DES GB2012 E

OLAF BORKERS: Our portfolio now comprises 20 shopping centers with a market value of €3.8 billion. Built on two lev- els, with a retail space of around 26,000 m2 , the Herold-Center houses some 130 specialist outlets, all of which are let. The center was opened in 1971 and most recently expanded in 2003. Did you explore new avenues with regard to external financing this time? OLAF BORKERS: Yes we did. We issued a our very first con- vertible bond. In doing so we secured financing in the amount of €100 million for a five-year period at an interest rate of 1.75%. That’s a good rate for us, yet at the same time attractive for bond investors who expect DES share prices to rise. CLAUS-MATTHIAS BÖGE: A small capital increase also brought €67.7 million in equity. Why were private shareholders excluded from partici- pating in the capital increase? CLAUS-MATTHIAS BÖGE: I’ve said many times in the past that we prefer to carry out capital increases with subscrip- tion rights for our many loyal private shareholders, as we most recently did twice in 2010. However, there’s been a change in the Wertpapierprospektgesetz (German Securities Prospectus Act). A general securities pro- spectus requirement has been in effect since July 2012, also for the type of rights issue we liked to work with. Since it takes several weeks to draw up a prospectus, the delay that entails as well as the uncertain outcome in a changing capital market environment could become a deal breaker during the purchase process. That’s something we’d like to avoid. Plus drawing up a prospectus is extremely expensive. We only issued around 2.3 million shares in November and chose the quick accelerated book building process to do this. Unfortu- nately when using this process, one which places new shares close to the stock market price, only “qualified investors” can be approached, generally institutional investors, and subscription rights must be excluded for shareholders. Ultimately, though, we were very pleased that both measures were well received on the capital market despite the fact that we were still an unknown quantity for the bond market. The good track record we’ve now been able to establish here, too, should prove beneficial if we ever decide to repeat the move. ? ? But you’ll also continue to rely on classical forms of external financing? OLAF BORKERS: Absolutely! We took advantage of favour- able financing terms for Deutsche EuroShop and were able to reduce the average interest rate of our liabilities from 4.59% to 4.1%, or in other words by 43 basis points. ? DES ANNUAL REPORT 2012 { 10 } Interview with the Executive Board

DES GB2012 E

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