Bond Adler Holding 2.25% ( XS2336188029 ) in EUR

Adler Holding

29.5 % ▼

Germany

XS2336188029 ( in EUR )

2.25% per year ( payment 1 time a year)

26/04/2027

Prospectus brochure of the bond ADLER Group XS2336188029 en EUR 2.25%, maturity 26/04/2027

27/04/2026 ( In 129 days )

ADLER Group is a German real estate company focusing on residential and commercial properties, primarily located in Germany, with operations encompassing development, property management, and investment.

The Bond issued by Adler Holding ( Germany ) , in EUR, with the ISIN code XS2336188029, pays a coupon of 2.25% per year.
The coupons are paid 1 time per year and the Bond maturity is 26/04/2027

ADLER Group S.A.
(incorporated in Luxembourg as a public limited liability company)
5,000,000,000
Debt Issuance Programme
(the "Programme")
This offering memorandum (the "Offering Memorandum") does not constitute a prospectus within the meaning of
Regulation (EU) No 2017/1129 of the European Parliament and of the Council of June 14, 2017 (as amended, the
"Prospectus Regulation"). Neither the Commission de Surveillance du Secteur Financier, the Luxembourg
competent authority under the Prospectus Regulation, nor any other "competent authority" (as defined in the
Prospectus Regulation) has approved this Offering Memorandum or reviewed information contained in this
Offering Memorandum.
This Offering Memorandum has been approved as a prospectus in compliance with the Rules and Regulations of
the Luxembourg Stock Exchange dated January 2020 by the Luxembourg Stock Exchange as a competent
authority under Part IV of the Luxembourg Law of July 16, 2019 on Prospectuses for Securities (Loi relative aux
prospectus pour valeurs mobilières) (the "Luxembourg Prospectus Law"). Application has been made to list the
notes to be issued under the Programme (the "Notes") on the official list (the "Official List") of the Luxembourg
Stock Exchange and for admission to trading of the Notes on the Euro MTF operated by the Luxembourg Stock
Exchange, which is a multilateral trading facility for the purposes of Directive 2014/65/EU of the European
Parliament and of the Council on markets in financial instruments, as amended, ("MiFID II"), and, therefore, not
an EU-regulated market.
The date of this Offering Memorandum is April 16, 2021. This Offering Memorandum is valid until April 16, 2022.
It is published in electronic form together with all documents incorporated by reference on the website of the
Luxembourg Stock Exchange (www.bourse.lu) and available on the Company's website at www.adler-group.com.
This Offering Memorandum does not constitute an offer to sell, or the solicitation of an offer to buy, the
Notes in any jurisdiction where such offer or solicitation is unlawful.
Arranger
J.P. Morgan

Dealers
Barclays
Deutsche Bank
J.P. Morgan

(i)

RESPONSIBILITY STATEMENT
ADLER Group S.A., the Company, with its registered office at 1B, Heienhaff, L-1736 Senningerberg, Grand
Duchy of Luxembourg, and registered with the Luxembourg Register of Commerce and Companies (Registre de
Commerce et des Sociétés, Luxembourg) under the registration number B197554, assumes responsibility for the
content of this Offering Memorandum, and declares having taken all reasonable care to ensure that such is the
case, that the information contained in this Offering Memorandum is, to the best of its knowledge, in accordance
with the facts and contains no omissions likely to affect its import.
If any claims are asserted before a court of law based on the information contained in this Offering Memorandum,
the investor appearing as plaintiff may have to bear the costs of translating the Offering Memorandum prior to the
commencement of the court proceedings pursuant to the national legislation of the member states of the EEA.
NOTICE
The Company has confirmed that this Offering Memorandum contains to the best of its knowledge all information
with regard to the Company and the Notes which is (in the context of the Programme, the issue, offering and sale
of the Notes and the guarantee of the Notes) material; that such information is true and accurate in all material
respects and is not misleading in any material respect; that any opinions, predictions or intentions expressed herein
are honestly held or made and are not misleading in any material respect; that this Offering Memorandum does not
omit to state any material fact necessary to make such information, opinions, predictions or intentions (in the
context of the Programme, the issue, offering and sale of the Notes and the guarantee of the Notes) not misleading
in any material respect; and that all proper enquiries have been made to verify the foregoing.
The Company undertakes with the dealers set forth on the cover page and as appointed under the Dealer
Agreement (as defined below) from time to time (together, the "Dealers") to publish a supplement to this Offering
Memorandum or to publish a new offering memorandum if and when the information herein should become
materially inaccurate or incomplete or in the event of any significant new factor, material mistake or material
inaccuracy relating to the information included in this Offering Memorandum which is capable of affecting the
assessment of the Notes which arises or is noted between the time when this Offering Memorandum has been
approved and the time when trading of any Tranche of the Notes begins.
By approving this Offering Memorandum, the Luxembourg Stock Exchange may not incur any liability whatsoever
and does not give any undertaking as to the economic and financial soundness of the operation or the quality or
solvency of the Company. Investors shall make their own assessment as to the suitability of investing in the Notes.
No person has been authorized to give any information which is not contained in or not consistent with this
Offering Memorandum or any other document entered into in relation to the Programme or any information
supplied by the Company or such other information as in the public domain and, if given or made, such
information must not be relied upon as having been authorized by the Company, the Dealers or any of them.
In particular, the Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), and are being sold pursuant to an exemption from the registration requirements
of the Securities Act. The Notes are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes
may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons
(as defined in Regulation S under the Securities Act ("Regulation S")).
No Dealer nor the Arranger nor any other person mentioned in this Offering Memorandum, excluding the
Company, is responsible for the information contained in this Offering Memorandum or any supplement thereof, or
any Final Terms (as defined below) or any other document incorporated herein by reference, and neither the
Arranger nor any Dealer has separately verified the information contained in this Offering Memorandum or any
other document incorporated herein. Accordingly, and to the extent permitted by the laws of any relevant
jurisdiction, none of these persons accepts any responsibility for the accuracy or completeness of the information
contained in any of these documents.
This Offering Memorandum should be read and understood in conjunction with any supplement hereto and with
any other documents incorporated herein by reference and, in relation to any Tranche of Notes, together with the
relevant final terms (the "Final Terms"). For the avoidance of doubt, the content of websites this Offering
Memorandum refers to in hyperlinks does not form part of this Offering Memorandum.
This Offering Memorandum and any supplement hereto as well as any Final Terms reflect the status as of their
respective dates. The delivery of this Offering Memorandum or any Final Terms and the offering, sale or delivery
of any Notes may not be taken as an implication that the information contained in such documents is accurate and
complete subsequent to their respective dates or that there has been no adverse change in the financial situation of
the Company since such date or that any other information supplied in connection with the Programme is accurate
(ii)

at any time subsequent to the date on which it is supplied or, if different, the date indicated in the document
containing the same.
None of the Dealers, any of their affiliates or any other person mentioned in the Offering Memorandum makes
any representation as to the suitability of the Notes to fulfil environmental and sustainability criteria required by
any prospective investors. The Dealers have not undertaken, nor are responsible for, any assessment of any
sustainability bond framework or any eligible sustainable projects, any verification of whether such eligible
sustainable projects meet the criteria set out in such sustainability bond framework or the monitoring of the use of
proceeds.
The distribution of this Offering Memorandum, any supplement thereto and any Final Terms and the offering, sale
and delivery of any of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession
this Offering Memorandum, any supplement thereto or any Final Terms come are required by the Company and
the Dealers to inform themselves about and to observe any such restrictions. For more information, see "Selling
Restrictions" on pages 203-207 of this Offering Memorandum.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET  The Final Terms in respect of any Notes may
include a legend entitled "MiFID II Product Governance" which will outline the target market assessment in
respect of the Notes and which channels for distribution of the Notes are appropriate. Any person subsequently
offering, selling or recommending the Notes (a "distributor") should take into consideration the target market
assessment; however, a distributor subject to Directive 2014/65/EU (as amended, "MiFID II") is responsible for
undertaking its own target market assessment in respect of the Notes (by either adopting or refining the target
market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the MiFID Product
Governance rules under EU Delegated Directive 2017/593 (the "MiFID Product Governance Rules"), any
Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but otherwise neither the Arranger
nor the Dealers nor any of their respective affiliates will be a manufacturer for the purpose of the MiFID Product
Governance Rules.
UK MIFIR PRODUCT GOVERNANCE / TARGET MARKET  The Final Terms in respect of any Notes
may include a legend entitled "UK MiFIR Product Governance" which will outline the target market assessment
in respect of the Notes and which channels for distribution of the Notes are appropriate. Any distributor should
take into consideration the target market assessment; however, a distributor subject to the FCA Handbook Product
Intervention and Product Governance Sourcebook (the "UK MiFIR Product Governance Rules") is responsible
for undertaking its own target market assessment in respect of the Notes (by either adopting or refining the target
market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the purpose of the UK MiFIR Product
Governance Rules, any Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but otherwise
neither the Arranger nor the Dealers nor any of their respective affiliates will be a manufacturer for the purpose of
the UK MIFIR Product Governance Rules.
PRIIPS REGULATION / EEA RETAIL INVESTORS  If the Final Terms in respect of any Notes include a
legend entitled "Prohibition of Sales to EEA Retail Investors", the Notes are not intended to be offered, sold or
otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in
the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is one (or more)
of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of
Directive 2016/97/EU as amended (the "Insurance Distribution Directive"), where that customer would not
qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Where such a Prohibition of
Sales to EEA Retail Investors is included in the Final Terms, no key information document required by Regulation
(EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making
them available to retail investors in the EEA has been prepared and therefore offering or selling such Notes or
otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
UK PRIIPS REGULATION / UK RETAIL INVESTORS  If the Final Terms in respect of any Notes include
a legend entitled "Prohibition of Sales to UK Retail Investors", the Notes are not intended to be offered, sold or
otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in
the United Kingdom ("UK"). For the purposes of this provision the expression "retail investor" means a person
who is one (or more) of the following: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No
2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA"); or
(ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (the
"FSMA") and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that
customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No
(iii)

600/2014 as it forms part of domestic law by virtue of the EUWA. Where such a Prohibition of Sales to UK Retail
Investors is included in the Final Terms, no key information document required by Regulation (EU) No
1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or
selling the Notes or otherwise making them available to retail investors in the UK has been prepared and therefore
offering or selling the Notes or otherwise making them available to any retail investor in the UK may be unlawful
under the UK PRIIPs Regulation.
BENCHMARKS REGULATION STATEMENT IN RELATION TO ADMINISTRATOR'S
REGISTRATION  Interest amounts payable on Notes with a floating rate of interest ("Floating Rate Notes")
will be calculated by reference to a specific benchmark which will be provided by an administrator. As at the date
of this Offering Memorandum, the specific benchmark applicable to an issue of Floating Rate Notes has not yet
been determined. However, interest amounts payable under Floating Rate Notes issued under the Programme may
be calculated by reference to the Euro Interbank Offered Rate ("EURIBOR") which is provided by the European
Money Markets Institute ("EMMI").
As at the date of this Offering Memorandum, EMMI appears on the register of administrators and benchmarks
established and maintained by the European Securities and Markets Authority (the "ESMA") pursuant to
Article 36 of the Benchmarks Regulation (EU) 2016/1011 of the European Parliament and the Council of June 8,
2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the
performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No
596/2014 (as amended, the "Benchmarks Regulation").
Neither this Offering Memorandum nor any Final Terms may be used for the purpose of an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person
to whom it is unlawful to make such an offer or solicitation.
Neither this Offering Memorandum nor any Final Terms constitutes an offer or an invitation by the Company or
by the Dealers to subscribe for or to purchase any Notes and should not be considered as a recommendation by the
Company, the Arranger, any Dealer or any of them that any recipient of this Offering Memorandum or any Final
Terms should subscribe for or purchase any Notes.
In connection with the issue of any Tranche of Notes, a Dealer or Dealers (if any) named as stabilization
manager(s) (or persons acting on behalf of any stabilization manager(s)) (the "Stabilization Manager(s)") in
the applicable Final Terms may over-allot Notes or effect transactions with a view to supporting the market
price of the Notes at a level higher than that which might otherwise prevail. However, stabilization may not
necessarily occur. Any stabilization action may begin on or after the date on which adequate public
disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at any
time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche of
Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilization action
or over-allotment must be conducted by the relevant Stabilization Manager(s) (or persons acting on behalf
of any Stabilization Manager(s)) in accordance with all applicable laws and rules.
In this Offering Memorandum all references to "", "EUR", "Euro", "euro" and "EURO" are to the single
currency of the member states of the European Union participating in the third stage of the European Economic and
Monetary Union.

(iv)

FORWARD-LOOKING STATEMENTS
This Offering Memorandum contains forward-looking statements. A forward-looking statement is a statement that
does not relate to historical facts or events or to facts or events as of the date of this Offering Memorandum. This
applies, in particular, to statements in this Offering Memorandum containing information on the ADLER Group's
future earnings capacity, plans and expectations regarding its business growth and profitability, and the general
economic conditions to which the ADLER Group is exposed. Statements made using words such as "believes",
"predicts", "forecasts", "plans", "intends", "endeavors", "expects", "will", "aims", "targets" or similar terms and
phrases, including reference and assumptions, may be an indication of forward-looking statements.
The forward-looking statements contained in this Offering Memorandum are subject to risks and uncertainties as
they relate to future events and are based on estimates and assessments made to the best of the Company's present
knowledge. These forward-looking statements are based on assumptions, uncertainties and other factors, the
occurrence or non-occurrence of which could cause the Company's actual results, including the financial
condition and profitability of the ADLER Group, to differ materially from, or fail to meet, the expectations
expressed or implied in the forward-looking statements. These expressions can be found in different sections of
this Offering Memorandum, particularly in the sections entitled "Risk Factors" and "Strategy" and wherever
information is contained in this Offering Memorandum regarding the Company's intentions, beliefs, or current
expectations relating to its future financial condition and results of operations, plans, liquidity, business outlook,
growth, strategy and profitability, as well as the economic and regulatory environment to which the ADLER
Group is subject.
In light of these uncertainties and assumptions, it is also possible that the future events mentioned in this Offering
Memorandum might not occur. In addition, the forward-looking estimates and forecasts reproduced in this
Offering Memorandum from third-party reports could prove to be inaccurate (for more information on the third-
party sources used in this Offering Memorandum, see the discussion on External Data under "--Notice" above).
Actual results, performance or events may differ materially from those in such statements due to, among other
reasons:
changes in general economic conditions in Berlin, including changes in the unemployment rate, the level
of consumer prices, wage levels, etc.;
demographic changes, in particular with respect to Berlin;
changes affecting interest rate levels;
changes in the competitive environment, that is, changes in the level of construction activity relating to
housing;
political changes; and
changes in laws and regulations, in particular tenancy and environmental laws and regulations.
See "Risk Factors" for a further description of some of the factors that could influence the Company's forward-
looking statements.
It should be noted that neither the Company nor any of the Dealers assumes any obligation, and does not intend to
update or revise any forward-looking statement or risk factors or to conform any such statement to new
information, future events or developments or otherwise. All subsequent written and oral forward-looking
statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements referred to above and contained elsewhere in this Offering Memorandum.
(v)

ESG RATINGS
The Company's exposure to Environmental, Social and Governance ("ESG") risks and the related management
arrangements established to mitigate those risks has been or may be assessed by several agencies, including
Sustainalytics, among others, through Environmental, Social and Governance ratings ("ESG ratings").
ESG ratings may vary amongst ESG ratings agencies as the methodologies used to determine ESG ratings may
differ.
The Company's ESG ratings are not necessarily indicative of its current or future operating or financial
performance, or any future ability to service the Notes and are only current as of the dates on which they were
initially issued. Prospective investors must determine for themselves the relevance of any such ESG ratings
information contained in this Offering Memorandum or elsewhere in making an investment decision.
Furthermore, ESG ratings shall not be deemed to be a recommendation by the Company or any other person to
buy, sell or hold the Notes. Currently, the providers of such ESG ratings are not subject to any regulatory or other
similar oversight in respect of their determination and award of ESG ratings. For more information regarding the
assessment methodologies used to determine ESG ratings, please refer to the relevant rating agency's website
(which website does not form a part of, nor is incorporated by reference in, this Offering Memorandum).

(vi)

TABLE OF CONTENTS

RISK FACTORS ........................................................................................................................................................ 1
GENERAL DESCRIPTION OF THE PROGRAMME ............................................................................................ 38
OPTION I Emissionsbedingungen für festverzinsliche Schuldverschreibungen ................................................... 42
OPTION I Terms and Conditions that apply to fixed rate Notes ........................................................................... 42
OPTION II Emissionsbedingungen für variabel verzinsliche Schuldverschreibungen ......................................... 83
OPTION II Terms and Conditions that apply to floating rate Notes ..................................................................... 83
FORM OF FINAL TERMS .................................................................................................................................... 132
DESCRIPTION OF THE COMPANY AND THE ADLER GROUP .................................................................... 153
TAXATION ............................................................................................................................................................ 200
GENERAL INFORMATION ................................................................................................................................. 203
VALUATION REPORTS ..................................................................................................................................... V-1
ADDRESSES ........................................................................................................................................................ A-1

(vii)

RISK FACTORS
Before deciding to purchase Notes issued under the Programme, investors should carefully review and consider
the following risk factors and the other information contained in this Offering Memorandum. Should one or
more of the risks described below materialize, this may have a material adverse effect on the business,
prospects, shareholders' equity, assets, financial position and results of operations (Vermögens-, Finanz- und
Ertragslage) or general affairs of ADLER Group S.A. (the "Issuer" or the "Company" and together with its
consolidated subsidiaries, "we", "us", "our" or the "ADLER Group"). Moreover, if any of these risks occur,
the market value of Notes issued under the Programme and the likelihood that the Issuer will be in a position to
fulfil its payment obligations under Notes issued under the Programme may decrease, in which case the holders
of Notes (the "Noteholders") issued under the Programme could lose all or part of their investments. Factors
which the Issuer believes may be material for the purpose of assessing the risks associated with Notes issued
under the Programme are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in Notes
issued under the Programme, but the Issuer may be unable to pay interest, principal or other amounts on or in
connection with Notes issued under the Programme for other unknown reasons than those described below.
Additional risks of which the Issuer is not presently aware could also affect the business operations of the
ADLER Group and have a material adverse effect on its business activities, financial condition and results of
operations. Prospective investors should read the detailed information set out elsewhere in this Offering
Memorandum (including any documents incorporated by reference herein) and reach their own views prior to
making any investment decision.
The following risk factors are organized in categories depending on their respective nature.
Risks related to the ADLER Group's Business Activities and Industry
Our business is significantly dependent on our ability to generate rental income. Our rental income and
funds from operations could particularly be negatively affected by a potential increase in vacancy rates.
We rely significantly on rental income. Our rental income is impacted predominantly by the size, rent levels and
vacancy levels of our portfolio. The vacancy levels within our portfolio could increase, particularly in lower-
value residential units, in less attractive locations, in areas with weak infrastructure or in properties where
investments do not result in increased rents in line with expected market rents or increased occupancy levels.
Our strategy also focuses on the renovation and refurbishment of selected parts of our portfolio with the highest
vacancy levels. If these measures do not result in a significant reduction in vacancy levels for these properties
after completion of the renovation and refurbishment work, this could have an adverse effect on our financial
results relative to our business plan. In addition to lost rental income, additional fixed and ancillary costs
incurred for the maintenance of vacant residential units could reduce our operating profit. Furthermore, a longer
period of high vacancy levels could generally lead to lower levels of income from rental activities and make it
more difficult to increase average rental levels. Further growth of our revenue therefore depends on our ability
to reduce vacancy levels or increase rents.
Our ability to operate our business successfully relies on assumptions that may prove to be incorrect and
circumstances that may be unfavorable, in part or as a whole, in particular due to unexpected liabilities, an
incomplete or inaccurate assessment of a market, value determinations and due diligence findings and
challenges with respect to achieving anticipated synergies and insufficient investment horizons.
We face the risk that we may not be able to generate returns or generate significantly lower returns in the future.
In particular, our projections of the future demand for apartments suitable for modernization may turn out to be
inaccurate or inappropriate to achieve a positive return. Also, tenant preferences may change. Further, we may
not be in a position to find sufficient investment opportunities to achieve further growth. In addition, we may
not be able to pass on the costs for these modernization measures to our tenants due to legal constraints or if the
tenants would be unable to afford rent increases as a result of these modernization measures. Tenants may also
cause postponements to our modernization measures by, for example, refusing to vacate the units for
modernization work to take place. Further, we may be restricted in our ability to finance the investment
program through loans or other debt instruments depending on our current and future debt level and structure.
The success of our business model depends in part on our ability to increase rent levels through modernizing
our existing real estate portfolio and real estate properties that we acquire as well as our ability to estimate and
control the costs of such modernizations. We plan to continue investing a significant amount into modernization
measures, particularly in residential markets that provide for significant rent upside for refurbished apartments.
Due to the Berlin rent freeze (Mietendeckel), this was previously not the case for our property portfolio located
in Berlin. On April 15, 2021, the German Federal Constitutional Court (Bundesverfassungsgericht) held that
1

this rent freeze is void. However, there is no assurance that any similar legislative decisions or measures will be
taken in the future. In addition, there is no assurance that the targeted rent upside can be realized. Even if the
existing real estate portfolio and the real estate properties that we may acquire can be repositioned, modernized
and refurbished, such measures could prove to be unsuccessful or ineffective and not result in targeted rent
levels. Further, our assumptions in relation to achievable rental levels, rental increases, vacancy rates,
modernization costs, personnel (including in-house facility management personnel), overhead expenses,
maintenance and capital expenditures may prove to be partially or entirely inaccurate. Furthermore, unforeseen
issues or risks could materialize that could result in substantially increased maintenance and capital
expenditures, in particular, due to changes in applicable laws and regulations; or we may be unable to resolve
such issues or risks at all or not in an economically reasonable manner. Regarding environmental matters
relevant to modernizations and refurbishments, see "--Regulatory and Legal Risks--Our business is subject to
the general legal environment in Germany. Any disadvantageous changes in the legal environment, such as
mandatory environmental modernization provisions, restrictions regarding modernization measures or
provisions (including taxes) that result in the incurrence of costs in the event of a property sale, or
disadvantageous changes to the Berlin Mietspiegel regulation, may be detrimental to us." and "We may incur
environmental liabilities, for example, from residual pollution including wartime ordnance, soil conditions,
asbestos and contaminants in building materials, as well as from possible building code violations."
In the event that a building is subject to historic preservation laws, compliance with the respective historic
preservation requirements could significantly delay the refurbishment or modernization process and could result
in significantly higher expenses for the particular project. Consequently, we may be unable to perform our
obligations to a tenant, which could result in rent to be deferred or not due at all. In addition, legal requirements
relating to our properties could become more stringent or onerous, particularly with respect to construction and
environmental requirements; similarly, requirements might be imposed to increase the availability of
handicapped-accessible and adapted housing.
The realization of any of these risks could have a negative effect on our ability to successfully conduct our
business and could have a material adverse effect on our business, financial condition, results of operations,
cash flows and prospects.
The integration of the ADLER Real Estate Group into the ADLER Group could potentially not be
consummated as intended and could result in expenses not anticipated at all or not adequately accounted for
and the Company could potentially be legally bound to consummate the integration regardless of a materially
adverse change of its economic rationale.
The completion (the "Completion") of the combination of the business of ADLER Real Estate AG ("ADLER
Real Estate" and, together with its consolidated subsidiaries, the "ADLER Real Estate Group") and its
consolidated subsidiaries with the business of ADO Properties S.A. (renamed to ADLER Group S.A.) and its
consolidated subsidiaries (the "Business Combination") following the voluntary takeover offer by the
Company for all shares in ADLER Real Estate in the form of an exchange offer, as published on February 7,
2020, (the "ADLER Offer") allowed the Company to consolidate the ADLER Real Estate Group's property
portfolio in the Company's consolidated financial statements.
Following the Completion, the ADLER Real Estate Group is being integrated into the ADLER Group (the
"Integration"). We expect the Integration to be a multi-year process that requires significant human and
financial resources. The successful integration of the existing workforces, IT systems, corporate cultures and
corporate structures and the introduction of joint processes are essential to the success of the Integration. The
Integration will be time-consuming and costly and could negatively affect our business operations and/or those
of the ADLER Real Estate Group. We and the ADLER Real Estate Group could be confronted with a variety of
difficulties during the process of the Integration, including, among others:
The administration of a significantly larger group, including the size of the portfolio and number of
assets;
The combinations and standardizations of the business activities, including the services offered to
tenants and customers and the coordination of the business activities;
The coordination of the corporate and administrative structures and the harmonization of insurance
coverage;
Unexpected problems relating to the coordination of the accounting-, IT-, communications and
administrative systems and other systems;
2

Problems to adequately cope with potential differences in the corporate cultures and leadership
philosophies;
The implementation of uniform standards, control mechanisms, procedures and guidelines;
Legal disputes related to the Integration, including legal disputes with shareholders;
The diversion of the attention of the management from other areas of the business activities;
Maintaining existing agreements and business relationships with tenants, customers, service providers
and financing banks and delays related to the entering into of new contracts with future tenants,
customers, service providers and financing banks;
Unforeseen and unexpected obligations in relation to the Integration and the business of the ADLER
Real Estate Group;
The inability to enter into a domination agreement (Beherrschungsvertrag) with ADLER Real Estate
in order to give us effective control over its management; and
The identification and elimination of obsolete business activities and assets, including those that fall
short of expectations.
Any inability of the ADLER Group to efficiently and effectively carry out the Integration could lead to a
reduction or failure or delay in the realization of the anticipated advantages and cost savings envisaged in
connection with the Integration could negatively affect the ADLER Group.
The Integration could result in additional or unforeseen costs and the anticipated advantages of the Integration
could potentially not be realized in full or not at all. To the extent actual growth and costs savings are realized,
these could fall short of anticipations and their achievement could require more time than currently anticipated
by the Company. Any inability of the Company to adequately address and manage the challenges of the
Integration could result in a decrease of the anticipated benefits of the Integration or in the premature
termination of the Integration.
Certain risks in connection with the business of the Consus Group are similar to the risks of our existing
business, the benefits expected as a result of an acquisition of Consus Real Estate may not be fully realized
or not be realized at all.
The Company acquired a majority stake in Consus Real Estate AG ("Consus Real Estate" and together with its
consoliated subsidiaries, the "Consus Group") in several steps: On December 15, 2019, the Company entered
into various share purchase agreements with minority shareholders of Consus Real Estate to acquire a 22.18%
stake in Consus Real Estate, which, as a result of the Completion, increased to 25.75% due to the fact that
ADLER Real Estate held 3.57% in Consus Real Estate prior to the Completion. On June 29, 2020, the Company
exercised its call option under the call/put-option agreement with Aggregate Holdings S.A. ("Aggregate") for
the acquisition of 69,619,173 shares in Consus Real Estate, as amended (the "Call/Put-Option Agreement").
The settlement of the call option exercise under the Call/Put-Option Agreement occurred by transfer of the
newly issued shares in the Company and transfer of the Company's existing shares previously indirectly held by
ADLER Real Estate (the "Consus Real Estate Acquisition").
On December 13, 2020, the Company announced that it has resolved to further increase its stake in Consus Real
Estate, which, at that time, amounted to approximately 65.0%. As part of two distinct capital increases against
contributions in kind, implemented on December 14 and December 15, 2020, respectively, the Company
acquired shares in Consus Real Estate from certain other shareholders of Consus Real Estate at an exchange
ratio of 0.272 new shares of the Company for each share of Consus Real Estate by way of contribution of a total
of 46,780,535 shares of Consus Real Estate in exchange for 12,724,303 new shares of the Company (the
"Consus Increases"). Following the completion of the Consus Increases, ADLER held a stake of
approximately 94.0% in Consus Real Estate. Against this background, the Company had decided not to pursue
the voluntary public tender offer in the form of an exchange offer to all Consus shareholders at that time.
However, the Company may seek to further increase its shareholding in Consus going forward.
The Consus Real Estate Acquisition and the Consus Increases are part of our strategy to benefit from access to
Consus Real Estate's development platform with a pipeline of over 15,000 residential rental units that is
focused on Berlin, Cologne, Düsseldorf, Dresden, Frankfurt am Main, Hamburg, Leipzig, Munich and Stuttgart
(together, the "Top 9 Cities"). There is no assurance that the anticipated benefits of the Consus Real Estate
Acquisition will be realized in full or at all. Prior to the Consus Real Estate Acquisition, we conducted a
restricted due diligence on the basis of limited information. Therefore, certain important circumstances relevant
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