Adaptationof the strategy and business model to the current market situation

TAG has made use of and accelerated existing opportunities in the German real-estate market to extend and diversify its business model across various segments. The focusof its business activity lies on the activerental and asset managementof its properties, with a specific emphasis on continued vacancy reduction in its residential properties, with the attendant reductionin vacancy costs and exploitation of potential for rent increases.

Consolidation as the basis for future growth

Since mid-2009, TAG has strategically built a solid basis in these extraordinary economic times. It did so by optimising its portfolio and business model on the one hand, and achieving operational turnaround on the other, which will enable continuedgrowth. With regard toacquisitions, TAG is focusing on residential properties that are a good match for TAG’s structure and strategy , i.e. that are located in German metropolitan regions where TAG already has investments. Other important criteria in realising a transaction include its positive effects on the NAV (Net Asset Value), profits and cashflow.

Growth as a strategic opportunity

TAG’s business model is characterised by a high proportion of fixed and step costs relative to total costs. This means that additional growth can be achieved at much lower cost, since the integration and implementation of all newly acquired real estate can be achieved without appreciable additional staff resources. So focussing and concentrating our portfolio not onlyrepresents a strategic opportunity, but is also an operational imperative that is mandatory for a continued and significant improvement in our profitability.

Long-term outlook – TAG as an attractiveasset play

TAG’s strategic outlook hinges on this increased focus on active asset management, vacancy reduction and further growth, and the much-improved profitabilitythat results from this. Our goal is to become a preferred vehicle for investing in German residential properties thanks to a good portfolio, top-notch Corporate Governance, and good yields. The realisation of long-term value increase potential and according market valuation that comes with this should benefit our shareholders.