With long-term increase in value on the market

With 49,026 units, our residential property portfolio represents the core of our business activity. With an area of approximately 3 million m2, the majority of our holdings is located in the growth regions Berlin, Frankfurt / Main and Rhine Main. In our portfolio strategy, we count on growth and the continuous optimisation of the core portfolio.

The starting point of our portfolio strategy is the segmentation of the property portfolio into core and disposal portfolio.

The core portfolio is our most important portfolio and includes property that shows further potential for increase in value and is therefore managed long-term by Deutsche Wohnen. It is subdivided in two clusters for optimal strategic control: cluster A contains properties that gain in value through increases in rent and reduction of vacancy. The above-average current gross rent potential in the housing units in cluster B is raised through additional investments in the medium-term.

The disposal property consists of two areas: the single privatisation, predominantly in Berlin, Frankfurt/Main and Rhine Main, includes property that is sold in the context of single privatisation. Block sales are targeted to dispose of property in the course of a portfolio adjustment, especially where location and characteristics no longer correspond to our portfolio strategy. They are predominantly located in the key regions Brandenburg and Rhineland- Palatinate.

The realisation of developments and opportunities on the market does not only impact disposal property. Block sales are also possible in cluster A, if the margin from the disposal is significantly above the value that sustainable management would generate.

The DB 14 portfolio has a special role and is therefore not listed in our own properties.

The division of the property into the described cluster groups has proven itself in the past years and is a dependable basis for the expert evaluation of our properties. However, the analysis of our real property showed that a reorganisation of the properties in the existing clusters is advisable. As the tables show, we strengthened the core portfolio and raised it from 33,507 to 37,546 units. The disposal property decreased by 4,039 units. With the new portfolio profile, we can optimally pursue differentiated developmental strategies for our buildings.

My Annual Report

Reorganisation of the portfolio for 2010