Press release

TAG sells its commercial real estate portfolio to fund affiliated with Apollo Global Management

Hamburg, (28 March 2014) - TAG Immobilien AG ('TAG' in the following) and Apollo European Principal Finance Fund II, a fund affiliated with Apollo Global Management, LLC (together with its consolidated subsidiaries, "Apollo" in the following) today signed a contract regarding the divestment of TAG's commercial real estate portfolio. The divestment will be carried out via a sale of TAG Gewerbeimmobilien GmbH ('TAG GI' in the following). The sale will be performed as a share deal at a value of approximately EUR 297 million and a small book profit at TAG is expected.

TAG will retain a 20% holding in TAG GI. The purchase price - excluding loans of EUR 167 million to be assumed by the investor - is approximately EUR 130 million, of which approximately EUR 78 million will be paid in cash at closing with the remaining balance to be paid at a later date. The parties expect the deal to be concluded during the second quarter of 2014.

TAG GI's commercial portfolio, which currently comprises 21 properties with total floor area of ​​approximately 270,000 sqm, primarily includes office properties. As at 31 Dec 2013, TAG GI generated net target rent of approximately EUR 20 million per year with the portfolio. The portfolio, which comprises properties in various locations including Berlin, Munich, Hamburg and Cologne, has stable cash flows and potential for development. By selling this portfolio, TAG gives up its 'commercial' segment and focuses on the management of residential real estate. The disposal of third-party liabilities collateralized by the portfolio will reduce the LTV ratio at Group level by about 1.5% to about 60%. This means that FFO I will be reduced by approximately EUR 8 million per annum going forward. TAG's acquisitions of around 7,000 residential units ​​in December 2013 and February 2014 will more than compensate for this FFO I effect, so that TAG sticks to its FFO I forecast of EUR 90 million for 2014.

Rolf Elgeti: "By selling our Gewerbeimmobilien GmbH, we have taken the final step in our focus on residential real estate. The equity freed up by the sale will help to improve the LTV ratio. At the same time we look forward to the cooperation with Apollo initiated by the sale, and expect we will continue to create value for our shareholders through our remaining 20% stake."

Press enquiries:
TAG Immobilien AG
Head of Investor & Public Relations
Dominique Mann
Phone +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 390
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