Press release

TAG Immobilien AG to purchase TLG Wohnen GmbH and resolves on capital increase against cash contributions for up to 30 million New Shares to finance the acquisition

(Hamburg, 19 November 2012) Today, the Federal Republic of Germany accepted the bid of TAG Immobilien AG ('TAG') to acquire TLG WOHNEN GmbH ('TLG Wohnen'). Thus, TAG succeeded in the bidding process initiated by the German Ministry of Finance for the privatisation of the TLG companies, which are successor entities of the German 'Treuhand' Trust Agency. The purchase price for the acquisition is EUR 471 million and includes the roll-over of liabilities of TLG Wohnen in the amount of c. EUR 256 million.

TLG Wohnen comprises approximately 11,350 residential units with a total floor area of approximately 697,000 sqm. The annual rental income amounts to approximately EUR 42.4 million. The portfolio, which is almost entirely consisting of residential units, has a geographic focus on the regions of Berlin, Dresden and Rostock. The vacancy level is 4.7%. The transaction documentation agreed with the Federal Republic of Germany includes comprehensive provisions to protect the interests of the residential tenants.

Upon completion of the acquisition of TLG Wohnen, which is expected in the coming weeks, TAG will have a residential portfolio of approx. 69,000 units with a total floor area of 4,166,052 sqm. Total assets will exceed EUR 3.6 billion and the total annual net cold rent of the TAG group will be approximately EUR 254 million.

The operating business of TLG Wohnen will be integrated into TAG's existing operating platform. The staff of TLG Wohnen will further strengthen the know-how of the local teams, thereby improving TAG's business expertise in East Germany.

The Management Board expects a significant increase of TAG's 'Funds from Operations' (FFO), which is a key performance metric in the real estate industry. The improvement includes synergies in the amount of a low single digit EUR-million amount per annum, which TAG expects to realise within the next six months. Key drivers for the expected accretion are a significant geographic overlap of the acquired properties with the existing portfolio of TAG as well as the fact that TLG Wohnen will be purchased without a centralised management structure.

Today, the management board of TAG, with the approval of the supervisory board, resolved on a capital increase against cash contributions of up to 30 million New Shares, in order to refinance the equity purchase price in the amount of approximately EUR 218 million and for financing of additional smaller acquisitions that complement the existing portfolio and in which TAG is already in advanced negotiations. The resolution is based on the Authorised Capital resolved at the Annual General Meeting of shareholders on 14 June 2012 and includes subscription rights for existing shareholders. The subscription ratio will be 17 : 5. The offer price, which will correspond to the subscription price, is expected to be determined on 3 December based on a bookbuilding procedure, whereby the New Shares will be offered to selected domestic and international investors subject to clawback, i.e. a pro rata reduction to the extent subscription rights were exercised in the Subscription Offer. The registered share capital of currently EUR 100.7 million will be increased to up to EUR 130.7 million. The New Shares are to be admitted to trading immediately after registration of the capital increase with the Commercial Register, which is expected in December 2012 and shall have full dividend rights from 1 January 2012. The members of TAG's management board intend to fully exercise the subscription rights attributable to their privately held TAG shares. The capital increase is conditional upon approval of the prospectus by the German Federal Financial Supervisory Authority ('BaFin'), which is expected for 22 November 2012.

The capital increase will be managed by a bank syndicate, consisting of Barclays and Credit Suisse in the role of the 'Joint Global Coordinators' and 'Joint Bookrunners'. TAG has received a bridge financing commitment in the amount of the equity purchase price from those two banks. Close Brothers Seydler Bank, Kempen & Co and UniCredit Bank are acting as Co-Lead-Managers. Credit Suisse has advised TAG on the transaction as 'Financial Advisor'.

In context of the acquisition, TAG is able to roll-over existing debt of TLG Wohnen in the amount of approximately EUR 256 million. However, it is planned to further optimise the debt financing structure at the beginning of 2013 and TAG is expecting to significantly improve the financing terms based on its strong network of financing banks. TAG has already obtained respective indicative term sheets. The management board will focus, in context of the planned refinancing- and capital measures, on an appropriate capital structure and will further strengthen the balance sheet.

Rolf Elgeti, CEO of TAG Immobilien AG: 'We are excited about this very attractive acquisition which is an excellent strategic fit for us. The transaction will significantly increase TAG's FFO and further improves our strong Cash Flow profile. We will raise new equity again in a disciplined way and in the best interest of creating value for our shareholders. The deal demonstrates the possibility of profitable growth in the current market environment. TLG Wohnen features a high quality portfolio that has been managed at very professional standards, which is also reflected in the low vacancy level. We would like to welcome the new tenants and employees to the TAG Group and are very much looking forward to working together.'

This document constitutes neither an offer to sell nor a solicitation to buy securities of TAG Immobilien AG and does not substitute the securities prospectus. Investments in the securities of TAG Immobilien AG should only be based on the securities prospectus which, once approved by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), will be available as of 22 November 2012 free of charge from TAG Immobilien AG.

Not for distribution or release, directly or indirectly, in or into the United States, Australia, Canada or Japan or any other jurisdiction in which the distribution or release would be unlawful.

This document (press release) does not contain or constitute an offer for the sale of securities in the United States of America, Australia, Canada, Japan or other jurisdictions in which offers are subject to legal restrictions. The securities referred to in this document (press release) have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act') and may not be sold or offered for sale in the United States of America absent registration or an exemption from registration. Subject to certain exemptions in accordance the securities referred to in this announcement may not be sold or offered for sale in the United States of America, Australia, Canada or Japan or to or for the account of Australian, Canadian or Japanese persons. No registration will take place of the offer or sale of the securities referred to in this announcement in accordance with the respective legal requirements in Canada, Australia and Japan. No public offer of securities is made in the United States of America.