Bond Vonovia AG 2.125% ( DE000A1HNTJ5 ) in EUR

Issuer Vonovia AG
Market price 100 %  ▼ 
Country  Germany
ISIN code  DE000A1HNTJ5 ( in EUR )
Interest rate 2.125% per year ( payment 1 time a year)
Maturity 25/07/2016 - Bond has expired



Prospectus brochure of the bond Vonovia SE DE000A1HNTJ5 in EUR 2.125%, expired


Minimal amount 100 000 EUR
Total amount 700 000 000 EUR
Detailed description Vonovia SE is a German real estate company that owns and manages residential properties, primarily in Germany, Austria, and Sweden.

The Bond issued by Vonovia AG ( Germany ) , in EUR, with the ISIN code DE000A1HNTJ5, pays a coupon of 2.125% per year.
The coupons are paid 1 time per year and the Bond maturity is 25/07/2016









24 April 2014



PROSPECTUS

for the admission to trading on the regulated market of the Luxembourg
Stock Exchange (Bourse de Luxembourg)

of

Deutsche Annington Finance B.V.
(incorporated in The Netherlands as a private company with limited liability)
as Issuer
EUR 700,000,000 2.125% Senior Unsecured Notes due 2016
ISIN DE000A1HNTJ5 and German Securities Code (WKN) A1HNTJ
EUR 600,000,000 3.125% Senior Unsecured Notes due 2019
ISIN DE000A1HNW52 and German Securities Code (WKN) A1HNW5
with unconditional and irrevocable guarantees as to payment of principal and interest from
Deutsche Annington Immobilien SE
(incorporated in Germany as a European Company (Societas Europaea))
as Parent Guarantor

On 25 July 2013 (the Issue Date) Deutsche Annington Finance B.V., incorporated in The Netherlands as a private company with limited liability (the Issuer)
originally issued 700,000,000 in the aggregate principal amount of 2.125% Senior Unsecured Notes due 2016 (the 2016 Notes) and 600,000,000 in the aggregate
principal amount of 3.125% Senior Unsecured Notes due 2019 (the 2019 Notes, and together with the 2016 Notes, the Notes, and each of the 2016 Notes and the
2019 Notes is also referred to as a series of Notes). The 2016 Notes will bear interest at a rate of 2.125% per year. The 2019 Notes bear interest at a rate of 3.125%
per year. The Issuer will pay interest on the Notes annually in arrears on 25 July, commencing on 25 July 2014. The Notes of each series are issued only in
denominations of 100,000 each.
The Notes constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer, ranking pari passu among themselves and pari passu with all
other unsecured and unsubordinated obligations of the Issuer, unless such obligations are accorded priority under mandatory provisions of statutory law. Each
series of Notes is unconditionally and irrevocably guaranteed by Deutsche Annington Immobilien SE, a European company (Societas Europaea) incorporated in
Germany (the Parent Guarantor and together with all consolidated subsidiaries, Deutsche Annington or the Deutsche Annington Group or the Group). The
obligations of the Parent Guarantor under the guarantees (the Parent Guarantees) constitute unsecured and unsubordinated obligations of the Parent Guarantor,
ranking pari passu in right of payment with the Parent Guarantor's other unsecured and unsubordinated obligations, unless such obligations are accorded priority
under mandatory provisions of statutory law.
In addition, each series of Notes was initially be unconditionally and irrevocably guaranteed by certain subsidiaries of the Parent Guarantor (each a Subsidiary
Guarantor and, together with the Parent Guarantor, the Guarantors and each a Guarantor and such guarantees each a Subsidiary Guarantee and, together with
the Parent Guarantee, the Guarantees and each a Guarantee). On 8 October 2013, each Subsidiary Guarantee was automatically released upon the repayment of
the Term Loan in full.
Unless previously redeemed or purchased and cancelled in accordance with the terms and conditions of the Notes, the 2016 Notes will be redeemed at par on 25
July 2016 and the 2019 Notes will be redeemed at par on 25 July 2019. Each series of Notes may, and in certain circumstances shall, be redeemed before this date,
in whole but not in part, at its principal amount, together with, if applicable, accrued interest, notably in the event of any change in taxation or in an event of
default. The Issuer will have the option to redeem any series of Notes prior to maturity, in whole but not in part, at its principal amount, together with accrued
interest, if applicable, and a premium. If a change of control occurs, each Holder will have the option to require the Issuer to redeem or, at the Issuer's option,
repurchase all or part of the Notes held by such Holder at their principal amount together with, if applicable, accrued interest.
The Notes were originally admitted to trading on the unregulated open-market segment (Freiverkehr) of the Frankfurt Stock Exchange on the Issue Date.
This Prospectus has been prepared by the Issuer for the purpose of having the Notes listed on the Official List of the Luxembourg Stock Exchange and admitted to
trading on the Luxembourg Stock Exchange's regulated market on or about the date of this Prospectus. This Prospectus has been approved by the Luxembourg
Commission de Surveillance du Secteur Financier (the CSSF), which is the Luxembourg competent authority for the purpose of the Directive 2003/71/EC (the
Prospectus Directive), as amended by Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010, and relevant implementing
measures in Luxembourg as a prospectus issued in compliance with the Prospectus Directive and relevant implementing measures in Luxembourg. The CSSF
assumes no responsibility for the economic and financial soundness of the transactions contemplated by this Prospectus or the quality or solvency of the Issuer in
accordance with Article 7(7) of Luxembourg Act dated 10 July 2005 on prospectuses for securities (Loi relative aux prospectus pour valeurs mobilières) (the
Prospectus Law).
Application has been made to the CSSF in its capacity as competent authority under the Prospectus Act to approve this document as a prospectus for the purposes
of Prospectus Directive. Application has also been made to the Luxembourg Stock Exchange for the Notes to be listed on the Official List of the Luxembourg
Stock Exchange and to be admitted to trading on the Luxembourg Stock Exchange's regulated market, Bourse de Luxembourg. The Luxembourg Stock Exchange's
regulated market is a regulated market for the purposes of Directive 2004/39/EC (the Markets in Financial Instruments Directive).
The Prospectus will be published in electronic form together with all documents incorporated by reference on the website of the Luxembourg Stock Exchange
(www.bourse.lu).




RESPONSIBILITY STATEMENT
Deutsche Annington Finance B.V. (the Issuer) and Deutsche Annington Immobilien SE (the Parent
Guarantor and together with all consolidated subsidiaries, Deutsche Annington or the Deutsche
Annington Group or the Group) are solely responsible for the information given in this Prospectus.
Each of the Issuer and the Parent Guarantor hereby declares that, having taken all reasonable care to
ensure that such is the case, the information contained in this Prospectus for which it is responsible, is,
to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its
import.
PURPOSE OF THE PROSPECTUS
This Prospectus comprises a prospectus for the purposes of Article 5.3 of the Prospectus Directive and
for the purpose of giving information with regard to the Issuer which is necessary to enable investors
to make an informed assessment of the assets and liabilities, financial position, profit and losses and
prospects of the Issuer and of the rights attaching to the Notes.
This Prospectus has been prepared by the Issuer for the purpose of having the Notes listed on the
Official List of the Luxembourg Stock Exchange and admitted to trading on the Luxembourg Stock
Exchange's regulated market on or about the date of the Prospectus.
Application has been made to the Luxembourg Stock Exchange for the Notes to be listed on the
Official List of the Luxembourg Stock Exchange and to be admitted to trading on the Luxembourg
Stock Exchange's regulated market, Bourse de Luxembourg.
NOTICE
This Prospectus should be read and construed with any supplement thereto and with any other
documents incorporated by reference.
No person has been authorised by the Issuer or the Parent Guarantor to give any information or to
make any representation not contained in or not consistent with this Prospectus or any other document
entered into in relation to the Notes or any information supplied by any Issuer or the Parent Guarantor
or such other information as is in the public domain and, if given or made, such information or
representation should not be relied upon as having been authorised by the Issuer or the Parent
Guarantor.
Neither the delivery of this Prospectus nor the offering, sale or delivery of any Note shall, in any
circumstances, create any implication that the information contained in this Prospectus is true
subsequent to the date upon which this Prospectus has been published or most recently amended or
supplemented or that there has been no adverse change in the financial position of the Issuer since the
date hereof or, as the case may be, the date upon which this Prospectus has been most recently
supplemented or the balance sheet date of the most recent financial statements which are deemed to be
incorporated into this Prospectus by reference or that any other information supplied in connection
with the Notes is correct at any time subsequent to the date on which it is supplied or, if different, the
date indicated in the document containing the same.
This document may only be communicated or caused to be communicated in circumstances in which
section 21(1) of the Financial Services and Markets Act 2000 (FSMA) does not apply.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended (the Securities Act), and will include Notes in bearer form that are subject to U.S. tax law

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requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the
United States or to U.S. persons, see "Subscription and Sale -- Selling Restrictions".
The distribution of this Prospectus as well as the offering, sale, and delivery of the Notes in certain
jurisdictions may be restricted by law.
Persons into whose possession this Prospectus comes are required by the Issuer to inform themselves
about and to observe any such restrictions. For a description of certain restrictions on offers, sales and
deliveries of Notes and on the distribution of this Prospectus and other offering material relating to the
Notes, see "Subscription and Sale -- Selling Restrictions".
This Prospectus may not be used for the purpose of an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is
unlawful to make such an offer or solicitation.
This Prospectus constitutes no offer or invitation to subscribe for or purchase any Notes and should
not be considered as a recommendation by the Issuer or the Parent Guarantor that any recipient of this
Prospectus should subscribe for or purchase any Notes. Each recipient of this Prospectus shall be taken
to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer
and the Parent Guarantor.
This Prospectus contains assessments of market data and information derived therefrom which could
not be obtained from any independent sources. Such information is based on the Issuer's own internal
assessments and may therefore deviate from the assessments of competitors of Deutsche Annington or
future statistics by independent sources. As regards the market positions of Deutsche Annington,
Deutsche Annington's own estimations are mainly based on company data which either is derived
from information by competitors or from data provided by independent research companies.
The language of this Prospectus is English. In respect of the documents incorporated by reference, the
German language version is controlling and binding in relation to the documents listed in the table of
documents incorporated by reference under the heading "Deutsche Annington Finance B.V." and
"Deutsche Annington Immobilien SE" in the section "Documents Incorporated by Reference".
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements. A forward-looking statement is a
statement that does not relate to historical facts and events. They are based on analyses or forecasts of
future results and estimates of amounts not yet determinable or foreseeable. These forward-looking
statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate",
"expect", "intend", "plan", "predict", "project", and similar terms and phrases, including references and
assumptions. This applies, in particular, to statements in this Prospectus containing information on
future earning capacity, plans and expectations regarding the Deutsche Annington Group's business
and management, its growth and profitability, and general economic and regulatory conditions and
other factors that affect it.
Forward-looking statements in this Prospectus are based on current estimates and assumptions that the
Issuer makes to the best of its present knowledge. These forward-looking statements are subject to
risks, uncertainties and other factors which could cause actual results, including Deutsche Annington
Group's financial condition and results of operations, to differ materially from and be worse than
results that have expressly or implicitly been assumed or described in these forward-looking
statements. Deutsche Annington Group's business is also subject to a number of risks and uncertainties
that could cause a forward-looking statement, estimate or prediction in this Prospectus to become
inaccurate. Accordingly, investors are strongly advised to read the following section of this
Prospectus: "Description of the Parent Guarantor and the Group". This section include more detailed

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descriptions of factors that might have an impact on Deutsche Annington Group's business and the
markets in which it operates.
In light of these risks, uncertainties and assumptions, future events described in this Prospectus may
not occur. In addition, the Issuer assumes no obligation, except as required by law, to update any
forward-looking statement or to conform these forward-looking statements to actual events or
developments.

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TABLE OF CONTENTS
Section
Page
Risk Factors ........................................................................................................................................................ 6
Terms and Conditions of the 2016 Notes ......................................................................................................... 38
Terms and Conditions of the 2019 Notes ......................................................................................................... 58
Parent Guarantee .............................................................................................................................................. 80
Guarantee of Initial Subsidiary Guarantors ...................................................................................................... 93
Description of Rules regarding Resolutions of Holders ................................................................................. 109
Description of the Issuer ................................................................................................................................. 112
Description of the Parent Guarantor and the Group ....................................................................................... 115
Taxation .......................................................................................................................................................... 174
Subscription, Sale and Selling Restrictions .................................................................................................... 183
General Information ....................................................................................................................................... 185
Documents Incorporated by Reference .......................................................................................................... 187
Names and Addresses ..................................................................................................................................... 189



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RISK FACTORS
Below is a description of risk factors that are material for the assessment of the market risk associated with
the Notes and risk factors that may affect each of the Issuer's ability to fulfil its obligations under the Notes
and, as applicable, the Parent Guarantor's ability to fulfil its obligations under the Guarantee and Negative
Pledge. Any of these risks could have a material adverse effect on the financial condition and results of
operations of the Deutsche Annington. The market price of the Notes could decline due to any of these risks,
and investors could lose all or part of their investments.
Potential investors should carefully consider the specific risk factors outlined below in addition to all other
information in this Prospectus and consult with their own professional advisors should they deem it
necessary before deciding upon the purchase of Notes. In addition, investors should bear in mind that
several of the described risks can occur simultaneously and thus have, possibly together with other
circumstances, a stronger impact. The order in which the risks are described neither indicates the
probability of their occurrence nor the gravity or significance of the individual risks nor the scope of their
financial consequences. Additional risks of which Deutsche Annington is not presently aware could also
affect the business operations of Deutsche Annington and have a material adverse effect on Deutsche
Annington's business activities and financial condition and results of operations.
Words and terms that are defined in the "Terms and Conditions of the Notes" below or elsewhere in this
Prospectus have the same meaning in this section "Risk Factors".
Potential investors should, among other things, consider the following:
Risk factors relating to the Issuer
The Issuer acts as financing subsidiary of the Parent Guarantor, the principal activity of the Issuer is the
provision of loans to members of the Group financed with funds acquired from the capital market, bank
loans and loans from other companies of the Group. Its assets mainly consist of financial investments in
Group companies, receivables from loans to Group companies, and other receivables owed by Group
companies. The Issuer may issue further notes in future.
The ongoing business activities of the Issuer depend on the ability of the Parent Guarantor and other
companies of the Group to fulfill their payment obligations vis-à-vis the Issuer or the obligation to assume
losses. If individual or all members of the Group were unable to meet their payment obligations to the Issuer
in due time, this could considerably impair the ability of the Issuer to fulfill its obligations arising from the
Notes towards the investors.
Risk factors relating to the Parent Guarantor
Market risks
Deutsche Annington is dependent on demographic and economic developments in Germany and in the
regional sub-markets where its properties are located. Further, the Group is dependent on its ability to
adapt its housing activities to these developments.
As Deutsche Annington's properties are dispersed across more than 530 cities and communities throughout
the Federal Republic of Germany (Germany), Deutsche Annington's business activities are affected by
numerous demographic, economic and political factors. Economic developments in and related to the
residential property market in Germany and in its regional sub-markets are of significant importance for
Deutsche Annington's business and future prospects. These developments play a decisive role in determining
housing prices, rent levels, turnover and vacancy rates, as well as home ownership and rental rates and may
vary significantly across Germany and within regional sub-markets.

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Economic studies forecast that demographic change, including shrinking and ageing population will cause
the nationwide demand in Germany for accommodation to fall in the long-term, although the total number of
households is expected to grow by 2.9% between 2010 and 2025, due to a trend towards smaller household
sizes (Source: BBSR ­ Regional Planning 2030). As of 31 December 2013, approximately 69% of Deutsche
Annington's residential units were concentrated in cities with more than 100,000 inhabitants. Economic and
demographic forecasts for metropolitan areas in Germany differ from forecasts for less densely populated
regions. In recent years, population and, consequently, demand for housing has grown faster in German
metropolitan areas than in Germany's less densely populated rural regions, where growth has been more
moderate or even negative. Such dynamics are expected to continue in the future (Source: BBSR ­ Regional
Planning 2030). Other macro-economic indicators, such as the development of the gross domestic product
(GDP), unemployment rates, purchasing power and the development of the household size, are also expected
to develop in a diverse manner across the different regions in which the Group owns properties.
Economic and demographic developments significantly impact, among other things, the demand for
Deutsche Annington's properties, the rents Deutsche Annington is able to charge and the payment behavior
of Deutsche Annington's tenants. These factors have a significant effect on vacancy rates, Deutsche
Annington's revenues and the valuation of Deutsche Annington's properties. Accordingly, Deutsche
Annington is subject to economic developments in Germany and to the trends in the regional sub-markets in
which its portfolio is concentrated.
While Deutsche Annington has taken steps to absorb the effects of expected unfavorable regional
demographic and economic developments, Deutsche Annington may nevertheless be negatively affected by
unfavorable economic and demographic developments in Germany, or in the regions where its properties are
located.
If the macro-economic indicators discussed above develop negatively from Deutsche Annington's
perspective, Deutsche Annington's dependence on economic and demographic developments in Germany
and the various regions where its properties are located could have material adverse effects on Deutsche
Annington's business, net assets, financial condition, cash flow, and results of operations.
The continuing uncertainty regarding the development of the global economy, for example due to the
ongoing sovereign debt crises in many parts of the world, particularly in Europe, may result in economic
instability, limited access to debt and equity financing and possible defaults by Deutsche Annington's
counterparties.
The severe global economic downturn in the years following the global economic and financial crisis of
2008 and 2009 and its effects, in particular, the scarcity of financing, tensions in the capital markets and
weak consumer confidence and declining consumption in many markets, adversely impacted the economic
development worldwide. This crisis was followed by sovereign debt crises in many parts of the world,
particularly in the Eurozone, which are still ongoing and have resulted in recessions in many of the impacted
countries. This macroeconomic environment gives rise to economic and political instability, including the
possibility of a breakup of the Eurozone. Such instability and the resulting market volatility may also create
contagion risks for economically strong countries like Germany and may spread to the German financial
sector and the German residential real estate market.
Given Deutsche Annington's dependence on its ability to access the financial markets for the refinancing of
its debt liabilities, any worsening of the economic environment or the capital markets may reduce its ability
to refinance its existing and future liabilities. Furthermore, Deutsche Annington's counterparties, in particular
its hedging counterparties, may not be able to fulfill their obligations under the respective agreements due to
a lack of liquidity, operational failure, bankruptcy or other reasons.
Any of these risks could have material adverse effects on Deutsche Annington's business, net assets,
financial condition, cash flow, and results of operations.

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The current economic environment is characterized by low interest rates and comparatively high
valuations of residential real estate portfolios in Germany. Any rise in interest rates could have material
adverse effects on the German real estate market and on Deutsche Annington.
The global financial and economic crisis has resulted in increased uncertainty regarding future economic
developments. This uncertainty regarding the general economic outlook has increased the popularity of
investment opportunities that provide stable and largely predictable cash flows, such as investments in
German residential real estate. The increased popularity of investments in residential real estate has resulted
in an increase in property prices and the value of residential real estate companies.
These developments could reverse themselves if, for example interest rates rise. A rise in interest rates may
result from an improvement in the economic environment, which could increase investor interest in
investments with a higher risk profile and decrease their interest in real estate investments. Rising interest
rates could adversely impact Deutsche Annington in a number of ways, including:

The discount rate used to calculate the fair value of the Group's (such fair value hereinafter referred
to as the Fair Value) properties tends to increase in an environment of rising interest rates, which in
turn could result in Deutsche Annington's properties having a lower Fair Value. For more
information, see "--Risks related to the valuation of Deutsche Annington's properties--If interest
rates change, the market deteriorates or the Group's rent levels or vacancy rates develop unfavorably,
Deutsche Annington may be required to adjust the current Fair Values of its investment properties
and recognize significant losses.".

Deutsche Annington's strategy of disposing assets from its Non-Core portfolio segment at or around
Fair Value and pursuing sales of assets from its privatization portfolio segment at a premium to Fair
Value could be jeopardized. Income from the disposal of properties constitutes an important source
of both gross profit (fiscal year 2013: 52.0 million) and cash flow (fiscal year 2013: 270.3 million)
for Deutsche Annington. At present, Deutsche Annington's disposal strategy is benefiting from the
low-interest economic environment and the prevailing perception of residential real estate property
as a low-risk investment opportunity. If any of these factors change, Deutsche Annington could be
prevented from increasing its portfolio quality and operational efficiency through divestments of
assets allocated to the Privatise and Non-Core portfolio segments.

Deutsche Annington's business model is currently based on borrowing against its properties. When
negotiating financing agreements or extending such agreements, Deutsche Annington depends on its
ability to agree to terms and conditions pertaining to interest payments that will not impair its
targeted profit, and to amortization schedules that do not restrict its ability to pay intended dividends.
Further, Deutsche Annington may be unable to enter into hedging instruments that may become
necessary if variable interest rates are agreed upon, or may only be able to do so at significant costs.
If the current low-interest rate environment is followed by one in which high rates prevail, the
Group's financing costs, including costs for hedging instruments, may increase.

As of 31 December 2013, Deutsche Annington took out hedges for an aggregate of 84,7% of
Deutsche Annington's loans that bear interest at a variable rate or that are otherwise subject to
hedging commitments. As of 31 December 2013, an amount of 1,157.0 million was outstanding
under these loans. The valuation of hedging instruments, which itself depends on the level of interest
rates, also impacts the Group's equity and, to a lesser extent, the Group's results of operations. Any
increase in interest rates would result in an increase in the Group's equity and would have a negative
effect on its results of operations.
Any increase in interest rates could have material adverse effects on Deutsche Annington's business, net
assets, financial condition, cash flow, and results of operations.

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It could become more difficult for Deutsche Annington to implement its strategy of capturing additional
growth opportunities by acquiring residential real estate portfolios or real estate companies on attractive
terms, particularly due to the relatively high current market prices for real estate portfolios and real estate
companies. Any such development could impair the growth of Deutsche Annington's business and could
prevent the Group from generating additional economies of scale and from improving its overall portfolio
quality through acquisitions.
As part of its business strategy, the Group seeks to capture external growth opportunities by acquiring
residential real estate portfolios and real estate companies when these are deemed value-enhancing. Such
acquisitions may only be implemented, however, if attractive real estate portfolios or real estate companies
are available for purchase at reasonable prices. Given the current high demand for residential real estate in
Germany, such portfolios and companies may be unavailable or available only on unfavorable terms. In
addition, competitors with asset acquisition objectives similar to those of Deutsche Annington may possess
greater financial resources and lower costs of capital than Deutsche Annington. Furthermore, it cannot be
guaranteed that Deutsche Annington will be able to generate sufficient funds to finance such envisaged
acquisitions in the future.
Additionally, the supply of real estate portfolios might be limited, for example due to fewer sales of real
estate portfolios by municipalities and federal states. If municipalities and federal states cease privatizing or
if they reduce their privatization activities, supply could be constricted, which could increase competition for
acquisitions that would be suitable for the Group and result in the prices of residential properties on the
German market increasing further. As a consequence of these factors, the Parent Guarantor could be forced
to pay higher prices or could only be able to acquire fewer (if any) properties.
Any inability to acquire residential real estate portfolios or real estate companies could not only impair
Deutsche Annington's strategy to capture external growth opportunities but could also jeopardize Deutsche
Annington's efforts to improve the quality of its portfolio and to reduce the administrative burden per unit
through active sales and acquisitions.
Any inability to acquire suitable properties on attractive terms could limit Deutsche Annington's growth and
could have material adverse effects on Deutsche Annington's business, cash flow, and results of operations.
Risks related to Deutsche Annington's business
Deutsche Annington is exposed to risks related to the structural condition of its properties and their
maintenance and repair. The Group's loan and purchase agreements require Deutsche Annington to
invest specified amounts in certain portfolios. Such requirements may lead to a sub-optimal funds
allocation.
In order to sustain demand for a rental property and to generate adequate revenue over the long-term, a
property's condition must be maintained or improved to a standard that meets market demand. Typically, the
costs associated with maintaining a rental property at market standards are borne primarily by the property
owner. If maintenance and modernization is required to meet changing legal or market requirements
(e.g. with regard to energy saving), the property owner may be burdened with substantial expenses. In
Germany, rent increases may be introduced to compensate for these expenses only under certain conditions
and these rent increases may not exceed a certain percentage of the costs incurred in connection with certain
modernization measures. In addition, Deutsche Annington may not be able to increase rents to the extent
legally permissible as a result of prevailing market conditions or the inability of tenants receiving state aid
(as is the case for a part of Deutsche Annington's tenants) to afford these increased rents or otherwise.
Although Deutsche Annington constantly reviews the condition of its properties and has established a
reporting system to monitor and budget the necessary maintenance and modernization measures, numerous
factors may generate substantial unbudgeted costs for maintenance and modernization. These factors may
include the material and substances used at the time of construction, currently unknown building code

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violations and/or the age of the relevant building. Approximately 76.0% of Deutsche Annington's residential
real estate units were built between 1949 and 1980 and approximately 15.4% were built prior to 1949
(calculated on the basis of the floor area as of 31 December 2013).
Deutsche Annington would incur additional and unexpected costs if the actual costs of maintaining or
modernizing its properties were to exceed Deutsche Annington's estimates, if Deutsche Annington is not
permitted to raise rents in connection with maintenance and modernization due to statutory or contractual
constraints, or if hidden defects that are not covered by insurance or contractual warranties are discovered
during the maintenance or modernization process.
In addition, with respect to some of the properties in its portfolio, Deutsche Annington also entered into
obligations under its loan and purchase agreements to spend minimum average amounts per square meter on
maintenance and modernization. This may restrict the Group's ability to focus on otherwise planned
modernizations and may thus result in a sub-optimal allocation of funds.
The Parent Guarantor's failure to undertake appropriate maintenance and modernization work in response to
the factors described above could adversely affect the rental income earned from affected properties. Such a
failure could entitle tenants to withhold or reduce rental payments or even to terminate existing letting
contracts. Any such event could have material adverse effects on Deutsche Annington's business, net assets,
financial condition, cash flow, and results of operations.
Deutsche Annington may be unable to sell any portion of its portfolio on favorable terms or may be
unable to do so at all.
The real estate market, in which Deutsche Annington invests and operates, is characterized by limited
liquidity. Deutsche Annington's general ability to sell parts of its real estate portfolio depends on the state of
investment markets and on market liquidity. If Deutsche Annington were required to sell parts of its real
estate portfolio, including for the purpose of raising cash to support its operations, there is no guarantee that
the Group would be able to sell such parts of its portfolio on favorable terms or at all. In addition, existing
contractual obligations under purchase agreements restrict Deutsche Annington's ability to sell certain parts
of its portfolio. As of 31 December 2013, approximately 37,000 residential units were subject to such
restrictions. In the case of a forced sale of all or part of Deutsche Annington's real estate portfolio, for
example if creditors realize collateral, there would likely be a significant shortfall between the price obtained
and the carrying amount of the portfolio sold.
Any such shortfall could have material adverse effects on Deutsche Annington's business, net assets,
financial condition, cash flow, and results of operations.
Deutsche Annington bears risks in connection with possible acquisitions and investments. These risks
include unexpected liabilities, greater indebtedness, higher interest expenses and challenges with respect
to integrating acquisitions and achieving anticipated synergies. In addition, transaction costs for the
acquisition of real estate may increase due to a recent change in German tax law. Furthermore, portfolios
or real estate companies that may be acquired in the future may not develop as favorably as expected.
As part of Deutsche Annington's strategy, Deutsche Annington evaluates property portfolios and real estate
companies in order to identify those that might fit in with both its existing property portfolio and its current
management platform and of which Deutsche Annington believes might improve the quality of its property
portfolio. In the past, Deutsche Annington has carried out several takeovers of companies in the relevant
industrial area, the last of which are the announced takeovers of certain entities of the Vitus group
comprising around 30,000 residential units and of a portfolio of around 11,500 residential units managed by
DeWAG, which are intended to be closed in the fourth quarter of 2014 or have been closed on 1 April 2014,
respectively.

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