical purchase price—will be discounted at the discount rate effective at the date of valuation. The result of this step is the Gross Present Value(GPV) as at that date.

V-38

The GPV is then reduced by the common costs of a transaction, i.e. stamp duty land purchase tax, agent fee, notaryfee, which results in the Net Present Value (NPV).

The applied rates are normally set by comparing money market rates (i.e. interest rate for risk-minimisedinvestments) and allowing for the relative disadvantages of real estate ownership. These are generally considered asadjustments to the base rate due to the risks revolving from the specific type of property, due to the risks of illiquidity(marketing periods, costs of transaction etc.) and due to the potential of additional costs of portfolio management.

These risks are evaluated according to the following categories for each property, e.g. by conducting a structuredproperty rating:

• Quality of the macro location (i.e. image, socio-demographics, economy, etc.)

• Quality of the micro location (i.e. local image, local supplier market adequacy for the specific property use,infrastructure, etc.)

• Quality of the building (i.e. age and condition of building, concept of areas/ architecture, fit-out, alternativeusability, energy management, plot characteristics, etc.)

• Quality of cash flow (i.e. letting concept, length of lease terms, agreements on ancillary costs, covenant of thetenant, current vacancy, relettability)

The exit capitalisation rate is the reciprocal of the multiplier on potential rent less non-recoverable costs at the endof the cash flow period and is mainly derived from the rating of the location (including the land value) and the rating of thebuilding quality.

Method of Calculation: Liquidation Approach

Developed properties, whose developments do not allow for sustainable revenue generation, are valued according toliquidation value method. The liquidation value is also based upon the DCF method as described above. However thefollowing modifications were necessary:

• Holding Period:

The holding period is usually until the time that the last current lease contract or assumed option periodexpires. During the holding period, non-recoverable costs are deducted from the current gross rental income.As a result, the net operating income (NOI) will be calculated for each period. The NOI is discounted with thesame approach as defined in the discounted cash-flow for the re-letting scenario.

• Capital Expenditures:

During the holding period, we do not apply any capital expenditures as we assume that until the liquidation ofthe property the costs for ongoing maintenance are sufficient.

• Exit Value:

At the end of the time horizon, we assume that the property is demolished and the land is sold (liquidationvalue). The liquidation value is the land value adjusted by the inflation rate minus the inflation adjusteddemolition costs.

• Discount Rate:

As the liquidation value is considered, we have chosen a discount rate which reflects the different risk profileof the subject property. This discount rate is set by the rating’s subcriteria, namely macro and micro location.

V-39

Method of Calculation: Land Values

According to the Valuation Law (Bewertungsgesetz), the land value may be defined as the value of the land as if itwas free of any construction.

Basically, the purchase prices of comparable property are to be considered in the determination of the value of land(land value). Pursuant to cf. §§ 193 of the Town and Country Planning Code (BauGB), the determination of the land valuemay also be based—in addition to, or instead of, the purchase prices—on suitable recommended land values determined byresponsible land valuation boards in consideration of purchase price surveys.

Features, which influence the value, have to be allowed for as increases or reductions or in other appropriate ways.Such features to be considered include in particular:

• the location, size and layout of the site,

• the type and extent of the possible uses stipulated by building laws and the actual use,

• the type and nature of ingresses,

• the most important commercial and transport connections,

• possibilities of connections to services, sewers and drains,

• the recoupment charge for local public infrastructure still to be incurred, and,

• existing reference values and comparable prices.

Once comparable transaction values are verified and adjusted to the subject property, the determined price per sq mwill be applied to the total area of the site which will result in the total land value.

Method of Calculation: Residual Approach

The residual valuation method is used to verify land values. Basically, the residual value is the amount that is leftover after all other costs (except for buying the land) have been deducted from the potential sale revenue of the completedproperty.

As a first step, the exit value of the development, or the price the property can be sold for after completion, needs tobe assessed.

At a second stage, the following cost groups need to be deducted from this future value:

• Construction costs incl. budget for unforeseeable costs,

• Letting Costs,

• Financing Costs,

• Development Profit,

• Transaction Costs

In doing so, the outcome will reflect the amount that a developer is able to pay for the building land.

V-40

IV. Yields and Multipliers

1. Gross Multipliers

A gross multiplier expresses the ratio of the market value to the rental income of a property. In our report we statethree different kinds of gross multipliers:

• Gross Multiplier on Current Rent = Market Value / Current Rent

• Gross Multiplier on Market Rent = Market Value / Market Rent

• Gross Multiplier on Potential Rent = Market Value / Potential Rent

Please note that the Gross Multiplier on Current Rent can be misleading if the property is currently considerablyunderrented, overrented or vacant. In those cases we suggest also to consider multipliers and yields on market or potentialrent.

2. Net (Initial) Yields

A Net Yield expresses the ratio of the Net Operating Income to the Gross Present Value (Market Value includingacquisition costs). It can be considered as a cash-on-cash yield, although it does not consider finance costs.

In our report we state three different kinds of Net Yields:

• Net Initial Yield on Current Rent = Net Operating Income derived from Current Rent / Market Value +Acquisition costs

• Net Yield on Market Rent = Net Operating Income derived from Market Rent / Market Value + Acquisitioncosts

• Net Yield on Potential Rent = Net Operating Income derived from Potential Rent / Market Value + Acquisitioncosts

Please note that the Net Initial Yield on Current Rent can be misleading if the property is currently considerablyunderrented, overrented or vacant. In those cases we suggest also to consider multipliers and yields on market or potentialrent.

V-41

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V-44

GLOSSARY

1alex Property . . . . . . . . . . . . . . . . . . . . . . . . The office property located Alexanderstraße on 1, 3, 5, Berlin.

Acquisition Loan . . . . . . . . . . . . . . . . . . . . . A loan from the Existing Shareholders assumed by TLG in 2013.

Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . Adjusted EBITDA is defined as EBITDA adjusted for result from thedisposal of investment property, result from the disposal of real estateinventory and one-off items (i.e., severance packages, reversal of a provisionfor real estate transfer taxes in connection with the spin-off of TLGWOHNEN GmbH, reversal of a provision from the pass-through of purchaseprices and accrued interest, reversal of a provision for subsidy payment risk,and share based payment obligations (bonus agreements).

AFFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjusted FFO represents FFO less capex.

AGD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Altmarkt-Galerie Dresden KG, Hamburg.

Ancillary Benefits . . . . . . . . . . . . . . . . . . . . . Benefits in kind such as company cars, mobile phones andcontributions to health insurance, own-occupation disabilityinsurance (Berufsunfähigkeitsversicherung), disability insurance(Invaliditätsversicherung) or under pension plans provided by the Companyto the members of the Management Board.

ARR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refers to average rent per room.

Articles of Association . . . . . . . . . . . . . . . . . The Company’s articles of association.

BaFin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The German Federal Financial Supervisory Authority (Bundesanstalt fürFinanzdienstleistungsaufsicht).

Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . The annual base salary in an amount of €300,000, payable in twelve equalmonthly installments in arrears, provided to members of the ManagementBoard under each of the two service agreements.

Base Shares . . . . . . . . . . . . . . . . . . . . . . . . . . Up to 9,302,326 newly issued bearer shares, 21,545,674 existing bearershares from the holdings of East AcquiCo and 2,652,000 existing bearershares from the holdings of Delpheast.

BP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refers to basis points.

BVS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Federal Institute for Special Tasks Arising from Unification (Bundesanstaltfür vereinigungsbedingte Sonderaufgaben), a federal office of Germany.

CAGR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAGR refers to the compounded annual growth rate.

Capex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital expenditures excluding cost of acquisition of properties, cost ofproject developments and maintenance expenses.

Change of Control . . . . . . . . . . . . . . . . . . . . If a third party were to directly or indirectly acquire more than 50% of theCompany’s shares, or if the Company becomes an affiliated company due toan affiliation in accordance with Section 319 et seq. of the German StockCorporation Act (Aktiengesetz).

Clearstream . . . . . . . . . . . . . . . . . . . . . . . . . . Clearstream Banking Aktiengesellschaft, Mergenthalerallee 61, 65760Eschborn, Germany.

Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The German Corporate Governance Code as amended on May 13, 2013.

COMMERZBANK . . . . . . . . . . . . . . . . . . . . COMMERZBANK Aktiengesellschaft, Frankfurt am Main, Germany.

Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company refers to TLG IMMOBILIEN AG, a Germany-based stockcorporation (Aktiengesellschaft) incorporated and existing under the laws ofGermany.

Contamination . . . . . . . . . . . . . . . . . . . . . . . Refers to the residual pollution and harmful changes to soil as referred to inthe German Federal Soil Protection Act (Bundesbodenschutzgesetz).

G-1

Core Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 321 office, retail and hotel properties with an aggregate market value of€1,338.9 million as of June 30, 2014, and located in Berlin and easternGermany, which TLG plans to hold long term.

D&O . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D&O refers to directors and officers.

DCF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DCF refers to discounted cash flow.

DDT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DDT refers to Dichlorodiphenyltrichloroethane, an organochlorine insecticidefrequently used in agriculture. Common sources of exposure to DDT arefoods, including meat, fish, and dairy products. DDT can be absorbed byeating, breathing, or touching products contaminated with the substance.

Delpheast . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delpheast Beteiligungs GmbH & Co. KG.

Domestic Paying Agent . . . . . . . . . . . . . . . . A domestic credit institution, domestic financial services institution, domesticsecurities trading company or a domestic securities trading bank, includingdomestic branches of foreign credit institutions or financial serviceinstitutions, that holds or administers shares in the Company for ashareholder, or that executes the disposal of shares in the Company and paysout or credits the capital gains for a shareholder.

Domination Agreement . . . . . . . . . . . . . . . . The domination agreement (Beherrschungsvertrag) entered into by theCompany and East AcquiCo on January 2, 2013 and terminated onSeptember 18, 2014.

DUHO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DUHO Verwaltungs-Gesellschaft mbH, a limited liability company with itsregistered office in Berlin, Germany and registered with the commercialregister of the local court (Amtsgericht) of Charlottenburg under the docketnumber HRB 38419. DUHO is the Company’s legal predecessor.

E&Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ernst & Young Wirtschaftsprüfungsgesellschaft GmbH, Stuttgart, officeBerlin, Friedrichstraße 140, 10117 Berlin, Germany.

East AcquiCo . . . . . . . . . . . . . . . . . . . . . . . . LSREF II East AcquiCo S.à r.l., Luxemburg.

EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings before interest and taxes.

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EBITDA refers to earnings before interest, taxes, depreciation andamortization and is defined as consolidated net income or loss for the periodbefore income taxes, interest result, income from joint ventures, gain/lossfrom the remeasurement of derivatives, depreciation as well as before theresult from the remeasurement of investment property, all as reflected in therespective consolidated financial statements of the Company.

EBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings before taxes.

ECB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . European Central Bank.

EPRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EPRA refers to the European Public Real Estate Association.

EPRA NAV . . . . . . . . . . . . . . . . . . . . . . . . . . EPRA NAV is calculated based on equity (i) plus fair value remeasurement ofother non-current assets (IAS 16) and fair value remeasurement of propertiesin inventories and (ii) excluding the fair values of financial derivatives,deferred tax assets and deferred tax liabilities.

EPRA Vacancy Rate . . . . . . . . . . . . . . . . . . The EPRA vacancy rate is the estimated rental value (ERV) of vacant spacedivided by the estimated rental value of the whole portfolio.

Equity Ratio . . . . . . . . . . . . . . . . . . . . . . . . . Equity Ratio refers to the ratio of equity to total equity and liabilities.

euro and € . . . . . . . . . . . . . . . . . . . . . . . . . . . Refer to the single European currency adopted by certain participatingmember states of the European Union, including Germany.

G-2

EU Short Selling Regulation . . . . . . . . . . . . Regulation (EU) No 236/2012 of the European Parliament and of theEuropean Council of March 14, 2012 on short selling and certain aspects ofcredit default swaps.

Existing Shareholders . . . . . . . . . . . . . . . . . East AcquiCo and Delpheast.

Existing Shares . . . . . . . . . . . . . . . . . . . . . . . Refers to 21,545,674 bearer shares with no par value (Stückaktien) from theholdings of East AcquiCo and 2,652,000 bearer shares from the holdings ofDelpheast.

Exit Bonus Agreement . . . . . . . . . . . . . . . . . On September 8/18, 2014, the members of the Management Board and theExisting Shareholders canceled the incentive agreement relating to a potentialexit of the Existing Shareholders in full or in part, which was concluded onApril 11/30, 2014 and signed a new incentive agreement relating to apotential exit of the Existing Shareholders in part or in full.

FFO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FFO refers to the net income/loss for the period adjusted for the result fromthe disposal of investment property, the result from the disposal of real estateinventory, the result from the remeasurement of investment property, thegain/loss from the remeasurement of derivatives and other effects, as well asdeferred taxes and the tax effects from the result from the disposal ofinvestment property and the disposal of real estate inventory, as well as thetax effects from the settlement of interest rate swaps.

FFO Forecast . . . . . . . . . . . . . . . . . . . . . . . . Forecast of TLG’s FFO for the fiscal year 2014.

FSMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The United Kingdom Financial Services and Markets Act 2000.

GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GDP refers to gross domestic product.

German GAAP . . . . . . . . . . . . . . . . . . . . . . . German GAAP refers to the accounting rules and standards set forth by theGerman Commercial Code (Handelsgesetzbuch (HGB)).

Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Federal Republic of Germany.

Greenshoe Option . . . . . . . . . . . . . . . . . . . . . Greenshoe option refers to an option that East Acquico has granted theUnderwriters, which allows them to acquire borrowed shares at the offer priceless agreed commissions.

HfT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Held for Trading.

HSBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HSBC Trinkaus & Burkhardt AG, Dusseldorf, Germany.

IDW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Institute of Public Auditors, Germany (Institut der Wirtschaftsprüfer inDeutschland e.V.).

IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The International Financial Reporting Standards as adopted by the EuropeanUnion.

IPO Capital Increase . . . . . . . . . . . . . . . . . . By resolution of the extraordinary shareholders’ meeting expected to be heldon October 22, 2014, the Company’s share capital is expected to be increasedby up to €9,302,326. The Existing Shareholders are expected to waive theirsubscription rights. It is anticipated that the aforementioned capital increasewill be registered with the commercial register on or about October 23, 2014.

J.P. Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . J.P. Morgan Securities plc, London, United Kingdom.

Joint Bookrunners . . . . . . . . . . . . . . . . . . . . J.P. Morgan, UBS, COMMERZBANK, Kempen & Co and HSBC, together.

Joint Global Coordinators . . . . . . . . . . . . . . J.P. Morgan and UBS, together.

Kempen & Co . . . . . . . . . . . . . . . . . . . . . . . . Kempen & Co N.V., Amsterdam, the Netherlands.

Long-Term Incentive . . . . . . . . . . . . . . . . . . Refers to incentives included in the service agreements of the members of theManagement Board, measured against the long-term incentive targets at theend of four-year periods.

G-3

LS SCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LSREF II East Lux GP SCA, a partnership limited by shares (société encommandite par actions), registered with the commercial and companyregister of Luxembourg (Registre de Commerce et des SocieétésLuxembourg) under the company number B 173601, having its registeredoffice at 33, rue du Puits Romain, L-8070 Bertrange, Luxembourg.

LSCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lone Star Capital Investments S.à r.l., Luxembourg.

LTV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The loan to value ratio is the ratio of debt (sum of current and non-currentliabilities due to financial institutions) to real estate (sum of investmentproperty, owner-occupied properties, prepayments for investment properties,assets classified as held for sale and inventories).

Luxembourg . . . . . . . . . . . . . . . . . . . . . . . . . The Grand Duchy of Luxembourg.

Majority Shareholder . . . . . . . . . . . . . . . . . A shareholder holding 95% of a company’s share capital.

Management Board . . . . . . . . . . . . . . . . . . . Management Board refers to the Company’s management board.

Minimum Shareholding . . . . . . . . . . . . . . . . Under the management service agreements, each member of the ManagementBoard is required to hold a minimum number of shares of the Company equal tothe result of dividing two times such member’s Base Salary by the offer price ofthe Offer Shares as long as such member serves on the Management Board.

Net LTV-Ratio . . . . . . . . . . . . . . . . . . . . . . . The net loan to value ratio is the ratio of net debt (sum of current and non-current liabilities due to financial institutions less cash and cash equivalents),to real estate (sum of investment property, owner-occupied properties,prepayments for investment properties, assets classified as held for sale andinventories).

New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . New shares refers to up to 9,302,326 newly issued bearer shares with no parvalue (Stückaktien) from a capital increase against contribution in cash to beresolved by an extraordinary shareholders’ meeting of the Company.

OCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income.

Offer Period . . . . . . . . . . . . . . . . . . . . . . . . . The offer period, during which investors may submit purchase orders for theshares, which is expected to begin on October 15, 2014 and is expected to endon October 23, 2014 at 12:00 noon CEST (Central European Summer Time)for retail investors (natural persons) and at 16:00 CEST (Central EuropeanSummer Time) for institutional investors.

Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . Base Shares and Over-Allotment Shares.

Over-Allotment . . . . . . . . . . . . . . . . . . . . . . . Under possible stabilization measures, investors may, in addition to BaseShares being offered, be allocated up to 3,350,000 additional shares from theholdings of East AcquiCo as part of the allocation of shares to be placed.

Over-Allotment Shares . . . . . . . . . . . . . . . . 3,350,000 existing bearer shares from the holdings of East AcquiCo inconnection with a possible Over-Allotment.

Parent-Subsidiary Directive . . . . . . . . . . . . The European Council Directive 90/435/EEC dated July 23, 1990 asamended.

PCB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Polychlorinated Biphenyl was used in hundreds of industrial and commercialapplications, including electrical, heat transfer, and hydraulic equipment andin paints. PCBs have been demonstrated to cause cancer, and have adverseeffects on the immune system, reproductive system, nervous system, andendocrine system.

PCP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pentachlorophenol is an organochlorine compound used as a pesticide, woodpreservative, and disinfectant. It is extremely toxic to humans from acute(short-term) ingestion and inhalation exposure, and can result in neurological,blood, and liver effects, and eye irritation. Chronic (long-term) exposure byinhalation has resulted in effects on the respiratory tract, blood, kidney, liver,immune system, eyes, nose, and skin.

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Post-IPO Equity attributable toShareholders per Share . . . . . . . . . . . . . . The adjusted equity attributable to shareholders, expressed as a per share

figure, assuming 61,302,326 outstanding shares of the Company uponcompletion of the offering.

Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . This prospectus and all annexes thereto.

Prospectus Directive . . . . . . . . . . . . . . . . . . . Directive 2003/71/EC as amended of the European Economic Area.

Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . Regulation S under the Securities Act.

Restitution Agreement . . . . . . . . . . . . . . . . . The agreement for the cumulative assumption of liabilities regardingrestitution claims brought against TLG entered into by BVS and TLG onDecember 20, 2007.

RETT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RETT refers to the real estate transfer tax (Grunderwerbssteuer).

REVC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . REVC refers to the Real Estate Value Creator, a software designed toimprove the depth and quality of TLG’s controlling and asset management.

RevPAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RevPAR refers to revenue per available room.

Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . Rule 144A under the U.S. Securities Act of 1933.

SAB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sächsische Aufbaubank, a government entity owned by the state of Saxony.

Savills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Savills Advisory Services GmbH, Taunusanlage 19, 60325 Frankfurt amMain, Germany.

Securities Act . . . . . . . . . . . . . . . . . . . . . . . . The U.S. Securities Act of 1933, as amended.

Severance Payment Cap . . . . . . . . . . . . . . . In case of an early termination of the management service agreements,severance payments may not exceed two years’ compensation includingShort-Term Incentives and Long-Term Incentives under any circumstances.

Share Bonus I . . . . . . . . . . . . . . . . . . . . . . . . If the Existing Shareholders partially divest shares of the Company inconnection with the offering and the closing of the offering is on or beforeMay 31, 2015, the Existing Shareholders will pay the members of theManagement Board a cash bonus in an amount of €1,050,000 and grant sharesof the Company in an amount of €300,000.

Share Bonus II . . . . . . . . . . . . . . . . . . . . . . . In addition to Share Bonus I, the Existing Shareholders will grant shares ofthe Company in an amount of €850,000 to each member of the ManagementBoard.

Share Bonuses . . . . . . . . . . . . . . . . . . . . . . . . Refers to Share Bonus I and Share Bonus II.

Sqm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Square meter.

Stabilization Period . . . . . . . . . . . . . . . . . . . The period in which stabilization measures may be taken. Such measures maybe taken from the date shares of the Company are listed on the regulatedmarket on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) andmust be terminated no later than 30 calendar days after this date.

Supervisory Board . . . . . . . . . . . . . . . . . . . . Supervisory Board refers to the Company’s supervisory board.

Tangible Fixed Assets . . . . . . . . . . . . . . . . . . Properties accounted for as property, plant and equipment.

THA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Treuhandanstalt, a public company tasked with administrating businessesowned by the former German Democratic Republic (Deutsche DemokratischeRepublik).

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TLG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Company together with its consolidated subsidiaries.

TLG FAB . . . . . . . . . . . . . . . . . . . . . . . . . . . Refers to TLG FAB S.à r.l., Luxemburg.

UBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UBS Limited, London, United Kingdom.

Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . J.P. Morgan, UBS, COMMERZBANK, Kempen & Co and HSBC, together.

Underwriting Agreement . . . . . . . . . . . . . . . The Underwriting Agreement relating to the offering entered into with theCompany, the Existing Shareholders and the Underwriters on October 14,2014.

Valuation Report . . . . . . . . . . . . . . . . . . . . . The report on the fair value of TLG’s real estate portfolios as of June 30,2014 pursuant to IAS 40 in conjunction with IFRS 13 by Savills.

WALT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WALT refers to the weighted average lease term, i.e., the remaining averagecontractual lease term for unexpired leases with a contractually fixedmaturity.

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RECENT DEVELOPMENTS AND OUTLOOK

According to the German Federal Statistical Office GDP in Germany decreased by 0.2% – upon price, seasonal andcalendar adjustment – in the second quarter of 2014 compared with the previous quarter. The German Federal StatisticalOffice states that the decline is likely attributable to the extremely mild weather at the beginning of the year, which led to highgrowth rates in the first quarter of the year. According to the most recent calculations, the German economy had grown 0.7%in the first quarter of 2014. The increase in the entire first half of 2014, when adjusted for price, seasonal and calendar effects,was as much as 0.8% on the second half of 2013 (Source: German Federal Statistical Office, Press Release No. 306 as ofSeptember 1, 2014).

In the six-month period ended June 30, 2014, TLG was able to reduce its average interest rate on its financialliabilities to 2.99% while increasing the average debt maturity to 5.9 years (both as of June 30, 2014). In March 2014, TLGconcluded new interest rate hedges, so that now 94% of its interest rates are either hedged or fixed (based on the valueweighted interest rates on the liabilities due to financial institutions in an amount of €727.9 million as of June 30, 2014) whichhas materially limited TLG’s exposure to an increase in reference interest rates in the future. During the same period, TLGcompleted its headcount reduction plan, which had begun in 2013, with the result that as from January 1, 2015, the number ofemployees will be reduced to 127.

The Company is currently focusing on further optimizing its portfolio through acquisitions and investments in itsCore Portfolio and continued disposals of its remaining non-core properties. Since June 30, 2014, the Company has completedthe following transactions:

• Acquisition of the office building Köpenicker Straße 30-31 (K30) in Berlin closed in September 2014 for apurchase price of €23.0 million (including ancillary acquisition costs).

• Acquisition of approximately 94.9% of the shares of TLG FAB, which owns the “Forum am Brühl” in Leipzigat Richard-Wagner-Straße 1, 2-3. The purchase price was based on an agreed asset value for the “Forum amBrühl” of €49.5 million (including ancillary acquisition costs), which was adjusted with respect to cash anddebt of TLG FAB (including the replacement by TLG of the existing debt financing). The share purchaseagreement was signed on September 5, 2014 and the transaction closed effective October 1, 2014. Thepurchase price was partially debt financed.

• The following table provides additional information on these two properties:

LocationFair

value(1)



(As of the respective signing date)(5)

Köpenicker Str.30-31 . . . . . . . . . . . . . Berlin 22.9 1,344.1 6.5 12,156 ver.di; Deutsche Bahn

Richard-Wagner-Str. 1,2-3 . . . . . . . . . . . . . . . Leipzig 49.7 3,297,1 5.1 26,500 Deutsche Bahn, APO-Bank

(1) In € million.

(2) In € thousand. Annualized in-place rent is calculated based on contracted rents as of the respective signing date, withoutdeduction for any applicable rent free periods, multiplied by twelve. In-place rent is not an IFRS measure.

(3) In years. WALT refers to the weighted average lease term, i.e., the remaining average contractual lease term forunexpired leases with a contractually fixed maturity.

(4) In sqm and excluding parking space and open space.

(5) Signing date for Köpenicker Straße 30-31: July 18, 2014. Signing date for Richard-Wagner-Straße 1, 2-3: September 5,2014.

• Besides the recent investments above which already closed, the Management and Supervisory Board havemade no firm commitments on any significant future investments.

• However, the Company is currently negotiating with the seller of a retail asset in Berlin with a potentialacquisition price (including ancillary acquisition costs) of approximately €35 million and is currentlyconducting due diligence with regard to an office asset in Rostock with an acquisition price (including ancillaryacquisition costs) of approximately €16 million. In addition, the Company is currently reviewing in more detailpotential acquisitions of office and retail properties located in Berlin, Dresden/Leipzig, Rostock or therespective surrounding areas and other parts of eastern Germany in which TLG operates with an aggregate fairvalue of €20 million and €140 million, respectively.

• Through September 15, 2014, TLG sold, or signed agreements to sell, 48 non-core properties with an aggregatefair value of €70.6 million, which has reduced the number of non-core properties from 188 properties with anaggregate fair value of approximately €170.8 million as of June 30, 2014 to 140 properties with an aggregatefair value of approximately €100.3 million as of September 15, 2014. However, the buyer of one property that

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TLG had agreed to sell for approximately €23.9 million may have the right to withdraw from the purchaseagreement or to considerably reduce the purchase price, and in that case, TLG would likely incur a significantnon-cash loss.

As a result of these transactions including those not yet closed and adjusted for new or renewed lease agreements ofproperties in TLG’s Core Portfolio, annualized in-place rent increased by €3.9 million, or 3.4%, from €113.9 million as ofJune 30, 2014 to €117.8 million as of September 15, 2014.

Having achieved a FFO level of €26 million in the first half of the fiscal year 2014, the Company forecasts that FFOfor the full fiscal year 2014 will amount to €50 million (for the assumptions underlying this FFO Forecast see “ProfitForecast”). Taking FFO projected for the second half of 2014 into account and deducting the estimated net costs of theoffering to be borne by the Company in an amount of approximately €4 million, the Company anticipates that its EPRA NAVof €729 million as of June 30, 2014 will increase by approximately €20 million to approximately €749 million as ofDecember 31, 2014.

Between June 30, 2014 and the date of this Prospectus, there have been no material changes to the Company’s orTLG’s financial position, financial performance or cash flows, or in the Company’s or TLG’s trading position.

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SIGNATURE PAGE

Berlin, London, Frankfurt, Amsterdam, Dusseldorf, October 2014

TLG IMMOBILIEN AG

Signed by: Peter Finkbeiner(Member of the Management Board)

Signed by: Niclas Karoff(Member of the Management Board)

J.P. Morgan Securities plc

Signed by: Stefan Weiner

UBS Limited

Signed by: Wolfgang Fuchs Signed by: Andreas Wittmann

COMMERZBANK Aktiengesellschaft Kempen & Co N.V.

Signed by: Stefan WeinerJ.P. Morgan Securities plc on behalf of COMMERZBANK

Aktiengesellschaft

Signed by: Wolfgang FuchsUBS Limited on behalf of Kempen & Co N.V.

HSBC Trinkaus & Burkhardt AG

Signed by: Stefan WeinerJ.P. Morgan Securities plc on behalf of HSBC Trinkaus &

Burkhardt AG

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