tender offer for swedish residential player victoria park an...

Tender Offer for Swedish Residential Player Victoria Park An Attractive Initial Step into a Promising Market

3 May 2018

Tender Offer for Victoria Park

Vonovia has developed

into a German champion…

German-wide residential company of scale with almost 394k units and a gross asset value of ca.

€39bn

Since the IPO in 2013, Vonovia has

proven that residential is a scalable business

implemented an efficient, large-scale modernization platform

established a meaningful, dynamically growing value-add business

acquired and integrated almost 280k units (incl. BUWOG)

diversified its funding structure

… and started exploring

opportunities in European

Metropolitan Areas

Thorough analysis of residential markets in attractive European metropolitan areas

Urban areas primarily in France, Sweden and The Netherlands were identified as the most

promising in terms of exporting the Vonovia business model at scale

Strategic partnership with SNI (“CDC Habitat”) in France

Acquisition of conwert and BUWOG in Austria

Sweden with strong

similarities to German

residential market

The Swedish residential market functions in broadly similar ways and under similar regulatory

and operating frameworks as Germany

Strong urbanization trend

Supply / demand imbalance in urban areas as strong population growth and slow new-build

production creates supply shortage

Attractive portfolio investment opportunities

Sizeable and liquid market with numerous consolidation opportunities, including municipality owned

portfolios

The Million

Home Program

Very homogeneous housing stock provides opportunities for professional, industrialized modernization

Investments: Between 1965 and 1975, about one million apartments were built (“Million Home

Program”), of which about two thirds offer attractive investment opportunities

Executive Summary (1/2)


Executive Summary (2/2)

Victoria Park is a

leading player

and can serve

as a nucleus for

market

consolidation…

Vonovia had been actively following Victoria Park for the past 12 months and considers Victoria Park to be a leading

player in the Swedish market with many similarities to Vonovia (e.g. modernization strategy with self-financing

renovation model which generates ~40% rent increase)

High quality portfolio of ca. 14k residential units (c. €1.5bn) primarily in the Stockholm, Gothenburg and Malmö

regions

Best-in-class platform with a portfolio improvement business model and development opportunities similar to Vonovia's

Vonovia intends to harness the potential of the Swedish residential market via Victoria Park’s scalable platform

and potentially become the market consolidator, replicating the Vonovia success story of the last 10 years

…and meets all

of Vonovia's

acquisition

criteria

Strategic fit: Victoria Park’s portfolio is located in urban growth regions and Swedish rental regulation provides the

necessary foundation to run a low-risk business similar to our German operations

NAV accretive and FFO accretive to Vonovia shareholders

Rating neutral: No impact on rating or outlook as a result of this transaction

Transaction

On Apr. 1, 2018, Starwood Capital had made an unsolicited offer for Victoria Park at SEK 34.00 (adjusted for dividends) per

each A & B class share and SEK 315.00 per preference equity share

When we were made aware of the situation by Victoria Park’s financial advisor we started to consider an amicable offer to

Victoria Park’s shareholders

Vonovia had been following Victoria Park for about 12 months in the context of its European activities, and was able

to further build on that knowledge during expedited due diligence work

Cash offer of SEK 38.00 for every Class A share (19.5% premium to undisturbed price1 of SEK 31.80) and Class B

share (19.9% premium to undisturbed price1 of SEK 31.70) and SEK 316.00 for every Preference equity share (1.0%

premium to undisturbed price1 of SEK 313.00)

Implied enterprise value of Victoria Park at SEK 17.8bn (equivalent to €1.7bn) based on cash consideration

The offer will be subject to reaching the minimum acceptance threshold of more than 50% on a fully diluted basis and

including call options. In addition, the offer will include other standard conditions

The independent bid committee of the Board of Victoria Park has recommended the offer

The Chairman, Peter Strand, and other board members have decided to sign an irrevocable as part of the offer

Irrevocable undertakings and call options have been received from 37.31% of the total voting rights, equivalent to 31.82%

of the shareholder base

Note: Stats based on latest reported company information as of 31 March 2018 for Vonovia and Victoria Park unless otherwise stated; all SEK figures converted into EUR using an SEK/EUR exchange rate of 10.6; 1 Undisturbed price refers to the latest closing price pre Starwood offer announcement, as of 29 March 2018


Vonovia's Strategy and Track Record in Germany Serve as Blueprint for Victoria Park

Financing 2

Portfolio Management 3

Value-add Business 4

Innovative

Tra

ditio

nal

Property Management 1

Reputation & Customer Satisfaction

Vonovia Mergers & Acquisitions Strategy

5

Building on existing German operations

Measured approach

Excellent partners for cooperation

Leveraging know how, experience and best practices

European Activities 6

Core Strategies Opportunistic Strategies

Vonovia Victoria Park

Adjusted EBITDA Margin

Finance Mix

Vonovia's average cost per apartment modernization is an estimated ~30% lower3

% of Adj. EBITDA Operations (estimate)4

Victoria Park2

2013 2017

Vonovia

Vonovia

Source: Company Reports as of March 31, 2018 for Victoria Park and December 31, 2017 for Vonovia; 1 Calculated as operating profit divided by revenue; 2 Based on the Company’s SEK 8,573m of debt and c. SEK1,000m of bonds as of December 31, 2017; 3 Average property costs for a residential unit; 4 Based on Vonovia estimates only, potentially subject to differences in methodology / definition; 5 Indicative cost of incremental debt, based on and in line with recent Vonovia unsecured financing issuances. Current average in-place cost of debt is 1.8%

Secured 56%

60.8% 73.2%

49.7%1

2013 2017 Victoria Park

Unsecured 44%

Unsecured 79%

Secured 21%

Secured 88%

Unsecured 12%

Cost of debt: 2.0% Cost of debt: 3.3% Incremental cost5 of debt: ~1.5% (8 yrs.)

99

~1

92

8

Vonovia Victoria Park

Rental

Value-add

`000 units

IPO Sales Acq. Q1 2018

180 63

277 394


Attractive Rental Housing Market Dynamics


Commentary

New build production costs above inflation

70

90

110

130

150

170

1990 1994 1998 2002 2006 2010 2014 2018

CPI

Single-Family Houses

Multi-Family Buildings

Index = 100

Source: Swedish National Statistics Office (SCB)

Demand for rentals remains

high as higher property prices

are a strong barrier to entry

Production costs have

outpaced inflation as a result

of increasing property prices.

However, rental production

costs are c. 40% cheaper than

tenant owned primarily due to

low cost of land

Historically low vacancies,

especially in metropolitan

areas

Recent increase in rental

housing can be explained by:

Strong demand and low

vacancies

Skepticism towards tenant

owned housing market

Post deregulation in 2007,

number of sold municipally

owned rental flats increased

significantly, especially

through conversions in

Stockholm

3,000

3,500

4,000

4,500

5,000

2006 2008 2010 2012 2014 2016

Sweden

Stockholm

Gothenburg

4,000

4,500

5,000

5,500

6,000

6,500

2006 2008 2010 2012 2014 2016

Sweden

Stockholm

Gothenburg

0

20,000

40,000

60,000

80,000

1977 1982 1987 1992 1997 2002 2007 2012 2017

Vacant (total stock)

Vacant (available to rent)

Average rental levels 1 room apts (SEK/month) Average rental levels 2 room apts (SEK/month)

Number of vacant flats

Positive market fudamentals with steady rent growth, low vacancy levels and limited new supply


Source: Swedish National Statistics Office (SCB) Source: Broker research


The Million Home Program Offers Significant Untapped Potential

88.5

73.8 44.4

214.3

180.0

132.4

47.6 36.0 33.4 33.0 31.0 28.2 28.2 27.7 27.6 27.2 26.3 25.5 24.0 23.7 18.4 17.2 11.8 4.6

0

50

100

150

200

250

Tenant-Owned Rental Owner-Occupied

Victoria Park has built the best-in-class platform in Swedish residential

With Vonovia's industralised approach and low cost of capital, Victoria Park will be able to fully harness the potential of the Million Home

Program

More than 1m units were built across Sweden between

1965-1975, of which ~60% is related to residential flats

Around half of the stock is located in regions surrounding

Stockholm, Gothenburg and Malmö

Approximately 70% of the stock was suitable for renovation as of

2014, creating a large opportunity for portfolio acquisitions

and subsequent renovation projects

It is estimated that a full renovation of the entire stock would

take ~10 – 20 years, providing long term prospects for

continued growth

Victoria Park targets acquisitions of portfolios which offer

potential for renovation upside

Units (000s) Stockholm

Gothenburg

Malmö

~205K rental units in the top 3 counties alone

Source: Boverket, Chalmers Research, Prognoscentret 1 Tenant-Owned: Flats are owned by a housing association and tenants own a share in the association (indirect ownership); 2 Owner-Occupied: Direct ownership and occupancy of flat

1 2

0

40,000

80,000

120,000

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

Multi-Dwelling Single-Dwelling

Total of ~1m units

Overview of the Million Home program Number of completed housing units

The Million Housing Program Stock by Location (County)

Source: Boverket


Sizeable Consolidation Opportunities

Overview of the Swedish housing market size Top 10 largest private competitors hold ~16% of the private rental market, representing ~9% of the total rental market including the municipality owned rental housing

In the private rental housing sector, there are about 50 companies owning more than 1,000 flats

These 50 companies own about 200 – 300k flats, representing a market share of about ~14%, suggesting a high degree of fragmentation in the private sector

In the public sector, the market is more concentrated with only ~10% of the market being held by smaller municipality owned companies

Due to market factors and the regulatory environment, price competition is almost non-existent

38%

17% 8%

23%

21%

39%

0%

25%

50%

75%

100%

Total HousingStock

Rental HousingStock

Top 20 LargestPrivate and Public Players

% Share

% share of total housing stock1

21% of total

4,796k

1,822k

385k

45% Stockholm 52% Malmö 64% Gothenburg

Source: Company Information, Boverket, SABO 1 As of 31 December 2016; 2 Direct ownership and occupancy of flat; 3 Flats are owned by a housing association and tenants own a share in the association (indirect ownership); 4 As of 31 December 2017; 5 Q1-18 incl. acquisition of May-18

27.9 27.1 26.9 26.5 26.0 24.6 24.3 24.2 23.0 22.5 19.1 18.6 18.3 18.1 16.7 14.0 13.3 11.0 8.7 6.2

Rik

shem

Sto

ckholm

shem

Poseid

on

Svenska B

ostä

der

Willh

em

Heim

sta

den

Ste

na

Bosta

dsbola

get

i G

BG

MKB F

astighets

Öre

bro

Bostä

der

Fam

ilje

bostä

der

Fam

ilje

bostä

der

i G

BG

Stå

ngåsta

den

D.

Carn

egie

& C

o

Uppsala

hem

Vic

toria P

ark

Akelius

Bald

er

Wallensta

m

L E

Lundberg

Top 20 largest private and public rental housing players (k flats)4

5

Private rental housing companies Municipally owned rental housing companies

Total public rental housing

Total private rental housing

Rental housing

Tenant owned housing3

Owner occupied housing2

Source: Swedish National Statistics Office (SCB), Company information


Victoria Park – company overview

Source Company information 1 First listing in 2007 on First North, part of the OMX Nordic Exchange; 2 Comparing Q1 2018 versus Q1 2017

Business overview

Victoria Park is a listed property company, focusing on residential

properties in growth districts in southern and central Sweden

The company's main focus is to acquire residential properties with

significant value development potential and then renovate the

portfolio to achieve lower yield requirements and higher

property values

In addition to the standard-enhancing and value increasing investments

through renovation, Victoria Park works actively with socially

responsible property management and densification projects in

unutilized surrounding areas

Founded in 2006 and listed on Nasdaq Stockholm since 20131

Approx. 160 employees, HQ in Malmö, Sweden

45%

18%

37%

Stockholm

Gothenburg

Malmö

Geographical footprint

Distribution of rental value per geography

Region Stockholm

6,027 flats

Region Malmö

5,331 flats

Region Gothenburg

2,367 flats

SEKm 2014 2015 2016 2017 Q1 ‘18

Revenue 298 622 832 1062 284

Growth (%) 109% 34% 28% 10.5%2

EPRA NAV 1,327 2,985 4,821 7,201 7,549

EPRA NAV per share 6.46 13.41 20.08 29.65 31.08

LTV 65.9% 60.9% 59.8% 52.3% 51.4%

Market value properties 3,100 7,300 12,300 15,440 16,173

Financial development

66% CAGR

`14-`17

Example pictures of the property portfolio

Gothenburg Linköping

Do we have a 3rd

picture?

Eskilstuna


Victoria Park Operates a Proven Business Model, Significant Similarities to Vonovia's Approach

Source: Financial reports, Capital Markets Day presentation 2017 1 Per March 31, 2018; 2 Based on Vonovia estimates only, potentially subject to differences in methodology / definition

Focus on social responsibility creates future opportunities

Significant potential from renovations

Proven business model

Active property management

Value-creating development

Acquisitions of residential

properties with significant value

potential

1 2

4

69% of Victoria Park’s property

portfolio yet to be renovated1

Self financing renovation model

Renovations generate ~40% rent

increase, higher energy efficiency

with lower costs

86% value uplift on invested

CAPEX drives NAV growth

Impressive track record 3

Increase in EPRA NAV per share of

~66% CAGR from 2014 to 2017

Market value of properties

increased from SEK 3.1bn (2014)

to 16.2bn (2018 Q1)

Solid track record of creating

shareholder value

Social investments are key for

Victoria Park to increase the

residential areas’ attractiveness

and maximize the value potential

Local tenants are hired to create

an ongoing dialogue between the

company and tenants

~69% of the apartments are not renovated1

Victoria Park renovated ~1,200 apartments in 2017, 293 in Q1 ‘18

Strong track record of value generation, with embedded value upside from c. 69% of Victoria Park portfolio yet to be renovated

Victoria Park’s flat renovation programme, called ROT-programme, is similar to Vonovia's optimize apartments programme regarding components and yields

Rent increases in Sweden are regulated and can only be accomplished in accordance with the tenant association. VP negotiates with the tenant association a

modernization standard to achieve a certain rent level – per building or block. This ensures a certain standard and a certain price.

Victoria Park’s proven business model

Victoria Park Vonovia

Strong similarities in business model

70%

80%

90%

500

400

300

200

100

0

% Unreno vated of total portfol io

Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q2 '17 Q3 '17 Q4 '17 Q1 '17

Planned renovations

Completed renovations

Victoria Park’s flat renovation program, called ROT-program, is similar to Vonovia's Optimize Apartments

program regarding components and yields

Flooring

Painting

Electric installation

Bathroom

Kitchen (incl. electric devices)

Flooring

Painting

Electric installation

Bathroom

Kitchen (incl. electric devices)

Δ 10k - 15k

25k – 28k EUR 35k – 40k EUR

Renovation rate of property portfolio

Q1 '18

UPDATED

Vonovia's average cost per apartment modernization is an estimated ~30% lower2


With Vonovia's Platform and Low Cost of Capital, Victoria Park Can Fully Harness its Potential

What has Victoria Park accomplished…

Optimize apartments

Value enhancing renovation strategy

Close relationship with tenant associations and

municipalities

Acquisition-oriented growth

…What will Vonovia “bring to the table”

Industrialisation and standardisation expertise

Financing (lower cost of capital for Victoria Park)

Optimize Apartments (Vonovia with lower cost)

Expertise in upgrade building, neighborhood

development and space creation (additional

potential)

Value-add strategy

Drive consolidation of Swedish market

Building on Victoria Park‘s strong platform, Vonovia intends to enforce Victoria Park‘s strengths, add complimentary strategies and scale the business


Overview of Vonovia's and Victoria Park’s Key Financial and Portfolio Metrics

Source: Company information, market data as of 2 May 2018; Note: Stats based on latest reported company information as of 31 March 2018 for Vonovia and Victoria Park unless otherwise stated; all SEK figures converted into EUR using an SEK/EUR exchange rate of 10.6; combined figures are estimated sums only and actual methodologies for calculation may differ, affecting actual combination; non-GAAP financial measures, such as FFO, may be calculated differently by different companies; investors are advised to use caution when comparing such non-GAAP measures between companies; 1 Adj. in-place rent per month calculated by gross in-place rent of €8.4 and adj. for non recs; 2 Multiple calculated by dividing GAV of €1.5bn by rental revenue of €109m and adj. for non recs.; 3 Value of investment properties divided by total sqm; 4 Average property costs (adjusted for non recs.) for a residential unit; 5 Midpoint of Vonovia standalone guidance plus indicative estimated 2018 FFO I contribution from BUWOG; 6 Incl.

shares in other real estate companies; 7 As per current earnings capacity disclosed by Victoria Park at the end of Q1 not including any changes in rents or vacancy until year end; 8 Excluding BUWOG; 9 Only

incl. class A and B shares

Pu

blic m

arket

/ P

&L

Almost € 41bn of assets and c. 408k units

Expanding residential market leadership and obtaining a best-in-class platform for critical mass in Sweden

Po

rtf

olio

FFO (2018E)

Rental income (2018E)

Market capitalization

Value

Residential units

Gross asset value

Multiple

Cost per unit

Vacancy

Victoria Park

€38m7

€109m7

c. €0.8bn9

€1,4073/sqm

c. 14k

€1.5bn

c. 17.5x2

c. €1,6654

c. 3.0%

€ 6.691/sqm In-place net cold rent

Vonovia

€1,040m5

€1,680m8

c. €20.3bn

€1,455/sqm

c. 394k

€39.2bn6

c. 19.8x

c. €526

c. 2.8%

€6.18/sqm

PF combined

c. €1,078m

c. €1,789m

c. €21.1bn

€1,468/sqm

c. 370k

€36.7bn

c. 19.6x

c. 2.7%

€6.31/sqm

€1,292/sqm

c. 23k

€2.5bn

c. 23.4x

c. 4.5%

€4.40/sqm

€1,407sqm

c. 14k

€1.5bn

c. 17.5x2

c. €1,6654

c. 3.0%

€6,691/sqm

c. €526


An Attractive Offer for Victoria Park’s Shareholders

Financial terms

Cash offer of SEK 38.00 for every Class A and Class B share and SEK 316.00 for every Preference equity share

Implied Enterprise Value of Victoria Park at SEK 17.8bn (equivalent to €1.7bn) based on cash consideration

Attractive offer for

Victoria Park shareholders

Class A: 19.5% premium compared to undisturbed price1 of SEK 31.80; 8.3% compared to closing price of SEK 35.10 as of May 2; 18.9% compared to the 20 trading day undisturbed VWAP1 of SEK 31.97; and 24.6% compared to the 60 trading day undisturbed VWAP1 of SEK 30.50

Class B: 19.9% premium compared to undisturbed price1 of SEK 31.70; 7.3% compared to closing price of SEK 35.40 as of May 2; 20.5% compared to the 20 trading day undisturbed VWAP1 of SEK 31.54; and 24.9% compared to the 60 trading day undisturbed VWAP1 of SEK 30.43

Preference shares: 1.0% premium compared to undisturbed price1 of SEK 313.00; 0.3% compared to closing price of SEK 315.00 as of May 2; and 1.8% compared to the 20 trading day undisturbed VWAP1 of SEK 310.472

22.3% premium to last reported EPRA NAV per share of Victoria Park of SEK 31.08 (Q1 2018) per Class A and B share

11.8% premium to the Starwood’s offer at SEK 34.00 (adjusted for dividends) per each A and B class share

Victoria Park support

When we were made aware of the situation by Victoria Park’s financial advisor we started to consider an amicable

offer to Victoria Park’s shareholders

Independent bid committee of board of Victoria Park has recommended Vonovia's offer

Current chairman, Peter Strand, and other board members have decided to sign the irrevocable as part of the offer

Transaction features

Irrevocable undertakings and call options have been received for 37.31% voting rights, equivalent to 31.82% of capital

The offer will be subject to reaching the minimum acceptance threshold of more than 50% on a fully diluted basis and including call options. In addition, the offer will include other standard conditions

Transaction financing

Vonovia has the necessary bridge financing in place to execute the offer, hedged on a contingent basis

In connection with this transaction, we expect to raise approximately €1bn in the equity markets with timing depending on market conditions

The transaction meets all of Vonovia's acquisition criteria: Strategic fit, FFO/share accretive, NAV/share at least neutral, Rating neutral

Note: Stats based on latest reported company information as of 31 March 2018 for Vonovia and Victoria Park unless otherwise stated; all SEK figures converted into EUR using an SEK/EUR exchange rate of 10.6; 1 Undisturbed price or undisturbed VWAP refers to the latest closing price or the VWAP pre Starwood offer announcement, as of or during a period preceding 29 March 2018 2 To enable a comparison on a like-for-like basis, the historical volume-weighted average price has been adjusted for the impact of accrued dividend due to the detachment of dividend of SEK 5 per preference share as of 28 March 2018


Transaction Meets Our Acquisition Criteria

Strategic Fit

Acquisition of Victoria Park offers a scalable portfolio in attractive urban growth regions of

Sweden and allows Vonovia to access the Swedish market via an existing successful platform

With the successful acquisitions of conwert and BUWOG in Austria the acquisition of Victoria Park

follows the same strategic logic for the “next step” in international expansion in Sweden, a

highly complementary market with strong similarities to German residential

German residential remains Vonovia's core business strategy

FFO per share Accretion

FFO per share accretion of c. €0.01 — €0.02 per share in first full year of consolidation (2019)1

NAV per share non-dilution

NAV per share accretion of c. €0.01 — €0.09 per share in first full year of consolidation (2019)1

Rating neutral No impact on rating or outlook expected

Note: Stats based on latest reported company information as of 31 March 2018 for Vonovia and Victoria Park unless otherwise stated; all SEK figures converted into EUR using an SEK/EUR exchange rate of 10.6; 1 Based on 50% debt and 50% equity financing on total cost basis (i.e. enterprise offer value including transaction costs) in line with our acquisition criteria, and does not assume any potential synergies. Actual financing of the transaction might differ

Unlike other public transactions, this time Vonovia was able to engage in expedited business diligence and consequently Vonovia has been

able to form and validate a business plan for Victoria Park

Consequently, based on that business plan we believe that the deal is at least NAV neutral and FFO accretive in 2019, based on a 50% equity

and 50% debt financing structure in line with our criteria (on a total cost basis, i.e. offer enterprise value incl. transaction cost)

NAV growth of Victoria Park is expected to be significantly higher than Vonovia standalone NAV growth due to the modernisation driven

business model


3 May 2018 Announcement of a voluntary take-over offer with support from Victoria Park’s board and management

25 May 2018 Start of the acceptance period

18 Jun 2018 End of the acceptance period

21 Jun 2018 Publication of the outcome of the offer

28 Jun 2018 Payment and settlement

Anticipated Transaction Timeline

1 Indicative expected dates only

Transaction timeline1


Wrap-up

Attractive offer

Attractive offer and deal structure for Victoria Park shareholders, offering a superior transaction proposition and significant premium to undisturbed share price as well as a premium to last reported EPRA NAV

Meets all acquisition

criteria

Transaction is accretive for Vonovia shareholders and meets all our acquisition criteria

Internationalexpansion

Following the successful acquisitions of BUWOG in Austria, the acquisition of Victoria Park follows the same strategic logic for the “next step” in international expansion in Sweden, a highly complementary market with strong similarities to German residential

Initial step with

substantial potential

Vonovia intends to harness the potential of the Swedish residential market via Victoria Park and aims to become the market consolidator, replicating the Vonovia success story of the last 10 years in a similar market


Appendix


Unparalleled Acquisition Track Record

1 73.8% of acceptance achieved at end of initial acceptance period, with additional acceptance period to close on June 18, 2018

~20k units acquired

~11k units acquired

~140k units acquired

~30k units acquired

~27k units acquired

Transaction announcement: February 2014

Transaction closing: April 2014

Integration completion: June 2014

Achieved synergies: €10m p.a.

Transaction announcement: February 2014

Transaction closing: October 2014

Integration completion: December 2014


Transaction announcement: December 2014

Transaction closing: March 2015

Integration completion: December 2015

Achieved synergies: €76m operational + €61m financial p.a.

Transaction announcement: June 2015

Transaction closing: July 2015

Integration completion: September 2015


Transaction announcement: September 2016

Transaction closing: January 2017

Integration completion: June 2017


First sizeable portfolio acquisition

First sizeable corporate acquisition

Mixed cash/stock public takeover

Sizeable all equity financed portfolio acquisition

Public takeover and first acquisition outside Germany

Transaction announcement: December 2017

Transaction closing: Pending1

Integration completion: YE 2018 for German operating business

Announced synergies: €30m p.a.

Public takeover and acquisition of critical mass in Austria ~49k units

acquired

Transaction announcement: May 2018

Scheduled transaction closing: End of June 2018

Public takeover and acquisition of “nucleus” in Sweden

~14k units

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjLgKiemczaAhXC_aQKHQINDw8QjRx6BAgAEAU&url=https://www.buwog.com/en&psig=AOvVaw3jW-fq4Jc74lMjHG3dx68q&ust=1524428602606147


Regulated Rental Market and Stable Rent Growth

6,600

7,400

8,200

9,000

9,800

2006 2008 2010 2012 2014 2016

5,000

5,500

6,000

6,500

7,000

7,500

8,000

2006 2008 2010 2012 2014 2016

1 Room Apartments 2 Room Apartments

3 Room Apartments 4+ Room Apartments

Sweden Stockholm Gothenburg

3,000

3,500

4,000

4,500

5,000

2006 2008 2010 2012 2014 2016

4,000

4,500

5,000

5,500

6,000

6,500

2006 2008 2010 2012 2014 2016

Rental regulation highlights

Rents in Sweden are typically gross rents which

include “normal consumption” of water and heating.

Rent increases are negotiated with the tenant

organization or directly with each single tenant. The

tenant organization can determine a rent increase for a

whole building and not only a single tenant.

Two types of rent increases similar to Germany:

a) annual rent increase for sitting tenants

b) new letting rent increase (standard and new

letting rent to be negotiated with the tenant

organization) high degree of stability and track

record of ~40% uplift for Victoria Park

High degree of tenant protection safeguards stable

market conditions

Average rental levels (SEK/month)



Residential

Premises

Stockholm

Gothenburg

Malmö

Victoria Park’s current portfolio1

Example pictures of the property portfolio

Source: Company information and press releases Notes: 1 Property portfolio as of March 31, 2018; 2 Acquired 327 flats in Malmö and Trelleborg (lettable area of c. 26 tm2) to be taken into possession on 15 May 2018; 3 Premises made up of community premises and commercial premises, which are located inside the residential properties. Victoria Park owns no pure commercial properties

Victoria Park’s densification project portfolio

Gothenburg Linköping

Lettable area(3)

Rental value per geography

Renovated vs. not renovated

Not renovated

Renovated

City / Area # Prop. # Flats Lettable area tm

2

Rental value

Percentage renovated

Fair value Economic

occupancy rate, %

Turn- over

rate, %

SEK / m2

SEKm

SEK / m

2 SEKm

Stockholm 97 6,027 491 1,102 541 33.1% - - 96 17

Gothenburg 17 2,367 189 1,110 210 18.2% - - 99 11

Malmö2

105 5,331 403 1,097 442 33.5% - - 98 17

Total 219 13,725 1,083 1,101 1,193 30.7% 14,721 16,173 97 16

90% 10% 45%

37%

18%

69%

31%

Victoria Park’s property portfolio

Category No. of flats GFA m2

Fair value, SEKm

Land ready for development 484 38,250

Planning in process 1,515 111,000

New development plan required 1,076 75,000

Total 3,075 224,250 230


Victoria Park’s Shareholder Base

Victoria Park’s shareholder base1 243.9m non-diluted number of shares

Comments

Source: Victoria Park’s Interim Report as of 31 March 2018 1 The shareholder base split is based on the percentage of voting rights as per Victoria Park report as of March 31, 2018; 2 As of March 31, 2018

Victoria Park’s shareholder base has no substantial overlap

with Vonovia's shareholder base

Victoria Park’s total number of outstanding shares2:

243,906,359

Class A shares: 77,814,815

Class B shares: 165,059,497

Preference shares: 1,032,047

19.2%

7.9%

7.6%

6.8%

5.5%

53.0%

Other

Greg Dingizian

Anders Pettersson

Foundation For Baltic and East European Studies

Dan Olofsson (Danir AB)

Isabelle Wikner (Fogelvik Holding AB)


Swedish Macroeconomic Outlook

Continued positive near-term macro outlook supportive for residential real estate investments

Source: SCB, Swedish National Institute of Economic Research, GFK, BMI, OECD December 2017 & March 2018 1 Real GDP

Commentary

5.0%

6.0%

7.0%

8.0%

2015 2016 2017 2018 2019

Sweden Germany

0.0%

1.0%

2.0%

3.0%

2015 2016 2017 2018 2019 2020 2021 2022

Sweden Germany

Continued positive near-term macro

outlook and consumer confidence

Historically low and further declining

unemployment

Projected real wage growth in line

with Germany

Strong and supportive macro fundamentals, very similar to Germany in most respects

Strong GDP and population growth1

0.0%

1.0%

2.0%

3.0%

4.0%

2017 2018 2019 2020 2021 2022

SWE GDP SWE Population GER GDP GER Population

Low and further decreasing unemployment rates

Real wage growth

Source: Swedish Institute of Economic Research, Deutsche Bundesbank, BMI

Source: Swedish Institute of Economic Research, Deutsche Bundesbank

Source: Swedish Institute of Economic Research, BMI


Large Metropolitan Areas with Low Home Ownership Ratios

85%

78%

78%

76%

76%

59%

55%

52%

48%

46%

44%

44%

36%

36%

36%

34%

33%

29%

28%

Warsaw

Valencia

Bilbao

Madrid

Barcelona

Venlo

Stockholm

Germany

Malmo

Eindhoven

Arnhem

Marseille

Randstad

Gothenburg

Aarhus

Lyon

Paris

Copenhagen

Lille

Home ownership ratios

Low home ownership is not a phenomenon unique to Germany but can be seen in metropolitan areas across Europe

Sources: JLL Research, own calculations Note: Data partly refers to city boundaries; size of rental market is illustrative and based on JLL Research and Vonovia FY2016 numbers (for German cities) incl. an assumed average flat size of 65sqm and an assumed monthly rent per sqm.

Urbanization (% of total population living in cities)

70

75

80

85

90

95

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Germany France Netherlands

Sweden Spain

Clear urbanization trend across Europe Strong tenant protection in Sweden


Disclaimer

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE THIS WOULD VIOLATE THE LAWS OR REGULATIONS OF SUCH JURISDICTION

The facts and information contained herein are as up to date as is reasonably possible and nothing herein shall imply that the facts and information presented are accurate or applicable at any time other than on the date of this presentation. Neither Vonovia SE (the “Company”) nor any of its directors, officers, employees or advisors, or any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation nor does the information herein constitute a recommendation to any person to acquire any securities. Neither the Company nor any of its directors, officers, employees or advisors, or any other person shall have any liability whatsoever for losses howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise arising in connection therewith.

This document is selective in nature and is intended to provide an introduction to, and overview of, the business of the Company and its subsidiaries and for the potential transaction. The information relating to the Company does not constitute a complete overview of the Company and must be supplemented by the reader wishing such completeness. Any opinions expressed in this document reflect the Company’s current views and are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained herein. A significant portion of the information contained in this document, including market data and trend information, is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. Certain facts stated herein are derived from public sources and notwithstanding that such information has been correctly reproduced and the Company considers the sources to be reliable, the Company has not independently verified the information and such information should not be interpreted as having been adopted or endorsed by the Company as being accurate or complete.

This presentation contains forward-looking statements relating to the business, financial performance and results of the Company or the industry in which the Company operates. These statements may be identified by words such as “expectation”, “guidance”, “belief”, “estimate”, “plan”, “target” or “forecast” and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions and involve risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. No obligation is assumed to update any forward-looking statements.

The information contained herein does not constitute an offer, nor a solicitation of an offer, to buy any securities, and it does not constitute any form of commitment or recommendation in relation thereto. This presentation does not constitute an offer document and has not been approved or registered with any supervisory authority. In connection with the proposed combination of Vonovia and Victoria Park, an offer document relating to the offer will be filed with and published by the Swedish Financial Supervisory Authority (the “SFSA”). Shareholders of Victoria Park should read the offer document carefully when it becomes available, since it will contain important information about the transaction. Shareholders of Victoria Park may obtain free copies of the offer document, any amendments or supplements thereto and other documents containing important information about the transaction, from Vonovia’s website http://en.vonovia-k.de

This document and any materials distributed in connection with this document are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction, in particular, but not limited to Australia, Canada, Hong Kong, Japan, New Zealand or South Africa.

This presentation speaks as of its date. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company or its subsidiaries since such date.

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