PRESS RELEASE

TAG Immobilien AG exceeds FFO forecast again in 2019, further dividend increase announced

- FFO increases 10% to EUR 160.6m or EUR 1.10 per share in 2019 (2018: EUR 146.5m, EUR 1.00 per share)

- Increased dividend proposal for 2019: EUR 0.82 per share after originally planned EUR 0.80 per share (2018: EUR 0.75 per share)

- Strong valuation result in 2019 (+8.6% year-on-year) raises NAV per share to EUR 20.45 (+18%)

- LTV at 44.8% on December 31, 2019 ; new LTV target of c. 45% (previously c. 50%) ensures continued stable financing policy

- Vacancy in TAG's residential units was 4.5% at year-end 2019, up from 5.0% at the beginning of the year; total rental growth of 2.4% on a like-for-like basis in 2019, after 2.6% in the previous year

- Entry into the Polish property market legally completed in January 2020; planned development of a rental portfolio of 8,000 to 10,000 apartments in Poland in the next 3 to 5 years

Hamburg, 27 February 2020

TAG Immobilien AG (TAG) looks back on a very successful 2019, a financial year in which Funds from Operations (FFO as FFO I excluding net income from sales) increased by EUR 14.1m or 10% year-on-year. This improvement in earnings was mainly driven by the significant increase in net rental income and a further year-on-year reduction in financing costs.

Claudia Hoyer, COO of TAG: "As in previous years, we again exceeded our guidance in 2019. We are especially pleased that our strategy of fair business management and conduct, based on the principles of sustainability, has once again demonstrated the long-term viability of our business model to our tenants, regions, and all other stakeholders. For instance, with average rents in the TAG Group of EUR/sqm 5.39, we continue to focus on affordable housing in Germany and are very well positioned for the future, thanks to our customer focus and service quality as well as the expansion of our business in Poland".

Successful rental business and further reduction in financing costs form the basis for strong financials

The net rent of the portfolio, which comprised almost 85,000 residential units at the end of 2019, rose from EUR 302.2m in the previous year to EUR 315.0m in the financial year 2019, due to acquisitions and ongoing rent increases. As a result, net rental income also increased significantly to EUR 259.6m (previous year: EUR 246.1m).

The occupancy rate was improved in almost all regions, with the result that vacancy in the residential units fell to just 4.5% at year-end, compared with 5.0% at the beginning of the financial year. In December 2019, vacancy across the total portfolio was 4.9%- the first time it has fallen below the 5%-mark - compared with 5.3% at year-end 2018.

On a like-for-like basis, growth in rents across TAG's total residential units was 2.4% p.a. including the effects of vacancy reduction, and 1.9% p.a. excluding these effects. So compared to the previous year (2.6% and 2.3% p.a.), these figures once again were at a very good level, with total investments remaining moderate at an average of EUR/sqm 20.45 (previous year: EUR/sqm 19.24).

At EUR 547.3m, Earnings before Taxes (EBT) were roughly on a par with the previous year's level of EUR 542.2m. Besides the higher net rental income, this development resulted from further reductions in financing costs (decline in average costs of debt from 1.9% p.a. to 1.7% p.a. in the course of 2019, and of total FFO-relevant financing costs by EUR 9.0m year-on-year) as well as from valuation gains on the property portfolio, which came to EUR 414.1m for the full year (previous year: EUR 430.0m). As a result, the value of the property portfolio increased by 8.6% year-on-year. This underscores the positive market trend in the regions managed by TAG, particularly in East Germany. All in all, however, the real estate valuation remains at a conservative level with an average of c. EUR/sqm 1,030 or a gross yield of 6.1%.

In addition to the significant increase in FFO, Adjusted Funds from Operations (AFFO), which are FFO less total capex, improved year-on-year to EUR 93.9m or EUR 0.64 per share (+6%). Net income declined from EUR 488.2m in the previous year to EUR 456.4m in 2019 due to higher deferred, i.e. non-cash, tax effects.

Net asset value (NAV) per share rose to EUR 20.45 at the end of 2019 from EUR 17.32 at the end of the previous year (+18%), despite the dividend pay-out of EUR 0.75 per share in May 2019. The loan-to-value (LTV) debt ratio fell to 44.8% in 2019, a year-on-year decrease of 2.5 percentage points. In order to maintain a stable financing policy going forward, TAG's LTV target has been consistently reduced from c. 50% to c. 45%.

Purchases and sales of residential units in the financial year 2019

Another 1,331 residential units were acquired in the financial year 2019. All acquisitions were made in regions in Eastern Germany currently already managed by TAG, at an attractive average gross yield of 8.3%. Shortly after the reporting date, the purchase of a further portfolio of 431 residential units in Saxony-Anhalt was agreed in January 2020.

On the sales side, the disposal of 568 residential units was signed. The vast majority of these are non-core assets, which due to their location do not form part of TAG's strategic core portfolio and were sold at their book values.

2019 FFO forecast exceeded, increased dividend proposal of EUR 0.82 per share for the 2019 financial year

TAG had forecasted FFO of between EUR 154m and EUR 156m or EUR 1.06 per share for 2019. With FFO of EUR 160.6m or EUR 1.10 per share, this forecast was clearly exceeded thanks to the excellent business performance not only in the final quarter. A dividend of EUR 0.82 per share is therefore now planned for the 2019 financial year, which corresponds to a 10% year-on-year increase and a pay-out ratio - again attractively high - of 75% of FFO.

With regard to the 2020 financial year, the figures published in November last year - FFO ranging between EUR 168m and EUR 170m or EUR 1.16 per share, and a dividend of EUR 0.87 per share - continue to apply.

Martin Thiel, CFO of TAG, commented: "Building on the successes of the previous years, we took a strategic step last November, making our first investment in the Polish residential market by acquiring 100% of the shares in Vantage Development S.A., an acquisition that closed on 13 January 2020. In our opinion, the rental housing market in Poland complements our existing business activities in Germany very nicely, and offers further growth opportunities. In the medium term, i.e. within the next 3 to 5 years, we aim to have a portfolio of 8,000 to 10,000 residential-for-rent units in Poland and achieve attractive returns for our shareholders there as well."

For further details on the results of the past financial year, please refer to the presentation published and the 2019 Annual Report published today at https://www.tag-ag.com/en/investor-relations/.

Press enquiries:
TAG Immobilien AG
Dominique Mann
Head of Investor & Public Relations
Phone +49 (0) 40 380 32 300, Fax +49 (0) 40 380 32 388
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