DES Q1 2012 e

/ / / 2 DES Interim Report, Q1 2012 Business and Economic Conditions Group structure and operating activities Activities Deutsche EuroShop is the only public company in Germany to invest solely in shopping centers in prime locations. As of the reporting date, it had investments in 19 shopping centers in Germany, Austria, Poland and Hungary. The Group generates its reported revenue from rental income on the space which it lets in the shopping centers. Group’s legal structure Due to its lean personnel structure, the Deutsche EuroShop Group is centrally organised. The parent company, Deutsche EuroShop AG, is responsible for corporate strategy, portfolio and risk management, financ- ing and communication. The Company’s registered office is in Hamburg. Deutsche EuroShop is an Aktiengesellschaft (stock corporation) under German law. The individual shopping centers are managed as separate companies and, depending on the share of nominal capital owned, are either fully or proportionally consolidated or accounted for using the equity method. The share capital amounts to € 51,631,400.00 and is composed of 51,631,400 no-par value registered shares. The notional value of each share is € 1.00. Macroeconomic and sector-specific conditions The debt crisis in Europe is putting a damper on global economic growth. In its economic forecasts for 2012, the German government only antici- pates growth of 0.7 %. That puts its estimate far behind the good growth rates experienced during the past two years when the gross domestic prod- uct grew by more than 3 %. This cautious forecast is mainly attributable to the weak final quarter of 2011. Furthermore, the past few months have brought a drastic worsening of the sovereign debt crisis. We still expect the job market to remain stable, however. The key stim- uli for 2012 are expected to come from domestic demand, particularly from investments and private consumption. An inflation rate of around 2 % is predicted. After contracting for five months in a row, the German retail sector saw a return to growth in March 2012. Compared to February, retail sales in March rose by 1.3 % nominally, with a real increase of 0.8 %. This is the biggest increase since June 2011. Results of Operations, Financial Position and Net Assets Increasing our shopping center shareholdings With effect from 1 January 2012, Deutsche EuroShop AG acquired 5.1 % of the Rathaus-Center Dessau KG, thus taking its sharehold- ing to 100 %. The purchase price of € 5.9 million was paid in early 2012. In addition, with effect from 1 January 2012, around 11 % of the Allee-Center Hamm KG (purchase price € 8.9 million) and 0.1 % of the Rhein-Neckar-Zentrum KG (purchase price € 0.2 million) were acquired. Deutsche EuroShop AG now holds 100 % of the shares in these prop- erties as well. The purchase prices were paid at the end of 2011. These acquisitions resulted in an excess of cost of acquisition over identified net assets acquired in accordance with IFRS 3 in the amount of € 0.3 million, which were reported as an expenditure in measurement gains / losses. Results of Operations Revenue growth of 17 % As of 31 March 2012, rental income amounted to € 51.9 million, nearly 17 % higher than the same period of the previous year (€ 44.4 million). This increase can be attributed to the larger share of revenue generated through the center expansions completed last year in Dresden, Wildau and Sulzbach as well as the acquisition of the Allee-Center Magdeburg (1 October 2011). Rental income from the other portfolio properties increased by 0.9 % compared with the same period last year. Operating and administrative costs for property: 10.3 % of revenue Center operating costs were € 5.4 million in the reporting period, com- pared with € 4.3 million in the same period of the previous year. Costs therefore stood at 10.3 % of revenue (previous year: 9.6 %). Other operating expenses of € 1.5 million Other operating expenses amounted to € 1.5 million, slightly below the previous year’s level (€ 1.6 million). EBIT up 19 % Earnings before interest and tax (EBIT) increased € 7.3 million (+19 %) from € 38.6 million to € 45.9 million. Net finance costs down € 2.3 million At € -21.4 million, net finance costs fell by € 2.3 million. This can be attributed to the fact that both the interest expense (€ +1.4 million) and the profit share for third-party shareholders (€ +0.9 million) have risen substantially as a result of the expansion measures. Furthermore, acqui- sition of the Billstedt-Center on 1 January 2011 was initially funded through equity and then refinanced with a loan in the third quarter of 2011. EBT excluding measurement gains / losses up 26 % Earnings before taxes and measurement increased from € 19.5 million to € 24.5 million to end 26 % higher than the same period of the pre- vious year.

DES Q1 2012 e

Pages