Forecast report

Future Alignment of the Company and the Business Activity

We significantly increased our competitiveness with the successful and speedy integration of Deutsche Wohnen and GEHAG and placed the profitability of the company on a solid foundation. Our managed assets developed very well overall so that further value corrections are not necessary from our current point of view. The debt relief policy initiated in 2008 was accelerated through the income from the capital increase. Today, the debt position is within the margin targeted by us. Loans of overall EUR 900.0 million were renegotiated; the balance-sheet optimisation is thus mostly finalised.

It is now imperative to stabilise the positive developments and to scale the business model. This means on the one hand to systematically utilise the available growth potentials, and on the other hand to generate lasting, external growth in the core regions.

In this respect, there are two goals on which to focus in 2010:

  • We want to continue to improve operationally, leave the years of losses behind, and reinforce the dividend capacity.
  • We want to grow and thus permanently establish ourselves among the large listed companies in Germany.

We have made the following assumptions for the 2010 and 2011 forecasts:

In the 2009 Annual Expert Report of the Council of Experts, an increase of the gross domestic product of 1.6 % is expected for 20109, other forecasts mention a margin of 1.2 % to 1.9 %. For 2011, growth rates of 1.2 % to 2.0 % are published. On this basis, we expect a further consolidation of the economy. In this context, the interest level will also rise again.

In the segment residential property management, we expect increasing rental income and less impact of the vacancy rate so that the rental shortfalls are to be mostly compensated again by the disposals.

In the area of disposals, the privatisation goal of 500 housing units remains unchanged.

The loan repayments will show full effect in 2010 so that the interest charge once again decreases significantly.

Due to the absence of further restructuring costs, we should be able to achieve a balanced and/or slightly positive overall result for the first time in 2010. In 2011, we expect a positive overall result.

For 2010, we anticipate a clear increase of the FFO of more than 10 % from currently EUR 0.43 per share to ca. EUR 0.48 per share. We estimate a comparable level in 2011.

The earnings contributions from the valuation, bloc sales, and/or acquisitions are excluded hereby.

Frankfurt/Main, 3 March 2010

Deutsche Wohnen AG

Michael Zahn, Chief Executive Officer (Signature) Helmut Ullrich, Chief Financial Officer (Signature)
Michael Zahn
Chief Executive Officer
Helmut Ullrich
Chief Financial Officer

9 Council of Experts, Annual Expert Report 2009/2010.

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