HAMBORNER AKTIENGESELLSCHAFT ANNUAL REPORT 2008

HAMBORNER AKTIENGESELLSCHAFT ANNUAL REPORT 2008

Osnabrück, Sutthauser Straße 285 / 287

HAMBORNER at a glance: Key figures for the Group in accordance with IFRS 2006 2007 2008 From the profit and loss account Income from rent and leases 12,597 13,239 19,437 Operating results 9,074 10,642 20,768 Result from participations 413 449 643 Financial result -65-35 -2,927 EBITDA 16,398 48,325 30,975 EBIT 13,836 45,148 21,643 Consolidated surplus 11,277 52,226 17,341 From the balance sheet Balance sheet total 178,932 290,197 281,346 Non-current assets 162,546 203,051 225,848 Equity capital 136,226 155,507 160,050 Equity ratio in % 76.1 53.6 56.9 From the cash flow statement Cash flow from operating activity 8,152 23,528 10,283 Cash flow from investment activity -2,278-73,103 41,696 Cash flow from financing activity -7,281 58,428-10,998 Change in liquidity -1,407 8,852 40,981 The HAMBORNER share * Earnings per share in E 0.50 2.29 0.76 Funds from Operations (FFO) per share in E - - 0.37 Dividend per share in E 0.30 0.35 0.35 Stock market prices per no-par-value share in E (XETRA) Highest share price 11.53 12.49 9.30 Lowest share price 9.10 8.45 5.10 Year-end share price 10.67 8.94 5.75 Dividend yield in relation to the year-end share price in % 2.81 3.91 6.09 Price/earnings ratio ** 21.34 3.90 7.57 Market capitalisation at the year-end 242,956 203,564 130,928 Net asset value per share in E - 11.36 10.57 Other data Market value of the property portfolio 185,696 281,020 273,100 Number of employees at the year-end including the Managing Board 22 25 26 * Details per share for 2006 converted for the purpose of comparability with 2007 and 2008 (1:3 after share split). ** The price in relation to the result from activities to be continued produces a p/e ratio of 11.51 for 2007.

To our shareholders 6 Letter to shareholders 8 Managing Board and Supervisory Board 10 Report of the Supervisory Board 14 Corporate Governance at HAMBORNER AG 20 The HAMBORNER share Management report 28 General economic conditions 32 Economic report 50 Report on opportunities and risks 54 Final declaration on the report regarding relationships with affiliated companies (Art. 312 of the German Stock Company Act [Aktiengesetz]) 54 Report on additional information under company law (Art. 289 Para. 4 of the German Commercial Code [HGB] in conjunction with Art. 315 Para. 4 of the German Commercial Code) 57 Remuneration of the Managing Board and Supervisory Board 60 Supplementary report 61 Forecast report Consolidated financial statement 67 Consolidated profit and loss account 68 Consolidated balance sheet 70 Consolidated cash flow statement 71 Consolidated statement of changes in equity 72 Consolidated fixed asset movement schedule 74 Notes to the consolidated financial statements 105 Assurance of the legal representatives 106 Declaration of the Managing Board 107 Audit certificate of the statutory auditor Supplementary information 110 Important terms and abbreviations 113 General information 115 Financial calendar

To our shareholders Bremen, Hermann-Köhl-Straße 3

Letter to shareholders 6 Managing Board and Supervisory Board 8 Report of the Supervisory Board 10 Corporate governance at HAMBORNER AG 14 The HAMBORNER share 20

6 To our shareholders: Letter to shareholders

To our shareholders: Letter to shareholders 7 The world economy is in a deep recession, the most serious for decades. Negative news dominates the financial press and pessimism is everywhere. Whereas it appeared at the outset that only the financial markets were affected, the crisis has meanwhile encroached into virtually every industry. What consequences does this have for HAMBORNER AG? Firstly, economic conditions and the letting market have not become easier for our company either, of course. Secondly, however, opportunities also present themselves opportunities to play to our strengths and to differentiate ourselves positively from the competition. As a long-term owner of a commercial property portfolio, HAMBORNER has a clearly focused business model. With the discontinuation of the special securities fund, the disposal of the purely residential properties and the sale of our shareholding in Wohnbau Dinslaken, we have made our structures even leaner, and can focus entirely on our core businesses. In addition, HAMBORNER is showing significant financial strength. With an equity ratio of 56.9% and high liquid reserves, the terms credit squeeze or refinancing problems are foreign words for our company. The balanced composition of our asset portfolio and the sound tenant structure ensure that rental income, which has risen by 46.8% year-on-year to 19.4 million, remains highly stable. Our investments over the past two years in particular have contributed to this. As unpleasant as the overall economic situation currently appears, HAMBORNER has recorded another successful year: in the reporting year, we achieved an operating result in the Group amounting to 20.8 million and a profit for the financial year of 17.3 million. The consolidated surplus results in earnings per share of 0.76. For the first time in our annual report, we have mentioned the FFO (Funds from Operations), a key figure that forms an element of our control system. It is the benchmark for the liquid funds generated from ongoing operating activity. The FFO for 2008 amounts to 0.37 per share. In light of this positive business development, we will be proposing a dividend of 0.35 per share for 2008 to the general shareholders meeting. In doing so we have taken a balanced approach both to the justified demand for an appropriate distribution of profit and to our obligation to strengthen HAMBORNER s internal financing ability. The year-end share price of 5.75 has given rise to an attractive dividend yield of 6.1%. The persistence of difficult economic conditions notwithstanding, we are optimistic that the course of business will be positive in 2009. Our financial strength, the current attractive interest rates and the temporary further easing of property prices all offer HAMBORNER opportunities which we will be exploiting to the full. We thank all of our shareholders for their trust in HAMBORNER AG, and look forward to your continued support of the company in its future development. Kind regards Dr. Rüdiger Mrotzek Hans Richard Schmitz

8 To our shareholders: New property acquisitions in 2007 Erfurt, Neuwerkstraße 2

To our shareholders: Managing Board and Supervisory Board 9 Managing Board and Supervisory Board Managing Board Dr. Rüdiger Mrotzek, Hilden born 1957, member of the Managing Board since 8 March 2007, appointed until 7 March 2010, responsible for the areas of finance/accounting, taxes, properties, EDP, risk management/controlling Hans Richard Schmitz, Bonn born 1956, member of the Managing Board since 1 December 2008, appointed until 30 November 2011, responsible for the areas of legal matters, personnel, corporate governance, investor relations/public relations, insurance Roland J. Stauber, Essen Spokesperson, born 1962, member of the Managing Board from 15 May 2007 until 15 August 2008, responsible for the areas of properties, legal matters, personnel, corporate governance, public relations, insurance Supervisory Board Dr. jur. Josef Pauli, Essen - Honorary Chairman - Volker Lütgen, Wentorf Managing Director of HSH Capitalpartners GmbH Dr. rer. pol. Eckart John von Freyend, Bad Honnef - Chairman - Shareholder of Gebrüder John von Freyend Vermögens- und Beteiligungsgesellschaft m.b.h. Dr. rer. pol. Marc Weinstock, Kelkheim-Fischbach - Deputy Chairman - Chairman of the Managing Board of HSH Real Estate AG Robert Schmidt, Datteln Managing Director of Evonik Immobilien GmbH Edith Dützer, Moers *) Clerical employee Hans-Bernd Prior, Dinslaken *) Technician *) employee representatives

10 To our shareholders: Report of the Supervisory Board Report of the Supervisory Board Dear Shareholders, 2008 was another successful business year for HAMBORNER AG. The company is well prepared for the continuing difficult market conditions. Armed with a healthy balance sheet and high liquidity, in our opinion HAMBORNER AG will also be able to overcome the huge challenges of 2009. Dr. rer. pol. Eckart John von Freyend, Bonn (Chairman of the Supervisory Board) Monitoring the conduct of business and cooperation with the Managing Board We have thoroughly and regularly monitored the Managing Board s management of the business in the reporting year 2008, informing ourselves in depth about all significant business transactions and upcoming decisions. For this, in accordance with Art. 90 Paras 1 and 2 of the German Stock Company Act, the Managing Board has reported in good time and comprehensively, both orally and in writing, on the strategic orientation of the company as well as all relevant aspects of the business plan, including financial, investment and personnel planning. In addition, we were informed about the economic position and the profitability of the company and of the Group as well as about the course of transactions, including the risk position and risk management. Five meetings of the Supervisory Board were held in the financial year 2008. Additionally, we effected resolutions outside meetings in the case of seven urgent transactions predominantly relating to the buying and selling of properties. Each meeting was attended by all members of the Supervisory Board. Furthermore, as Chairman of the Supervisory Board, I was in regular contact with the Managing Board in order to inform myself about current developments in the business s position, important transactions and upcoming decisions. Main focus of work in the Supervisory Board plenum The turnover, earnings and personnel development of the Group, the financial position as well as the letting rate and the current situation with regard to purchases and sales were explained to us in detail by the Managing Board in all meetings and then discussed collectively by us. We also thoroughly discussed numerous individual issues with the Managing Board in the meetings. In the financial statements meeting of 7 March 2008, the Supervisory Board approved the annual and consolidated financial statements of HAMBORNER AG as of 31 December 2007 after its own review and discussion of significant aspects with the statutory auditor, BDO Deutsche Warentreuhand Aktiengesellschaft Wirtschaftsprüfungsgesellschaft. We also approved the Managing Board s proposal for the appropriation of profits. Furthermore, we adopted the resolution proposals to be submitted to the ordinary Annual General Meeting 2008 and discussed the subject of REITs. The focal points of the meeting on 14 May 2008 were the preparation for the general shareholders meeting 2008 and authorisation for the sale of the Osnabrück property, Große Straße 61.

To our shareholders: Report of the Supervisory Board 11 The constitutive meeting of the Supervisory Board took place on 5 June 2008 following the general shareholders meeting. In that meeting, I was re-elected as Chairman, and Dr. Weinstock as Deputy Chairman of the Supervisory Board. In addition, the appointments of all members of the Executive, Audit and Nominating Committees were confirmed. The meeting on 18 September 2008 predominantly dealt with a yield-orientated control concept for the HAMBORNER Group. Possible portfolio transactions within the framework of the corporate strategy were also discussed. The Group s budget and medium-term plan for the years 2009-2013 were the main areas explored at the planning meeting on 20 November 2008. Planned growth in turnover and earnings was discussed thoroughly with the Managing Board. At the same time, the Managing Board explained the nine-month report. Report from the committees Part of the Supervisory Board s activities also take place in committees. Three committees were in place during the financial year 2008. The Executive Committee met twice to discuss the determination of the variable Managing Board remuneration and personnel matters. The Audit Committee convened four times in the reporting year with the involvement of the statutory auditor. It discussed the annual and consolidated financial statements 2007 in detail and had the 1st quarter, half-year and 3rd quarter interim reports 2008 explained by the Managing Board. In addition, it occupied itself with the preparation of the Supervisory Board s electoral proposal to the general shareholders meeting for the appointment of the statutory auditor. There was no reason for the Nominating Committee to convene in the reporting year. At the start of each of its meetings the Supervisory Board was informed about the activity of the committees by the respective Chairman. Corporate governance an important part of our work The Supervisory Board and Managing Board also dealt in depth with the progression of intra-company corporate governance in the financial year 2008. We report on this together with the Managing Board in the Corporate Governance report for 2008 in accordance with Art. 3.10 of the German Corporate Governance Code. On 7 February 2008, in order to avoid a conflict of interest, Messrs. Weinstock and Lütgen abstained from voting in connection with the conclusion of an intermediary agreement with HSH Capitalpartners GmbH, a 100% subsidiary of HSH Real Estate AG, for the purpose of purchasing two commercial properties in Hamburg.

12 To our shareholders: Report of the Supervisory Board Equally, they did not participate in the voting with regard to a consultancy contract for HSH Real Estate AG on 18 September 2008. Similarly, Mr Schmidt abstained from the written vote of 11 November 2008, the object of which was the sale of Wohnbau Dinslaken to an affiliated company of Evonik Immobilien GmbH. No other conflicts of interest within the meaning of Art. 5.5.3 of the German Corporate Governance Code have arisen with any of our members. The statutory auditor submitted a declaration of independence in accordance with Art. 7.2.1 of the German Corporate Governance Code, which gave no cause for doubts in our view. The Supervisory Board together with the Managing Board submitted an updated declaration of compliance with the German Corporate Governance Code on 3 December 2008, in accordance with Art. 161 of the German Stock Company Act. This declaration of compliance is published on the company s website www.hamborner.de (Unternehmen/Corporate Governance/ Entsprechenserklärung gemäß 161 AktG). Conclusion of the annual and consolidated financial statements On 19 March 2009, the annual financial statements 2008 were examined in detail with the participation of the auditor, initially in the Audit Committee and then in the Supervisory Board meeting. In preparation, copies of the audit reports were sent to all members of the Supervisory Board in advance. The auditors certifying the annual financial statements reported on the audit results and were available to the Supervisory Board to answer questions. The Supervisory Board examined in detail the annual and consolidated financial statements of HAMBORNER AG with the consolidated management report as well as the proposal for the appropriation of profits. There was no cause for objections so the Supervisory Board approved the annual and consolidated financial statements 2008 in its meeting on 19 March 2009. As a result, the annual financial statements 2008 prepared by the Managing Board are adopted. The Supervisory Board endorsed the Managing Board s proposal for distribution of the unappropriated surplus. Unqualified audit certificate of the statutory auditor The annual financial statements of HAMBORNER AG as of 31 December 2008, prepared by the Managing Board in accordance with the rules of the German Commercial Code and the German Stock Company Act, as well as the Management Report of the public limited company and of the Group, consolidated pursuant to Art. 315 Para. 3 of the German Commercial Code, were audited by Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Dusseldorf. The Supervisory Board had appointed this auditor on foot of a resolution approved at the general shareholders meeting of 5 June 2008. The statutory auditor issued an unqualified audit certificate. The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS). The additional preparation of consolidated financial statements in accordance with the German Commercial Code was waived pursuant to Art. 315 Para. 1 of the German Commercial Code. The statutory auditor also granted an unqualified audit certificate to both the consolidated financial statements submitted and the consolidated report regarding the position of the company and of the Group.

To our shareholders: Report of the Supervisory Board 13 Report on relationships with associated companies The report to be prepared by the Managing Board, pursuant to Art. 312 of the German Stock Company Act, regarding the company s relationships with associated companies has been audited by the statutory auditor and furnished with the following unqualified audit certificate: Following our compulsory audit and evaluation, we confirm that: 1. The factual details of the report are correct; 2. In the case of the transactions recorded in the report, the company s payment was not unduly high. The statutory auditor s representative was also available for explanation of this report in the Supervisory Board meeting on 19 March 2009. After undertaking its own examination, the Supervisory Board approved the audit result of the statutory auditor. There was also no cause for objection with regard to the statement of the Managing Board at the end of the report regarding relationships with associated companies. Changes in the Managing Board The Supervisory Board revoked the appointment of Dipl.-Kfm. Roland J. Stauber as a member of the Managing Board on 15 August 2008 with immediate effect on compelling grounds. The lawyer Mr. Hans Richard Schmitz was appointed as a member of the Managing Board as of 1 December 2008. The Supervisory Board thanks the directors Dr. Rüdiger Mrotzek and Hans Richard Schmitz as well as all employees for their great personal dedication, their efforts and their continuing commitment. Duisburg-Hamborn, 19 March 2009 The Supervisory Board Dr. Eckart John von Freyend (Chairman)

14 To our shareholders: Corporate governance at HAMBORNER AG Corporate Governance at HAMBORNER AG Corporate Governance Report Commensurate with the recommendations in Art. 3.10 of the German Corporate Governance Code in the version of 6 June 2008, the Managing Board and Supervisory Board report on corporate governance at HAMBORNER AG as follows: Transparency and good company management traditionally rank very highly for the Managing Board and Supervisory Board of HAMBORNER AG. For this reason, we regularly, promptly and comprehensively inform our shareholders, all other capital market participants, financial market analysts, the relevant media, and also our employees, about the position of the company and any significant changes. We use a wide variety of potential information and communication channels for this purpose, whereby special mention should be made of our regular quarterly, interim and annual reports, our announcements for disclosure under capital market legislation such as ad-hoc announcements or notifications on directors dealings, but also our participation in events with financial analysts such as the Real Estate share initiative or the publication of press releases on current issues relating to HAMBORNER AG. In the process, we primarily use the internet to distribute information. All of the above-mentioned corporate information is available to interested parties on our website. Since the German Corporate Governance Code entered into force, the Managing Board and Supervisory Board have addressed the Code s recommendations at regular intervals and as far as possible and necessary implemented them promptly. The objective was and always is to ensure good and responsible corporate development geared to sustainability which is in the interests of all stakeholders. The Code as such was most recently the subject of the Supervisory Board meeting on 18 September 2008 at which the amendments to the Code, contained in the new version of 6 June 2008, published in the electronic German Federal Gazette on 8 August 2008 and valid since that date, were discussed in depth. The recommendation in Art. 4.2.2 of the Code, according to which the Supervisory Board plenum, on the suggestion of the committee that deals with the management contracts, should approve the remuneration system including the basic contract components and regularly review it, has already been implemented in the case of the appointment of Hans Richard Schmitz to the Managing Board of our company. The recently incorporated recommendation in Clause 2 to Art. 7.1.2 of the Code, that the Supervisory Board or its Audit Committee and the Managing Board discuss half-yearly and possible quarterly financial reports prior to publication, corresponds with existing practice at HAMBORNER and will be complied with in the future as well.

To our shareholders: Corporate governance at HAMBORNER AG 15 The Managing Board and Supervisory Board of HAMBORNER AG therefore adopted the following declaration of compliance in December 2008 in accordance with Art. 161 of the German Stock Company Act. According to that, apart from minor qualifications the company has complied with the recommendations of the German Corporate Governance Code in the reporting year. Reference is made to the text of the declaration of compliance with regard to the explanations on the deviations from the Code s recommendations: Current declaration of compliance from December 2008 Declaration of the Managing Board and Supervisory Board of HAMBORNER AG on the recommendations of the Government Commission for the German Corporate Governance Code pursuant to Art. 161 of the German Stock Company Act The Managing Board and Supervisory Board of HAMBORNER AG declare that, up to 15 August 2008, HAMBORNER AG has fully complied with the recommendations of the Government Commission for the German Corporate Governance Code ( Code ) in the Code version of 14 June 2007 as well as the recommendations in the Code version of 6 June 2008 since submission of its last declaration of compliance in November 2007. The Code has been complied with since then with the exception of the recommendation in Art. 4.2.1 Clause 1. HAMBORNER AG will comply with the Code in the future with the slight qualification of the recommendation in Art. 4.2.1 Clause 1. Explanation: Art. 4.2.1 Clause 1 of the Code states that the Managing Board should consist of several persons and have a Chairman or spokesperson. Since the departure of the previous spokesperson for the company, Roland J. Stauber, with effect from 15 August 2008, the Managing Board was occupied by just one person until 30 November. With the appointment of Hans Richard Schmitz as a member of the Managing Board as from 1 December 2008, it once again consists of two persons. The nomination of a Chairman or spokesperson was waived on account of the Managing Board consisting of just two persons. Duisburg-Hamborn, December 2008 HAMBORNER Aktiengesellschaft Managing Board Supervisory Board

16 To our shareholders: Corporate governance at HAMBORNER AG Internet information for our shareholders Both the current declaration of compliance and all declarations from previous years are available on our website www.hamborner.de at Unternehmen/Corporate Governance/ Entsprechenserklärung gemäß 161 AktG. In addition, shareholders may obtain information at Investor Relations/IR-News/Finanzkalender regarding the dates on which recurring publications such as financial reports will appear, and on the date of the general shareholders meeting. On our website, the annual report also informs our shareholders in detail about the previous financial year, in advance of the general shareholders meeting. In addition the website offers all interested parties access to other corporate information published by the company, such as notifications in accordance with the German Securities Trading Act and the German Securities Prospectus Act [Wertpapierprospektgesetz], press releases or the latest corporate presentation. Collaboration between the Managing Board and the Supervisory Board The Managing Board and Supervisory Board work together closely for the benefit of the company. At regular intervals, the Managing Board promptly and comprehensively notifies the Supervisory Board about all relevant issues of the business plan, about the course of transactions and the position of the Group including the risk position. Questions on strategic orientation and further development are discussed jointly between Supervisory Board and Managing Board. Important Managing Board decisions are linked to the agreement of the Supervisory Board in accordance with the former s procedural rules and the Articles of Association. No consultancy or other service or work contracts were concluded directly between HAMBORNER AG and individual members of the Supervisory Board in the financial year 2008. However, one brokerage agreement was concluded with HSH Capitalpartners GmbH, a 100% subsidiary of HSH Real Estate AG, in connection with the purchase of two commercial properties in Hamburg. In addition, an agreement was signed with HSH Real Estate itself regarding transaction consultancy in connection with the takeover of a larger property portfolio. When approval was sought from the Supervisory Board on this issue, Messrs. Weinstock and Lütgen abstained from voting. Similarly, Mr. Schmidt abstained from the written vote of 11 November 2008, the object of which was the sale of the Wohnbau Dinslaken GmbH shareholding to an affiliated company of Evonik Immobilien GmbH. Other potential or actual conflicts of interest of members of the Managing Board and Supervisory Board, requiring immediate disclosure to the Supervisory Board, did not arise during the reporting period. In accordance with Art. 15a of the German Securities Trading Act, a duty of disclosure is incumbent on the members of the Managing Board and Supervisory Board, as well as persons who perform management functions with the issuers of shares, regarding the purchase and sale of securities of the company as soon as the total value of transactions by a person

To our shareholders: Corporate governance at HAMBORNER AG 17 with management functions and individuals in a close relationship with that person reaches or exceeds the total negligible value of 5,000 by the end of the calendar year. The following completed transactions were notified to HAMBORNER AG during the reporting year 2008: On 7 July 2008, Dr. Rüdiger Mrotzek (member of the Managing Board) purchased 1,500 no-par-value shares at a weighted average price of 8.18 per share. On 24 October 2008, Dr. Rüdiger Mrotzek (member of the Managing Board) purchased 1,500 no-par-value shares at a weighted average price of 6.28 per share. On 12 December 2008, Dr. Rüdiger Mrotzek (member of the Managing Board) purchased 2,500 no-par-value shares at a weighted average price of 5.532 per share. The company did not receive any further notifications regarding transactions of management staff pursuant to Art. 15a of the German Securities Trading Act during the reporting year. All of these notifications are permanently available on our website www.hamborner.de at Unternehmen/Corporate Governance/Meldepflichtige Wertpapiergeschäfte. As at 31 December 2008 there was no ownership subject to disclosure requirements pursuant to Art. 6.6 of the German Corporate Governance Code in the version of 6 June 2008. In compliance with the requirements of the German Investor Protection Improvement Act [Anlegerschutzverbesserungsgesetz], the company has created an insider list, in which all relevant persons are included. The mandates of members of the Managing Board and Supervisory Board are shown in the notes to the consolidated financial statements on page 104 and relationships with associated persons are shown on page 102. Responsible risk management The company s responsible handling of risks is also part of good corporate governance. Systematic risk management within the framework of our value-oriented corporate management ensures that risks are identified and assessed early, and risk positions optimised. HAMBORNER AG s early risk identification system is also subject to review by the statutory auditor. It is continuously enhanced and adapted to changing economic conditions. For information on risk management and the current risk position, please refer to the report on opportunities and risks. The statutory auditor Deloitte & Touche The statutory auditor proposed to the general shareholders meeting for election for the financial year 2008, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Dusseldorf, submitted its declaration of independence in accordance with Art. 7.2.1 of the German Corporate Governance Code in a letter dated 28 March 2008. It was agreed with the statutory auditor that the Chairman of the Audit Committee should be immediately informed regarding grounds for exclusion or lack of impartiality which arise during the audit, in so far as they are not immediately eliminated. It was further agreed that the Chairman of the Supervisory Board

18 To our shareholders: Corporate governance at HAMBORNER AG and the Chairman of the Audit Committee would be immediately informed in the event that specific findings or incidents arise in the execution of the audit of financial statements, which could be of significance for the proper discharge of the functions of the Supervisory Board. This includes the discovery of any facts demonstrating that the declarations submitted by the Managing Board and Supervisory Board pursuant to the Code contain some inaccuracy. Remuneration report The objective of the German Corporate Governance Code is to promote the confidence of national and international investors, clients, employees and the general public in the management and monitoring of German quoted companies. To this end, the German Corporate Governance Code provides for, inter alia, disclosure of the remuneration granted to members of the Managing Board and members of the Supervisory Board. The emoluments of the Managing Board and Supervisory Board are oriented to the annual corporate profit of HAMBORNER AG. They are made up of fixed and variable parts. Detailed explanations on the remuneration system and on the remuneration of the Managing Board and Supervisory Board may be found in the management report on page 57 et seq. The statements quoted there are part of the corporate governance report.

To our shareholders: Corporate governance at HAMBORNER AG 19 Hamburg, Fuhlsbüttler Straße 107-109

20 To our shareholders: The HAMBORNER share The HAMBORNER share General position in the share market 2008 was an extremely difficult stock market year and brought severe price reversals to the international stock markets. The global economic downturn triggered by the worsening financial market crisis took its toll. After getting off to a weak start, leading international stock exchanges were unable to recover and the German leading share indices were not spared either. Standing at around 8,000 points at the beginning of the year, the DAX then slipped down to almost 4,000 points. Thanks to share gains at the year-end, losses ultimately amounted to approximately 40.4%. As a result, the DAX remained slightly behind 2002 s all-time low (-44.0%). While the MDAX lost 43.2% over the year, the SDAX even lost 46.3%. Financial shares were particularly hard hit. In view of the effects of the US mortgage crisis and the resulting precariousness of the international financial markets, bank and insurance shares produced the weakest performance by far of all the leading shares. Property shares were also unable to escape this negative trend. Measured by the DAX All Real Estate subsector, European property shares have lost approximately 71% of their value. The situation on the stock markets will remain overshadowed in the coming months by the global economic downturn and companies downward revision of profit forecasts. Stock market listing in Germany The HAMBORNER AG share The HAMBORNER share is officially listed on the stock markets in Frankfurt am Main, Dusseldorf, Berlin, Munich and Hamburg with variable prices. It is traded in the regulated market in Stuttgart and in the unofficial market in Hanover. The share is listed under the security identification number 601300 (ISIN: DE0006013006). The company has conferred a mandate on DZ-Bank AG, Frankfurt am Main, to act as designated sponsor. The bank commenced its activities in November 2007. As the designated sponsor, the DZ-Bank ensures negotiability of the HAMBORNER share at all times through the day-to-day quotation of bid/ ask prices. Stable shareholder structure HAMBORNER continues to have a stable shareholder structure since the change of the main shareholder in 2007. In addition to HSH Real Estate AG, Hamburg, which has a share of 52.7% in the company, another shareholder - Prof. Dr. Siegert, Dusseldorf - continues to hold more than 10% of the shares. The free float currently amounts to approximately 36%.

To our shareholders: The HAMBORNER share 21 11.60 % Prof. Dr. Siegert, Dusseldorf, indirectly via de Haen-Carstanjen & Söhne GmbH, Dusseldorf, and SIEGERT & CIE GmbH, Dusseldorf 35.69 % free floating 52.71 % HSH Real Estate AG, Hamburg, 2.39% directly and a further 50.32% indirectly via the subsidiary HSH-RE Beteiligungs GmbH Share price movement of the HAMBORNER share in 2008 The negative economic environment in 2008 also had an impact on the share price performance of the HAMBORNER share, even though the share still performed comparatively well in the sectoral comparison. After a 2007 year-end share price of 8.94, the share was able to remain relatively stable, with a value of 8.01 at the half-year point. However, it too suffered a setback, particularly during the second half of the year, to close at 5.75. This corresponds to a reduction of 35.7% on the price at the beginning of the year. By comparison, the German property share index published by the banking firm Ellwanger und Geiger, E&G DIMAX, fell by around 24% in the first half-year 2008 and in fact ultimately recorded a loss of approximately 50% as of 30.12.2008. The EPRA index lost approximately 51% in the same period. Development of the HAMBORNER share 105% 95% 85% 75% 65% 55% 45% 35% 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 HAMBORNER AG EPRA E&G DIMAX HAMBORNER AG - 35.7 % E&G-DIMAX - 50.3 % EPRA index - 50.7 % DAX - 40.4 % HAMBORNER AG/XETRA share prices: Year-end share price Highest share price Lowest share price 5.75 E 9.30 E 5.10 E

22 To our shareholders: The HAMBORNER share After the overall pleasing performance of the HAMBORNER share in recent years, share price performance in the reporting year has been disappointing and unsatisfactory. The causes for the current considerable losses in net asset value ( NAV ) may be sought in the general stock market environment, but not in the company s earnings and financial situation. We therefore see our transparent corporate policy with its corresponding investor relations work as a sound basis for renewed positive share performance in the future. Development of the HAMBORNER share start 1997 to end 2008 (monthly prices) 13 E 12 E 11 E 10 E 9 E 8 E 7 E 6 E 5 E 1/97 1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07 1/08 1/09 Investor Relations The objective of our investor relations work is to convey, by means of ongoing, open and active communication with the capital market, a sound and transparent picture of our company, thereby facilitating a fair company valuation. Within the scope of this work, we see it as a central task to foster relationships with shareholders, analysts and investors in order to thus reinforce confidence in HAMBORNER AG. As a consequence, we extended our investor relations activities in 2008. In addition to hosting our first balance sheet press conference, we showcased ourselves for the second time at the Real Estate share initiative in Frankfurt am Main, receiving a very positive response. We have maintained close contact with the capital market at all times through individual discussions with analysts, investors and shareholders. We have also restructured our homepage and created a separate investor relations area, containing all important details on the share and the company s key figures. We will be introducing additional measures to further expand our investor relations activities in 2009. You will find information on our share as well as publications and dates, including those for analyst and investor conferences, on our website www.hamborner.de.

To our shareholders: The HAMBORNER share 23 Net asset value per share HAMBORNER AG has again engaged the experts Jones Lang LaSalle, Frankfurt to determine the market and fair values of its property portfolios. After a net asset value ( NAV ) was determined in 2007 for the first time using the latest fair values of properties, the properties were subjected to a subsequent assessment in 2008. The valuation method applied in the process corresponds to the principles of the International Valuation Standards. The NAV represents the benchmark for the underlying strength of a company and, within the framework of value-oriented corporate management, is an important indicator for us, also relative to other companies. It is our objective to increase the NAV through a value-enhancing corporate policy. However, the strained economic and financial market environment in 2008 resulted in lower fair values for the portfolios overall in virtually all companies and thus also to losses in net asset values. A NAV of 10.57 per share is calculated for HAMBORNER as of 31 December 2008. Compared with the year-end share price of 5.75, this corresponds to a reduction of 45.6%. NAV calculation (in accordance with EPRA) 31.12.08 31.12.07 Non-current balance sheet assets * 223,934 202,895 + Current balance sheet assets 55,368 7,863 + Non-current assets held for disposal 130 19,813 + Assets from activities to be discontinued 0 59,470 - Non-current liabilities and provisions * -91,785-58,167 - Current liabilities -8,516-56,955 - Liabilities from activities to be discontinued * 0-195 Balance sheet NAV * 179,131 174,724 + Hidden reserves of non-current assets ** 61,579 70,297 + Hidden reserves in the case of non-current assets held for disposal 0 13,597 NAV 240,710 258,618 NAV per share in E 10.57 11.36 * Excluding deferred taxes and derivative financial instruments ** Determination of hidden reserves in the property portfolio based on the Jones Lang LaSalle fair value assessment; own assumptions in the case of agricultural and silvicultural land.

24 To our shareholders: The HAMBORNER share FFO The FFO (Funds from Operations) is a key financial ratio not determined in accordance with IFRS. It is used within the framework of value-oriented corporate management to represent the funds generated which are available for investments and dividend payouts to shareholders. We determined the FFO for the first time in 2008. FFO calculation 31.12.08 EBITDA from activities to be continued 30,722 + Interest income 1,717 - Interest payments -4,644 - Taxes paid -1,347 FFO including sales activity 26,448 - Result from sales activity -17,914 FFO excluding sales activity 8,534 FFO per share in E 0.37 The FFO per share disregarding sales proceeds amounts to approximately 0.37 for 2008. Based on the year-end share price of 5.75, this gives rise to an FFO yield of 6.4%.

To our shareholders: The HAMBORNER share 25 Dividend development at HAMBORNER It will be proposed to the general shareholders meeting on 9 June 2009 to once again distribute a dividend of 0.35 per no-par-value share for the financial year 2008. A dividend yield of 6.1% results from this in relation to the share price at the end of 2008. Dividend proposal: E 0.35 per share HAMBORNER AG has increased the dividend steadily in previous years from 0.15 to 0.35 per no-par-value share. Dividend development 0.40 E 0.35 E 0.30 E 0.25 E 0.20 E 0.15 E 0.10 E 0.05 E 0.00 E 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Ordinary dividend Bonus payment If the company s situation permits, we also propose to maintain high payout ratios and to increase the dividend further in the future. The HAMBORNER share at a glance 2006 2007 2008 Subscribed capital EUR million 19.43 22.77 22.77 Market capitalisation 1) EUR million 243.0 203.6 130.9 Year-end share price 2) EUR 10.67 8.94 5.75 Highest share price 2) EUR 11.53 12.48 9.30 Lowest share price 2) EUR 9.10 8.36 5.10 Dividend per share 2) EUR 0.30 0.35 0.35 Total dividend EUR million 6.83 7.97 7.97 Dividend yield 1) % 2.81 3.91 6.09 Price/earnings ratio 1), 3) 21.54 3.89 7.57 1) Basis: XETRA year-end share price 2) All figures in EUR per no-par-value share, converted for comparability (1:3 after the share split in August 2007) 3) Basis: consolidated surplus in accordance with IFRS; the price in relation to the result from activities to be continued produces a p/e ratio of 11.51 for 2007

Management report Meppen, Am Neuen Markt 1

General economic conditions 28 Economic report 32 Report on opportunities and risks 50 Final declaration on the report regarding relationships with affiliated companies (Art. 312 of the German Stock Company Act [Aktiengesetz]) 54 Report on additional information under company law (Art. 289 Para. 4 of the German Commercial Code [HGB] in conjunction with Art. 315 Para. 4 of the German Commercial Code) 54 Remuneration of the Managing Board and Supervisory Board 57 Supplementary report 60 Forecast report 61

28 Management report: General economic conditions General economic conditions Macroeconomic environment The global economic downturn intensified in the last quarter of 2008, as the turmoil in the financial markets increased again and its effects encroached on the real economy. On the other hand, inflationary pressure has eased globally due to the big drop in commodity prices and lower worldwide demand. Since the middle of 2008, the German economy has also been feeling the adverse effects of the increasingly gloomy world economy and the intensifying crisis in the international financial markets to an ever greater extent. Whereas the number of unemployed fell to a seasonally-adjusted 3.15 million people in November 2008, the economic crisis now has a firm hold on the labour market as well. The number of unemployed people rose to 3.49 million in January 2009, thus raising the rate of unemployment to 8.3%. In the face of the economic crisis, the European Central Bank (ECB) decided at the beginning of December 2008 to reduce the eurozone base rate by a hitherto un-precedented 0.75 percentage points to 2.5%. At a subsequent meeting in the middle of January 2009, the ECB further reduced the base rate to 2.0%. The economic prospects for the German economy in 2009 have deteriorated considerably in view of the accelerating downturn. Economic forecasts have become increasingly pessimistic. Thus, the Kiel Institute for the World Economy is expecting German gross domestic product to contract by 2.7%. A recovery with slight growth is only expected in 2010, whereby it is assumed that by then the international financial crisis will be surmounted. General situation in the property market in Germany Market for retail properties In spite of the financial crisis, recession and bad news from other industries, the retail trade largely performed well in 2008. Thus, retail companies were able to increase their turnover by 1.9% to 2.4% nominally on the previous year (minus 0.5% in real terms) according to latest estimates from the German Federal Statistical Office. We expect that disposable income will increase slightly in 2009 in view of rising wages and monetary social security benefits and in spite of job cuts; that consumer prices will develop considerably below the growth rate of 2008 and that, as a result, personal consumer spending will remain steady in 2009 compared with the previous year. Developments in the labour market will be crucial. Management report: As the operating activities of the Group essentially consist of those of HAMBORNER AG, use was made in this management report of the relief option of Art. 315 Para 3 of the German Commercial Code [HGB], according to which the management report of the Group and of the parent company of HAMBORNER AG may be consolidated. Accordingly, the consolidated financial statements and the annual financial statements of the public limited company are jointly disclosed. If figures are commented on, which differ in the consolidated financial statements from those of the annual financial statements of the public limited company, reference is clearly made to which set of figures the respective figures relate. Otherwise, statements are deemed to apply to both the Group and the parent company.

Management report: General economic conditions 29 Retail space continues to grow in Germany, although moderately. This growth in space has led to increasingly heightened competition. It is to be expected that many establishments which were carried out solely for the purposes of securing a location and displacement will not be sustainably successful. There is a trend towards large outlets across all sectors. Due to nominally rising retail sales, productivity levels per space will not fall further in the medium-term but rather will stabilise despite further growth in space. Concentration in the German retail trade continues to increase so that the lion s share of the market is held by a low number of businesses. The most significant changes in 2008 took place in German food retailing. Thus, the German monopolies commission approved the takeover of the Plus supermarket chain by EDEKA subsidiary Netto in July 2008. On the acquisitions side, the REWE Group was also successful with its takeover of the extra discount stores from the METRO Group. Discounters were able to increase their market shares further, even if growth rates were lower. The traditional, non-chain speciality shops, whose market share again fell considerably in 2008, still have structural difficulties. Department stores and emporia once again suffered losses in market share, as highlighted by the recent insolvencies of Wehmeyer, Hertie and SinnLeffers. The letting market for retail premises in premium locations lost momentum somewhat in 2008. Nevertheless, successful retailers with a good credit rating and innovative concepts continue to drive on their expansion notwithstanding, focusing on first-class shopping streets. Competition for retail premises falling vacant remains high due to the short supply of space. The textile trade remains the most important interested party by far for retail premises on Germany s shopping streets. The losers in this trend are, once again, the non-premium and ancillary sites. Because of low demand, permanent vacancies may be expected at such second-class locations even in the event of sustained good economic development. Rent increases in Germany s most important shopping locations in 2008 can be described as moderate.

30 Management report: General economic conditions Market for office space The effects of the financial market crisis and the continuing poor prospects for macroeconomic development in 2009 adversely affected the German office markets in 2008. According to the leading brokers, in the nine most important German office locations of Berlin, Dusseldorf, Essen, Frankfurt, Hamburg, Cologne, Leipzig, Munich and Stuttgart, approximately 3.5 million m² of office space were transacted in 2008, 5% less than in 2007. Nevertheless, the result was the third-best on record. Still on a record-breaking course up to the middle of 2008, German office letting markets were then hit by the financial crisis in the second half of the year. With the exception of Cologne (take-up approximately 290,000 m², plus 5%), Leipzig (approximately 89,000 m², plus 1%) and Stuttgart (approximately 189,000 m², plus 18%), the take-up in the Big Nine decreased. The biggest take-up was achieved once again in Munich with approximately 786,000 m² (minus 6%), followed by Frankfurt with approximately 566,000 m² (minus 10%) and Hamburg with approximately 544,000 m² (minus 4%). Viewed across all Big Nine locations, vacancies have reduced by almost 320,000 m² in 2008 to a good 8.4 million m² (minus 3.7%) at present. With the exception of Berlin, Frankfurt and Leipzig, prime rents in the Big Nine rose by approximately 4% on average last year. The 10% increase in Munich turned out to be the most striking, raising current prices to a good 34/m². Larger, modern spaces in the top locations are still in short supply in many places. Nor will this situation change significantly during 2009. At the same time, the financing of new projects is proving difficult, so that even a medium-term surplus of new, modern spaces is not very likely. Situation in the property investment market in Germany Investment turnover registered nationwide in 2008 for commercial properties was approximately 65% below the record result of the previous year, at almost 20.7 billion, according to figures from Germany s leading brokers. In the six most important German investment locations of Berlin, Dusseldorf, Frankfurt, Hamburg, Cologne and Munich, a transaction volume of a good 9.2 billion was recorded, which corresponds to a drop of approximately 70% compared with 2007. The global recession practically brought the German investment market to a standstill in the last few months of the year 2008. The greatly reduced volume of transactions is attributable less to a lack of buyer interest than to the current, almost complete absence of financing options. Almost 64% of commercial investment turnover in 2008 was apportioned to individual transactions, whereas only 36% was invested in portfolios. This demonstrates that buyers are once again focusing more on the quality of properties, while the quantity approach of purchasing as much property as possible is now taking a back seat.

Management report: General economic conditions 31 The spotlight was on both retail trade properties with a total turnover of a good 7.2 billion (approximately 35%) and office buildings, in which approximately 6.9 billion was invested (approximately 33%). At around 1.9 billion, a good 9% of the transaction volume was apportioned to logistics properties. The share of foreign investors has decreased further in 2008 and now stands at only around 57%. In the case of individual transactions, German buyers are once again already the biggest group of investors at 56%. It may be seen that investors with sufficient equity capital, such as open-ended funds, insurers, pension funds and private individuals are increasingly pressing to the fore, with the result that speculative investments are losing ground. After the prime yields for German top office properties had fallen almost to the level of large European metropolises in 2007, since this low they rose by between 50 and 105 basis points, bringing yields back up to the 5% mark in Germany s six most important investment markets. As a result, the average level of the past 20 years has once again been achieved. Yields on commercial buildings in premium locations in pedestrian zones have largely remained stable, given that such buildings are highly inflation-proof and uniquely sited.

32 Management report: Economic report Economic report Earnings, financial and asset situation of the HAMBORNER Group The HAMBORNER Group performed well in 2008 in an overall difficult market environment and can again look back at an operationally successful financial year. The result for ordinary activities in the Group improved by 7.4 million to approximately 18.5 million. Revenue from the management of properties and buildings of 21.3 million was around 6.8 million up on the previous year. Investments in 2007, which made a full-year contribution to rent income for the first time, had a particular impact here. Other operating income increased by 11.9 million to 19.5 million compared with the previous year largely due to the sale of our 14.1% shareholding in Wohnbau Dinslaken GmbH and the resulting book profit achieved of approximately 11.2 million. In addition, portfolio properties were sold achieving a profit of 6.7 million. Personnel costs amounted to around 3.0 million overall and increased by 453 T compared with the previous year, essentially because of personnel changes in the last two years. The other operating expenses rose from approximately 2.3 million in the previous year to approximately 2.7 million in tandem with an increasing volume of business. The financial result amounted to -2.9 million in the reporting year. Interest payments of -4.6 million for acquisition financing were offset by interest income amounting to 1.7 million. Group tax expenses amount to -1.5 million in 2008 after a positive sum of 6.6 million in the previous year. In 2007, however, this item was affected by a non-cash once-off effect on account of a revaluation of the deferred taxes shown in the balance sheet on both the assets and liabilities side made necessary as a consequence of the tax law amendment. The consolidated surplus from activities to be continued amounts to approximately 17.0 million in the financial year and is thus roughly at the level of the previous year ( 17.7 million). The result from activities to be discontinued, amounting to 374 T, includes the income and expenses from the special securities fund up to its closure in February 2008. The Properties held as financial investments show a value of 223.3 million in the balance sheet, compared with 201.7 million in the previous year. In 2007, we had shown properties with a value of 19.8 million in the balance sheet as Non-current assets held for disposal. Since we did not sell all of these properties in the financial year due to the market situation and the dates of further possible sales are currently uncertain, we have reclassified these properties as Properties held as financial investments. In addition, changes in this item compared with the previous year are largely due to depreciations. We enter our properties in the balance sheet at the amortised acquisition and construction costs. According to the IFRS accounting rules, these valuations should be compared to the current market values. In view of the economic and financial market crisis with the current difficult environment for property transactions, our portfolio properties also suffered a reduction in value to some extent, and this has been taken into account through appropriate depreciations. Depreciations for the financial year amount to 10.3 million in total, composed of 5.6 million of scheduled and 4.7 million of non-scheduled depreciations.

Management report: Economic report 33 On the liabilities side of the balance sheet, financial liabilities and derivative financial instruments amount to 91.1 million and are 6.7 million above the previous year ( 84.4 million). If the financial liabilities are related to the fair values of the portfolio, an LTV (loan to value) of 31% arises. The balance sheet equity capital of the Group increased by 4.5 million to 160.0 million. The Group thus has an equity ratio of 56.9%, which even exceeds the high value of 53.6% of the previous year. In addition to the high equity ratio, the HAMBORNER Group has liquid assets amounting to 54.0 million, which significantly exceeds the value for the previous year ( 6.4 million). A net financial debt of 37.1 million arises taking these liquid funds into account. A debtequity ratio of just 16.4% is calculated from this in relation to the total non-current assets. The highly positive earnings situation as well as the Group s comfortable financial and asset situation in a difficult market environment are an endorsement of HAMBORNER s measures and strategy over the last two years. By discontinuing the financial assets segment, we have removed a risk-laden line of business, and the reinvestment of the resources in easily let retail and office properties ensures sustainable and stable cash flows. The conservative accounting of properties at acquisition and construction costs is also advantageous in phases of economic weakness. The influencing of results through writeups or write-downs due to revaluations is far lower than with accounting at market values and therefore the result is less volatile overall. Furthermore, the high liquid funds and the low net indebtedness are proof of the Group s underlying financial soundness.

34 Management report: Economic report Earnings, financial and asset situation of HAMBORNER AG In the individual financial statements of the company, the result for ordinary activities has increased considerably year-on-year by 52.5 million to 62.3 million. The increase results essentially from the sale of our shares in the special securities fund terminated in the financial year and the resulting capital gains ( 45.7 million), higher rent income as well as the sale of shares in Wohnbau Dinslaken GmbH. The effect on results from the termination of the special securities fund had already been reflected in the consolidated financial statements in accordance with IFRS in the previous year with the realisation of the share price gains within the fund. In this respect, the 2008 result under commercial law differs significantly from the consolidated result. Income taxes amount to 6.0 million following 2.0 million in the previous year. This includes the final levying of taxes and reserve allocations for additional tax payments amounting to 0.5 million resulting from the sale of the special securities fund, as indicated by a tax field audit carried out for previous years. A profit for the financial year of 56.2 million (previous year: 7.8 million) results in the individual financial statements after tax. Of this amount, 28.1 million is allocated to the other retained earnings, resulting in an unappropriated surplus of 28.1 million (previous year: 8.0 million). The balance sheet total has risen by 39.7 million to 283.9 million. In this regard, equity capital has increased by 48.3 million to 87.8 million as a consequence of the high profit for the financial year, excluding pro rata allocation of the special account with reserve characteristics. The special account with reserve characteristics amounts to 95.6 million and has increased by 5.9 million year-on-year. The equity capital and the medium-term and long-term borrowed funds cover the fixed assets in full. Overall opinion on the economic position Overall, the Managing Board assesses the economic position of the Group to be good on the date of the preparation of the consolidated management report. As the business development in the first weeks of the new financial year is going in accordance with expectations in the case of transactions for rents and leases, the Managing Board assumes a positive progression overall.

Management report: Economic report 35 Herford, Bäckerstraße 24-28

36 Management report: Economic report Business development in the property sector Overview of the HAMBORNER property portfolio The HAMBORNER property portfolio contained 54 portfolio properties at the end of the reporting year. The properties are predominantly in large and mediumsized towns at 41 different locations in Germany and have a total usable floor space of 159,040 m², of which 149,035 m² are commercially used and 10,005 m² used as residential space. More detailed information on the year of purchase, location, size, nature of the respective use and on the fair value of all the properties may be found in the following portfolio register. Further information with the respective property data is also available online at www.hamborner.de.

Management report: Economic report 37 Map of Germany with locations as of 31 December 2008 Schleswig- Holstein Mecklenburg- West Pomerania Hamburg Hamburg Geldern NRW Duisburg Essen Krefeld Düren Moers St. Augustin Meppen Rheine Münster Dinslaken Oberhausen Leverkusen Lüdenscheid Solingen Cologne Neuwied Oldenburg Bremen Lower Saxony Osnabrück Minden Herford Bad Oeynhausen Gütersloh Hamm Dortmund Wuppertal Kassel Hessen Bremen Hanover Lüneburg Erfurt Thuringia Saxony- Anhalt Berlin Berlin Brandenburg Saxony Freital Rhineland- Palatinate Wiesbaden Frankfurt Saarland Kaiserslautern Mosbach Bavaria Baden-Württemberg Augsburg Freiburg Villingen-Schwenningen

38 Management report: Property portfolio register (position at: 31 December 2008) Property portfolio register (position at: 31 December 2008) Year of purchase Property Building use Property size (in m 2 ) Usable floor space (in m 2 ) 1976 Solingen Friedenstraße 64 T 27,344 7,933 1980 Krefeld Krützpoort 1 O 1,056 1,417 1981 Cologne v.-bodelschwingh-straße 6 T 7,890 2,630 1982 Frankfurt Cronstettenstraße 66 O 1,246 1,828 1982 St. Augustin Einsteinstraße 26 C 8,610 2,417 1982 Krefeld Emil-Schäfer-Straße 22-24 C 5,196 2,793 1983 Wiesbaden Kirchgasse 21 T/R 461 1,214 1983 Moers Homberger Straße 41-41c T/R 1,291 2,079 1984 Frankfurt Steinweg 8 T/O 167 607 1984 Essen Hofstraße 10-12 T/O 2,320 2,266 1984 Duisburg Rathausstraße 18-20 T/O/R 4,204 2,310 1985 Solingen Kirchstraße 14-16 T/R 1,119 3,059 1986 Frankfurt Königsteiner Straße 69a and 73-75 T 6,203 2,639 1987 Oberhausen Marktstraße 69 T/R 358 522 1987 Lüdenscheid Wilhelmstraße 9 T 136 425 1988 Dortmund Westfalendamm 84-86 O/R 1,674 2,633 1988 Wuppertal Turmhof 6 T/O/R 403 1,324 1989 Duisburg Fischerstraße 91 T/R 421 625 1991 Hamm Weststraße 11 T/O/R 407 946 1991 Oberhausen Marktstraße 116 T/R 461 1,339 1991 Dortmund Königswall 36 T/O/R 1,344 2,846 1991 Erfurt Neuwerkstraße 2 T/O/R 579 2,231 1992 Erfurt Marktstraße 2 T/O/R 495 1,343 1992 Erfurt Marktstraße 7-9 T/O 365 545 1995 Bad Oeynhausen Klosterstraße 11 T/R 348 582 1995 Berlin Schloßstraße 23 T/R 305 542 1996 Duisburg Fischerstraße 93 T/R 421 433 1996 Hanover Karmarschstraße 24 T/O/R 239 831 1997 Augsburg Bahnhofstraße 2 T/O/R 680 1,437 1998 Dinslaken Neustraße 60-62 / Klosterstraße 8-10 T/O/R 633 1,210 1999 Kaiserslautern Fackelstraße 12-14 / Jägerstraße 15 T/O/R/U 853 1,433 1999 Kassel Quellhofstraße 22 T 5,000 1,992 2000 Gütersloh Berliner Straße 29-31 T/R 633 1,292 2001 Hamburg An der Alster 6 O 401 1,408 2002 Düren Wirtelstraße 30 T/R 202 518 2002 Osnabrück Große Straße 82-83 T 322 750 2003 Leverkusen Wiesdorfer Platz 33 T/R 809 588 2004 Oldenburg Achternstraße 47/48 T 391 847 2006 Krefeld Hochstraße 123-131 T 1,164 3,457

Management report: Property portfolio register (position at: 31 December 2008) 39 Rents 2008 Ø Residual term of the rental agreements (in months) Fair value * Discounting rate (in %) Capitalisation rate (in %) Other notes 1,379,406 136 14,790,000 6.30 7.40 Leasehold property 82,426 27 950,000 8.00 7.50 276,499 59 3,860,000 6.50 6.55 339,352 60 5,900,000 6.75 5.75 428,852 24 3,530,000 10.25 8.75 162,000 21 1,570,000 7.50 8.50 549,427 114 11,010,000 5.30 5.00 241,883 23 3,100,000 7.20 7.00 316,242 55 5,730,000 5.10 4.90 303,353 51 3,680,000 6.70 6.65 178,545 27 2,120,000 7.60 7.00 379,265 34 4,420,000 7.15 6.85 325,767 58 4,470,000 6.50 6.65 114,719 25 1,570,000 7.10 6.85 66,000 63 970,000 5.85 6.50 281,610 84 4,100,000 6.65 6.15 244,274 49 3,300,000 6.10 6.35 82,401 48 1,010,000 7.40 7.10 95,974 24 1,170,000 7.10 7.00 116,341 25 1,410,000 7.35 7.20 313,895 95 4,680,000 6.75 6.40 181,220 40 2,130,000 7.80 6.85 136,539 73 1,950,000 7.50 6.75 272,728 11 1,260,000 7.75 6.60 46,907 29 530,000 7.50 7.50 212,160 84 3,890,000 5.55 5.35 52,541 26 650,000 7.30 7.00 236,510 83 4,500,000 5.45 5.40 448,619 38 6,920,000 6.00 5.75 167,725 34 2,220,000 7.00 6.90 443,805 39 7,100,000 5.95 5.80 182,310 84 2,490,000 7.00 7.30 341,778 49 3,670,000 5.95 5.75 Leasehold property 120,358 55 3,690,000 6.50 5.75 177,271 21 2,440,000 6.35 6.20 306,000 120 5,490,000 5.80 5.60 161,033 52 2,610,000 6.45 6.00 237,344 111 4,150,000 6.20 5.90 503,873 61 8,190,000 6.70 6.20

40 Management report: Property portfolio register (position at: 31 December 2008) Property portfolio register (position at: 31 December 2008) Year of purchase Property Building use Property size (in m 2 ) Usable floor space (in m 2 ) 2006 Minden Bäckerstraße 8-10 T/R 982 1,007 2007 Münster Johann-Krane-Weg 21-27 O 10,787 9,499 2007 Neuwied Allensteiner Straße 61 and 61a T 8,188 3,548 2007 Freital Wilsdruffer Straße 39 T 15,555 7,940 2007 Geldern Bahnhofstraße 2 T 12,390 8,749 2007 Lüneburg Am Alten Eisenwerk 2 T 13,319 4,611 2007 Meppen Am Neuen Markt 1 T 13,111 10,205 2007 Mosbach Hauptstraße 96 T 5,565 6,493 2007 Villingen-Schwenningen Auf der Steig 10 T 20,943 7,270 2007 Rheine Emsstraße 10-12 T/O/R 909 2,250 2007 Bremen Hermann-Köhl-Straße 3 O 9,994 7,157 2007 Osnabrück Sutthauser Straße 285 / 287 O 3,701 3,843 2007/08 Bremen Linzer Straße 7, 9 and 9a O 9,276 10,141 2008 Herford Bäckerstraße 24-28 T 1,054 1,783 2008 Freiburg Robert-Bunsen-Straße 9a T 26,926 9,253 Total 238,851 159,040 O T C S R U Office spaces, medical practices Commercial spaces (retail trade, self-service markets, emporia, catering) Other commercial and production spaces Storage areas Residential spaces Undeveloped reserve spaces * According to the Jones Lang LaSalle valuation report, valuation date 31 December 2008

Management report: Property portfolio register (position at: 31 December 2008) 41 Rents 2008 Ø Residual term of the rental agreements (in months) Fair value * Discounting rate (in %) Capitalising rate (in %) Other notes 348,740 23 5,210,000 6.20 5.90 1,004,185 29 14,850,000 6.90 6.50 386,274 65 4,890,000 7.00 7.20 738,453 154 10,320,000 6.30 6.95 813,615 130 8,120,000 6.30 6.30 Partial leasehold property 428,790 154 6,010,000 6.30 6.90 949,040 130 13,590,000 6.30 6.35 Co-ownership share 603,825 130 8,570,000 6.30 6.55 319,498 49 3,820,000 7.10 7.10 280,417 65 5,250,000 6.50 6.25 593,373 48 9,880,000 6.95 6.60 349,855 55 6,890,000 6.85 6.60 1,142,571 44 16,470,000 6.85 6.50 160,538 92 4,220,000 6.40 6.00 129,196 114 7,790,000 6.50 6.90 Leasehold property 18,755,321 273,100,000

42 Management report: Economic report Development of rental and leasing income Rental and leasing income amounted to approximately 19.4 million in the reporting year and thus increased considerably by around 6.2 million compared with 2007 due to new investments. Despite challenging market conditions, we succeeded in implementing rent increases in several cases. On a comparative basis i.e. in the case of properties that were in the portfolio throughout the years 2007 and 2008 net rents of 11.1 million were slightly above the previous year s level ( 10.9 million). Uncollectable receivables in the reporting year 2008 were again at a low level at approximately 70 T. The overall vacancy rate in the financial year 2008 has increased slightly compared with the previous year (1.8%) to 2.1%. The revised economic vacancy rate (including income from rent guarantees) is 1.0%. It results predominantly from vacancies necessitated by renovations at our property in Hamburg and an office space of approximately 870 m 2 in the Bremen property, Hermann-Köhl-Straße 3. Apart from a few apartments and car parking spaces, current vacancies mainly relate to the aforementioned office space in the Bremen property. Other vacancies in the properties in Osnabrück, Sutthauser Straße, Münster and Rheine are covered by rent guarantees on the seller s side. The following table gives an overview of HAMBORNER AG s ten biggest tenants: Company Net rent (in %)* 1. Kaufland Group 25.3 2. Douglas 3.4 3. REWE 3.1 4. EDEKA 3.0 5. Telefónica O 2 2.8 6. FLYLINE 2.7 7. Nordsee 2.7 8. OAS 2.3 9. MAN 2.2 10. Deichmann 2.1 * Based on level of rent generated The bulk of our rental income is generated by retail spaces, which have already proved to be largely reliable lets in the last few years.

Management report: Economic report 43 Based on types of usage and rent generated, the portfolio in 2008 breaks down as follows: 80 % 70 % 68.8% 60 % 58.4% 50 % 40 % 30 % 20 % 29.6% 24.1% 10 % 0 % Retail trade spaces 3.4% 3.2% Office spaces and Mfg. and other medical practices commercial spaces 8.6% 3.6% Residential 0.0% 0.3% Garages/car parking spaces Spaces on an annual average Rental incomes The residual term of our commercial rental agreements weighted according to rental income amounts to 6.7 years. The weighted residual term for the office sector is 5.2 years and approximately 7.9 years for retail space. More than two thirds of the contractual rental income will only expire after 2012: Rental agreement expiries * 70 % 68% 60 % 50 % 40 % 30 % 20 % 10 % 0 % 10% 5% 7% 9% 1% 2009 2010 2011 2012 2013 et seq. indefinite period * In relation to the rental income Rent income represents the main source of revenue for our company. Tracking the development of its structure, rental agreement expiries, vacancy rates, rent arrears and nonpayments is an integral part of our control system and the monthly controlling reporting.

44 Management report: Economic report Building and property maintenance The continuous maintenance and optimisation of our buildings is a fundamental prerequisite for our successful business policy. Regular inspections of the properties by our structural engineering department ensure that existing defects are detected in good time and quickly eliminated. In addition, numerous measures for structural and roofing improvements were also undertaken again, securing the intrinsic value of the building in the long-term. These tasks can be scheduled and are carried out in consultation with the existing users or in conjunction with pending new lettings, thus greatly reducing the inconvenience for tenants. In 2008, we once again succeeded in achieving energy efficiency improvements to the various structural elements by means of renovations to roofing, façades and building technology installations. Thanks to energy certificates, most of which have already been issued, we will be in the position to carry out such measures in an even more targeted manner and also to document them for tenants or buyers. We remain convinced that tenants and/or potential clients will be focusing more sharply on rising energy prices and the associated increases in incidental costs in future, so that investments to improve a building s energy efficiency will increase its long-term rentability. As a secondary effect, these measures also reduce primary energy needs and harmful emissions. Maintenance expenditure of approximately 1.1 million (previous year: 1.6 million) was incurred for the financial year 2008. The reduction of around 500 T is largely attributable to portfolio adjustments implemented in 2007 and 2008. At the same time, the new investments demonstrate fewer defects because of the respective property structures and the lower age of the buildings, making it possible to reduce overall expenditure. In the financial year 2008, the main focus was on alterations and improvements which were undertaken in conjunction with changes of tenant. These include the modernisation of office floors in our Hamburg property, the creation of a medical practice in Erfurt, and the ongoing conversion of an office space into a day care facility in Krefeld. Moreover, with the measures carried out, which are linked with the renewal or conclusion of long-term rental agreements, we also succeeded in accommodating the individual wishes of our tenants, thus creating the basis for a good landlord-tenant relationship. Performance of the property portfolio The historical acquisition and construction costs of our properties listed in the portfolio register amounted to 272.9 million overall at the end of 2008. Use was made in the consolidated balance sheet of the option in accordance with IAS 40 (30) in conjunction with (56) and the portfolio properties were shown with the amortised acquisition or construction costs determined in accordance with IAS 16. The amount stated in the balance sheet is 223.3 million as of 31 December 2008.

Management report: Economic report 45 We had our property portfolio valued by an external expert again at the end of 2008. Jones Lang LaSalle was commissioned to determine the market value of the property portfolio and to document it in the form of an expert report. The valuation was carried out on the basis of the internationally recognised International Valuation Standards (IVSC) and/or the guidelines of the Royal Institution of Chartered Surveyors (RICS) regarding the valuation of assets. The market value is the estimated value, for which a property is exchanged between a willing buyer and a willing seller on the valuation date, whereby each of the parties has acted independently after proper marketing, knowledgeably, prudently and without obligation. The definition above corresponds to that of the model for the attributable market value (fair value model), as found in the International Financial Reporting Standards under IAS 40. The valuation was carried out on the basis of a discounted cash flow (DCF) process. The cash flows to be expected in each case were determined for a consideration period of eleven years 2009 to 2019 within the DCF process. The market value of a property is derived from the sum of the discounted cash flows of the overall planning period plus the residual value also discounted on the valuation date. When determining the cash flows, the rent income was always reduced by the propertyspecific costs and not those apportionable to the tenant. In addition, the expected expenses for maintenance or modernisation as well as the expected administrative expenditure were deducted. In the case of agreements which still had long-term contract periods, rent increases were taken into account on the basis of indexations in individual cases. Rent forecasts were prepared if rental agreements terminated within the consideration period. They were discounted on the valuation date for calculation of the cash value of future cash flows. The discounting rates range between 5.1% and 10.25% and take into account the respective property-specific risks. We have indicated the 2008 rent incomes as an important measure for determination of the net cash flows, the discounting rates and the capitalisation rates separately for each portfolio property in the preceding property list. The fair values determined by Jones Lang LaSalle are also individually listed. A total market value of 273.1 million is calculated for the HAMBORNER property portfolio overall, which is 7.9 million below the previous year s portfolio value. The difference arises from fair value disposals amounting to 13.5 million through sales, fair value additions through purchases amounting to 13.9 million as well as a fair value reduction in the asset portfolio year-on-year due to a revaluation of approximately 8.3 million.

46 Management report: Economic report The current financial and economic crisis is reflected in the fair value calculations for the properties, resulting in a trend towards lower valuations. Furthermore, the serious decline in property transactions and the associated lack of meaningful comparative values hamper a rational valuation of asset portfolios. The current market situation has resulted in a general trend of depreciations, from which our portfolio was not entirely exempt. Thanks to our conservative accounting at amortised acquisition and construction costs and not at higher market values the full impact of downward revaluations has not been felt on the consolidated result. We will be undertaking non-scheduled depreciations worth approximately 4.7 million for 2008, which are offset by write-ups amounting to 0.9 million. Owing to the current property crisis and the resulting lower valuations, the negative impact on the consolidated result amounts to around 3.8 million. Successful new investments at HAMBORNER Achieving profitable growth remains our company s objective. However, as we cannot rule out further pressure on property prices, we have responded flexibly to market developments and been deliberately cautious with regard to new investments. We slowed down the pace of investment in the reporting year and conserved our high liquidity. New investments, including additional purchase expenses, with a value of 16.1 million were transacted in the financial year 2008. In keeping with our strategy, our new investments are concentrated on commercial buildings on premium sites, specialist stores at high footfall locations and high-quality office properties. Purchase agreements were already concluded in 2007 for an Edeka supermarket in Freiburg (integral part of the Kaufland portfolio), an office building in Bremen Technology Park and an office building on a premium site in Herford s pedestrian zone. All properties transferred into our ownership in 2008. They are low management and maintenance properties in excellent locations with long-term leases and tenants with a good credit rating. The following is an individual breakdown of new investments with transfer of ownership during the financial year 2008: City Address Use Space (in m 2 ) Rental income p.a. Bremen Linzer Straße 7 Office 1,107 133 Freiburg Robert-Bunsen-Straße 9a Commercial 9,253 930 Herford Bäckerstraße 24-28 Commercial 1,783 275 40% of own funds were used for the new investments with the remainder being financed through bank loans.

Management report: Economic report 47 Depending on developments in the property transactions market, HAMBORNER AG will grow further in the asset categories of office and retail properties in 2009. In 2008, purchase agreements were already concluded for two mixed-usage properties in Hamburg and a further office building in an excellent location in Münster. These properties transferred into the ownership of HAMBORNER AG in February 2009. The associated investment volume amounts to 30.5 million. Sales from the asset portfolio In the previous financial year, we again achieved pleasing contributions to profits through the sale of portfolio properties. An agreement was already concluded in 2007 for the sale to a German investor of a commercial property in Oldenburg s pedestrian zone. This property transferred to the new owner at the beginning of 2008 in accordance with the agreement. The well-located office building only offers limited potential for a rent increase but, thanks to intense investment demand, it was possible to sell it in 2007 at a price that was considerably higher than the going market rate. Furthermore, a commercial building, in the prime location of Osnabrück s pedestrian zone, was sold to a Dutch investor in 2008. Ownership transferred to the new owner on 01.10.2008. The property, which was extensively optimised with regard to rent and space utilisation, was sold considerably above fair value. With the placement of our residential portfolio, we were able to achieve a strategically important disinvestment for the company, albeit smaller in terms of size. The four residential buildings with 51 dwelling units located in Duisburg, Dinslaken and Mönchengladbach were sold to a German investor with transfer of ownership on 30.10.2008. As a result, the company succeeded in adjusting the property portfolio, emphasising the focus on a commercial property public limited company and making an important step in the direction of a REIT. The Group has realised book profits amounting to approximately 6.7 million from the aforementioned sales in the reporting year. However, the financial market crisis has also contributed to the fact that we were not able to carry out all the planned sales from the asset portfolio in the financial year 2008. Although initiated in 2007, it has not yet been possible to effect the sale of other properties which no longer fit in with the company s strategic reorientation. We had classified these properties as Held for disposal as of 31.12.2007. It remains to be seen whether we can profitably place any of these properties on the market in 2009. Because of this uncertainty, we have reclassified these properties in the balance sheet under the item Held as financial investments.

48 Management report: Economic report Explanatory notes on the property portfolio The Group had a property portfolio of 4,731,690 m² overall as of 31.12.2008. This is predominantly made up of agricultural space or forest land, acquired during our erstwhile mining involvement. The remaining portfolio items from this holding are located in the municipalities of Dinslaken, Hünxe and Duisburg. Only 172,185 m², or 3.6% of the total portfolio, are apportionable to developed inner-city properties, which were newly acquired after our withdrawal from mining. The portfolio register contains more detailed information on these properties. The property portfolio as of 31.12.2008 broken down by types of usage compared with the previous year is as follows: 31.12.2008 (in m 2 ) 31.12.2007 (in m 2 ) Properties with business or commercial premises 172,185 168,384 Properties with residential buildings 0 6,945 Undeveloped residential building land 1) 4,600 4,600 Undeveloped commercial and industrial sites 6,000 6,000 Land for agriculture and forestry 2) 4,548,905 4,549,483 Total 4,731,690 4,735,412 1) Identified by means of the development plan or suitable for development in accordance with Art. 34 of the German Federal Building Code [BauGB] 2) Including farmhouses and cottages as well as other green and open spaces The areas described above are almost exclusively owned by HAMBORNER AG. Only 32,051 m² were owned by the subsidiary Hambornberg Immobilien- und Verwaltungs-GmbH on the balance sheet date. The areas shown as land for agriculture and forestry of approximately 4.55 million m² are largely in peripheral outer areas. As such, even over the long-term the prospects of future rezoning to commercial or residential building land remain limited. In the balance sheet, the undeveloped property was valued in the consolidated financial statements at the original acquisition and construction costs (average of approximately 0.52 /m²). In the financial year 2008, we sold land with an area of around 600 m² from our undeveloped existing holding, namely a roadway in Hünxe, achieving income of approximately 12 T in the process. Furthermore, a deed of sale for a plot of land of 484 m² in Duisburg-Beeck was concluded in December 2008 at a purchase price of approximately 53 T. The transfer of ownership was effected on 28.01.2009. A deed of sale for a plot of land of 22,400 m² in Dinslaken-Hiesfeld was concluded at the beginning of January 2009. The purchase price was 205 T. The transfer of ownership was scheduled for 28.02.2009.

Management report: Economic report 49 Participations In the reporting year, we sold our shareholdings in Wohnbau Dinslaken GmbH, Dinslaken and Gesellschaft für Stromwirtschaft m.b.h. in Mülheim an der Ruhr shown under the financial assets in the previous year. Book profits of 11.2 million were achieved in the process. In this way, we are systematically pursuing the reorientation of the company to a purely commercial property public limited company. The sale of the company s remaining shareholding in Montan GmbH Assekuranz Makler, Dusseldorf, which was concluded at the beginning of 2009, should also be seen in this light. The reclassification of the participation from Noncurrent assets into Assets held for disposal was carried out as of 31.12.2008 in conformity with IFRS 5. The book value of the participation was adjusted to the fair value in accordance with IFRS 5.18, without affecting the operating result. Workforce Our employees shape the image of the company for our clients and business partners. In the financial year 2008, they have again made a major contribution to the success of our company in their respective roles, demonstrating great personal commitment and a high willingness to assume responsibility. The Group employed 26 employees on an annual average, including the two members of the Managing Board. The remuneration arrangements for the members of the Managing Board are shown in detail in the remuneration report. Proposal for the appropriation of profits The unappropriated surplus of HAMBORNER AG under commercial law is the basis for the dividend distribution. The profit for the financial year determined in accordance with the provisions of the German Commercial Code amounted to 56,257,747.93 in the reporting year. After a transfer of 28,127,747.93 into other retained earnings, the unappropriated surplus amounts to 28,130,000. The Managing Board will propose to the general shareholders meeting of HAMBORNER AG on 9 June 2009 to distribute a dividend of 0.35 for each no-par-value share from the unappropriated surplus of the financial year 2008 amounting to 28,130,000 and to carry forward the remaining amount of 20,160,500.

50 Management report: Report on opportunities and risks Report on opportunities and risks Responsible handling of risks Principles of our risk policy As a property company operating across Germany, HAMBORNER is exposed to various risks that can negatively affect the Group s net worth, financial position and earnings. To reduce the risks, we have tailored our business policy to avoid business lines with a particularly highrisk potential from the outset. In this regard and as in the past, in 2008 we again avoided involving ourselves in highly speculative financial transactions or property development schemes. With termination of the special securities fund, risks from fluctuating share prices with a corresponding influence on the assets and earnings position for the HAMBORNER Group no longer exist. We assume proportionate, manageable and controllable risks, provided that the opportunities counterbalancing them offer adequate appreciation in value. Risk management In order to delimit our exposure to risk, we have implemented a risk management system for the prompt identification and handling of risks that could be of significance for the economic position of the Group. It complies with the requirements established by the German Act on Corporate Governance and Transparency (KonTraG), is subject to regular review, and is adjusted or extended accordingly in the event of changing economic conditions. The early risk identification system is reviewed by the statutory auditor within the framework of the annual audit of the annual financial statements. HAMBORNER AG s risk management system is closely tied into the operating procedures particularly the planning and controlling processes and entails several stages. Of central importance in this regard is the risk inventory, with the help of which the potential individual risks are recorded, analysed and assessed with regard to probability of occurrence, the possible level of loss and in respect of the associated exposure potential. In addition, measures for risk management and timely risk handling were laid down and the internal responsibilities allocated. Reporting, lean organisational structures and transparent decision-making channels ensure that the Managing Board is directly involved with regard to all risk-related issues. Opportunities and risk situation and individual risks We describe below the opportunities and risks that can have serious repercussions on the net worth, financial position and earnings of the company. Opportunities and risks of future macroeconomic development The HAMBORNER Group is affected by the economic and political climate. The German economy is currently in a distinct downturn phase, the extent and duration of which can hardly be forecast. Against this backdrop, the market environment for the HAMBORNER Group has also become more difficult. In view of our business model and our capital position, we however still consider ourselves to be well positioned even under these generally poor economic conditions.

Management report: Report on opportunities and risks 51 Opportunities and risks of the market in the property sector We expect good demand again for the current financial year for our properties on premium sites in pedestrian zones. It remains to be seen how the general economic environment will develop for office buildings in 2009. Vacancy risks continue to exist with regard to unmodernised office space or properties on second-rate sites used for retail trade. Regardless of economic risks, the property industry is subject to distinct market cycles, which can have an adverse impact on the retention of value and rentability of the properties held in the portfolio. We try to anticipate this risk by means of thorough market observation and through close contact with our tenants and we endeavour to minimise the risk of nonpayment of rent by concluding long-term contracts with tenants with a good credit rating wherever possible. General letting risks Through a broad regional dispersal of our property portfolio across 41 locations at the moment we attempt to reduce the effect on the overall portfolio of specific negative local influences, such as those arising out of the construction of mega shopping centres, for example. In addition, a good location and the greatest possible flexibility of usage are important criteria for us when purchasing properties. Moreover, we endeavour to limit the letting risks through regular monitoring and improvement of the structural quality of the properties. By managing all the portfolio properties ourselves, we are able to respond to a proposed change of tenant early with targeted subsequent lettings. The aforesaid measures for minimisation of letting risks have contributed to achieving an occupancy rate of more than 98% on average in the last 15 years. 2006 was an exception with 96%. In the financial year 2008, the vacancy rate amounted to 2.1% on average and thus again conformed to the low level of the past. We ensure a good occupancy rate in the case of new investments. Furthermore, rent guarantees cover future letting risks to some extent. Risks of non-payment of rent We reduce the risk of non-payment of rent, particularly due to tenants inability to pay, by means of efficient debt management, the regular monitoring and review of the creditworthiness of our tenants and the stipulation of rent securities commensurate with the risk. Uncollectable receivables amounted to approximately 70 T in the financial year 2008 and thus represented 0.4% of our annual rental income. In addition, an increase in uncollectable receivables should not be ruled out for the current financial year on account of the deteriorating economic prospects. However, due to our tenant structure, there are no indications of major rent losses are at present. The Kaufland Group is our biggest single tenant with a share of approximately 25% in the total rent volume. In view of the creditworthiness of this tenant and the location of the properties, we consider the risk resulting therefrom to be manageable.

52 Management report: Report on opportunities and risks Valuation risk The retention of value of our properties is checked annually using the generally recognised DCF process. We had the valuation for our commercial property portfolio carried out by an independent third party again at the end of 2008. Detailed information on the valuation of our property portfolio can be found in the section Performance of the portfolio. A need for extraordinary depreciations to the extent of 4.7 million ensued in the consolidated financial statements in accordance with IFRS for the financial year 2008 on the basis of the valuations carried out. On the other hand, a reversal of impairment adjustment amounting to 0.9 million was made for a total of five properties subjected to a non-scheduled depreciation in previous years. Changes in the general risk assessment, the interest rate level or property-specific risks may also have an impact on the valuation of properties in the future. Financial Risks The asset and financial structure of our Group remains extremely sound. Financial liabilities and derivative financial instruments amounted to 91.1 million at the end of the reporting year. The equity ratio of the Group was 56.9% at the end of the financial year. We will continue to avail of appropriate borrowing to finance our growth. As such, interest rate developments are of corresponding importance for the Group. To avoid exposure to short-term interest rate risks, we have financed our investments with fixed long-term loans using interest rate hedges. The risks resulting from the financial instruments relate to credit, liquidity and market risks. Credit risks exist in the form of risks of default for financial assets. Maximum risk exposure here amounts to the book values of the financial assets. For derivatives, this is the sum of all the positive market values and, for primary financial instruments, the sum of the book values. If risks of default exist, they are taken into account by means of value adjustments. Liquidity risks constitute refinancing risks and thus the risks of meeting existing obligations when they fall due. The strategy and the results of the planning process are taken as a basis for the early identification of the future liquidity situation. The expected liquidity requirements are scheduled in the medium-term plan, which covers a period of five years. An additional risk not just for HAMBORNER arises due to the so-called interest deduction ceiling, i.e. that interest on borrowed capital is no longer deductible in full under certain circumstances. In view of the probable result position and good capitalisation, we expect the interest deduction ceiling to have little or no impact in 2009. However, with increasing leverage, it should not be ruled out that HAMBORNER may incur higher tax charges in subsequent years due to non-deductible interest payments. Furthermore, the company utilises the prerogative of extended trade tax reduction. Due to the narrow prerequisites for this, which restrict business activity, there is a risk of a possible discontinuation resulting in higher tax payments in the future as well as higher deferred taxation on the liabilities side.

Management report: Report on opportunities and risks 53 Legal risks Within the framework of its business activities, HAMBORNER AG is currently involved in the following significant court cases or threatened legal disputes: The resolutions of the ordinary Annual General Meeting 2008 approving the acts of the executive bodies and the creation of Authorised Capital were contested at Duisburg Regional Court. An intervening party has joined the legal action. The validity of the resolutions on the creation of Authorised Capital is dependent on registration. These resolutions are registered in the Commercial Register at Duisburg County Court. In order to prevent the registration in the Commercial Register from being reversed on foot of a possible successful appeal by the petitioner, the company is pursuing a release procedure with regard to these resolutions. We do not expect the outcome of this legal action to have any significant impact on the company s economic or financial situation. In addition, we had already been informed in 2007 of a possible compensation claim against various other companies amounting to approximately 1.3 million on account of mining damage. It should not be ruled out that HAMBORNER AG may also be involved in a possible action in this connection. Mining damage risks There are potential risks from our former mining activities, e.g. due to mining-related damage or shaft stabilisation. The associated economic risk and the extent of possible refurbishment work that may become necessary were determined and assessed by an expert in 2005. To cover possible additional safety measures that may become necessary in the long-term due to altered water drainage in the area of our former coal fields, we will be increasing our mining damage provisions in the long-term to approximately 1.6 million overall. The potential compensation claim mentioned under Legal risks relates to a coalfield located in Duisburg. As a former co-owner, HAMBORNER is liable for claims from the old mining industry to an extent of 50%, so that a pro rata claim should not be ruled out. Therefore, in the consolidated financial statements and in the HAMBORNER AG individual financial statements under commercial law, a precautionary reserve amounting to 0.7 million was already created in the annual financial statements 2006. As far as we are aware to date, no other contaminated land risks, e.g. due to soil pollution exist. An inspection of the register of contaminated sites has been carried out at the respective municipalities with regard to our entire developed and undeveloped property holdings. No significant risks have been identified in this regard. Summarised assessment of the risk situation Taken overall, risks jeopardising the HAMBORNER Group and HAMBORNER AG portfolio cannot currently be identified from an income, assets or liquidity viewpoint. No portfolio jeopardising risks identified to date

54 Management report: Report on opportunities and risks Report of the Managing Board in accordance with Art. 312 of the German Stock Company Act In accordance with Art. 312 Para. 3 of the German Stock Company Act, the Managing Board has prepared a report for the financial year 2008 regarding relationships with affiliated companies. The report contains the following final declaration: In conclusion, the Managing Board declares that, based on the circumstances of which it was aware at the time the transaction was carried out, the company received an appropriate consideration in the case of each transaction. Statements in accordance with Art. 289 Para. 4 and Art. 315 Para. 4 of the German Commercial Code Composition of the subscribed capital As of 31 December 2008, the subscribed capital of HAMBORNER AG stood at 22,770,000. The share capital is divided into 22,770,000 no-par-value shares, to which a computed amount of 1 per share is apportionable. The shares are fully paid-up. The entitlement of shareholders to certification of their share is excluded in accordance with Art. 3 Para. 4 Clause 2 of the Articles of Association. The company is entitled to document the entire share capital in one or several collective documents of title. All shares of HAMBORNER AG are documented in one permanent collective document of title. Each no-par-value share grants one vote in the general shareholders meeting, but rights from shares which belong to a registrant or from which voting rights are allocated to him in accordance with Art. 22 Para. 1 Clause 1 No. 1 or 2 of the German Securities Trading Act, do not exist during such time as the disclosure requirements in accordance with Art. 21 Para. 1 or 1a of the German Securities Trading Act are not fulfilled. The exception to this pursuant to Art. 28 Clause 2 of the German Securities Trading Act are entitlements in accordance with Art. 58 Para. 4 of the German Stock Company Act and Art. 271 of the German Stock Company Act, where disclosure was not wilfully omitted and has been rectified. With regard to the rights and obligations of shareholders, reference is made to the German Stock Company Act, particularly to the right therein to attend the general shareholders meeting, Art. 118 Para. 1 of the German Stock Company Act, the right to obtain information in accordance with Art. 131 of the German Stock Company Act, the voting right in accordance with Arts. 133 et seq., as well as the entitlement to participation in the unappropriated surplus, Art. 58 Para. 4 of the German Stock Company Act. Voting right restrictions or share transfer restrictions The shares issued by HAMBORNER AG are subject to no restrictions whatsoever in this respect.

Management report: Report on opportunities and risks 55 Interests in the capital that exceed 10% of the voting rights The direct or indirect interests in the capital of the company which attain or exceed 10% of the voting rights are as follows: HSH Nordbank AG, Hamburg indirectly holds more than 50% of the voting rights and thus an interest that exceeds 10% of the voting rights via the participations of its Group companies, HSH Real Estate AG and HSH-RE Beteiligungs GmbH, which are attributable to it in accordance with Art. 22 Para. 1 Clause 1 No. 1 of the German Securities Trading Act [WpHG]. In addition, Professor Dr. Siegert indirectly holds an interest of more than 10% in the voting capital of HAMBORNER AG via the voting rights of de Haen Carstanjen & Söhne GmbH, Dusseldorf and of SIEGERT & CIE GmbH attributable to him in accordance with Art. 22 Para. 1 Clause 1 No. 1 of the German Securities Trading Act. We have not been notified of any other direct or indirect interests in the capital of the company, which attain or exceed 10% of the voting rights. Shares with special rights that bestow controlling powers No such special rights are contained in shares issued by the company. Nature of the voting right control, if employees have an interest in the capital and do not exercise their control rights directly HAMBORNER AG has no employee share programme. If employees have purchased shares on their own account, they exercise their rights arising therefrom directly themselves in accordance with the statutory requirements and the provisions of the Articles of Association. Statutory requirements and provisions of the Articles of Association regarding the appointment and removal of members of the Managing Board and the amendment of the Articles of Association Members of the Managing Board are appointed by the Supervisory Board for a maximum of five years pursuant to Art. 84 Para. 1 of the German Stock Company Act. A repeated appointment or extension of the term of office is permitted, for a maximum of five years in each case. If a necessary member of the Managing Board is absent, the court has to appoint the member in urgent cases, at the request of a party involved, pursuant to Art. 85 of the German Stock Company Act. In accordance with Art. 6 Para. 1 of the Articles of Association, the Managing Board of HAMBORNER AG consists of several members, whose number is determined by the Supervisory Board, whereby the Supervisory Board may nominate one member as Chairman pursuant to Art. 84. Para 2 of the German Stock Company Act. Furthermore, it may withdraw the appointment as member of the Managing Board and the nomination as Chairman of the Executive Board in accordance with Art. 84 Para. 3 of the German Stock Company Act, if compelling grounds exists. Any amendment to the Articles of Association requires a resolution of the general shareholders meeting pursuant to Art. 179 of the German Stock Company Act, whereby the general shareholders meeting may delegate to the Supervisory Board the authority for amendments

56 Management report: Report on opportunities and risks which relate only to the wording (Art. 179 Para. 1 Clause 2 of the German Stock Company Act). The authority is delegated to the Supervisory Board pursuant to Art. 11 Para. 3 of the Articles of Association of HAMBORNER AG. The amendment of the Articles of Association requires an extraordinary resolution of the general shareholders meeting approved by votes representing at least three quarters of the share capital (Art. 179 Para 2 Clause 1 of the German Stock Company Act). In accordance with Art. 179 Para. 2 of the German Stock Company Act, the Articles of Association may stipulate other controlling interests and provide for additional requirements. Powers of the Managing Board for the issuing of shares or for a share buy-back Art. 3 of the Articles of Association contains specifications for the share capital of the company. In order to allow the company to respond to market circumstances in such a way as to protect the share price and, above all, to create the possibility of a rapid and flexible response such as is customary in the market and the industry, to meet capital market requirements or in the case of acquisitions, at the general shareholders meeting on 5 June 2008 the Managing Board was authorised as follows: AGM resolution 2008: Creation of Authorised Capital I+II a) to increase the share capital of the company, with the approval of the Supervisory Board, once or several times until 4 June 2013, by up to E 2,270,000 nominally by issuing new no-par-value shares made out to bearer against a cash contribution (Authorised Capital I) and to offer them to the shareholders for subscription. b) to increase the share capital of the company, with the approval of the Supervisory Board, once or several times until 4 June 2013, by up to E 9,080,000 overall by issuing new no-par-value shares made out to bearer (Authorised Capital II) and, with the approval of the Supervisory Board, to exclude the statutory subscription right of shareholders in certain cases. An action against these resolutions and against the vote by the general shareholders meeting to approve the acts of the executive bodies is pending at Duisburg Regional Court. The company immediately announced the lodging of the legal action in the electronic German Federal Gazette in accordance with Art. 246 Para. 4 of the German Stock Company Act. The amendment to the Articles of Association (capital increase) was entered in the Commercial Register on 16 July 2008. The Managing Board is not empowered to buy back own shares. Fundamental arrangements of the company, which are conditional on a change of control as a result of a takeover offer and consequences following from this HAMBORNER AG has not concluded such arrangements. Company agreements for compensation reached with the members of the Managing Board or employees in the event of a takeover offer No compensation agreements of this kind have been concluded.

Management report: Remuneration report 57 Remuneration report For us, as a stock exchange-listed company, corporate governance and transparent company management also mean reporting comprehensively on the emoluments of the Managing and Supervisory Board. The remuneration report summarises the principles that apply when determining the remuneration of the Managing Board of HAMBORNER AG and explains the extent and structure of its emoluments. The principles and extent of the remuneration of the Supervisory Board are also outlined. The remuneration report conforms with the recommendations of the German Corporate Governance Code and includes details which, in accordance with the requirements of German commercial law, as extended by the German Disclosure of Managing Board Remuneration Act (VorstOG), form a component part of the notes in accordance with Art. 285 of the German Commercial Code, of the notes to the consolidated accounts in accordance with Art. 314 of the German Commercial Code and/or of the management report in accordance with Art. 289 of the German Commercial Code and of the consolidated management report in accordance with Art. 315 of the German Commercial Code. Remuneration of the Managing Board Managing Board remuneration is determined by the Executive Committee of the Supervisory Board. The extent of the Managing Board remuneration at HAMBORNER AG is geared to the size of the company, its economic and financial situation and its success. The remuneration of the Managing Board is performance-related and takes into account the functions and the contribution of the respective member of the Managing Board. The remuneration for members of the Managing Board consists of fixed and results-related components. The non-profit-related parts consist of a fixed allowance and supplementary benefits (e.g. company car). The fixed allowance is paid as basic remuneration in the form of a monthly salary. The results-related (variable) remuneration accrues to the director once a year as a bonus and is dependent upon the attainment of individually agreed performance targets. Owing to the associated high administrative cost and the low number of members on the Managing Board, there are no plans for an additional, variable remuneration component geared to the long-term for instance within the framework of a share option programme. The structure of the Managing Board remuneration is subject to periodic review by the Supervisory Board. The remuneration of active members of the Managing Board for the financial year 2008 is made up as follows on the basis of the existing service contracts and the associated, separately concluded results-related bonus arrangements: Fixed remun. Variable remun. Total Roland J. Stauber (spokesperson until 15.08.2008) 103 123 226 Dr. Rüdiger Mrotzek 135 174 309 Hans Richard Schmitz (since 01.12.2008) 12 0 12 Total 250 297 547

58 Management report: Remuneration report In addition to the aforementioned emoluments, members of the Managing Board received remunerations in kind essentially in the form of use of company cars and subsidies for pension, health and nursing care insurance. These subsidies each correspond in their extent to half of the amounts paid by the given member of the Managing Board, but at most to the maximum amount of the employer s percentage for pension, health and nursing care insurance due by law, taking into account the contribution assessment ceilings applicable at the time. The additional emoluments amounted to 48 T in total in the reporting year. Mr Roland J. Stauber has stepped down from the Managing Board of the company with effect from 15.08.2008. In view of the service contracts concluded with him, he has an entitlement to the extent of the cash value (5% base) of the gross annual fixed salary that would have been due to him up to the normal end of his contract (14.05.2010). Consequently, Mr. Stauber received a severance payment of 257 T in October 2008. Dr. Rüdiger Mrotzek s employment contract contains a corresponding clause. According to that, the cash value (5% base) of the gross annual fixed salary that would have been disbursed up to the normal expiry of the contract is due to Dr. Mrotzek in the event of revocation of his appointment by the Supervisory Board as recompense for the early termination of the contract. Pension commitments No pension commitments were granted to the members of the Managing Board by the company. The total remunerations of former members of the Managing Board of the company amount to 665 T in the reporting year. This includes the above-mentioned lump-sum settlement amount paid to Mr Stauber. The pensions provisions formed for this group of people amount to 3,646 T. Miscellaneous Loans were not granted to members of the Managing Board by the company. No member of the Managing Board received benefits or corresponding commitments from a third party in the past financial year with regard to his activity as a member of the Managing Board. D & O insurance The company has concluded a pecuniary loss liability insurance policy for members of the Managing Board and for members of the Supervisory Board. This covers pecuniary losses incurred out of activities as a member of the executive bodies and supervisory bodies of HAMBORNER AG. Furthermore, the officers of Hambornberg Immobilien- und Verwaltungs- GmbH are insured persons (insurance cover relates here to the Managing Directors of the private limited company). The sums insured amount to 5 million per insurance claim, but with a maximum of 5 million per insurance year. Appropriate deductibles have been agreed.

Management report: Remuneration report 59 The insurance cover lapses in the event of wilful intent so that, where applicable, cover previously granted shall lapse retroactively in the event of (subsequent) discovery and benefits provided are to be refunded to the insurer. The annual insurance premium currently amounts to approximately 12.5 T plus insurance tax. An advance premium of 11.5 T plus insurance tax was paid in the reporting year for the year 2009. Remuneration of the Supervisory Board The remuneration of the Supervisory Board is regulated in Art.12 of the Articles of Association. Supervisory Board remuneration is geared to the size of the company, the functions and the responsibility of the members of the Supervisory Board and is quite largely dependent on the economic success of the company. In accordance with Art. 12 of the Articles of Association, the fixed remuneration amounts to 15,000 and the variable remuneration 500 per euro cent, by which the undiluted consolidated result per share (earnings per share) exceeds the amount of 0.15. The variable remuneration is limited to twice the fixed remuneration. The Chairman of the Supervisory Board receives twice the remuneration, his deputy one and a half times. Members of the Supervisory Board who have only belonged to the Supervisory Board for part of the financial year are entitled to the remuneration pro rata temporis. Members of the Supervisory Board who belong to one of the three committees formed receive an additional remuneration of 2,000 per financial year. Twice this remuneration is due to the respective committee chairmen. Three committees exist at the moment: the Executive, Audit and Nominating Committees. The members of the Nominating Committee waive the remuneration due to them, as long as the committee does not meet. The relevant remuneration of the Supervisory Board for the financial year 2008 is as follows: Fixed remuner. Variable remuner. Total Dr. Eckart John von Freyend 33 60 93 Dr. Marc Weinstock 28 45 73 Robert Schmidt 19 30 49 Volker Lütgen 17 30 47 Edith Dützer 17 30 47 Hans-Bernd Prior 15 30 45 Total 129 225 354 Furthermore, members of the Supervisory Board received no additional remunerations or benefits in the reporting year for services personally provided, particularly consultancy and mediation services. Members of the Supervisory Board receive no loans or advances from the company.

60 Management report: Supplementary report Supplementary report On 06.02.2008, a deed of sale was concluded with regard to an office building in Fuhlsbüttler Straße as well as an office property with warehouse space in Ziethenstraße in Hamburg. Both properties transferred into the ownership of HAMBORNER AG at the beginning of February 2009. An office property in Münster also passed into our ownership in February 2009. The notarised deed of sale for this transaction was concluded on 10.07.2008. Purchase price payments of 30.5 million in total were payable for these property acquisitions. In the wake of the strategic reorientation of the company into a pure property public limited company, we initiated measures in the reporting year to divest ourselves of the fragmentary shareholdings. In this context, we have sold our 0.71% shareholding in Montan GmbH. The sale of our share in the business was contractually executed on 28.01.2009 with economic effect on the date of notarisation. The purchase price of 130 T has since been received. No further transactions of particular importance have been concluded since the close of the financial year.

Management report: Forecast report 61 Forecast report Orientation of the Group HAMBORNER is a commercial property company which operates throughout Germany and will also maintain this orientation in the future. The company s strategy is geared to valuecreating growth in the retail trade and office sectors. Our investment priorities are therefore retail properties in first-class locations in German regional centres and medium-sized towns, retail centres and office buildings in established locations. In view of our excellent capital position, we consider ourselves to be optimally positioned in the current difficult market environment and well equipped for further growth. We can and will exploit those market opportunities which present themselves, whereby acquisitions will be made depending on price and market developments. Our strategy is therefore geared to the medium and long-term. We will also maintain our sound financing structure in the future and will finance investments with an appropriate use of borrowed funds of approximately 60%. We are striving to preserve the equity ratio of the company as a whole at an unchanged 45%. Parallel to the expansion of the portfolio, the optimisation of the inventory through sales will be an ongoing function. This relates primarily to older, mainly smaller properties which no longer conform to our strategy. Through the termination of the special securities fund, and the sale of both the residential properties and our shareholding in Wohnbau Dinslaken GmbH, we have reached important milestones on the way to becoming a property public limited company operating solely in the commercial sector. At the same time, we have thus fulfilled additional requirements for conversion into a REIT. Expected economic environment Having been relatively robust for several consecutive years, the world economy s situation increasingly deteriorated in 2008. Germany is in a deep recession. The dramatic drop in economic activity was triggered by the crisis in the financial markets. Despite the government s massive stimulus packages, the financial crisis is not yet over. Economic forecasts therefore now have a much weaker footing than is otherwise the case. A significant decline in real gross domestic product is expected for 2009. In terms of impact on the labour market, it is predicted that the rate of unemployment will rise to over 8% through into next year. At present, a gradual easing of this strained situation is only expected in 2010 at the earliest.

62 Management report: Forecast report Future situation in the industry Letting market The non-monetary effects of the global financial market crisis have also reached the German letting market and the impact will be even greater on the office property than the retail property markets. In 2009 therefore, it is unlikely that the record turnovers of past years will be attained again and, in many places, prime rents will already have peaked. Investment market The credit squeeze and the considerable deterioration in the economic environment as a whole will probably mean that investment volume in terms of commercial properties and large residential portfolios will show a further decline on 2008 s relatively low level. We expect that in 2009, and probably 2010 as well, the number of transactions with a very high debt financing element will be lower than in the past. Anticipated business development For both 2009 and 2010 we expect operational business to develop stably within a market environment that has become more difficult overall. Whereas the consolidated result was positively affected by special influences such as the termination of the special securities fund, revaluation of deferred taxes and by capital gains in the past two years, rental income will be the main source of revenue in the future. For 2009 we expect an increase in our rental and leasing income compared with the previous year. In particular, the new acquisitions transferred or concluded in 2008 which have not yet or only partially contributed to rental income in the reporting year, will generate a corresponding increase. In terms of the economic vacancy rate and loss of rent, we expect the level to remain low in the future as well. No major lease agreements expire in 2009, so no follow-up agreements have been concluded to date; moreover our main tenants boast good creditworthiness. Taken overall this indicates that our company has a sound foundation based on secure rental income, particularly from the retail sector. Viewed from an overall economic perspective, the next two years will certainly be very difficult. However, HAMBORNER believes itself to be well positioned vis-à-vis the competition, particularly in the current environment, due to its financial strength and its strategic reorientation over the last two years. This does not preclude further pressure on property prices and thus on the valuation of portfolio properties. As such, dates for possible purchases in keeping with our growth strategy or portfolio adjustments through selective sales cannot be predicted at present. At this point, it is a question of tracking ongoing market developments, to which HAMBORNER can respond promptly in view of its high liquid reserves.

Management report: Forecast report 63 Overall, we expect positive earnings for 2009 and subsequent years, which will allow appropriate and, as far as possible, increasing dividends. This presupposes that we remain spared from significant unforeseeable reductions in earnings. Duisburg-Hamborn, 24 February 2009 The Managing Board Dr. Rüdiger Mrotzek Hans Richard Schmitz

Consolidated financial statements Leverkusen, Wiesdorfer Platz 33

Consolidated profit and loss account 67 Consolidated balance sheet 68 Consolidated cash flow statement 70 Consolidated statement of changes in equity 71 Consolidated fixed asset movement schedule 72 Notes to the consolidated financial statements 74 Assurance of the legal representatives 105 Declaration of the Managing Board 106 Audit certificate of the statutory auditor 107

66

Consolidated financial statements: Consolidated profit and loss account 67 Profit and loss account for the period from 1 January to 31 December 2008 Income from the management of properties and buildings (1) Notes 2008 2007 Income from rents and leases 19,437 13,239 Income from passing on incidental costs to tenants 1,873 1,229 21,310 14,468 Other own work capitalised (2) 0 27 Other operating income (3) 19,500 7,568 Total operating income 40,810 22,063 Expenses for management of properties and buildings (4) Current operating expenses -3,026-1,859 Property and building maintenance -1,109-1,594 Personnel costs (5) -4,135-3,453 Wages and salaries -2,599-2,199 Social security, pensions and other benefits -374-321 -2,973-2,520 Amortisations of intangible assets, tangible fixed assets and properties held as a financial investment (6) -10,257-3,177 Other operating expenses (7) -2,677-2,271 Total operating expenses -20,042-11,421 Operating result 20,768 10,642 Result from participations (8) 643 449 Financial result (9) Income from securities including capital gains 0 654 Other interest and similar income 1,717 545 Interest and similar charges -4,644-1,234-2,927-35 Result on ordinary activities 18,484 11,056 Taxes on income and profit (10) -1,517 6,645 Result from activities to be continued 16,967 17,701 Result from activities to be discontinued (11) 374 34,525 Consolidated surplus 17,341 52,226 Profit carried forward from previous year 53,922 1,554 Dividend -7,970 0 Transfer into other retained earnings -28,128 0 Transfer from other retained earnings 0 142 Consolidated unappropriated surplus 35,165 53,922 Earnings per share (in E) (12) 0.76 2.29 of which, from activities to be continued 0.75 0.78 of which, from activities to be discontinued 0.01 1.51

68 Consolidated financial statements: Consolidated balance sheet Assets Notes 31 December 2008 31 December 2007 Non-current assets Intangible assets (13) 12 22 Tangible fixed assets (13) 176 174 Properties held as a financial investment (14) 223,342 201,702 Financial assets (15) Participations 0 578 Other loans 38 54 38 632 Other assets (16) 366 365 Deferred tax assets (16) 1,914 156 225,848 203,051 Current assets Trade receivables and other assets (16) 799 967 Income tax receivables (16) 557 454 Bank deposits and cash balances (17) 54,012 6,442 55,368 7,863 Non-current assets held for disposal and discontinued business lines Non-current assets held for disposal (18) 130 19,813 Assets from activities to be discontinued (19) 0 59,470 130 79,283 55,498 87,146 Total assets 281,346 290,197

Consolidated financial statements: Consolidated balance sheet 69 Liabilities Equity capital (20) Notes 31 December 2008 31 December 2007 Subscribed capital 22,770 22,770 Retained earnings Legal reserve 2,277 2,277 Other retained earnings 104,575 76,448 Revaluation reserve -4,737 90 102,115 78,815 Consolidated unappropriated surplus 35,165 53,922 160,050 155,507 Non-current liabilities and provisions Financial liabilities and derivative financial instruments (21) 87,350 48,034 Deferred tax liabilities (22) 15,188 14,219 Trade accounts payable and other liabilities (24) 3,784 3,860 Provisions for pensions (25) 5,780 5,923 Other provisions (26) 678 555 112,780 72,591 Current liabilities and provisions Financial liabilities (21) 3,754 36,397 Income tax liabilities (23) 660 102 Trade accounts payable and other liabilities (24) 1,823 18,137 Other provisions (26) 2,279 2,318 8,516 56,954 Liabilities from activities to be discontinued (19) 0 5,145 8,516 62,099 Total equity capital, liabilities and provisions 281,346 290,197

70 Consolidated financial statements: Consolidated cash flow statement Cash flow from operating activity (29) Notes 01.01. to 31.12.2008 01.01. to 31.12.2007 Consolidated annual result before tax (EBT) 18,919 45,433 Write-downs/write-ups (-) 9,312 3,177 Financial income 2,081-1,258 Change in provisions -59-917 Book profits/losses (offset) from the disposal of tangible fixed assets, investment properties and non-current assets held for disposal -6,741-5,621 Book profits/losses (offset) from the disposal of financial assets -11,477-32,826 Other non-cash expenditure (+) / income (-) 3,711-2,004 Change in receivables and other assets and deferred income -923-1,050 Change in liabilities and deferred income -1,426 18,855 Dividend received 643 1,313 Interest inflows 1,720 512 Tax payments -5,477-2,086 Cash flow from investment activity (30) 10,283 23,528 Investments in intangible assets, tangible fixed assets and investment properties -36,309-98,008 Proceeds from disposals of tangible fixed assets, investment properties and non-current assets held for disposal 15,417 17,764 Investments in financial assets 0-87,947 Proceeds from disposals of financial assets 62,601 95,087 Net cash outflow from the discontinuation of the special share fund Südinvest 107-13 0 Cash flow from financing activity (31) 41,696-73,103 Dividend payments -7,970-6,831 Net cash outflow from the acceptance of financial liabilities and derivative financial instruments 37,713 66,308 Net cash outflow for the repayment of financial liabilities and derivative financial instruments -37,027-551 Interest outflows -3,714-498 -10,998 58,428 Changes in the cash fund 40,981 8,852 Cash fund on 1 January 13,031 4,179 Bank deposits and cash balances * 13,031 4,175 Near-liquid investments 0 4 Cash fund on 31 December 54,012 13,031 Bank deposits and cash balances 54,012 13,031 * Including liquid funds of 6,589 TE contained in the Assets from activities to be discontinued as of 31.12.2007

Consolidated financial statements: Consolidated statement of changes in equity 71 Retained earnings Consolidated unappropriated surplus Subscribed capital Legal reserve Other retained earnings Revaluation reserve Surplus Carryforward Appropriation of profits Equity capital total Position at 1 January 2007 19,430 1,943 79,151 26,204-1,780 11,277 136,226 Carryforward to new account 11,277-11,277 Capital increase from company funds 3,340 334-3,674 Distribution of profit for 2006-6,831-6,831 Transfer into other retained earnings 1,112-1,112 Transfer from other retained earnings -142 142 Price adjustment of securities from securities fund -25,988-25,988 Revaluation of derivative financial instruments -126-126 Total of the income and expenses directly entered in the equity capital -26,114-26,114 Consolidated surplus 01.01. - 31.12.2007 52,226 52,226 Overall consolidated result 01.01. - 31.12.2007-26,114 52,226 26,112 Position at 31 December 2007 22,770 2,277 76,447 90 1,554 52,226 142 155,507 Carryforward to new account 52,226-52,226 Distribution of profit for 2007-7,828-142 -7,970 Transfer into other retained earnings 28,128-28,128 Price adjustment of securities from securities fund -217-217 Adjustment of book values of participations to the fair value 129 129 Revaluation of derivative financial instruments -4,739-4,739 Total of the income and expenses directly entered in the equity capital -4,827-4,827 Consolidated surplus 01.01. - 31.12.2008 17,341 17,341 Overall consolidated result 01.01. - 31.12.2008-4,827 17,341 12,513 Position at 31 December 2008 22,770 2,277 104,575-4,737 17,824 17,341 0 160,050

72 Consolidated financial statements: Consolidated fixed asset movement schedule Acquisition and construction costs Position Additions Disposals Profit-neutral Reallocations Position 01.01.2008 adjustments as per IFRS 5 31.12.2008 to fair value Intangible assets 102 0 5 0 0 97 Tangible fixed assets 818 34 51 0 0 801 Properties held as a financial investment 231,040 19,357 0 0 22,486 272,883 Financial assets Participations 578 0 577 129-130 0 Other loans 67 0 17 0 0 50 645 0 594 129-130 50 Overall 232,605 19,391 650 129 22,356 273,831

Consolidated financial statements: Consolidated fixed asset movement schedule 73 Provisions Residual book values Position Additions Write-ups Disposals Reallocations Position Position Position 01.01.2008 (depreciations as per IFRS 5 31.12.2008 31.12.2007 31.12.2008 for the financial year) 80 10 0 5 0 85 22 12 644 31 0 50 0 625 174 176 29,338 10,215 945 0 10,933 49,541 201,702 223,342 0 0 0 0 0 0 578 0 13 0 0 1 0 12 54 38 13 0 0 1 0 12 632 38 30,075 10,256 945 56 10,933 50,263 202,530 223,568

74 Consolidated financial statements: Notes to the consolidated financial statements Notes to the consolidated financial statements Principles for the preparation of the financial statement General principles HAMBORNER AG acquires, manages and realises property and other assets. The headquarters of the company is in Duisburg-Hamborn, Germany. It is entered in the Commercial Register at Duisburg County Court, Germany, under HRB 0004. The consolidated financial statements as of 31 December 2008 of HAMBORNER AG, Duisburg-Hamborn were prepared in accordance with the International Financial Reporting Standards (IFRS) valid on the balance sheet date, as applicable in the European Union, and with the additional provisions under commercial law to be observed in accordance with Art. 315 of the German Commercial Code and Art. 315a Para. 1 of the German Commercial Code. The IFRS comprise the IFRS issued by the International Accounting Standards Board (IASB), the International Accounting Standards (IAS), the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) as well as those of the Standing Interpretations Committee (SIC). All standards and interpretations issued by the International Accounting Standards Board (IASB) and applicable at the time of preparation of the consolidated financial statements are applied, provided that they have been adopted by the EU (endorsement). To this extent the consolidated financial statements of HAMBORNER AG comply with the IFRS. The consolidated financial statements of HAMBORNER AG were prepared in euro ( ). All amounts are shown in thousands of euro (T ) unless otherwise stated. Minor differences may arise with computations of totals and percentage figures due to rounding. The Managing Board prepared the consolidated financial statements at 31 December 2008 and the consolidated management report for the year 2008 on 24 February 2009 and approved them for submission to the Supervisory Board. The present consolidated financial statements as of 31 December 2008 are based on the same accounting and valuation methods and calculation rules as in the previous year. The balance sheet as of 31 December 2008 is broken down by maturities in accordance with IAS 1(51). In order to improve the clarity of the presentation, various items of the consolidated balance sheet and consolidated profit and loss account have been summarised and explained in the notes. The profit and loss account was structured according to the total cost format. The consolidated financial statements as well as the annual financial statements of HAMBORNER AG are filed with the operator of the electronic Federal Gazette and then announced there. They are available for download on the website www.hamborner.de. In addition, they may be requested from HAMBORNER AG, Goethestrasse 45, 47166 Duisburg. HAMBORNER AG is included in the consolidated financial statements of HSH Nordbank AG and of HSH Real Estate AG. HSH Nordbank AG, Hamburg/Kiel, prepares the consolidated financial statements for the largest group of companies and HSH Real Estate AG, Hamburg, prepares the consolidated financial statements for the smallest group of companies. The consolidated financial statements of HSH Nordbank AG are filed at the County Courts in Hamburg (HRB 87366) and Kiel (HRB 6127). The consolidated financial statements of HSH Real Estate are lodged at Hamburg County Court under HRB 80145. Amended or new IFRS and disclosure, approach or valuation changes arising therefrom Compared with the consolidated financial statements as of 31 December 2007, the standards and interpretations specified below have changed or were applied for the first time due to their subsequent assumption into EU legislation or the coming into effect of the regulation: IFRS 7: Financial instruments: Specifications IAS 39: Financial instruments: Recognition and measurement IFRIC 11: IFRS 2 Group and treasury share transactions These rules are not relevant for HAMBORNER AG at present. As such, there were no resultant effects.

Consolidated financial statements: Notes to the consolidated financial statements 75 The following new or amended standards and interpretations were published by the IASB or IFRIC up to the balance sheet date, but their application only becomes compulsory in future reporting periods or they have not yet been incorporated into EU legislation: IFRS 1: First-time adoption of International Financial Reporting Standards IFRS 2: Share-based payment IFRS 3: Business combinations IFRS 5: Non-current assets held for sale and discontinued operations IFRS 7: Financial instruments: Disclosures IFRS 8: Operating segments IAS 1: Presentation of financial statements IAS 2: Inventories IAS 7: Cash flow statements IAS 8: Accounting policies, changes in accounting estimates and errors IAS 10: Events after the reporting period IAS 16: Property, plant and equipment IAS 19: Employee benefits IAS 20: Accounting for Government Grants and Disclosure of Government Assistance IAS 23: Borrowing costs IAS 27: Consolidated and separate financial statements IAS 28: Investments in associates IAS 29: Financial reporting in hyperinflationary economies IAS 31: Interests in joint ventures IAS 32: Financial instruments: Specifications and presentation IAS 34: Interim financial reporting IAS 36: Impairment of assets IAS 38: Intangible assets IAS 39: Financial instruments: Recognition and measurement IAS 40: Investment property IAS 41: Agriculture IFRIC 12: Service concession arrangements IFRIC 13: Customer loyalty programmes IFRIC 14: IAS 19 The limit on a defined benefit asset, minimum funding requirements and their interaction IFRIC 15: Agreements for the construction of real estate IFRIC 16: Hedges of a net investment in a foreign operation IFRIC 17: Distribution of non-cash assets to owners IFRIC 18: Transfers of assets from customers No use was made of the possibility to apply those standards and interpretations already incorporated into EU legislation on the balance sheet date ahead of time. HAMBORNER AG anticipates that there will be no significant impact on the net worth, financial position and earnings in the future arising out of the application of the standards and interpretations issued on the balance sheet date, but not yet incorporated into EU legislation.

76 Consolidated financial statements: Notes to the consolidated financial statements Consolidation group and principles Consolidation group Hambornberg Immobilien- und Verwaltungs-GmbH, Duisburg- Hamborn as well as - until its termination on 06.02.2008 - the special share fund Südinvest 107, Unterföhring, Munich, are included in the consolidated financial statements unchanged on the previous year, in addition to HAMBORNER AG, as HAMBORNER AG directly holds or held 100% of the voting rights or shares. Principles of consolidation The financial statements included in the consolidated financial statements are prepared in accordance with uniform accounting and valuation principles. Capital consolidation is effected through the offsetting of the book value of participations of Hambornberg Immobilien- und Verwaltungs- GmbH with the corresponding proportionate equity capital at the time of the first inclusion in the consolidated financial statements. The consolidation group has changed compared with the last consolidated financial statements through the termination of the securities fund Südinvest 107 and, as of 31.12.2008, only consists of HAMBORNER AG and Hambornberg Immobilien- und Verwaltungs-GmbH. This capital consolidation has not given rise to any differential amounts on the assets or liabilities side. Revenues, income and expenses as well as receivables and liabilities between the included companies are eliminated (where they accrue). Accounting and valuation methods Intangible assets Intangible assets are valued at acquisition cost, reduced by scheduled straight-line depreciations. The depreciations correspond to the economic life, which amounts to three to eight years. Tangible fixed assets Tangible fixed assets are valued at acquisition or construction cost, reduced by scheduled straight-line depreciations. Earnings from investment disposals (proceeds from disposals less residual book values) are shown in the profit and loss account under other operating income (profits) or other operating charges (losses). Properties held as a financial investment Properties held as a financial investment (investment properties) are valued by exercising the option in accordance with IAS 40 (30) in conjunction with (56) for amortised acquisition or construction costs, taking into account straight-line depreciations. All undeveloped and developed properties as well as buildings and parts of buildings which are held for the attainment of future rental income, for the attainment of profits from appreciations in value and/or for an as yet undetermined use, are regarded as investment properties. They are not intended for administrative purposes or for short-term trade in the context of normal business activity. Scheduled depreciations are carried out on a straight-line basis over the given property s economic life. In order to determine the fair value to be indicated in the notes in accordance with IAS 40, we had our property portfolio valued by independent experts at the end of 2008 in accordance with internationally recognised standards. The property market values were calculated using the discounted cash flow (DCF) method. The cash surpluses (cash flows) to be expected in each case for the respective property were determined for a consideration period of eleven years 2009 to 2019 within the DCF process. The market value of properties results from the sum of the discounted cash flows of the overall planning period before tax plus the residual value also discounted on the valuation date. Riskadjusted interest rates of 5.1% to 10.25% were applied for the discounting. Please refer to the section Performance of the portfolio in the management report for further information.

Consolidated financial statements: Notes to the consolidated financial statements 77 Non-scheduled depreciations and write-ups of intangible assets, tangible fixed assets and properties held as a financial investment In the case of all intangible assets, tangible fixed assets and properties held as a financial investment, the retention of value for the amounts stated in the balance sheet is regularly checked, if events or changes in circumstances indicate that the book value shown in the balance sheet may no longer achievable. Where the achievable amount of these assets falls significantly below the book value on the financial statement date, this is taken into account by means of non-scheduled depreciations. The net sales proceeds derived from an active market or if higher the cash value of estimated future cash flows from use are referred to for the determination of the achievable amount. If the grounds for non-scheduled depreciations undertaken in previous years no longer exist, write-ups are applied up to the amortised book values. The disclosure of non-scheduled depreciations is carried out under the item Amortisations of intangible assets, tangible fixed assets and properties held as a financial investment. Write-ups are entered in other operating income. The consolidated result was reduced in the reporting year to adjust the reported residual book values to the fair values applicable as of 31.12.2008 through non-scheduled depreciations amounting to 4.717 T. On the other hand, a reversal of impairment adjustment of 945 T was made for properties subjected to a non-scheduled depreciation in previous years. Financial assets Financial assets are assessed at the fair value in their first valuation, in conformity with IAS 39, which takes into account the transaction costs on acquisition. The subsequent valuation depends on the category to which a financial asset is allocated. Loans and receivables are valued at amortised acquisition cost. Where necessary, identifiable individual risks are appropriately taken into account by means of value adjustments. Financial assets held until final maturity are valued at amortised acquisition cost or at the lower market value. The other loans included therein have a fixed term and are therefore valued applying the effective interest method. The financial assets available for sale are assessed at the fair value. Derivative financial instruments HAMBORNER AG utilises derivative financial instruments in the form of interest rate swaps for the management of risks from interest rate fluctuations. Derivative financial instruments are first shown in the balance sheet on the trading day. The valuation of interest rate derivative transactions which do not satisfy the requirements of hedge accounting was effected at market values. The profits and losses resulting from changes in market value are disclosed in the profit and loss account within the financial result. In the case of cash flow hedges used for the hedging of risks that have an impact on the amounts or the timeframe of future cash flows, changes in market value are entered in the equity capital (revaluation reserve) without affecting the operating result and taking deferred taxes into account, with presentation and documentation of adequate risk limitation efficiency. In the reporting year, -4,739 T was entered for this directly in the equity capital.

78 Consolidated financial statements: Notes to the consolidated financial statements The efficiency of cash flow hedges was determined in accordance with the dollar-offset method. As a result, the determination resulted in it being possible to take into account the changes to the assigned values in the equity capital. Positive market values of derivative financial instruments are shown under other assets, negative market values under financial liabilities. The market values notified by the banks at the time result through discounting of the expected future cash flows over the residual term of the contracts on the basis of current market interest rates or yield curves. Deferred income Payments that were paid or collected for agreed future liabilities are deferred at the time of the cash flow and released over the term of the agreements with an effect on the operating result. Non-current assets held for disposal and activities to be discontinued Non-current assets that are intended for sale are shown in the balance sheet as Non-current assets held for disposal in accordance with IFRS 5. The acquisition or construction costs of these assets as well as the accumulated depreciations apportionable to them are shown in the consolidated fixed asset movement schedule under disposals. The valuation is carried out at the lower value of the book value and fair value less selling costs. From the date of the reclassification, no further scheduled depreciations are carried out. Furthermore, in accordance with IFRS 5, business lines to be discontinued are to be shown separately. A business line to be discontinued refers to a significant business area or a part of a business that is held for disposal. For discontinued business lines, separate disclosure requirements apply in addition for the profit and loss account and the cash flow statement. In implementing the strategic decision to discontinue investment in securities, we show the assets and the liabilities of the special share fund Südinvest 107 in the prior year s balance sheet and the corresponding profit positions in the profit and loss account under separate items in each case. The fund shares were sold on 06.02.2008. Provisions In light of the maturity breakdown required in accordance with the IFRS standards, the provisions were subdivided into long-term and short-term and shown accordingly. Provisions for pensions Pension provisions are calculated in accordance with the project unit credit method, taking into account future remuneration and pension adjustments. The corridor approach permitted in accordance with IAS 19 is used for actuarial profits and losses. According to that, where actuarial profits and losses exceed 10% of the extent of the commitment, they are allocated over the average remaining working period of the future beneficiaries. The work service costs and the actuarial profits/losses to be entered for the current year are shown within the personnel costs, the interest element included in the pension costs within the interest charges. The pension obligations are determined taking into account the biometric calculation principles in accordance with Prof. Dr. Klaus Heubeck s 2005 G actuarial tables. The following parameters form the basis of the calculations: Parameter p.a. 2008 2007 Actuarial interest rate 5.8 % 5.5 % Remuneration trend 2.1 % 2.5 % Pension trend 2.0 % 2.0 % Average fluctuation 0.0 % 0.0 % The expenses for defined contribution plans are entered as expenditure and shown in the personnel costs.

Consolidated financial statements: Notes to the consolidated financial statements 79 Other provisions The short-term provisions have been formed to the extent of the estimated utilisation (best estimate) without discounting and take into account all liabilities identifiable on the balance sheet date which are based on business transactions or past events, the extent and/or maturity of which is uncertain. In the process, only third-party obligations are taken into account, for which it is probable that an outflow of assets will result. Provisions for liabilities that do not result in an encumbrance of assets in the subsequent year are formed to the extent of the cash value of the anticipated outflow of assets. Deferred tax assets are entered to the extent that it is probable that a taxable income will become available, against which the deductible temporary difference can be used. Expenses and revenue recognition On principle, the recording of turnover and other operating income corresponds with when the payments were made or, in the case of sale transactions, when all the relevant opportunities and risks in connection with the ownership were transferred to the buyer. Operating expenses are entered with take-up of the payment or as expenditure on the date incurred. Liabilities Liabilities are assessed at their fair value in the first valuation. The subsequent valuation is carried out at amortised acquisition cost. Liabilities are classified as long-term where the contract provides for redemption after twelve months. Deferred taxes Tax deferrals are carried out in the IFRS balance sheet on temporary differences between the assigned values of the assets and liabilities in the tax balance sheet and their book values (liability method) and shown as deferred tax assets or liabilities. The tax rates that are expected with removal of temporary differences and inflow of the actual amount payable are referred to in order to determine the expected future tax charges. Deferred taxes are entered in the profit and loss account as tax proceeds or expenses, unless they relate to items directly entered in the equity capital which do not affect the operating result. In this case, the deferred taxes are also entered in the equity capital without affecting the operating result.

80 Consolidated financial statements: Notes to the consolidated financial statements Explanatory notes on the profit and loss account (1) Revenue from the management of properties and buildings In the reporting year, we achieved total turnover of 21,310 T from the letting and leasing of the properties shown in the balance sheet in accordance with IAS 40. Of this sum, 19,437 T is apportionable to revenue from rents and leases. An increase of 6,198 T overall resulted year-on-year, mainly from the property acquisitions of the current and previous year, which have had an impact of 6,730 T. On the other hand, property sales resulted in a decrease in revenue of 675 T. The remaining rent increases of approximately 244 T arising from indexed or graduated rent arrangements were reduced by a total of 101 T by rent losses, rent reductions in the case of a change of tenant and due to rent rebates granted for the avoidance of vacancies. Incidental costs passed on to tenants mainly entail heating costs, property levies and other incidental rental costs, which are apportionable under the terms of the respective lease agreements. The revenues in this regard increased by 644 T in the reporting year. The increase of 660 T in the revenue from charges passed on arises as a balance due to the change in the property portfolio, whereas in relation to the remaining properties in the portfolio, revenue from passing on incidental costs decreased by -16 T overall. 2008 2007 Revenue from rents and leases Retail space 13,233 9,567 Office space and medical practices 4,636 2,019 Manufacturing and other industrial areas 627 614 Residential 695 751 Garages/car parking spaces 55 90 Other lettings and leasings (agricultural leasings, licensing agreements etc.) 191 198 Subtotal 19,437 13,239 Income from passing on incidental costs to tenants 1,873 1,229 Total 21,310 14,468 (2) Other own work capitalised No own work to be capitalised accrued in the reporting year. The valuation of the previous year related to in-house engineering work and construction overhead charges in connection with alterations to be capitalised to our office building in Hamburg. (3) Other operating income 2008 The income from investment disposals results mainly from the sale of two portfolio properties and a residential portfolio consisting of four properties. The income from the disposal of participations results from the sale of our shares in Wohnbau Dinslaken GmbH. The reversal of impairment adjustment arises from the adjustment of properties depreciated to the lower fractional value in previous years to the fair values determined by an expert as of 31.12.2008. (4) Expenses for management of properties 2007 Income from the disposal of Properties held as a financial investment and of Non-current assets held for disposal 6,737 5,621 Income from to the disposal of participations 11,224 0 Reversal of impairment adjustment 945 1,516 Write-ups of discounted housing loans 1 1 Remaining other operating income Receipt of indemnifications and reimbursements 432 179 Release of provisions 66 223 Charges passed on to tenants and leaseholders 55 13 Pension liability insurance 3 13 Other 37 2 Subtotal 593 430 Total 19,500 7,568 and buildings Overall, administrative costs increased by 682 T year-onyear and amount to 4,135 T. Ongoing operating expenses increased by 1,167 T, mainly as a result of property acquisitions. This item essentially includes expenses for energy, property levies, ground rents, insurance premiums and land taxes, which we predominantly pass on to our tenants under the terms of the respective lease agreements.

Consolidated financial statements: Notes to the consolidated financial statements 81 Maintenance expenditure decreased by 485 T and amounts to 1,109 T. The decrease is based essentially on the discontinuation of the measures carried out in the previous year in our Hamburg office property. 2008 2007 Current operating expenses Energy, water and similar 1,235 574 Property levies 368 321 The number of employees (excluding the Managing Board) was made up as follows in the reporting year on an annual average: 2008 (Number) 2007 (Number) Employees outside the collective agreement 7 6 Pay-scale employees 17 16 Total 24 22 Land taxes 574 308 Ground rents 552 348 Insurance premiums 221 154 Rents and leases for third-party properties 14 12 Other 62 142 Subtotal 3,026 1,859 Building and property maintenance 1,109 1,594 Total 4,135 3,453 (5) Personnel costs/employees Personnel costs rose by a total of 453 T compared with the previous year. Whereas social security contributions and expenditure for the pension scheme rose only slightly by 53 T, wages and salaries increased by 400 T. The personnel changes of the previous year, which were recognised as an expense in full for the first time in the reporting year, played a key role in this regard. The severance settlement paid to the departing spokesperson of the Managing Board also increased personnel costs for the reporting year. 2008 2007 Wages and salaries 2,599 2,199 Social security and other pension costs 258 239 Expenditure for pension scheme/ pension costs 116 82 Total 2,973 2,520 (6) Amortisations of intangible assets, tangible fixed assets and properties held as financial investments Amortisations in 2008 were around 7,080 T greater than the previous year and amounted to 10,257 T. Of this, 10,215 T is apportionable to Properties held as a financial investment. Included in this are non-scheduled depreciations amounting to 4,717 T due to the adjustment of the residual book values shown as of 31.12.2008 to the applicable fair values. (7) Other operating expenses The item breaks down as follows: 2008 2007 General management and Articles of Association-related expenses 1,042 861 Remaining other operating expenses 1,635 1,410 Total 2,677 2,271 The general management and Articles of Associationrelated expenses increased by 181 T year-on-year and amount to 1,042 T. This is attributable to increases in the costs in connection with the general shareholders meeting (84 T ) amongst other factors. The remaining other operating charges increased by 225 T to 1,635 T. This increase results essentially from the allocation to the mining damage provision, which is 155 T higher than in the previous year. The remaining other operating charges of the financial year include consultancy fees of 1,179 T. Overall, these are at the same level as the previous year (1,162 T ). Where closely associated companies were included in the consultancy services, we refer to the additional explanatory notes in the section Relationships with closely associated companies and persons in the financial year 2008.

82 Consolidated financial statements: Notes to the consolidated financial statements The following statutory auditor s fees were entered as expenses in the financial year: (8) Result from participations BDO D & T 2008 2007 2008 2007 Audit of financial statements 0 80 81 0 Tax consultancy services 12 8 52 0 Other services 7 93 24 0 Total 19 181 157 0 The income from participations entails distributions of profit of Wohnbau Dinslaken GmbH and Montan GmbH Assekuranz-Makler. (9) Financial result The proceeds from securities including the capital gains of the reporting year amount to 277 T following 35,566 T in the previous year. They relate to interest, investment and disposal proceeds from the securities fund Südinvest 107 and are shown under the proceeds from Activities to be discontinued. Capital losses of 20 T (previous year: 1,426 T ) accrued to the fund. They are also shown under the activities to be discontinued. Due to the investment of the capital gains realised from the sale of the fund shares and disposals of tangible fixed assets and financial fixed assets as time deposits, interest and similar income increased by 400 T year-on-year. Of this, 202 T is apportionable to activities to be discontinued (previous year: 974 T ). 2008 2007 Wohnbau Dinslaken GmbH, Dinslaken 623 437 Montan GmbH Assekuranz-Makler, Dusseldorf 20 12 Total 643 449 Total 2008 Activities to be discont d 2008 Activities to be continued 2008 Total 2007 Activities to be discont d 2007 Activities to be continued 2007 Earnings from securities including capital gains 277 277 0 35,566 34,912 654 Capital losses and amounts written off financial investments -20-20 0-1,426-1,426 0 Other interest and similar income 1,919 202 1,717 1,519 974 545 Interest and similar charges -4,644 0-4,644-1,234 0-1,234 Financial result -2,468 459-2,927 34,425 34,460-35

Consolidated financial statements: Notes to the consolidated financial statements 83 Interest and similar charges: Interest and similar charges rose by 3,410 T overall yearon-year to 4,644 T, essentially due to the increase in the credit financing for our property investments. The other interest expense of the reporting year includes interest amounting to 50 T for tax arrears payments anticipated following an audit The interest rate hedging transactions involve interest rate swaps of varying terms. Payment is agreed on the basis of fixed interest rates and quarterly or half-yearly accounting. In turn, we receive a variable interest rate based on the 3-month or 6-month EURIBOR. You will find further information on the interest rate swaps in the section Financial liabilities and derivative financial instruments. (10) Taxes on income and profit 2008 2007 Interest element of allocations to pensions provisions -375-317 Interest rate hedging transactions -39-23 Interest on loans -4,029-850 Other interest and similar charges -112-4 Interest for provision of security on account of Münster -89-40 Total -4,644-1,234 2008 2007 Current income tax charge 5,998 1,678 Deferred taxes -4,475-8,323 Foreign withholding tax -6 0 Total 1,517-6,645 a) Income tax charge The current income tax charge includes the corporation tax and business tax of HAMBORNER AG. Other items taken into consideration mainly involve a tax charge for previous years of 500 T arising from a tax audit for the years 2001 to 2006 as well as tax proceeds to the extent of 400 T from the adjustment of the provision for corporation tax for 2007. The tax rate that was effective on the balance sheet date is used to determine the deferred taxes. The consolidated tax rate to be applied to the result before taxes on income amounts to 15.8% in the reporting year (previous year: 26.4%). The reduction is based on the amendment of the German Corporation Tax Act by the corporate tax reform that came into effect on 01.01.2008. The anticipated tax charge arising with application of HAMBORNER AG s consolidated tax rate can be linked to the actual tax charge as follows: 2008 2007 Result of the business activity from activities to be continued 18,484 11,056 Consolidated tax rate 15.8% 26.4% Anticipated tax charge 2,925 2,917 +/- Tax effects from previous years 79-76 +/- Effect from the alteration of tax rates 0-9,449 - Effect from tax-free income -1,586-277 + Effect from non-deductible charges 18 48 +/- Effect from the parts of income subject to trade tax (current and deferred) 97 0 +/- Value adjustment/resolution or cessation of deferred tax claims 0 192 +/- Other effects -16 0 Taxes on income 1,517-6,645 Consolidated tax ratio 8.2% -60.1%

84 Consolidated financial statements: Notes to the consolidated financial statements b) Deferred taxes The (credited) deferred taxes charged to the equity capital relate to the market valuation of the securities and derivative financial instruments. The development of deferred taxes on both the assets and the liabilities side is represented as follows in the reporting year: Deferred taxes on the assets side Revaluation/ market valuation Pension provisions Derivative financial instruments Other provisions Other Write-down to the going concern value of invest. prop. Total Position at 1 January 2008 407 34 60 0 3 59 563 Reduction/increase in profit for the financial year -407-34 0 233 16 688 496 Reclassification into the equity capital 0 0 855 0 0 0 855 Position at 31 December 2008 0 0 915 233 19 747 1.914 Deferred taxes on the liabilities side Special tax write-downs Pension provisions Revaluation/ market valuation Other Total Position at 1 January 2008 14,192 0 4,942 35 19,169 Reduction/increase in profit for the financial year 935 21-4,942 5-3,981 Position at 31 December 2008 15,127 21 0 40 15,188 (11) Result from activities to be discontinued The result from activities to be discontinued includes the income and expenses from our special securities fund Südinvest 107 until its termination and breaks down as follows: Interest and investment proceeds of 202 T and capital gains (offset with capital losses and depreciations) of 257 T were achieved in the fund in the reporting year. 2008 2007 Other operating income 0 5 Other operating expenses -25-88 Dividend earnings 0 1,314 Realised share price gains 257 33,598 Realised share price losses 0-1,418 Write-downs of securities 0-8 Interest income 202 974 Earnings before tax 434 34,377 Taxes on income and profit -60 148 Result after tax 374 34,525

Consolidated financial statements: Notes to the consolidated financial statements 85 (12) Earnings per share A consolidated surplus of 17,341 T, which is lower by 34,885 T year-on-year, is shown in the reporting year mainly due to the discontinuation of the extraordinary income realised in the previous year through the termination of the securities fund Südinvest 107 as well as a one-off tax effect arising from adjustment of the deferred taxes to the tax rates applicable from 2008. Earnings per share are determined in compliance with IAS 33 according to which, earnings per share are derived from the net result apportionable to the shares being divided by the weighted average number of shares. A dilution, e.g. through stock options or convertible bonds, does not apply as HAMBORNER has issued no such programmes. The diluted and undiluted earnings per share are therefore identical. 31.12.08 31.12.07 Number of shares in circulation Thsd. units 22,770 22,770 Net result/ consolidated surplus TE 17,341 52,226 Dividend per share E 0.35 0.35 Earnings per share as per IAS 33, E 0.76 2.29 of which from activities to be continued E 0.75 0.78 from activities to be discontinued E 0.01 1.51 Explanatory notes to the balance sheet (13) Intangible assets and tangible fixed assets Intangible assets entail usage rights for system and application software acquired against payment, valued at acquisition cost and depreciated on a straight-line basis over a useful life of three to eight years. This decrease in value is presented under the item Amortisations of intangible assets, tangible fixed assets and properties held as a financial investment. Non-scheduled value adjustments (reductions and increases) were not necessary in 2008. We show the company s administrative building in Duisburg and the fixtures and equipment under tangible fixed assets. The depreciation calculation for the administrative building is based on a total useful life of 50 years and a residual useful life on the balance sheet date of 11 years. The fixtures and equipment have an average useful life of between 3 and 15 years. (14) Properties held as a financial investment The additions in the case of properties held as a financial investment ( investment properties ) are apportionable to the portfolio properties acquired in the reporting year and prepayments on account at 17,363 T and to postcapitalisations to additions of the previous year at 1,994 T. Of the Non-current assets held for disposal shown with a value of 19,813 T in the prior year s balance, properties with a book value of 8,259 T were sold in the reporting year, after another property from the properties held as a financial investment was reclassified during the year into the non-current assets held for disposal. Since it no longer appeared highly likely on the balance sheet date that the properties remaining as of 31.12.2008 would be marketed, in accordance with IFRS 5.26 they were reallocated to the investment properties to be shown in the balance sheet in accordance with IAS 40. A book value addition to the investment properties of 11,553 T results on balance from the reclassifications of the properties.

86 Consolidated financial statements: Notes to the consolidated financial statements The following useful life ranges were applied in the reporting year: Useful life ranges of non-current assets Years Business and office buildings 33 to 50 Other commercial buildings 40 to 50 Self-service stores 33 to 40 To adjust the amortised acquisition and construction costs shown as of 31.12.2008 to the applicable fair values, the consolidated result was reduced through a non-scheduled depreciation amounting to 4,717 T. On the other hand, a reversal of impairment adjustment to the extent of 945 T was made for properties subjected to a non-scheduled depreciation in previous years. The development during the reporting year of the properties held as a financial investment is as follows: 2008 2007 Position at 1 January 201,702 108,782 + Additions as a result of purchase 16,133 114,204 + Additions as a result of prepayments 1,230 145 + Additions as a result of subseq. inv. 1,994 576 19,357 114,925 - Disposals as a result of sales 0-569 - Disposals as a result of reclassifications -4,976-19,813 + Additions as a result of reclassifications 16,529 0 11,553-20,382 + Reversal of impairment adjustment 945 1,516 - Depreciations for the financial year -10,215-3,139 Position at 31 December 223,342 201,702 The direct operating expenses from leased and vacant in- vestment properties amount to 4,135 T in the reporting year (previous year: 3,453 T ). All properties, with the exception of temporary partial vacancies in individual properties, were let on the balance sheet date. Expenses apportionable to vacant spaces in the reporting year, including unlet and undeveloped property holdings, amount to 79 T (previous year: 251 T ). The expenses apportionable to the unlet spaces are determined here according to the weighted percentage ratio which is apportionable to the vacancies in relation to the total leased area. Our commercial property portfolio was also valued by independent experts as of 31.12.2008 according to internationally recognised standards. Taking into account the purchases and sales in the reporting year, the fair value of our developed property portfolio was as follows: 2008 2007 Properties held as a financial investment 273,100 247,610 Non-current assets held for disposal 0 33,410 Total 273,100 281,020 Five of the 16 properties reclassified into the current assets in the prior year s balance sheet in accordance with the provision of IFRS 5 were sold in the reporting year. The remaining 11 properties were reallocated to the item Properties held as a financial investment as of 31.12.2008, as the marketing of these properties no longer appeared highly likely on the balance sheet date. The property portfolio is valued in accordance with the discounted cash flow process. For further details on the valuation of our properties, we refer to the section Performance of the portfolio in the management report. Arising out of two notarial deeds of sale concluded in the reporting year, the transfer of ownership of three properties in total was still outstanding on the balance sheet date, as the prerequisites for transfer had not yet been completely fulfilled. Purchase price payments of 30.5 million in total were payable on transfer of ownership, which took place at the beginning of February 2009. The undeveloped property is shown in the balance sheet at the historical acquisition cost. A different value cannot be reliably ascertained due to its structure (areas used for agricultural and silvicultural purposes).

Consolidated financial statements: Notes to the consolidated financial statements 87 (15) Financial assets Other loans predominantly include long-term interest-free housing loans and other loans to staff, which were valued at cash value. They decreased by 16 T to 38 T through scheduled redemptions and repayments. The participations shown under the item in the previous year were sold in the reporting year or at the beginning of 2009. Where the shares were not yet transferred on 31.12.2008, we show them under the Non-current assets held for disposal. (16) Trade receivables and other assets, deferred tax assets, income tax receivables All receivables and other assets are shown in the balance sheet at the nominal value or at the lower fair value. Individual value adjustments on doubtful receivables were not necessary in 2008. General value adjustments are not made. The other non-current assets primarily include paid development costs of 264 T (previous year: 274 T ) for the leasehold property in Solingen, and the capitalised actuarial reserve for claims from pension liability insurance policies for pension obligations (99 T, previous year: 87 T ). The existing pension liability insurance policies are not considered to be plan assets as per IAS 19. The deferred tax claims essentially result from valuation differences for interest rate derivatives, investment properties and other provisions. They increased by 1,758 T year-on-year to 1,914 T. At 855 T, the biggest part of the increases related to the interest rate derivatives. The deferred tax claims from the market valuation of the securities fund amounting to 407 T, shown under the assets from activities to be discontinued in the previous year, were released with an effect on earnings in the reporting year due to the sale of the fund. The receivables and other current assets break down as follows: Trade receivables relate almost exclusively to receivables due from tenants and leaseholders. As of 31.12.2008, the item includes an indemnity claim amounting to 155 T, which was payable due to early termination of a tenancy. The other receivables and current assets decreased by 326 T and amount to 602 T, mainly due to the receipt of a purchase price claim shown in the previous year. The trade receivables shown were all due on the financial statement date and are thus overdue within less than 30 days following the balance sheet date. The result of the reporting year was reduced by 70 T (pre- vious year: 11 T ) due to the write-off of receivables; written off receivables amounting to 11 T (previous year: 1 T ) have been received in the same period. Income tax receivables amount to 557 T (previous year: 454 T ) and relate to reimbursement claims for the assessment periods 2007 and 2008. 31.12.08 31.12.07 Trade receivables 197 39 Other 602 928 Total 799 967

88 Consolidated financial statements: Notes to the consolidated financial statements (17) Bank deposits and cash balances (cash fund) The receivables and other current assets break down as follows: The increase in liquid funds by 47,570 T mainly results from the cash inflows gained from the sale of the special securities fund, the shareholding in Wohnbau Dinslaken GmbH, the properties in Oldenburg and Osnabrück and the residential portfolio. (18) Non-current assets held for disposal 31.12.08 31.12.07 Bank deposits 54,010 6,438 Cash balances 2 4 Total 54,012 6,442 Where the properties reclassified into the short-term cate- gory in the prior year s balance sheet were not sold in the reporting year, they have been reallocated to Properties held as a financial investment as of 31.12.2008. This change in presentation was carried out in compliance with IFRS 5.26. In view of the current situation in the property and financial markets, sale no longer appears highly likely. The omitted scheduled depreciations of properties were rectified to the extent of 467 T in the course of the reclassification as long as they were classified as held for disposal. The item from the shareholding in Montan GmbH Assekuranz Makler, Dusseldorf continues to exist as of 31.12.2008. The company shares were sold by notarial deed dated 28.01.2009. (19) Assets and liabilities from activities to be discontinued The breakdown of assets and liabilities from discontinued business lines prescribed in accordance with IFRS 5 lapses with the discontinuation of our involvement in securities in February 2008. The prior year s balance sheet contains the following information on this: (20) Equity capital The development of the equity capital from 1 January 2007 until 31 December 2008 is shown in the statement of changes in the equity capital. 31.12.08 31.12.07 Securities 0 50,715 Deferred tax assets 0 407 Receivables and other current assets 0 1,448 Bank deposits and cash balances 0 6,589 Income tax receivables 0 311 Assets from activities to be discontinued 0 59,470 Deferred tax liabilities 0-4,950 Other current liabilities 0-195 Liabilities from activities to be discontinued 0-5,145 The subscribed capital amounts to 22.77 million and is divided into 22,770,000 no-par-value shares made out to bearer. The legal reserve amounts to 2,277 T. Both items relate to HAMBORNER AG. On foot of resolutions approved by the general shareholders meeting on 5 June 2008, the Managing Board was authorised to increase the share capital of the company with the agreement of the Supervisory Board as follows: 2,270 T (Authorised Capital I) 9,080 T (Authorised Capital II). Authorised allotments of 11,350,000 shares result from the authorised capital sums which can be issued to the shareholders as no-par-value shares. The authorisation is valid until 4 June 2013. The issued shares in the company would increase to 34,120,000 units in the event of full implementation of the authorised capital measures.

Consolidated financial statements: Notes to the consolidated financial statements 89 The HAMBORNER Group has an unappropriated surplus amounting to 35,165 T (previous year: 53,922 T ) as of 31 December 2008 after the transfer of 28,128 T into other retained earnings. The Managing Board will propose a total dividend payout of 7,969,500 to the general shareholders meeting for the financial year 2008. This corresponds to a dividend of 0.35 per no-par-value share. The dividend proposal is based on the unappropriated surplus of HAMBORNER AG under commercial law amounting to 28,130 T. The other retained earnings include the earnings achieved in the past by the companies included in the consolidated financial statements, in so far as they were not distributed and amount to 104,575 T. They increased by 28,127 T year-on-year. The revaluation reserve includes the fair value changes from the valuation of derivatives in conjunction with hedging transactions (cash flow hedges), in so far as they were handled without affecting the operating result, as well as the profit-neutral adjustment of the book value of participations of Montan GmbH Assekuranz-Makler to the fair value. (21) Financial liabilities and derivative financial instruments Financial liabilities increased by 6,673 T to 91,104 T. The bulk of this increase, 5,807 T, predominantly relates to the addition of financial derivatives and the change in market value of existing derivatives. The growth in the property sector effected in the two previous years was financed in part by the raising of loans to the extent of a nominal 86.8 million. These loans amounted to 84.5 million on the balance sheet date. Other loans with a value of 18.4 million for notarised property purchases have been applied for and authorised, but had not yet been disbursed on the balance sheet date. Both long-term fixed-interest agreements and for greater flexibility interest rate agreements based on EURIBOR underlie the disbursed property loans. The interest rate risk was eliminated in the latter instances by concluding EURIBOR-based interest rate swaps and, on the other hand, by paying an agreed fixed-rate interest over the swap term. The nominal hedging volume resulting from this amounted to 89.8 million on the balance sheet date and the market value for the interest rate hedging transactions concluded was -5,780 T. The term of the derivatives ends in 2017 or in 2018 depending on the underlying loan transactions. The objectives of our capital management are to secure both the company s continuing existence and an adequate return on capital. The provisions of company law form the basic framework for capital management. Where compliance with further regulatory or contractual provisions is required, equity capital is additionally controlled in accordance with such provisions. In instances in which no compliance with separate provisions is required, the equity capital to be controlled consists of the balance sheet equity capital. Otherwise, the balance sheet equity capital is always adjusted to the regulatory and contractual requirements. In addition, the company has held two further financial derivatives since 2000 for which no hedging relationship with a loan transaction exists. The nominal hedging volume stood at approximately 0.9 million on the balance sheet date. The term of the interest rate hedging transactions ends in 2010. Liabilities of 26 T were shown in the reporting year for possible risks that may arise from these derivatives. A change in the market valuation resulted in expenses of 8 T (previous year: an income of 33 T ) in the reporting year, which are included in the interest payments (previous year: interest revenues). On 31.12.2008, land charges of 90.4 million were entered in the land register. Furthermore, to safeguard a line of credit of 3 million, the identical amount was guaranteed to a bank in the form of a mortgage on one of our properties.

90 Consolidated financial statements: Notes to the consolidated financial statements A temporary current account overdraft amounting to 34 million, used until the disbursement of the requested long-term loans of 31 million, was repaid in February 2008. Financial liabilities Derivative financial instruments 31 December 2008 31 December 2007 Long-term Short-term The financial liabilities attract interest at rates of between 4.41% and 5.21%. The redemptions are effected quarterly, halfyearly or annually commensurate with the loan agreements. Contractually agreed redemption payments Long-term Short-term 81,543 3,754 47,829 36,397 5,807 0 205 0 Total 87,350 3,754 48,034 36,397 Financial liabilities 2008 2007 of which payable within one year 3,753 36,397 payable within two to five years 12,154 8,396 payable after five years 69,390 39,433 Total 85,297 84,226 HAMBORNER AG is exposed to various risks due to its business activity. The risk report, which is part of the management report, includes a detailed presentation of these risks and their management. Derivative financial instruments in the form of interest rate swaps are used in the main for the management of interest rate risks. The risks resulting in connection with the use of these derivative financial instruments are subject to HAMBORNER AG s risk management and control. The risks resulting from the financial instruments relate to credit, liquidity and market risks. Credit risks exist in the form of risks of default for financial assets. Maximum risk exposure here amounts to the book values of the financial assets. For derivatives, this is the sum of all the positive market values and, for primary financial instruments, the sum of the book values. If risks of default exist, they are taken into account by means of value adjustments. Liquidity risks constitute refinancing risks and thus the risks of failure to meet existing obligations when they fall due. The strategy and the results of the planning process are taken as a basis for the early identification of the future liquidity situation. The expected liquidity requirements are scheduled in the medium-term plan, which covers a period of five years. The current liquidity requirements are compared with the actual data by means of daily, weekly and monthly budgetary accounts. Sensitivity analyses are required for the presentation of market risks in accordance with IFRS 7. Hypothetical changes in risk variables based on past experience should demonstrate both influences on the result as well as on the equity capital. Interest rate risks in particular are relevant for HAMBORNER AG in this regard. Interest rate risks result from changes in market interest rates. We limit such risks through the use of interest rate swaps. Sensitivity analyses, which show the consequences of changes in market interest rates on interest payments, interest charges and income as well as on the equity capital, are carried out in compliance with IFRS 7. The following assumptions apply to this end: primary financial instruments with a fixed interest rate are only subject to interest rate risks where they are assessed at the fair value. Financial instruments that are valued at acquisition cost are not subject to interest rate risks. In the case of cash flow hedges for the hedging of interest-induced payment fluctuations, changes in the market interest rates have consequences on the reserve in the equity capital. Therefore, these financial instruments are taken into account in the sensitivity analysis. Primary financial instruments with a variable interest rate should also be subjected to a sensitivity analysis, as they too are subject to a risk of a change in the market interest rate. In the sensitivity analysis, the indicative valuation was calculated as of the balance sheet date on the basis of the market value, taking accrued interest into account.

Consolidated financial statements: Notes to the consolidated financial statements 91 Sensitivity analysis 31.12.2008 31.12.2007 Market value of financial instruments on a floating-rate basis -5,807-205 Change in hedging reserve Interest rate + 1% 4,492 1,861 Interest rate - 1% -4,879-1,861 Profit and loss account Interest rate + 1% 5 15 Interest rate - 1% -5-15 Other information on financial instruments As a result of the forthcoming sale, our shareholding in Montan GmbH Assekuranz-Makler, Dusseldorf was reclassified from the item Participations into the Non-current assets held for disposal as of 31.12.2008. The valuation under the current assets is now carried out at the market value. For short-term financial assets and liabilities that are not derivatives, the respective book value constitutes an appropriate approximation of the fair value within the meaning of the IFRS. The net profit from financial assets which are assessed at the fair value with an effect on the operating result amounts to 0 T (previous year: 4.9 T ) in the reporting year.

92 Consolidated financial statements: Notes to the consolidated financial statements Additional details on financial instruments (2008) Valuation in accordance with IAS 39 31.12.2008 Continued activities available for disposal Fair value available for disposal / derivatives Assets Intangible assets 12 Tangible fixed assets 176 Properties held as a financial investment 223,342 Financial assets 38 Long-term other assets 366 Deferred tax assets 1,914 Short-term trade receivables and other assets 799 Income tax receivables 557 Bank deposits and cash balances 54,012 Non-current assets held for disposal and assets from activities to be discontinued 130 130 Liabilities 281,346 0 130 Equity capital 160,050 Long-term trade accounts payable and other liabilities 91,134 5,807 * Deferred tax liabilities 15,188 Provisions for pensions 5,780 Other long-term provisions 678 Short-term trade accounts payable and other liabilities 5,577 Liabilities from taxes on income 660 Other short-term provisions 2,279 Liabilities from activities to be discontinued 281,346 0 5,807 * Derivatives

Consolidated financial statements: Notes to the consolidated financial statements 93 Valuation in accordance with IAS 39 Valuation in accordance with other standards Continued activities Loans and receivables Continued activities held until final maturity Continued activities Fair value Continued activities 12 176 223,342 38 3 363 1,914 799 557 54,012 54,814 401 0 0 226,001 160,050 83,575 1,753 15,188 5,780 678 4,898 679 660 277 2,002 88,750 0 0 678 186,112

94 Consolidated financial statements: Notes to the consolidated financial statements Additional details on financial instruments (2007) Valuation in accordance with IAS 39 31.12.2007 Continued activities available for disposal Fair value available for disposal / derivatives Assets Intangible assets 22 Tangible fixed assets 174 Properties held as a financial investment 201,702 Financial assets 632 578 Long-term other assets 365 Deferred tax assets 156 Short-term trade receivablesand other assets 967 Income tax receivables 454 Bank deposits and cash balances 6,442 Non-current assets held for disposal and assets from activities to be discontinued 79,283 50,715 Liabilities 290,197 578 50,715 Equity capital 155,507 Long-term trade accounts payable and other liabilities 51,894 205 * Deferred tax liabilities 14,219 Provisions for pensions 5,923 Other long-term provisions 555 Short-term trade accounts payable and other liabilities 54,534 Liabilities from taxes on income 102 Other short-term provisions 2,318 Liabilities from activities to be discontinued 5,145 290,197 0 205 * Derivatives

Consolidated financial statements: Notes to the consolidated financial statements 95 Valuation in accordance with IAS 39 Valuation in accordance with other standards Continued activities Loans and receivables Continued activities held until final maturity Continued activities Fair value Continued activities 22 174 201,702 54 3 362 156 967 454 6,442 8,036 719 19,813 15,448 416 0 719 222,321 155,507 49,765 1,924 14,219 5,923 87 468 52,135 2,399 102 365 1,953 5,145 102,352 0 0 468 187,173

96 Consolidated financial statements: Notes to the consolidated financial statements The net result (profit +/loss -) from financial assets and liabilities is made up as follows: 2008 2007 Available for disposal 1,078 34,826 Held until final maturity 0 5 Derivatives -8 33 Liabilities at amortised acquisition cost -4,025-844 (22) Deferred tax liabilities Deferred tax liabilities amount to 15,188 T following 14,219 T in the previous year. They predominantly relate to the special account with reserve characteristics under commercial law. The increase is derived in the main from the change in the special account with reserve characteristics. (23) Liabilities from taxes on income Liabilities from taxes on income increased by 558 T to 660 T. They relate to business taxes for the year 2008 amounting to 160 T as well as the probable additional payment amounts as established by a tax field audit. (24) Trade accounts payable and other liabilities The trade accounts payable and other liabilities amount to a total of 5,607 T as of 31.12.2008. Of this amount 1,823 T is payable within the next 12 months. The item decreased by 16,390 T compared with the previous year. The decrease is mainly accounted for by the outflow of various liabilities in connection with property transactions that were shown in the prior year s balance sheet. There were trade accounts payable amounting to 606 T on the balance sheet date. At 58 T, the figure was marginally below the value for the previous year. (25) Provisions for pensions Occupational pension scheme commitments exist for eligible current and former employees and surviving dependants. These are performance-related commitments in accordance with IAS 19. The Projected Unit Credit method forms the basis of the valuation of the provision. It is not only pensions and purchased pension entitlements known on the balance sheet date that are taken into account with this project unit credit method, but also increases in salaries and pensions to be expected in the future. Furthermore, a pensionable age of 63 years is assumed. Expenses from these commitments are apportioned over the length of service of employees in accordance with expert actuarial opinion and consist of the work service costs and the actuarial profits or losses recorded for the current year, which are shown under personnel costs, as well as the interest expense, which has an influence on the financial result. Interest charges from pension obligations amounted to 375 T in 2008 (previous year: 317 T ). In compliance with the corridor approach envisaged in accordance with IAS 19, actuarial losses not yet recorded on the balance sheet date, amounting to 1,060 T, were disregarded in the funding of pension provisions to prevent greater volatility. These losses are only taken into account with application of the corridor approach in so far as they exceed the thresholds of the corridor defined in IAS 19 (10% of the actual defined benefit obligation). The corridor threshold represents 684 T on the balance sheet date. In 2008, the corridor threshold has therefore been exceeded by 376 T which should be apportioned over the expected average remaining working period of the beneficiaries. This pro rata loss, which has not yet been taken into account, should only be offset in the subsequent period in each case, in accordance with IAS 19. As such, an amount of 80 T will be taken into account in 2009. The overstepping of the corridor threshold in 2007 has given rise to actuarial losses of 83 T in the reporting year.

Consolidated financial statements: Notes to the consolidated financial statements 97 Development of pension provisions in the reporting year: 2005 2006 2007 2008 Balance sheet value on 1 January 6,415 6,330 6,140 5,923 Ongoing work service costs 67 40 41 11 Interest expenditure 336 320 317 375 Actuarial profits/losses recorded for the current year 0 0 13 83 Pension payments -488-550 -588-612 Balance sheet value on 31 December 6,330 6,140 5,923 5,780 Actuarial losses not recorded 670 777 1,174 1,060 Defined Benefit Obligation (DBO) at the year-end 7,000 6,917 7,097 6,840 Experience-based adjustment of plan liabilities 132 82 641 171 The movements in the cash value of the performance- related obligation are constituted as follows: 2005 2006 2007 2008 Cash value on 1 January (Defined Benefit Obligation) 6,938 7,000 6,917 7,097 Work service costs 67 40 41 11 Interest expenditure 336 320 317 375 Actuarial profits/losses 147 107 410-31 Pension payments -488-550 -588-612 Cash value on 31 December (Defined Benefit Obligation) 7,000 6,917 7,097 6,840 During the reporting year HAMBORNER paid contributions of 145 T (previous year: 131 T ) into statutory pension insurance, which should be regarded as a defined contribution pension scheme. In addition, contributions to direct insurance policies or pension funds of 12 T (previous year: 13 T ) were assumed by the company. With regard to defined contribution schemes, the company assumes no additional obligations beyond the settlement of contribution payments. Charges are entered in personnel costs. Pension payments of 649 T are anticipated in the financial year 2009.

98 Consolidated financial statements: Notes to the consolidated financial statements (26) Other provisions The maturities of the other provisions break down as follows: 01.01.2008 31.12.2008 of which Overall Allocations Utilisation Releases Overall Long-term Short-term Provisions for Bonus 450 559 426 24 559 0 559 Ratingen lease guarantee 264 0 264 0 0 0 0 Mining damage 1,168 212 2 0 1,378 678 700 Provisions linked to the Articles of Association and legal form 401 406 389 12 406 0 406 Legal and consultancy expenses 36 195 36 0 195 0 195 Outstanding invoices 365 277 315 51 276 0 276 Other 189 143 189 0 143 0 143 Total 2,873 1,792 1,621 87 2,957 678 2,279 Bonus provisions increased by 109 T in the reporting year to 559 T. The increase is mainly attributable to the fact that remunerations granted only pro rata temporis in the previous year are recognised in full as an expense in the reporting year. The lease guarantee granted in connection with the sale of the Ratingen property and limited to 24 months expired in the reporting year. In 2008, we received a claim of 264 T arising out of the guarantee. The provisions for mining damage relate to the potential risks from our former mining activity, which persist to a limited extent. In this connection, we refer to the more comprehensive explanations in the report on opportunities and risks which is an integral part of the consolidated management report. Mining-related provisions are long-term provisions that are shown in the balance sheet at their settlement value discounted on the balance sheet date. A rate of interest of 6.0% (previous year: 6.0%) with a residual term of up to 23 years (previous year: 24 years) is taken as a basis here as the discount factor. An allocation of 189 T was made in the reporting year to adjust the provision amount to the fair value. An amount of 23 T resulted from the addition of accrued interest. The 2 T shown under consumption relates to expenses for management of the pits and coalfields concerned. The provisions for obligations linked to the Articles of Association and legal form include remunerations for the Supervisory Board and statutory auditor s fees. We refer to marginal number (7) for further information on the statutory auditor s fees within the meaning of Art. 314 Para. 1 No. 9 in conjunction with Art. 315a Para. 1 of the German Commercial Code. The provisions for outstanding invoices decreased by 89 T year-on-year and amount to 276 T.

Consolidated financial statements: Notes to the consolidated financial statements 99 (27) Contingent liabilities and financial obligations One guarantee in connection with three compulsory shares in a housing association is not shown in the balance sheet. It amounts to an unchanged 0.8 T. The other financial obligations after the balance sheet date result from four long-term leasehold contracts and are constituted as follows: Contract term until Obligation to pay (in TE p.a.) Charge passed on (in TE p.a.) 31 December 2034 184 184 31 March 2060 113 0 30 June 2012 * 228 0 30 June 2023 204 0 Total 729 184 * The leasehold expires on 30.06.2012. The encumbered property transfers into our ownership on that date on the basis of contractual agreements. There are no further contingent liabilities, third-party liabilities or other financial obligations. (28) Leasing relationships All leases that HAMBORNER has concluded with its tenants are classified as operating leasing in accordance with IFRS, as all opportunities and risks associated with ownership remain in the Group. Accordingly, HAMBORNER is the lessor in all operating leasing relationships (tenancies), of varied structure, for investment properties. Within the framework of operating leasing, investment properties with a book value of 220.7 million (previous year: 218.9 million) were let as of 31.12.2008. HAMBORNER will receive the following minimum leasing payments from existing non-terminable operating leasing relationships from commercial letting: 2008 2007 up to one year 18,377 17,401 longer than one year up to five years 58,104 56,173 more than five years 45,407 48,941 121,888 122,515 The minimum leasing payments comprise net rents up to the agreed expiry of the contract or up to the earliest possible termination date of the lessee (tenant), irrespective of whether a termination or non-utilisation of an extension option is actually to be expected. Conditional rent payments had no significant impact in the reporting period.

100 Consolidated financial statements: Notes to the consolidated financial statements Explanatory notes to the cash flow statement The consolidated cash flow statement was prepared in accordance with the provisions of IAS 7 and subdivides the cash flows of the financial year into cash flows from operating, investment and financing activities. HAMBORNER is not subject to influences from exchange rate movements or changes in the consolidation scope. The cash flows from dividends, interest and tax payments received are always shown separately in the presentation of the cash flow statement. (29) Cash flow from operating activity The cash flow statement is attached to the consolidated annual result before tax (EBT), taking into account the result from activities to be discontinued. The book profit from the disposal of financial assets results mainly from the sale of our participation in Wohnbau Dinslaken GmbH amounting to 11.2 million and was eliminated from the cash flow of the operating income. The value for the previous year of 32.8 million results due to the switches made in the special securities fund Südinvest. The non-cash expenses arise in the main from the change of 4,470 T in deferred taxes affecting net income as well as interest charges and income of -730.9 T, which resulted in no outflow or inflow of funds in the reporting year. Operating cash flow per share developed as below: 2008 2007 Number of shares in circulation Thsd. units 22,770 22,770 Operating cash flow TE 10,283 23,528 Operating cash flow per share E 0.45 1.03 (30) Cash flow from investment activity The cash flow from investment activity resulted in a cash inflow of 41,696 T overall in the past financial year (cash outflow of 73,103 T in the previous year). The main reason for these changes was the cash inflow of 62.6 million from the sale of both the special securities fund and our shareholding in Wohnbau Dinslaken GmbH. The cash outflow from investments in the reporting year mainly results from a payment of a purchase price liability from the previous year as well as from the cash outflow for the properties purchased in Herford, Bäckerstr. 24-28 and Freiburg, Robert-Bunsen-Str. 9a. (31) Cash flow from the financing activity In the financial year 2008, approximately 8.0 million was distributed to the shareholders of the company and thus 1.1 million more than in the previous year. The cash outflow of the reporting year results from the scheduled loan repayment as well as the redemption of short-term property bridging finance, for the refinancing of which a long-term loan was utilised. In addition, a funding framework already provided in the previous year was utilised for the financing of the Freiburg property. (32) Cash flow from activities to be discontinued The present cash flow statement also includes the cash inflows and outflows of the securities fund Südinvest 107 shown in the profit and loss account and in the balance sheet as Activities to be discontinued. The cash flows from the fund included in the consolidated cash flow statement break down as follows: 2008 2007 Cash flow from operating activity 1,405 445 Cash flow from investment activity 50,784 5,716 Cash flow from the financing activity 0-2,046 Cash flow from activities to be discontinued 52,189 4,115

Consolidated financial statements: Notes to the consolidated financial statements 101 Other explanatory notes and compulsory details Events after the balance sheet date On 06.02.2008, a deed of sale for an office building in Fuhlsbüttler Straße and an office property with storage areas in Ziethenstraße in Hamburg was notarised. Both properties transferred into the ownership of HAMBORNER AG at the beginning of February 2009. An office property in Münster also passed into our ownership in February 2009. The notarial deed of sale for this was concluded on 10.07.2008. Purchase price payments of 30.5 million in total were payable for these property acquisitions, and have been made in the meantime. made it permanently available to shareholders online. The declaration of compliance is also published in full in the annual report 2008 of HAMBORNER AG. Notification regarding the existence of an interest HSH Nordbank AG, Hamburg indirectly holds more than 50% of the voting rights and thus an interest that exceeds 10% of the voting rights via the participations of its Group companies, HSH Real Estate AG and HSH-RE Beteiligungs GmbH, which are attributable to it in accordance with Art. 22 Para. 1 Clause 1 No. 1 of the German Securities Trading Act [WpHG]. In keeping with the company s strategic reorientation into a pure property corporation, we initiated measures in the reporting year to divest ourselves of our fragmentary participations in Montan GmbH Assekuranz Makler in Dusseldorf and Gesellschaft für Stromwirtschaft mbh in Mülheim an der Ruhr. The sale of our shareholding in Montan GmbH was contractually executed on 28.01.2009 with economic effect on the date of notarisation. The purchase price of 130 T has since been received. Assumptions and estimates In the preparation of the consolidated financial statements, assumptions have been made and estimates used which have had an impact on the reporting and extent of the assets, liabilities, income and expenses shown in the balance sheet. These assumptions and estimates essentially relate to the determination of useful life ranges, the retention of value of properties and buildings, receivables and participations, the appropriation and the valuation of provisions as well as the realisability of deferred taxes on the assets side. In individual cases actual values may deviate from the assumptions and estimates made. Changes are taken into account at the time of a better cognizance with an effect on the operating result. Employees HAMBORNER AG had 24 (previous year: 22) employees on average in the reporting year, in addition to the two directors, of which 23 (previous year: 21) were salaried employees and 1 (previous year: 1) was a wage-earning employee. Corporate governance In December 2008, the Managing Board and Supervisory Board submitted an updated declaration of compliance and HSH-RE Beteiligungs GmbH most recently informed us, on 13.05.2008, that the voting rights share of HSH-RE Beteiligungs GmbH (formerly Mustaphar 5. Verwaltungs GmbH) in HAMBORNER Aktiengesellschaft still exceeded the threshold of 50% on 05.02.2008 and amounted to 50.32% (11,457,519 voting rights) on that day. In addition, we were notified on 6 February 2009 in accordance with Art. 21 Para. 1 of the German Securities Trading Act, that Professor Dr. Theo Siegert, Dusseldorf has indirectly held 6.15% (1,400,000 units in absolute terms) of the voting rights since 28.11.2008 via de Haen Carstanjen & Söhne GmbH, Dusseldorf. Furthermore, 5.45% (1,240,000 units in absolute terms) of the shares in the voting capital of our company are attributed to him indirectly via SIEGERT & CIE GmbH, Dusseldorf, Germany as from 18 December 2008. Overall, he thus indirectly holds an interest that, at 11.6% (2,640,000 votes in absolute terms), exceeds the threshold of 10% of the voting rights shares. HAMBORNER AG is included in the consolidated financial statements of HSH Nordbank AG and of HSH Real Estate AG. HSH Nordbank AG, Hamburg/Kiel, prepares the consolidated financial statements for the largest group of companies and HSH Real Estate AG, Hamburg, prepares the consolidated financial statements for the smallest group of companies. The consolidated financial statements of HSH Nordbank AG are filed at the County Courts in Hamburg (HRB 87366) and Kiel (HRB 6127). The consolidated financial statements of HSH Real Estate AG are filed at Hamburg County Court under HRB 80145.

102 Consolidated financial statements: Notes to the consolidated financial statements Relationships with closely associated companies and persons in the financial year 2008 Payments amounting to 26 T were transferred to the contracting partners in the reporting year due to a consultancy agreement dated 28.03.2007 between HAMBORNER AG and HSH Real Estate AG, which had already been the subject of the dependent company report in 2007. The payments involved services the provision of which only concluded fully in 2008. On 25./29.02.2008, an intermediary agreement for the acquisition of a property portfolio was concluded between HAMBORNER AG and HSH Capitalpartners GmbH. HAMBORNER was able to purchase two properties in Hamburg using Capitalpartners existing contacts with the seller. In accordance with the agreement, a purchase fee of 100 T plus statutory value-added tax to be paid by HAMBORNER AG is due to Capitalpartners on conclusion of a notarised deed of sale. A corresponding liability with regard to HSH Capitalpartners GmbH was shown in Q1/2008 on notarisation of the deed of sale. As the transfer of ownership of the properties was delayed due to official permits not being available, the liability was not discharged by the financial statement reporting date. The purchase fee is an incidental purchase expense to be capitalised, which, where apportionable to the building acquisition costs, should be allocated over the useful life of the property. In addition, we have reimbursed to our contractual partner incidental costs and expenses amounting to 17 T plus statutory valueadded tax incurred in connection with the intermediary agreement. On 02./03.09.2008, HAMBORNER AG signed another agreement with HSH Real Estate AG, under which HSH Real Estate AG would provide consultancy services to HAMBORNER AG in the event of a possible portfolio acquisition. The agreement foresees a success fee based on a percentage of the purchase price, payable on realisation of the transaction. In addition to this fee, the agreement provides for the reimbursement of more specifically defined incidental costs and expenses incurred by HSH Real Estate AG. As the transaction fell through, HSH Real Estate AG had no fee entitlement. In accordance with the agreement, we reimbursed incidental costs and expenses of 11 T plus value-added tax incurred in connection with this project. HAMBORNER AG has a current account at HSH Nordbank AG, which shows a balance of 657.80 in our favour on 31.12.2008. The standard market conditions and terms were agreed for all supply and service relationships with associated companies and persons. Fees to persons in key positions of the HAMBORNER Group, which are declarable in accordance with IAS 24, entail the remuneration of the Managing Board and Supervisory Board. Members of the active Managing Board were remunerated as follows in the financial year 2008: 2008 2007 Payments due in the short-term 547 481 Payments after termination of the employment relationship 0 548 Payments on the occasion of the termination of the employment relationship 257 146 Total 804 1,175

Consolidated financial statements: Notes to the consolidated financial statements 103 In addition, the amount of 48 T accrued for contributions for pension scheme, health and nursing care insurance as well as remunerations in kind in the form of use of company cars. The present consolidated financial statements take into account payments due in the short-term to the active members of the Supervisory Board amounting to 354 T (previous year: 267 T ). Remuneration of the Managing Board and Supervisory Board The remuneration of the Managing Board and Supervisory Board as well as the principles underlying the remuneration system are presented in detail in the remuneration report, which is an integral part of the management report. The total remunerations of the active Managing Board amounted to 595 T in the reporting year. Former members of the Managing Board and their surviving dependants received emoluments amounting to 665 T. The pension provisions formed for this group of people amount to 3,646 T. The emoluments of the members of the Supervisory Board amount to 354 T for the financial year.

104 Consolidated financial statements: Executive bodies of the company and their mandates Supervisory Board Committees of the Supervisory Board Dr. jur. Josef Pauli, Essen Honorary Chairman Dr. rer. pol. Eckart John von Freyend, Bad Honnef Chairman Shareholder of Gebrüder John von Freyend Verwaltungs- und Beteiligungsgesellschaft mbh External mandates: Finum AG *1) (chairmanship) Hahn Immobilien-Beteiligungs AG *1) Infopark Fejlesztési Rt, Budapest, Hungary *2) (until 10.04.2008) IVG Immobilien AG *1) Konzept plus AG *1) (chairmanship) Litos AG *1) VNR Verlag für die Deutsche Wirtschaft AG *1) Dr. rer. pol. Marc Weinstock, Kelkheim-Fischbach Deputy Chairman Chairman of the Managing Board of HSH Real Estate AG External mandates: LB Immo Invest GmbH *2) DSK Deutsche Stadt- und Grundstücksentwicklungsgesellschaft mbh *2) ((Chairman as from 12.02.2008) BIG BAU-INVESTITIONSGESELLSCHAFT mbh *2) (Deputy Chairman) GEHAG GmbH *2) (until 18.01.2008) Landgesellschaft Schleswig-Holstein mbh *2) (Deputy Chairman until 30.11.2008) Pirelli RE Asset Management Deutschland GmbH *2) (from 01.05.2008) H/H-Capital Management GmbH *2) Deutsche PPP Holding GmbH *2) (Chairman until 31.12.2008) Volker Lütgen, Wentorf Managing Director of HSH Capitalpartners GmbH Robert Schmidt, Datteln Managing Director of Evonik Immobilien GmbH External mandates: HSH Real Estate AG *1) (from 20.08.2008) RAG Montan Immobilien GmbH *2) (until 12.03.2008) (formerly Montan-Grundstücksgesellschaft mbh) THS GmbH *2) (from 13.03.2008) Wohnbau Dinslaken GmbH *2) (Deputy Chairman) Edith Dützer *3), Moers Clerical employee Executive Committee Members of the Committee: Dr. rer. pol. Eckart John von Freyend (Chairman) Dr. rer. pol. Marc Weinstock Volker Lütgen Robert Schmidt Audit Committee Members of the Committee: Dr. rer. pol. Marc Weinstock (Chairman) Robert Schmidt Edith Dützer Nominating Committee Members of the Committee: Dr. rer. pol. Eckart John von Freyend (Chairman) Dr. rer. pol. Marc Weinstock Volker Lütgen Robert Schmidt Managing Board Dr. Rüdiger Mrotzek, Hilden Director for finance/accounting, taxes, properties, EDP, risk management/controlling External mandates: Wohnbau Dinslaken GmbH *2) (until 31.12.2008) Hans Richard Schmitz, Bonn (from 01.12.2008) Director for legal matters, personnel, investor relations/public relations, corporate governance, insurance Roland J. Stauber, Essen (until 15.08.2008) Spokesperson, director for properties, legal matters, personnel, corporate governance, public relations, insurance External mandates: Wohnbau Dinslaken GmbH *2) (until 30.09.2008) VBW Bauen und Wohnen GmbH *2) *1) Membership of other Supervisory Boards to be constituted by law *2) Membership of comparable domestic and foreign monitoring bodies *3) Employee representative on the Supervisory Board Hans-Bernd Prior *3), Dinslaken Technician Duisburg-Hamborn, 24 February 2009 The Managing Board Dr. Rüdiger Mrotzek Hans Richard Schmitz

Consolidated financial statements: Assurance of the legal representatives 105 Assurance of the legal representatives We declare, to the best of our knowledge, that the consolidated financial statements convey a picture of the net worth, financial position and earnings of the Group corresponding to the actual circumstances in accordance with the accounting principles to be applied and that, in the consolidated management report, which is consolidated with the management report of HAMBORNER AG, the course of business including the operating results and the position of the Group are portrayed in such a way that a picture corresponding to the actual circumstances is conveyed and the significant opportunities and risks for the probable development of the Group are described. Duisburg-Hamborn, 24 February 2009 The Managing Board Dr. Rüdiger Mrotzek Hans Richard Schmitz

106 Consolidated financial statements: Declaration of the Managing Board Declaration of the Managing Board The Managing Board of HAMBORNER AG is responsible for the preparation, completeness and accuracy of the consolidated financial statements and consolidated management report as well as the other information given in the annual report. The consolidated financial statements were prepared using the International Financial Reporting Standards (IFRS) as applicable in the European Union. The consolidated management report of HAMBORNER AG and of the Group contains an analysis of the net worth, financial position and earnings as well as additional explanatory notes provided in accordance with the provisions of the German Commercial Code. Where required, appropriate estimates were made based on the information available at the time. Deviations may result when the assumptions taken as a basis are not or are only partially fulfilled. An effective internal management and control system is in place to ensure the reliability and completeness of the data for preparation of the consolidated financial statements and the report on the position of the company and Group (consolidated management report) as well as the internal reporting. Moreover, a comprehensive risk management system was implemented commensurate with the requirements of the German Law on Corporate Governance and Transparency [KonTraG]. As a result, the Managing Board is able to identify significant risks at an early stage and, where appropriate, to initiate necessary preventive measures. Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Dusseldorf has audited the present consolidated financial statements and the consolidated management report and granted an unqualified audit certificate. The Managing Board Dr. Rüdiger Mrotzek Hans Richard Schmitz

Consolidated financial statements: Audit certificate of the statutory auditor 107 Audit certificate of the statutory auditor We have audited the consolidated financial statements prepared by HAMBORNER Aktiengesellschaft, Duisburg-Hamborn consisting of the profit and loss account, balance sheet, cash flow statement, statement of changes in the equity capital, fixed asset movement schedule and notes as well as the consolidated management report combined with the management report for the financial year from 1 January 2008 to 31 December 2008. The preparation of consolidated financial statements and consolidated management report in accordance with both the International Financial Reporting Standards (IFRS) as applicable in the EU, and the supplementary provisions of commercial law to be applied in accordance with Section 315a Para. 1 of the German Commercial Code is the responsibility of the Managing Board of the company. Our function is to submit an assessment of the consolidated financial statements and the consolidated management report on the basis of the audit we have undertaken. We have carried out our audit of the consolidated financial statements in accordance with Art. 317 of the German Commercial Code in compliance with the German principles of proper audit of financial statements established by the German Institut der Wirtschaftsprüfer [institute of auditors] under the terms of which the audit should be planned and carried out in such a way that inaccuracies and infringements which have a significant impact on the presentation of the picture of the net worth, financial position and earnings conveyed by the consolidated financial statements in compliance with the accounting provisions to be applied and by the consolidated management report, are detected with sufficient certainty. When determining the auditing procedures, knowledge regarding the business activity and the economic and legal environment of the Group and the expectations regarding possible errors are taken into account. The effectiveness of the internal control system relating to financial reporting and the evidence for the details in the consolidated financial statements and consolidated management report are predominantly evaluated on the basis of random spot checks within the framework of the audit. The audit entails the assessment of the annual financial statements of the companies included in the consolidated financial statements, of the demarcation of the consolidation scope, of the accounting principles and principles of consolidation applied and of the fundamental estimates of the Managing Board as well as the appraisal of the overall presentation of the consolidated financial statements and of the consolidated management report. We are of the opinion that our audit constitutes a sufficiently reliable basis for our evaluation. Our audit has not resulted in any objections. According to our evaluation on the basis of the knowledge acquired during the audit, the consolidated financial statements of Hamborner Aktiengesellschaft, Duisburg-Hamborn comply with the IFRS, as applied in the EU, and with the supplementary provisions of commercial law to be applied in accordance with Section 315a Para. 1 of the German Commercial Code and, in compliance with these provisions, convey a picture of the net worth, financial position and earnings of the Group corresponding to the actual circumstances. The consolidated management report is consistent with the consolidated financial statements, conveys an accurate picture overall of the position of the Group and correctly portrays the opportunities and risks of future development. Dusseldorf, 25 February 2009 Deloitte & Touche GmbH Auditors Harnacke Auditor Lüdke Auditor

Supplementary information Minden, Bäckerstraße 8-10

Important terms and abbreviations 110 General information 113 Financial calendar 115

110 Supplementary information: Important terms and abbreviations AktG Cash flow Cash flow statement Consolidation Corporate Governance DAX Declaration of compliance Deferred taxes Derivative Designated sponsor DIMAX EBIT EBITDA EPRA Fair value FFO GDP Aktiengesetz; German Stock Company Act Cash balance from the inflow and outflow of liquid funds in a given period. The cash flow statement makes the cash flows in the company transparent. Transactions impacting on liquidity are classified by operating, investment and financing activities. Preparation of consolidated financial statements under the notional assumption that the Group is a legally integrated company (entity theory). Principles of responsible company management and control geared to long-term creation of value. The most important German share index established by Deutsche Börse AG. It shows the development of the 30 biggest German public limited companies, in terms of their market capitalisation and stock exchange turnover. Declaration by the Managing Board and Supervisory Board in accordance with Art. 161 of the German Stock Company Act for implementation of the recommendations of the Government Commission for the German Corporate Governance Code. Items on the assets side and/or on the liabilities side to offset the difference between the tax liability actually assessed and the economic tax burden caused due to balance sheet preparation under commercial law. A financial instrument the value of which is derived predominantly from the price, price fluctuations and price expectations of an underlying asset, such as shares, interest-bearing securities or foreign currencies; often used as a hedging instrument. Designated sponsors are specialised financial service providers who counterbalance temporary imbalances between supply and demand in individual shares in the electronic trading system Xetra. Placing bid and ask limits aims to improve the negotiability of a share. Share index published by the banking firm Ellwanger & Geiger, which combined a total of 75 German property shares at the end of 2008. Earnings before interest and taxes (only taxes on income). Earnings before interest, taxes, depreciation and amortisation (only taxes on income). European Public Real Estate Association European association of property companies quoted on the stock market. Financial analysts, investors, auditors and consultants are also represented in it in addition to companies. The fair value is the amount for which knowledgeable and willing parties would be prepared to exchange an asset at normal market conditions or to discharge a liability. Funds From Operations: Key indicator of the company s operational management. Corresponds to the net income, less the profits or losses from the sale of properties, plus depreciations for wear and tear on the property. Gross Domestic Product: measurement for the economic performance of a national economy, i.e. the combined value of all goods and services that are produced in the domestic market within a specific period.

Supplementary information: Important terms and abbreviations 111 HGB Ifo IFRS Investment properties KonTraG Market capitalisation MDAX Net asset value (NAV) Performance Projected Unit Credit Method REIT Risk management SDAX Volatility VorstOG WpHG Handelsgesetzbuch; German Commercial Code Ifo Institute for Economic Research, Munich. International Financial Reporting Standards: international accounting provisions issued by the International Accounting Standards Board (IASB). Obligatory from 1 January 2005 for capital market-orientated companies and Groups, their aim is to facilitate better international comparability. All undeveloped and developed properties as well as buildings and parts of buildings, which are held for the attainment of future rental income and/or profits from appreciations in value to third parties and/or for an as yet undefined use. They are not intended for administrative purposes or for short-term trade in the context of normal business activity. Gesetz zur Kontrolle und Transparenz im Unternehmensbereich; German Act on Corporate Governance and Transparency. Market value of a public limited company. Current share price multiplied by the number of shares. Mid-Cap Index: German second-line index, combining 50 shares from traditional, non-technologyheavy sectors, which follow the DAX shares with regard to market capitalisation and stock exchange turnover. The net asset value reflects the economic equity capital of the company. It is determined from the market values of group assets essentially the value of properties net of the borrowed capital. Measurement for the yield of an investment in a specific period. It is composed of the performance, the profit distribution and the liquidity within a given period and is normally expressed as a percentage. The projected unit credit method takes not only the pensions and purchased pension entitlements known on the balance sheet date into account but also expected future increases in salaries and pensions. Abbreviation of Real Estate Investment Trust. Mainly a stock exchange-listed company that invests solely in properties. Permits the investor to invest indirectly in real estate through the purchase of shares. The greater part of the profit is distributed and taxation is effected exclusively at investor level (tax transparency). Systematic process with the aim of identifying potential risks in the company at an early stage, evaluating them and, where appropriate, introducing necessary preventive measures. Small-Cap Index: German share index that, as a second-line index, includes the 50 most important shares after the DAX and MDAX. The S for small-cap refers to smaller companies with low market capitalisation and stock exchange turnover. Statistical measurement for the fluctuation margin of a rate of exchange or price, particularly of securities or currencies. Gesetz über die Offenlegung der Vorstandsvergütung; German Disclosure of Managing Board Remuneration Act Wertpapierhandelsgesetz; German Securities Trading Act

112 Hamburg, An der Alster 6

Supplementary information: General information 113 Note The present report contains statements directed at the future, e.g. on the macroeconomic development in Germany, on the future situation of the property industry and on our own probable business development. These statements are based on current assumptions and estimates of the Managing Board, which were carefully made on the basis of all information available at the present time. Where the assumptions underlying the statements and forecasts prove to be incorrect, actual results may differ from those currently anticipated. This report also appears in German. The consolidated financial statements were prepared and adopted in German. The English publication is a translation of the German financial statements. The German version shall prevail. General information Publisher HAMBORNER AG Goethestraße 45 47166 Duisburg Telephone +49 (0203) 54405-0 Fax +49 (0203) 54405-49 info@hamborner.de www.hamborner.de Concept and design david uk. Matthias David Unternehmenskommunikation, Geeste Image credits HAMBORNER AG Translation Lanzillotta Translations GmbH, Dusseldorf

Financial calendar 2009 / 2010 1 April 2009 Press conference on the balance sheet for the financial year 2008 15 May 2009 Interim report for 1st quarter 2009 9 June 2009 Annual general shareholders meeting 2009 10 June 2009 Payment of the dividend for the financial year 2008 13 August 2009 Interim report for 1st half-year 2009 12 November 2009 Interim report for 3rd quarter 2009 31 March 2010 Annual report 2009 14 May 2010 Interim report for 1st quarter 2010 10 June 2010 Annual general shareholders meeting 2010

HAMBORNER AKTIENGESELLSCHAFT Goethestraße 45 47166 Duisburg Telephone +49 (02 03) 5 44 05-0 Fax +49 (02 03) 5 44 05 49 info@hamborner.de www.hamborner.de