La Historia de Santa Claus

Several legal stipulations apply in Austria and Germany when setting the rent for housing: AUSTRIA

The predominant area of BUWOG Group’s total holdings in Austria will be regulated and rented out according to the Non-Profit Housing Act (WGG). The WGG contains numerous models for establishing housing rent. In addition to rent for covering costs, which are composed of proportionate costs for purchasing property, construction, financing and administration costs, there is the “Burgenland standard value -30% (BRW-30)” for rental agreements after 1994 with a yearly increase in accordance with legal regulations (EUR 3.30 per sqm). No general indexing is performed, but changes to financing costs may apply. In the second case, the legally-stipulated standard value for Burgenland is reduced by 30% and increased by administration expenses and additional costs. These costs can be adjusted yearly, indexing is predefined. Regulated rental agreements in Austria show a rented total usable area of around 1.7 million sqm and/or 89.5% of the rented total usable area of Austrian holdings (1.9 million sqm). The annualised net rent without utilities from the cost-covering rent and according to the Burgenland standard value of -30% amounts to approximately EUR 75.9 million, which results in an average monthly rent of around EUR 3.70 per sqm.

Unregulated rental agreements in Austria show a total rented area of around 138,000 sqm or 7.2% of the rented holdings in Austria (1.9 million sqm). The average monthly rent for these rental agreements amounts to 5.33 per sqm.

Rental agreements for others, including businesses which do not contain rental restrictions, are shown without subdividing them into Austria and Germany. The percentage of these areas amounts to approximately 3% of the rented total usable area of BUWOG Group’s total holdings in Austria and Germany and exhibit an average monthly rent of EUR 10.32 per sqm.

GERMANY

There are unregulated rental agreements for around 960,000 sqm of the BUWOG portfolio, this equals 60% of the rented total usable space of the Germany portfolio of 1.6 million sqm. The resulting annualised net rent without utilities consists of around EUR 60.5 million for an average rent of EUR 5.25 per sqm.

The regulated rental agreements in the German holdings consist of around 37% of the overall rented total usable space of the holdings portfolio (1.6 million sqm). For these real estate holdings, the annualised net rent without utilities consists of around EUR 35.8 million for an average rent of EUR 5.05 per sqm. Rental law limitations in Germany originated, among other things, from the Schleswig-Holstein Housing Allowance Act (Wohnraumförderungsgesetz).

As of 30 April 2014, 7,303 stock units in the DGAG portfolio are deemed to be fixed price (40.5% of this portfolio). 6,122 apartments thereof fall under the transitional provision of the Schleswig-Holstein Housing Allowance Act (§16 SHWoFG). Ever since the amendment to the law came into force on 1 July 2009, the cost rents stipulated at this point in time are deemed to be so-called base rents. Starting on 1 July 2014, the base rents may be increased by a maximum of 9% (differing cap limit) within a time period of three years based on §16 of the Schleswig-Holstein Housing Allowance Act (SHWoFG) (which now allows ways of increasing the rent pursuant to § 558 of the Civil Code [BGB]). With the elimination of the rent control stipulated in conjunction with the funding, a rent increase no greater than 20% is possible on the basis of legal regulations, but no earlier than 31 December 2018. The aforementioned capping limits do not apply to modernisations. Legal increase options apply here.

While rent controls are in place, the aforementioned rent controls must also be taken into account when reletting. After the controls are eliminated, relet- ting can take place at market rents. So-called occu- pancy commitments continue to apply to publicly subsidised rental apartments. Under these controls, apartments can only be rented to certain persons entitled to their occupancy.

For rental apartments that have complied with the occupancy commitment for 35 years as of 1 July 2014, the legally binding commitment ends on 30  June 2014. This is the case for 2,469 units. After this date, there are thus no restrictions on the occupancy of the apartment. Otherwise, the occupancy commitments expire after 35 years. If the 35-year period ends after 1 January 2019, the rent controls and occupancy commitments expire at the same time. Of the previously mentioned 6,122 apartments in the DGAG portfolio, occupancy commitments and rent controls will expire for 52.4% of these apartments within the next five years. Only 12.1% of the apartments will be subject to these controls beyond 2030.

Due to the external requirements described regarding the structure of rents, an increase in rental income can mainly be achieved only through tenant turnover and prescribed annual adjustments. In this environment, it is particularly important to use active asset management to exploit the existing potential of the properties to the greatest degree possible, to identify potential for value appreciation in the form of additions and extensions and to contain costs structures.

pORTFOLIO STRUcTURE

BY TYpE OF RENTAL AGREEMENT

in-place rent incl. DGAG and Apollo portfolios Other incl. commercial 7% Regulated rental agreements 57% Unregulated rental agreements 36%

Unregulated rental agreements Austria

(incl. reasonable rents pursuant to WGG and MRG)1) _{138,421 8.9 5% 5.33}

Regulated rental agreements Austria

(incl. other provisions under WGG)2) _{1,709,529 75.9 39% 3.70}

Unregulated rental agreements Germany

(incl. DGAG and Apollo portfolios) 959,490 60.5 31% 5.25 Regulated rental agreements Germany

(incl. DGAG and Apollo portfolios) 590,429 35.8 18% 5.05 Other incl. commercial 112,572 13.9 7% 10.32

Total 3,510,441 195.0 100% 4.63

STRUcTURE OF RENTAL AGREEMENTS AS OF 30 ApRIL 2014

incl. DGAG and Apollo portfolios

Rental area in sqm as of 30 April 2014 Annualised in-place rent in EUR million as of end 2013/14 Proportion of annualised in-place rent In-place rent per sqm in EUR as of end 2013/14

1) Reasonable rents under WGG includes properties for which subsidies received have already been repaid and for which indexing can be individually agreed. 2) Cost-covering rent and Burgenland guidelines -30%

ASSET MANAGEMENT