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basic information about the group/economic review basic information about the group economic review group business model long-term leases in shopping centers, which is paid out to shareholders in the form of an macroeconomic and sector-specific conditions deutsche euroshop is an aktiengesellschaft annual dividend. to this end, the company (public company) under german law. the invests its capital in shopping centers in dif- the prospect of continued labour market company’s registered office is in hamburg. ferent european regions in accordance with strength, low inflation and extremely low inter- deutsche euroshop is the only public com- the principle of risk diversification. germany est rates are stimulating consumer spending pany in germany to invest solely in shopping is the main focus for investment. indexed and in germany’s retail sector. the unemploy- centers in prime locations. a total of 21 shop- turnover-linked commercial rents ensure that ment rate at the end of june 2017 stood at ping centers in germany, austria, poland, hun- the high earnings targets are achieved. 5.5%. private consumption remains a driver gary and the czech republic are held in the the company may invest up to 10% of of economic development in germany. accord- real estate portfolio. the group generates its equity in joint ventures in shopping center ing to the federal statistical office, german reported revenue from rental income on the projects in the early stages of development. retail sales (including online spending) rose space it lets in the shopping centers. new investments should be financed from by 1.7% year-on-year in real terms in the first the shopping centers are held by inde- a balanced mix of sources, and borrowing six months of 2017. online retailers were once pendent companies, with deutsche euroshop may not account for more than 55% of financ- again a significant driver of growth here. in holding stakes of 100% in twelve of them and ing across the group over the long term. as contrast, bricks-and-mortal retail recorded a between 50% and 75% in the other nine. the a general rule, long-term interest rates are markedly slower rate of growth and also falls operational management of the shopping fixed when loans are taken out or renewed, in revenue in some segments. centers is contracted out to external service with the goal of keeping the duration (average providers under agency agreements. fixed interest period) at over five years. the group managing company is deutsche euroshop ag. it is responsible for corporate management system strategy, portfolio and risk management, financing and communication. the deutsche the executive board of deutsche euroshop euroshop group has a central structure and manages the company in accordance with the lean personnel organisation. provisions of german company law and with the share capital amounted to € 58,404,996 its rules of procedure. the executive board’s on 30 june 2017 and was composed of duties, responsibilities and business proce- 58,404,996 no-par value registered shares. the dures are laid down in its rules of procedure notional value of each share is € 1.00. and in its schedule of responsibilities. objectives and strategy the management indicators are based on the targets of having shopping centers with sustainable and stable value growth and a the management focuses on investments in high liquidity surplus generated by long-term high-quality shopping centers in city centres leases. these indicators are revenue, ebit and established locations offering stable long- (earnings before interest and taxes), ebt (earn- term value growth. a key investment target is ings before taxes) excluding measurement the generation of high surplus liquidity from gains / losses and ffo (funds from operations). deutsche euroshop ag half-year financial report 2017 2

particular contributed € 2.7 million in the first contributed € +0.5 million to the improved net increase in income taxes half-year of 2017. in addition to this, interest finance costs. expense for the other at-equity accounted taxes on income and earnings amounted to € 14.2 million (previous year: € 11.4 million). of companies fell by € 1.4 million owing to more ebt (excluding measurement gains / losses) this, € 2.6 million (previous year: € 2.6 million) favourable refinancing. up significantly by 12.3% was attributable to taxes to be paid and the interest expense of group companies ebt (excl. measurement gains / losses) rose € 11.6 million (previous year: € 8.8 million) to declined slightly by € 0.2 million. lower inter- from € 65.0 million to € 73.0 million (+12.3%) deferred taxes. est costs due to loan repayments, improved due in particular to expansions of the portfolio. interest conditions and a current short-term interest rate agreement for a loan stood in measurement gains / losses consolidated profit and earnings up significantly contrast to the newly added interest expense influenced by investments at € 56.2 million, consolidated profit was up for the financing of the olympia center. the measurement loss of € -2.6 million (pre- by € 7.5 million compared with the previous other financial expense, which consisted vious year: € -5.0 million) includes investment year (€ 48.7 million). thus basic earnings per mainly of a measurement gain on an inter- costs incurred by our portfolio properties share increased from € 0.90 to € 0.99 (+10.0%). est rate swap for the financing of the alt- (including the at-equity portion) and subject epra earnings per share rose by 8.1% from markt-galerie dresden, profited from the to normal cyclical variations. € 1.111 to € 1.20. year-on-year interest rate development and epra earnings consolidated profit measurement gains / losses investment properties * measurement gains / losses derivative financial instruments * acquisition costs deferred taxes related to epra adjustments ** epra earnings expense for convertible bond epra earnings (diluted) weighted number of no-par value shares issued weighted number of no-par value shares issued (diluted) 01.01. – 30.06.2017 in € thousand 01.01. – 30.06.2017 per share in € 01.01. – 30.06.2016 in € thousand 01.01. – 30.06.2016 per share in € 56,233 2,608 -1,751 276 10,607 67,973 1,172 69,145 0.99 0.05 -0.03 0.00 0.19 1.20 1.15 56,754,256 60,021,528 48,673 4,985 -1,002 358 6,996 60,010 1,172 61,182 0.90 0.09 -0.02 0.01 0.13 1.11 1.07 53,945,536 57,211,375 * including the share attributable to equity-accounted joint ventures and associates ** these concern deferred taxes on investment properties and derivative financial instruments 1 in the half-year financial report dated 30 june 2016, epra earnings stood at € 0.97 per share. in contrast to the previous year, deferred taxes attributable to the change in the tax balance sheet were also included in 2017. in addition, measurement gains / losses on derivative financial instruments were taken into account. the determination of the previous year’s figure was adjusted accordingly. further details on the epra key figures are provided in the “epra report” in the annual report 2016. deutsche euroshop ag half-year financial report 2017 4

reports on events after the balance sheet date/outlook financial position and net assets liabilities current and non-current financial liabilities of outlook € 1,649.8 million were € 204.2 million higher economic conditions significant increase in total assets due than their level at the end of 2016, due to the to the acquisition of the olympia center initial consolidation of the olympia center and the ifo institute revised its gdp forecast the acquisition of the olympia center led to the raising of a long-term € 130 million loan upward for 2017, from 1.5% to 1.8% during an increase in the total assets of the deutsche in the reporting period. non-current deferred the current year. positive consumer senti- euroshop group of € 441.4 million as at the tax liabilities increased by € 65.9 million to ment, strong growth in the construction indus- balance sheet date, and is mainly attributable € 425.2 million due to the acquisition of the try, flourishing foreign trade and the positive to investment properties (€ +374.0 million). olympia center and additional provisions. situation on the job market will continue to furthermore, goodwill of € 53.9 million was other short-term liabilities totalled stimulate the german economy in 2017. with recognised, which was virtually offset by € 81.8 million and comprised a liability for the respect to the performance of brick-and-mor- deferred tax liabilities. the deferred tax lia- distribution of the dividend for the financial tar retailing in 2017, the gfk market research bilities were generated within the scope of the year 2016, which was approved by the annual institute expects nominal growth of 1.0% for acquisition and will not be realised due to our general meeting of deutsche euroshop ag on germany as a whole, 1.8% for austria, 5.3% intention to hold them over the long term. 28 june 2017 and paid out on 3 july 2017. for poland, 5.7% for hungary and 2.8% for the net assets and liquidity excluding the acquisition of the olympia center, total assets grew in the first half of 2017 by € 49.0 million. this was mainly attrib- utable to the increase in cash and cash equiv- alents, which mainly came as a result of the first dividend payment made at the end of the period under review. report on events after the balance sheet date czech republic. the recently opened brexit negotiations, uncertainty surrounding the future us trade policy and the escalating crisis in the relation- ship between germany and turkey, however, harbours risks for further growth. all in all and in light of the good economic conditions in our core market of germany, we remain cautiously optimistic and expect that deutsche euroshop’s business will continue equity ratio of 51.7% no further significant events occurred between to perform positively and according to plan in order to finance the equity required for the balance sheet date of 30 june 2017 and the this year. the acquisition of the olympia center, a cash date of preparation of the financial statements. capital increase was carried out in march by utilizing some of the authorised capi- tal. the deutsche euroshop group obtained € 165 million (before deduction of transaction costs amounting to € 1.4 million) from the capital increase. the equity ratio (including the shares of third-party shareholders) was 51.7%, slightly down compared to the last reporting date (54.5%). deutsche euroshop ag half-year financial report 2017 6

consolidated balance sheet consolidated balance sheet assets liabilities in € thousand assets non-current assets intangible assets property, plant and equipment equity and liabilities equity and reserves 53,893 224 29 267 issued capital capital reserves 30.06.2017 31.12.2016 in € thousand 30.06.2017 31.12.2016 58,405 1,121,553 878,441 53,945 961,970 900,233 investment properties 3,895,804 3,520,824 retained earnings investments accounted for using the equity method other financial assets non-current assets current assets trade receivables other current assets cash and cash equivalents current assets 517,075 515,361 52 52 total equity 2,058,399 1,916,148 4,467,048 4,036,533 2,234 8,314 127,227 137,775 6,601 7,277 64,046 77,924 non-current liabilities financial liabilities deferred tax liabilities right to redeem of limited partners other liabilities 1,527,965 1,242,754 425,222 324,596 44,231 359,365 324,559 49,083 non-current liabilities 2,322,014 1,975,761 current liabilities financial liabilities trade payables tax liabilities other provisions other liabilities current liabilities 121,815 202,827 2,869 860 5,901 92,965 224,410 1,394 649 6,644 11,034 222,548 total assets 4,604,823 4,114,457 total equity and liabilities 4,604,823 4,114,457 deutsche euroshop ag half-year financial report 2017 8

consolidated cash flow statement consolidated cash flow statement in € thousand consolidated profit income taxes net finance costs depreciation of intangible assets and property, plant and equipment unrealised changes in fair value of investment property distributions and capital repayments received changes in trade receivables and other assets changes in current provisions changes in liabilities cash flow from operating activities interest paid interest received income taxes paid net cash flow from operating activities outflows for the acquisition of investment properties inflows from disposal of intangible assets and property, plant and equipment outflows for the acquisition of intangible assets and property, plants and equipment inflows from the disposal of financial assets acquisition of subsidiary (net of cash acquired) cash flow from investing activities inflows from financial liabilities outflows from the repayment of financial liabilities payments to limited partners inflow from capital increase payments to group shareholders cash flow from financing activities net change in cash and cash equivalents cash and cash equivalents at beginning of period cash and cash equivalents at end of period 01.01. – 30.06.2017 01.01. – 30.06.2016 * 56,233 14,074 19,980 28 2,209 13,041 3,852 -743 -3,654 105,020 -26,060 20 -4,056 74,924 -3,250 27 -9 0 -199,437 -202,669 130,000 -93,440 -9,221 163,587 0 190,926 63,181 64,046 127,227 48,673 11,382 25,521 37 3,249 11,787 4,714 -1,093 -5,218 99,052 -26,284 46 -2,455 70,359 -12,108 51 -11 2,820 0 -9,248 30,000 -8,541 -9,709 0 -72,826 -61,076 35 70,699 70,734 * in order to improve the presentation of the financial position, the cash flow statement has been revised and the statement from the previous year ad- justed in line with the new recognition standards. in so doing, there were no changes in the cash flows from operating activities, investment and finance activities in the previous year. essentially, the adjustments involved the disclosures previously made in the annex in relation to interest and tax payments being transferred to the cash flow statement, the separate recognition of dividends and cash payments received and the unnetted recognition of inflows and outflows from financial liabilities deutsche euroshop ag half-year financial report 2017 10

disclosures on the consolidated balance sheet and the consolidated income statement value of future net payments expected to be individual performance indicators as well as received from hedging transactions (level 2 to the group’s success. in comparison to the in accordance with ifrs 13) based on cur- previous procedure, the income, expenditure, rent interest rate yield curves. liabilities assets and liabilities of the joint ventures will from interest rate hedges came to € 42.6 mil- in future be consolidated proportionately with investment properties lion as at 30 june 2017 (31 december 2016: their group share in the internal reports. pre- property held as a financial investment € 48.7 million). (ias 40) is measured at fair value. in the viously, these were recorded using the at-eq- uity method, as ifrs 11 also stipulates for absence of special events (such as a new segment reporting external reports. acquisition), fair values are determined by an similarly, for subsidiaries in which the external appraiser on an annual basis as at segment reporting by deutsche euroshop group is not the sole shareholder, income, the 31 december reporting date. ag is carried out on the basis of internal expenditure, assets and liabilities are no jones lang lasalle gmbh performed reports that are used by the executive board longer consolidated in their entirety but only this appraisal as at 31 december 2016 using to manage the group. internal reports distin- proportionately according to the correspond- the discounted cash flow method (dcf). the guish between shopping centers in germany ing group share. this results in the segments approach used under this method as well (“domestic”) and other european countries being divided as followed: as the related valuation parameters are (“abroad”). explained in the consolidated financial state- ments as at 31 december 2016 (annual report 2016, pp. r37 and r39 ff.). this is a valuation breakdown by geo graphical segment method from level 3 of the fair value hierarchy as set out in ifrs 13. mid-year changes to properties held as a financial investment result mainly from the first consolidation of the olympia center. financial instruments with the exception of derivative financial instruments and other financial investments in € thousand revenue (01.01. – 30.06.2016) ebit (01.01. – 30.06.2016) ebt excl. measurement gains / losses (01.01. – 30.06.2016) domestic 97,252 (95,276) 86,838 (84,919) inter- national 15,610 (10,327) 14,305 (9,500) total 112,862 (105,603) 101,143 (94,419) recon- ciliation 01.01. – 30.06.2017 -7,067 (-3,773) -8,647 (-5,594) 105,795 (101,830) 92,496 (88,825) 63,241 (60,819) 12,505 (6,698) 75,746 (67,517) -2,713 (-2,477) 73,033 (65,040) 30,06,2017 measured at fair value, financial assets and liabilities are measured at amortised cost. segment assets (31.12.2016) 3,409,640 (3,417,174) 797,691 (357,083) 4,207,331 (3,774,257) 397,492 (340,200) due to the predominantly short-term nature of trade receivables, other assets and other liabilities and cash and cash equivalents, the carrying amounts on the reporting date do not of which investment properties (31.12.2016) 3,382,464 (3,382,151) 719,030 (344,330) 4,101,494 (3,726,481) -205,690 (-205,657) 4,604,823 (4,114,457) 3,895,804 (3,520,824) deviate significantly from the fair values. as the group’s main decision-making body, the adjustment of the proportionate the fair values of financial liabilities the deutsche euroshop ag executive board consolidation of the joint ventures and sub- measured at amortised cost correspond to first and foremost assesses the performance sidiaries in which the group does not own a the cash values of debt-related payments of the segments based on revenue, ebit and 100% stake is carried out in the reconciliation based on current interest rate yield curves ebt excluding measurement gains / losses. column. further, this still includes the elim- (level 2 in accordance with ifrs 13) and the measurement principles for segment ination of intra-group activities between the amount to € 1,738.8 million as at 30 june 2017 reporting correspond to those of the group. segments. (31 december 2016: € 1,549.3 million). at the start of the financial year 2017, an in view of the geographical segmentation, the derivative financial instruments meas- internal report was further developed with the no further information pursuant to ifrs 8.33 ured at fair value are interest rate hedges. aim of being better able to assess the con- is given. here the fair value is equivalent to the cash tribution of the respective segments to the deutsche euroshop ag half-year financial report 2017 12

financial calendar 2017/contact financial calendar 2017 15.08. half-year financial report 2017 04. – 05.09. des real estate summer, brno 12. – 13.09. boa merrill lynch global re conference, new york 18.09. goldman sachs & berenberg german conference, munich baader investment conference, munich 19.09. 28.09. 29.09. 16.11. 17.11. 17.11. 21.11. 29.11. 05.12. natixis european mid caps conference, paris amsterdam roadshow, société générale brussels roadshow, kempen & co dz bank equity conference, frankfurt supervisory board meeting, hamburg berenberg european conference, pennyhill supervisory board meeting, hamburg 11. – 12.12. hsbc global real estate conference, cape town société générale pan european real estate 18. – 19.12. abu dhabi & dubai roadshow, berenberg conference, london 04. – 06.10. expo real, munich 06. – 07.11. tel aviv roadshow our financial calendar is updated continuously. please check our website for the latest events: 15.11. quarterly statement 9m 2017 http://www.deutsche-euroshop.com/ir would you like additional information? then visit us online or call us: patrick kiss and nicolas lissner tel.: +49 (0)40 - 41 35 79 20 / -22 fax: +49 (0)40 - 41 35 79 29 www.deutsche-euroshop.com/ir e-mail: ir@deutsche-euroshop.de forward-looking statements rounding and rates of change this quarterly statement contains forward-looking statements based percentages and figures stated in this report may be subject to rounding on estimates of future developments by the executive board. the state- differences. the rates of change are based on economic considerations: ments and forecasts represent estimates based on all of the informa- improvements are indicated by a plus (+); deterioration by a minus (-). tion available at the current time. if the assumptions on which these statements and forecasts are based do not materialise, the actual re- sults may differ from those currently being forecast. deutsche euroshop ag half-year financial report 2017 14