Obbligazione ADLER Group 1.5% ( XS1652965085 ) in EUR

ADLER Group

78.373 EUR ▼

Germania

XS1652965085 ( in EUR )

1.5% per anno ( pagato 1 volta l'anno)

26/07/2024 - Obbligazione è scaduto

Prospetto opuscolo dell'obbligazione ADLER Group XS1652965085 in EUR 1.5%, scaduta

100 000 EUR

400 000 000 EUR

The Obbligazione issued by ADLER Group ( Germany ) , in EUR, with the ISIN code XS1652965085, pays a coupon of 1.5% per year.
The coupons are paid 1 time per year and the Obbligazione maturity is 26/07/2024

Not for distribution in the United States of America

ADO Properties S.A.
(incorporated in Luxembourg as a public limited liability company)
400,000,000 1.500% Fixed Rate Notes due 2024
Issue Price: 99.651%

________________________
ADO Properties S.A., a public limited liability company (société anonyme) (the "Issuer", "Company",
or "ADO", and together with its consolidated subsidiaries, "we", "our" or the "Group"), with its registered
office at 1B, Heienhaff, L-1736 Senningerberg, Grand Duchy of Luxembourg ("Luxembourg") and registered
with the Luxembourg Register of commerce and companies (Registre de Commerce et des Sociétés,
Luxembourg) under number B197554, will issue on July 27, 2017 Notes in the aggregate principal amount of
400,000,000 1.500% fixed rate notes in bearer form due 2024 (the "Notes") with a denomination of 100,000
each. The Notes, which are governed by the laws of the Federal Republic of Germany ("Germany"), will bear
interest at a rate of 1.500% per year. The Issuer will pay interest on the Notes annually in arrears on July 26,
commencing on July 26, 2018.
The Notes will 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.
On issue the Notes are rated Baa2 (stable outlook) by Moody's Investors Service Ltd ("Moody's"). At
the date of this Prospectus (as defined below) the Issuer has a long-term issuer rating of Baa2 (stable outlook)
assigned by Moody's. A rating is not a recommendation to buy, sell or hold securities and may be subject to
suspension, change or withdrawal at any time by the assigning rating agency. At the date of this Prospectus (as
defined below) Moody's is established in the European Union ("EU"), registered under Regulation (EC) no.
1060/2009 of the European Parliament and of the Council dated September 16, 2009 on credit rating agencies, as
amended (the "CRA Regulation") and included in the list of registered credit rating agencies published by the
European Securities and Markets Authority on its website (www.esma.europa.eu) in accordance with the CRA
Regulation.
International Securities Identification Number (ISIN): XS1652965085
German Securities Code (Wertpapierkennnummer, WKN): A19L3U
Common Code: 165296508

Investing in the Notes involves risks. See "Risk Factors" beginning on page 1.
________________________
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act") or with any regulatory authority of any state or other jurisdiction in the United States of
America ("United States") and are being offered and sold in transactions outside the United States to non-
U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S")) in reliance on
Regulation S. The Notes are in bearer form that 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). For a further description of certain
restrictions on the offering, sale and transfer of the Notes and on the distribution of this Prospectus (as
defined below), see "Subscription and Sale of the Notes--Selling Restrictions".
Prospective investors should be aware that an investment in the Notes involves risks and that if certain risks,
in particular those described under "Risk Factors", occur, the investors may lose all or a very substantial part
of their investment.
This prospectus (the "Prospectus"), together with all documents incorporated by reference herein, has
been prepared on the basis that all offers of Notes will be made pursuant to an exemption under the European

Union's Directive 2003/71/EC, as amended, including by Directive 2010/73/EU (the "Prospectus Directive"),
from the requirement to produce a prospectus in connection with offers of Notes and is thus, for the purposes of
the offering of the Notes (the "Offering"), not a prospectus for the offer of securities within the meaning of the
Prospectus Directive. Accordingly, any person making or intending to make any offer within the European
Economic Area ("EEA") of the Notes which are the subject of the Offering contemplated in this Prospectus
should only do so in circumstances in which no obligation arises for the Issuer or the Joint Bookrunners to
produce a prospectus for such offers. None of the Issuer or the Joint Bookrunners has authorized, nor do they
authorize, the making of any offer of the Notes through any financial intermediary, other than offers made by the
Joint Bookrunners which constitute the final placement of the Notes contemplated in this Prospectus.
Application has been made to the Luxembourg Stock Exchange (Bourse de Luxembourg) for the Notes
to be listed on the official list of the Luxembourg Stock Exchange (Bourse de Luxembourg) ("Official List")
and to be admitted to trading on the regulated market (the "Regulated Market") of the Luxembourg Stock
Exchange (Bourse de Luxembourg). The Regulated Market of the Luxembourg Stock Exchange (Bourse de
Luxembourg) is a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of
the Council of April 21, 2004 on Markets in Financial Instruments, as amended. Only for purposes of the
admission to trading, this Prospectus constitutes a prospectus within the meaning of the Prospectus Directive, i.e.
a listing prospectus according to Article 5.3 of the Prospectus Directive. By approving a prospectus, the
Commission de Surveillance du Secteur Financier (the "CSSF") shall give no undertaking as to the economic
and financial soundness of the operation or the quality or solvency of the issuer pursuant to Article 7 para. 7 Loi
relative aux prospectus pour valeurs mobilières.
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy Notes in any
jurisdiction where such offer or solicitation is unlawful. For a further description of certain restrictions on the
offering, sale and transfer of the Notes and on the distribution of this Prospectus, see "Subscription and Sale of
the Notes--Selling Restrictions" below.
Joint Bookrunners
Société Générale
Barclays
Morgan Stanley
Corporate & Investment Banking

The date of this Prospectus is July 24, 2017

RESPONSIBILITY STATEMENT
ADO Properties S.A., the Issuer, 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 de Luxembourg) under the registration number B197554, assumes
responsibility for the content of this Prospectus, and declares having taken all reasonable care to ensure that such
is the case, that the information contained in this Prospectus 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 Prospectus,
the investor appearing as plaintiff may have to bear the costs of translating the Prospectus prior to the
commencement of the court proceedings pursuant to the national legislation of the member states of the EEA.
The information in this Prospectus will not be updated subsequent to the date hereof except in case of a
significant new factor or material mistakeor inaccuracy relating to the information contained in this Prospectus
which is capable of affecting an assessment of the securities and which occurs or comes to light following the
approval of the Prospectus, but before the admission of the securities to trading.
NOTICE
This Prospectus should be read and understood in conjunction with any supplement hereto and with any
other documents incorporated herein by reference.
No person is authorized to give any information or to make any representations other than those
contained in this Prospectus and, if given or made, such information or representations must not be relied upon
as having been authorized by or on behalf of the Issuer or the Joint Bookrunners (each a "Joint Bookrunner"
and together, the "Joint Bookrunners", and as further defined in "Subscription and Sale of the Notes"). In
making an investment decision, investors must rely on their own examination of the Issuer and the terms of the
Offering, including the merits and risks involved. Any decision to purchase Notes should be based solely on this
Prospectus.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that (i) that the information in this Prospectus is correct as of any time subsequent to the
date hereof or, as the case may be, subsequent to the date on which this Prospectus has been most recently
supplemented, or (ii) that there has been no adverse change in the financial situation of the Issuer which is
material in the context of the issue and sale of the Notes since the date of this Prospectus or, as the case may be,
the date on 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 (iii) that
any other information supplied in connection with the issue of 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.
Neither the Joint Bookrunners nor any other person mentioned in this Prospectus, except for the Issuer,
is responsible for the information contained in this Prospectus or any other document incorporated herein by
reference, and accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these
persons makes any representation or warranty or accepts any responsibility as to the accuracy and completeness
of the information contained in any of these documents. The Joint Bookrunners have not independently verified
any such information and accept no responsibility for the accuracy thereof.
The distribution of this Prospectus and the sale and delivery of Notes in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus comes are required to inform themselves about
and observe any such restrictions. In particular, the Notes have not been and will not be registered under the
Securities Act, and are subject to special U.S. tax law requirements when held by U.S. persons (TEFRA D
rules). Subject to certain limited exceptions, the Notes may not be offered, sold or delivered within the United
States of America or to U.S. persons. For a further description of certain restrictions on offerings and sales of the
Notes and distribution of this Prospectus (or of any part thereof) see " "Subscription and Sale of the Notes--
Selling Restrictions".
None of the Issuer or the Joint Bookrunners, or any of their respective representatives, is making any
representation to any offeree or purchaser of the Notes regarding the legality of an investment in the Notes by
such offeree or purchaser under the laws applicable to such offeree or purchaser. Prospective investors should

not construe anything in this Prospectus as legal, tax, business or financial advice. Each investor should consult
with his or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the
Notes.
In this Prospectus, "euro" and "" refer to the single European currency adopted by certain
participating member states of the European Union (the "EU Member States"), including Germany and
Luxembourg. All of the financial data presented in the Prospectus are shown in thousands of euro (in
thousand), except as otherwise stated. In order to ensure that figures given in the text and the tables sum up to
the totals given, the numbers are commercially rounded to the nearest whole number or in some cases to such
number that facilitates the summing up. The percentage changes that are stated in the text and the tables have
been commercially rounded to one decimal point unless stated otherwise. Financial information presented in
parentheses denotes the negative of such number presented.
Furthermore, this Prospectus contains industry related data taken or derived from industry and market
research reports published by third parties ("External Data"). Commercial publications generally state that the
information they contain originated from sources assumed to be reliable, but that the accuracy and completeness
of such information is not guaranteed and that the calculations contained therein are based on a series of
assumptions. The External Data have not been independently verified by the Issuer. The External Data was
reproduced accurately by the Issuer in the Prospectus, and as far as the Issuer is aware and is able to ascertain
from information published by any third party, no facts have been omitted that would render the reproduced
External Data inaccurate or misleading. The Issuer does not have access to the underlying facts and assumptions
of numerical and market data and other information contained in publicly available sources. Consequently, such
numerical and market data or other information cannot be verified by the Issuer.
Each investor contemplating purchasing any Notes should make its own independent investigation of
the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer. This Prospectus
does not constitute an offer of Notes or an invitation by or on behalf of the Issuer or the Joint Bookrunners to
purchase any Notes. Neither this Prospectus nor any other information supplied in connection with the Notes
should be considered as a recommendation by the Issuer or the Joint Bookrunners to a recipient hereof and
thereof that such recipient should purchase any Notes.
IN CONNECTION WITH THE ISSUANCE OF THE NOTES, THE JOINT BOOKRUNNERS (OR
PERSONS ACTING ON BEHALF OF THE JOINT BOOKRUNNERS) MAY OVER-ALLOT THE 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, THERE IS
NO ASSURANCE THAT THE JOINT BOOKRUNNERS (OR PERSONS ACTING ON BEHALF OF THE
JOINT BOOKRUNNERS) WILL UNDERTAKE STABILIZATION ACTION. ANY STABILIZATION
ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF
THE TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY
TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE
AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES. ANY STABILIZATION
ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE JOINT BOOKRUNNERS (OR
PERSON(S) ACTING ON BEHALF OF THE JOINT BOOKRUNNERS) IN ACCORDANCE WITH ALL
APPLICABLE LAWS AND REGULATIONS.
This Prospectus may only be used for the purpose for which it has been published.
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 does not constitute an offer or an invitation to subscribe for or purchase any
Notes and should not be considered as a recommendation by the Issuer, the Joint Bookrunners or any of
them that any recipient of the Prospectus should subscribe or purchase any Notes. Each recipient of the
Prospectus shall be taken to have made its own investigation and appraisal of the condition (financial and
otherwise) of the Issuer.
The legally binding language of this Prospectus is English. Any part of the Prospectus in German
language constitutes a translation, except for the terms and conditions of the Notes (the "Terms and
Conditions") in respect of which German is the legally binding language.

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA
This Prospectus has been prepared on the basis that all offers of Notes will be made pursuant to an
exemption under the Prospectus Directive, as implemented in member states of the EEA from the requirement to
produce a prospectus for offers of the Notes. Accordingly, any person making or intending to make any offer of
the Notes within any such EEA member state should only do so in circumstances in which no obligation arises
for the Issuer or any of the Joint Bookrunners to produce a prospectus for such offer. Neither the Issuer nor the
Joint Bookrunners have authorized, nor do they authorize, the making of any offer of Notes through any
financial intermediary, other than offers made by the Joint Bookrunners which constitute the final placement of
the Notes contemplated in this Prospectus.
NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM
This Prospectus and any other material in relation to the Notes described herein is directed at and for
distribution in the United Kingdom only to persons in the United Kingdom that are qualified investors within the
meaning of Article 2(1)(e) of the Prospectus Directive ("qualified investors") that are also (i) persons who have
professional experience in matters relating to investments falling within Article 19(5) of the Financial Services
and Markets Act 2000, as amended (the "FSMA") (Financial Promotion) Order 2005 (the "Order"), or (ii) high
net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons being together referred to as
"Relevant Persons"). The Notes are only available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such Notes will be engaged in only with, Relevant Persons. Any person in the
United Kingdom who is not a Relevant Person should not act or rely on this Prospectus or any of its contents.
Any investment or investment activity to which this Prospectus relates is available only to Relevant Persons and
will be engaged in only with Relevant Persons. This Prospectus and its contents are confidential and should not
be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the
United Kingdom.
Furthermore, the Joint Bookrunners have warranted that they (i) have only invited or will only invite
participation in investment activities in connection with the Offering or the sale of the Notes within the meaning
of Section 21 of the FSMA, and have only initiated or will only initiate such investment activities to the extent
that Section 21(1) of the FSMA does not apply to the Company; and (ii) have complied and will comply with all
applicable provisions of FSMA with respect to all activities already undertaken by each of them or will
undertake in the future in relation to the Notes in, from, or otherwise involving the United Kingdom.
FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements. A forward-looking statement is any statement
that does not relate to historical facts or events or to facts or events as of the date of this Prospectus. This
applies, in particular, to statements in this Prospectus containing information on our future earnings capacity,
plans and expectations regarding its business growth and profitability, and the general economic conditions to
which it is exposed. Statements made using words such as "predicts", "forecasts", "plans", "endeavors",
"expects", "intends", "will" or words of similar meaning may be an indication of forward-looking statements.
The forward-looking statements in this Prospectus 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 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 several sections in this Prospectus,
particularly in the sections entitled "Risk Factors", "Description of the Issuer--Business" and wherever
information is contained in the Prospectus regarding our intentions, beliefs, or current expectations relating to
our 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 we are subject.
In light of these uncertainties and assumptions, it is also possible that the future events mentioned in
this Prospectus might not occur. In addition, the forward-looking estimates and forecasts reproduced in this
Prospectus from third-party reports could prove to be inaccurate (for more information on the third-party sources
used in this Prospectus, 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.
Moreover, it should be noted that neither the Company nor any of the Joint Boookrunners assumes any
obligation, except as required by law, to update any forward-looking statement or to conform any such statement
to actual events or developments. Nevertheless, the Company has the obligation to disclose any significant new
factor or material mistake or inaccuracy relating to the information contained in this Prospectus which is capable
of affecting an assessment of the securities and which occurs or comes to light following the approval of the
Prospectus, but before the admission of the securities to trading. These updates must be disclosed in a prospectus
supplement in accordance with Article 13(1) of the Luxembourg Prospectus Law.
See "Risk Factors" for a further description of some of the factors that could influence the Company's
forward-looking statements.

CONTENTS
Section
Page

RISK FACTORS .............................................................................................................................. 1
RISKS RELATED TO THE MARKET ................................................................................................. 1
RISKS RELATED TO OUR BUSINESS ................................................................................................ 3
RISKS RELATED TO THE VALUATION OF OUR PROPERTIES ............................................................ 12
FINANCIAL RISKS ....................................................................................................................... 13
REGULATORY AND LEGAL RISKS................................................................................................. 16
RISKS RELATED TO TAXATION .................................................................................................... 21
RISKS RELATED TO THE NOTES ................................................................................................... 24
TERMS AND CONDITIONS OF THE NOTES ............................................................................ 31
DESCRIPTION OF THE ISSUER ................................................................................................. 74
GENERAL INFORMATION ON THE COMPANY AND THE GROUP ....................................................... 74
SELECTED CONSOLIDATED FINANCIAL DATA AND GROUP DATA .................................................. 77
BUSINESS ................................................................................................................................... 83
Overview ............................................................................................................................ 83
Competitive Strengths ......................................................................................................... 84
Strategy .............................................................................................................................. 86
Our Portfolio ....................................................................................................................... 87
Business Operations ............................................................................................................ 90
Corporate Information ......................................................................................................... 94
Material Agreements ........................................................................................................... 96
REGULATORY ENVIRONMENT ................................................................................................... 101
GOVERNING BODIES OF ADO PROPERTIES S.A. ......................................................................... 112
SHAREHOLDER STRUCTURE ...................................................................................................... 114
RECENT DEVELOPMENTS (KEY MATERIAL ACQUISITIONS) ......................................................... 115
TAXATION .................................................................................................................................. 116
TAXATION IN GERMANY ........................................................................................................... 116
TAXATION IN LUXEMBOURG ..................................................................................................... 118
SUBSCRIPTION AND SALE OF THE NOTES ......................................................................... 122
SUBSCRIPTION .......................................................................................................................... 122
SELLING RESTRICTIONS ............................................................................................................ 122
GENERAL INFORMATION ....................................................................................................... 125
AUTHORIZATION AND ISSUE DATE ............................................................................................ 125
USE OF PROCEEDS .................................................................................................................... 125
DELIVERY OF NOTES................................................................................................................. 125
COSTS AND EXPENSES RELATING TO THE PURCHASE OF NOTES .................................................. 125
LISTING AND ADMISSION TO TRADING OF THE NOTES ................................................................ 125
CLEARING SYSTEM AND SECURITY CODES ................................................................................ 125
RATINGS OF THE ISSUER AND THE NOTES................................................................................... 126

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INDICATION OF YIELD ............................................................................................................... 126
DOCUMENTS AVAILABLE .......................................................................................................... 126
INCORPORATION BY REFERENCE ........................................................................................ I-1
SELECTED DEFINED TERMS .................................................................................................. D-1
ADDRESSES ................................................................................................................................ A-1

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RISK FACTORS
An investment in the Notes of ADO Properties S.A. (the "Issuer", the "Company", "ADO", and, together
with its consolidated subsidiaries, "we", "our" or the "Group") is subject to risks. Therefore, investors
should carefully consider the following risks and the other information contained in this Prospectus when
deciding whether to invest in the Notes. The market price of the Notes could fall if any of these risks were to
materialize, in which case investors could lose some or all of their investment. The following risks, alone or
together with additional risks and uncertainties not currently known to the Company, or that the Company
might currently deem immaterial, could materially adversely affect our business, net assets, financial
condition, cash flows and results of operations.
The order in which the risks are presented is not an indication of the likelihood of the risks actually
materializing, or the significance or degree of the risks or the scope of any potential harm to our business,
net assets, financial condition, cash flows or results of operations. The risks mentioned herein may
materialize individually or cumulatively.
RISKS RELATED TO THE MARKET
We are dependent on regional real estate markets, particularly in Berlin. Further, we are dependent on
our ability to adapt our business activities to developments in these markets. Negative market
developments in Berlin or an inability on our part to adapt our business activities and/or properties could
have material adverse effects on our business, net assets, financial condition, cash flows and results of
operations.
Substantially all (99.7% as measured by fair value as of March 31, 2017) of the real estate we own
is located in Berlin. Accordingly, we are dependent on trends in the Berlin residential real estate market, as
well as general economic conditions and developments in Berlin. Our performance and valuation are
dependent on various factors including demographic and cyclicality trends in Berlin, purchasing power of
the population, the development of the population, attractiveness of the particular locations of our
properties, the unemployment rate and employment offers, infrastructure, social structure, and supply and
demand for real estate space and assets in the respective locations and markets in Berlin. Furthermore, we
are also affected by the German economic conditions as a whole, such as growth in gross domestic product
("GDP"), unemployment, interest rates, inflation and financing availability. Because regional markets
within Germany do not develop uniformly, our dependence on the Berlin market due to our portfolio
concentration in Berlin could create a disadvantage compared to competitors who have a more
geographically diversified real estate portfolio.
We may be negatively affected by unforeseen unfavorable demographic and economic
developments in Germany and specifically, in Berlin. We may also be exposed to risk over-proportionally
and may suffer from concentration risks because substantially all (99.7% as measured by fair value as of
March 31, 2017) of our portfolio is located in Berlin.
In the event of a decline in the attractiveness of the Berlin real estate market, or if there is a
downturn or illiquidity in the Berlin real estate market, we may be unable to rent or sell properties which
could have material adverse effects on our business, net assets, financial condition, cash flows and results of
operations.
The continuing uncertainty regarding the development of the global economy, for example due to the
ongoing sovereign debt crises and inflation and deflation risks in many parts of the world, particularly in
Europe, the uncertainties associated with the outcome of the United Kingdom's vote to leave the
European Union and the ongoing quantitative easing announced by the European Central Bank, may
result in economic instability, limited access to debt and equity financing and possible defaults by our
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. In addition, the inflation and deflation risks in many parts of the world, particularly in
Europe, and the ongoing quantitative easing announced by the European Central Bank, may result in limited

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access to debt and equity financing and possible defaults by our counterparties. Also, on June 23, 2016, a
majority of the voters in the United Kingdom voted to leave the European Union. There are significant
uncertainties in relation to the terms and time frame within which such an exit would be effected, the future
terms of the United Kingdom's relationship with the European Union and to how, when and to what extent
these developments would impact on the economy in the United Kingdom and the European Union, and on
levels of investor activity and confidence, on global market performance and on exchange rates. This
macroeconomic environment may give rise to economic or political instability, including the possibility of a
breakup of the Eurozone or the weakening of exchange rates for the euro. 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.
Furthermore, the creditworthiness of tenants and potential real estate purchasers could deteriorate,
for example, if unemployment increased or economic conditions worsen. Tenants may become insolvent or
social security laws, pursuant to which some of our tenants receive funds, may change. Additionally, real
incomes could stagnate or decline, decreasing the ability and willingness of private households to make
expenditures for housing.
The current economic environment is characterized by low interest rates and comparatively high values
of residential real estate portfolios in Germany. Any rise in interest rates could have material adverse
effects on the asset valuations, the German real estate market and on us.
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, especially in the current low-interest rate environment. The
resulting 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 were to 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 us in a number of ways. For example, the discount rate used to
calculate the value of the Group's properties ("Fair Value") recorded on the Company's balance sheet in
accordance with International Accounting Standard ("IAS") 40 in conjunction with International Financial
Reporting Standards as adopted by the European Union ("IFRS") 13 tends to increase in an environment of
rising interest rates, which in turn could result in our properties having a lower Fair Value. For more
information, see the risk factors under "--Risks Related to the Valuation of Our Properties."
Any increase in interest rates could have material adverse effects on our business, net assets,
financial condition, cash flows and results of operations.
It could become more difficult for us to implement our strategy of capturing additional growth
opportunities by acquiring residential real estate portfolios on attractive terms, particularly due to the
high current and future market prices for real estate portfolios.
As part of our business strategy, the Group seeks to acquire residential real estate portfolios. Such
acquisitions are only feasible, however, if attractive real estate portfolios are available for purchase at
reasonable prices. Given the current high demand for residential real estate in Germany, such portfolios
may be unavailable or available only on unfavorable terms. Any such development could impair the growth
of our business and could prevent us from generating additional economies of scale and strategically
developing our portfolio through acquisitions and investing into our portfolios with attractive returns. In
addition, competitors with asset acquisition objectives similar to ours may possess greater financial
resources and lower costs of capital than we do (see risk factor "Risks Related to the Market--Competition
for the acquisition of assets from buyers that have lower costs of capital or lower return expectations than
we do could limit our ability to compete for acquisitions and therefore to grow our business effectively.").
In the future, increased competition could make it more difficult for us to acquire properties on attractive
terms.
Any inability to acquire residential real estate portfolios could not only impair our strategy to
capture external growth opportunities but could also jeopardize our efforts and strategic goals, including the
acquisition of real estate suitable for sales of condominiums (privatizations).

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