There was a substantial increase in the number of residential units in the TAG Group in the first half of 2011 due to the Colonia acquisition. The locations of both companies’ residential properties overlap with a few exceptions and are located - with the exception of the Salzgitter portfolios - in German metropolitan regions with growth potential such as Berlin, Hamburg / North Germany, North Rhine-Westphalia and Leipzig / Saxony. As a holder of investment properties, TAG’s focus is on active leasing and asset management, with the aim of profitably managing properties and realising potential appreciation. One core area of this is the reduction of vacancy within the overall portfolio, which was further advanced in the first half of 2011.

Colonia’s integration into the TAG Group is progressing well

The restructuring process initiated at Colonia in the first quarter is progressing well and already showing signs of success. The merging of administrative units already resulted in savings of around EUR 11 million by the end of the second quarter. The Colonia portfolio is now largely managed in-house and various external mandates have been terminated. For example, the contract outsourcing the management of Colonia’s largest single property portfolio (approximately 8,900 units) in Salzgitter was terminated on 1 July 2011. TAG expects millions of euros in savings from the strategically justified „insourcing“ of property management - from, among other things, improvements in operating profitability, the realisation of synergies, and the reduction of vacancy costs.