PRESS RELEASE

TAG Immobilien AG starts FY 2019 with significantly increased FFO

• FFO increases to EUR 39.5m or EUR 0.27 per share in Q1 2019 compared to EUR 37.8m or EUR 0.26 per share in Q4 2018; more than 12% year-on-year increase in FFO (compared with Q1 2018)
• Total like-for-like rental growth at 2.8% p.a. as of 31 March 2019, after 2.6% p.a. as of 31 December 2018
• Vacancy in the residential units of the portfolio at 5.2% in March 2019 after 5.0% on a like-for-like basis at the beginning of the year
• NAV per share rises to EUR 17.54 (31 December 2018: EUR 17.32)
• LTV reduced to 46.8% thanks to operating results and ongoing loan amortisation, compared to 47.3% at year-end 2018
• Tax-free dividend of EUR 0.75 per share planned for the Annual General Meeting to be held on 7 May 2019; dividend for 2019 to increase further to EUR 0.80 per share as planned

Hamburg (25 April 2019) - In the first quarter of 2019, TAG Immobilien AG (TAG) once again increased its operating profit (funds from operations as FFO I excluding net income from sales). This positive development was based not only on ongoing rental growth and the refinancing already implemented, but also on the acquisition of around 2,500 residential units that took effect at the end of 2018. The Group's capital structure is characterised by long-term stability and cost-effectiveness. At the end of the first quarter of 2019, the loan-to-value (LTV) debt ratio was 46.8%, average interest cost and maturities of total financial debt amounted to 1.9% and 7.9 years, respectively, at the reporting date.

With a portfolio of approx. 84,300 units as of 31 March 2019 (31 December 2018: approx. 84,400 units) TAG's net rent rose to EUR 78.6m in the first quarter of 2019, compared with EUR 76.1m in the preceding fourth quarter of 2018. Net rental income increased from EUR 61.6m in the preceding quarter to EUR 63.5m. Besides the portfolios of around 2,500 residential units transferred at the end of Q4 2018, another contributor to this positive operating performance was the like-for-like rental growth of 2.8% p.a. as of 31 March 2019 (31 December 2018: 2.6% p.a.) or - excluding the effects of vacancy reduction and on par with the 2018 financial year - 2.3% p.a. in addition to the effects of lower vacancy (0.5%), rental growth mainly consisted of regular rent increases for existing tenants (1.3%) and higher rents achieved from tenant turnover (0.9%). As in previous years, the vast majority of modernisation expenditure (capex) was on reducing vacancy in acquired portfolios. Rent increases for existing tenants due to the modernisation surcharge contributed only 0.1% to rental growth. TAG's capex in the first quarter of 2019 focused on the Chemnitz and Gera regions and Brandenburg an der Havel (Berlin region). At EUR 19.04 per sqm, total investment (maintenance and capex) in the residential units, annualised over a period of 12 months, was roughly at the level of the 2018 financial year of EUR 19.24 per sqm.

As a result of the new acquisitions and the ongoing modernisation programmes to reduce vacancy, the vacancy rate in the residential units temporarily rose from 5.0% at the beginning of the year to 5.2% in March 2019, in line with developments at the beginning of the last financial year. Across the portfolio, vacancy totalled 5.6% in March 2019 compared with 5.3% at the beginning of the year.

Net income at the end of the first quarter of 2019 was EUR 33.3m after EUR 239.6m in the preceding quarter - which included EUR 200.2m in valuation gains from the property valuation carried out on 31 December 2018 and EUR 9.5m higher deferred tax income - and EUR 26.7m in the first quarter of 2018. Adjusted funds from operations (AFFO), based on FFO less all capex, also increased in Q1 2019 to EUR 24.3m, compared to EUR 22.0m in Q4 2018 and EUR 22.1m in Q1 2018.

Total assets remained constant at EUR 5.0bn as at 31 March 2019 compared with the end of 2018. At 46.8%, the loan-to-value (LTV) debt ratio was again at a lower level than at the end of the previous quarter (47.3%). Net asset value (NAV) per share rose from EUR 17.32 at year-end 2018 to EUR 17.54 at 31 March 2019.

"We can be very satisfied with the first months of the 2019 financial year", says Martin Thiel, CFO of TAG. "Our focus on market-driven investments in locations that still have relatively high vacancy is not only attractive for our shareholders, but also enables us to reconcile, from the start, social and commercial goals - which are not in opposition when you take a long-term view in portfolio management. Our philosophy of ongoing neighbourhood development, and the on-site management we have in place at all our major locations are other essential contributors to the good results."

At the Annual General Meeting to be held on 7 May 2019, a dividend of EUR 0.75 per share will be proposed to shareholders. This is 15% higher than in the previous year (EUR 0.65 per share). Since this dividend payment is made from a tax perspective from the capital contributions account, no capital gains tax and no solidarity surcharge will be withheld. The dividend for the 2019 financial year is to rise to EUR 0.80 per share as planned, so that shareholders will continue to participate directly in the positive development of the regions managed by TAG.

Further details regarding the first quarter of 2019 can be found in the interim report published today at https://www.tag-ag.com/en/investor-relations/financial-statements/quarterly-reports/.

Press enquiries:
TAG Immobilien AG
Dominique Mann
Head of Investor & Public Relations
Phone +49 (0) 40 380 32 0
Fax +49 (0) 40 380 32 390
ir@tag-ag.com