Prospectus. for the public offering. and

Transcription

1 This document constitutes merely a non-binding convenience translation of the German Wertpapierprospekt (the Prospectus ) as approved by the German Financial Supervisory Authority (BaFin) on 23 September 2010 relating to the public offering and listing of new shares of HAMBORNER REIT AG (the New Shares ) in Germany. Only the Prospectus is legally binding in connection with the offering and listing of the New Shares. This document does not constitute an offer to sell nor a solicitation to make an offer to buy any securities in any jurisdiction, in particular not in relation to the New Shares. Investors who consider to purchase New Shares must base their investment decision solely on the Prospectus. This document has been prepared only for information purposes. Prospectus for the public offering and for admission to the regulated market with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange and for admission to the regulated markets of the Stock Exchanges in Berlin, Dusseldorf, Hamburg, Munich and Stuttgart of up to 11,350,000 new no-par-value bearer shares (shares without nominal value) from the capital increase against cash contribution from authorized capital with subscription rights of the shareholders of HAMBORNER REIT AG resolved by the Board of Management of the Company on September 23, 2010 with the approval of the Supervisory Board on September 23, 2010 each with a notional interest of EUR 1.00 per share in the share capital and with full dividend rights as of January 1, 2010 of HAMBORNER REIT AG Duisburg International Securities Identification Number (ISIN): DE Wertpapier-Kenn-Nummer (WKN Securities Identification Number): Sole Lead Manager and Sole Bookrunner WestLB AG Co-Lead Managers Berenberg Bank Kempen & Co N.V. September 23, 2010

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3 CONTENTS 1. Summary of the Prospectus Summary of the Business Activities of HAMBORNER Summary of the Offering Selected Financial and Business Information Summary of Risk Factors Risk Factors Market-related Risks Company-related Risks REIT-related Risks Offer-related Risks General Information Responsibility for the contents of the Prospectus Subject matter of the Prospectus Forward-looking statements Availability of the Prospectus Inspection of documents Presentation of currency and financial information Sources of market data and industry information, additional information provided by third parties and numerical data Information on the shares of the Company Important notice regarding the market-value expert opinion The Offering Subject matter of the Offering Timetable for the Offering Subscription Offer Determination of the final issue volume, Subscription Ratio and Subscription and Offer Price; currency of the issue Lock-up agreements Selling restrictions Underwriters, Underwriting Agreement Information on the New Shares offered Interests of persons involved in the Offering Reasons for the Offering and Use of Proceeds Proceeds and costs of the issue Reasons for the offering and use of proceeds Pro Rata Result and Dividend Policy General Rules for Appropriation of Profit and Dividend Payments Special Rules for the Appropriation of Profit and Dividend Payments Capital Endowment and Indebtedness Dilution Selected financial and business information Management s Discussion and Analysis of Financial Condition and Results Of Operations Overview of Business Activities Material Factors affecting results of operations Basis of presentation of financial condition and Results of Operations Results of operations Liquidity and Capital Endowment Asset Situation Explanations on the Annual Financial Statements (German Commercial Code) of HAMBORNER REIT AG for the Financial Year Market Overview and Competition Introduction Overall development in Germany Market Competitive situation i

4 12. Description of the business activity of HAMBORNER Introduction Competitive Strengths Corporate Strategy Business Activities Description of the Property Portfolio Tenant Structure Property and Real Estate Investments Industrial Property Rights Research and Development Employees and Pension Obligations Significant agreements Insurance Policies Significant Legal Disputes Regulatory Environment German REIT Legislation Restrictions in German Tenancy Law Liability for Contamination Regional Planning, Construction Planning and Building Law Heritable Building Rights Architectural Conservation Subsidence Damage Law General Provisions under Civil Law Principal Shareholders Notification of Voting Rights Shareholder Structure Transactions and Legal Relationships with related Parties General Information about the company Foundation and History of the Company Legal Form, Name of the Company, Domicile, Financial Year and Duration of the Company Object of the Company Corporate Structure Auditor Notifications and Paying Agent Specific Provisions of the Articles of Association according to the German REIT Act Description of the Share Capital of the Company Share capital and shares Development of share capital Certification and transferability of the shares Admission to the stock exchange General provisions on the change in the share capital Capital increase with respect to New Shares Authorised capital Convertible bonds and bonds with warrants Stock option plan Authorisation to acquire own shares Own-shares Allocation of profits and payment of dividends General provisions regarding the liquidation of the Company General provisions regarding subscription rights Exclusion of minority shareholders Notice periods for shareholdings Information on the governing bodies of the Company The Management Board Supervisory board Certain information regarding the members of the Management Board and the Supervisory Board ii

5 18.4 General Meeting Corporate governance Taxation in the Federal Republic of Germany REIT Corporation Taxation of the Company Taxation of shareholders Taxation of dividends Taxation of capital gains Special regulations for companies in the financial and insurance sectors Inheritance and gift tax Other taxes Financial Section... F Market Value Report...M Recent Developments and Outlook... A Glossary... G SIGNATURE PAGE... U-1 iii

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7 1. SUMMARY OF THE PROSPECTUS Non-binding convenience translation The following summary is to be understood as an introduction to this prospectus (the Prospectus ). The summary brings together information contained in this prospectus and is supplemented by more detailed information contained elsewhere in the prospectus. Investors should base their investment decision with respect to the shares in HAMBORNER REIT AG described in this prospectus on the considerably more detailed information contained in other parts of this prospectus and on an analysis of the entire prospectus. HAMBORNER REIT AG, Goethestrasse 45, Duisburg, Germany ( HAMBORNER or the Company ) and WestLB AG, Herzogstrasse 15, Dusseldorf (the Sole Lead Manager ) and Joh. Berenberg, Gossler & Co. KG, Neuer Jungfernstieg 20, Hamburg and Kempen & Co N.V., Beethovenstraat 300, 1077 WZ Amsterdam, The Netherlands (together referred to as the Co-Lead Managers and together with the Sole Lead Manager the Underwriters ) hereby assume responsibility in accordance with section 5 (2) sentence 3 no. 4 of the Wertpapierprospektgesetz (WpPG German Securities Prospectus Act) for the contents of this summary. They can be held liable for the contents of the summary, albeit only in cases where the summary is misleading, inaccurate or contradictory when read together with the other parts of the prospectus. Where a claim is brought before a court on the basis of the information contained in this prospectus, the plaintiff investor might, under the relevant national legislation of the individual states of the European Economic Area, have to bear the costs of translating the prospectus before the legal proceedings are initiated. 1.1 Summary of the Business Activities of HAMBORNER Business Activities As a listed stock corporation in the form of a Real Estate Investment Trust (REIT) HAMBORNER REIT AG operates in the real estate sector and has positioned itself as a portfolio holder for high-yielding commercial properties. In the opinion of the Company it holds an attractive diversified property portfolio which consists mainly of large-scale retail properties in frequented areas, commercial buildings in prime locations (so-called high-street-objects) and high quality office buildings in well-established office locations. Despite the historic regional focus in North Rhine- Westphalia the portfolio includes properties across Germany with, according to the Company s view, a high occupancy rate compared to market standards and yielding sustainable rental incomes. HAMBORNER REIT AG stands out due to extensive experience in the German real estate market and the acquisition and managing of commercial properties as well as long-standing capital market expertise. The Company believes to have a balanced tenant structure with comparatively low vacancy rates and partly long-standing business relationships with its tenants. HAMBORNER believes to have a sound financial structure with, according to the Company s own observations, currently comparatively low financing costs; it also enjoys certain benefits from the advantages of the REITstatus, such as exemption from corporation and trade tax. In addition, the Company shows a lean and efficient corporate structure. On the reporting date as at August 31, 2010, HAMBORNER had a property portfolio of 60 portfolio properties in 43 locations in Germany with a fair value of approximately EUR 354,160,000. The properties have a total usable floor space of around 208,070 sqm, of which approximately 198,330 sqm are used commercially and around 9,740 sqm as residential spaces. The economic vacancy rate (taking into account rent guarantees) calculated on the basis of the total rental income of the property portfolio (excluding leaseholds) amounted to 1.18% in total for the period from January 1, 2010 to August 31, The market value appraisal by Jones Lang LaSalle contained in this prospectus reports an economic vacancy rate of 1.38% for the month of August

8 On February 18, 2010, HAMBORNER acquired REIT status retroactively as of January 1, On June 8, 2009, the shares of HAMBORNER REIT AG were listed in the Prime Standard segment of the Frankfurt Stock Exchange and included in the REIT segment of Deutsche Börse AG on February 22, It is the objective of the Company, through investments in selected property assets and through a strategic portfolio management, to realize sustained and yield-orientated growth with property assets that are as balanced as possible, diversified and located in Germany. The Company s objectives are to be met by focusing on large-scale retail properties, commercial buildings in prime locations as well as office buildings in medium sized towns and regions in Germany which have long-term growth prospects. When acquiring new property, the Company s focus is on maintaining a sound financial basis and the ability to continuously pay out an attractive dividend. Competitive strengths HAMBORNER s key strengths include: A major real estate corporation in terms of market capitalization in Germany; Long-term experience in the property sector, in the acquisition and management of real estate property; Strong property portfolio; Sound financial structure; Attractive dividends, stable earnings position and conservative balance sheet preparation by recording adjusted acquisition costs; REIT status (in particular exemption from corporation and trade tax); Transparent and efficient corporate and organisational structure; Long-term capital markets expertise. Strategy The strategic objectives of HAMBORNER are to be achieved by the following specific measures: Focus on large-scale retail properties in busy areas, commercial buildings in prime locations (so-called high street properties) and high quality office buildings; Growth and expansion of its property portfolio; Focus on medium-sized cities and areas in Germany with long-term growth prospects; Use of purchasing opportunities while maintaining a sound financial structure and the continued distribution of an attractive dividend. 1.2 Summary of the Offering Subject matter of the Offering... The Offering relates to up to 11,350,000 new no par value shares of the Company, each with a notional interest of EUR 1.00 in the 2

9 share capital and carrying full dividend rights from January 1, 2010 (the New Shares ). The New Shares will be issued from the capital increase against cash contribution out of authorized capital with subscription rights for shareholders in accordance with Article 3(5) and (6) of the Company s Articles of Association. The Board of Management of the Company resolved on September 23, 2010, when utilizing this authorization, with the approval on the same day of the Supervisory Board, to increase the share capital of the Company from authorized capital by up to EUR 11,350,000 by issuing up to 11,350,000 new no-par value shares against cash contribution (the Utilization Resolution ). Furthermore, the Board of Management of the Company will determine by way of resolution the exact number of New Shares to be issued, the Subscription Ratio and the Offer Price (as defined below) and the Subscription Price (as defined below) for the New Shares; such resolution is expected to be adopted on October 7, 2010, with the approval of the Board of Management of the Company expected on the same day (the Determination Resolution ). The implementation of the capital increase is expected to be registered in the commercial register on October 11, After registration of the capital increase in the Commercial Register, the share capital of the Company will amount to up to EUR 34,120,000. The Offering... Subscription Offer... The New Shares will be offered through a public Subscription Offer (as defined below) in Germany and by way of a Pre-placement (as defined below). A syndicate of banks led by WestLB AG (the Sole Lead Manager ) and Joh. Berenberg, Gossler & Co. KG and Kempen & Co N.V. (collectively the Co-Lead Managers and together with the Sole Lead Manager the Underwriters ) have agreed on the basis of an underwriting agreement (the Underwriting Agreement ), which was entered into on September 23, 2010 between the Company and the Underwriters, to underwrite the New Shares and to offer them to the shareholders by way of indirect subscription rights during the subscription period, in accordance with the Subscription Ratio and at the Subscription Price per New Share (the Subscription Offer ). The Underwriters will subscribe the New Shares. The Subscription Price as well as the amount of the capital increase will be determined based on the results of the bookbuilding procedure for the Pre-placement (as defined below). Subscription Period... The subscription period is expected to run from and including October 12, 2010 to and including October 25, Pre-placement... TheUnderwriters also agreed, on the basis of the Underwriting Agreement, to offer, prior to the commencement of the Subscription Offer, the New Shares in a private placement exclusively to 3

10 institutional investors in Germany and in other countries (other than in the United States of America in accordance with Regulation S of the U.S. Securities Act dated 1933 as amended from time to time) or to other investors on the basis of another exemption from prospectus requirements according to section 3 (2) of the German Securities Prospectus Act, (the Pre-placement ). The Pre-placement will take the form of a bookbuilding procedure. The Offer Price will amount to a maximum of EUR Offer Period... The offer period for the Pre-placement is expected to run from and including October 4, 2010 to and including October 7, 2010 at 2.00 p.m. CET. Assigned Subscription Rights... Theshareholders of HAMBORNER HSH Real Estate AG and its subsidiaries HSH RE 2. Beteiligungs GmbH, HSH RE 3. Beteiligungs GmbH, HSH RE 4. Beteiligungs GmbH, HSH RE 5. Beteiligungs GmbH, HSH RE 6. Beteiligungs GmbH, HSH RE 7. Beteiligungs GmbH (jointly referred to as the Assigning Shareholders ) currently hold 12,003,164 no-par value shares of the Company and have subject to a gratuitous waiver (as described below) entered into an agreement (the Assignment Agreement ) with the Sole Lead Manager concerning the assignment and transfer, without consideration, of all their future subscription rights to New Shares (the Assigned Subscription Rights ). The Assigning Shareholders have undertaken to waive in advance, upon request of the Company and the Sole Lead Manager, as many of their subscription rights as required in order to ensure an even Subscription Ratio. The number of Assigned Subscription Rights is reduced to the extent to which the Assigning Shareholders have waived their subscription rights. The assignment of the Assigned Subscription Rights is, amongst others, subject to the condition precedent that the implementation of the capital increase is registered with the Commercial Register and that the Subscription Price corresponds to the Offer Price. The Sole Lead Manager may neither exercise nor dispose of the Assigned Subscription Rights assigned to it. Claw-Back in the Pre-placement... Itispointedouttoinstitutional investors who wish to purchase New Shares in the course of the Pre-placement that the purchase of New Shares under the Pre-placement will partially be subject to the right to rescind, and to this extent such purchase is also subject to a partially deferred settlement. The portion of the New Shares allotted in the course of the Pre-placement subject to the right to rescind (the Claw-Back Shares ) in relation to the total number of New Shares alloted to investors is determined by the claw-back ratio. The claw-back ratio corresponds to the ratio of New Shares, which cannot be attributed to Assigned Subscription Rights, to the total 4

11 number of New Shares which are allocated to investors in the course of the Pre-Placement. To each of these investors, the same claw-back ratio will apply. If and to the extent to which the shareholders of the Company exercise their statutory subscription rights during the Subscription Period, the right to rescind will be exercised vis-à-vis the investors who have been allotted Claw-Back Shares in the course of the Preplacement, pro rata corresponding to the ratio of the total number of New Shares subscribed under the Subscription Offer to the total number of Claw-Back Shares. Termination of Subscription Offer or Pre-placement... The Subscription Offer and the Pre-placement are subject, among other things, to the condition that the Determination Resolution is taken (presumably on October 7, 2010) and that the registration of the implementation of the capital increase is entered into the Commercial Register (presumably on October 11, 2010). Moreover, the Subscription Offer and the Pre-placement may be terminated under certain further circumstances until delivery of the respective New Shares. Offer Price and Subscription Price... Theoffer price per share (the Offer Price ) for the Pre-placement is expected to be determined on October 7, 2010 based on the outcome of the bookbuilding procedure for the Pre-placement. The Subscription Price for the Pre-Placement is also expected to be determined by resolution of the Company s Board of Management on October 7, 2010, with the approval of the Supervisory Board also expected on the same day, based on the outcome of the bookbuilding procedure for the Pre-placement. The Subscription Price will correspond to the Offer Price. The Subscription Price, the Offer Price and the volume of the capital increase are expected to be published as an ad-hoc announcement through an electronic information system and on the Internet page of the Company ( on October 7, The Subscription Price for the Subscription Offer will be included in the Subscription Offer which is expected to be published on October 11, 2010 in the electronic version of the German Federal Gazette (Bundesanzeiger) and in the Börsenzeitung. Exercise of subscription rights... In order to avoid exclusion from participation in the capital increase the shareholders are requested in the Subscription Offer to exercise their subscription rights to the New Shares during the subscription period through their custodial banks at the Subscription Agent during ordinary business hours. Subscription rights which are not exercised within the relevant time limit will expire. Custodial banks are responsible for booking subscription rights to the shareholders securities accounts. 5

12 It is expected that the subscription rights (ISIN DE000A1EYHN6, WKN A1EYHN) which are attributable to the shares of the Company (ISIN DE , WKN ) will automatically be booked on the evening of October 11, 2010 to the custodial banks through Clearstream Banking AG, Neue Börsenstrasse 1, Frankfurt am Main, Germany. Subscription agent... Subscription Agent is WestLB AG, Herzogstraße 15, Dusseldorf. Subscription rights trading... Subscription rights coordinator... Admission and trading of the New Shares... Certification and delivery of New Shares... In connection with the Offering of the New Shares an exchange trading of the subscription rights will occur. The Subscription Rights (ISIN DE000A1EYHN6, WKN A1EYHN) for the New Shares are expected to be traded in the period from October 12, 2010 up to and including October 21, 2010 on the regulated market of the Frankfurt stock exchange. The subscription agent, is prepared to procure purchases and sales of subscription rights on the stock exchange. No compensation will be awarded for subscription rights which are not exercised. As of October 12, 2010, the existing shares of the Company will be listed ex subscription rights. WestLB AG may take measures in order to provide liquidity for orderly subscription rights trading or to perform other activities customary for a subscription rights coordinator, in particular, the buying and selling of subscription rights for New Shares. In this respect, WestLB AG reserves the right to conduct hedging transactions in shares of the Company or corresponding derivatives. Admission of the New Shares to the regulated market of the Frankfurt Stock Exchange with simultaneous admission to the sub-segment of the regulated market with additional postadmission obligations (Prime Standard) as well as to the regulated markets of the stock exchanges in Berlin, Dusseldorf, Hamburg, Munich and Stuttgart will presumably take place on October 12, 2010 with the application for admission being expected to be filed on September 30, The New Shares will be represented by one global share certificate, which will be deposited with Clearstream Banking AG, Neue Börsenstrassße 1, Frankfurt am Main, Germany. Any right of the shareholders to request certification of their respective individual interests is excluded. The delivery of the New Shares will take place through collective safe custody deposit. New Shares purchased in the Pre-placement which are not Claw- Back Shares are expected to be delivered on October 13,

13 The Claw-Back Shares are, to the extent the Subscription Period is not extended, expected to be delivered on October 28, 2010, if and to the extent the rescission right is not exercised. The New Shares purchased in the Subscription Offer are, to the extent the subscription period is not extended, expected to be delivered on October 28, 2010 as well. Lock-up agreement and selling restrictions... TheCompany has agreed with the Underwriters that, as of the date of the Underwriting Agreement, for the period of six months following delivery of the New Shares acquired in the Subscription Offer and without the prior written consent of the Sole Lead Manager, (A) it will not offer or sell or enter into any obligations in this respect for the sale or disposal of (i) bonds which are convertible into shares of the Company or which can be exchanged for such, (ii) shares of the Company or (iii) other securities convertible into or exchangeable for shares of the Company or with a right to subscribe or receive such shares and (B) it will not enter into any swaps or other agreements under which the economic consequences of ownership of shares of the Company are transferred in whole or in part to another party, regardless of whether the transaction is settled through delivery of securities, in cash or in any other manner. This obligation does not apply to the issuance of the New Shares. The Assigning Shareholders have agreed with the Sole Lead Manager that, as of the date of the Assignment Agreement, for the period of up to 12 months following from the delivery of the New Shares acquired in the Subscription Offer, they will not neither themselves nor, with certain exceptions, through one of their dependent companies without the prior written consent of the Sole Lead Manager, (x) offer or sell or enter into any obligations in this respect for the sale or transfer of shares of the Company (including New Shares) or other securities convertible into or exchangeable for shares of the Company (including New Shares) or with a right to subscribe or receive such shares (including New Shares) or (y) enter into any swaps or other agreements under which the economic consequences of ownership of shares of the Company (including New Shares) are transferred in whole or in part to another party, regardless of whether the transaction is settled through delivery of securities, in cash or in any other manner. The Assigning Shareholders are, however, allowed, following the registration of the implementation of the capital increase with the commercial register, to sell shares without the approval of the Sole Lead Manager outside of the stock exchange, if the purchaser undertakes vis-à-vis the Sole Lead Manager beforehand, in the same manner as the Assigning Shareholders, to comply with the aforementioned limitations with respect to the shares in the Company which are to be acquired until expiry of the 12 month-period. Certain selling restrictions apply to the Offering. 7

14 Use of issue proceeds... ISIN, WKN and stock market symbol of the New Shares and the subscription rights... The net proceeds from the offer of the New Shares are intended to be used to strengthen HAMBORNER s capital base and financial soundness. The Company intends to use the proceeds from the offer to finance the further expansion of HAMBORNER. In particular, it is envisaged to provide financing for the acquisition of additional properties in accordance with HAMBORNER s investment strategy as well as to increase its strategic flexibility with respect to future acquisitions. The following potential uses of the net proceeds, which are consistent with HAMBORNER s strategic objectives, are of particular importance to the Company: (i) growth and expansion of its own property portfolio concentrating on largescale retail properties in frequented locations, business properties in prime locations (so-called high-street-objects) as well as highquality office buildings, (ii) regional diversification with particular emphasis on regions with long-term growth prospects in southern and southwestern Germany, (iii) taking advantage of acquisition opportunities while maintaining a sound financial structure. The Company, moreover, intends to invest the proceeds from the offer in fixed interest rate investments or for general corporate purposes until investments in line with the Company s strategy can be made. International Securities Identification Number (ISIN) For the New Shares: DE For the subscription rights to the New Shares: DE000A1EYHN6 Wertpapier-Kenn-Nummer (WKN Securities Identification Number) For the New Shares: Selected Financial and Business Information For the subscription rights to the New Shares: A1EYHN Stock market symbol of the Company s shares: HAB WKN and ISIN of the New Shares correspond to those of the existing shares. The summarized financial information for the financial years 2009 and 2008 is based on the audited IFRS individual financial statements of HAMBORNER REIT AG for the financial year ending on December 31, 2009, which have been audited by Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, and received an unqualified auditors opinion while the financial information summarised below for the 2007 financial year is based on the audited IFRS consolidated accounts of HAMBORNER REIT AG for the financial year ending on December 31, 2007 (subject to rounding differences), which were audited by BDO Deutsche Warentreuhand Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Essen branch, and received an unqualified auditors opinion (the IFRS accounts ). The financial information for the income statement for the 8

15 financial year 2007 was adjusted to reflect the new structure shown as applied to the financial years 2008 and 2009 which was changed on the basis of the recommendations of the European Public Real Estate Association (EPRA) and which has been widely adopted by property companies. The financial information summarized below for the first six months of 2010 and 2009 are based on the IFRS interim financial statements of HAMBORNER REIT AG for the half-year ending on June 30, 2010, (the IFRS half-year financial statement ). The IFRS half-year financial statement was subjected to a review by Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, in accordance with section 37w of the German Securities Trading Act ( WpHG ) and received a review report. The IFRS accounts and the IFRS half-year financial statement were prepared on the basis of the International Financial Reporting Standards, as these are to be applied in the European Union ( IFRS ) and are reproduced in section 20. Financial Section of this prospectus. in TEUR Selected Information from the Income Statement of HAMBORNER 1st halfyear 2010 (reviewed) 1st halfyear 2009 (reviewed) 2009 (audited) 2008 (audited) 2007 (unaudited) 1 Income from rents and leases... 11,840 11,076 22,451 19,725 13,318 Income from passed-on incidental costs to tenants... 1,347 1,145 2,419 1,873 1,229 Real estate operating expenses... -1,819-1,675-3,666-3,026-1,860 Property and building maintenance ,264-1,109-1,594 Net rental income... 10,916 10,276 19,940 17,463 11,093 Administrative expenses , Personnel costs... -1,314-1,369-2,740-2,973-2,520 Amortisations of intangible assets, tangible fixed assets and investment property... -3,607-3,195-7,268-10,257-3,177 Other operating income ,128 12,475 1,896 Other operating expenses ,587-1,410-5,377-4,567-9,503-3,384-6,071 Operating result... 5,539 5,709 10,437 14,079 5,022 Result from the sale of investment property ,689 5,621 Result from investments Earnings before interest and taxes (EBIT)... 5,603 5,973 10,884 21,411 11,092 Interest income , Interest expenses... -2,853-2,669-5,508-4,644-1,234 Income from securities, including capital gains Financial result... -2,776-2,315-5,019-2, Earnings before taxes (EBT)... 2,827 3,658 5,865 18,484 11,056 Taxes on income and profit... -2, ,517 6,645 Result from continuing operations... 5,073 16,967 17,701 Result from discontinued operations ,525 Profit for the financial year/period ,316 5,073 17,341 52,226 Retained profits from previous year... 23,844 27,196 35,165 53,922 1,554 2 Dividends... -7,970-7, Transfer to retained earnings , Withdrawal from other retained earnings Net retained profits... 23,890 30,512 32,268 35,165 53,922 Earnings per share (in EUR) thereof from continuing operations thereof from discontinued operations Adjusted to reflect the new structure shown as applied for the financial years 2008 and 2009 which was changed on the basis of the recommendations of the European Real Estate Association (EPRA) and which has been widely adopted by property companies. This relates to (i) the expenses and income from the sale of properties which are now no longer recorded in the income statement under other income but are recorded separately; (ii) administrative expenses which in previous years were recorded in other expenses, (iii) income from rental guarantees, which in previous financial years were recorded in other income, as well as (iv) internally produced and capitalised assets which are no longer separately recorded but instead recorded as other operating income. 2 Retained profits from previous year, the dividends and the transfer into other retained earnings have been included in the item retained profits from previous year, and, shown separately, amount to TEUR 9,497 (retained profits), TEUR -6,138 (dividends) and TEUR -1,112 (transfer). 9

16 Assets in TEUR Selected Information from the Balance Sheet of HAMBORNER Non-binding convenience translation June 30, 2010 (reviewed) Dec 31, 2009 (audited) Dec 31, 2008 (audited) Dec 31, 2007 (audited) Non-current Assets Intangible assets Tangible fixed assets Investment property , , , ,702 Financial assets Other assets Deferred tax assets... 2,170 1, , , , ,051 Current Assets Trade receivables and other assets... 1, Income tax receivables Bank deposits and cash balances... 6,940 37,942 54,012 6,442 8,059 38,473 55,368 7,863 Non-current assets held for sale... 1, ,813 Assets from discontinued operations... 59,470 9,594 38,473 55,498 87,146 Total assets , , , ,197 Equity and Liabilities in TEUR June 30, 2010 (reviewed) Dec 31, 2009 (audited) Dec 31, 2008 (audited) Dec 31, 2007 (audited) Equity Subscribed capital... 22,770 22,770 22,770 22,770 Retained earnings Legal reserve... 2,277 2,277 2,277 2,277 Other retained earnings , , ,575 76,448 Revaluation reserve ,136-6,594-4, , , ,115 78,815 Net retained profits... 23,890 32,269 35,165 53, , , , ,507 Non-current liabilities and provisions Financial liabilities and derivative financial instruments , ,052 87,350 48,034 Deferred tax liabilities... 14,708 15,188 14,219 Trade accounts payable and other liabilities... 3,961 4,075 3,784 3,860 Provisions for pensions... 5,545 5,603 5,780 5,923 Other provisions , , ,780 72,591 Current liabilities and provisions Financial liabilities and derivative financial instruments... 4,577 4,620 3,754 36,397 Income tax liabilities Trade accounts payable and other liabilities... 3,239 1,877 1,823 18,137 Other provisions... 1,328 2,253 2,279 2,318 9,168 9,152 8,516 56,954 Liabilities from discontinued operations... 5,145 Total equity, liabilities and provisions , , , ,197 10

17 in TEUR Selected Information from the Cash Flow Statement of HAMBORNER Jan 1 to June 30, 2010 (reviewed) Jan 1 to June 30, 2009 (reviewed) Non-binding convenience translation Jan 1, to Dec 31, 2009 (audited) Jan 1 to Dec 31, 2008 (audited) Jan 1 to Dec 31, 2007 (audited) Cash flow from operating activities Earnings before taxes (EBT)... 2,827 3,658 5,865 18, ,433 1 Depreciation, Amortization and Impairments/write-ups (-)... 3,607 3,195 6,002 9,312 3,177 Financial result... 2, ,302 5,006 2,081-1,258 3 Change in provisions , Gain (-) /loss (+) (offset) from the disposal of tangible fixed assets, investment properties and non-current assets held for sale ,741-5,621 Gain (-) /loss (+) (offset) from the disposal of financial assets ,477-32,826 Other non-cash expenses (+) / income (-) ,711-2,004 Change in receivables and other assets ,050 Change in liabilities ,040-1,426 18,855 Dividends received ,313 Interest received , Tax payments ,936-1, ,477-2,086-8,969 6,174 14,129 10,283 23,528 Cash flows from investment activities Investments in intangible assets, tangible fixed assets and investment properties ,128-29,883-39,349-36,309-98,008 Proceeds from disposals of tangible fixed assets, investment properties and non-current assets held for sale ,417 17,764 Investments in financial assets ,947 Proceeds from disposals of financial assets ,601 95,087 Net cash outflow of funds due to the disposition of the special share fund Südinvest ,056-28,938-37,686 41,696-73,104 Cash flow from financing activities Dividend payments... -8,425-7,970-7,970-7,970-6,831 Proceeds from borrowings... 22,640 18,400 23,800 37,713 66,308 Repayment of borrowings... -2,004-1,840-3,257-37, Interest outflows... -3,188-2,802-5,086-3, ,023 5,788 7,487-10,998 58,428 Change in cash and cash equivalents ,002-16,976-16,070 40,981 8,852 Cash and cash equivalents as of January ,942 54,012 54,012 13,031 4,179 Bank deposits and cash balances... 37,942 54,012 54,012 13,031 4,175 Near-liquid assets... 4 Cash and cash equivalents as of the end of the period... 6,940 37,036 37,942 54,012 13,031 Bank deposits and cash balances... 6,940 37,036 37,942 54,012 13,031 1 Earnings before taxes (EBT) in the cash flow statement corresponds to the sum total of the earnings before taxes (EBT) and the result from discontinued operations both as shown in the income statement adjusted for tax effects of TEUR 61 in the financial year 2008 and TEUR -148 in the financial year For the first half-year 2010 this figure does not contain income from investments. 3 In the financial year 2007 presented as financial income. 11

18 Selected Key Data Jan 1 to June 30, 2010 (unaudited) Jan 1 to June 30, 2009 (unaudited) Jan 1 to Dec (unaudited) Jan 1 to Dec 31, 2008 (unaudited) Jan 1 to Dec 31, 2007 (unaudited) EBITDA in TEUR ,210 9,168 16,886 30,975 46,809 EBDA in TEUR ,653 6,511 11,075 26,673 53,887 REIT equity ratio in % Balance sheet equity capital in % Loan to Value (LTV) in % Profit per share in EUR Funds from Operations (FFO) 5 in TEUR... 6,371 5,325 9,620 8,536 6,037 Funds from Operations (FFO) 5 per share in EUR Dividend per share in EUR Quoted market price per share in EUR (XETRA)... Highest share price Lowest share price Year/period-end share price Dividend yield in relation to the year/period-end share price in % Price/FFO 5 ratio Market capitalisation at the year/period-end , , , , ,564 Net asset value 6 per share in EUR Fair value of the property portfolio in TEUR , , , ,020 Net asset value 6 in TEUR , , , ,618 Number of employees at the relevant calculation date including the Managing Board Earnings before interests, taxes, depreciation and amortization (EBITDA) means the profit for the financial year/period before interest (interest income less interest expenses) before taxes on income and profit, before amortization/write-ups of intangible assets, tangible fixed assets and investment property. 2 Earnings before depreciation and amortization (EBDA) means the profit for the fiscal year/period before amortization/write-ups of intangible assets, tangible fixed assets and investment property. 3 REIT equity ratio corresponds to the equity-to-assets ratio pursuant to Sec. 15 in conjunction with Sec. 12 (1) sentence 2 REIT Act meaning the ratio of the equity (on a fair value basis) to the fair value of immovable assets. The equity (on a fair value basis) is the sum of the balance-sheet equity and the hidden reserves. The immovable assets of the Company consist of the property portfolio and undeveloped land which is predominantly agricultural and forestry land. The fair value of the Company s property portfolio was determined on the basis of the market value appraisals. Thereby, the capital expenditures for properties, which were not yet transferred on the reporting date, were increasingly considered (as at June 30, 2010, TEUR 1,507; as at December 31, 2009, TEUR 517; as at December 31, 2008, TEUR 1,229 and as at December 31, 2007, TEUR 329). The undeveloped land was recognized with the acquisition costs of such a land at approximately EUR 2.6 million, because another value could not be determined in a reliable manner. 4 Loan to Value (LTV) represents the ratio of the Company s financial liabilities to the market value of the Company s property portfolio. The financial liabilities are determined on the outstanding amount of loans due to credit institutions plus interest not due but allocated to the relevant period as at the respective reporting date and which amounted to TEUR 126,451 as at June 30, 2010; TEUR 105,827 as at December 31, 2009; 85,297 as at December 31, 2008 and TEUR 84,227 as at December 31, These financial liabilities are shown in the balance sheet in the item financial liabilities and derivative financial instruments in the aggregate together with derivative financial instruments. By calculating the market value of the immovable assets, only the property portfolio of the Company was considered. The value of the Company s headquarter building in Goethestrasse 45 in Duisburg as well as the undeveloped land of the Company are not considered. 5 Funds from Operations (FFO) is a key financial figure of the operating business of the Company. The FFO is used for the value orientated financial management of the Company to represent the generated financial resources that are available for investments, repayment of debt and dividend payments to the shareholders. The Company calculates FFO according to the following formula: in TEUR Jan 1 to June 30, 2010 (unaudited) Jan 1 to June 30, 2009 (unaudited) Jan 1, to Dec 31, 2009 (unaudited) Jan 1 to Dec 31, 2008 (unaudited) Jan 1 to Dec 31, 2007 (unaudited) Net rental income... 10,916 10,276 19,940 17,463 11,093 - Administrative expenses , Personnel costs... -1,314-1,369-2,740-2,973-2,520 +Other operating income adjusted for write-up in respect of previous amortisations and results from the sale of investments Other operating expenses ,587-1,410 + Result from investments and income from securities including capital gains ,103 +Interest income , Interest expenses... -2,853-2,670-5,508-4,644-1,234 FFO before tax... 6,371 5,925 10,756 9,883 7,096 -Taxes on adjusted profit ,136-1,347-1,259 FFO after tax... 6,371 5,325 9,620 8,536 5,837 FFO per share in EUR

19 Taxes on adjusted profit means the hypothetical tax burden which would have existed if the earnings before tax (EBT) corresponded to the FFO. Therefore, the tax effects of the income from the fund were eliminated in the financial year 2007, the tax effects from disposals of investments were eliminated in the financial year 2008 and various tax effects were eliminated in the financial year 2009 (among other things sales of investments, sales of properties, release of reserves) to calculate such a hypothetical tax burden. Due to the REIT status, the Company is exempted from paying the corporate tax so that, for the purposes of calculating the FFO, taxes on adjusted profits no longer apply. 6 Net asset value (NAV) or net tangible value reflects the economic equity of the Company. It is determined by the fair market value of the Company s assets which is essentially the fair market value of the properties minus debt. The Company calculates the NAV according to the following formula: in TEUR Jan 1 to June 30, 2010 (unaudited) Jan 1 to Dec 31, 2009 (unaudited) Jan 1 to Dec 31, 2008 (unaudited) Jan 1 to Dec 31, 2007 (unaudited) balance sheet non-current assets without deferred taxes and derivative financial instruments , , , ,895 + Current assets... 8,058 38,473 55,368 7,863 + non-current assets held for sale... 1, ,813 + assets from discontinued operations... 59,470 - non-current liabilities and provisions without deferred taxes and derivative financial instruments , ,597-91,785-58,167 - current liabilities and provisions without deferred taxes and derivative financial instruments... -9,164-9, ,516-56,955 - liabilities from discontinued operations Balance sheet NAV , , , ,724 + Hidden reserves of non-current assets... 63,109 60,388 61,579 83,894 NAV , , , ,618 NAV per share in EUR The current assets include all current assets, except for the non-current assets held for sale and assets from discontinued operations. The hidden reserves represent the difference between the book value and the market value (fair value) of the investment properties and the Company s non-current assets which are held for sale, the latter only to the extent that they consist of immovable assets, on the respective reporting dates. The investment properties of the Company consist of the property portfolio of the Company and undeveloped land. The market value (fair value) of the property portfolio was determined on the basis of market value appraisals. The capital expenditures for properties, which were not transferred on the reporting date, were increasingly considered (TEUR 1,507 as at June 30, 2010; TEUR 517 as at December 31, 2009; TEUR 1,229 as at December 31, 2008; and TEUR 329 as at December 31, 2007). The value of the undeveloped land was determined for the purpose of the NAV-calculation on the basis of the Company s own assumptions, since there is no reliable way to determine the fair value of the undeveloped land. In the case of non-current assets held for sale, only the TEUR 1,535 reported as at June 30, 2010 was considered; the amount of TEUR 130 reported as at December 31, 2008 does not relate to immovable properties. As at all reporting dates (except for December 31, 2007), the calculation of hidden reserves relates exclusively to differences in respect of immovable assets. Other tangible assets and other assets did not include any hidden reserves. Only as at December 31, 2007, the hidden reserves in an amount of TEUR 14,734 were included in the NAV-calculation, representing the difference between the book value and the market value (fair value) of the investment in the Wohnbau Dinslaken GmbH. 7 Adjusted for the capital increase made on August 2, 2007 of EUR 22,770,000.00, divided into 22,700,000 shares with a calculated nominal value of EUR 1.00 each. 8 The presented fair value of the property portfolio refers only to the built-on property portfolio of the Company. The value of the Company s headquarter building in Goethestrasse 45 in Duisburg as well as the undeveloped land belonging to the Company are not included. The calculation of the fair market value of the property portfolio as at June 30, 2009 and 2010, respectively, is based on the values determined for the annual financial statements from the respective preceding financial year, unless there are indications of any significant changes in the market value of the properties since then. As at June 30, 2010 and 2009, respectively, there was no evidence of such changes in value of such properties that had already been held by the Company at such preceding reporting date so that the value of such properties corresponds to the values recognized for the annual financial statements for the respective preceding financial year. As at June 30, 2010 and 2009, respectively, the value of newly acquired properties was determined using an expert opinion on the indicative market value (if available) or the value was determined on the basis of the acquisition/production costs. In case of asset disposals, the value of the property portfolio is reduced by the corresponding fair market value. However, there were no investment disposals during the first half year of As at December 31, 2009, this position includes short-term derivative financial instruments in the amount of TEUR Excluding deferred tax liabilities. Note: The above listed financial key figures EBITDA, EBDA, FFO, LTV and NAV are not defined by IFRS unambiguously. Potential investors should take into consideration that these financial key figures are not applied in a consistent manner or standardized, that their calculation can vary and that these financial key figures by themselves are not a basis to compare different companies. EBITDA and EBDA are furthermore not recognized as financial key figures by IFRS and do not substitute the financial key figures of the income statement and the cash flow statement that were recognized in accordance with IFRS. 13

20 1.4 Summary of Risk Factors Prior to their investment decision, investors should carefully read the following risk factors along with the other information contained in this prospectus and consider them when making their investment decision. The materialization of one or more of these risks can considerably impair the business activities of HAMBORNER REIT AG and have significant negative effects on the net assets, financial position and results of operations of HAMBORNER. The quoted market price of the shares of the Company may fall considerably due to the realization of any of these risks, and investors might lose some or even all of their invested capital. The risks described below are not the only risks to which the Company is exposed. Further risks and uncertainties of which the Company is not currently aware might also impair the business operations of the Company and have considerable negative effects on the Company s business activities and its net assets, financial position and results of operations. The order in which the following risks are listed does not provide any indication of the probability of their occurrence or the extent or significance of the individual risk. The risks referred to may occur individually or cumulatively Market-related Risks Risks from the development of the general business and economic environment and the commercial property market: The German commercial property market is influenced by the overall economic environment, as well as the development of property values in Germany. These developments depend on numerous interdependent factors and are therefore subject to fluctuations on which HAMBORNER has no influence and which can have a considerable negative effect on the business activities of HAMBORNER. Competition risks: In the field of commercial properties HAMBORNER is facing competition for tenants and is competing with other investors for attractive properties. General interest risk: A rise in interest rates may make the financing of the purchase prices for properties, as well as modernization and maintenance measures for properties more expensive. Furthermore, increasing interest rate levels for loans might increase the financing costs of third parties and therefore have a negative effect on the willingness of potential purchasers to buy and the ability of potential tenants to pay an appropriate rent Company-related Risks Dependence of the business activities of HAMBORNER on the acquisition and marketing of suitable commercial properties at reasonable prices: The business activities of HAMBORNER depend on the acquisition and marketing of suitable commercial properties at appropriate prices and conditions. With respect to the adjustment of the property portfolio, HAMBORNER is also exposed to the uncertainty of determining whether sales can be effected at the right time and on suitable conditions. Risk of negative developments of investments in properties: The assumptions made upon the acquisition of property assets may prove to be partly or completely unsuitable or unforeseen problems or unidentified risks may occur in conjunction with the acquired properties which might not have been contractually secured against. Letting and management risk: The economic success of the property investments of HAMBORNER significantly depends on corresponding income being generated from lettings. Rent losses and falling rents or even vacant buildings due to the fact that certain 14