PRESS RELEASE

TAG Immobilien AG reports strong results again in Q3 2018 - FFO and dividend per share both expected to increase 9% in 2019, to EUR 154-156 million and EUR 0.80

- FFO of EUR 37.5 million in the third quarter of 2018 and EUR 108.7 million in the first nine months of 2018 corresponds to year-on-year increases of 17%

- LTV drops to 49.4% as of 30 September 2018

- Vacancy in the Group's residential units reduced to 5.2% in September 2018, from 5.5% in the previous quarter

- Total like-for-like rental growth rises to 2.8% p.a. as of 30 September 2018, after 2.5% p.a. in Q2 2018

- Acquisition of around 1,300 apartments in eastern Germany in the third quarter of 2018

Hamburg (30 October 2018) - In the third quarter of 2018, TAG Immobilien AG (TAG) generated FFO I (funds from operations excluding net revenues from sales) of EUR 37.5 million, compared with EUR 36.1 million in the previous quarter and EUR 33.9 million in the same period of the previous year. For the first nine months of 2018 as a whole, FFO amounted to EUR 108.7 million or EUR 0.74 per share, a significant increase of 17% over the previous year (EUR 93.2 million or EUR 0.64 per share).

Positive development of operating indicators

In the third quarter of 2018, net rent rose once again, to EUR 75.4 million after EUR 75.1 million in the previous quarter. Net rental income for the first nine months of 2018 came to EUR 226.1 million, compared with EUR 218.0 million in the same period of the previous year. Net rental income rose to EUR 182.6 million as of 30 September 2018, up from EUR 176.8 million as of 30 September 2017.

The EPRA NAV (net asset value) per share was EUR 15.36 at the end of the third quarter of 2018, after EUR 15.15 in the previous quarter and EUR 13.80 on 31 December 2017. The loan-to-value (LTV) debt ratio further decreased to 49.4% as of 30 September 2018 compared to the previous quarter (50.2%) and the beginning of the year (52.3%).

Group-wide vacancy in TAG's residential units fell from 5.5% as of 30 June 2018 to 5.2% at the end of the third quarter of 2018. Like-for-like rental growth over the past twelve months amounted to 2.4% p.a. as of 30 September 2018. Taking into account the effects of vacancy reduction, the overall like-for-like rental growth was an attractive 2.8% p.a. (30 June 2018: 1.9% and 2.5% respectively). Average expenditure on maintenance and modernisation capex remained at a moderate level of EUR 13.96 per sqm through the end of September 2018 (EUR 15.12 per sqm in the full 2017 financial year).

Acquisition of around 1,300 apartments in eastern Germany in the third quarter of 2018

In September 2018, a portfolio of 73 units in Riesa (Saxony) was acquired for a purchase price of EUR 3.2 million. Annual net rent (without utilities) is currently EUR 0.23 million, resulting in a purchase multiplier of 13.9 and an annualised gross yield of 7.2%. Vacancy in the portfolio at the time of purchase was 8.0%. The transfer of ownership, benefits and obligations is expected to take place at the end of 2018.

Also in September, the property portfolio was expanded by another 1,266 units in Mecklenburg-Vorpommern and Brandenburg. The main locations of the portfolio are in Schwerin and Angermünde. The annual net rent amounts to EUR 4.2 million, vacancy in the portfolio is currently at 6.5%. The parties have agreed to keep the purchase price confidential. The transfer of ownership, benefits and obligations of the portfolio is expected to take place on 31 December 2018.

So all in all, TAG has acquired a good 1,500 apartments in the 2018 financial year. There were no major transactions on the sales side in the third quarter of 2018, so just over 800 units were sold in the first nine months of the financial year.

New FFO and dividend guidance for 2019

We were already able to raise our FFO and dividend guidance for the 2018 financial year in August of this year due to TAG's very positive business performance. This remains unchanged. The new FFO and dividend guidance for the 2019 financial year, published today, is as follows:

- FFO 2019: EUR 154-156 million (forecast for 2018: EUR 141-143 million)

- FFO per share 2019: EUR 1.06 (forecast for 2018: EUR 0.97)

- Dividend per share for 2019: EUR 0.80 (forecast for 2018: EUR 0.73)

The forecast assumes that approximately 500 apartments from the ongoing disposals business and some 1,600 units that are not part of the strategic core portfolio (non-core assets) will be sold in the course of the 2019 financial year, resulting in an FFO reduction of around EUR 3m, which is already accounted for in the above forecast. Further acquisitions, on the other hand, are not included in the forecast.

This means that significant year-on-year increases of +9% are expected again in 2018/2019. CFO Martin Thiel explains: "Based on the extremely positive operational developments in rents and vacancy, the acquisitions already made in the financial year 2018, and the refinancing implemented in recent months, we can forecast a further significant rise in FFO for the 2019 financial year. Our strategy of exploiting growth potential and return opportunities primarily in the eastern German federal states is paying off. Steadily growing cash flows enable us to increase the dividend for the 2019 financial year to an attractive EUR 0.80 per share."

Further details can be found in the interim statement as of September 30, 2018, 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
Tel. +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 390
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