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Outlook According to the German Bundesbank, 2013 can be expected to begin with a temporary weak phase before the economy returns to its growth trajectory. Assuming that the global economy picks up again and the reform process in the eurozone continues to make pro- gress, the German Bundesbank expects a moderate 0.4% increase in real gross domestic product in 2013. As long as the eurozone’s bank and sovereign debt crisis does not intensify any further and uncer- tainty among investors and consumers gradually abates, the real gross domestic product could rise 1.9% in 2014. The temporary economic downturn should not have any negative impact on private consumer demand. According to the German Bundesbank, it will actually bene- fit from a low unemployment rate (7.2% in 2013 and 7.0% in 2014) as well as a slight rise in income. Consequently, the German Bun- desbank anticipates that private consumption in 2013 and 2014 will increase in real terms by 1.0% and 1.3%, respectively. According to estimates from the Handelsverband Deutschland (HDE – German Retail Association), the retail sector should remain stable in 2013. The Association expects slight revenue growth of 1.0% in nominal terms. According to the market research company GfK, consumer climate has also improved somewhat recently. SOUND OUTLOOK FOR OUR SHOPPING CENTERS We expect this positive trend to be echoed in our shopping cent- ers. Restructuring and modernisation work in the Altmarkt-Galerie Dresden (original site) and the Rhein-Neckar-Zentrum will reach completion during the current business year. With the exception of a few small spaces, all leases due to expire were extended. Thus, the occupancy rate across all our shopping centers is currently expected to continue to hover at around 99%. At the end of 2012, the occupancy rate for the total surface was at 98.6%, slightly above the previous year’s level (99.5%). The occupancy rate for retail space stood steady at 99.6%. Only in Árkád Pécs were there any significant vacancies in retail spaces. The remaining vacancies consisted largely of office and storage space. Outstanding rents and necessary valuation allowances remain stable at a low level. We see no sign of a significant change in this satisfac- tory situation. TRANSACTION MARKET REMAINS STRONG Against a background of ongoing uncertainty on the financial markets as well as a fear of both rising inflation and low capital market inter- est rates, the global demand for capital investments that retain value remains strong, particularly in financially well-positioned countries such as Germany. This is still driving demand for properties for which there is insufficient supply. Retail property in particular remains a focus of interest among many institutional investors, leading to very high transaction prices and correspondingly low anticipated returns for core properties. We will therefore continue to monitor develop- ments on the real estate market intensively. As in the past, we will only make new investments if the return that is achievable over the long term bears a reasonable relation to the investment risks. AGREED TRANSACTIONS ARE THE FOUNDATION FOR REVENUE AND EARNINGS PLANNING The Deutsche EuroShop Group’s revenue and earnings planning for 2013 and 2014 does not include the purchase or sale of any proper- ties. The results of the annual valuation of our shopping centers and exchange rate factors are not included in our planning since they are not foreseeable. Forecasts about the future revenue and earnings situation of our Group are based on a) the development of revenue and earnings of the existing shop- ping centers, b) the assumption that there will be no substantial reduction in rev- enue in the retail sector that would cause a large number of retail- ers to no longer be able to meet their obligations under existing leases and c) the switch to equity accounting SWITCH TO EQUITY ACCOUNTING As mentioned several times in the past, the amendments to the Inter- national Accounting Standards regarding the permissibility of pro- portional consolidation of our joint ventures have been approved, yet application of these changes is only mandatory as of 2014. Regard- less of this and as already announced, we will exercise our right as set forth in IAS 31 which permits us to switch to equity accounting as of 1 January 2013. { 137 } DES ANNUAL REPORT 2012 GROUP MANAGEMENT REPORT Outlook

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