Deutsche Wohnen AG announces public exchange offer for all shares of GSW Immobilien AG

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1 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION C o r p o r a t e N e w s announces public exchange offer for all shares of GSW Immobilien AG Transaction to create a leading German residential property company with approximately 150,000 residential units and a portfolio value of approximately EUR 8.5 billion and GSW Immobilien AG complement each other ideally: Same business philosophy with focus on quality, efficiency and adequate investment strategy Combined company with housing stock in dynamic growth regions across Germany and emphasis on the highly attractive Berlin market 51 Deutsche Wohnen shares offered in exchange for 20 GSW Immobilien shares; ownership structure assuming full acceptance of the exchange offer: 57 percent Deutsche Wohnen shareholders, 43 percent GSW Immobilien shareholders Based on the 3-months volume weighted average share price of Deutsche Wohnen AG before announcement of the transaction the offer values GSW Immobilien AG s equity at EUR 1,750 million, implying a premium of 15.4 percent on the 3-months volume weighted average share price of GSW Immobilien AG before announcement of the transaction Expected synergies of about approx. EUR 25 million p.a. after complete integration Sustainable FFO accretion per Deutsche Wohnen share expected in the mid-singledigit percent range Frankfurt am Main/Berlin, 20 August After resolutions of both its Management Board and Supervisory Board, announced today that it intends to

2 make a public exchange offer for all outstanding shares of GSW Immobilien AG. The combination would create a leading German residential property company with a portfolio of approximately 150,000 residential units and a total portfolio value of approximately EUR 8.5 billion (as of 30 June 2013). Ideal fit due to congruent business philosophy and focus on dynamic growth regions GSW Immobilien AG and share a common focus on value conservation regarding their housing stock. Both companies have been and are investing adequately thus ensuring a high standard for their tenants. The efforts will be further intensified in the upcoming years. With more than two thirds of the combined portfolio located in Berlin, the combined company would have a strong focus on one of the most dynamic growth regions in Germany. As a result of the combination with GSW Immobilien AG, will achieve the critical size allowing the company to further establish itself in the European capital market and increase its already high attractiveness for the capital markets. Access to equity and debt capital will improve accordingly and strengthen the company further in a very competitive environment. Efficiency gains expected from the combination shall be reinvested on a long-term basis into the portfolio. Michael Zahn, Chief Executive Officer of, said: "With the combination of Deutsche Wohnen and GSW, the two companies combine their strengths and create a leading company by European standards. All of our stakeholders will benefit from this merger: We will create significant added value based on the large potential of the Berlin market and the expected synergy effects. At the same time we secure investments into our housing stock and reinforce our quality leadership in this sector." Expected synergies of approximately EUR 25 million p.a. Once completely integrated, estimates that the combination will generate synergies of approximately EUR 25 million p.a. The complementary portfolio, particularly in Berlin, will result in increased economies of scale in the management and administration of properties as well as savings on the procurement side (i.e. facility management, insurance, energy). The integration is expected to be completed within 24

3 months after consummation of the transaction with integration costs amounting to approximately EUR 25 million. Attractive offer for shareholders of both companies The exchange offer foresees that GSW Immobilien AG shareholders will receive 51 shares in exchange for 20 GSW Immobilien AG shares. This corresponds to an exchange ratio of 51:20. The new shares of will be entitled to profit-sharing from 1 January Based on the volume weighted average share price of during the three months prior to the announcement of the exchange offer of EUR 13.58, the exchange ratio values GSW Immobilien AG s share capital at EUR 1,750 million. This represents a premium of 15.4 percent on the volume-weighted average share price of GSW Immobilien AG of EUR during the three months prior to the announcement of the exchange offer and a premium of 14.7 percent on the closing share prices of and GSW Immobilien AG (Frankfurt XETRA-trading) on the day before the announcement of EUR and EUR 31.47, respectively. Lars Wittan, Chief Financial Officer of, commented on the rationale of the transaction: "After full integration, we expect sustainable FFO accretion per share of in the mid-single-digit percent range implying a sustainable increase in profits. The combination with GSW Immobilien AG further strengthens the already high attractiveness of the company for the capital markets. After the consummation of the transaction, the previous shareholders of Deutsche Wohnen AG will have a share of 57 percent and the previous shareholders of GSW Immobilien AG a share of 43 percent, in the combined company, provided that all GSW Immobilien AG shares will be exchanged. The exchange offer is subject to customary terms and conditions for a transaction of this type and size. The conditions which are set forth in the bidding documents include, amongst others, the execution of a capital increase against contribution in kind by

4 to create new shares for the exchange and a minimum acceptance threshold of 75 percent. Accordingly, will today invite its shareholders to an extraordinary general meeting on 30 September 2013 to pass a resolution approving the capital increase. With the dissemination of the invitation to the extraordinary general meeting of, the financial parameters of the transaction are set and can no longer be modified. The transaction is expected to close in the first half of The execution of this offer is subject to approval of the offer document by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) and, following such approval, will be made available at Deutsche Bank and UBS act as financial advisors of. Its legal advisors are Sullivan & Cromwell. About is one of the largest publicly listed residential property companies in Germany whose operational focus lies particularly on managing and developing of its housing stock in the Core + -regions Berlin, the Rhine-Main region and the Rhineland. The portfolio comprises around 90,600 units (as of 30 June 2013), of which 89,500 are residential units and 1,100 are commercial properties. The company is listed in the Deutsche Börse s MDAX and is also included in the leading indices EPRA/NAREIT and GPR 250. Disclaimer This announcement is neither an offer to exchange nor a solicitation of an offer to exchange GSW Immobilien AG shares. Moreover, the announcement is neither an offer to purchase nor a solicitation to purchase shares. The final terms and further provisions regarding the public takeover offer will be disclosed in the offer document after the publication has been approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). Furthermore, reserves the right to deviate in the final terms of the public takeover offer from the basic information described herein. Investors and holders of GSW Immobilien AG shares are strongly recommended to read the offer document and all documents in connection with the public takeover offer as soon as they are published, since they will contain important information. Subject to the exceptions described in the offer document as well as any exemptions that may be granted by the relevant regulators, a public takeover offer will not be made directly or indirectly, in or into the USA or any other jurisdiction where to do so would constitute a violation of the laws of such jurisdiction. The takeover offer will be carried out under exclusion of the use of the mails or any other means or instruments of interstate or foreign commerce (inter alia, transmission by

5 facsimile, telephone or internet) in the USA and under exclusion of any facility of a national securities exchange of the USA. Accordingly, the sending or any other distribution of this announcement or any other accompanying document by mail, their forwarding or transmission in or into the USA is not permitted. The shares have not been nor will they be registered under the U.S. Securities Act of 1933 as amended or with any securities regulatory authority of a state or any other jurisdiction in the USA. Therefore, subject to certain exceptions, shares must not be offered or sold within the USA or any other jurisdiction where to do so would constitute a violation of the laws of such jurisdiction. There will be no registration of the Deutsche Wohnen AG shares mentioned herein pursuant to the relevant laws in the USA. There will be no public offering in the USA. Subject to certain exceptions, shares must not be sold, or offered, to persons in the USA. To the extent permissible under applicable law or regulation, and in accordance with normal German market practice, or its brokers may purchase, or conclude agreements to purchase, GSW Immobilien AG shares, directly or indirectly, out of the public takeover offer, before, during or after the period in which the offer remains open for acceptance. This applies to other securities which are directly convertible into, exchangeable for, or exercisable for GSW Immobilien AG shares. These purchases may be completed via the stock exchange at market prices or outside the stock exchange at negotiated conditions. Any information on such purchases will be disclosed as required by law or regulation in Germany or any other relevant jurisdiction. If any announcements in this document contain forward-looking statements, such statements do not represent facts and are characterized by the words "will", "expect", "believe", "estimate", "intend", "aim", "assume" or similar expressions. Such statements express the intentions, opinions or current expectations and assumptions of and the persons acting together with. Such forward-looking statements are based on current plans, estimates and forecasts which and the persons acting together with have made to the best of their knowledge, but which do not claim to be correct in the future. Forward-looking statements are subject to risks and uncertainties that are difficult to predict and usually cannot be influenced by or the persons acting together with. It should be kept in mind that the actual events or consequences may differ materially from those contained in or expressed by such forward-looking statements.