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5ANNUAL REPORT 2014 Deutsche EuroShop INTERVIEW Is it time to buy? Wilhelm Wellner: You have to accept the mar- ket. Not only are returns at historical lows; financing costs have also hit a new bottom. It thus also hinges on the relative return of a shopping center that is being offered. It has to pay off in the long run, however, as a low inter- est rate will not cure any structural problems facing a shopping center. It goes without say- ing that other criteria such as location, tenant mix, catchment area and size must fit with our portfolio. In addition, this year we have already ex- amined various options at home and abroad, but so far we have not found any centers that Deutsche EuroShop is actually prepared to add to its portfolio for the prices being asked. Our shareholders can assume that we will stick to and refine our current strategy of targeting high-quality shopping centers and seizing attractive opportunities as and when they arise. Are there other options along- side acquisitions to expand the successful portfolio? Wilhelm Wellner: Yes, there are. The Phoenix- Center in Hamburg-Harburg has been un- dergoing a process of expansion and mod- ernisation since September 2014 at a cost of around €30 million. The sales area of currently 26,500m2 is to be enlarged by just under 10% to 29,000m2 by spring 2016. The center will also receive a modern and very attractively designed food court with seating for around 300 people. This type of culinary offering is very much in vogue. This facility will therefore improve the quality of the overall shopping ex- perience and the frequency of customer visits and – very importantly – will strengthen the on-site offering versus Internet shopping. After all, when you shop online, you can’t meet with friends, shop together or grab a bite to eat. For City Point in Kassel, we are also currently look- ing into the option of integrating a food court. An expansion we have had in the back of our mind for some time is Galeria Baltycka. The land is available, the plans have been drawn up, yet everything still depends on the building per- mits that need to be obtained. This naturally takes a lot of time. We hope we will be able to make a decision on the expansion in 2016. Then, the center in the Polish city of Danzig could house approx. 15,000m2 of additional rental space with some 70 new shops. This is a plan I’m especially ex- cited about, since I’ve been involved with Gale- ria Baltycka from the development phase until market launch and feel I’m in a good position to continue the center’s success story, also in face of its increasing competition. If all three plans come to fruition, we’re talking about investments totalling €80 mil- lion for Deutsche EuroShop. Mr Wellner, you have a great deal of international expertise. Which other countries might you consider for a portfolio expansion? Wilhelm Wellner: We will no doubt continue to focus our portfolio weighting on Germany, whose share currently accounts for around 90%. Nothing is set in stone, however. I, personally, would, however, not be averse to taking a closer look at investments in oth- er European countries alongside our existing markets of Poland and Austria. These countries should be stable politically as well as economi- cally and contribute to the centers’ long-term, stable development. One last question: What is your operating forecast for 2015? Olaf Borkers: We expect revenue to increase by up to 1.5% to between €201 million and €204 million. This albeit slight recovery in rental income can be attributed to the low level of inflation. Building on this, we forecast earnings be- fore interest and taxes to be between €177 mil- lion and €180 million, and earnings before tax excluding valuation gains/losses to be between €126 million and €129 million. This equates to an increase of 2%. For FFO, we expect between €2.14 and €2.28 per share. As a result, the increased dividend to €1.35 per share that has been earmarked for the 2015 financial year will not pose any problems. Thank you for talking to us. And, Mr Böge, all the best for the future. C Olaf Borkers Member of the Executive Board After serving as a ships offi cer with the German Federal Navy, Mr Borkers qualifi ed as a bank clerk with Deutsche Bank AG in 1990. He then stud- ied business administration in Frankfurt/Main. From 1995, Mr Borkers worked as a credit analyst for Deutsche Bank AG in Frankfurt and Hamburg. In 1998, he joined RSE Grundbesitz und Beteiligungs-AG, Hamburg, as assistant to the Executive Board. In 1999, Mr Borkers was appointed to the Executive Board of TAG Tegernsee Immobilien und Beteiligungs-AG, Tegernsee and Hamburg, where he was responsible for finances and inves- tor relations until September 2005. In addition, Mr Borkers held various Supervisory Board and management positions within the TAG Group. Olaf Borkers joined the Executive Board of Deutsche EuroShop AG in October 2005. He is married and has two children. C » We will continue to pursue and carefully refine our current strategy.