Deutsche EuroShop AG Annual Report 2018 Englisch

Introduction and overview
Content
Shopping
Center overview
Investor relations
Combined management report
Consolidated financial statements
Service

DEUTSCHE EUROSHOP OVERVIEW in € millions Revenue EBIT Net finance costs Measurement gains / losses EBT Consolidated profit FFO per share in € Earnings per share in € * EPRA Earnings per share in € * Equity ** Liabilities Total assets Equity ratio in % ** LTV-ratio in % Cash and cash equivalents Net asset value (EPRA) Net asset value per share in € (EPRA) Dividend per share in € * undiluted ** incl. non controlling interests *** proposal RE V ENUE in € million EBIT in € million EB T * in € million 2018 225.0 199.1 -41.3 -55.7 102.1 79.4 2.43 1.29 2.39 2.573.4 2.036.8 4.610.2 55.8 31.8 116.3 2.667.5 43.17 1.50*** 2017 Difference 218.5 192.4 -35.1 8.6 165.8 134.3 2.54 2.31 2.42 2.574.9 2.052.1 4.627.0 55.6 32.4 106.6 2.668.4 43.19 1.45 3% 4% -18% -38% -41% -4% -44% -1% 0% -1% 0% 9% 0% 0% 3% FFO in € million Result Goal Goal 153 150 150.4 151 148 FFO per share in € Result 225.0 Goal Goal 222 – 226 222 – 226 Result 199.1 Goal Goal 194 – 198 194 – 198 Result 160.9 Goal Goal 159 – 162 161 – 164 Result 2.43 Goal Goal 2.40 – 2.44 2.43 – 2.47 2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020 * excluding measurement gains / losses

EDITORIAL also to offer visitors a contemporary, interest- ing and pleasant shopping environment. Initial customer surveys reveal that in this respect we are successfully meeting the tastes and needs of our center guests. We are also pressing ahead with digitalisa- tion – we recently provided our Main-Taunus- Zentrum and Altmarkt-Galerie Dresden with a digital twin, a “digital mall”. This means that our customers already have online access to around half a million products, which are searchable, comparable across shops and reservable without obligation with just a few clicks. This provides a true omnichannel experience for a steadily growing number of products and brands. Much is still in the development stage. One particularly inter- esting idea is to deliver the products that are available in the shops of our centers in the best locations directly from there. As many of our customers live in the immediate vicinity of our centers, this gives us the opportunity of offering them an optimal service at any time – whether offline, online or mixture of both. I hope you enjoy reading our report and thank you for the trust you place in us. Best regards Wilhelm Wellner CEO DEAR READERS, Deutsche EuroShop closed financial year 2018 with sound operating results and even exceeded its own forecasts, despite the ambivalent nature of the market environ- ment for bricks and mortar retail. Although consumption continued to be buoyed by the growing economy, the dynamic growth of online retail continued to pose a challenge for some retailers. A look at the stock market also reveals a nuanced picture. Last year the price of our share fell – despite our good operating results – to clearly below its intrinsic value. Shopping center shares across the globe are following this trend, which is mainly attribut- able to the transformation process under way in the retail sector. In view of these developments, it is par- ticularly worthwhile examining our shopping center portfolio in detail. Our current annual report provides you with many interesting insights into our business and how we oper- ate it. We show you how our centers can continue to position themselves as vibrant marketplaces in the future and how they can be optimally integrated into the omnichannel shopping world. In keeping with the motto “show & room” we present our centers as shopping destina- tions that remain just as attractive as ever and adapted continuously to the wishes of customers. We offer a lively platform and lots of space to successful shop concepts and events where they can showcase themselves live and try out new things. This makes our centers interesting places in which custom- ers can discover and marvel, experience and dream, and feel and enjoy their surroundings. To keep it that way, we are making extensive investments over the next few years in our “At your service” and “Mall beautification” pro- grammes. This enables us to not only keep our centers state of the art in technical terms, but D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 0 1

S H OW RO OM d n a n O i t c u d O r t n i / s l a o g r u O / s e u l a v r u O 001 INTRODUCTION U2 Overview 001 Editorial 002 Our values / our goals 004 Interview with the Executive Board 010 Report of the Supervisory Board 098 126 COMBINED MANAGEMENT REPORT INVESTOR RELATIONS 098 The shopping center share 106 Annual general meeting 107 Conferences and roadshows 108 Marketing 112 Corporate governance 120 EPRA reporting 189 SERVICE 190 Glossary 193 Legal / Disclaimer 194 Financial calendar 2019 195 Multi-year overview 016 044 155 SHOPPING CENTER CONSOLIDATED FINANCIAL STATEMENTS 024 Omnichannel-trends 028 What I bought myself in 2018 030 E-Commerce 034 GO and buy somewhere else! 038 Forsa survey 040 Consumption forecast for 2019 044 Center overview 062 Our portfolio 072 Activities in the centers 074 Environment 082 Practical example: tenant 086 Book recommendation 090 New services 094 The factor behind success: Shoplifter! The shop 097 Digital malls OUR VALUES OUR GOALS We are the only public company in Germany that invests solely in shop- Deutsche EuroShop does not seek short-term success, but rather the ping centers in prime locations. We invest only in carefully chosen stable increase in the value of our portfolio. Our objective is to generate properties. High quality standards and a high degree of flexibility are a sustainably high surplus liquidity from the longterm leasing of our just as important to us as sustained earnings growth from index- and shopping centers to distribute an attractive dividend to our share- turnover-linked rental contracts. In addition, we boast a higher than holders every year. In order to achieve this, we shall acquire further average occupancy rate of around 99% and professional center man- prime properties and hence establish ourselves as one of the largest agement – these are the pillars of our success. companies in Europe focusing on retail properties. 2 0 0

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 0 5 OLAF BORKERS WILHELM WELLNER “OUR SALES REVENUES ROSE BY THREE PERCENT.” OLAF BORKERS Mr. Borkers, Mr. Wellner, can you please outline the most significant results of the past financial year? Olaf Borkers: Operationally, we again enjoyed success in 2018 and we are happy with the results. Our sales revenues rose by three per- cent to 225.0 million euros, and earnings before interest and tax stood at 199.1 mil- lion euros which represents a year-on-year increase of 3.5 percent. In terms of pre-tax earnings and excluding measurement gains or losses, we saw a significant increase of 5 percent to 160.9 million euros. Our FFO figure also increased by 1.5 percent to 150.4 million euros which represents a good performance. Wilhelm Wellner: The positive factors driv- ing this growth included expansion of the portfolio carried out in the last few years, the continued stability of occupancy rates and operating expense ratios as well as low interest expenses. When we evaluate the portfolio, we see the first small dip since 2009 after many years of appreciable rises in shopping center prices. The highly competitive environment in bricks and mortar retail, the growth of e-commerce and with it the modified expectations for rent rises were reflected in investors’ reluctance to purchase and the resulting rise in returns on purchase for shopping centers in Germany. Together with higher investments in the modernisation and positioning of the existing portfolio, this led to a slight average fall in property values and a measurement loss of -58.3 million euros.

SHOW ROOM d n a n O i T C U D O R T n i / d r a o B e v i t u c e x E e h t h t i w w e i v r e t n I 6 0 0 WILHELM WELLNER OLAF BORKERS The overall picture, however, is gratifying. Our operating earnings, EPRA earnings, posted positive growth, climbing by 4.3 percent to 147.4 million euros, and the EPRA Net Asset Value remained almost unchanged from last year’s level at 43.17 euros per share. Congratulations, you have thus surpassed your own 2018 forecasts – were you too pessimistic? Wilhelm Wellner: I don’t think we were pessi- mistic. However, we have become somewhat more cautious in our budgeting of rent and cost increases in the prevailing market envi- ronment facing bricks and mortar retail. But, of course, we are delighted by the continued positive growth in turnover and we will be happy if we are positively surprised by lower than budgeted interest expenses and very low bad debt allowances on rent receivables. What are the success factors underlying Which centers have given you more pleas- Deutsche EuroShop’s future business ure: those in Germany or the ones abroad? model? What makes your shopping centers so attractive to retailers and their customers? Wilhelm Wellner: The most important suc- cess factors for a shopping center are and remain its location, first-class shopping and a high quality mall experience. Our centers are all to be found in the heart of town or in estab- lished locations. More than 175 million people visit our centers every year. We offer these customers a special shopping experience. Wilhelm Wellner: You should look at the portfolio as a whole because every center is subject to its own local market influences and cycles. But if you force me to name some highlights, they would be as follows: The City- Arkaden in Wuppertal and the Olympia Center in Brno posted the highest growth in footfall, while the Main-Taunus Center and the Árkád Pécs were among the front runners in terms of retail sales. The highest growth in rental income was posted by the Phoenix-Center in Harburg and the City-Arkaden in Klagenfurt. And when it comes to measurement gains or losses, our centers in Passau and Pécs gave us the greatest pleasure last year.

“THE MOST IMPORTANT SUCCESS FACTORS FOR A SHOPPING CENTER ARE AND REMAIN ITS LOCATION, FIRST- CLASS SHOPPING AND A HIGH QUALITY MALL EXPERIENCE.” WILHELM WELLNER You said yourself bricks and mortar retail You are budgeting a further increases is having a tough time at present. How in the dividend in 2019 and 2020, from are you responding to the new challenges 1.50 euros to 1.55 euros and 1.60 euros. facing retail? Wilhelm Wellner: Deutsche EuroShop is con- tinuously investing in the attractiveness of its shopping centers, as it has in previous years. In 2018, we launched separate programmes which in future will ensure further improve- ments in comfort and a great mall experience under the banners of “At your Service” and “Mall Beautification”. Both together will secure good footfall which represents an important platform for the success of our business. Olaf Borkers: By the way, we are funding the investments mentioned largely from self-generated resources, our Funds from Operations. Once again, this clearly shows the high earning power of our existing properties. Olaf Borkers: Deutsche EuroShop has a stake in 21 nearly fully let shopping centers which generate predictable cash flows. This enables us to raise the prospect of further increases in the dividend for this and next year. Online retail is growing in importance. Do you see this as a threat to your shopping centers? Wilhelm Wellner: Online retail is a challenge and an opportunity at one and the same time. Customers are frequently in search not just of a product but also all the trappings that go with it – the shopping experience. This is what they find in our shopping centers and much more besides, for example special services and the immediate availability and compa- rability of numerous products. Even if the market environment is not easy, we remain an interesting partner for physical retail shops with our well established locations and high footfall. Online and offline worlds are not separate any longer – they continue to grow together. We are currently focusing on rolling out our Digital Mall concept, the digital twin of a shopping center, where in future it will be possible to search, select and reserve the products available in a center with a few clicks on your smartphone. Even if much of this is still under construction, I see it as a very exciting development. Deutsche EuroShop is at the forefront of this process, and our Altmarkt-Galerie in Dresden and the Main-Taunus Center near Frankfurt will be among the first Digital Malls. In spite of these good figures, the Deutsche EuroShop stock is trading well below the value of its assets. What are the reasons for this? Wilhelm Wellner: The value of our assets determined by means of an expert report, the so-called Net Asset Value, stands at a good 43 euros per share but at the end of the year, the share price was around 40 percent lower. This discount continues to reflect the marked uncertainty on the part of sharehold- ers – as with most shopping center shares around the world – due to the rapid growth in online retailing and the major challenges facing physical retail outlets. Even if these challenges are real, the discrepancy seems exaggerated. In this phase of the market, we are there- fore focusing on intensive, transparent com- munication with all stakeholders with respect to the operating growth of our centers. We continue to expect stable rental income for these centers which will form an excellent basis for an interesting dividend return at today’s share price. We are optimistic that over time, the mar- kets will once again give greater weight to our success and that the Net Asset Value and the share price will converge again. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 0 7

SHOW ROOM d n a n O i T C U D O R T n i / d r a o B e v i t u c e x E e h t h t i w w e i v r e t n I 8 0 0 “LOW INTEREST EXPENSES HAVE A DIRECT, POSITIVE EFFECT ON OUR EARNINGS.” OLAF BORKERS What can you do to increase earnings in the What are these targets? Do you hold shares in Deutsche EuroShop next few years? yourself? Wilhelm Wellner: In the current year, we are expecting stable turnover more or less at the level of the previous year, in a range between 222 and 226 million euros. This should result in EBIT between 194 and 198 million euros with a slight increase in property operating expenses. On this basis, we then expect pre- tax operating earnings – we call it EBT excl. measurement gains or losses – of between 159 and 162 million euros. For Funds from Operations, we are budgeting 148 to 151 mil- lion euros or 2.40 to 2.44 euros per share. What is the outlook for future dividends? Olaf Borkers: With the steady operating growth expected and further possible sav- ings in finance costs, Deutsche EuroShop’s earnings level can continue to improve in the future, thereby offering a solid basis for attractive dividends. Olaf Borkers: More than 450 million euros of property loans will be due for refinancing within the next three years. The loans expir- ing have an average interest rate of around 4.50 percent. We are currently able to finance our operations at interest rates significantly below 2.0 percent. Low interest expenses have a direct, positive effect on our earnings. What can we expect from DES in 2019 in operating terms? Wilhelm Wellner: In an environment of rapidly growing online retailing and further increases in the space available, we cannot expect the business to become significantly easier in 2019. However, we see ourselves as opera- tionally well positioned with our portfolio and the investment and digitisation measures already initiated. As long as retailers’ – in some cases very individual – problems are not compounded and the general economic situation continues to improve, as expected, we should comfortably hit our targets this year, too. Wilhelm Wellner: Yes. We believe in the sus- tainable success of the business. Olaf Borkers: And with a dividend return cur- rently of around 5.7 percent, the stock is an attractive investment for shareholders with a long-term perspective. Thank you for talking to us and for giving such open and honest responses. THE INTERVIEW w a s co n d uc te d by Nicol a s Li ss n er.

THE EXECUTIVE BOARD Wilhelm Wellner is a trained banker who earned a degree in business management from the University of Erlangen-Nuremberg and a Master of Arts (economics) degree from Wayne State University Detroit. He started his professional career at Siemens AG in 1996 as a specialist for international project and export finance. In 1999 Mr Wellner took a position as a senior officer in the area of corpo- rate finance at Deutsche Lufthansa AG, where he was responsible for a variety of capital market trans- actions and supervised numerous M&A projects. In 2003 Mr Wellner switched to ECE Projektmanage- ment G.m.b.H. & Co. KG in Hamburg, Europe’s market leader in the area of inner-city shopping centers. As the international holding company’s Chief Financial Officer, he helped shape the expansion of this shopping center developer and was appointed Chief Investment Officer of the ECE Group in 2009. From 2012 to 2014 Mr Wellner served as Chief Financial Officer of the finance, human resources, legal affairs and organisation departments at Railpool GmbH, a Munich-based leasing company for rail vehicles. Mr Wellner joined the Executive Board of Deutsche Euro- Shop AG at the start of 2015. He is married and has two children. OLAF BORKERS MEMBER OF THE EXECUTIVE BOARD WILHELM WELLNER SPOKESMAN OF THE EXECUTIVE BOARD After serving as a ships officer with the German Federal Navy, Olaf Borkers qualified as a bank clerk with Deutsche Bank AG in 1990. He then studied business administration in Frankfurt / Main. From 1995, Olaf 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 Exec- utive Board. In 1999, Mr Borkers was appointed to the Executive Board of TAG Tegern- see Immobilien und Beteiligungs-AG, Tegernsee and Hamburg, where he was responsible for finances and investor relations until September 2005. In addition, Mr Borkers held var- ious Supervisory Board and manage- ment 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. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 0 9

SHOW ROOM d n a n O i T C U D O R T n i / d r a o B y r o s i v r e p u S e h t f o t r o p e R 0 1 0 REPORT OF THE SUPERVISORY BOARD DEAR SHAREHOLDERS, Below I would like to report to you on the work of the Supervisory Board in the past financial year. COLLABORATION BETWEEN THE SUPERVISORY BOARD AND THE EXECUTIVE BOARD During financial year 2018, the Supervisory Board performed the duties incumbent on it according to the law and the Articles of Asso- ciation and closely oversaw the performance of Deutsche EuroShop AG. The Executive Board coordinated the strategic orientation of the Company with the Supervisory Board, and discussed the status of implementing the strategy with us at regular intervals. The Supervisory Board monitored and advised the Executive Board on its management of the business, and the Executive Board informed us regularly, promptly and in detail of busi- ness developments. As the Chairman of the Supervisory Board, I was kept up to date in timely fashion by the Executive Board on all important events of significance for assessing the Company’s situation, development and its management. I was also given ongoing, detailed briefings between meetings of the Supervisory Board and its committees in regular conference calls with the Executive Board. FOCUS OF ADVISORY ACTIVITIES We conducted detailed examinations of our Company’s net assets, financial position, results of operations and risk management at our regular meetings. In this context, we also checked that the formal conditions for imple- menting an efficient system of monitoring our Company were met and that the means of supervision at our disposal were effective. We were informed on an ongoing basis of all significant factors affecting the business. We considered the development of the portfolio properties, specifically their sales and frequency trends, the accounts receiva- ble and occupancy rates, and the Company’s liquidity position. At meetings held over the course of the year, in-depth discussions took place regularly regarding the Company’s strategy as well as the question of how the REINER STRECKER CHAIRMAN Company should operate in an environment of continuing low interest rates, declining inter- est on the part of investors in retail property in Germany during the course of the year with tenants reporting falling footfall and lower sales due to the growth of online retailing. The extensive investment programme for 2018 to 2022 aimed at enhancing the com- petitiveness of our shopping centers contin- ued to be the subject of intensive discussions as were the opportunities open to operators going forward to drive the further integra- tion of online and offline retailing. Regular discussions were conducted with the Exec- utive Board regarding trends on the capital, credit, real estate and retail markets and the effects of these on the Company’s strategy. The Executive Board and Supervisory Board examined various investment and refinancing options. We received regular reports detailing the turnover trends and payment patterns of our tenants and banks’ lending policies. The Executive Board and Supervisory Board also held regular discussions on how the Company was valued by the stock market and its par- ticipants and made peer group comparisons.

The Chairman of the Supervisory Board and the Executive Committee of the Supervisory Board also discussed other topical issues with the Executive Board as required. Transactions requiring the approval of the Supervisory Board or a committee were discussed and decided on at the scheduled meetings. Where required, circular resolutions were passed in writing by the Supervisory Board and the responsible committee for transactions of the Executive Board requiring approval. All res- olutions in the reporting period were passed unanimously. To avoid conflicts of interest, any parties affected abstained from voting. Some meetings were held without the Exec- utive Board present. MEETINGS Four ordinary Supervisory Board meetings were held during financial year 2018. No member of the Supervisory Board attended only half or fewer than half of the meetings of the Supervisory Board and the committees April meeting At the first ordinary meeting held on 25 April 2018, the main focus was the Exec- utive Board’s presentation of the financial, accounting and tax aspects of the 2017 annual financial statements. The auditor also pro- vided an explanation of the results of his audit of the annual financial statements. During the subsequent discussion of the annual financial statements, we again attached great impor- tance this year to the explanations of the Exec- utive Board and those of the auditor concerning the real estate appraisals. We also discussed the Company’s dividend strategy with the Executive Board on the basis of longer-term corporate planning scenarios. The Executive Board presented current acquisition oppor- tunities and reported on the implementation of restructuring and modernisation concepts Meetings of the Supervisory Board Reiner Strecker (Chairman) Karin Dohm (deputy Chairwoman) Thomas Armbrust Beate Bell Manuela Better Dr Henning Kreke Alexander Otto Klaus Striebich Roland Werner Committee meetings Reiner Strecker (Chairman) Karin Dohm (deputy Chairperson) Thomas Armbrust Telephone conferences Reiner Strecker (Chairman) Karin Dohm (deputy Chairperson) Thomas Armbrust + = attended - = excused 25.04.2018 28.06.2018 28.09.2018 29.11.2018 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + - + - + + Executive Committee 11.04.2018 Audit Committee 11.04.2018 Executive Committee 29.11.2018 + + + + + + + + + Audit Committee 11.05.2018 Audit Committee 12.08.2018 Audit Committee 12.11.2018 + + + + + + + + + on which they serve during the reporting year. You can find the individual attendance record of members of the Supervisory Board in meetings of the Supervisory Board and its committees in the following overview. for individual centers. ECE also presented further details of its concept for enhancing the attractiveness of the centers. Finally, the agenda item for the Annual General Meeting was unanimously adopted. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 1 1 June meeting After the Annual General Meeting re-elected Dr. Henning Kreke and Alexander Otto to the Supervisory Board on 28 June 2018, we tackled the reorganisation of the Super- visory Board in the subsequent meeting on the same day. The distribution of responsi- bilities remained unchanged after the corre- sponding elections. The Executive Board then explained the current status of the project for extending Galeria Baltycka in Danzig as well as the noticeable decline in activity on the investment market for shopping centers in Germany. In addition, the Executive Board reported to us on the current follow-on financing for the shopping centers in Wildau and Neunkirchen. September meeting At our third meeting on 28 September 2018, we carried out an in-depth examination of the Company’s strategy and the measures and methods to be derived from it in view of the competition facing bricks-and-mortar retailing from online retailing which contin- ues to increase. Possible sales scenarios for individual shopping centers were also dis- cussed. It was agreed that ECE should pres- ent the digitisation options for our portfolio to our Company’s Supervisory Board. Finally, we discussed basic considerations with the Executive Board with regard to a share buy- back. At this meeting, we decided to extend Mr. Borkers’ contract of employment until September 2022. November meeting The final meeting of the year was held on 29 November 2018 in Brno in the Czech Republic after we had visited our shopping center “Olympia” the day before to find out the current situation and after viewing two fur- ther competitive centers. The Executive Board reported to us in the meeting on letting activ- ity and on the implementation of investment measures, in particular the programmes “At your service” and “Mall beautification” in var- ious centers. In addition, the Executive Board presented the latest

SHOW ROOM d n a n O i T C U D O R T n i / d r a o B y r o s i v r e p u S e h t f o t r o p e R 2 1 0 developments in the shopping center invest- ment market. We discussed the medium-term corporate planning presented by the Execu- tive Board in some detail as well as current developments in the retail market. Finally, we discussed the results of an analysis of the Executive Board on the possible impact of a share buyback on the Company’s key indicators. COMMITTEES The Supervisory Board has established three committees: the Executive Committee, the Audit Committee and the Capital Market Committee. Each of the committees is made up of three members. The Executive Com- mittee of the Supervisory Board functions simultaneously as a nomination committee. Given the size of the Company and the number of Supervisory Board members, we consider the number of committees and committee members to be appropriate. During the reporting period, the Executive Committee and the Audit Committee convened on 11 April 2018 for a regular meeting. The Executive Committee also met on 29 Novem- ber 2018 for a meeting in connection with the extension of Mr. Borkers’ contract as Chair- man of the Executive Board. The Audit Committee also discussed the quarterly financial reports with the Exec- utive Board in conference calls on 11 May, 12 August and 12 November 2018. CORPORATE GOVERNANCE In November 2018, together with the Execu- tive Board, we issued an updated declaration of conformity in relation to the recommenda- tions of the Government Commission pursu- ant to section 161 of the Aktiengesetz (German Public Companies Act – AktG) and made this permanently available on the Deutsche EuroShop AG website. A separate report on the implementation of the German Corporate Governance Code (DCGK) is included in this Annual Report. The members of the Supervi- sory Board and the Executive Board declared in writing at the beginning of 2019 that no con- flicts of interest had arisen during financial year 2018. After the Supervisory Board decided as early as 2017 that the Chairman of the Supervisory Board can conduct talks with investors on topics of relevance to the Supervisory Board in accordance with the recommendations of the DCGK and the “Principles for Dialogue between Investor and Supervisory Board”, I conducted such talks for the first time on an occasional basis in 2018. These talks gave us further insights into the investors’ perspec- tive of our corporate governance and the remuneration of the Executive Board. Klaus Striebich has been an independ- ent member of the Supervisory Board since 1 April 2019 after terminating his business relationships with companies affiliated to the major shareholder Alexander Otto. Six of the total of nine members of the Supervisory Board have therefore been inde- pendent since 1 April 2019. FINANCIAL STATEMENTS OF DEUTSCHE EUROSHOP AG AND THE GROUP FOR THE PERIOD ENDING 31 DECEMBER 2018 At the Audit Committee meeting on 11 April 2019 and the Supervisory Board meeting on 25 April 2019, the Audit Committee and the Supervisory Board respectively exam- ined in detail the annual financial statements of Deutsche EuroShop AG in accordance with German commercial law, and the consolidated financial statements in accordance with Inter- national Financial Reporting Standards (IFRS), each as at 31 December 2018, as well as the management report and group management report for financial year 2018. The auditor explained to us all matters which he regarded as being of particular significance for his audit of the consolidated financial statements, doing so in a manner that was easy to follow. The Supervisory Board shares the auditor’s assessment of the importance of these mat- ters for the consolidated financial statements. You can find details of these matters in the auditor’s report. The documents relating to the financial statements, the auditor’s reports and the Exec- utive Board’s proposal for the utilisation of the unappropriated surplus were presented to us in good time. The auditor appointed by the Annual General Meeting on 28 June 2018 – BDO AG Wirtschaftsprüfungsgesellschaft, Hamburg – had already audited the financial statements and issued an unqualified audit opinion in each case. The auditor also confirmed that the accounting policies, measurement methods and methods of consolidation in the consoli- dated financial statements complied with the relevant accounting provisions. In addition, the auditor determined in the course of its assess- ment of the risk management system that the Executive Board had undertaken all required measures pursuant to section 91 (2) AktG to promptly identify risks that could jeopardise the continued existence of the Company. The auditor’s representatives took part in the discussion of the annual financial state- ments and the consolidated financial state- ments on the occasions of the Audit Committee meeting on 11 April 2019 and the Supervisory Board meeting on 25 April 2019 and explained the main findings. The Supervisory Board has come to the conclusion that there are no objections to be raised against the annual financial state- ments or the audit conducted by the auditor. The combined management report meets statutory requirements in the opinion of the Supervisory Board. The Supervisory Board agrees with the statements in the management report on the further growth of the Company. The Supervisory Board has issued its agree- ment with the result of the audit of the annual financial statements and approved the annual financial statements of Deutsche EuroShop AG and the consolidated financial statements of the Deutsche EuroShop Group; the annual financial statements are therefore approved. The Supervisory Board also followed the profit appropriation proposal of the Executive Board to distribute a dividend of € 1.50 per share. The Supervisory Board thanks the Exec- utive Board and all employees of Deutsche EuroShop AG for their great commitment and for their excellent performance once again in the 2018 financial year. Hamburg, 25 April 2019 Reiner Strecker, Chairman

THE SUPERVISORY BOARD Members of the Supervisory Board Name Born 1961 Reiner Strecker (Chairman) Karin Dohm (Deputy Chairwoman) Thomas Armbrust Place of residence Wuppertal Nationality German Appointed since 2012 1972 Kronberg im Taunus German 2012 1952 Reinbek German 2001 End of appointment 2022 Annual General Meeting 2022 Annual General Meeting 2019 Annual General Meeting Committee activities Chairman of the Executive Committee, Deputy Chairman of the Capital Market Committee, Member of the Audit Committee Member of the Executive Committee, Chair of the Audit Committee, Financial Expert Member of the Executive Committee, Deputy Chairman of the Capital Market Committee, Member of the Audit Committee Membership of other legally required supervisory boards and mem- berships in compa- rable domestic and foreign supervisory bodies for business enterprises Position • akf Bank GmbH & Co. KG, Wuppertal • Ceconomy AG, Düsseldorf • Deutsche Bank Europe GmbH, Frankfurt (Chair) • ECE Projektmanagement G.m.b.H. & Co. KG, Hamburg (Chair) • TransConnect Unternehmensberatungs- • Deutsche Bank Luxembourg S.A., und Beteiligungs AG, Munich (Chair) Luxembourg (Luxembourg) • Platinum AG, Hamburg (Chair) • Paramount Group Inc., New York (USA) • Verwaltungsgesellschaft Otto mbH, Hamburg Personally liable partner, Vorwerk & Co. KG, Wuppertal Global Head of Government & Regulatory Affairs, Deutsche Bank AG, Frankfurt Member of Management, CURA Vermögensverwaltung G.m.b.H. & Co., Hamburg Key positions held • 1981 – 1985: Degree in business admin- • 1991 – 1997: Studied business and istration, Eberhard Karls University, Tübingen economics in Münster, Zaragoza (Spain) and Berlin • until 1985: Auditor and Tax Advisor • 1985 – 1992: Gruner + Jahr AG & Co KG, Hamburg, Director of Finance • 1986 – 1990: Commerzbank AG, • 2002: Steuerberaterexamen (German • since 1992: Member of Management, Frankfurt tax advisor exam) • 1991 – 1997: STG-Coopers & Lybrand • 2005: Wirtschaftsprüferexamen Consulting AG, Zurich (Switzerland) (German auditor exam) • 1998 – 2002: British-American Tobacco • 1997 – 2010: Deloitte & Touche GmbH, Group, Hamburg, London (UK), Auckland (New Zealand) • 2002 – 2009: British-American Tobacco (Industrie) GmbH, Hamburg, Member of the Executive Board for Finance and IT • 2009 to present day: Vorwerk & Co. KG, Wuppertal Berlin, London (UK), Paris (France) • 2010 – 2011: Deloitte & Touche GmbH, Berlin, Partner Financial Services • 2011 to present day: Deutsche Bank AG, Frankfurt of which - 2011 – 2014: Head of Group External • since 2010: Personally liable partner Reporting CURA Vermögensverwaltung G.m.b.H., Hamburg (Family Office of the Otto family) - 2015: Chief Financial Officer, Global Transaction Banking - 2016: Global Head of Group Structuring - since 2017: Global Head of Government & Regulatory Affairs none 0 Shareholder representative of the Otto family none 9,975 Relationship to majority / major shareholders Deutsche EuroShop securities portfolio as at 31 December 2018 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 1 3

SHOW ROOM d n a n O i T C U D O R T n i / d r a o B y r o s i v r e p u S e h T Name Born Beate Bell 1967 Place of residence Cologne Nationality German, Polish Appointed since 2014 Manuela Better 1960 Munich German 2014 End of appointment 2019 Annual General Meeting 2019 Annual General Meeting Committee activities — — Membership of other legally required supervisory boards and mem- berships in compa- rable domestic and foreign supervisory bodies for business enterprises Position • Hochtief AG, Essen • Deka Investment GmbH, Frankfurt (Deputy Chair) • Deka Immobilien GmbH, Frankfurt (Deputy Chair) • Deka Immobilien GmbH, Frankfurt (Deputy Chair) • Deka Vermögensmanagement GmbH, Frankfurt (previously Landesbank Berlin Investment GmbH, Berlin) (Deputy Chair) • S Broker AG & Co. KG, Wiesbaden (Deputy Chair) • S Broker Management AG, Wiesbaden (Deputy Chair) • WestInvest Gesellschaft für Investmentfonds mbH, Düsseldorf (Deputy Chair) • DekaBank Deutsche Girozentrale Luxembourg S.A., Luxembourg (Luxembourg) Managing Director, immoADVICE GmbH, Cologne Member of the Board of Management, DekaBank Deutsche Girozentrale, Frankfurt and Berlin Key positions held • 1993 – 1997: Studied supply engineer- • Studied business at Ludwig Maximilian University of Munich, certified business ing at Cologne University of Applied Sciences, certified engineer • 2000 – 2003: Studied industrial engineering at Cologne University of Applied Sciences, certified industrial engineer • 1997 – 2002: Anton Ludwig GmbH, Cologne, Project Manager • 2002 – 2004: Recticel Automobil- systeme GmbH, Rheinbreitbach, Project Controller economist • 1998 – 2003: HVB Group, Munich, various positions • 2004 – 2007: Hypo Real Estate Bank AG, Munich, Member of the Board of Management, Chief Risk Officer • 2007 – 2008: Hypo Real Estate Bank International AG, Stuttgart / Hong Kong, Member of the Board of Management, Head of Commercial Real Estate, Origination Asia • 2009 – 2010: Deutsche Pfandbriefbank AG, Munich, Member of the Board of Management (previously Hypo Real Estate Bank AG) • 2011 – 2013: DEPFA Bank plc, Dublin (Ireland), Chairwoman of the Board of Directors, Chief Risk Officer • 2004 – 2015: METRO Group, Düsseldorf, • 2010 – 2014: Hypo Real Estate AG Holding AG, Munich, Chair of the Board of various management functions; most recently METRO AG, Düsseldorf, Head of Group Compliance Management, and Deutsche Pfandbriefbank AG, Munich, Chair of the Board of Management • since 2009: Dr. Ingrid Better Vermögensverwaltung GmbH & Co KG, Managing • since 2015: immoADVICE GmbH, Director and Better GmbH, Munich, Managing Director Cologne, Managing Director • since June 2015: DekaBank Deutsche Girozentrale, Frankfurt and Berlin, Member of the Board of Management Relationship to majority / major shareholders none 4 1 0 0 Deutsche EuroShop securities portfolio as at 31 December 2018 none 0

Dr Henning Kreke Alexander Otto Klaus Striebich Roland Werner 1965 Hagen / Westphalia German 2013 1967 Hamburg German 2002 1967 Besigheim German 2012 1969 Hamburg German 2015 2023 Annual General Meeting 2023 Annual General Meeting 2022 Annual General Meeting 2020 Annual General Meeting Member of the Capital Market Committee — — • Douglas GmbH, Düsseldorf (Chair) • Thalia Bücher GmbH, Hagen / Westphalia • Encavis AG, Hamburg • Axxum Holding GmbH, Wuppertal • Püschmann GmbH & Co. KG, Wuppertal • Con-Pro Industrie-Service GmbH & Co. KG, Peine • Noventic GmbH, Hamburg • Perma-tec GmbH & Co., Euerdorf • Ferdinand Bilstein GmbH & Co. KG, Ennepetal Managing Partner, Jörn Kreke Holding KG and Kreke Immobilien KG, Hagen / Westphalia • Peek & Cloppenburg KG, • MEC Metro-ECE Düsseldorf • SITE Centers Corp., Beachwood (USA) (previously DDR Corp., Beachwood [USA]) Centermanagement GmbH & Co. KG, Düsseldorf (Chair) (until 31 March 2019) • Klier Hairgroup GmbH, • Sonae Sierra Brasil S.A., Wolfsburg São Paulo (Brazil) • Verwaltungsgesellschaft Otto mbH, Hamburg CEO, Verwaltung ECE Projektmanagement G.m.b.H., Hamburg • The Food Chain Investor Holding SE, Hamburg (previously Novocadis SE, Hamburg) • Sinn GmbH, Hagen • Unternehmensgruppe Dr. Eckert GmbH, Berlin Managing Director, RaRe Advise Klaus Striebich, Besigheim — — Chairman of the Board of Management, Bijou Brigitte modische Accessoires AG, Hamburg • Studied business (BBA and MBA) at the University of Texas at Austin (USA) • Studied at Harvard University and Harvard Business School, Cambridge, USA • Doctorate (Political Science) from the • 1994 to present day: University of Kiel - 1993 – 2017: DOUGLAS Holding AG, Hagen / Westphalia of which Verwaltung ECE Projektmanagement G.m.b.H., Hamburg - since 2000: - 1993 – 1997: Assistant to the Execu- Chief Executive Officer • Studied business in Mosbach • 1990: Kriegbaum Gruppe, • Studied business at EBC University, Hamburg Böblingen, Assistant to the Man- agement Board • 1992 – 2017: Verwaltung ECE Projektmanagement G.m.b.H., Hamburg of which - 2003 – 2017: Managing Director Leasing • since 2018: Independent Consultant, RaRE Advise Klaus Striebich, Besigheim • 2001 to present day: Bijou Brigitte modische Accessoires AG, Hamburg of which - 2004 – 2009: Member of the Board of Management - since 2009: Chairman of the Board of Management tive Board - 1997 – 2001: Member of the Board of Management - 2001 – 2016: Chairman of the Board of Management - since 2016: Chairman of the Supervisory Board • since 2016: Jörn Kreke Holding KG and Kreke Immobilien KG, Hagen / Westphalia, Managing Partner Partner and Advisory Board Member at Douglas GmbH as well as at Thalia Bücher GmbH (both companies are tenancy agreement partners of Deutsche EuroShop AG) Major shareholder none Independent consultant to the limited partnership CURA Vermö- gensverwaltung G.m.b.H. & Co (until 31 March 2019) (CURA Vermögens- verwaltung G.m.b.H. is a general partner of this company, which is the sole limited partner of ECE Projektmanagement G.m.b.H.) 0 11,631,391 27,000 525 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 1 5

SHOW ROOM d n a g n i P P O H S / s d n e r t l e n n a h c i n m O CUSTOMER, WHAT ARE YOUR WISHES? Three consumer wishes identify omnichannel trends in German retail. Free (returns) shipping, standard prices online and offline and goods ordered online exchanged in store – these are the three most valuable services from a consumer perspective in any integrated, cross-channel strategy for targeting cus- tomers in German retail. The “Leisure and Tech- nology” sector is the furthest advanced in this regard both quan- titatively and qualita- tively. These results form part of the findings from the Omnichannel Readiness Study and associated index (ORIX). With their Omnichan- nel Readiness Study, WISAG and Statista have analysed for the first time what omnichannel measures the German retail sector is using to address customers and how sensible and suc- cessful these measures are perceived to be from a customer perspective. Consumer opinions are canvassed in a repre- sentative survey of over 2,000 persons. Omnichannel is the term used to denote an integrated marketing approach via online and offline channels as well as the link- ing of analogue and digital service offers. While the “Leisure and Technology” sector achieved the most points in the study for its omnichannel performance, the largest potential for improvement lies in the “Fash- ion Premium Brands” sector. This is shown by the Omnichannel Readiness Index (ORIX) which results from an objective analysis of the range of services offered by Statista ana- lysts as well as an evaluation of the services by the consumers surveyed. 4 2 0 AN ARTICLE by Ger rit Egg, M a n a gi n g Di rec tor of WISAG

O R IX OMNICHANNEL READINESS INDEX IN POINTS LEISURE AND TECHNOLOGY FASHION MIXED BRAND STORES FOOD, HEALTH AND HOME DÉCOR FASHION BUDGET BRANDS BEAUTY AND LINGERIE ACCESSORIES AND SHOES FASHION PREMIUM BRANDS 62 52 47 44 44 43 42 “LEISURE AND TECHNOLOGY” AHEAD OF OTHER SECTORS For all the euphoria regarding the opportuni- ties and chances offered by the digitisation of processes, it should never be forgotten that the customer just wants to buy a product in comfort and for a suitable price. This is clearly shown by the three items heading up the consumer wish list. It would make sense, therefore, to prioritise these preferences in physical outlets from a strategic point of view. Services which are the most important across all sectors from a customer perspec- tive include the following: • • free shipping for goods ordered online identical prices between websites and physical shops • goods ordered online exchanged in the store The least important services for customers are beacon technology (customers addressed in the store with digital push notifications), mobile online shopping in branches by scan- ning QR codes and social media support (availability of retailers for customer queries on Twitter and / or Facebook). OMNICHANNEL IS THE HOLISTIC STRATEGY FOR TARGETING CUSTOMERS ACROSS ALL CHANNELS 62 %OF SHOES ARE PURCHASED IN-STORE OR IN SHOPPING CENTERS. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 2 5

SHOW ROOM d n a 36 % ONE-THIRD OF CUSTOMERS IN THE “LEISURE AND TECHNOLOGY” SECTOR USE ONLINE AND BRICK AND MORTAR SHOPS IN PARALLEL SERVICES WITH PARTICULAR POTENTIAL First and foremost, there is great potential in services which customers see as valuable but which retailers are not yet offering to a cor- responding degree at present. These include: Picking up goods bought online in physical shops outside of opening hours, digital infor- mation on the availability in stores of goods no longer available when ordering online and an online option to fix a service appointment in the store or for cashless payment by app. By contrast, the proportion of retailers offer- ing the services of mobile online shopping in branches, customer loyalty programmes and beacon technology is higher than the percent- age of customers who value such services. Customers expect immediate added value from digital services offered in physical shops. They appreciate pragmatic solutions which save time and make shopping easier. Establishing intelligent links between people and the latest technology may help with this process but it is not an end in itself. Irrespective of individual sectors or cus- tomer preferences, ORIX shows that phys- ical shops still constitute the channel most widely used: Nearly 70 % of those surveyed buy exclusively from physical shops. ORIX can give the trade important pointers for the way in which it addresses consumers. Shopping centers, specialist retail centers and large commercial buildings especially, find themselves in a particularly favourable vantage point from which to meet customer desires with respect to the availability of goods and a convenient and at the same time pleasant shopping experience. 24 % OF CUSTOMERS USE ONLINE AND PHYSICAL SHOP CHANNELS IN PARALLEL. IN % LEISURE AND TECHNOLOGY FASHION MIXED BRAND STORES FOOD, HEALTH AND HOME DÉCOR FASHION BUDGET BRANDS BEAUTY AND LINGERIE ACCESSORIES AND SHOES FASHION PREMIUM BRANDS 52 78 77 69 62 68 69 12 4 4 7 11 10 7 36 17 19 24 27 22 24 ON AVERAGE 68% IN THE SHOP / SHOPPING CENTER ON AVERAGE 8% ONLINE ON AVERAGE 24% BOTH g n i P P O H S / s d n e r T - l e n n a h c i n m O 6 2 0

SHOW ROOM d n a g n i P P O H S / f l e s y m t h g u o b I t a h W 8 2 0 Wilhelm Wellner Member of the Executive Board, Deutsche EuroShop The touring skis “K2 Way Back 88”, which I bought in a specialist sports shop after extensive consul- tation with the sales staff, were my purchase of the year. After using them a few times, I can say I am extremely satisfied. Olaf Borkers Member of the Executive Board, Deutsche EuroShop I have completely renewed my equipment for the fitness club. After all, it doesn’t hurt to look good when you’re training. A new bag (Napapijri Bering) as well some sports trousers (4KRFT Sport) and shirts (Freelift Sport Prime) together with shoes from Adidas (Ultraboost). Patrick Kiss Head of Investor & Public Relations, Deutsche EuroShop My family are now dog-owners – on the express wishes of our daughter. After an intensive getting-to-know- each-other phase, we adopted Charlie as a puppy from a Golden Retriever breeder in late summer. Since then, she has been brighten- ing up our lives and cheering our hearts. Nicolas Lissner Manager Investor & Public Relations, Deutsche EuroShop A nihola Family. In Copenhagen (where they are hand-made), you see this transport bicycle on every corner but it’s not quite so popular yet here in Hamburg. The cabin can carry loads of up to 100 kg or it has space for two children. And they stay dry in all weathers thanks to the rain hood. Ralph Borghaus Head of Accounting, Deutsche EuroShop My purchase of the year was analog. I bought the board game Azul in a local toy shop. Since then, we have spent a lot of time and had a lot of fun in the family and with friends playing this unu- sual game in which the aim is to lay your ceramic tiles (azulejos in Portuguese) on your player board and try to win as many points as possible in doing so. This great game was rightly crowned game of the year in 2018. Birgit Schäfer Secretary to the Executive Board, Deutsche EuroShop I bought a Philips TV with a built-in Ambilight function. With this tech- nology, LEDs project the colours beyond the edge of the screen onto the wall. A great visual effect.

Britta Behrmann Senior Finance Manager, Deutsche EuroShopp As a real northerner, I reckon there’s no such thing as bad weather, just bad clothing ... During one holiday on Helgoland, I bought a fantastic waterproof jacket, ideal for long walks along the beach in any wind and weather. Dr Ruth Vierbuchen Editor-in-Chief of the “Handels immobilien Report” (Retail Real Estate Report) A Suntec air conditioner. Despite the hottest summer in a century, they were quickly sold out in Düs- seldorf’s consumer electronics centers. But the online shop as well as the advances in “Click & Collect” technology meant you could still buy one. Bricks and mortar retail stores also still benefited. Only you do still need to be careful when transporting the devices. They may look small, but the inner parts are extremely heavy. So it’s better to have it delivered or have nice neighbours help you out. Rolf Bürkl Senior Consultant Consumer Insights, GfK A lot of water having flowed under the bridge since my last major trip in the Alps with a friend (Munich - Venice in three stages), we decided this year to do another multi-day mountain tour. Which is why I bought myself a spacious enough new rucksack from deuter. It should spur me on. WHAT I BOUGHT MYSELF IN 2 0 1 8 Richard Haimann freelance real estate journalist I splashed out on a Klättermusen Einride for mountaineering and climbing. The jacket has no sweat membrane consisting instead of long, organic cotton fibres that swell if they get wet in the rain, so offering natural protection from water penetration. Gerrit Egg Managing Director, WISAG Gebäudetechnik Holding To keep pace with digitalisation in terms of performance, I upgraded our work station at home with a new graphics card (GeForce RTX2080) at the end of the year. I can now run anything again on my large UHD monitor both for work and leisure without the picture freezing. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 2 9

SHOW ROOM d n a g n i P P O H S / e c r e m m o C - E 0 3 0 AN ARTICLE by Richa rd Ha i m a n n, freel a n ce jo u r n a li st – w ith the ki n d su p p or t of the Ger m a n Co u n ci l of Sho p pi n g Ce n ters (GCSC) SMALL VILLAGE SHOPS ARE CURRENTLY ENJOYING A REVIVALIN MANY PLACES PREMATURE REQUIEM The entertainer is prepared to go to People have been predicting the imminent demise of the retail trade for more than 200 years. So far, however, the forecasters have always got it wrong. Even e-commerce, currently talked of as the death- knell to all physical shops, is far removed from replacing bricks and mortar shops and shopping centers. extremes on behalf of his favourite shop. “Wenn Tante Emma nicht mehr ist und ein Discount den Laden frisst, setz’ ich mich auf den Bürgersteig und trete in den Hungerstreik” (If the corner shop disappears, devoured by a discounter, I’ll sit down on the pavement and go on hunger strike), – so sings Udo Jürgens in 1976 in his ode to the “Tante- Emma-Laden an der Ecke vis-à-vis” (the little shop on the corner opposite). It was intended as a requiem to the constantly shrinking number of small, family-owned shops and at the same time as criticism of the rapidly growing presence of supermarkets. Today, 43 years later, it is clear that the funeral bells were definitely sounded prematurely. On the one hand, small shops in the shape of bakeries, delicatessens, butch- ers and kiosks meeting essential needs late into the night with their products ranging from butter, cheese and jam to Custo m ers n o lo n ger ha d to w or r y that they m ay b e p ayi n g m ore for a pro d- uc t tha n others, just b ec a use they co uld n’t ha ggle so w el l. washing powder, and enjoying personal rela- tionships with their customers, have in any case stood the test of time. And on the other, the corner shop is currently enjoying a revival: in many small country towns where residents’ initiatives and municipal authorities are bringing small village shops back, but also in big cities. For example, in Schlüterstraße in Düsseldorf’s eastern district of Grafenberg. The retail chain Real which is part of the Metro Group, runs a shop there called “Emmas Enkel” (Emma’s grandchildren) close to its headquarters. Nostalgi- cally designed in the style of local shops in the 1970s, it offers customers the chance to get to know the staff: meat, cheese and cold cuts are served at counters where regular customers can also have a chat with the staff. The concept is proving popular. “Emmas Enkel is one of the most profitable shops we have”, says Markus Jablonski, Head of Corporate Communication at Real. Besides residents of the Grafental district, employees in the nearby company HQs – from the gas producer Air Liquide to Metro – are also showing their appreciation of the service in this nostalgic shop, he adds. (Trade means Change) – this saying has been used reg- ularly for more than 200 years to forecast the end of the retail trade. The 1970s with the accompanying boom in supermarkets ist Wandel” “Handel

“EMMAS ENKEL IS ONE OF THE MOST PROFITABLE SHOPS THAT WE HAVE,” SAID MARKUS JABLONSKI,HEAD OF CORPORATE COMMUNICATIONS AT REAL were not the first decade to see small shops consigned to death row. When Europe’s first department store in the shape of Harding Howell’s Grand Fashionable Magazine opened in London’s Pall Mall in 1796, politicians in the British capital were already worrying about the future of existing haberdashers, jewellers and tableware shops. Because the founder Howell used his inherited capital to buy large quantities of goods from manufacturers at a discount, and passed this price advantage on to his customers to tie them to his four-storey department store. E-COMMERCE TO SUPPLY THE POPULATION WITH BASIC NEEDS In Germany, the demise of small shops was prophesied for the first time when in quick succession, first Leonhard Tietz in Stralsund in 1879, then Rudolph Karstadt in Wismar in 1881 and one year later Tietz’s brother Oscar in Gera all opened their own department stores. These were the beginnings of the later department store giants, Hertie, Karstadt and Kaufhof. In contrast to the convenience stores of those days, there was no longer any haggling in the department stores. Instead, Karstadt and the Tietz brothers attracted cus- tomers with low fixed prices. Customers no longer had to worry that they may be paying more for a product than others, just because they couldn’t haggle so well. These days, on the other hand, it is the department stores whose end is said to be near as their sales have been in decline for decades. They have long been under pressure from discount stores with even lower prices: Hertie was already taken over by Karstadt in 1993. Online traders such as Amazon and Zalando are now providing stiff competition. The two remaining major chains now want to join forces. Karstadt, taken over in 2014 by Signa Holding belonging to the Innsbruck entrepreneur René Benko, and Kaufhof, owned since 2015 by the Canadian retail company, Hudson’s Bay Company, merged in 2018. Benko has a majority shareholding in the new joint company with the Canadians still on board as minority owners. Together, both companies generated sales of € 5.4 bn in 2017, according to HBC. The online market leader in Germany, Amazon, on the other hand, recorded retail sales of € 8.8 bn in 2017 according to figures published by the EHI Retail Institute in Cologne. These are the sort of comparisons that are leading players in the e-commerce busi- ness and many management consultants to announce the imminent demise of physical shops. The e n ter- ta i n er i s pre p a re d to go to ex t re m es o n b eha l f of hi s favo u rite sho p. “W e n n Ta n te Em m a nicht m ehr i st u n d ei n Di sco u n t d e n L a d e n fri sst, setz’ ich m ich a uf d e n Bü rgersteig u n d t rete i n d e n H u n ger- st reik”, – so si n gs U d o Jü rge ns i n 1976 i n hi s o d e to the “Ta n te-Em - m a-L a d e n a n d er Ecke vi s-à-vi s”. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 3 1

SHOW ROOM d n a g n i P P O H S / e c r e m m o C - E 2 3 0 “Online shopping remains the growth driver in the first half of 2018, posting an increase of 11.1 % by comparison with the same period in the previous year”, states an exultant Chris- toph Wenk-Fischer, Managing Director of the Federal Association of E-commerce and Mail Order Business, adding: “E-commerce is mak- ing an increasingly large contribution towards supplying the population with its basic needs.” And Corinna Powalla, founder of the Ber- lin online fashion mail order house Modomoto and Managing Director of the internet com- pany, Curated Shopping Group, regards last year’s hot summer as a further nail in the coffin for physical fashion shops. “The sum- mer of 2018 will go down as a turning point in fashion history” – just one quote she gave to the internet industry watch it4Retailers. She added that customers were hardly visiting any shops due to the heat but ordering online instead. “Colleagues in the business are tell- ing me of empty shops and piles of unsold goods”, Powalla says. “Above all, I feel sorry for small boutique owners.” The real proportions are somewhat dif- ferent as the latest figures from the Federal Statistical Office reveal. “The online share of clothing sales is only 15.5 %”, says Federal statistician Otfried Rörig. Even computers and software as well as books, the original business of e-commerce giant Amazon, continue to be bought in physical shops by the overwhelming majority of consumers in Germany. Only in sales of music does the internet achieve 50 percent – which seems Reta i l d o es i n d ee d a lw ays m e a n cha n ge, b u t thi s co n- si sts pri m a ri ly i n co nsu m ers b ei n g offere d a d d itio n a l sho p pi n g o p p or- tu nities. N either d e p a r t m e n t stores n or su p er m a rkets co m pletely re pl a ce d s m a l l sho ps a n d grocer y stores. RETAIL LEADS TO AN INCREASE IN EMPLOYMENT SUBJECT TO SOCIAL INSURANCE CONTRIBUTIONS 2018 TO 2017 Employment subject to social insurance contributions +32,000 2017 +32,000 Mini-jobs in retail +900 2017 -12,000 Total increase in retail jobs +33,000 2017 +20,000 Source: Federal Employment Agency, retail trade excluding vehicles, fuels, pharmacies; as at reporting dates 30.06.2017 / 30.06.2018 of the “American Dream”, a new shopping and entertainment center with 111,500 square metres of selling space which the project developer and mall operator Triple Five wishes to erect for USD 4 billion. “That doesn’t sound as if physical retail is exactly dead and buried”, Ozimek concludes. Retail does indeed always mean change, but this consists primarily in consumers being offered additional shopping opportu- nities. Neither department stores nor super- markets completely replaced small shops and grocery stores. Neither will e-commerce ren- der physical retail obsolete because custom- ers will always want to feel and try out goods directly and they look for personal service. What Udo Jürgens sang about corner shops still applies to bricks and mortar shops today: “Bei Tante Emma ist’s privat, sie ist kein Ware- nautomat ...” (At the corner shop, it’s personal, it’s not a vending machine). comparatively low given the massive online range offered by Apple’s iTunes Store, Google Play Music and Spotify. The situation in Amazon’s home country is scarcely any different. E-commerce is not the final nail in the coffin of bricks and mortar shops, according to Adam Ozimek, economist at Moody’s Analytics, a subsidiary of the New York rating agency Moody’s focussing on eco- nomic research, in a study for the business magazine Forbes. “Contrary to popular opin- ion, bricks and mortar retailers in the USA are doing fine.” Admittedly, large retail chains are continually getting into difficulty such as the toy retailer Toys “R” Us in 2018, he adds. But the bottom line is that physical retail outlets remain strong, he continues. One of the yard- sticks leading Ozimek to this conclusion is the number of employees in physical shops and shopping centers. “It is currently close to an all-time high.” Investors’ faith in shopping centers is also unbroken, he adds. In Philadelphia alone, the Gallery Mall and the King of Prussia Mall are being extended and modernised in a contract worth USD 825 million, he says. He goes on to explain that local government in Miami has just given the go-ahead for the construction

GO AND BUY SOME- WHERE ELSE! AN ARTICLE by Torb e n Diet rich, freel a n ce jo u r n a li st – w ith the ki n d su p p or t of the Ger m a n Co u n ci l of Sho p pi n g Ce n ters (GCSC) The hottest retail concept in the USA resembles a gallery visually. Or maybe a design museum. But one without attendants watching eagle-eyed to make sure you don’t touch anything. Because at “B8ta”, that is most definitely allowed. New products from the worlds of technology and electronics are presented here on solid wooden tables, in spartan arrangements and with no pack- aging. A young man is testing a toaster while another is trying on a pair of so-called virtual reality glasses. Between them, a customer rolls past on a battery-powered hoverboard. Trying things out is expressly desired in this young company from San Francisco. Where customers end up buying – whether in the outlet, on the website or even from a competitor – “we really don’t care”, says B8ta Manager Kevan Wilson to a German business magazine. How is this possible? E-commerce, in par- ticular, represents an increasingly existential threat to physical retail outlets. Shrinking profit margins, modernisation of the supply chain and the IT as well as changing customer expectations are putting pressure on the retail trade which has to perform if possible on all channels simultaneously. Including the local shop. Because although online shopping is catching up physical shops in terms of sales and posting ten times higher growth in Germany according to the German Retail Association (HDE), customers continue to source a very large part of their purchases in clothes shops, drugstores or grocery stores. And when it comes to high-quality technol- ogy, people still prefer to make their way to a specialist shop – even if they then order from Amazon. Because the one drawback of pure online shopping is the lack of tactile experience. Picking things up, looking at them carefully, perhaps testing some of the func- tions – these are the unbeatable advantages of a physical shop. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 3 5

SHOW ROOM d n a g n i P P O H S / ! e s l e e r e h w e m o s y u b d n a o G 6 3 0 B8TA CUSTOMERS ENTER SHOPS PRIMARILY OUT OF CURIOSITY SALES VIA PLACEMENT FEES B8ta puts this characteristic at the heart of its business model – and expands on it. Co-founder Phillip Raub does not have to sell anything, but just present. “Our shoppers can and should simply pick up the goods – mostly cool electrical gadgets such as photo robots for smartphones or an e-paper notepad – or try them out thoroughly”, he says. Nobody is to be pressured into buying. The concept works because B8ta is not funded through the sale of goods but via monthly placement fees – billed by the table or metre – which are collected directly from manufacturers. What B8ta offers in return is exclusive presentation and staff that have been superbly trained in the products, not called sales staff here but consultants. B8ta offers a platform to bring customers and products together in one place, particularly for manufacturers who predominantly (have to) sell online. The motto is: “See what the world is creating”. The concept behind it is to present ambitious, smart products – mostly from the realm of the Internet of Things – which customers would only rarely discover for themselves in the dense jungle of online shopping. At B8ta, you can find things you may not be looking for but still find stimulating. The genuine satisfaction of a need is in any case hardly likely to be customers’ motivation for entering one of the stylish shops. More likely to be curiosity. The shops present them- selves as a blend of museum and playground, a place for inspiration. Kevan Wilson: “Many people drop by in the evening on the way to a restaurant or bar.” If a customer decides to buy a product on the spot, the order and payment process is handled online as there is no checkout area. The goods are delivered the next day at the latest. “It seems obvious that B8ta has discovered a crucial aspect of shopping in stores”, says Daphne Howland from the US expert blog “retaildive”. “If we remove as many of the obstacles as possi- ble from customers and brands that prevent them from finding each other, we make shop- ping easier.” Matthias Storch is also convinced that physical shops are not on their way out but must simply function differently in this day and age. Together with business partner Marc Langner, he runs the “Butiq” in Mann- heim, a concept store with local colour. Vin- tage motorbikes or Piaggio mini-transporters and a built-in bar with an electronic wine rack represent visual elements designed to create a relaxed atmosphere for rummaging and discovering among an assorted collec- tion of culinary items, home accessories and spirits. “The mere satisfaction of a need can be accomplished with Zalando and others”, Storch states with conviction. In a similar way to B8ta, designers and products in Mannheim are also being offered a physical platform they would not otherwise enjoy.

„SEE WHAT THE WORLD IS CREATING“ IS THE MOTTO OF B8TA SHOPS A NEW, IRRESISTIBLE AND STIMULATING IN-STORE EXPERIENCE Google, too, seems to be discovering just how important analogue shopping experiences are for customers. According to reports in the media, managers of this US online giant which for many users is almost synonymous with the internet, are opening their first “Google Shop” in Chicago. Google has also seen which way the wind is blowing and is following a trend that might prove to point the way for- ward for the retail sector worldwide. Galeria Kaufhof is also closing in on a sim- ilar concept: The Galeria Kaufhof press office was reluctant to express any opinion about B8ta or on the question of whether this is a suitable way to entice customers away from their laptops and back into the shops. However, the recently launched shop-in-shop collaboration with electron- ics specialists Cyberport seems to be a step towards the future. “We see great potential in the areas of IT and consumer electronics”, confirms Edo Beukema, Purchasing Director of Galeria Kaufhof GmbH. The largest of the traditional retail play- ers and department store operators has drawn direct inspiration from the success of B8ta: Macy’s has announced that it will be relying on the technical expertise, experi- ence and pioneering spirit of B8ta for its new pop-up shop concept “The Market @ Macy’s”. To secure the collaboration for the long term, the company from Ohio which operates 728 department stores in the USA, has imme- diately taken a minority stake in the start-up. “We want to do everything we can to create a new, irresistible and stimulating in-store experience for our customers”, says Vice President Marc Mastronardi, who is respon- sible for the development of new business areas at Macy’s. The pop-up concept will put a different complexion on the entire shopping experience, he states. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 3 7

Accessibility and the variety of busi- nesses are the most important criteria for the success of a shopping center, say 80% of consumers. Customers don’t feel tied down to one place, but on average visit four different centers over the course of a year. Because for most people, it’s the overall concept that counts – only 12% go to a shopping center because of one shop in particular. These were the findings of a representative survey of more than 1,000 regular visitors to shopping centers carried out by Forsa and commissioned by JLL. How close a shopping center is plays a key role: 56% prefer shopping centers which they can get to within 20 minutes. 80% of those surveyed say that 30 minutes is a reasonable amount of time to travel to get there. It has to be worth sticking around in the shopping center once you’ve got there: only a fraction of people stay for less than 30 minutes. However, more than a third linger for up to an hour. The availability of multiple businesses in one place also counts. Therefore, visitors from smaller towns with a population of less than 20,000 people stay for longer on average than people from big cities. The range of fast food restaurants and cafés is also considered important. More substantial or formal cuisine is less in demand. In general, visitors are happy with the culinary offerings available in shopping centers. If anything is missing, then it’s mostly places to enjoy a drink and snacks together with friends. Around half of all those asked say there is room for improvement in terms of the availability of regional products, while visitors aged between 30 and 44 years mentioned the lack of childcare facilities. However, younger age groups between 18 and 29 focussed on leisure options such as bowling alleys. SHOW ROOM d n a g n i P P O H S / y e v r u s a s r o F 8 3 0 SHOPPING CENTERS STILL ATTRACTING C Meanwhile, significant gaps were identi- fied in the digital sector: two thirds of visi- tors had no idea, for example, if their local shopping center provided an app. And even when it does, people hardly use it: only 12% of those who knew that such an app exists also actually made use of it. However, far more people would use it if it offered not just store opening hours and a map, but also showed what was on offer in individ- ual stores and if it was possible to reserve products to collect in person.

SHOW ROOM d n a AN ARTICLE by Rol f Bü rk l, GfK CONSUMPTION FORECAST FOR 2019 Further increase in private consumption expected in Germany. At the beginning of the year, the GfK forecast real growth in consumer spending in Germany of 1.5% for 2019. The positive developments expected in the labour market in conjunction with favoura- ble prospects for incomes were seen as the crucial pillars of consumer demand. However, this forecast was based on the presupposi- tion that the uncertainty of German consum- ers with regard to the economy would not increase appreciably. At the end of the 1st quarter of 2019, the overall sentiment of German consumers was still quite balanced. Hopes for the economy were boosted while earnings expectations and propensity to buy fell slightly. As a con- sequence, consumer confidence received a slight setback after a satisfactory start to 2019. So far, consumers are not expecting Germany to slip into recession this year but they are also experiencing a marked slowdown in the economy. Their impressions are confirmed by a forecast recently published by the Ger- man Council of Economic Experts (SVR). The so-called “five wise men” have revised their forecast for growth this year from their orig- inal estimate of 1.7% down to a mere 0.8%. However, they are assuming that this will only be a temporary lull, as for 2020 they are pre- dicting that the economy will grow by 1.7%. This downturn is less home-grown than founded in external factors. Both the stale- mate with regard to the date and nature of the UK’s departure from the EU and the simmer- ing trade war between the EU and the USA are clearly causing growing uncertainty among consumers. Barriers to trade such as a rise in customs tariffs, for example, will have a negative impact, especially on Germany as an export nation. CONSUMER SENTIMENT IN GERMANY REMAINS DECIDEDLY HEALTHY INCOME EXPECTATIONS SUFFER A DROP In contrast to economic prospects, income expectations suffered a drop in March 2019 although they remain very positive. First and foremost, the consistently favourable state of the German employment market is driving confidence in income levels. Employment continues to rise which is a contributory fac- tor in the noticeable increase in wages and salaries. Those in retirement benefit in turn as their pensions are linked to wage growth in Germany. g n i P P O H S / 9 1 0 2 t s a c e r o f n o i t p m u s n o C 0 4 0

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 PROPENSITY TO BUY DRIVEN BY INCOME PROSPECTS Propensity to buy also suffered a drop at the end of the 1st quarter of 2019 in the wake of falling income expectations, and it fell to its lowest level for more than two years. In spite of the losses, however, consumer sentiment in Germany is decidedly healthy. The stability of the labour market with a further rise in employment is ensuring that consumers will in future be prepared to spend their money – especially as saving does not represent an attractive alternative given the low level of interest rates. CONSUMER SENTIMENT IN GERMANY IN POINTS 2014 2015 2016 2017 2018 2019 14 12 10 8 6 4 2 0 -2 Source: GfK consumer survey on behalf of the EU Commission | 3 /19 0 4 1

SHOW ROOM d n a g n i P P O H S / 9 1 0 2 t s a c e r o f n o i t p m u s n o C 2 4 0 CONSUMER CONFIDENCE WITH FIRST SETBACK FOLLOWING STEADY START As the key indicators for consumer confi- dence – income expectations and propensity to buy – suffered drops recently, consumer confidence was also dented for the first time after a pleasing start to 2019. Nevertheless, we can assume that consump- tion will be an important pillar of economic growth in Germany this year. However, this presupposes that the uncertainty triggered by Brexit and the trade conflict does not escalate. Above all, this uncertainty must not be allowed to spread to prospects in the labour market. Because if employees gain the impression that their job is no longer quite as safe as it was, they will also become more careful when it comes to their spending. In this case, consumer confidence would cer- tainly be affected and it would not be possible to maintain the forecast of 1.5% made at the beginning of the year. CONSUMPTION CONTINUES TO BE AN IMPORTANT PILLAR OF ECONOMIC GROWTH PROPENSITY TO BUY IN GERMANY IN POINTS 2014 2015 2016 2017 2018 2019 70 60 50 40 30 20 10 0 -10 Source: GfK consumer survey on behalf of the EU Commission | 3 /19

GFK RETAIL SALES GERMANY 2019 Share of retail trades In town- and country-districts in % (1,000 = Germany’s total revenue) under 0,5 0,5 to under 1,0 1,0 to under 1,5 1,5 to under 2,0 2,0 to under 2,5 2,5 to under 3,0 3,0 to under 3,5 3,5 to under 4,0 4,0 and more Kiel Hamburg Schwerin Bremen Hannover Berlin Potsdam Magdeburg D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 Dusseldorf Erfurt Dresden Wiesbaden Mainz Saarbrücken Stuttgart FORECAST FOR THE REGIONAL DISTRIBUTION OF RETAIL SALES IN GERMANY IN 2019 The GfK is forecasting an overall sales volume of € 423.1 bn for physical retail out- lets in Germany in 2019. By comparison with the previous year, retail sales are expected to grow by € 3.4 bn which corresponds to a nominal increase of 0.8%. As expected, the most highly populated areas of the country will see the highest retail sales. Berlin is easily top of the rankings – the capital should achieve a sales volume Munich of more than € 18.9 bn which would corre- spond to 4.48% of total sales in Germany. For Hamburg, the GfK is expecting retail sales of € 11.5 bn (2.71%) followed by Munich with € 11.1 bn (2.62%). S o u r c e : G f K ; . . w w w g f k c o m / g e o m a r k e t i n g - d e IN COMPARISON WITH THE PREVIOUS YEAR; RETAIL SALES ARE EXPECTED TO INCREASE BY 0.8% 0 4 3

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 6 4 0 W E i v R E v O R E T n E C / y n a m r e G We are the only public company in Germany that invests solely in shopping centers in prime locations. We invest only in carefully chosen properties. High quality standards and a high degree of flexibility are just as important to us as sustained earnings growth from index- and turnover-linked rental contracts. In addition, we boast a higher than average occupancy rate of around 99% and professional center management – these are the pillars of our success. THE DEUTSCHE GESELLSCHAFT FÜR NACHHALTIGES BAUEN (GERMAN – SUSTAINABLE BUILDING – COUNCIL, DGNB) AWARDED SUSTAINABILITY CERTIFICATES IN PLATINUM AND GOLD TO ALL 21 SHOPPING CENTERS IN OUR PORTFOLIO.

CENTERS IN GERMANY 143.0 880,600 Number of visitors in Germany in 2018 in million Floor space of all centers in Germany in m2 5 8 9 13 7 6 12 14 17 15 11 1 10 4 2 3 16 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 2,060 Number of stores in shopping centers in Germany 8.4 Average number of visitors per center in Germany in 2018 in million gERManY 1 Main-Taunus-Zentrum, Sulzbach / Frankfurt 2 A10 Center, Wildau / Berlin 3 Altmarkt-Galerie, Dresden 4 Rhein-Neckar-Zentrum, Viernheim / Mannheim Herold-Center, Norderstedt 5 6 Rathaus-Center, Dessau 7 Allee-Center, Magdeburg 8 Phoenix-Center, Hamburg 9 Billstedt-Center, Hamburg 10 Saarpark-Center, Neunkirchen 11 Forum, Wetzlar 12 Allee-Center, Hamm 13 City-Galerie, Wolfsburg 14 City-Arkaden, Wuppertal 15 City-Point, Kassel 16 Stadt-Galerie, Passau 17 Stadt-Galerie, Hameln D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 4 7

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 8 4 0 W E i v R E v O R E T n E C / y n a m r e G 7.6 MilliOn viSiTORS 2018 Sul zb a ch / Fr ank f ur t Main-TaUnUS- ZEnTRUM gOOglE 4.4 / 5 stars FaCEbOOK 4.4 / 5 stars 30,353 fans CENTER OVERVIEW Investments: 52% Leasable space: 124,000 m² of which retail space: 91,000 m² (plus C & A) Parking: 4,500 No. of shops: 170 Occupancy rate: 100% Catchment area: 2.1 million residents Purchased by DES: September 2000 Grand opening: 1964 Restructuring / Modernisation: 2004 Expansion: 2011 Anchor tenants: Anson‘s, Appelrath Cüpper, Apple, Breuninger, Galeria Kaufhof, H & M, Hollister, Intersport, Karstadt, Media Markt, REWE, Zara MainTaunusZentrum inSTagRaM maintaunuszentrum 6.6 MilliOn viSiTORS 2018 W il dau / B er l in a10 CEnTER gOOglE 4.4 / 5 stars 4.4 / 5 stars 26,614 fans A10Center FaCEbOOK Investments: 100% Leasable space: 121,000 m² of which retail space: 66,000 m² Parking: 4,000 No. of shops: 200 Occupancy rate: 100% Catchment area: 1.1 million residents Purchased by DES: January 2010 Grand opening: 1996 Restructuring / Modernisation: 2010 – 2011 Anchor tenants: Bambooland, Bauhaus, C & A, Hammer, H & M, Karstadt Sports, MediMax, Peek & Cloppenburg, real Address: Am Main-Taunus-Zentrum 65843 Sulzbach (Taunus) Address: Chausseestraße 1 15745 Wildau M A I N -T A U N U S - Z E N T R U M . D E A10CEN T ER .DE

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 14.4 MilliOn viSiTORS 2018 D r e s d en alTMaRKT- galERiE 9.6 MilliOn viSiTORS 2018 V ier nh eim / Mannh eim RHEin-nECKaR- ZEnTRUM gOOglE 4.4 / 5 stars FaCEbOOK 4.4 / 5 stars 80,619 fans altmarkt.galerie inSTagRaM altmarktgaleriedresden Investments: 100% Leasable space: 77,000 m² of which retail space: 44,000 m² Parking: 500 No. of shops: 200 Occupancy rate: 100% Catchment area: 1.4 million residents Purchased by DES: September 2000 Grand opening: 2002 Expansion: 2011 Anchor tenants: Apple, Hollister, H & M, New Yorker, REWE, Saturn, Sinn, SportScheck 4.4 / 5 stars gOOglE FaCEbOOK Investments: 100% Leasable space: 69,500 m² of which retail space: 60,000 m² (plus Karstadt and C & A) Parking: 3,800 No. of shops: 110 Occupancy rate: 99% Catchment area: 1.5 million residents Purchased by DES: September 2000 Grand opening: 1972 Restructuring / Expansion: 2002 Anchor tenants: Aldi, Bauhaus, Engelhorn Active Town, H & M, Hugendubel, Müller Drogerie, Peek & Cloppenburg, TK Maxx, Zara 4.3 / 5 stars 54,248 fans RheinNeckar ZentrumViernheim inSTagRaM rheinneckarzentrum_ viernheim Address: Webergasse 1 01069 Dresden Address: Robert-Schumann-Straße 8a 68519 Viernheim A LT M A RK T- GA L ERIE- DRE SDEN.DE RNZONL INE .DE D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 4 9

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 0 5 0 W E i v R E v O R E T n E C / y n a m r e G 10.4 MilliOn viSiTORS 2018 N o r d er s te d t HEROlD- CEnTER gOOglE 4.2 / 5 stars FaCEbOOK 4.1 / 5 stars 29,939 fans CENTER OVERVIEW Herold.Center.Norderstedt inSTagRaM heroldcenter Investments: 100% Leasable space: 54,300 m² of which retail space: 26,000 m² (plus Karstadt and Saturn) Parking: 850 No. of shops: 140 Occupancy rate: 99% Catchment area: 0.5 million residents Purchased by DES: January 2013 Grand opening: 1971 Restructuring / Expansion: 1995 and 2003 Anchor tenants: C & A, H & M, Peek & Cloppenburg, REWE 5.6 MilliOn viSiTORS 2018 D e s s au RaTHaUS- CEnTER 4.3 / 5 stars 19,056 fans rathauscenterdessau inSTagRaM rathauscenterdessau gOOglE 4.2 / 5 stars FaCEbOOK Investments: 100% Leasable space: 52,500 m² of which retail space: 32,900 m² (plus Karstadt) Parking: 850 No. of shops: 90 Occupancy rate: 96% Catchment area: 0.3 million residents Purchased by DES: November 2005 Grand opening: 1995 Anchor tenants: H & M, Modehaus Fischer, Thalia, TK Maxx Address: Berliner Allee 38-44 22850 Norderstedt Address: Kavalierstraße 49 06844 Dessau-Roßlau HEROL D - CEN T ER .DE R AT H AUS CEN T ER- DE S SAU.DE

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 9.1 MilliOn viSiTORS 2018 Ma g d eb ur g allEE- CEnTER 8.9 MilliOn viSiTORS 2018 Hamb ur g PHOEniX- CEnTER gOOglE 4.3 / 5 stars FaCEbOOK 4.3 / 5 stars 54,207 fans AlleeCenterMD inSTagRaM alleecentermagdeburg Investments: 50% Leasable space: 51,300 m² of which retail space: 35,000 m² Parking: 1,300 No. of shops: 150 Occupancy rate: 98% Catchment area: 0.8 million residents Purchased by DES: October 2011 Grand opening: 1998 Expansion: 2006 Anchor tenants: H & M, REWE, Saturn, Sinn, SportScheck PhoenixCenterHarburg inSTagRaM phoenixcenterharburg gOOglE 4.3 / 5 stars 4.2 / 5 stars 26,805 fans FaCEbOOK Investments: 50% Leasable space: 43,400 m² of which retail space: 29,000 m² Parking: 1,400 No. of shops: 130 Occupancy rate: 99% Catchment area: 0.5 million residents Purchased by DES: August 2003 Grand opening: 2004 Restructuring / Expansion: 2016 Anchor tenants: C & A, H & M, Karstadt Sports, Stadium, Media Markt, New Yorker, REWE, Sinn Address: Ernst-Reuter-Allee 11 39104 Magdeburg Address: Hannoversche Straße 86 21079 Hamburg A L L EE- CEN T ER- M AGDEBURG.DE PHOENI X- CEN T ER- H A RBURG.DE D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 5 1

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 2 5 0 W E i v R E v O R E T n E C / y n a m r e G 10.8 MilliOn viSiTORS 2018 Hamb ur g billSTEDT- CEnTER gOOglE 4.2 / 5 stars FaCEbOOK 3.9 / 5 stars 20,272 fans CENTER OVERVIEW Investments: 100% Leasable space: 42,500 m² of which retail space: 29,500 m² (plus Primark) Parking: 1,500 No. of shops: 110 Occupancy rate: 98% Catchment area: 0.8 million residents Purchased by DES: January 2011 Grand opening: 1969 / 1977 Restructuring: 1996 Anchor tenants: C & A, H & M, Media Markt, REWE, TK Maxx Billstedtcenter inSTagRaM billstedtcenter_hamburg 7.2 MilliOn viSiTORS 2018 N eunk ir ch en SaaRPaRK- CEnTER gOOglE 4.3 / 5 stars 4.3 / 5 stars 42,260 fans FaCEbOOK Investments: 50% Leasable space: 35,600 m² of which retail space: 33,500 m² Parking: 1,600 No. of shops: 130 Occupancy rate: 99% Catchment area: 0.7 million residents Purchased by DES: October 2016 Grand opening: 1989 Restructuring: 1999 / 2009 Anchor tenants: C & A, Müller Drogerie, H & M, Peek & Cloppenburg, REWE, TK Maxx SaarparkCenterNeunkirchen inSTagRaM saarparkcenter Address: Möllner Landstraße 3 22111 Hamburg Address: Stummplatz 1 66538 Neunkirchen BIL L S T EDT- CEN T ER .DE SA A RPA RK- CENTER-NEUNKIRCHEN.DE

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 7.9 MilliOn viSiTORS 2018 Wet zl ar FORUM 6.1 MilliOn viSiTORS 2018 Hamm allEE- CEnTER gOOglE 4.3 / 5 stars 4.2 / 5 stars 19,021 fans ForumWetzlar inSTagRaM forumwetzlar FaCEbOOK Investments: 65% Leasable space: 34,500 m² of which retail space: 23,500 m² Parking: 1,700 No. of shops: 110 Occupancy rate: 100% Catchment area: 0.5 million residents Purchased by DES: October 2003 Grand opening: 2005 Anchor tenants: Kaufland, Media Markt, Sporthaus Kaps, Thalia FaCEbOOK 4.2 / 5 stars 27,561 fans AlleeCenterHamm inSTagRaM alleecenterhamm Investments: 100% Leasable space: 34,000 m² of which retail space: 21,000 m² Parking: 1,300 No. of shops: 90 Occupancy rate: 100% Catchment area: 0.4 million residents Purchased by DES: April 2002 Grand opening: 1992 Restructuring / Modernisation: 2003 / 2009 Anchor tenants: C & A, H & M, Peek & Cloppenburg, REWE, Saturn Address: Am Forum 1 35576 Wetzlar Address: Richard-Matthaei-Platz 1 59065 Hamm FORUM -W E T ZL A R .DE A L L EE- CEN T ER- H A MM.DE D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 5 3

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 4 5 0 W E i v R E v O R E T n E C / y n a m r e G 7.2 MilliOn viSiTORS 2018 Wo lf sb ur g CiTY- galERiE gOOglE 4.2 / 5 stars FaCEbOOK 4.2 / 5 stars 10,889 fans CENTER OVERVIEW Investments: 100% Leasable space: 30,800 m² of which retail space: 20,000 m² Parking: 800 No. of shops: 100 Occupancy rate: 98% Catchment area: 0.5 million residents Purchased by DES: September 2000 Grand opening: 2001 Restructuring: 2011 Anchor tenants: Hempel, New Yorker, REWE, Saturn city.galerie.wolfsburg inSTagRaM citygaleriewolfsburg 8.9 MilliOn viSiTORS 2018 Wup p er t al CiTY- aRKaDEn 4.2 / 5 stars 10,382 fans CityArkadenWuppertal inSTagRaM cityarkadenwuppertal gOOglE 4.2 / 5 stars FaCEbOOK Investments: 100% Leasable space: 28,700 m² of which retail space: 20,000 m² Parking: 650 No. of shops: 80 Occupancy rate: 97% Catchment area: 0.7 million residents Purchased by DES: September 2000 Grand opening: 2001 Restructuring: 2011 Anchor tenants: Akzenta, H & M, Thalia, Reserved Address: Porschestraße 45 38440 Wolfsburg Address: Alte Freiheit 9 42103 Wuppertal CI T Y- GA L ERIE-WOL FSBURG.DE CI T Y-A RK A DEN -W UPPER TA L .DE

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 8.6 MilliOn viSiTORS 2018 K a s s el CiTY- POinT 7.2 MilliOn viSiTORS 2018 P a s s au STaDT- galERiE FaCEbOOK 4.2 / 5 stars 52,807 fans CityPointKassel inSTagRaM citypointkassel Investments: 100% Leasable space: 27,800 m² of which retail space: 20,000 m² Parking: 220 No. of shops: 60 Occupancy rate: 100% Catchment area: 0.6 million residents Purchased by DES: September 2000 Grand opening: 2002 Restructuring: 2009 / 2015 Anchor tenants: H & M, New Yorker, Saturn, tegut gOOglE 4.4 / 5 stars FaCEbOOK Investments: 75% Leasable space: 27,700 m² of which retail space: 21,000 m² Parking: 500 No. of shops: 90 Occupancy rate: 99% Catchment area: 0.8 million residents Purchased by DES: December 2006 Grand opening: 2008 Anchor tenants: C & A, Esprit, Saturn, Thalia 4.4 / 5 stars 33,131 fans StadtgaleriePassau inSTagRaM stadtgalerie_passau Address: Königsplatz 61 34117 Kassel Address: Bahnhofstraße 1 94032 Passau CI T Y- P OIN T- K A S SEL .DE S TA DT- GA L ERIE- PA S SAU.DE D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 5 5

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 6 5 0 W E i v R E v O R E T n E C / d a o r b A / y n a m r e G 6.4 MilliOn viSiTORS 2018 Ham el n STaDT- galERiE gOOglE 4.1 / 5 stars FaCEbOOK 4.2 / 5 stars 11,854 fans CENTER OVERVIEW Investments: 100% Leasable space: 26,000 m² of which retail space: 19,000 m² Parking: 500 No. of shops: 100 Occupancy rate: 97% Catchment area: 0.3 million residents Purchased by DES: November 2005 Grand opening: 2008 Anchor tenants: Müller Drogerie, New Yorker, real, Thalia StadtGalerieHameln inSTagRaM stadtgaleriehameln Address: Pferdemarkt 1 31785 Hameln S TA DTGA L ERIEH A MEL N.DE

SHOW ROOM d n a R E T n E C / w e i v r e v O r e t n e C 8 5 0 W E i v R E v O R E T n E C / d a o r b A 8.6 MilliOn viSiTORS 2018 B r n o , C ze ch Rep ub l ic OlYMPia CEnTER gOOglE FaCEbOOK 4.5 / 5 stars 4.4 / 5 stars 38,465 fans CENTER OVERVIEW Investments: 100% Leasable space: 85,000 m² of which retail space: 71,000 m² Parking: 4,000 No. of shops: 200 Occupancy rate: 99% Catchment area: 1.2 million residents Purchased by DES: March 2017 Grand opening: 1999 Restructuring: 2014 – 2016 Anchor tenants: Albert, H & M, Intersport, Peek & Cloppenburg olympiabrno inSTagRaM olympiacentrumbrno 9.0 MilliOn viSiTORS 2018 G dan sk , P o l an d galERia baŁTYCKa gOOglE 4.3 / 5 stars FaCEbOOK 4.4 / 5 stars 66,576 fans galeriabaltycka inSTagRaM galeriabaltycka Investments: 74% Leasable space: 48,700 m² of which retail space: 43,000 m² Parking: 1,050 No. of shops: 193 Occupancy rate: 99% Catchment area: 1.1 million residents Purchased by DES: August 2006 Grand opening: 2007 Anchor tenants: Carrefour, H & M, Peek & Cloppenburg, Reserved, Saturn, Zara Address: U Dálnice 777, 664 42 Modřice Brno, Tschechische Republik Address: al. Grunwaldzka 141 80-264 Gdańsk, Polen OLY MPI A- CEN T RUM.C Z GA L ERI A- BA LT YCK A .PL

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 5.2 MilliOn viSiTORS 2018 K l a g enf ur t , Aus tr ia CiTY aRKaDEn 12.5 MilliOn viSiTORS 2018 P é c s , Hun gar y ÁRKÁD PÉCS gOOglE 4.2 / 5 stars 4.4 / 5 stars 17,280 fans FaCEbOOK Investments: 50% Leasable space: 36,900m² of which retail space: 30,000 m² Parking: 880 No. of shops: 120 Occupancy rate: 98% Catchment area: 0.4 million residents Purchased by DES: August 2004 Grand opening: 2006 Anchor tenants: C & A, Peek & Cloppenburg, Saturn, Zara, H & M, Billa, Müller Drogeriemarkt cityarkadenklagenfurt inSTagRaM cityarkadenklagenfurt 4.3 / 5 stars 41,744 fans arkadpecs gOOglE 4.3 / 5 stars FaCEbOOK Investments: 50% Leasable space: 35,400 m² of which retail space: 33,500m² Parking: 850 No. of shops: 130 Occupancy rate: 97% Catchment area: 0.7 million residents Purchased by DES: November 2002 Grand opening: 2004 Anchor tenants: C & A, H & M, Media Markt, Interspar Address: Heuplatz 5 9020 Klagenfurt, Österreich Address: Bajcsy Zs. U. 11 /1 7622 Pecs, Ungarn CI T Y-A RK A DEN - K L AGENFUR T. AT A RK A DPEC S.HU D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 5 9

SHOW ROOM d n a R E T n E C / o i l o f t r o p r u O 2 6 0 A10 CENTER, WILDAU / BERLIN OUR PORTFOLIO The success of our company lies in our portfolio. We have 21 centers, each of which is unique. Of these, 17 are located in Germany, with one each in Austria, Poland, the Czech Republic and Hungary. Together, they contain 2,703 shops on an area covering 1,086,600 m². We wish to highlight our occupancy rate of 99% on average. This fig- ure provides a simple and concise insight into the quality of our portfolio. We are particularly proud of having been able to maintain this figure at this outstandingly high level ever since our company came into being. Our investments are squarely focused on Ger- many, where 82% of our centers are located. LOCATION IS A KEY FACTOR IN OUR SUCCESS The concepts of property and location have always been inextricably entwined. And when you add retail into the equation, location is more than an attribute; it is quite simply the basis for success. Our tenants naturally want to be where their customers expect them to be. Our tenants and shoppers can be sure that each of our 21 shopping centers is a prime location for them. Most of our properties are situated in city centers: places where people have been coming together for hundreds of years to meet and sell their wares. In many cases, our centers are immediately adjacent to local pedestrian zones. Our portfolio also includes shopping centers in established out-of-town locations. These centers, with their excellent transport links, have offered visitors and customers a welcome change for many years, in some cases they even replace city shopping expedi- tions altogether and frequently have a strong pull beyond the immediate region. OPTIMUM ACCESSIBILITY Whether in the city center or outside the city gates, we give particular attention to transport links for our properties. In cities, we like to be close to public transport hubs. In Hameln and Passau, for example, our centers are right next to the main bus sta- tions, while our properties in Norderstedt and Hamburg-Billstedt are directly above or adjacent to metro stations. All our centers also have their own park- ing facilities that offer visitors and custom- ers convenient and affordable parking, even in city centers, thereby ensuring optimum accessibility by car. Many of our properties outside inner cities offer free parking. These particular locations are alongside motorways, making them very easy to reach; examples include the A10 Center in Wildau on the A10 (Berlin ring road) and the Main-Taunus-Zen- trum in Sulzbach on the A66. Parking spaces reserved for women and people with disabilities are offered as part of our service at all our shopping centers. Charging stations for electric vehicles and joint ventures with car-sharing services are just a few examples that show that here too, we are always thinking of tomorrow. In addi- tion, we are gradually fitting more and more of our parking facilities at the centers with LED parking space indicators, which enable visitors to find a convenient vacant space

OUR CENTERS No. of centers Domestic Abroad 17 4 Total 21 Leasable space in m ² 880,600 206,000 1,086,600 No. of shops Occupancy rate* Inhabitants in catchment area in millions *as per EPRA, based on rental income 2,060 99% 13.5 643 99% 3.4 2,703 99% 16.9 ARCHITECTURE WITH SOMETHING SPECIAL When designing our locations, special attention is always given to the architecture, Specific plot requirements are seen as no less impor- tant than the functional needs of our CAR FINDER The fi rst a n d l a st to uch- p oi n t o n a v i sit to a ce n ter i s the c a r p a rk. O u r C a r Fi n d er offers b et ter gui d- a n ce here: Custo m ers si m ply sc a n the QR co d e o n a C a r Fi n d er sig n n e a r the vehicle, stori n g the p a rki n g p ositio n i n thei r s m a r t p ho n e. A f ter sho p pi n g, they c a n the n sc a n a n other QR co d e at o n e of the p ay m a chi n es a n d co nve nie n tly b e gui d e d b a ck to thei r c a r. far more quickly. QR code-based guidance systems also lead our visitors quickly back to their parking space after a lengthy wander around the shops. SUCCESSFUL MIX Each of our 21 shopping centers has a unique tenant structure resulting from a long, inten- sive and ongoing process. Especially given the current increase in the amount of shopping being done online, this process focuses on meeting the needs of customers and supple- menting the range of shops in each city center. Our goal is always to work with retailers in the neighbourhood to make the entire location more attractive so that everyone can benefit from the increased appeal of the city center as a whole. Our centers often play an active role in the marketing and management of each city, both financially and in terms of personnel and creative input. We attach great value to fair collaboration and partnerships. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 6 3

SHOW ROOM d n a R E T n E C / o i l o f t r o p r u O 4 6 0 tenants. We also always have a responsibil- ity towards the city and its residents, and it is important to us that we fulfil this. This includes the best-possible integration into the urban landscape, combined with an exterior that meets modern architectural standards. In seeking to achieve this, we work very closely with the local authorities. The results are clear: the outcome is often an architectural gem, where even unique his- torical buildings can be lovingly integrated into the center when possible, as is the case, for example, with the listed former Intecta department store, which is now structurally part of the Altmarkt-Galerie Dresden. What is inside counts too: the interiors of our shopping centers also need to be impres- sive, as the most important thing is that vis- itors and customers enjoy shopping there and experience the space in a special way. To achieve this, we opt for simple and timeless architecture, making use of premium materi- als that often have their origins in the region. Quiet rest areas, lovingly placed plants and fountains invite people to take a moment out to relax, innovative lighting concepts create the right atmosphere to suit the time of day, and state-of-the-art climate control technol- ogy provides a pleasant “shopping climate” all year round. Everything is designed to make each visi- tor enjoy being in the center and want to keep coming back. Ongoing modernisation and optimisation ensure that our centers retain their value and remain competitive. We and our center management partner ECE have launched “At Your Service”, a large-scale initi- ative to examine all the aspects of our centers’ service, to highlight the existing services even EVEN ON THEIR WAY TO THE SHOPS, OUR CUSTOMERS CAN DO SOMETHING FOR THE ENVIRONMENT: ALL OUR CENTERS ARE LOCATED NEAR BUS AND RAILWAY STATIONS more clearly and to optimise and supplement them where this is sensible and necessary. This includes major improvements to the signage inside the center, lighting and new colour schemes in the malls. Seating and lounge areas with smartphone charging facil- ities provide a relaxing break from shopping. Children’s play areas are provided for our smallest visitors. Visitors should feel happy and comfort- able with us – whatever their age. It goes without saying that our centers are designed for multi-generational use. Wide malls, esca- lators and lifts make it possible to easily explore every corner of the center, even with pushchairs or wheelchairs. SHOPPING WITHOUT BORDERS — FOR ALL! Ste p -free a ccess, w i d e d o or- w ays a n d ple n t y of s p a ce i n w hich to m a n o euv re e n a ble p e o ple w ith d i sa bi lities to e njoy m a xi m u m m o bi lit y i n o u r ce n ters a s w el l. SUSTAINABILITY GOES WITHOUT SAYING All our German centers have been operating on certified green electricity since 2011. Our foreign properties are in the process of being switched to energy from renewable sources. We also want to continuously reduce the over- all energy consumption of our properties and in so doing cut CO2 emissions. To achieve this aim, we use ultramodern technologies, such as heat exchangers and LED lighting sys- tems. We also constantly seek dialogue with our rental partners with the aim of working together to reduce energy consumption in the individual shops. The refuse in our centers is separated not just into paper / cardboard, lightweight packaging and glass, but also into leftover food and residual waste. Back in 2017, at Expo Real (a major trade fair for the real estate business) in Munich, the Deutsche Gesellschaft für Nachhaltiges Bauen (German Sustainable Building Coun- cil, DGNB) awarded prestigious sustainability certificates to 20 shopping centers in our portfolio. In the meantime, all of our proper- ties have been awarded certificates in gold or platinum.

A SECURE FUTURE THROUGH COMPLETE FLEXIBILITY MORE THAN 175 MILLION VISITORS Almost 17 million people live in the catchment areas of our shopping centers, just under 14 million of them in Germany. This equates to more than 16% of the German population. A location’s catchment area is a major factor for us when it comes to selecting an invest- ment: this is ascertained at regular intervals according to standardised rules for all shop- ping centers and represents the total num- ber of potential customers for the location in question. In 2018 we were able to welcome a total of over 175 million visitors to our 21 properties. SMART CONTROL SYSTEMS A s night fa l ls, the ro ofs of o u r ce n ters sta r t to m ove. Sm a r t co n t rol syste m s o p e n fl a ps that a l lo w hot a i r to esc a p e a n d cold a i r to flo w i n. Thi s re m oves the n ee d for m echa nic a l co ol- i n g a n d saves a lot of elec t ricit y. Retail is driven by constant change. One par- ticular challenge we face as the lessor is to be able to meet the frequently changing require- ments and needs of our tenants. Some tenants significantly expand their retail spaces so they can convert the shop from purely a retail area into a true expe- rience arena. The idea is to give customers more opportunities to take the time to try out and experience the product on site. Ever more intensive consultation is also part of this. All these factors play an increasingly important role, particularly at a time when more and more people are shopping online. We provide customised solutions to meet the demand for ever more varied spaces. We can almost always offer all tenants the exact floor plan they need to make their concepts a reality in our centers and are also able to respond if a tenant wants to make changes to an existing retail space later on. Moving the internal walls makes it possible to adapt virtually any retail space – to make it bigger or smaller – without major effort or expense. If a tenant wants to make a space smaller, this can, for example, create an opportunity to bring a new concept to the center at this site. It is precisely this factor that distinguishes our shopping centers from the traditional shopping street which, even today, generally offers only rigid floor plans that have to be accepted the way they are. In some cases, certain retailers wait to enter the market in a city until they are offered the right space in a shopping center because their search in the traditional pedestrian zone has proven unsuccessful. The whole of the retail sector in the city center ultimately benefits from the resulting increase in diversity.. SHOP FOR SUSTAINABLE PRODUCTS IN A SUS- TAINABLE ENVIRONMENT D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 6 5

SHOW ROOM d n a VARIETY IN THE A10 CENTER, WILDAU-BERLIN OUR TOP 10 TENANTS H&M, one of the world’s major textile retailers is our top tenant, accounting for 3.5% of our rental income. Ceconomy, at 2.7% with its two retail brands Media Markt and Saturn, comes second. Our rental contract portfolio is highly diversified: our top 10 retail tenants account for no more than around 22% of our rental income, so there is no major dependency on individual tenants. LONG-TERM RENTAL CONTRACTS Most of the rental contracts that we sign with our tenants are long-term. As at 31 December 2018 the weighted residual term of the rental agreements in our portfolio was 5.1 years, with 48% of our rental agreements being secured until at least 2024. OUR TOP 10 TENANTS share of rental income As at 31 December 2018 3.5% H & M 2.7% CECONOMY 2.5% DEICHMANN 2.4% NEW YORKER 2.3% PEEK & CLOPPENBURG TOTAL OF THE TOP 10 TENANTS: 22.2% OTHER TENANTS: 77.8% 2.0% C & A 1.8% REWE 1.8% DOUGLAS 1.8% METRO 1.4% DM R E T n E C / o i l o f t r o p r u O 6 6 0

RESIDUAL TERM OF RENTAL AGREEMENTS IN PLACE Long-term rental agreements share As at 31 December 2018 10% 2023 11% 2022 48% 2024 ff. 5% 2020 6% 2019 20% 2021 rather than short-term maximisation of rents. We want to offer our customers and visitors an attractive mix. Rather than focus on each shop space in isolation, we look at the property as a whole. The rent in each case is calculated primarily on the basis of the sales potential of the sector to which the tenant belongs as well as of its location within the shopping center. This also enables us to give new businesses and niche concepts an opportunity. All sides benefit from this system: as the landlord, we are able to build a relationship of trust with our tenants for the long term; our tenants benefit from high visitor numbers achieved due to the varied mix of offerings; and our customers appreciate the very wide choice of shops. These range from various fashion concepts to accessories, drugstores and supermarkets, right through to profes- sional services such as dry cleaners as well as bank and post office branches. Deutsche EuroShop benefits from its more than 50 years of experience both within Ger- many and abroad. Thanks to our streamlined structure, we are therefore able to focus on our core business and competence, portfolio management. RENT OPTIMISATION RATHER THAN MAXIMISATION One of the core tasks of center management is putting together the right combination of shops to suit the property and the local area. This mix of tenants and sectors is tailored exactly to each location and is constantly refined. It is the result of a careful analysis of each local retail market. Center management is also about identi- fying the wishes and needs of customers. We are also happy to create space in our centers for retailers from sectors that, due to current rental costs in prime locations, are rarely to be found in city centers any more, such as toy and porcelain shops. We set ourselves apart from the majority of building owners in the pedestrian zone in a key respect here: as long-term investors, it is our goal to achieve permanent optimisation OUR PARTNER FOR CENTER MANAGEMENT Management of our 21 shopping centers has been outsourced to our partner ECE Projektmanagement. ECE has been designing, planning, build- ing, letting and managing shopping centers since 1965. With around 195 centers in eleven countries currently under its management and more than 3,400 employees, the company is Europe’s market leader in the area of inner- city shopping centers. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 6 7

SHOW ROOM d n a R E T n E C / o i l o f t r o p r u O 8 6 0 CULINARY DELIGHTS Surveys show that the food and drink offering is an increasingly important consideration for customers when choosing whether to visit a center. And it’s not just for this reason that we want to offer our visitors something special on the gastronomic front: cafés, fast-food restaurants, ice-cream parlours, etc. offer a chance for refreshment and revitalisation while shopping. The Phoenix-Center in Ham- burg-Harburg, the City-Point in Kassel and the Galeria Bałtycka in Gdansk have their own food courts, with space for lots of diners to enjoy a wide variety of cuisines in a single seating area, so that friends or families can choose to eat from different outlets while still sitting together. NEW RENTAL CONTRACTS In 2018, w e sig n e d 287 n e w re n ta l co n t r a c ts for o u r ce n ters, 21 1 of the m i n Ger m a ny a n d 76 a bro a d. The n e wly let s p a ce a m o u n te d to a p prox. 74,0 0 0 m 2. These i n clu d e d n e w stores for the for m er ly o n li n e-o n ly o p tici a n Mi ster Sp ex, the Fre n ch cos m etics cha i n Se p hor a (b oth i n the M a i n-Ta u n us- Ze n t ru m, Sulzb a ch), the li fest yle fa shio n l a b el Blu e To m ato (A lt m a rkt-Ga lerie D resd e n) a n d the b u rger gri l l Ha ns i m Glück (Sta dtga lerie Pa ssa u). FOCUS ON FASHION The fashion industry dominates our retail mix at around 50%. The strength in fashion of our centers is confirmed time and again in customer surveys. It is one reason why cus- tomers are willing to travel sometimes long distances from the surrounding area to enjoy the wide selection and quality of the service. The individual tenant mix provides each of our centers with a character all of its own. In our shopping centers, we always make sure that there is a healthy blend of regional and local retailers as well as national and international chain stores. The colourful structure of our centers offers visitors something different each time and the opportunity to satisfy a vast range of consumer needs. RETAIL MIX (of rental space) As at 31 December 2018 1.8% SERVICE PROVIDERS 6.0% HEALTH PRODUCTS SECTOR 6.8% GROCERIES 4.4% FOOD AND RESTAURANTS 18.9% HARDWARE / ELECTRONIC DEPARTMENT 12.3% STORES / CONSUMER MARKETS 49.8% CLOTHING

SHOW ROOM d n a DIGITAL SUSTAINABILITY The impact of the internet on the pace of change in the retail sector continues una- bated. We want to bring together the best of both worlds in our centers, offline and online, and showcase the strengths of our tenants: atmosphere, services, fitting rooms, imme- diate availability of merchandise. It is not for nothing that more and more online-only retailers are learning that pure branding mostly takes place offline and that direct and personal contact with customers is often the optimum prerequisite even for subsequent online purchases. This is addressed in detail by the article entitled “The factor behind suc- cess: the shop” on page 94. Multichannel marketing also has a part to play here, enabling our tenants to com- bine various means of communication and distribution. For example, products that are out of stock in a store in the required size or colour can be delivered directly to customers at home. Alternatively, customers can order their goods online from home and collect them from our tenant’s store in the center. We are responding to the challenges of online retail by integrating various digital services into our centers. These include apps and social media offerings for each individual center. Since the end of 2018, the Main-Taunus- Zentrum and the Altmarkt-Galerie Dresden have been connected up to the Digital Mall developed by our partner ECE. This enables our customers to search for products avail- able anywhere in the center at any time, plus their sizes and prices, then simply reserve and collect them. The concept of the Digital Mall is based on the idea that customers can find out what is avail- able at their local center from home and not automatically be directed to the main e-com- merce providers when searching for products on the internet. An online product search now offers over 400,000 available articles from over 60 stores, and negotiations with many other tenants are already ongoing. There are also plans in place to offer the Digital Mall to other centers in our portfolio as well at a later date. And there is the prospect that products could be delivered from the centers to customers in the surrounding area. SUCCESSFUL TENANT PARTNERS Our tenants are among the key drivers of our success. They include Aldi, Apple, Bijou Brigitte, Birkenstock, Breuninger, C & A, Christ, Deutsche Post, Deutsche Telekom, dm-drogerie markt, Douglas, Fielmann, H & M, Jack & Jones, Kiehl’s, Media Markt, Mister Spex, Nespresso, New Yorker, Nord- see, Peek & Cloppenburg, Reserved, REWE, A10 CENTER, WILDAU / BERLIN Rituals, Saturn, Sephora, Søstrene Grene, Stadium, s.Oliver, Subway, Superdry, Tesla, Thalia, TK Maxx, Tommy Hilfiger, Vero Moda, Villeroy & Boch, Vodafone and Zara. OMNICHANNEL EXPERIENCE Fi n d o n li n e, b u y offli n e: The Digita l M a l l offers o u r custo m ers a se a m less o m nicha n n el ex p erie n ce. O n the w ebsites of the M a i n-Ta u n us- Ze n t ru m a n d the A lt m a rkt-Ga lerie D resd e n, custo m ers c a n ex p erie n ce the va riet y of pro d uc ts offere d by sever a l sho ps, fi n d o u t o n li n e a b o u t the offeri n g ava i l a ble, reser ve a r ticles a n d the n b u y the m fro m the releva n t reta i ler i n the a c tua l sho p pi n g ce n ter. The r a n ge cu r re n tly i n clu d es m ore tha n 4 0 0,0 0 0 pro d uc ts. By rol li n g o u t thi s pi lot projec t, o u r p a r t n er ECE ha s b eco m e the fi rst o p er ator of sho p pi n g ce n ters i n Ger m a ny to ful fi l m a ny custo m ers’ w i sh for a n i n tegr ate d, cross-cha n n el sho p pi n g ex p erie n ce. The i nvolve m e n t of other ce n ters i n o u r p or tfolio i s pl a n n e d. R E T n E C / o i l o f t r o p r u O 0 7 0

3D WAYFINDER It i s i m p or ta n t to offer custo m ers a va riet y of n avigatio n a l offers, es p eci a l ly i n l a rge sho p - pi n g ce n ters. O u r m o d- er n, d igita l 3D W ayfi n d er syste m s help the m to fi n d exa c tly w hat they a re lo ok- i n g for: w hether that’s a sho p, pro d uc t, AT M or toi let. The ro u te i s d i s pl aye d i n a n a u the n- tic, three- d i m e nsio n a l m a n n er fro m the custo m - er’s p ers p ec tive. It c a n a lso b e d o w n lo a d e d fro m the W ayfi n d er syste m o n to p erso n a l s m a r t p ho n es usi n g a QR co d e. UNIFORM BUSINESS HOURS At our centers, visitors can always rely on standard opening hours, unlike in the tra- ditional city center where each individual retailer decides for itself how long to be open. Whether it is a hair salon, an optician or a travel agency, every tenant is open to vis- itors for the center’s full opening hours. This too is a strategic advantage, and one that is appreciated in particular by customers who have to come a long way. TOGETHERNESS IS OUR STRENGTH In the center itself, the focus is always on service. There are Service Points manned by friendly staff who can answer any questions about the center. Gift vouchers and other items can also be bought at them. Many of them hire out children’s buggies. Digital touchpoints that enable communication with service staff by live video chat are the perfect complement to traditional customer information. We also lead the way with our new 3D Wayfinders, which show users how to get to the shop they want with authentic 3D vis- ualisation or which can be downloaded onto personal smartphones. Customers can feel safe at all times thanks to the deployment of discreet security personnel. Baby changing rooms, customer toilets and cash machines complete the services. It goes without saying that the centers are always clean. Every one of our tenants is automatically also a member of the marketing association of the center in question. This means that each tenant pays a share of the center’s mar- keting costs and can play an active role in the marketing strategy committee. The market- ing association plans events together with the center management, thus transforming the shopping center into a lively market- place: fashion shows, art exhibitions, coun- try-themed weeks and information events dealing with a whole range of topics offer visitors new and fresh experiences time and again. Local associations and municipal author- ities are also involved in the plans and are given the opportunity to represent them- selves in the center. The lavish center decora- tions for the Easter and Christmas periods are among the projects handled by the marketing associations. Another important area of the work is coordinating coherent social media and advertising activities for the center as a whole as well as editing a center newspaper, which is distributed as an insert in regional daily newspapers in the catchment area and pro- vides readers with regular and professional updates on all events and news relating to the center. Radio ads, adverts on and inside local public transport, and illuminated advertis- ing posters also ensure that the advertising measures reach a large audience. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 7 1

SHOW ROOM d n a R E T n E C / s r e t n e c e h t n i s e i t i v i t c A ACTIVITIES IN THE CENTERS CITY-ARKADEN KLAGENFURT SH O P W I TH O U T L I M I T! NORDERSTEDT SPRING HAS SPRUNG! Between 22 February and 10 March 2018, spring took hold of the Herold-Center in Nor- derstedt with a magnificently colourful dis- play of plants. Customers and visitors were given a taster of the garden season with this big spring campaign. Flowerbeds and varied garden landscapes completely transformed all the promotional areas in the center. As well as hundreds of flowers and bushes in bloom, there were light installations to pro- vide inspiring design ideas for the gardens and terraces at home. As well as a series of talks by celebrity gardener John Langley, who of course had lots of handy gardening tips, there were models in colourful floral outfits. www.herold-center.de HEROLD-CENTER NORDERSTEDT 2 7 0 Also on trend this year: destroyed jeans

WETZLAR WATCH OUT, SCHLAGERS ARE ABOUT! Old-fashioned pop music, known as Schlagers, is making an amazing comeback. Helene Fischer and Andrea Berg have reached high chart positions again and again, and even Heino now has a cult following among young people. Music unites generations. From 17 May to 2 June 2018, the Forum Wetzlar was also struck by Schlager fever, taking its visitors on an interactive journey through 100 years of big tunes. Blond singer Annemarie EIlfeld sang to a packed audience in front of the “Schlager- welten” stage. Nino de Angelo also knew how to get the crowds into an unforgettable mood. Following their performances, both artists took time out to sign autographs and give fans the opportunities to get close up to their music idols. www.forum-wetzlar.de KLAGENFURT LONG LIVE THE MIRACLE OF CORDOBA! At the end of June 2018, it was all about inter- national competitions in Klagenfurt: To mark the 40th anniversary of Austria’s legendary 3:2 win over Germany at the football World Cup in Argentina, better known as the ‘Mira- cle of Cordoba’ in Austria and the ‘Disgrace of Cordoba’ in Germany, the classic Derby match came to life again. Following in the footsteps of Hans Krankl, Karl-Heinz Rummenigge and others, teams of Austrian and German center visitors competed across a series of exciting football stations, including a goal wall, giant table football, a dribbling course, Subbuteo, a football quiz and much more. Guaranteed fun for all the family! As well as the honour of defeating their favourite neighbours, there were plenty of attractive prizes to be won. www.city-arkaden-klagenfurt.at FORUM WETZLAR ALLEE-CENTER MAGDEBURG MAGDEBURG 20 YEARS AND LOTS OF CAKE The Allee-Center in Magdeburg celebrated with a massive party in September 2018: At the event to mark its 20th anniversary, Thomas Wünsch, the State Secretary for the Economy in Saxony-Anhalt, described the center as “the most beautiful living room in the city” in praise of the newly completed renovation work. The center has reinvented itself: There is now a children’s play area in the basement, cosy lounge areas to relax in and trees growing up towards the sky. There was also a bake-off in which seven bakers and confectioners from Magdeburg and the surrounding area competed to bake a winning birthday cake. They were judged by a jury on appearance, flavour and difficulty. The best three cakes won prize money and were then shared out among the visitors. www.allee-center-magdeburg.de L E T´S G E T C A K E Cakes just always work D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 7 3

SHOW ROOM d n a ENVIRONMENT Climate protection is a top priority for Deutsche EuroShop. R E T n E C / t n e m n o r i v n E We firmly believe that sustainability and profitability are not mutually exclusive. Neither are shopping experience and environmental awareness. Long-term thinking is part of our strategy, and that includes a commitment to environmental protection. In 2018, 19 of our 21 shopping centers had contracts with suppliers that use renewable energy sources, such as hydroelectric power, for their electricity needs. The TÜV Süd cer- tified the green electricity for our centers in Germany with the renowned “Eco Power Product” label in 2018. We also plan to switch the remaining two centers over to green elec- tricity wherever possible within the next few years. The 19 centers used a total of around 72.8 mil- lion kWh of green electricity in 2018. This represented 100% of the electricity require- ments in these shopping centers, Based on conservative calculations, this meant a reduc- tion of around 30,011 tonnes in carbon dioxide emissions, which equates to the annual CO2 emissions of more than 1,350 two-person households. The use of heat exchangers and energy-saving light bulbs allows us to further reduce energy consumption in our shopping centers. Deutsche EuroShop also supports a diverse range of local and regional activities that take place in our shopping centers in the areas of the environment, society and the economy. REDUCTION OF CO2 EMISSIONS AND ELECTRICITY CONSUMPTION 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 20 18 16 14 12 10 8 6 4 2 0 4 7 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Number of centers included Total electricity consumption in mwh CO2 reduction in t

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 +++ SUSTAINABILIT Y TICKER +++ SUSTAINABILIT Y TICKER +++ SUSTAINABILIT Y TICKER +++ SUSTAINABILIT Y TICKER +++ RENTAL CONTRACTS Since 2015, 28% of rental contracts in DES shopping centers have been renegotiated, 60% of which in accordance with the green lease standard. Green lease contracts are aimed at raising tenants' awareness to the importance of sustainably fitting out and operating their rental space. In the contracts, both parties take on specific obligations with regards to the tenancy. The contracts, which are based on the industry standard of the General Property Federation (Zentraler Immobilien Ausschuss, ZIA), include specifi- cations on the use of materials in the fit-out and conversion of rental space as well as reg- ulations on sustainable management. BEEKEEPERS A joint bee project with a local grammar school was launched in City-Arkaden Wup- pertal in 2018 that involves setting up two-to three storey beehives on the roof of the center. The lower box or "super" houses the brood and has an entrance through which the bees enter the hive. This is where they live and tend to their offspring. In spring, another box, the honey super, is placed over the brood super, and, depending on the quantity of honey pro- duced, another honey super can be added as a third storey. Honey is harvested in May and July, which involves the beekeeper's removal of wax cappings from the honey frames and then the removal of the honey using an extractor. ENERGY-SAVING MEASURES Stadtgalerie Passau serves as an example of how shopping centers can be operated accord- ing to an all-round sustainable concept: Water is saved by operating fountains during shop opening hours only. Washbasins in toilets are equipped with water-saving mechanisms, and urinals operate without water. Energy-saving measures take the form of optimised oper- ating times of the various areas of the mall, exterior and parking areas. Lighting has been subject to increased control: timers are used to adapt various lighting scenarios with day- light-dependent and needs-based control to the center's opening hours. This not only cre- ates a pleasant atmosphere for shopping, but also saves energy. The lighting concepts have been converted to LED and are supported by presence detectors in the escape routes and ancillary areas. Lifts and escalators are also operated in energy-saving mode using an advanced building control system: A sleep function switches lift lighting off when they are not in use for a long period and stops escalators when not in use. Lifts are equipped with motors that feed energy back into the grid. In order to minimise the need for cooling and ventilation caused by heat radiation, the glass mall roofs have been equipped with a special foil coating and the shading system optimised with a light- and sun-position-de- pendent control system. ELECTROMOBILITY Charging infrastructure for electromobility has already been set up in five DES centers – 24 charging stations are already available in the A10 Center, Billstedt-Center Hamburg, Forum Wetzlar, Main-Taunus-Zentrum and Rathaus-Center Dessau. A further 42 charg- ing points are currently being planned for installation in nine other centers, with the ultimate goal of providing all of them with charging infrastructure in 2019. DISINFECTION WITH LIGHT Since the end of November 2018, innovative disinfectant modules from Cologne-based start-up UVIS have contributed to a suc- cessful, worry-free shopping experience at the Phoenix-Center in Harburg: the instal- lation is the first germ-free escalator in a shopping center in Germany, eliminating a potential contamination risk, especially in the winter flu season. The modules use UVC light in order to destroy the bacteria, viruses and fungi on the handrail and render them harmless. Visitors to the Phoenix-Center can safely hold the escalator handrails, safe in the knowledge they are not harbouring path- ogens. This is proven to lead to increased safety on the escalators and reduces the risk of accidents. The large sticker on the bannisters indicates that the handrails are germ-free. A representative survey after the instal- lation of the UVC disinfectant module at the Phoenix-Center shows that the germ-free GERMANY’S FIRST GERM-FREE ESCALATORS IN A SHOPPING CENTER handrails were very popular among visi- tors. Around 91% of those surveyed felt their visit to the center was more pleas- ant because of the disinfected handrails. There was also a markedly positive effect on the feeling of safety and cleanliness, the center’s image and atmosphere. 0 7 5

SHOW ROOM d n a R E T n E C / t n e m n o r i v n E ENVIRONMENTAL PERFORMANCE ESTIMATION OF LANDLORD-OBTAINED UTILITY CONSUMPTION None of our data is estimated.+ BOUNDARIES – REPORTING ON LANDLORD AND TENANT CONSUMPTION The electricity consumption reported includes electricity which we purchase as landlords and refers to common areas only. Consump- tion data for fuels, district heating and cool- ing and water include tenant data as it is not possible to separate common area and tenant area consumption. Waste data also includes tenant waste. ANALYSIS – NORMALISATION Intensity indicators are calculated using floor area (m²) for whole buildings. We are aware of the mismatch between nominator and denominator, as our consumption for elec- tricity relates to common areas only, whereas fuels, district heating and cooling and water data covers the entire building as we cannot separate common area from tenant area consumption. For our own offices we report intensity performance measures using the floor area we occupy within the building. INTRODUCTION We report on our energy, GHG emissions, water and waste impacts, and social and gov- ernance measures in accordance with the 3rd edition of the EPRA Sustainability Best Prac- tice Recommendations (sBPR). Our reporting response has been split into 2 sections: • 1. Overarching recommendations • 2. Sustainability performance measures OVERARCHING RECOMMEND- ATIONS ORGANISATIONAL BOUNDARIES We use the operational control approach for our data boundary, which includes 14 assets. There were no changes to our portfolio between 2017 and 2018, meaning the scope of assets included in our Absolute and Like- for-Like performance measures is the same. COVERAGE We report on all properties within the organ- isational boundary defined above, and for which we are responsible for utilities con- sumption (see Boundaries – reporting on landlord and tenant consumption). 6 7 0

We saw a matching 3% reduction in direct Scope 1 GHG emissions, and a 2% reduction in indirect Scope 2 emissions due to changes to grid emissions factors. The GHG emissions intensity of our portfolio likewise reduced by 2% to 0.014 tCO2 / m² in 2018. Water consumption reduced by 1% in abso- lute terms although the water intensity of our portfolio was unchanged at 0.003 m3 / visitor. All water is from the municipal supply. Waste produced across our portfolio rose by 7% to 5,679 tonnes in 2018. Of this, 45% was recycled, 4% was composted (a 25% increase compared with 2017) and 51% sent for incin- eration (a 2% reduction compared with 2017) meaning zero waste was sent to landfill. These changes can be attributed to the fact we have collected more accurate separation data over the past couple of years. ANALYSIS – SEGMENTAL ANALYSIS (BY PROPERTY TYPE, GEOGRAPHY) We have not carried out segmental analysis as we do not find this very informative for our portfolio, given that our assets are all shopping centers, located mainly in Germany, similar in age, and the majority have similar EPC ratings. THIRD PARTY ASSURANCE We do not have third party assurance. DISCLOSURE ON OWN OFFICES Our own occupied offices are reported sepa- rately to our portfolio. Please see Table Office Performance on page 80. NARRATIVE ON PERFORMANCE PORTFOLIO PERFORMANCE In 2018 we reduced the environmental impact of our portfolio with respect to the consump- tion of district heating and cooling (-3%) and fuels (-3%). These reductions were partly offset by a small increase (1%) in electricity consumption meaning the building energy intensity of our portfolio was unchanged at 97 kWh / m². D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 7 7

SHOW ROOM d n a In 2018, we continue to report that all our assets are certified to the DGNB standard at the following levels: • DGNB Platinum: A10 Center (Wildau), Billstedt-Center Hamburg, City-Galerie Wolfsburg, Phoenix-Center Hamburg, Stadtgalerie Passau, Árkád Pécs and City Arkaden Klagenfurt. Together, these rep- resent 31% of our portfolio by leasable floor area. • DGNB Gold: City-Point Kassel, Alt- markt-Galerie Dresden, Stadtgalerie Hameln, Allee-Center Hamm, City-Ark- aden Wuppertal, Herold-Center Nor- derstedt, Rathaus-Center Dessau, Rhein-Neckar-Zentrum Viernheim, Main-Taunus-Zentrum Sulzbach, Forum Wetzlar, Allee-Center Magdeburg, Saar- park-Center Neunkirchen and Galeria Bałtycka Gdansk. Together, these rep- resent 69% of our portfolio by leasable floor area. OWN OFFICE PERFORMANCE During 2018, consumption within our own office has either reduced or remained unchanged since the last reporting year. Nota- ble reductions include district cooling and heating consumption (-13%), building energy intensity (-11%) and water consumption (-7%). There was also a notable reduction in indi- rect Scope 2 GHG emissions (market based) in 2018 of 15%. SOCIAL AND GOVERNANCE PERFORMANCE MEASURES This is the first year we have reported on the EPRA sBPR Social and Governance Per- formance Measures for which we collect information. Our reporting on gender diversity is in line with the German Corporate Governance Code and our approach and performance is detailed in the Corporate Governance chapter of this report (see page 112). Information on the composition of our highest governance body, our processes for nominating and selecting members of the highest governance body, and the avoidance of conflicts of interest is also provided in this section. During 2018, 80% of our employees attended training which amounts to 25 hours (3 ½ days) per year. EmpDev is marked as not applica- ble: although every employee meets with the CFO and CEO annually providing the opportu- nity for open conversations to be had, these meetings do not constitute a formal review process. No employees joined or left the company meaning our new hire and turnover rate was zero. LOCATION OF EPRA SUS- TAINABILITY PERFORMANCE MEASURES EPRA sustainability performance measures for our portfolio and own offices can be found in Tables portfolio performance and office performance on page 79 and 80 of this report. R E T n E C / t n e m n o r i v n E 8 7 0

PORTFOLIO PERFORMANCE Indicator EPRA code Unit of measure 2017 Coverage 2018 Coverage Change Total electricity consumption Elec-Abs kWh 57.656.459 58.515.958 Like-for-like electricity consumption Elec-LFL Total energy consumption from district heating and cooling DH&C-Abs % from renewable sources 85 kWh kWh 57.656.459 23.946.403 100% 100% 85 58.515.958 23.322.030 100% 100% % from renewable sources na 100% na 100% Like-for-like consumption from district heating and cooling DH&C-LFL kWh 23.946.403 100% 23.322.030 100% Total energy consumption from fuel Fuels-Abs kWh 22.000.425 21.389.046 Like-for-like consumption from fuel Fuels-LFL kWh 22.000.425 % from renewable sources 0 na = not applicable n/a = not available GHG emissions: We calculate our emissions based on the GHG Protocol methodology using location-based emissions factors. Market-based emissions factors for indirect Scope 2 GHG emissions are not available at the time of publication. Renewable electricity comes from specific contracts certified by the TÜV Süd. Building energy intensity Energy-Int kWh/m² Direct GHG emissions (total) Scope 1 GHG-Dir-Abs tCO2 Indirect GHG emissions (total) Scope 2 GHG-Indir-Abs tCO2 (market based) tCO2 (location based) Building GHG emissions intensity GHG-Int tCO2/m² Total water consumption Water-Abs Total m3 Like-for-like water consumption Water-LFL m3 Building water consumption intensity Water-Int m3/visitor Weight of waste by disposal route (total) Weight of waste by disposal route (Like-for-like) Waste-Abs tonnes % recycled % composted % sent to incineration Waste-LFL tonnes Type and number of assets certified Cert-Tot % recycled % composted % sent to incineration % of portfolio certified OR number of certified assets % of portfolio by leasable space 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0 21.389.046 97 4.320 n/a 10.870 0,014 372.131 372.131 0,003 5.976 45 4 51 5.976 45 4 51 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 97 4.443 n/a 11.084 0,015 374.535 374.535 0,003 5.567 45 3 52 5.567 45 3 52 100% 100% 100% 100% 0% 69% awarded DGNB Gold 31% awarded DGNB Platinum 1% 0% 1% -3% na -3% -3% 0% -3% 0% -3% n/a -2% -2% -1% -1% 0% 7% 0% 25% -2% 7% 0% 25% -2% D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 7 9

SHOW ROOM d n a R E T n E C / t n e m n o r i v n E 0 8 0 Total electricity consumption Like-for-like electricity consumption Total energy consumption from district heating and cooling Like for like consumption from district heating and cooling Total energy consumption from fuel DH&C-LFL kWh Fuels-Abs kWh % from renewable sources Like-for-like consumption from fuel Fuels-LFL kWh Building energy intensity Energy-Int kWh/m² Direct GHG emissions (total) Scope 1 Indirect GHG emissions (total) Scope 2 Building GHG emissions intensity GHG-Dir-Abs tCO2 GHG-Indir-Abs tCO2 (location based) tCO2 (market based) GHG-Int tCO2/m² Total water consumption Water-Abs Water-LFL m3 m3 Water-Int m3/employee Waste-Abs tonnes % recycled % sent to incineration Waste-LFL tonnes % recycled % sent to incineration % of portfolio certified OR number of certified assets Cert-Tot Like-for-like water consumption Building water consumption intensity Weight of waste by disposal route (total) Weight of waste by disposal route (Like-for-like) Type and number of assets certified na = not applicable n/a = not available 0% 0% 0% -13% na -13% na na na -11% 0% n/a -15% 9% -7% -7% -1% 0% 0% 0% 0% 0% 0% 0% 54.565 na na na 231 0 n/a 11 0,03 592 100% 100% 100% 100% 100% 100% 100% 100% 100% 48.337 na na na 209 0 n/a 9 0,03 552 100% 100% 100% 100% 100% 100% 100% 100% 100% 592 100% 552 100% 50 2 12 88 2 12 88 0 100% 100% 100% 100% 49 2 12 88 2 12 88 0 100% 100% 100% 100% OFFICE PERFORMANCE Indicator EPRA Unit of measure 2017 Coverage 2018 Coverage Change Elec-Abs kWh % from renewable sources Elec-LFL kWh DH&C-Abs kWh 8.988 100 8.988 54.565 100% 100% 9.028 100 9.028 48.337 100% 100% % from renewable sources na 100% na 100% GHG emissions: We calculate our emissions based on the GHG Protocol methodology using location-based emissions factors. Market-based emissions factors for indirect Scope 2 GHG emissions are not available at the time of publication. Renewable electricity comes from specific contracts certified by the TÜV Süd. No fuels are used at our office building. Water, district heating and cooling and waste are calculated using figures for the whole building, and the m² percentage the DES office occupies (DES has an office of 275m² in a building of 6,088m²), as these are not metered separately. GHG emissions: We calculate our emissions based on the GHG Protocol methodology using location-based emissions factors.

SOCIAL AND GOVERNANCE MEASURES Indicator EPRA code Unit of measure Indicator 2018 Employee gender diversity Diversity-Emp % of male & female employees Supervisory Board 33% female 67% male Executive Board Other employees 100% male 40% female 60% male Employee training and development Emp-Training Average number of hours Average hours of training undertaken by employees in the reporting period 25 hours % of employees Number of employees Employee performance appraisals Emp-Dev % of total workforce % of total employees who received regular performance and career development reviews during the reporting period New hires and turnover Emp-Turnover Total number and rate New employee hires Employee turnover 80% na 0% 0% Composition of the highest governance body Gov-Board Total numbers Number of executive board members 9 Number of independent / non-executive board Average tenure on the governance body Number of independent / non-executive board members with competencies relating to environmental and social topics The nomination and selection processes for the Board of Directors and its committees and the specific criteria used for nominating and selecting highest governance body members Processes to ensure that conflicts of interest are avoided and managed in the highest governance body and how they are reported 56% 7.4 na Corporate Governance Section (pg 112) Corporate Governance Section (pg 112) Process for nominating and selecting the highest governance body Gov-Selec Narrative description Process for managing conflicts of interest Gov-COI. Narrative description na = not applicable. Please see narrative on peformance. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 8 1

L‘OSTERIA A little piece of Italy in the Allee-Center Magdeburg Magdeburg is about 1000 miles from Italy. But the two places have come a little closer together thanks to the opening of the new L‘Osteria restaurant in the Allee-Center Magdeburg. Since Septem- ber 2018, fans of Italian cuisine can enjoy the finest pizza and pasta in the regional capital of Saxony-Anhalt. The new restaurant can serve up to around 165 customers with authentic, Italian cuisine. In summer, there are nearly twice as many covers on a generous terrace. You quickly feel like you are in a typically Italian Osteria, as in Federico Fellini’s film “Roma”. It is a perfect place for a delicious meal for young and old, friends, family and couples. It is lively, with a real buzz, and everywhere there is the seduc- tive aroma of genuine Italian food. Pizzas extend way beyond the edge of the plate and are often ordered for two people with different toppings on each half. Fresh pasta is made in-house and always served al dente. There are also numerous other Italian classics at fair prices, including antipasti, salads, desserts and a weekly menu full of seasonal delicacies. You can see everything prepared in the open kitchen “à la mamma”. For those who prefer to eat back at home after a tiring shopping trip, all dishes are also avail- able to take away on request. The architecture and interior design of all L’Osteria restaurants are designed to make every visit a real pleasure. The L‘Osteria at the Allee-Center Magdeburg is light and airy with large windows. In the evening, designer light- ing bathes the restaurant in warm, friendly light. A conscious blend of styles combining furniture specifically designed for the site and a selection of vintage pieces provides a lovely, inviting atmosphere, a hint of retro charm and a real feel-good atmosphere. A lot of hard work and over one million euros have been invested into this unforgettable restaurant experience in Magdeburg. The first L‘Osteria restaurant opened in Nuremberg in 1999. There are now restau- rants at 96 locations in Germany, Austria, Switzerland, the United Kingdom, the Czech Republic and the Netherlands. There are plans for over 200 restaurants by 2021. INGREDIENTS: • 3CL GIN • 3CL CAMPARI • 3CL RED VERMOUTH • ICE CUBES INSTRUCTIONS: 1. POUR THE GIN, CAMPARI AND RED VERMOUTH INTO A MIXING GLASS 2. ADD ICE AND SHAKE FOR AROUND 30 SECONDS,UNTIL THE GLASS IS FOGGED UP 3. STRAIN INTO A TUMBLER 4. DECORATE WITH ORANGE PEEL D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 8 3 A COSY AMBIENCE WITH A RETRO CHARM IN L´OSTERIA THE NEGRONI COCKTAIL RECIPE THE POPULAR COCKTAIL FROM ITALY

LENILASH – EYELASH STORAGE – LASHBOX – ROSE GOLD COSMETIC BRUSH – FACE DEFINER – THE NUDE EDITION B E A U TY-TI P : THE OWN BRAND KOSMETIK4LESS PRODUCTS LEAVE NOTHING TO BE DESIRED IN TERMS OF PRICE, APPEARANCE AND QUALITY. LENILASH ONLY AVAILABLE IN GERMANY FROM KOSMETIK4LESS.DE. The kosmetik4less brand started life as an online-only shop for decorative cosmetics and false eyelashes. From the very outset, the team tracked down the most popular beauty trends from all over the world for its customers. For more than ten years, customers “on the internet” have been supplied with cosmetic products, with customer satisfaction always a very high priority. A major milestone in the company’s his- tory was the opening of the first and as yet only bricks and mortar store in the Phoenix- Center in Harburg in 2016. The store is in the center’s extension, which was opened the same year. Customers can find just about everything their hearts desire when it comes to beauty. The selection includes a range of popular brands which have previously been hard to find in stores, plus all the best sell- ers from the online shop, including their own MAKE-UP SERVICE (L.) AND PRODUCT VARIETY IN THE KOSMETIK4LESS STORES “lenilash” and “lenibrush” brands for quality false eyelashes and cosmetic brushes. The cosy feel of the story is an invitation to browse the range at leisure and discover one or more new favourite products. The large mirrors with professional lighting are perfect for testing the products selected in the store. And the friendly team are always happy to give advice or recommendations. There is also a special make-up service. Customers can be made up for an everyday look or a special event, take away valuable tips and buy the products used from the store. This would be a lot more difficult from a website! D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 8 5

SHOW ROOM d n a B O O K REC O MM E N D ATI O N : SHOPLIFTER! New Reta il Arch itecture a nd Bra nd Spaces Why leave the house at all when you can buy everything online? In a world where the objects of our desires are only ever a click away, retail faces the challenge of reinventing itself. Shop- lifter! presents the best and most surprising solutions and shows how brands of all sizes are rethinking their relationship with their customers. With the creative display windows from Hermès which look more like a film set than a traditional product presentation, an under- ground car park in Tokyo which has been con- verted into a store or the colourful basketball court in Paris which Nike has designed in conjunction with French streetwear label Pigalle and a design studio, it shows that more and more brands are recognising that relationships with their customers go beyond simple product purchases. Sales rooms are being transformed into places which invite customers to stay a while and interact. Shoplifter! collects an impressive range of innovative and surprising brand and store concepts from all over the world. The book also sheds light on the major trends from an expert perspective and narrates the dawn of a new era of retail design. Publisher: Gestalten Features: full colour, hard cover, thread bound, 256 pages Format: 24 x 30 cm Price: approx. € 49.90 English edition ISBN: 978-3-89955-941-5 R E T n E C / ! r e t f i l p o h S n o i t a d n e m m o c e r k o o B 6 8 0

CASH- BACK- SERVICE FOR TOURISTS Dresden is booming: In 2019, the city recorded a total of over 4.6 million overnight stays, which was up nearly four percent on the previous year. Around one fifth of visitors came from abroad. This means Dresden has become one of the most pop- ular cities in Germany among international tourists. And these visitors to Dresden want to see more than the Zwinger palace, the Frauen- kirche and the Semperoper. They also spend money on fashion, watches and jewellery. The city is an especially popular destination for tourists from Russia, China and Switzerland. The Altmarkt-Galerie is now offering a special service for non-EU visitors, who can claim back the value added tax on their purchases, in the form of a tax-free repay- ment machine from Global Blue. This uses a completely new technology: After filling in a form at the service counter on the ground floor of the shopping center, customers are given a card similar to a credit card. They can then go to one of the adjacent payment machines and withdraw their tax-free repayment directly in cash. The new service is already very popular among customers, specially among those who are not travelling by aeroplane, as previously the only place to process a refund in Dresden was at the airport. SIMPLE POST-PURCHASE VAT REFUNDS FOR TOURISTS D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 9 1

SHOW ROOM d n a R E T n E C / s e c i v r e s w e N 2 9 0 STYLE AND IMAGE ADVICE A full-time personal shopper? Yes, the Altmarkt-Galerie in Dresden has one. Larissa Markus has made her pas- sion into a job and quite literally provides hands-on advice and support for customers. Her exclusive service includes advice and development of personal style, determining figure type, colour advice and tips, make-up recommendations and the creation of indi- vidual style books. Other services include shopping assistance, wardrobe checks on the wardrobe at home and glasses and hairstyle advice, which customers in Dresden can book for a small fee. There are 200 shops in the Altmarkt-Galerie, over 100 of which are fashion-related. With such a wide range, professional help can do no harm, especially as not everyone has the time and patience to find exactly what they want in the huge area of the center. So it is all the better to have someone who knows the center like the back of their hand. After a short “theoretical” chat in a special, stylish lounge, it’s off on a tour of the shopping center, targeting those shops which will suit the customer best. In order to be perfectly prepared, Larissa Markus sends out a short questionnaire in advance which asks, for example, about preferred clothing styles, favourite brands and designers, etc. This allows the personal shopper to identify suitable shops or even individual garments in advance.

ACCESSORIES COMPLETE AN OUTFIT. WIN A STYLE CONSULTANT SESSION Fa n cy a cha n ge? W e a re givi n g a w ay a st yle a n d i m a ge a dv ice sessio n at the A lt m a rkt-Ga lerie i n D resd e n to the va lu e of 14 0 eu ros! Si m ply se n d us a n e-m a i l w ith the su bjec t “A lt m a rkt-Ga lerie D resd e n” a n d yo u r co n ta c t d eta i ls to re d a ktio n @ d es.a g by 30 Se p te m b er 2019! TERMS OF EnTRY: Entry in the prize draw is free. Entrants must be natural persons of 18 years or over and cannot be employees of the ECE Group or Deutsche EuroShop or their family members or members of their households. Deutsche EuroShop reserves the right to refuse entry to individuals for important reasons. Deutsche EuroSchop also reserves the right to exclude entrance from further participation in the prize draw or demand the prize is returned in the event of attempted abuse or deception. The prize draw takes place in the period from 29 April 2019 to 30 September 2019. The prize includes a style advice session at Altmarkt-Galerie Dresden. An appointment will be arranged in advance between the winner and the center. There is no cash alternative to the prize or parts thereof. By entering, entrants agree to the terms of entry and the data protection policy, which can be viewed at www.deutsche-euroshop.de/datenschutz. The winner’s name will be drawn by Deutsche EuroShop on 30 September 2019. The name will be drawn in private. The winner will be notified in writing. Personal data is provided on a voluntary basis. Deutsche EuroShop complies with the relevant data protection regulations on the storage and use of data. The data is used by the organiser exclu- sively for the purpose of this prize draw. The judge’s decision is final. YOUR VERY OWN STYLE CONSULTANT: LARISSA MARCUS Customers really enjoy the shopping experi- ence, often describing it as like going shop- ping with their best friend. The service always focuses on the customer’s personality and well-being. The service is also really worthwhile, as customers are rewarded with a 10 % bonus in the form of center vouchers on purchases worth over 100 euros. Of course, the package also includes free parking. There is also a monthly styling day in the Altmarkt-Galerie shops, where visitors can enjoy a speed consultation and discover the new services. The center also pub- lishes monthly styling tips on Facebook and Instagram. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 9 3

SHOW ROOM d n a R E T n E C / p o h s e h t : s s e c c u s d n i h e b r o t c a f e h T 4 9 0 IICSC STUDY: BRICKS DRIVE CLICKS THE FACTOR BEHIND SUCCESS: THE SHOP AN ARTICLE BY D r. Ru th V i er b u c h e n, Ed itor-i n - C hi ef of th e “H a n d el si m m o bi l i e n Re p or t ” (Re t a i l Re a l Est ate Re p or t) The effects of digitalisation on the bricks and mortar retail trade are now leaving their mark on the investment behaviour of many investors which can be seen, for example, in the decline in retail confidence. A study by the International Council of Shopping Centers (ICSC) Europe has now shown that the majority of consumers (53%), even when ordering online, attach great importance to whether the retailer also runs a physical shop besides their online shop. For Sarah Cole, Manager of International Research at the International Council of Shopping Centers (ICSC) Europe in Lon- don, the study, “Bricks drive Clicks”, proves what experts had long suspected: that real shops will continue to play a key role in the customer journey and remain an integral part of the retail concept, regardless of where the purchase is finally made – in a shop or on the internet. Because according to the study which surveyed 7,000 European consumers, the main motivation for buying online from an omni-channel retailer lies in exclusive offers, a wider range in the online shop and the opportunity to pick up the ordered goods in the local shop, return them or exchange them without incurring any despatch costs. In the view of this expert, viewing bricks and mortar retail shops as competing with the online trade, is to draw a false picture and underestimate the role of the real shop in the relationship with the customer and customer loyalty. According to Cole, this applies, in par- ticular, to retailers who are still unfamiliar to customers. The fact that bricks and mortar retail shops are so important to more than half the consumers surveyed reinforces the impression gained hitherto, according to the ISCS, that today’s customers value the com- bination of all distribution channels when it comes to finding the simplest, shortest and most comfortable way of making purchases. The presence of retailers with a real shop fosters trust in the brand, states Cole, and gives customers the crucial chance to consult with sales staff before and after the purchase as well as the opportunity to pick up goods ordered online in the shop (click & collect). From the perspective of these customers, therefore, real shops are still crucial for any retail strategy with respect to supply and ser- vice. This doubtless also explains why more and more online dealers are opening real shops.

Among the various generations, it is primarily the millenials, i.e. “generation Y born between the early 1980s and late 1990s, who have grown up with the internet, for whom bricks and mortar shops are particularly important when they order online. They attach greater importance to this than older generations such as generation X born between 1965 and 1980 or the baby boomers born between the end of the war and the start of the 1960s. 63% of millenials regard a physical shop as impor- tant, according to the ICSC study, while the figure is 51% for generation X and only 45% for baby boomers. Equally, the high value consumers attach to real shops means that for many of those surveyed by the ICSC, there is a palpable effect when a neighbourhood retailer closes a bricks and mortar shop as part of a ration- alisation drive – e.g. to push their online strat- egy. Around 40% of the European consumers surveyed stated that they would no longer buy from a company that closes a branch. They draw the inference that the company is in financial difficulty and fear that it will soon close down. Around 18% would switch to a physical shop owned by a different retailer and 14% to an online shop run by a competitor. According to the study, the retailer therefore loses visibility in this catchment area, and a substantial proportion of its customers will move to the competition. This should give SHOW ROOM d n a R E T n E C / s l l a m l a t i g i D / p o h s e h t : s s e c c u s d n i h e b r o t c a f e h T 6 9 0 28% of the people surveyed believe that having a physical shop is important for brand awareness. retailers pause for thought before they close shops in the name of rationalisation – real shops are important for the perception of their brand. A further result of the ICSC survey is that 28% of those surveyed believe that a real store matters for brand awareness. After all, if a real shop in the neighbourhood closed and the brand was no longer visible, customers would tend not to buy that brand any longer, so the argument runs, especially as they would then no longer be able to return or exchange goods or ask for advice. This shows the extent to which an online and offline presence are now mutually interdependent. A further significant finding of the study is that the opening of a real shop also boosts that retailer’s online business which clearly militates in favour of an omni-channel strat- egy. This link between both channels is very striking as the figures show: if a retailer opens a new shop, roughly nine out of ten (91%) of those surveyed stated that they would search out the new store and spend more time on that retailer’s website as an immediate reac- tion to the opening of the store regardless of whether they also visit the physical shop. So customers take different routes to finding a new supplier. It is interesting to note customers’ behav- iour when the new shop sells a brand which they do not know about yet: the vast majority of respondents (94%) would first visit the shop and 83% said they would look at the website. A very large proportion (79%) would visit the store and the website although the majority of this group would first visit the store and then the website. In the view of the ICSC, this illustrates the point that “bricks and clicks” is no either-or decision but linked to the way in which cus- tomers move between channels. However, they expect the same experience wherever they go. A very large number of people (79% of those surveyed) would visit both the store and the website.

D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 9 7 DRAW UP YOUR SHOPPING LIST AT HOME ALTMARKT-GALERIE AND MAIN-TAUNUS-ZENTRUM AS “DIGITAL MALLS” The “Digital Mall” developed by ECE is Participating retailers include Saturn, Thalia, Olymp, Gant, AppelrathCüpper and Lascana. Since the end of 2018, the product ranges from Galeria Kaufhof, Bijou, Brigitte, S. Oliver and Tchibo have also been available via the platform. available in more and more shopping centers. The Altmarkt-Galerie in Dres- den and the Main-Taunus-Zentrum in Sulz- bach near Frankfurt have been offering this thus far unique product search option on their websites since December 2018. Using the “Digital Mall”, customers can search products available in the center, plus sizes and prices, then simply reserve and collect them. • The idea of the “Digital Mall” is based on the idea that customers can find out about what is available at the center near them from home and not automatically land on the main e-commerce providers for product searches. According to a study by manage- ment consultancy Deloitte (Deloitte Digital: The New Digital Divide, 2016), 56% of in-store purchases are prepared online. The “Digital Mall” is available via the respec- tive center websites: • Altmarkt-Galerie: digitalmall.altmarkt-galerie-dresden.de Main-Taunus-Zentrum: digitalmall.main-taunus-zentrum.de/ home

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SHOW ROOM d n a S n O i T a l E R R O T S E v n i / e r a h s r e t n e c g n i p p o h s e h T 8 9 0 INVESTOR RELATIONS 2018 THE SHOPPING CENTER SHARE SHARE PRICE UNDER PRESSURE Following a year-end closing price for 2017 of €33.96, Deutsche EuroShop shares started the new year in a weak market with an ongo- ing downward trend, particularly for retail real estate stocks. The high for the period of €33.90 had already been posted on the first day of trading (2 January 2018). The 2nd quarter saw a slight recovery that lasted until mid-June. In the second half of the year, the DES price fell almost continuously – following the generally negative price movements for shopping center stocks worldwide – triggered by the overall poor sentiment towards retail real estate. The share price hit its low for the year of €24.98 on 27 December 2018. The year-end closing price was noted at €25.34. Taking into account the dividend of €1.45 per share paid on 3 July 2018, this corresponds to a performance of -21.8% (previous year: -8.6%). Deutsche EuroShop’s market capi- talisation stood at just under €1.6 billion on 31 December 2018.

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TREND OF SHARE Share price 35 30 25 volume 1,200 1,000 800 600 400 200 0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr, 2018 in € Number of shares in thousand 2019 OUTPERFORMING THE PEER GROUP AVERAGE Over the past year, German open-ended prop- erty funds achieved an average performance of +3.2% (2017: +5.5%), and attracted cash inflows of €6.4 billion (2017: €5.9 billion). The price of Deutsche EuroShop shares fell by 25.4%. The share price performance in 2018 was -21.8 % and significantly below that of the European benchmark for listed real estate companies, the EPRA index (-11.7%) but nev- ertheless in the top third of its European peer group which suffered average falls of 30.5% (median:. -26.8%). The benchmark index for medium-sized companies, the MDAX, fell 17.6% in the year under review. Stock market performance DES share DAX MDAX TecDAX EURO STOXX 50 (Europe) Dow Jones (USA) Nikkei (Japan) 2018 -21.8% -18.3% -17.6% -3.1% -14.7% -6.4% -12.1% 2017 -8.6% 12.5% 18.1% 39.6% 6.8% 25.1% 19.1% Figures for the Deutsche EuroShop share German securi- ties no. / ISIN Ticker symbol 748 020 / DE 000 748 020 4 DEQ Share capital in € 61,783,594.00 Number of shares (no- par- value registered shares) Indices Official market OTC markets 61,783,594 MDAX, EPRA, GPR 250, MSCI Small Cap, EPIX 30, HASPAX, F.A.Z.-Index, DivMSDAX Prime Standard Frankfurter Wertpapierbörse and Xetra Berlin-Bremen, Dusseldorf, Hamburg, Hanover, Munich and Stuttgart 1 Atrium European Real Estate, Citycon, Eurocommercial Properties, IGD, Intu Properties, Klepierre, Mercialys, Unibail-Rodamco-Westfield, Vastned Retail and Wereldhave. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 0 9 9

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CONTINUED BROAD COVERAGE OF THE SHARES Our shares are now regularly followed by 18 analysts (as at 10 April 2019) from respected German and international institutions , and their recommendations introduce us to new groups of investors. Deutsche EuroShop is one of the best-covered real estate companies in Europe. Information on the recommendations can be found at www.deutsche-euroshop.de/analysen ² Baader Bank, Bankhaus Lampe, Berenberg Bank, Commerzbank, Deutsche Bank, DZ Bank, Green Street Advisors, HSBC, Independent Research, J.P. Morgan Cazenove, Kempen, Kepler Cheuvreux, Metzler, M.M. Warburg, NORD / LB, Oddo BHF, Pareto and Societe Generale ATTENDANCE AT AGM STABLE The Annual General Meeting was held in Hamburg on 28 June 2018. Around 200 shareholders were in attendance at the Handwerkskam- mer, representing 63.2% (previous year: 67.5%) of the capital, and approved all of the items on the agenda. DIVERSITY OF ANALYST’S OPINION OF THE LAST 10 YEARS in % 100 90 80 70 60 50 40 30 20 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 negative neutral positive The majority of analysts are bullish on the prospects for the DES stock (as at 10 April 2019) AWARDS FOR REPORTING QUALITY The European Public Real Estate Association (EPRA) has again recognised the transparency of our reporting in terms of the sector-specific financial ratios and on the topic of sus- tainability with a Gold Award. Further awards for our capital market communications can be found on our website at: www.deutsche-euroshop.de/irkommunikation 9X BUY 8X HOLD 1X SELL D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 0 1

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SHOW ROOM d n a 14% INCREASE IN SHAREHOLDERS The number of investors once again rose significantly in 2018: Deutsche EuroShop now has around 22,750 shareholders (as at 10 April 2019, previous year: 20,000, +14%). Alexander Otto holds a 18.8% stake in Deutsche EuroShop AG, State Street 5.0%, BlackRock 3.4% and Johannes Schorr 3.3%. In addition, other institutional investors hold approx. 48.8% (previous year: 50.7%) of the shares and private investors hold 20.7% (pre- vious year: 21.9%). In a shareholder identification process, we regularly analyse the international distribu- tion of our shares. Over the past year, there were only slight changes in the regional breakdown. Almost unchanged at around 67%, German investors continue to hold a clear majority of the Deutsche EuroShop shares. Overall, the shareholder structure is also dominated by European investors (approx. 88%), with British and French investors lead- ing the way. US investors hold around 10% of the shares in DES. S T R U C T U R E S H A R E H O L D E R S 0 . 2 P r i v a t e % 7 i n v e s t o r s 8 . % 4 8 i o n a l i I n s t i n v e s t o r s t u t B l a c k - R o c k 3 . 4 % . 0 5 % S t a t e S t r e e t 8 . % 8 1 A l e x a n d e r O t t o 3 3 . % J o h a n n e s S c h o r r S H A R E H O L D E R S STR U C TU R E R E G I O N A L 6 7 . 2 % Germany 2 . 3 % Nor way 3 . 9 % France 1 . 7 % Rest of world 1 0 .4 % USA 1 . 9 % Switzerland 4 . 3 % Rest of Europe 8 . 3 % United Kingdom S n O i T a l E R R O T S E v n i / e r u t c u r t s s r e d l o h e r a h S 2 0 1

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5.9 %DIVIDEND YIELD DIVIDEND INCREASES BY A FURTHER 3.4% The Executive and Supervisory Boards will once again propose a €0.05 increase in the dividend payment (€1.50 per share) for financial year 2018 to the Annual General Meeting on 12 June 2019 in Hamburg. With our long-term strategy of a dividend policy based on continuity and a yield of 5.9% (based on the 2018 year-end closing price of €25.34), we hope to further cement the confidence of our existing shareholders and attract new investors. Further increasing the dividend by €0.05 per share each year, as is intended, should also help to achieve this. As a result, €1.55 per share is to be paid out in 2020 for financial year 2019. SHARE PRICE AND DIVIDEND SINCE IPO Share price at the end of the year in € RECORD DAY As part of the harmonisation of the secu- rities settlement process in the European Union, a standard settlement due date – the “record day” – was introduced in Germany on 1 January 2017. This changed the usual timeline for settling dividend payments. This was based on the 2015 amendment to Art. 58 of the German Stock Corporation Act (AktG), which post- poned the dividend due date to the third business day after the Annual General Meeting. Falling between the ex-dividend day and day of payment, the record day is the settlement due date on which the relevant assets for the payment of the dividend are determined. 50 40 30 20 10 1.00 28.08 1.05 1.05 1.05 1.05 1.20 1.10 1.10 24.30 28.98 31.64 31.83 23.50 23.67 24.80 0.96 0.96 0.96 0.96 19.26 23.73 15.50 16.88 1.35 38.67 1.25 36.20 1.30 40.46 1.55 * 1.50 * 1.40 1.45 25.34 33.96 26.78* * Dividend in € 1.50 1.00 0.50 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 * proposal ** Price on 10 April 2019 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 0 3

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SHOW ROOM d n a 1 0 R E A S O N S I N D E U T S C H E T O E U R O S H O P S H A R E S I N V E S T 2 F i r s t - r a t e l o c a t i o n s 1 T h e o n l y p u b l i c c o m p a n y i n G e r m a n y t o i n v e s t s o l e l y i n s h o p p i n g c e n t e r s 7 E x c e l l e n t p e r f o r m a n c e r e c o r d 6 E x p e r i e n c e d m a n a g e m e n t t e a m 8 C e n t e r s a l m o s t f u l l y l e t 5 S h a r e h o l d e r f r i e n d l y d i v i d e n d p o l i c y 4 S t a b l e c a s h f l o w w i t h h i g h l e v e l s o f c e r t a i n t y f o r t h e l o n g t e r m 3 P r o v e n , c o n s e r v a t i v e s t r a t e g y 9 I n f l a t i o n - p r o t e c t e d r e n t a l a g r e e m e n t s 1 0 S o l i d i t y c o m b i n e d w i t h g r o w t h p o t e n t i a l TAX SITUATION REGARDING THE DIVIDEND Dividends that are paid to shareholders domiciled in Germany are subject to Ger- man income or corporation tax. Since 2009, the uniform flat-rate tax rate for private investors has been 25% plus a solidarity surcharge. Exceptions can be made under certain conditions for dividend payments that are considered equity repayments for tax purposes (distribution from EK04, or from the tax contribution account since 2001). The Deutsche EuroShop dividend meets some of these conditions. Pursuant to Art. 20, para. 1 (1) (3) of the Income Tax Act, the div- idend payment represents partially non-tax- able (i. e. not subject to taxation) income for shareholders. However, following the revised legislation, distributions have been taxable since 2009 as profits from the sale of shares acquired after 31 December 2008 are taxable. In this case, the dividend distributions reduce the acquisi- tion costs of the stake in Deutsche EuroShop and therefore result in higher sales proceeds at the time of the sale. S n O i T a l E R R O T S E v n i / s e r a h S p o h S o r u E e h c s t u e D n i t s e v n i o t s n o s a e R 0 1 4 0 1

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Market capita- lisation (basis: year-end closing price) (€ million) Number of shares (year-end) Weighted average number of shares High € Low € Year-end closing price (31.12.) € Dividend per share (€) Dividend yield (31.12.) % Annual performance excl. / incl. dividend % Average daily trading volume (shares) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 1,566 2,098 2,086 2,183 1,953 1,717 1,707 1,280 1,496 895 61,783,594 61,783,594 53,945,536 53,945,536 53,945,536 53,945,536 53,945,536 51,631,400 51,631,400 37,812,496 61,783,594 58,248,007 53,945,536 53,945,536 53,945,536 53,945,536 51,934,893 51,631,400 45,544,976 36,799,402 33.90 (02.01.18) 39.32 (18.04.17) 42.52 (09.06.16) 48.00 (10.04.15) 37.84 (12.06.14) 34.48 (20.05.13) 32.03 (01.11.12) 29.06 (01.06.11) 28.98 (30.12.10) 26.00 (06.01.09) 24.98 (27.12.18) 30.37 (25.10.17) 35.86 (11.02.16) 36.32 (06.01.15) 30.72 (04.02.14) 29.45 (24.06.13) 23.72 (06.01.12) 22.94 (23.11.11) 21.72 (01.07.10) 18.66 (06.03.09) 25.34 33.96 38.67 40.46 36.20 31.83 31.64 24.80 28.98 23.67 1.50 1 1.45 1.40 1.35 1.30 1.25 1.20 1.10 1.10 1.05 5.9 4.3 3.6 3.3 3.6 3.9 3.8 4.4 3.8 4.4 -25.4 / -21.8 -12.2 / -8.6 -4.4 / -1.2 11.8 / 15.3 13.7 / 17.7 0.6 / 4.5 27.6 / 32.7 -14.4 / -11.1 22.4 / 28.1 -2,6 / 2,1 192,835 (incl. Multilateral Trading Facilities >526,239) ² 212,422 (incl. Multilateral Trading Facilities >533,866) 142,133 (incl. Multilateral Trading Facilities >412,750) 152,355 (incl. Multilateral Trading Facilities >449,500) 113,000 (incl. Multilateral Trading Facilities >250,400) 112,400 (incl. Multilateral Trading Facilities >204,000) 129,400 (incl. Multilateral Trading Facilities >174,000) 125,400 (incl. Multilateral Trading Facilities >210,000) 116,084 113,008 EPS (€) (undiluted) 1.29 2.31 4.11 5.73 3.29 3.17 2.36 1.92 -0.17 0.93 All share price information relates to Xetra 1 proposal 2 Source: Bloomberg, adjusted data, as of 11 April 2019 WOULD YOU LIKE MORE INFORMATION? PATRICK KISS Please visit our website 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 E-mail: ir@deutsche-euroshop.de Internet: www.deutsche-euroshop.de/ir NICOLAS LISSNER D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 0 5

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SHOW ROOM d n a ANNUAL GENERAL MEETING The Annual General Meeting of Deutsche EuroShop was held on 28 June 2018. The venue was once again the historic rooms of the Handwerkskammer Hamburg. Some 300 shareholders gathered there to hear CEO Wilhelm Wellner talk about the events and results of the previous financial year. In his speech, Mr Wellner also discussed the current economic environment, the current situation on the shopping center transaction market as well as the business outlook for the current year. Shareholders were also given an update on the latest portfolio growth in the Czech Republic and extensive information on current influences in the retail sector, including increasing digital- isation in this segment. The “At your service” and “Mall Beautification” portfolio investment programmes were also presented. Shortly after the event, the speeches and presentation were made available at the web address given below, where interested par- ties will also find a large archive of agendas and other information relating to our past Annual General Meetings. THE HANDWERKSKAMMER HAMBURG ON THE HOLSTENWALL, BUILT FROM 1912 TO 1915 The Annual General Meeting for financial year 2018 will be held on 12 June 2019 at the Handwerkskammer Hamburg. The invitation and all the documents needed for ordering entry tickets and for online voting will be posted out to our shareholders in good time. www.deutsche-euroshop.de/agm The agenda for this meeting included the election of two Supervisory Board members: Dr Henning Kreke and Alexander Otto were confirmed in office and re-elected for a term of five years. The attendance at the time of the vote was 63.2%. Shareholders made use of the opportu- nity to talk with the Supervisory Board, the Executive Board and employees before the Annual General Meeting and at the lunch that followed it. S n O i T a l E R R O T S E v n i / g n i t e e M l a r e n e G l a u n n A 6 0 1

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CONFERENCES AND ROADSHOWS In order to discuss Deutsche EuroShop’s strategy with its current investors and to present the Company to potential new investors, the Executive Board and the Investor Relations team again participated in various conferences and held numerous roadshows in 2018. Direct contact with our investors is very important to us: by engaging in frank dis- cussions with analysts as well as fund and portfolio managers, we seek to understand the requirements of the capital market and to learn which issues are seen as most impor- tant. Conversely, investment by fund manage- ment companies is often dependent on their being able to hold regular meetings with the Executive Board members of the companies concerned. In 2018, we held 13 roadshows in Abu Dhabi, Brussels, Chicago, Cologne, Copen- hagen, Dubai, Dublin, Düsseldorf, London, Munich, New York, Paris and Tel Aviv. We also took part in a total of 17 conferences in Amsterdam, Berlin, Cape Town, Frankfurt, Helsinki, London, Lyons, Munich, New York and Paris. Across all these events, we had over 250 one- to-one discussions. We also held telephone conferences, for example for the publication of the annual and quarterly figures, which can be streamed live on our website or viewed after the event. In addition, many investors came to see us at the Deutsche EuroShop head offices in Hamburg-Poppenbüttel, often also visiting our properties in and around Hamburg. We are once again planning a diverse range of investor relations activities for 2019 in order to cultivate contacts with our existing investors and tap new investor groups. You can find an overview in our financial calendar on page 200. A constantly updated version can also be found on our website at www.deutsche-euroshop.de/ir/en CaPiTal MaRKET COnFEREnCES Generally organised by banks, these are conferences at which both inves- tors and companies are given the opportunity to hold as many meet- ings as possible in a day. This makes it possible to address questions in detail during one-to-one and group discussions. Company presentations enable the Company to present itself to a wider specialist audience. ROaDSHOWS A roadshow involves a team, usually consisting of an Executive Board member and an Investor Relations manager of Deutsche EuroShop, travelling together with represent- atives of the organising bank (such as analysts and client advisors) to a financial center to visit existing or interested, potential investors in person and inform them about the company’s current development and / or strategy. Investors have the opportunity to meet the man- agement personally and put ques- tions to them. This allows up to 10 meetings to be held in one city on a single day. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 0 7

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S H O W ROOM d n a S n O i T a l E R R O T S E v n i / g n i t e k r a M MARKETING In addition to share marketing, we concentrate on refining and maintaining the Deutsche EuroShop brand. Our goal is to boost the awareness and recognition of the brand even further. Deutsche EuroShop intends to establish itself as the brand for investments in shopping centers. „SHOPPING EVOLUTION“ In 2018, we placed advertisements in the trade press designed for specific target groups that were perfectly timed to coincide with the publication of our latest financial fig- ures. The adverts show a woman and a robot hand in hand on a shopping trip. This is meant to symbolise how online and offline shopping can go together. Change in the retail sector is normal, and is seen as an evolutionary process. Over the past few years the retail sector has seen many new developments and this trend will continue in the future. The momentum emerging from this trend will be in part perceived as disruptive, but also as an opportunity to promote new and existing business models and reposition ourselves in a competitive market environment. Another aspect is the digitalisation of the industry, for example, also with the “digital mall”. SHOPPING EVOLUTION SHOPPING EVOLUTION Mehr Informationen über die Deutsche EuroShop finden Sie im aktuellen Geschäftsbericht unter www.deutsche-euroshop.de / IR Mehr Informationen finden Sie unter www.deutsche-euroshop.de ADVERTISEMENTS FOR DEUTSCHE EUROSHOP SHARES 8 0 1

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PUBLISHED CIRCULATION in millions 17,5 15 12,5 10 7,5 5 2,5 0 2014 2015 2016 2017 2018 Q1 Q2 Q3 Q4 MEDIA ATTENTION DECLINING Deutsche EuroShop enjoyed a strong media presence, particularly in the first quarter of 2018, and business and financial journalists regularly wrote about our company. In addi- tion, a number of television channels, radio stations and online publications all devoted reports and interviews to Deutsche EuroShop. The print circulation of these media outlets decreased by around 8% from 9.9 million in the previous year to 9.1 million copies, and the equivalent advertising value from reports in newspapers and magazines fell to €2.12 million (previous year: €2.31 million). The electronic versions of these publications do not appear in the statistics. Taken over a period of five years, the decline in reporting about Deutsche EuroShop ran almost in par- allel with the decline in the total circulation of printed newspapers and magazines in Germany. SHOPPING EVOLUTION SHOPPING EVOLUTION Mehr Informationen finden Sie unter www.deutsche-euroshop.de Mehr Informationen finden Sie unter www.deutsche-euroshop.de D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 0 9

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SHOW ROOM d n a S n O i T a l E R R O T S E v n i / g n i t e k r a M 0 1 1 WEBSITE WITH 11% MORE VISITORS VISITORS AND SITE VIEWS visitors 250,000 200,000 150,000 100,000 50,000 0 WEBSITE WITH 11% MORE VISITORS The trend towards providing information in digital form can also be seen with our com- pany website – which is often the first point of contact for investors. Our website has been very popular for a number of years, and is always ranked among the best in the MDAX and European property sector for the infor- mation it provides and its user-friendliness. In 2018, the number of visitors grew by 11%, while the number of pages viewed fell by 7%. Our website can be found at www.deutsche-euroshop.de Site views 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Visitors (left scale) Site views (right scale)

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DEUTSCHE EUROSHOP NOW ALSO ON INSTAGRAM Social media has become established as a channel of communication – including for cap- ital market participants. For many years, we have shown ourselves to be open to technical innovations and use social media actively to provide our investors and interested parties with news and supplementary information about Deutsche EuroShop. Perhaps we can establish contact with you through one or more of these platforms too – we would be happy to see you there: TOP 10 CENTER Altmarkt-Galerie Dresden Fans: 80,619 Galeria Bałtycka Gdansk Fans: 66,576 Allee-Center Magdeburg Fans: 54,207 Rhein-Neckar-Zentrum Viernheim Fans: 54,248 City-Point Kassel Fans: 52,807 Saarpark-Center Neunkirchen Fans: 42,260 ÁRKÁD Pécs Fans: 41,744 Olympia Centrum Brno Fans: 38,465 STADTGALERIE Passau Fans: 33,131 Main-Taunus-Zentrum Fans: 30,353 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 S O C I A L M E D I A Follow us on Twitter: www.twitter.com/DES_AG Become a fan on Facebook: www.facebook.com/euroshop Instagram: From 2018, you can also see photos and videos from DES at: www.instagram.com/deutscheeuroshop IR Mall: Our Investor Relations blog: www.ir-mall.com View our photos on the online platform Flickr: www.flickr.com/desag See our presentations and reports on SlideShare: www.slideshare.net/desag Watch our videos on YouTube: www.youtube.com/DeutscheEuroShop D E U T S C H E E U R O S H O P C E N T E R – O N L I N E K P I S 6.5 39 87 MILLION PEOPLE REACHED 690 THOUSAND FANS 5.5 THOUSAND POSTINGS 7 MILLION VISITS, OF WHICH 76% ARE MOBILE THOUSAND FOLLOWERS 1 1 1

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SHOW ROOM d n a CORPORATE GOVERNANCE 2018 AND DECLARATION ON CORPORATE GOVERNANCE The Company may invest up to 10% of equity in joint ventures in shop- ping center projects in the early stages of development. New investments must be financed from a balanced mix of sources, and borrowing may not account for more than 55% of financing across the Group over the long term. As a general rule, long-term interest rates are fixed when loans are taken out or renewed, with the goal of keeping the duration (average fixed interest period) at over five years. PROFITABLE PORTFOLIO WITH STABLE VALUE Deutsche EuroShop AG holds a balanced, diversified portfolio of shopping centers in Germany and other parts of Europe. We focus our investment activities on prime locations in cities with a catchment area of at least 300,000 residents in order to guarantee a sustained high level of investment security. Deutsche EuroShop is a transparent company that operates in accord- ance with a strategy geared towards long-term success. This focus on constancy is a key aspect of our corporate culture. Based on the legal and company-specific conditions governing the management of a listed company, we strive to promote the trust of investors, creditors, employees, business partners and the public in the man- agement and supervision of our Company. This goal is consistent with the requirements of a demanding corporate governance system. In conformity with section 3.10 of the Deutscher Corporate Governance Kodex (German Corporate Governance Code) as well as section 289f (1) of the Handelsgesetzbuch (HGB – German Commercial Code), this declaration contains a report by the Executive Board, also on behalf of the Supervisory Board, on corporate governance. OBJECTIVES AND STRATEGY The management focuses on investments in high-quality shopping centers in city centers and established locations offering stable long- term value growth. A key investment target is the generation of high surplus liquidity from long-term leases in shopping centers, which is paid out to shareholders in the form of an annual dividend. To this end, the Company invests its capital in shopping centers in different Euro- pean regions in accordance with the principle of risk diversification. Germany is the main focus for investment. Indexed and turnover-linked commercial rents ensure that high earnings targets are achieved. S n O i T a l E R R O T S E v n i / 8 1 0 2 e c n a n r e v o G e t a r o p r o C 2 1 1

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SEIZING OPPORTUNITIES AND MAXIMISING VALUE In line with our buy and hold strategy, we consistently place greater importance on the quality and yield of our shopping centers than on our portfolio’s rate of growth. We monitor the market continuously and act as buyers when an opportunity arises. Rapid decision- making chains and considerable flexibility regarding potential investments and financing structures allow Deutsche EuroShop to react to very wide-ranging competitive situations. At the same time, the Group’s management focuses on optimising the value of the existing portfolio of properties. TAILORED RENT STRUCTURE One key component of the rental model is a tailored rent structure. While individual owners in city centers are often concerned with achieving the highest possible rents for their property (which results in a monostructured retail offering), we ensure an attractive sector mix and long-term optimisation of our rental income through combined costing. Rental partners pay sector-specific and turnover-linked rent. Minimum rents linked to the consumer price index provide a guaranteed minimum level of income for Deutsche EuroShop AG during periods of economic weakness. THE SHOPPING EXPERIENCE CONCEPT We have outsourced center management to an experienced external partner, Hamburg-based ECE Projektmanagement GmbH & Co. KG (ECE). ECE has been designing, planning, building, letting and managing shopping centers since 1965. The company is currently the European market leader, with around 200 shopping centers under management. We consider professional center management to be the key to the success of a shopping center. In addition to guaranteeing standard opening hours and a consistently friendly, bright, safe and clean shopping environment, the center management can employ unusual displays, promotions and exhibitions to make shopping an experience. The 500,000 to 600,000 people who visit our 21 centers on average every day are fascinated by not only the variety of sectors represented but also by our wide range of thematic exhibitions, casting shows, fashion shows and attractions for children. As a result, the shopping centers become market places where there is always something new and spectacular on offer. In addition, we are constantly adding new products and services that are being developed as part of the ongoing integration of bricks-and-mortar retailing and online shopping sites, and that further enhance the shopping experience and level of service for our customers. Some of these include center apps as well as Click & Collect and shop delivery services. WORKING METHODS OF THE EXECUTIVE AND SUPERVISORY BOARDS The strategic orientation of the Company is coordinated between the Executive Board and the Supervisory Board, and the progress of strategy implementation is discussed at regular intervals. The Executive Board is required to inform the Supervisory Board regu- larly, promptly and in detail of business developments. The Executive and Supervisory Boards examine the Company’s net assets, financial position and results of operations, as well as its risk management, regularly and in detail. In this context, the formal conditions for implementing an efficient system of managing and monitoring the Company are checked, as is whether the means of supervision are effective. The significant factors affecting the business are determined by the Executive Board, which notifies the Supervisory Board. The committees advise on the development of the portfolio properties, their turnover trends, accounts receivable, occupancy rates, construc- tion measures and liquidity, as well as investment cost trends for our new development projects. The sales trends and payment patterns of tenants are observed in detail so that consequences can be drawn from these wherever required. New investment opportunities are examined by the Executive Board and, if necessary, presented to the Supervisory Board at regular Supervisory Board meetings. Investment decisions are made by the Executive Board and then submitted to the Supervisory Board for approval within the framework of a decision paper. Moreover, the Executive and Supervisory Boards discuss develop- ments on the capital and credit markets as well as the effects of these not only on the Company’s strategy but also in terms of raising equity and obtaining borrowed capital. The Supervisory Board and its committees also discuss other topical issues with the Executive Board as required. Transactions requiring the approval of the Supervisory Board are discussed and resolved upon at the scheduled meetings. Online retailing, its impact on footfall and sales in centers and the countermeasures taken are becoming increasingly important in reporting to the Executive Board. For transactions requiring approval, conference calls are also con- ducted with the Supervisory Board or its committees and circular resolutions are passed in writing. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 1 3

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SHOW ROOM d n a CORPORATE GOVERNANCE 2018 The Government Commission on the German Corporate Govern- ance Code published the German Corporate Governance Code on 26 February 2002 and approved amendments and additions to individual recommendations and suggestions, most recently on 7 February 2017. The Government Commission published the draft of an amended German Corporate Governance Code on 25 October 2018. Final publication is expected in the first half of 2019. THE EXECUTIVE BOARD AND THE SUPERVISORY BOARD The Supervisory and Executive Boards performed their statutory duties in financial year 2018 in accordance with the applicable laws and the Articles of Association. The strategic orientation of the Company was coordinated between the Executive Board and the Supervisory Board, and the progress of strategy implementation was discussed at regular intervals. The Supervisory Board was informed regularly, promptly and in detail of business developments and the risk situation by the Executive Board. Detailed information on the main areas of focus of its activities in financial year 2018 can be found in its report in Annual Report 2018 of Deutsche EuroShop AG. In financial year 2018, there were no advisory or other contracts for work or services in existence between members of the Supervisory Board and the Company. COMPOSITION AND DIVERSITY Supervisory Board The Supervisory Board formulated specific goals in 2012 for its com- position and geared itself towards the needs of a listed company with a small staff base which makes long-term investments with high capital requirements. The diversity concept was further developed in 2015, and confirmed by the Supervisory Board in April 2017. In view of this, the intention is that the Supervisory Board be primarily composed of independent members of both genders who have special knowledge and experience of the retail trade, the letting of retail space, the man- agement of shopping centers, the equity and debt financing of listed real estate companies, of accounting principles and internal control processes in accordance with German and / or international regula- tions, and of corporate governance and business management. It is intended that the proportion of women on the Supervisory Board be at least 30%. The upper age limit for members of the Supervisory Board is 70. The Supervisory Board also takes the view that professional qualifications and skills should be the key criteria for its members. For that reason, no rule as to the length of time for which members may serve on it has been adopted. Since 2015 the company has disclosed the skills provided by the indi- vidual members of the Supervisory Board in the nomination process for the elections to the Supervisory Board. The German Corporate Governance Code states that a member of the Supervisory Board “is not deemed independent if they have a personal or business relationship with the company, its governing bodies, a controlling shareholder or an associate thereof that could give rise to a material conflict of interest which is more than temporary.” In 2015, the Supervisory Board of Deutsche Euroshop AG stipulated that the materiality criterion does not apply to tenants accounting for less than 1% of Group rental income. This is the case for Roland Werner, Chair of the Management Board of Bijou Brigitte Modische Accessoires AG, a tenant operating a total of some 1,000 shops. 21 of these are in shopping centers of Deutsche Euroshop AG. Klaus Striebich stepped down as Chairman of the Advisory Board of MEC Metro-ECE Centermanagement GmbH & Co. KG on 31 March 2019 and also ceased to be an independent advisor to KG CURA Vermögens- verwaltung G.m.b.H. & Co. Since then he has been an independent member of the Supervisory Board. Hence based on its own assessment, the Supervisory Board has an adequate number of independent members. Five (since 1 April 2019: six) of the total of nine members of the Supervisory Board are inde- pendent. These are Reiner Strecker, Karin Dohm, Beate Bell, Manuela Better, Roland Werner and Klaus Striebich (since 1 April 2019). S n O i T a l E R R O T S E v n i / 8 1 0 2 e c n a n r e v o G e t a r o p r o C 4 1 1

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Executive Board The Executive Board of Deutsche EuroShop AG manages the Company in accordance with the provisions of German company law and with its rules of procedure. The Executive Board’s duties, responsibilities and business procedures are laid down in its rules of procedure and in its schedule of responsibilities. The chief management duties of the Executive Board are the management of the Group and the deter- mination of its strategic orientation, planning, and the establishment, implementation and monitoring of risk management. The diversity concept of the Supervisory Board for the Executive Board which originated in 2015 was given concrete shape and expanded in April 2017. It proposes that the Executive Board should consist of members of both sexes with a proportion of women of at least 30%. The composition of the Executive Board should be geared towards the needs of a listed company with a small staff base. This should take into account the requirements of accounting with high capital investment as well as the largely national activities in long-term investment in retail properties. The members of the Executive Board are expected to have knowledge and experience in the application of accounting prin- ciples and internal control procedures according to German and / or international accounting standards, in the retail trade as well as in the management of shopping centers, in equity and debt financing, capital market, corporate governance, corporate and personnel management, corporate acquisitions and mergers, and in the purchase and sale of real estate. The focal points of knowledge and experience must complement each other. The upper age limit for members of the Executive Board is 60. As of 31 December 2018, the Executive Board of Deutsche Euro- Shop AG comprised two members. Wilhelm Wellner Born 8 March 1967 First appointment: 2015 Appointed until: 31 December 2021 Wilhelm Wellner joined Deutsche EuroShop in 2015, initially as a mem- ber of the Executive Board, and took on his present position as CEO on 1 July 2015. He is also a managing director and director at various companies in the Deutsche EuroShop Group. Olaf Borkers Born 10 December 1964 First appointment: 2005 Appointed until: 30 September 2022 Olaf Borkers joined Deutsche EuroShop AG in 2005 as a member of the Executive Board. He is also a Managing Director and Director at various companies in the Deutsche EuroShop Group, and is responsi- ble for ESG issues (environmental social governance) on the Executive Board. On 14 December 2018, Mr Borker’s term in office, which ends on 30 September 2019, was extended until 30 September 2022. Supervisory Board The Supervisory Board supervises and advises the Executive Board in its management activities in accordance with the provisions of German company law and its rules of procedure. It appoints members of the Executive Board, and significant business transacted by the Executive Board is subject to its approval. The Supervisory Board is composed of nine members, who are elected by the Annual General Meeting. The Supervisory Board has established the notification and reporting duties to be met by the Executive Board. In addition to a three- member Supervisory Board Executive Committee (which also functions as a nomination committee), an Audit Committee and a Capital Market Committee were established (each also consisting of three members). The members of the Supervisory Board are: • Reiner Strecker, Chairman • Karin Dohm, Deputy Chairwoman • Thomas Armbrust • Beate Bell • Manuela Better • Dr Henning Kreke • Alexander Otto • Klaus Striebich • Roland Werner Mr Strecker, Ms Dohm and Mr Armbrust are members of the Supervi- sory Board Executive Committee. The Executive Committee is chaired by the Chairman of the Supervisory Board. The Committee discusses urgent business matters and passes relevant resolutions. Moreover, it is responsible for human resources issues concerning the Executive Board and for reviewing the Company’s corporate governance princi- ples. The Executive Committee of the Supervisory Board also fulfils the role of a nomination committee. The Audit Committee consists of Ms Dohm as Financial Expert and Chairwoman as well as Mr Armbrust and Mr Strecker. It is responsible for issues relating to financial reporting, auditing and the prepara- tion of the annual and consolidated financial statements. In addition, this committee supervises the audit as well as the effectiveness of internal control and risk management systems. Former members of the Company’s Executive Board and the Chairman of the Supervisory Board generally do not chair the Audit Committee, to avoid conflicts of interest. Mr Armbrust, Dr Kreke and Mr Strecker were members of the Capital Market Committee. During the past year, it was chaired by Mr Armbrust. The position of Deputy Chairman was held by Mr Strecker. The Supervisory Board’s powers relating to the utilisation of approved capital and conditional capital were transferred to the Committee for decision-making and processing. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 1 5

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SHOW ROOM d n a SHAREHOLDINGS Executive Board As at 31 December 2018, the Executive Board held a total of 6,500 shares, less than 1% of Deutsche EuroShop AG’s share capital. Supervisory Board As at 31 December 2018, the Supervisory Board held a total of 11,693,891 shares, and hence more than 1% of Deutsche EuroShop’s share capital. In addition to the general statutory provisions requiring public dis- closure, the rules of procedure of the Executive Board and of the Supervisory Board govern the reporting duties of Executive and Supervisory Board members in the event of dealings involving shares in the Company or related rights of purchase or sale, as well as rights directly dependent on the Company’s share price. Directors’ dealings The following securities transactions by members of the Executive Board and of the Supervisory Board or by certain persons related to members of the executive bodies were notified to Deutsche EuroShop AG during financial year 2018 in accordance with section 15a of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act): Quota of women The Supervisory Board and the Executive Board took into considera- tion the Act on the Equal Participation of Women and Men in Executive Positions in the Private and Public Sector that entered into force in 2015, and defined corresponding quotas. A quota of women of at least 30% was set for the Supervisory Board and the Executive Board. The Executive Board also set the same target for the management levels below the Executive Board. Given that there are five employees in total, there is only one management level. Since the quota was established in 2015, the target for the nine- member Supervisory Board has been met with three female members. The quota of women on the two-member Executive Board as of 31 December 2018 was 0%. Mr Wellner’s term in office on the Executive Board, which ended on 30 June 2018, was extended until 31 December 2021 in view of his performance. In December 2018, Mr Borker’s term in office on the Executive Board, which ended on 30 September 2019, was likewise extended until 30 September 2022 in view of his performance. Moreover, continuity and experience gained with the business model are important to the company‘s success. The expansion of the Executive Board to three members is neither appro- priate nor reasonable due to the low number of employees and to the specifics of a holding company. The quota of women in the first management level below the Executive Board, which consists of two people, was also at 0% on 31 December 2018. The quota of women specified in 2015 at 50% was met until the leading female member left the Company at her own request on 31 March 2016. Her responsibilities were taken over by a new male employee whose professional training and experience made him the best choice. S n O i T a l E R R O T S E v n i / 8 1 0 2 e c n a n r e v o G e t a r o p r o C 6 1 1

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D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 Name / Company name Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Oliver Bell Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Olaf Borkers Wilhelm Wellner Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Kommanditgesellschaft CURA Vermögensverwaltung G.m.b.H. & Co Christine Huber Christine Huber * ISIN: DE0007480204 Name of financial instrument Type of transaction Date Price (€) Number Total volume (€) Place Share* Purchase 06.02.2018 29.70 167,535 4,976,325.61 Xetra Share* Purchase 07.02.2018 29.53 167 4,931.50 Xetra Share* Purchase 08.02.2018 29.41 76,667 2,255,027.72 Xetra Share* Share* Purchase 09.02.2018 29.41 Purchase 15.02.2018 29.60 7,081 700 208,219.16 20,720.00 Share* Purchase 15.02.2018 29.49 6,375 188,013.82 Xetra Xetra Xetra Share* Purchase 26.03.2018 29.14 70,000 2,039,779.00 Xetra Share* Share* Share* Purchase 27.03.2018 29.18 130,000 3,793,010.00 Purchase 27.04.2018 29.32 Purchase 16.05.2018 30.79 1,500 5,000 43,979.50 153,943.08 Xetra Xetra Xetra Share* Purchase 12.07.2018 29.87 223,934 6,688,057.63 Xetra Share* Purchase 13.07.2018 30.18 3,990 120,431.37 Xetra Share* Purchase 23.08.2018 28.66 141,517 4,055,778.16 Xetra Derivative** Sale 23.08.2018 1.15 200,000 229,000.00 Eurex Share* Purchase 06.09.2018 28.60 57,804 1,653,067.28 Xetra Share* Purchase 06.09.2018 28.67 3,631 104,089.70 UBS Limited EMEA Trading Share* Purchase 07.09.2018 28.45 42,628 1,212,839.07 Xetra Share* Purchase 10.09.2018 28.57 23,389 668,111.46 Xetra Share* Purchase 11.09.2018 28.18 58,924 1,660,638.68 Xetra Share* Purchase 12.09.2018 28.39 38,350 1,088,630.46 Xetra Share* Purchase 12.09.2018 28.45 4,225 120,207.09 UBS Limited EMEA Trading Share* Purchase 26.09.2018 28.10 21,049 591,383.68 Xetra Derivative** Sale 28.09.2018 0.55 200,000 110,000.00 Share* Share* Purchase 30.11.2018 27.50 Purchase 04.12.2018 27.04 1,090 1,000 29,975.00 27,040.00 Over the counter Tradegate Tradegate ** Put option on Deutsche EuroShop AG (ISIN DE0007480204), OTC puts, European, physical settlement, expiry 23.05.2019, strike price €27.40 ** Put option on Deutsche EuroShop AG (ISIN DE0007480204), OTC puts, European, physical settlement, expiry 21.06.2019, strike price €25.00 1 1 7

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SHOW ROOM d n a RELATIONSHIPS WITH SHAREHOLDERS Shareholders exercise their rights in matters concerning the Company at the Annual General Meeting. The Annual General Meeting elects the members of the Supervisory Board and passes resolutions approving the actions of the Executive and Supervisory Boards. It decides on the utilisation of the unappropriated surplus and amendments to the Com- pany’s Articles of Association. The Annual General Meeting, at which the Executive and Supervisory Boards give an account of the past financial year, takes place once a year. When resolutions are adopted at the Annual General Meeting, each share confers entitlement to one vote in line with the principle of “one share, one vote”. All shareholders are entitled to attend the Annual General Meeting and to speak and submit questions about items on the agenda. Deutsche EuroShop reports to its shareholders and to the public on the Company’s business performance, financial position and results of operations four times a year in line with a financial calendar. Press releases also inform the public and the media of Company activities. Information that may materially influence the Company’s share price is published in the form of ad hoc disclosures in accordance with the statutory requirements. The Executive Board gives regular presentations to analysts and at investor events as part of the Company’s investor relations activ- ities. Analyst conferences on the release of the annual and quar- terly financial statements are broadcast over the Internet, where they are available to anyone interested in the Company. In addition, Deutsche EuroShop AG provides financial information and other infor- mation about the Deutsche EuroShop Group on its website. ACCOUNTING AND AUDITS The Deutsche EuroShop Group prepares its financial statements according to International Financial Reporting Standards (IFRSs) on the basis of section 315a of the Handelsgesetzbuch (HGB – German Commercial Code). The annual financial statements of Deutsche EuroShop AG will continue to be prepared in line with the account- ing provisions of the HGB. The Executive Board is responsible for the preparation of the financial statements. The Chairman of the Audit Committee commissions the auditor of the annual financial state- ments, as elected by the Annual General Meeting. The stricter require- ments for auditor independence are met in this process. At the Annual General Meeting on 28 June 2018, BDO AG Wirtschafts- prüfungsgesellschaft was elected as the statutory auditor for the consolidated financial statements for financial year 2018. BDO AG Wirtschaftsprüfungsgesellschaft has audited the annual and consol- idated financial statements of Deutsche EuroShop AG from 2005 to 2018 without interruption. The responsible auditors within the audit company have changed several times during the above-mentioned period. The current auditor, Andrea Reese, audited the annual finan- cial statements for the third time in 2018, while the ancillary audi- tor, Christoph Hyckel, audited the annual financial statements of our company for the fifth time in this function. BDO also provided other consultancy services for our Company in financial year 2018 in the amount of €5 thousand. OUTLOOK The composition of the Supervisory Board has changed significantly since 2012 in view of the change of generations and new requirements as to its membership. Its adequate composition is assured and it is also ensured that the specifications of the German Corporate Governance Code will be complied with in a balanced manner. S n O i T a l E R R O T S E v n i / 8 1 0 2 e c n a n r e v o G e t a r o p r o C 8 1 1

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DECLARATION OF CONFORMITY In November 2018, the Executive and Supervisory Boards of the Com- pany jointly submitted their updated declaration of conformity with the recommendations of the Government Commission on the German Corporate Governance Code for financial year 2018 in accordance with section 161 of the Aktiengesetz (AktG – German Public Companies Act). The declaration was made permanently available to the public on the Company’s website at www.deutsche-euroshop.de. • No limit has been set for the terms of office of members of the Supervisory Board (Section 5.4.1). The Supervisory Board believes that professional qualifications and skills represent the key criteria for members of the Super- visory Board. Limiting the term of office could force the retire- ment of a qualified and successful Supervisory Board member. • The consolidated financial statements are published within 120 days of the end of the financial year (Section 7.1.2). It is important to the Company to publish audited financial state- ments that have been approved by the Supervisory Board. An earlier publication date is not feasible due to the schedules for the preparation, auditing and adoption of the financial state- ments. Unaudited data of relevance to the capital market is published in advance. Hamburg, 24 November 2018 The Executive Board and the Supervisory Board Deutsche EuroShop AG Joint declaration by the Executive and Supervisory Boards of Deutsche EuroShop AG relating to the recommendations of the Government Commission on the German Corporate Governance Code in accordance with section 161 AktG. The Executive Board and the Supervisory Board of Deutsche EuroShop AG declare that the Company has complied with, and will continue to comply with, the recommendations of the Government Commis- sion on the German Corporate Governance Code (as published by the German Federal Ministry of Justice in the official section of the electronic German Federal Gazette (Bundesanzeiger) on 4 July 2003, and as amended on 7 February 2017), subject to a limited number of exceptions as indicated below: • The existing D&O insurance policy taken out for the Supervi- sory Board does not provide for any deductible (Section 3.8). In accordance with the statutory provisions of Article 93 (2) sen- tence 3 AktG, a deductible was agreed upon for the Executive Board. No deductible is foreseen for the Supervisory Board in the future. In the Executive Board and Supervisory Board’s view, a deductible has no effect on the sense of responsibility and loyalty with which the members of these bodies perform the duties and functions assigned to them. • The Supervisory Board did not select a senior management team for a comparison of compensation (Section 4.2.2). Since the staff of Deutsche EuroShop AG consists of just five people, a differentiation between these and a senior manage- ment team would not be meaningful. In this respect, only the relationship between the compensation paid to the Executive Board and that paid to the overall staff can be considered by the Supervisory Board. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 1 9

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SHOW ROOM d n a EPRA REPORTING The Brussels-based European Public Real Estate Association (EPRA) has set itself the goal of improving the transparency and compara- bility of reports published by listed companies in Europe. To this end, EPRA has defined key figures in its Best Practice Recommendations. Deutsche EuroShop supports this goal as a member of EPRA. The currently valid version 1 of the EPRA Best Practice Recommenda- tions was used to determine the key figures. OVERVIE W OF EPR A KE Y FIGURES 31.12.2018 31.12.2017 Change EPRA earnings EPRA NAV EPRA NNNAV in € thousand per share in € in € thousand per share in € 147,388 2,667,499 2,114,355 2.39 43.17 34.22 141,304 2,668,446 2,119,478 2.42 43.19 34.30 + / - in € thousand 6,084 -947 -5,123 EPRA net initial yield (EPRA NIY) EPRA “topped-up” net initial yield EPRA cost ratio (incl. direct vacancy costs) EPRA cost ratio (excl. direct vacancy costs) EPRA vacancy rate 31.12.2018 31.12.2017 in % 5.0 % 5.1 % 12.3 % 12.1 % 1.4 % in % 4.9 % 5.0 % 12.6 % 12.5 % 1.2 % 1 The currently valid version of the EPRA Best Practice Recommendations can be found at http://www.epra.com/regulation-and-reporting/bpr/. in % 4.3 0.0 -0.2 Change in % points 0.1 0.1 -0.3 -0.4 0.2 S n O i T a l E R R O T S E v n i / g n i t r o p e R A R P E 0 2 1

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EPRA EARNINGS EPRA earnings represent sustained operating earnings and thus lay the foundation for a real estate company’s ability to pay a dividend. To calculate this, the profit / loss for the year is adjusted to reflect any income components that have no sustained, recurring impact on operational performance. EPRA earnings are therefore essentially comparable with the “funds from operations” (FFO) parameter that we employ. In contrast to EPRA earnings, however, all non-cash deferred taxes and, in addition, the prior year’s non-cash expense of convertible bond conversion rights are adjusted for FFO. EPR A E ARNINGS in € million / per share in € 117.7 123.7 2.29 141.3 2.42 147.4 2.39 2.18 2015 2016 2017 2018 EPR A E ARNINGS in € thousand in € thousand per share in € in € thousand in € thousand per share in € per share in € Consolidated profit 79,395 1.29 134,333 2.31 -1.02 31.12.2018 31.12.2017 Change in % -44.2 -8,724 -4,396 55,706 2,608 -2,256 -348 Measurement gains / losses investment properties Measurement gains / losses investment proper- ties (at equity) Measurement gains / losses investment properties 1 Measurement gains / losses derivative financial instruments Measurement gains / losses derivative financial instruments (at equity) Measurement gains / losses derivative financial instruments 1 Goodwill write-down Other measurement gains / losses Acquisition costs Deferred taxes on adjustments 1 EPRA earnings Weighted number of no-par-value shares issued 1 Including the share attributable to equity-accounted joint ventures and associates 58,314 0.94 -13,120 -0.23 1.17 -508.7 -2,968 -475 -3,443 140 34 276 23,084 141,304 -0.06 0.00 0.00 0.00 0.40 2.42 0.02 0.00 0.00 0.00 -0.20 -0.03 -33.3 – – – -50.0 -1.2 -2,604 0 9 0 12,274 147,388 -0.04 0.00 0.00 0.00 0.20 2.39 61,783,594 58,248,007 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 2 1

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SHOW ROOM d n a S n O i T a l E R R O T S E v n i / g n i t r o p e R A R P E 2 2 1 EPRA NET ASSET VALUE EPRA NAV measures the net asset value of a company based on a busi- ness model with a long-term focus. To do so, Group equity is adjusted for assets and liabilities that are unlikely to be realised if held over the long term. EPR A NAV Equity Derivative financial instruments measured at fair value Derivative financial instruments measured at fair value (at equity) Derivative financial instruments measured at fair value 1 Equity excluding derivative financial instruments Deferred taxes on investment properties and derivative financial instruments 1 Goodwill as a result of deferred taxes EPRA NAV Number of no-par-value shares issued as at the reporting date 31.12.2018 31.12.2017 Change in € thousand in € thousand 2,229,748 per share in € in € thousand 36.09 in € thousand 2,237,376 per share in € per share in € 36.21 -0.12 in % -0.3 33,546 1,017 39,040 1,365 34,563 0.56 40,405 0.66 -0.10 -15.2 2,264,311 36.65 2,277,781 36.87 -0.22 -0.6 456,915 7.39 444,392 7.19 0.20 -53,727 2,667,499 -0.87 43.17 -53,727 2,668,446 -0.87 43.19 0.00 -0.02 2.8 - 0.0 61,783,594 61,783,594 1 Including the share attributable to equity-accounted joint ventures and associates EPRa nav / EPRa nnnav per share in € / in € million 39.58 43.24 43.19 43.17 31.40 34.00 34.30 34.22 in € million EPRA NAV EPRA NNNAV 2015 2016 2017 2018 2,135.2 1,693.7 2,332.6 1,833.9 2,668.4 2,119.5 2,667.5 2,114.4

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EPRA TRIPLE NET ASSET VALUE Whereas EPRA NAV employs a long-term perspective based on the assumption of a going concern, EPRA NNNAV also factors in assets and liabilities measured at fair value as at the reporting date, which are unlikely to be realised using a long-term view. Using EPRA NAV as a basis, the fair values of derivative financial instruments and financial liabilities as well as the associated deferred taxes are included. EPR A NNNAV EPRA NAV Derivative financial instruments measured at fair value 1 Difference between non-accounted financial liabilities measured at fair value and their carrying amount of which attributable to third-party shareholders in commercial partnerships Difference between non-accounted financial liabilities measured at fair value and their carrying amount (at equity) Difference between non-ac- counted financial liabilities measured at fair value and their carrying amount 1 Deferred taxes on difference between non-accounted financial liabilities measured at fair value and their carrying amount 1 Deferred taxes on investment properties and derivative financial instruments 1 EPRA NNNAV Number of no-par-value shares issued as at the reporting date 31.12.2018 31.12.2017 Change in € thousand in € thousand 2,667,499 per share in € in € thousand 43.17 in € thousand 2,668,446 per share in € per share in € 43.19 -0.02 in % 0.0 -34,563 -0.56 -40,405 -0.66 0.10 -15.2 -78,617 11,210 -82,330 10,181 -7,677 -5,718 -75,084 -1.22 -77,867 -1.26 0.04 -3.2 13,418 0.22 13,696 0.22 0.00 0.0 -456,915 2,114,355 -7.39 34.22 -444,392 2,119,478 -7.19 34.30 -0.20 -0.08 2.8 -0.2 61,783,594 61,783,594 1 Including the share attributable to equity-accounted joint ventures and associates D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 2 3

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SHOW ROOM d n a EPRA NET INITIAL YIELD AND EPRA “TOPPED-UP” NET INITIAL YIELD EPRA net initial yield is calculated on the basis of annualised rental income as at the reporting date less the costs that are not allocable to tenants, calculated in proportion to the market value of the property including ancillary acquisition costs. EPRA “topped-up” net initial yield also takes into account granted rental incentives in the determination of annualised rental income. EPR A NE T INITIAL YIELD (EPR A NIY ) AND EPR A “TOPPED -UP” NE T INITIAL YIELD Market value investment properties Market value investment properties (at equity) Market value investment properties Less expanded space 1 Less ancillary acquisition costs 1 Market value investment properties (gross) Annualised rental income 1 Non-allocable property expenses 1 Annualised net rental income Rental incentives and other rental adjustments 1 Annualised “topped-up” net rental income EPRA net initial yield (EPRA NIY) EPRA “topped-up” net initial yield in € thousand in € thousand in € thousand in € thousand 31.12.2018 31.12.2017 3,891,700 676,960 3,924,157 675,960 4,568,660 -7,160 262,271 4,823,771 264,415 -21,521 242,894 1,088 243,982 5.0 % 5.1 % 4,600,117 -12,616 264,401 4,851,902 261,275 -21,239 240,036 882 240,918 4.9 % 5.0 % 1 Including the share attributable to equity-accounted joint ventures and associates S n O i T a l E R R O T S E v n i / g n i t r o p e R A R P E 4 2 1

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EPRA VACANCY RATE The EPRA vacancy rate is the ratio of the market value of vacant space to the market rent of the entire portfolio as at the reporting date. INVESTMENTS IN REAL ESTATE ASSETS Investments in the Group’s real estate assets amounted to: EPR A INVESTMENTS IN RE AL ESTATE A SSE TS EPR A VACANCY R ATE 31.12.2018 31.12.2017 31.12.2018 31.12.2017 in € thousand in € thousand in € thousand in € thousand Market rent for vacancy 1 Total market rent 1 EPRA vacancy rate 3,464 253,060 1.4 % 3,074 255,281 Acquisitions Developments, new construction 1.2 % Portfolio properties 1 Including the share attributable to equity-accounted joint ventures and associates EPRA COST RATIO The EPRA cost ratio compares the sum of operating and adminis- trative costs with rental income, allowing for an estimation of cost efficiency across comparable real estate companies. Operating and administrative costs comprise all expenses that cannot be allocated or passed on from the management of the property portfolio (excluding depreciation, interest and taxes) as well as Group management costs. EPR A COST R ATIO Operating and administrative costs for property 1 Other operating expenses 1 excluding financing costs Other revenue from cost allocations and reimbursement 1 EPRA costs (incl. direct vacancy costs) Direct vacancy costs 1 EPRA costs (excl. direct vacancy costs) Rental revenue 1 EPRA cost ratio (incl. direct vacancy costs) EPRA cost ratio (excl. direct vacancy costs) 1 Including the share attributable to equity-accounted joint ventures and associates 0 374,000 1,336 19,526 0 1,333 8,291 0 20,862 383,624 Other EPRA investments in real estate assets The acquisition in the prior year related to the purchase of the Olympia Center in Brno. Development investments were made as part of the planned expansion of the Galeria Bałtycka. The increase in invest- ments in portfolio properties compared with the previous year was the result of the “At-your-service” and “Mail Beautification” investment programmes in financial year 2018, which will further boost the attrac- tiveness of the shopping centers. 31.12.2018 in € thousand 31.12.2017 in € thousand 26,702 5,723 0 32,425 -378 32,047 264,056 12.3 % 12.1 % 25,660 6,740 0 32,400 -286 32,114 257,105 12.6 % 12.5 % D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 2 5

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SHOW ROOM d n a COMBINED MANAGEMENT REPORT The Group management report was combined with the manage- ment report of Deutsche EuroShop AG for financial year 2018 for the very first time. The information provided in the combined manage- ment report applies to both the Group and Deutsche EuroShop AG, except where otherwise stated. The separate financial statements of Deutsche EuroShop AG are reported on in a separate section of the combined management report. BASIC INFORMATION ABOUT THE GROUP GROUP BUSINESS MODEL, TARGETS AND STRATEGY Deutsche EuroShop is an Aktiengesellschaft (public company) under German law. The Company’s registered office is in Hamburg. Deutsche EuroShop is the only public company in Germany to invest solely in shopping centers in prime locations. A total of 21 shopping centers in Germany, Austria, Poland, Hungary and the Czech Republic are held in the real estate portfolio. The Group generates its reported revenue from rental income on the space it lets in the shopping centers. The shopping centers are held by independent companies, with Deutsche EuroShop holding stakes of 100% in twelve of them and between 50% and 75% in the other nine. Further information on the incorporation of these companies into the consolidated annual results is provided in the notes to the consolidated financial statement. The Group managing company is Deutsche EuroShop AG. It is respon- sible for corporate strategy, portfolio and risk management, financ- ing and communication. The Deutsche EuroShop Group has a central structure and lean personnel organisation. Objectives and strategy The management focuses on investments in high-quality shopping centers in city centers and established locations offering stable long- term value growth. A key investment target is the generation of high surplus liquidity from long-term leases in shopping centers, much of which is paid out to shareholders in the form of an annual dividend. To this end, the Company invests its capital in shopping centers in different European regions in accordance with the principle of risk diversification. Germany is the main focus for investment. Indexed and turnover-linked commercial rents ensure that high earnings targets are achieved. T R O P E R T n E M E g a n a M D E n i b M O C / p u o r G e h t t u o b a n o i t a m r o f n i c i s a B 8 2 1

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The Company may invest up to 10% of equity in joint ventures in shop- ping center projects in the early stages of development. as a wide variety of attractions for children. As a result, the shopping centers become market places where there is always something new and spectacular on offer. New investments must be financed from a balanced mix of sources, and borrowing may not account for more than 55% of financing across the Group over the long term. As a general rule, long-term interest rates are fixed when loans are taken out or renewed, with the goal of keeping the duration (average fixed interest period) at over five years. Profitable portfolio with stable value Deutsche EuroShop has a balanced and diversified portfolio of German and European shopping centers. The management focuses on invest- ments in prime (1a) locations in cities with a catchment area of at least 300,000 residents that bring a high level of investment security. Seizing opportunities and maximising value In line with the buy & hold strategy, the management is increasingly concentrating on shopping center quality and returns rather than rapid portfolio growth. The management constantly monitors the market and takes opportunities to buy when they arise. Rapid decision-making chains and considerable flexibility regard- ing potential investments and financing structures allow Deutsche EuroShop to react to very wide-ranging competitive situations. At the same time, the Group’s management focuses on optimising the value of the existing portfolio of properties. Tailored rent structure One key component of the rental model is a tailored rent structure. While city center property owners often focus on obtaining the high- est possible rents for their properties – creating a monolithic retail offering – Deutsche EuroShop’s management uses a calculation combining a range of factors to create an attractive sector mix and optimise long-term rental income. Rental partners pay sector-specific and turnover-linked rent. Minimum rents linked to the consumer price index provide a guaranteed minimum level of income for Deutsche EuroShop AG during periods of economic weakness. The shopping experience concept Deutsche EuroShop has outsourced center management to an expe- rienced external partner: ECE Projektmanagement G.m.b.H. & Co. KG (ECE), based in Hamburg. ECE has been designing, planning, building, letting and managing shopping centers since 1965. The company is currently the European market leader, with around 200 shopping centers under management. Deutsche EuroShop views professional center management as the key to successful shopping centers. In addition to guaranteeing standard opening hours and a consistently friendly, bright, safe and clean shopping environment, the center man- agement can employ unusual displays, promotions and exhibitions to make shopping an experience. Each day, an average of 500,000 to 600,000 shoppers visit the 21 Deutsche EuroShop centers, where they are impressed not only by the range of sectors represented, but also by promotional activities including car, talent and fashion shows as well MANAGEMENT SYSTEM The Executive Board of Deutsche EuroShop manages the Company in accordance with the provisions of German company law and with its rules of procedure. The Executive Board’s duties, responsibilities and business procedures are laid down in its rules of procedure and in its schedule of responsibilities. The management indicators are based on the targets of having shop- ping centers with sustainable and stable value growth and a high liquidity surplus generated by long-term leases. These indicators are revenue, EBIT (earnings before interest and taxes), EBT (earnings before taxes) excluding measurement gains / losses and FFO (funds from operations). Based on three-year medium-term planning for each shopping center, aggregated Group planning is drawn up once a year and the manage- ment indicator targets are established. Throughout the year, current performances are periodically (quarterly) compared against these targets and current projections. In addition, the value drivers behind the management indicators, such as rental income, visitor numbers and reletting statistics, are monitored in monthly controlling reports. This allows any urgent measures required to be taken immediately. The Supervisory Board supervises and advises the Executive Board in its management activities in accordance with the provisions of German company law and its rules of procedure. It appoints the members of the Executive Board, and significant transactions by the Executive Board are subject to its approval. The Supervisory Board comprises nine members, all of whom are elected by the Annual General Meeting. Members of the Executive Board are appointed and dismissed on the basis of sections 84 and 85 of the Aktiengesetz (AktG – German Public Companies Act). Changes to the Articles of Association are made in accordance with sections 179 and 133 of the AktG, and the Supervisory Board is also authorised, without a resolution of the Annual General Meeting, to adapt the Articles of Association to new legal provisions that become binding on the Company, as well as to resolve changes to the Articles of Association that only relate to the wording. More information about the Executive Board and the Supervisory Board can be found in the declaration on corporate governance. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 2 9

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SHOW ROOM d n a ECONOMIC REVIEW MACROECONOMIC AND SECTOR-SPECIFIC CONDITIONS In 2018, Germany’s gross domestic product (GDP) rose by 1.5%, accord- ing to the calculations of the German Federal Statistical Office. By comparison with the two previous years in both of which growth stood at 2.2%, economic growth experienced a slight slowdown. Positive impetus continued to come mainly from the domestic market, particu- larly from increased consumer spending and greater investment in construction. Spending by private households which profited from the positive trend on the labour market, rose by a price-adjusted 1.0% and government spending by 1.1%. Investment in construction increased in 2018 by a price-adjusted 3.0%, with investment in public civil engineer- ing projects, in particular, higher than in the previous year. The centers’ competitive position in the Deutsche EuroShop portfolio is determined with reference to both the shops in the relevant city centers and other shopping centers in the catchment area. The centers also have to compete with major regional city centers. For example, the city centers of Dortmund, Mannheim and Braunschweig are serious rivals to the Allee-Center in Hamm, the Rhein-Neckar-Zentrum in Viernheim and the City-Galerie in Wolfsburg respectively. There can be additional competition for city center retail in the form of growing numbers of factory and designer outlets on greenfield sites outside the city limits and to a certain extent also within them. For example, 2018 saw the expansion of a factory outlet center near our center in Dessau. In addition, a planned, large-scale project development in Remscheid is progressing in the direct vicinity of our shopping center in Wuppertal while a further inner-city project develop ment is currently experiencing further delays. GfK estimates that total retail floor space in Germany increased by 0.6% in 2018 (pre- vious year: +0.4%). On the labour market, the positive trend of recent years also continued: On average, 2.3 million people were registered as unemployed during the year, putting the unemployment rate at 5.2% (previous year: 5.7%). Consumer prices in Germany rose by 1.9% versus 2017, mainly caused by the increase in energy prices (+4.9%) and food (+2.5%). In addition to further growth in available retail space, the competitive situation in bricks-and-mortar retailing and in our shopping centers is being intensified particularly by the strong, steady gains being made by online shopping, a channel which continues to absorb much of the growth in retail sales. In 2018, real employee pay rose by 1.0% according to the German Federal Statistical Office. In an environment with ongoing high employ- ment and incomes rising in real terms, the propensity to consume fell slightly by comparison with the previous year, but was still at a very good level according to market research institution GfK. The savings rate rose slightly in 2018 to 10.3% (previous year: 9.9%) and private consumer spending, making up 52.5% of GDP, rose by 1.0% (price-adjusted). According to provisional calculations by the German Federal Statistical Office, German retail sales (including online sales) posted nominal growth of 2.8% and real growth of 1.2% over 2017, with rising online sales in particular again contributing to the positive sales growth in retail. According to figures from the German Retail Federation (HDE), online sales increased year on year to around €53.6 billion, an increase of approximately 10.1%. That equates to roughly a 10.2% share of total retail sales in 2018, which according to the HDE statistics came to €523.6 billion. Bricks-and-mortar retail sales in Germany grew 1.2% in nominal terms in 2018, though the key indicator for shopping centers of bricks-and-mortar fashion retail sales registered a 2.0% decline according to figures from the industry magazine TextilWirtschaft. Retail sector Based on the calculations of real estate consultants JLL, rental turn- over on retail spaces leased in Germany rose 7% to 480,000 m² in 2018 in connection with high demand from international concepts for large spaces. The average leased area increased to 445 m² (previous year: 425 m²), though 52% (previous year: with 56% of lease agreements concluded concerning spaces smaller than 250 m². With around 27% of rented floor space, textile retailers again consti- tuted the largest demand group, although that demand saw further declines. In second place behind textile retailers were restaurants and food retailers, accounting for 20% (previous year: 19%), and health and beauty retail took third place with just under 15% (previous year: 16%). The expansion of chain restaurants, creation of new catering spaces in shopping centers and new leases taken out by discount stores in inner- city locations explain the rise in rented floor space in the restaurants and food retailers segment. These offerings are becoming increasingly important as customer magnets for shopping centers, according to a study by the EHI Retail Institute. Around 10% of all retail sales in Germany in 2018 was generated online. Online sales of food (+20.3%) enjoyed particularly strong growth although it remains a niche business when viewed by its share of total sales in food retail (< 1%). The second-largest segment, electronics & telecommunications, grew by just under a fifth, while the largest retail segment in terms of sales, namely fashion, increased by 7.9%. T R O P E R T n E M E g a n a M D E n i b M O C / w e i v e r c i m o n o c E 0 3 1

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There was also a noticeable trend in 2018 of purely online retailers renting physical shops in central locations or taking over bricks-and- mortar retailers within the framework of company acquisitions, or entering into joint ventures with bricks-and-mortar retailers, in order to achieve multi-channel capability, which is becoming increasingly important to consumers. Online retail and offline retail are increasingly merging. Real estate market With a 6% rise in the volume of transactions to €60.3 billion (previous year: €56.8 billion), the German investment market in commercial real estate reached a new record level, according to JLL. Retail real estate accounted for 13% of the volumes (previous year: 20%). Investments in German shopping centers totalled just slightly below €1.4 billion in full-year 2018 (previous year: €2.0 billion), represent- ing a decline of 30% compared with the previous year. JLL attributes this decline to a more cautious attitude on the part of investors towards this asset class due to the current retail environment and strong growth in online retail. In general, transactions took longer and were of smaller size. The average volume fell from €57.9 million to €56.7 million, indicating that smaller centers in particular changed hands – only four (previous year: five) transactions had a volume in excess of €100 million. As in the previous year, it was among German investors in particular that 65% of investments in German retail real estate were concen- trated in 2018. The yields for these investments in Germany increased slightly due to lower demand for shopping centers. According to JLL, returns on top shopping center investments in Germany averaged around 4.1% at the end of the year (previous year: 3.9%) thus remaining at a very low level. Share price performance Following a year-end closing price for 2017 of €33.96, Deutsche EuroShop shares started the new year in a weak market with an ongoing downward trend, particularly for commercial real estate stocks. The high for the period of €33.90 had already been posted on 2 January 2018. The end of April saw a slight recovery that lasted until mid-June. In the second half of the year, the DES price fell almost continuously – following the generally negative price movements for shopping center stocks worldwide – triggered by the overall poor sentiment towards retail real estate. The share price hit its low for the year of €24.98 on 27 December 2018. The year-end closing price was noted at €25.34. Taking into account the dividend of €1.45 per share paid on 3 July 2018, this corresponds to a performance of -21.8% (pre- vious year: -8.6%). Deutsche EuroShop’s market capitalisation stood at just under €1.6 billion on 31 December 2018. BUSINESS DEVELOPMENT AND OVERALL COMMENT ON THE GROUP’S FINANCIAL SITUATION Key consolidated figures in € million Revenue EBIT EBT (excluding meas- urement gains / losses 1) EPRA ² earnings FFO Equity ratio in % 3 LTV ratio in % 4 Forecast for 2018 01.01.– 31.12.2018 01.01.– 31.12.2017 220 – 224 193 – 197 154 – 157 145 – 148 225.0 199.1 160.9 147.4 150.4 55.8 31.8 218.5 192.4 153.3 141.3 148.1 55.6 32.4 + / - 3.0% 3.5% 5.0% 4.3% 1.5% Forecast for 2018 01.01.– 31.12.2018 01.01.– 31.12.2017 + / - 2.39 2.43 2.42 2.54 -1.2% -4.3% in € EPRA ² earnings per share FFO per share 2.35 – 2.39 EPRA ² NAV per share 43.17 43.19 0.0% Weighted number of no-par-value shares issued 5 61,783,594 58,248,007 6.1% 1 Including the share attributable to equity-accounted joint ventures and associates ² European Public Real Estate Association 3 Incl. third-party interests in equity 4 Loan-to-value ratio (LTV ratio): ratio of net financial liabilities (financial liabilities less cash and cash equivalents) to non-current assets (investment properties and invest- ments accounted for using the equity method) 5 Used to calculate EPRA earnings and FFO per share: to calculate EPRA NAV per share the number of no-par-value shares in issue on the reporting date was used, which amounted to 61,783,594 in 2017 and 2018 Financial year 2018 ended successfully in terms of operations, with results higher than those forecast. Revenue rose by 3% from €218.5 million in the previous year to €225.0 million (forecast: €220 to €224 million). Earnings before interest and taxes (EBIT) of €199.1 million (forecast: €193 to 197 million) were €6.7 million or 3.5% higher than the previ- ous year (previous year: €192.4 million). Earnings before taxes (EBT) excluding measurement gains / losses increased significantly by 5% from €153.3 million in the previous year to €160.9 million (forecast: €154 to 157 million). FFO also posted a good result at €2.43 per share (forecast: €2.35 to €2.39). D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 3 1

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SHOW ROOM d n a The portfolio expansion completed in recent years, a stable operating expense ratio and lower interest costs were major reasons for this positive trend, which was achieved despite a still very competitive retail environment. In the last financial year, this market environment also affected the appreciation of our shopping center portfolio in particular. In the last financial year, measurement losses of €58.3 mil- lion (previous year: measurement gains of €12.9 million) impacted significantly on the consolidated profit of €79.4 million (previous year: €134.3 million). EARNINGS POSITION OF THE GROUP 01.01. – 31.12.2018 01.01. – 31.12.2017 E ARNINGS POSITION in € thousand Revenue Operating and administrative costs for property NOI Other operating income Other operating expenses EBIT At-equity proﬁt / loss Measurement gains / losses (at equity) Deferred taxes (at equity) At-equity (operating) profit / loss Interest expense Profit / loss attributable to limited partners Other financial gains or losses Financial gains or losses (excl. measurement gains / losses) EBT (excl. measurement gains / losses) Measurement gains / losses Measurement gains / losses (at equity) Measurement gains / losses (including at-equity profit / loss) Income taxes Deferred taxes Deferred taxes (at equity) Deferred taxes (including at equity) Consolidated profit 225,047 -22,183 202,864 1,828 -5,557 199,135 27,602 2,608 477 34,451 -4,396 425 -55,715 -2,608 30,687 -52,726 -18,448 2,286 -38,201 160,934 -58,323 -10,573 -12,166 -477 -12,643 79,395 8,550 4,396 -25,512 -425 218,491 -21,539 196,952 2,035 -6,619 192,368 30,480 -54,023 -18,522 3,005 -39,060 + / - 6,556 -644 5,912 -207 1,062 6,767 207 1,297 74 -719 859 153,308 7,626 12,946 -5,984 -71,269 -4,589 -25,937 13,294 134,333 -54,938 Change in % 3.0 -3.0 3.0 -10.2 16.0 3.5 0.7 2.4 0.4 -23.9 2.2 5.0 -550.5 -76.7 51.3 -40.9 T R O P E R T n E M E g a n a M D E n i b M O C / w e i v e r c i m o n o c E 2 3 1

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Revenue growth thanks to portfolio expansion Consolidated revenue rose in the financial year by 3.0%, from €218.5 million to €225.0 million and therefore exceeded expectations. This growth was attributable in the main to the Olympia Center in Brno, which has been included in the consolidated figures since 31 March 2017 and contributed €5.7 million of the rise in revenue. In the current bricks-and-mortar retail market environment, rents for remaining centers, both in Germany and abroad, performed well and were €0.8 million (+0.4%) higher than the previous year. RE VENUE in € million 200.8 202.9 205.1 14.9 15.0 14.9 30.7 36.7 218.5 225.0 185.9 187.9 190.2 187.8 188.3 +1.0% +1.1% +6.5% +3.0% 2014 2015 2016 2017 2018 Domestic International RE VENUE in € thousand Main-Taunus- Zentrum, Sulzbach Altmarkt-Galerie, Dresden A10 Center, Wildau Rhein-Neckar- Zentrum, Viernheim Herold-Center, Norderstedt Billstedt-Center, Hamburg Allee-Center, Hamm City-Galerie, Wolfsburg Forum, Wetzlar City-Arkaden, Wuppertal City-Point, Kassel Rathaus-Center, Dessau Stadt-Galerie, Hameln DES Verwaltung GmbH Domestic 188,358 187,830 1,406 1,492 -86 528 Galeria Baltycka, Gdansk Olympia Center, Brno Caspia, Gdansk Abroad Total 15,689 15,332 357 20,967 15,265 5,702 37.4 33 64 -31 -48.4 36,689 30,661 6,028 225,047 218,491 6,556 19.7 3.0 01.01. – 31.12.2018 01.01. – 31.12.2017 + / - in % Change 36,030 35,655 25,224 25,093 21,112 20,734 375 131 378 1.1 0.5 1.8 17,977 17,951 26 0.1 12,878 12,984 -106 -0.8 10,750 10,753 10,593 10,542 -3 51 9,981 9,746 235 9,870 9,793 9,416 9,417 8,678 8,615 77 -1 63 7,896 8,047 -151 6,547 7,008 -461 0.0 0.5 2.4 0.8 0.0 0.7 -1.9 -6.6 -5.8 0.3 2.3 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 3 3

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INCOME STATEMENT OF THE JOINT VENTURES 01.01. – 31.12.2018 01.01. – 31.12.2017 + / - in % Change 7,872 7,950 -78 -1, 0 7,232 7,029 203 2.9 7,094 7,195 -101 -1.4 NOI 34,490 34,493 -3 SHOW ROOM d n a Operating and administrative costs for property constant at 9.9% of revenue Center operational costs in the reporting period, at €22.2 million, which comprised mainly of center management fees, non-allocable ancillary costs, maintenance and write-downs of rent receivables, rose slightly compared with the same period of the previous year (€21.5 million), especially due to higher maintenance expenses and write-downs. At a cost / revenue ratio of 9.9% (previous year: 9.9%), costs were in line with the previous year and the budget. Other operating income and expenses Other operating income amounted to €1.8 million (previous year: €2.0 million), down slightly on the previous year. Other operating expenses amounted to €5.6 million, €1.0 million lower than in the pre- vious year (€6.6 million). In the previous year, higher consultancy costs in particular were recorded in connection with the acquisition of the Olympia Center in Brno. EBIT grows at same rate as revenue Earnings before interest and taxes (EBIT) at €199.1 million were greater than the figure for the previous year (€192.4 million), to a significant extent due to the acquisition of the Olympia Center in Brno. Financial gains or losses excluding measurement effects on the up Financial gains or losses (excluding measurement gains / losses) improved by €0.9 million from €-39.1 million in the previous year to €-38.2 million. The at-equity profit recognised in financial gains or losses, at €30.7 million (previous year: €30.5 million) was slightly above the previous year. The interest expense of Group companies declined by €1.3 million. Lower interest costs due to loan repayments, the cessation of interest payments on the convertible bond and more favourable refinancing of the Altmarkt-Galerie in Dresden were offset against the additional interest expense for the financing of the Olympia Center. Other financial gains or losses, which consisted mainly of a meas- urement gain on an interest rate swap for the financing of the Altmarkt-Galerie in Dresden, fell because the swap matured dur- ing the year at the end of September to €2.3 million (previous year: €3.0 million). T R O P E R T n E M E g a n a M D E n i b M O C / w e i v e r c i m o n o c E 4 3 1 in € thousand Allee-Center, Magdeburg Phoenix-Center, Harburg Stadt-Galerie, Passau Saarpark Center, Neunkirchen City-Arkaden, Klagenfurt Árkád, Pécs Other Revenue Operating and administrative costs for property Other operating income Other operating expenses EBIT Interest income Interest expense Other financial gains or losses Financial gains or losses Current tax expense At-equity profit (excluding measure- ment gains / losses) Measurement gains / losses Deferred taxes 6,259 6,209 50 6,629 6,417 212 3,888 35 3,779 35 109 0 39,009 38,614 395 -4,519 -4,121 -398 0.8 3.3 2.9 0.0 1.0 -9.7 0.0 154 112 72.7 266 -307 -305 34,449 34,342 2 3 -3,984 -4,191 -2 107 -1 207 -0.7 0.3 -33.3 4.9 348 475 -127 -26.7 -3,634 -128 -3,713 -149 79 21 2.1 14.1 30,687 30,480 207 0.7 -2,608 -477 4,396 -7,004 -159.3 -425 -52 -12.2 Share of profit / loss 27,602 34,451 -6,849 -19.9 EBT (excluding measurement gains / losses) up by 5.0% EBT (excl. measurement gains / losses) rose from €153.3 million to €160.9 million (+5.0%) due in particular to the Olympia Center in Brno, lower interest expense and an improved operating profit on the port- folio properties.

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Measurement gains well down on the previous year The measurement loss of €-58.3 million (previous year: measurement gain of €13.1 million) resulted from the valuation of the Group’s real estate assets according to IAS 40. Measurement losses on real estate assets, after minority interests, broke down into €-55.7 million (pre- vious year: measurement gain of €8.7 million) from the measurement of the real estate assets reported by the Group and €-2.6 million (pre- vious year: measurement gain of €4.4 million) from the measurement of the real estate assets of the joint ventures recorded on the balance sheet according to the at-equity method. The average value of Group properties, after ongoing investments, fell by -1.4% (previous year: rose by 0.6%); individual measurement gains / losses ranged between -5.3% and +4.7%. With a high unchanged occupancy rate of around 99%, the valuation of the property port- folio was mainly influenced by a slight increase in acquisition yields for shopping centers in Germany, higher investment in modernising and positioning the existing portfolio and changes to expected rental trends. Income taxes Taxes on income and earnings, including the share reported under at- equity profit, came to €23.2 million, compared with €31.9 million in the previous year. An addition of €12.6 million (previous year: €25.9 million) was made to deferred tax provisions in the year under review. The lower additions were primarily the result of a slight fall in the market values of our shopping center portfolio. Income tax expenditure amounted to €10.6 million (previous year: €6.0 million). This rise was due not only to the Olympia Center in Brno and the improved operating profit for 2018, but also in particular to the use of tax loss carryforwards and other tax- relevant non-recurring effects in the previous year. Measurement loss led to a decline in consolidated profit The measurement loss of €-58.3 million, which was €71.2 million below the measurement gain of €12.9 million in the previous year, caused a decline in consolidated profit by €54.9 million to €79.4 million (previous year: +€134.3 million). EPRA Earnings and earnings per share Operating profit excluding measurement effects (EPRA earnings) increased from €141.3 million to €147.4 million. Due to the higher number of no-par-value shares issued, EPRA earnings per share fell slightly to €2.39 (previous year: €2.42). Earnings per share (consoli- dated net profit per share) came to €1.29 in the year under review due to the measurement loss, compared with €2.31 in the previous year. EPR A E ARNINGS in € million / per share in € 117.7 123.7 2.29 141.3 2.42 147.4 2.39 2.18 2015 2016 2017 2018 EPR A E ARNINGS Consolidated profit Measurement gains / losses investment properties 1 Measurement gains / losses derivative financial instruments 1 Goodwill write-down Other measurement gains / losses Acquisition costs Deferred taxes in respect of EPRA adjustments ² EPRA earnings 01.01. – 31.12.2018 01.01. – 31.12.2017 in € thousand per share in € in € thousand per share in € 79,395 58,314 -2,604 0 9 0 12,274 147,388 1.29 0.94 -0.04 0.00 0.00 0.00 0.20 2.39 134,333 -13,120 -3,443 140 34 276 23,084 141,304 2.31 -0.23 -0.06 0.00 0.00 0.00 0.40 2.42 Weighted number of no-par-value shares issued 61,783,594 58,248,007 1 Including the share attributable to equity-accounted joint ventures and associates ² affects deferred taxes on investment properties and derivative financial instruments D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 3 5

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SHOW ROOM d n a Positive development of funds from operations (FFO) Funds from operations (FFO) are used to finance our ongoing invest- ments in portfolio properties, scheduled repayments on our long-term bank loans and the distribution of dividends. During the year under review, FFO of €150.4 million was generated, a rise of €2.3 million on €148.1 million in the previous year. FFO per share declined from €2.54 to €2.43 because of the higher number of shares. FUNDS FROM OPER ATIONS Consolidated profit Bond conversion expense Measurement gains / losses investment properties 1 Goodwill write-down Other measurement gains / losses Deferred taxes 1 FFO 01.01. – 31.12.2018 01.01. – 31.12.2017 in € thousand per share in € in € thousand per share in € 79,395 0 58,314 0 9 12,643 150,361 1.29 0.00 0.94 0.00 0.00 0.20 2.43 134,333 781 -13,120 140 34 25,937 148,105 2.31 0.01 -0.23 0.00 0.00 0.45 2.54 Weighted number of no-par-value shares issued 61,783,594 58,248,007 1 Including the share attributable to equity-accounted joint ventures and associates Proposed dividend: €1.50 per share Based on a successful financial year, we are able to maintain our dividend policy, which is geared towards the long term and continuity. The Executive Board and Supervisory Board will therefore propose to the shareholders at the Annual General Meeting in Hamburg on 12 June 2019 that a dividend of €1.50 per share, 3.4% or €0.05 higher than the previous year, be distributed for financial year 2018. An estimated €0.57 per share of the dividend is expected to be deducted as capital gains tax. FUNDS FROM OPER ATIONS (FFO) in € million / per share in € 120.5 123.4 129.9 148.1 150.4 2.54 2.41 2.43 2.29 2.23 2014 2015 2016 2017 2018 T R O P E R T n E M E g a n a M D E n i b M O C / w e i v e r c i m o n o c E 6 3 1

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Results of operations of the segments The subsidiaries and equity-accounted joint ventures are included in the Group’s segment reporting in proportion to the Group’s share therein. A distinction is made between the shopping centers in Germany (“domestic”) and elsewhere in Europe (“abroad”) (for further details, please see our statements on segment reporting in the notes to the consolidated financial statements): in € thousand Revenue Domestic Abroad EBIT Domestic Abroad EBT (excl. measurement gains / losses) Domestic Abroad 01.01. – 31.12.2018 01.01. – 31.12.2017 239,188 196,070 43,118 214,709 174,360 40,349 164,699 131,568 33,131 232,530 195,676 36,854 207,832 174,406 33,426 156,972 129,014 27,958 + / - 6,658 394 6,264 6,877 -46 6,923 7,727 2,554 5,173 Change in % 2.9 0.2 17.0 3.3 0.0 20.7 4.9 2.0 18.5 The clear increase in the key segment figures for abroad is due to the Olympia Center in Brno, which was incorporated for an entire year in financial year 2018 for the first time (previous year: nine months). Financing analysis As at 31 December 2018, the Deutsche EuroShop Group reported the following key financial data: EBT (excl. measurement gains / losses) in the domestic segment increased particularly due to interest savings owing to more favoura- ble refinancing and scheduled repayments. in € million Total assets 31.12.2018 31.12.2017 Change 4,610.2 4,627.0 -16.8 Equity (including third-party shareholders) Equity ratio (%) Net financial liabilities Loan-to-value ratio (LTV ratio) in % 2,573.4 55.8 1,406.1 2,574.9 55.6 1,440.1 31.8 32.4 -1.5 0.2 -34.0 -0.6 At €2,573.4 million, the Group’s economic equity capital, which com- prises the equity of the Group shareholders (€2,229.7 million) and the equity attributable to third-party shareholders (€343.7 million), was virtually unchanged from the previous year (previous year: €2,574.9 million). Accordingly, the equity ratio of 55.8% was almost the same as the previous year (previous year: 55.6%). FINANCIAL POSITION OF THE GROUP Principles and objectives of financial management For the purposes of financing its investments, Deutsche EuroShop uses the stock exchange for procuring equity, as well as the credit and capital markets for procuring loans. Within the Group, both the individual property companies and Deutsche EuroShop AG act as borrowers from banks or bond debtors. Loans and bonds are taken out in euros for all Group companies. In general, the use of equity and loans for investments should be equally weighted and the equity ratio in the Group (including third-party interests) should not fall signifi- cantly below 45%. We finance our real estate projects on a long-term basis and also use derivative financial instruments to hedge against rising capital market rates. Hedging transactions are used to hedge individual loans. An available credit line enables Deutsche EuroShop to react quickly to investment opportunities. Until used for investment, any cash not needed is invested short-term as time deposits to finance ongoing costs or pay dividends. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 3 7

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SHOW ROOM d n a FINANCIAL LIABILITIES in € thousand 31.12.2018 31.12.2017 Change Non-current bank loans and overdrafts Current bank loans and overdrafts 1,496,313 1,517,773 -21,460 26,080 28,899 -2,819 Total 1,522,393 1,546,672 -24,279 Of the 19 loans across the Group, 13 are subject to credit covenants with the financing banks. There are a total of 21 different conditions on different debt service cover ratios (DSCRs), interest cover ratios (ICRs), changes in rental income, the Group’s leverage ratio and its loan-to- value ratio (LTV). All conditions were met. Based on the budgeted figures, compliance with the covenants may also be assumed in the current financial year and for the planning period until 2021. Cash and cash equivalents Net financial liabilities -116,335 -106,579 -9,756 1,406,058 1,440,093 -34,035 Scheduled repayments totalling €21.7 million will be made from current cash flow during financial year 2019. Over the period from 2019 to 2023, repayments will average €16.1 million per annum. Current and non-current financial liabilities fell from €1,546.7 million to €1,522.4 million in the year under review, a decline of €24.3 million, due to scheduled repayments. Together with the rise in cash and cash equivalents by €9.7 million, net financial liabilities, at €1,406.1 mil- lion, were on balance €34.0 million lower than at the end of 2017 (€1,440.1 million). The net financial liabilities existing at the end of the year are used exclusively to finance non-current assets. This brings the percentage of non-current assets financed with debt capital (LTV) in the year under review to 31.8% (previous year: 32.4%). The financing terms for consolidated borrowing as at 31 December 2018 were fixed at 2.72% p. a. (previous year: 2.89% p. a.) with an aver- age residual maturity of 5.4 years (previous year: 5.6 years). The loans to Deutsche EuroShop are maintained as credit facilities with 24 banks in Germany, Austria and the Czech Republic. LOAN STRUC TURE as at 31 December 2018 Interest rate lock-in Up to 1 year 1 to 5 years 5 to 10 years Over 10 years Total There is no imminent refinancing to be negotiated in financial year 2019. Loans totalling €129.2 million must then be extended in 2020, €198.3 million in 2021 and €217.8 million in 2022. Current and non-current financial liabilities totalling €1,522.4 mil- lion were recognised in the balance sheet at the reporting date. The €3.0 million difference between that amount and the sum of the amounts cited here relates mainly to deferred interest and repayment obligations that were settled at the beginning of 2019. as % of loan in € million Average residual maturity (years) Average interest rate 1.4 53.6 37.9 7.1 100 21.7 813.6 575.6 108.5 1,519.4 1.0 3.5 8.6 11.0 5.4 3.66 3.44 2.41 2.24 2.72 T R O P E R T n E M E g a n a M D E n i b M O C / w e i v e r c i m o n o c E 8 3 1

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Investment analysis In financial year 2018, the investment in modernising and positioning the existing portfolio was increased significantly and amounted to €20.9 million after €9.6 million in the previous year. 01.01. – 31.12.2018 01.01. – 31.12.2017 Liquidity analysis in € thousand Net cash flow from operating activities Cash flow from investing activities 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 DE VELOPMENT OF FINANCIAL RESOURCES in € million 159.2 -20.9 -128.6 Cash flow from investing activities 159,202 156,024 -20,915 -211,014 106.6 -128,531 97,523 9,756 42,533 106,579 64,046 116,335 106,579 Cash and cash equivalents at the beginning of the period Net cash flow from opera- ting activity Cash flow from financing activities 116.3 Cash and cash equivalents at the end of the period NET ASSETS OF THE GROUP Total assets down slightly due to real estate valuation The Group’s total assets fell slightly by €16.8 million from €4,627.0 mil- lion to €4,610.0 million. in € thousand Current assets 31.12.2018 31.12.2017 133,504 122,121 Non-current assets 4,476,724 4,504,878 Current liabilities 53,580 56,652 Non-current liabilities 2,326,900 2,332,971 Equity 2,229,748 2,237,376 Change 11,383 -28,154 -3,072 -6,071 -7,628 Total assets 4,610,228 4,626,999 -16,771 The Group’s operating net cash flow of €159.2 million (previous year: €156.0 million) constitutes the amount generated by the Company through the leasing of shopping center space after deduction of all costs. It is primarily used to finance the dividends of Deutsche EuroShop AG and payments to third-party shareholders as well as ongoing loan repayments and investments. Cash flow from investing activities primarily consisted of investment in portfolio properties (€20.9 million; previous year: €9.6 million). In the previous year, this also included the acquisition of Olympia Brno on 31 March 2017 for €201.6 million and inflows of €0.2 million from the disposal of two associate companies. Cash flow of €128.5 million from financing activities comprises a cash outflow from current repayments of financial liabilities of €24.2 mil- lion (previous year: €97.7 million) as well as a dividend distribution to shareholders of €89.6 million (previous year: €81.2 million) and a pay-out to third-party shareholders of €14.7 million (previous year: €16.6 million). In the previous year, cash flow from financing activities still included the cash inflow of €163.6 million from the cash capital increase in March 2017 (after the deduction of transaction costs). Cash and cash equivalents rose by €9.7 million in the year under review to €116.3 million (previous year: €106.6 million). D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 3 9

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SHOW ROOM d n a BAL ANCE SHEE T STRUC TURE in € million assets 4,627.0 4,610.2 122.1 133.5 liabilities 4,610.2 4,627.0 53.6 56.6 2,326.9 2,333.0 4,504.9 4,476.7 Current assets 2,229.7 2,237.4 Current liabilities Non-current liabilities Non-current assets 2017 2018 2018 2017 Equity Current assets rise due to increase in cash and cash equivalents At the end of the year, current assets amounted to €133.5 million, rep- resenting an €11.4 million rise versus the previous year (€122.1 million) which was mainly the result of a €9.7 million increase in cash and cash equivalents as at the reporting date (€116.3 million; previous year: €106.6 million). Trade receivables advanced €1.4 million to €6.7 million with respect to the previous year (€5.3 million). Other assets rose by €0.3 million, from €10.2 million to €10.5 million. Non-current assets down slightly due to valuation losses on real estate assets Non-current assets fell from €4,504.9 million to €4,476.7 million in the year under review, representing a €28.2 million reduction. Investment properties reduced by €32.4 million to €3,891.7 million. While additions and the costs of investments in portfolio properties came to €20.9 million, revaluation of the property portfolio resulted in valuation losses of €53.3 million. At-equity investments increased by €4.3 million, from €526.7 million to €531.0 million. This increase is attributed to the difference between the share in the earnings (€27.6 million) and losses for the financial year (€23.3 million). Current and non-current liabilities declining Current liabilities declined €3.1 million, from €56.7 million to €53.6 mil- lion due to lower repayment obligations by comparison with the pre- vious year. Non-current liabilities down Non-current liabilities fell by €6.1 million from €2,333.0 million to €2,326.9 million, primarily due to the scheduled repayment of long- term loans (€-21.5 million) and the reduction in other non-current liabilities (€-3.6 million). Deferred tax liabilities, on the other hand, rose by €12.8 million, while redemption entitlements for third-party shareholders increased by €6.2 million. Equity At €2,229.7 million as at the end of the year under review, Group equity was down €7.6 million against the previous year (€2,237.4 million). The reduction in the year under review was mainly due to the difference between the consolidated profit of €79.4 million and the dividend paid in July 2018 of €89.6 million as well as the change in the fair value of swaps, which at €2.6 million impacted equity positively. EPRA net asset value virtually unchanged Net asset value (NAV) stood at €2,667.5 million or €43.17 per share as at 31 December 2018, compared with €2,668.4 million or €43.19 per share in the previous year. Net asset value per share was therefore down slightly by 0.02% year on year. T R O P E R T n E M E g a n a M D E n i b M O C / w e i v e r c i m o n o c E 0 4 1

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EPR A NAV Equity Derivative financial instruments measured at fair value 1 Equity excluding derivative financial instruments Deferred taxes on investment properties and derivative financial instruments 1 Goodwill as a result of deferred taxes EPRA NAV Number of no-par-value shares issued as at the reporting date 1 Including the share attributable to equity-accounted joint ventures and associates 31.12.2018 31.12.2017 in € thousand per share in € in € thousand per share in € 2,229,748 34,563 2,264,311 456,915 -53,727 2,667,499 36.09 0.56 36.65 7.39 -0.87 43.17 2,237,376 40,405 2,277,781 444,392 -53,727 2,668,446 36.21 0.66 36.87 7.19 -0.87 43.19 61,783,594 61,783,594 EPR A NE T A SSE T VALUE per share in € 2,332.6 2,135.2 2,668.4 2,667.5 REPORT ON EVENTS AFTER THE REPORTING DATE 1,789.4 33.17 43.24 43.19 43.17 39.58 2014 2015 2016 2017 2018 Until 2012, Deutsche EuroShop AG as a holding company had partici- pations in tax-exempt partnerships purely engaged in asset manage- ment, and in this context, took advantage of the so-called “extended trade tax deduction”. In a ruling dated 19 October 2010, the German Federal Fiscal Court (BFH) rejected any option to claim the extended trade tax deduction for cases in which the property is not held by the company itself but through non-commercial, asset management partnerships as is the case with Deutsche EuroShop AG. Applying this ruling, the extended trade tax deduction was denied for the years 2007 to 2011 and Deutsche EuroShop AG was assessed for the corresponding trade tax. Deutsche EuroShop AG appealed against this tax assessment. In a resolution adopted on 25 September 2018 (published on the BFH website on 27 March 2019), the Grand Senate of the Federal Fiscal Court ruled contrary to the decision handed down on 19 October 2010 as part of pending appeal proceedings that it is permissible to claim the extended trade tax deduction even if the property is held through a partnership purely engaged in asset management. As a result of the resolution adopted by the Grand Senate of the BFH, we expect our appeals against the relevant tax assessments to be successful. Based on a provisional calculation, this would result in a trade tax refund (including interest on the refund until 31 March 2019) of around €9.6 million. No further significant events occurred between the balance sheet date and the date of preparation of the financial statements. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 4 1

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SHOW ROOM d n a OUTLOOK The ongoing soundness of a healthy domestic economy will continue to underpin growth in employment in 2019. In its annual economic report for 2019, the German federal government expected a further fall in the unemployment rate to 4.9% with attendant real increases in workers’ income. Uncertainties exist in the foreign economic environment, where the risks have increased and the German export-oriented industry in particular could be affected by negative trends. The federal government is therefore predicting growth in gross domestic product of just 1.0%. In the case of retail sales, the German Retail Federation (HDE) predicts growth of 2.0%, with bricks-and-mortar retail set to grow by 1.2% and online sales as the biggest growth driver again by around 9%. Despite the positive and robust state of the economy in our core market of Germany, there are risks in the foreign economic environment. The uncertainties caused by Brexit and the ongoing protracted Brexit negotiations, the escalating trade disputes, the economic slowdown in China and the intensification of international tax competition, as well as ongoing geopolitical crises, lead us to believe that the risk to the economy as a whole remains high. In light of these financial and economic challenges and notwithstanding the current slight dip in the economy, there is an intensifying global need for capital investments that retain their value, particularly in finan- cially solid countries such as Germany. The long-lasting low interest rate phase also means that the likes of life insurance companies and similar pension institutions in Germany and beyond are still seeking real estate investment opportunities that will meet the long-term return expectations of policyholders. This is keeping the general demand for real estate at very high levels, with supply limited in terms of adequate quality. Retail real estate also appeals to institutional investors, in prin- ciple. However, due to increasing online trade and greater challenges for bricks-and-mortar retail, the previously overheated shopping center transactions market has normalised. In Germany, there is even an evident reluctance to invest at present. We are monitoring developments on the real estate market closely. We will only make new investments if the return that is achievable over the long term is reasonably correlated to the investment risks. Stable outlook for our shopping centers in an increasingly competitive environment With strong growth in online sales and an increasing supply of floor space in retail, we remain well placed operationally. All our properties are largely full and let on a long-term basis, and the outstanding rents and necessary writedowns remain at a low level. We currently see no indications of a significant change in this stable situation. Agreed transactions are the foundation for revenue and earnings planning The Deutsche EuroShop Group’s revenue and earnings planning for 2019 and 2020 does not include the future purchase or sale of any properties. The results of the annual valuation of our shopping centers and exchange rate factors are also not included in our planning since they are not foreseeable. Forecasts about the future revenue and earnings situation of our Group are based on the following factors: a) the development of revenue and earnings in the existing shopping centers b) the assumption that there will be no substantial reduction in revenue in the retail sector that would cause a large number of retailers to no longer be able to meet their obligations under existing leases. Revenue in 2019 and 2020 Revenue of €225.0 million in financial year 2018 slightly exceeded forecasts of €220–224 million. Assuming that rental income remains stable overall, revenue should then lie within a range of €222–226 mil- lion in 2019 and 2020. RE VENUE in € million Result 225.0 Goal 222 – 226 Goal 222 – 226 2018 2019 2020 T R O P E R T n E M E g a n a M D E n i b M O C / k o o l t u O 2 4 1

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Stable operating earnings for 2019 and 2020 Earnings before interest and taxes (EBIT) were €199.1 million in 2018, especially due to higher revenue generated and lower prop- erty operating costs, and therefore exceeded the expected range of €193–197 million. For 2019 and 2020, EBIT is expected to be between €194–198 million, with revenue at the same level as the previous year and with property operating costs rising slightly. EBIT in € million Result 199.1 Goal 194 – 198 Goal 194 – 198 FFO performance up to 2020 In the year under review, funds from operations (FFO), at €150.4 mil- lion or €2.43 per share, exceeded expectations (€145–148 million or €2.35–2.39 per share) due to the positive variances described and actual taxes that were higher than projected. For 2019, we expect FFO of €148–151 million or €2.40 – 2.44 per share. According to our projections, FFO will increase to between €2.43 and €2.47 per share for financial year 2020. In absolute terms, FFO should rise to €150–153 million. FFO Result Goal FFO in € million 150.4 151 Goal 153 150 2018 2019 2020 148 FFO per share in € 2.43 2.40 – 2.44 2.43 – 2.47 2018 2019 2020 Dividend policy We intend to maintain our long-term, reliable dividend policy and antic- ipate that we will be able to pay a dividend of €1.55 per share to our shareholders for financial year 2019. In the year under review, operating earnings before tax (EBT excluding measurement gains / losses) amounted to €160.9 million, significantly above our forecast of €154–€157 million. Alongside the effects on EBIT, as already described, the results of the equity- accounted companies, which exceeded forecasts, also had a pos- itive effect on the operating earnings. Taking into account further interest savings from follow-on financing arrangements as well as one-off interest income in connection with an expected tax refund for previous years (see “Report on events after the reporting date”), we are assuming operating earnings for 2019 to lie in the range of €159 to 162 million. For 2020, we calculate €161–164 million. EBT * in € million Result 160.9 Goal 159 – 162 Goal 161 – 164 2018 2019 2020 * excluding measurement gains / losses D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 4 3

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SHOW ROOM d n a T R O P E R T n E M E g a n a M D E n i b M O C / t r o p e r k s i R 4 4 1 RISK REPORT PRINCIPLES GOVERNING THE RISK MAN- AGEMENT SYSTEM AND INTERNAL CONTROL SYSTEM Deutsche EuroShop’s strategy is geared towards maintaining and sus- tainably increasing shareholders’ assets and generating sustainably high surplus liquidity from leasing real estate, thereby enabling the distribu- tion of an appropriate and sustainable dividend. The focus of the risk management system is therefore on monitoring compliance with this strategy and, building on this, on the identification and assessment of risks and opportunities as well as the fundamental decision on how to manage these risks. Risk management ensures that risks are identified at an early stage and can then be evaluated, communicated promptly and mitigated. Monitoring and management of the risks identified form the focal point of the internal control system, which at Group level is essentially the responsibility of the Executive Board. The internal control system is an integral part of the risk management system. Within the framework of its legal mandate for auditing the annual finan- cial statements, the auditor checks whether the early warning system for risks is suitable for detecting at an early stage any risks or developments that might endanger the Company. The risk analysis, as a continuous process, promptly identifies, evaluates and communicates the factors that may jeopardise the achievement of business targets. The process also includes management and control of the risks identified. Risk analysis Under existing service contracts, the Executive Board of Deutsche EuroShop AG is continuously briefed about the business performance of the shopping centers and the corresponding property companies. Financial statements and financial control reports are submitted on a quarterly basis for each shopping center, with medium-term corporate plans submitted annually. The Executive Board regularly reviews and analyses these reports, using the following information in particular to assess the level of risk: 1. Portfolio properties • Trend in amounts outstanding • Trend in occupancy rates • Retail sales trend in the shopping centers • Variance against projected income from the properties • Observance of financial covenants in loan agreements 2. Centers under construction • Pre-leasing levels • Construction status • Budget status • Development of financial covenants in loan agreements and observance of disbursement conditions Risks are identified by observing issues and changes that deviate from the original plans and budgets. The systematic analysis of economic data such as consumer confidence and retail sales trends is also incor- porated into risk management. The activities of competitors are also monitored continually. Risk inventory The risks identified in the course of the risk analysis are summarised in a risk inventory and evaluated in terms of their potential loss amounts and likelihood of their occurrence in consideration of compensatory measures (from a net standpoint). The risk inventory is regularly examined and updated when necessary. In addition, in the Supervisory Board meetings, the Executive Board reports on significant new risks and in the event of risks that jeopard- ise our portfolio issues a report immediately. ACCOUNTING-RELATED INTERNAL CONTROL SYSTEM Preparation of the financial statements is a further important part of the internal control system and is monitored and controlled at the level of the Group holding company. Internal regulations and guide- lines ensure the conformity of the annual financial statements and the consolidated financial statements. The decentralised preparation of Group-relevant reports by the service provider is followed by the aggregation and consolidation of the individual annual financial statements and the preparation of the information for reporting in the notes and combined management report in the accounting department of the holding company with the aid of the consolidation software Conmezzo. This is accompanied by manual process controls such as the principle of dual control by the employees charged with ensuring the regularity of financial reporting and by the Executive Board. In addition, within the scope of its auditing activities, the auditor of the consolidated financial statements per- forms process-independent auditing work, including with respect to financial reporting. Advice on Limitations By virtue of the organisational, control and monitoring measures laid down in the Group, the internal control and risk management system enables the full recording, processing and evaluation of Company- related facts as well as their proper presentation in Group financial reporting.

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Decisions based on personal judgement, flawed controls, criminal acts or other circumstances cannot be entirely ruled out, however, and may limit the effectiveness and reliability of the internal control and risk management system that is in use. Consequently, the application of the systems used cannot guarantee absolute security as to the correct, complete and timely recording of facts in Group financial reporting. The statements made relate solely to those subsidiaries included in the consolidated financial statements of Deutsche EuroShop for which Deutsche EuroShop is in a position, directly or indirectly, to dictate their financial and operating policies. EVALUATION OF THE OVERALL RISK POSITION The overall risk situation is presented in the following matrix. Against a background of current challenges in bricks-and-mortar retailing amid intensifying e-commerce and the attendant limitation on rental growth, higher investment requirements and a reduced demand for shopping centers on the investment market, the valuation risk is rated as higher than in the previous year. In this market environment, we are also rating the rental risk as slightly higher than the previous year. The potential extent of losses is calculated on the basis of the impact for the financial year following the year under review. RISK MATRIX S E S S O L F O T N U O M A h g i h m u i d e m w o l n o i l l i Valuation risk m 5 € > n o i l l i m 5 € – 1 n o i l l i m 1 € o t p u Valuation and cost risks Currency risk Market and sector risks Rental risk Risk of rent loss Interest rate change and financing risks Legal risk Personnel risk IT risk Risk of damage low 0% – 25% medium 25% – 50% high >50% LIKELIHOOD OF OCCURRENCE On the basis of the monitoring system described, Deutsche EuroShop AG has taken appropriate steps to identify developments that could jeopardise its continued existence at an early stage and to counteract them. The Executive Board is not aware of any risks that could jeop- ardise the continued existence of the Company. PRESENTATION OF MATERIAL INDIVIDUAL RISKS Valuation risk The value of a property is essentially determined by its capitalised earnings value, which in turn depends on factors such as the level of annual rental income and management costs, the underlying location risk, the general condition of the property, the evolution of capital market interest rates and, in particular, the demand for shopping center properties. The appreciation of property values is also impacted by various macro-economic and regional factors as well as by factors specific to those properties, which are for the most part unforeseeable and beyond the control of the Company. The factors described are taken into account in the annual market valuations of our portfolio properties by independent appraisers. Changes in value are recog- nised in the income statement of the consolidated financial statements in accordance with the requirements of IAS 40 and may thus increase the volatility of consolidated profit. Thus, the measurement gains and losses for Group companies and equity-accounted companies on the balance sheet amounted to -57% of EBT (previous year: 8%) in the year under review. In addition, the market valuations of our portfolio properties may also affect compliance with loan conditions on existing financing arrangements (e. g. compliance with debt ratios) as well as the terms of new financing and refinancing agreements. The assignment of external, independent appraisers with a great deal of experience in the industry, along with our own critical assessment of their appraisal, minimises the risk of measurement error. As part of efforts aimed at controlling value-driving factors, the Company has adopted further measures towards minimising valuation risk. The main focus here is on professional management of the centers, costs and rentals at the shopping centers, which is ensured through the selection of suitable asset managers. All of our shopping centers are currently managed by ECE, the European market leader in the area of shopping center management, with active maintenance management ensuring that the properties are continuously kept in a sound general condition. Market and sector risks Retail trade will continue to undergo structural changes in the coming years due to changing demand behaviour on the part of consumers, the demographic shift and constant new forms of offerings. Online retail will continue to grow dynamically and faster than the overall retail market. In addition, attractive and spacious retail facilities that are leaders in their respective catchment areas, which can offer cus- tomers a broad range of products, an enjoyable time and a special shopping experience, will continue to enjoy stable growth. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 4 5

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SHOW ROOM d n a Additional retail commercial space offered on the rental market, created for example through the building, expansion or modernisa- tion of shopping or factory outlet centers both in city centers and on the outskirts, as well as through the revitalisation of retail locations in city centers, may cause realisable revenues in bricks-and-mortar retail trade to be distributed over more rental space overall and lead to lower space utilisation. Even though the rate of growth in online trade was lower in 2018 than in previous years, e-commerce continued to grow significantly in absolute terms, and its share of total retail revenues increased. The segments of fashion, shoes and consumer electronics, in particular, continue to dominate online commerce, together making up around 50% of total online sales, and are also especially heavily represented in shopping centers. In addition to the rising share of online revenues along with potential pressure on space utilisation, bricks-and-mortar retail is tackling floor-space restructuring and focusing on good retail locations with increasing interconnection between the offline and online worlds, product range optimisations and improvements in the quality of service and an emphasis on personal contact when shopping. Retailers find themselves at varying stages of progress in the implementation of such measures, the success of which is also significantly affected by size and industry. According to figures from the German Retail Federation (HDE), we are seeing the first signs of success here, with bricks-and-mortar retail growing faster online in 2018 than purely online retailers. However, many retailers and also some medium-sized chain stores continue to face sizeable market-related challenges that, in some cases, jeopardise their existence. Larger or improved rental space offerings in the competitive environment of our shopping centers and a potentially permanent redistribution of retail revenues to online channels and the accompanying permanent drop in space utilisation for bricks-and-mortar retailers harbour the risk that sub- sequent leases and / or renewals could be concluded at lower rent prices and / or under less favourable contractual terms. Deutsche EuroShop AG is actively confronting this trend with a variety of measures. The tenant and sector mix at our centers is continuously and individually optimised on the basis of intensive market scrutiny in order to increase our centers’ attractiveness for customers. In addition, the integration of the offline and online shopping worlds will be optimised further, partly through the Digital Mall concept, which is currently at the pilot stage and aims to enable customers to see, reserve and order products that are available immediately in a shop- ping center conveniently in just a few clicks via their smartphone or over the internet. The leisure, customer experience and meeting point aspects of our centers are also being enhanced. This includes the crea- tion of attractive new restaurant spaces as well as our “At Your Service” and “Mall Beautification” investment programmes launched in 2018. The aim is to make the centers a more pleasurable place to be and to raise the quality of service through targeted investments in, among other things, improved service and lounge areas, modern entertain- ment zones for kids, simplified in-house navigation when searching for shops or parking using touch screens or smartphone solutions, and intelligent parking guidance systems. The conclusion of long-term leasing contracts with tenants with high credit ratings across every retail segment furthermore reduces market and sector risks. Rental risk In particular, the long-term success of the Deutsche EuroShop AG business model depends on lease renewals for retail space and the generation of stable and / or growing rental income in addition to low vacancy rates. Due to the medium-term and long-term renting of retail space, Deutsche EuroShop AG is not as reliant on short-term economic developments as companies in other sectors are. However, given retail commerce’s greater dependency on the state of the economy, we cannot rule out the possibility of a change in economic conditions impacting Deutsche EuroShop AG’s business. The global economy continued to grow in 2018, though there was a noticeable slowdown in the pace of growth. The uncertainty among market participants and the resulting curbing of the upturn may be attributed to the protectionist measures of the USA and the response of its trading partners to those measures, the ongoing risk of a disor- derly Brexit and Italy’s high level of national debt. Against this back- drop, negative consequences for economic growth and consumers’ purchasing behaviour cannot be ruled out. Economic fluctuations in addition to structural changes in the retail market affect demand for floor space, rent prices and contractual conditions. Thus, there is the risk that floor space is not rented or is rented at inadequate prices or is rented under excessively unfavour- able conditions, for example with respect to lease terms or service charge apportionments. Low contributions to revenues from leasing and / or rising vacancy rates are also possible. As a result, income would turn out to be less than budgeted, and distri- butions to shareholders might have to be reduced. If the rental income for a property company is no longer sufficient to meet its interest and repayment obligations, this could lead to the loss of the entire property. Our reaction to this risk is to transfer leasing management to pro- fessional market leaders in asset management as well as to closely monitor the market with continuous and timely reporting on regular or foreseeable unscheduled leasing. In addition, we enforce a prefer- ence for medium-term and long-term leasing contracts involving high minimum rent price agreements. 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Risk of rent loss Deteriorating credit ratings among tenants may lead to defaults on leases and other financial burdens, with the risk of default on leases comprising the rent payments in their entirety, allocable ancillary costs and potential legal and reinstatement costs. Insolvency on the part of tenants, especially anchor tenants or shop chains, can more- over lead to temporary increases in vacancy rates. Risk is minimised by carefully selecting tenants, regularly analysing their sales growth and amounts outstanding as well as adopting relet- ting measures early in the event of negative developments. As a rule, tenants also put up commensurate security deposits, which are able to offset some of the financial burden in the event of default. The requisite writedowns are recognised on the balance sheet in indi- vidual cases. These amounted to €1.0 million in financial year 2018 (previous year: €0.9 million). Depending on how the economy fares and in view of the clear structural change in bricks-and-mortar retailing, an increase in write-downs in the current financial year cannot be ruled out. Cost risk The complexity of the applicable court decisions and changes thereto could lead to corrections and objections in relation to ancillary costs, which in turn could lead to limits being enforced on passing the burden on to tenants and / or to subsequent reimbursements to same. Besides financial losses, this could also affect tenant satisfaction. Continuous examination of ancillary cost invoicing based on current legislation minimises this risk. New changes in the law may also mean that addi- tional costs cannot legally and / or economically be passed on entirely to tenants as ancillary costs in future. The focus at present is on the real property tax reform of 31 December 2019. Here it is impossible to make any assessment at present based on the current state of the legislative proceedings. Expenditure on maintenance and investment projects can turn out higher than budgeted on the basis of our past experience. Differences may also materialise owing to external damage or loss, inaccurate assessment of maintenance requirements or deficiencies that are not identified or are identified too late. We minimise risks from cost overruns in current investment projects and maintenance measures by taking cost models for all identifiable risks into account in our calculations as a precautionary measure at the planning stage. In addition, more large-scale construction con- tracts are normally only awarded on a fixed-price basis to general contractors with strong credit ratings. During the building phase, professional project management is assured by the companies we commission. However, it is impossible to completely avoid cost over- runs in individual cases. Financing and interest rate risks Interest rate levels are materially determined by underlying macro- economic and political conditions and therefore cannot be predicted by the Company. There is a risk that refinancing may only be available at higher interest rates than before. This would negatively impact EBT and FFO. As at the reporting date, the Group’s financing arrangements for the most part involved long-term interest rate hedging. There is currently no discernible risk to the Group in connection with changes in interest rates based on upcoming new financing and refinancing agreements. On the basis of current interest rate levels and the available loan offerings, it is expected that refinancing can be concluded at lower interest rates than the original rates contracted and that the planned interest rates are attainable with sufficient certainty. We are constantly monitoring the interest rate environment so as to be able to react appropriately to interest rate changes. We minimise the interest rate risk for new property financing as far as possible by entering into long-term loans with fixed-interest periods of up to 15 years. Deutsche EuroShop AG occasionally uses derivatives that qualify for hedge accounting to hedge interest rate risks. These interest rate swap transactions transform variable interest rates into fixed inter- est rates. An interest rate swap is an effective hedge if the principal amounts, maturities, repricing or repayment dates, interest payment and principal repayment dates, and the basis of calculation used to determine the interest rates are identical for the hedge and the under- lying transaction and the party to the contract fulfils the contract. The Company counters the risk of default by stringently examining its contract partners which are also lenders. Interest rate swaps and the underlying transaction are generally reported as one item in the annual financial statements. Financial instruments are not subject to liquidity or other risks. A test of effectiveness for the hedges described is implemented regularly. An economic or financial crisis as well as a clear intensification of online competition or a stricter regulation of the financial sector could lead to a significant deterioration of banks’ lending policies with respect to credit margins, financing terms and expiries as well as loan conditions, which would negatively affect the earnings and financial position of the Company. Under extreme circumstances, the financing market could dry up altogether. The possibility cannot be completely excluded that, due for example to a deterioration in the results of operations of individual property companies, banks may not be prepared to provide refinancing or to extend credit lines. Deutsche EuroShop AG responded to this financing risk by concluding long-term loan agreements, avoiding the accumulation over time of loan dues and observing conservative debt ratios. Furthermore, the Company maintains long-term business relationships with a large number of investment, commercial and mortgage banks in its target markets in order to secure the best possible access to the capital markets. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 4 7

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SHOW ROOM d n a Currency risk Deutsche EuroShop AG’s activities are limited exclusively to the Euro- pean economic area. Manageable currency risks arise in the case of the eastern European investment companies. These risks are not hedged because this is purely an issue of translation at the reporting date and is therefore not associated with any cash flow risks. The currency risk from operations is largely hedged by linking rents and loan liabilities to the euro. There is a risk that if the Hungarian forint, the Polish zloty or the Czech koruna were to plummet against the euro for a long period of time, tenants would no longer be able to pay what would then be considerably higher rents denominated in a foreign currency. IT risk Deutsche EuroShop AG’s information system is based on a centrally managed network solution. Corrective and preventive maintenance of the system is carried out by an external service provider. A detailed access policy ensures that staff and external service providers are granted access exclusively to systems they require for their work. A virus protection concept and permanent monitoring of data traffic with respect to hidden and dangerous content are designed to protect against external attacks. All data relevant to operations is backed up daily by remote backup and also regularly on multiple storage media. In the event of a hardware or software failure in our system, all data can be reproduced at short notice. Risk of damage Real estate properties are subject to the risk of total or partial ruin on account of external factors (e. g. damage from fire or flooding, vandal- ism, terror attacks), which can lead to maintenance costs and leasing defaults. These damages are hedged to the greatest possible extent by insurance policies with insurers with a high credit rating. It is, however, conceivable that not all theoretically possible damage is adequately covered by insurance policies, or that this insurance coverage cannot be maintained on adequate terms in light of changing conditions in the insurance market, or that sufficient insurance protection will not even be offered. In addition, insurers may deny their services or a deterio- ration in the credit rating of an insurer may lead to potential defaults on payments in connection with the enforcement of insurance claims. In order to avoid damage, our properties are also actively secured by fire and burglary protection and anti-vandalism measures. Legal risk The concept for our business model is based on the current legal situation, administrative opinion and court decisions, all of which may, however, change at any time. The Company is not currently aware of any legal risks that could have a major impact on its assets or results of operations. Personnel risk Given the small number of employees of Deutsche EuroShop AG, the Company is dependent on individual persons in key positions. The departure of these key staff would lead to a loss of expertise, and the recruitment and induction of new replacement personnel could tempo- rarily impair day-to-day business. This kind of impairment is kept to a minimum by means of representation policies and the documentation of material work processes. OPPORTUNITY REPORT Deutsche EuroShop AG forms part of a retail market undergoing dynamic structural transformation. While bricks-and-mortar retail is currently facing challenges from strong growth in online retail, and more and more transformation processes are being initiated actively, the strict boundaries between online and offline are increasingly disappearing. There is a clear trend towards purely online retailers opening their own shops and branch networks for the first time or gaining access to bricks-and-mortar retail chains and their branch network through acquisitions or joint ventures. Behind this develop- ment is the expectation from customers that they will be able to buy all products online or offline depending on the situation as well as the insight that many online providers have that they can offer an improved customer service and achieve greater sales growth with an omni-channel sales approach. In addition, bricks-and-mortar spaces are seen by online retailers as possible local logistics hubs for a quick and cost-efficient delivery service. Thanks to the positioning of our shopping centers at first-rate locations, broad sector diversification within the centers and their conceptional adaptation with an emphasis on leisure, customer experience and meeting point aspects, and the increasing importance of shop space to online retail, we see opportunities for success during these structural changes, including in periods of stagnation. In the area of financing, the continued environment of low interest rates affords good opportunities for concluding refinancing and new financing agreements on more favourable terms, which would posi- tively impact EBT and FFO. T R O P E R T n E M E g a n a M D E n i b M O C / t r o p e r y t i n u t r o p p O 8 4 1

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There are also growth opportunities for Deutsche EuroShop AG, in keeping with its clearly defined, selective investment strategy, through the acquisition of further shopping centers or stakes therein, which would positively impact the results of operations. Further external growth can also enhance the diversification effect in the Company’s holdings portfolio. Due to the great degree of flexibility in the imple- mentation of our acquisition and holdings structures, our good repu- tation with banks and as a reliable partner in the real estate market, the Company is well positioned to be able to continue to operate in the transactions market in such a way as to exploit opportunities going forward. REMUNERATION REPORT The remuneration model of Deutsche EuroShop AG was changed in line with the German Act on the Appropriateness of Managing Board Remuneration (VorstAG) and the requirements of the Corporate Governance Code and was last put before the General Meeting for approval in June 2018. In the case of new or extended Executive Board memberships, the requirements were examined and amended by the Supervisory Board. REMUNERATION SYSTEM FOR THE EXECUTIVE BOARD Remuneration for the Executive Board is set by the Supervisory Board. The remuneration system provides for a non-performance-related basic annual remuneration component based on the individual Executive Board member’s duties, a performance-related remunera- tion component, and non-cash benefits in the form of a company car and contributions to a pension scheme. As a performance-related remuneration component, the bonus is dependent on the long-term performance of the Company. It is based on the weighted average over the financial year and the two previous financial years. Group EBT (excluding measurement gains / losses) for the financial year is taken into account at a weighting of 60% in the basis of calculation, that of the previous financial year at 30% and that of the financial year before that at 10%. Mr Wellner receives 0.25% of the calculation basis as a bonus and Mr Borkers 0.2%. The bonus is limited to 150% of the basic annual remuneration. The non-performance-related basic annual remuneration is €267 thou- sand for Mr Wellner and €186 thousand for Mr Borkers. In addition, Mr Wellner is expected to receive a bonus of €387 thousand and Mr Borkers €279 thousand for 2018. The final amount of the bonuses will only be available after approval of the consolidated financial state- ments by the Supervisory Board, upon which they will be payable. Should the results of operations and net assets of the Company dete- riorate during the term of the respective employment contracts to such an extent that further payment of this remuneration becomes unreasonable, the rules of section 87 (2) of the AktG will apply. The Supervisory Board will decide at its own discretion on the extent to which such remuneration will be reduced. In the event that the employment contract is terminated prematurely by the Company without any good cause, the members of the Executive Board will be entitled to a settlement in the amount of the annual remu- neration outstanding up to the end of the agreed contractual term, but limited to an amount equivalent to a maximum of two annual remuner- ations (basic annual remuneration plus bonus). For the measurement of the annual remuneration amount, the average annual remuneration for the previous financial year and the probable annual remuneration for the current financial year will be applicable. A long-term incentive (LTI 2015) remuneration component was agreed in financial year 2015. The amount of the LTI 2015 is based on the positive change in market capitalisation of Deutsche EuroShop AG according to the data provided by Deutsche Börse over the period from 1 January 2015 (for Mr Wellner) and 1 July 2015 (for Mr Borkers) to 30 June 2018. Over the aforementioned periods, there was no positive change in market capitalisation according to the data provided by Deutsche Börse, so there was no entitlement to remuneration under the LTI 2015. Following expiry of the LTI 2015, a new long-term incentive (LTI 2018) remuneration component was agreed in financial year 2018. The amount of the LTI 2018 is based on the positive change in market capi- talisation of Deutsche EuroShop AG according to the data provided by Deutsche Börse over the period from 1 July 2018 to 31 December 2021. Market capitalisation is calculated by multiplying the volume-weighted average price over the last 20 trading days by the number of Company shares issued. According to the data provided by Deutsche Börse, the Company’s volume-weighted market capitalisation stood at €1,862.4 million as at 1 July 2018. Mr Wellner will receive 0.10% of any positive change in market capi- talisation over the above period of up to €500 million, and Mr Borkers 0.05%. For any change over and above this amount, Mr Wellner will receive 0.05% and Mr Borkers 0.025%. Payment under the LTI 2018 will be made in three equal annual instalments, the first being payable on 1 January 2022. In the event that the employment contract is terminated prematurely by the Company, any entitlements arising from the LTI 2018 until that date will be paid out prematurely. On 31 December 2018, the market capitalisation of the Company stood at €1,644.5 million, which was €217.9 million lower than the figure as at 1 July 2018. There was therefore no potential liability under the LTI 2018 as at the reporting date. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 4 9

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SHOW ROOM d n a REMUNERATION OF THE EXECUTIVE BOARD 2018 The remuneration of the Executive Board amounted to €1,232 thou- sand, which broke down as follows: in € thousand Contributions made Fixed remuneration Ancillary benefits Total One-year variable remuneration Multi-year variable remuneration LTI 2015 LTI 2018 Total Pension expense Total remuneration (*) no maximum Wilhelm Wellner CEO Joined: 01.02.2015 Olaf Borkers Total Member of the Executive Board Joined: 01.10.2005 2018 2017 2018 (min) 2018 (max) 2018 2017 2018 (min) 2018 (max) 267 21 288 387 0 387 71 746 252 18 270 363 0 363 0 633 0 0 401 (*) 186 21 207 279 0 279 0 186 15 201 279 0 279 0 486 480 0 0 279 (*) 2018 495 666 71 1,232 In 2018, the Executive Board was in receipt of payments totalling €1,162 thousand: in € thousand Income Fixed remuneration Ancillary benefits Total One-year variable remuneration (**) Multi-year variable remuneration LTI 2015 LTI 2018 Total Pension expense Total remuneration (*) no maximum Wilhelm Wellner CEO Joined: 01.02.2015 Olaf Borkers Total Member of the Executive Board Joined: 01.10.2005 2018 2017 2018 (min) 2018 (max) 2018 2017 2018 (min) 2018 (max) 267 21 288 363 0 363 25 676 252 18 270 363 0 328 0 598 0 0 378 (*) 186 21 207 279 0 279 0 186 15 201 259 0 259 0 486 460 0 0 279 (*) 2018 495 642 25 1,162 (**) Due to the preliminary nature of these calculations at the time the annual financial statements were drawn up, the figures published may vary slightly with respect to the approved figures in the remuneration report for the previous year. T R O P E R T n E M E g a n a M D E n i b M O C / t r o p e r n o i t a r e n u m e R 0 5 1

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Ancillary benefits include the provision of a car for business and private use. Pension expenses for Mr. Wellner comprise a defined contribution pension plan amounting to €50 thousand p.a. which was granted to him until the age of 62. The pension commitment will terminate prematurely if Mr. Wellner does not accept an extension to his work on the Executive Board offered to him by the Company and in the event of incapacity for work or death. No advances or loans were granted to members of the Executive Board. The Company has not entered into any commitments or con- tingent liabilities in favour of these persons. The outgoing CEO, Claus-Matthias Böge, is to receive a total of €1,712 thousand under the Long-Term Incentive 2010, which covered the period to 30 June 2015. Since 2016, this amount has been paid at the start of each year in five equal instalments, finishing in 2020. An old-age pension contribution of €83 thousand for Mr Böge was also recognised under expenditure in the previous year. The remuneration of the members of the Supervisory Board totalled €312 thousand (including 19% VAT) in the period under review, which breaks down as follows: in € thousand Reiner Strecker Thomas Armbrust Beate Bell Manuela Better Karin Dohm Dr Henning Kreke Alexander Otto Klaus Striebich Roland Werner 2018 59.50 29.75 29.75 29.75 44.62 29.75 29.75 29.75 29.75 2017 59.50 29.75 29.75 29.75 44.62 29.75 29.75 29.75 29.75 312.37 312.37 REMUNERATION OF THE SUPERVISORY BOARD No advances or loans were granted to the members of the Supervisory Board. The remuneration of the Supervisory Board is based on section 8 (4) of the Articles of Association of Deutsche EuroShop AG. In accordance with the Articles of Association, the remuneration amounts to €50,000 for the chairman, €37,500 for the deputy chairman and €25,000 for each of the other members of the Supervisory Board. Committee membership is not taken into account when determining the remu- neration of the Supervisory Board. Moreover, the remuneration does not contain any performance-related elements. The remuneration is determined on the basis of the business model and size of the Com- pany as well as the responsibility associated with the role. The Com- pany’s business and financial position is also taken into consideration. If any member of the Supervisory Board should leave the Supervisory Board during the financial year, they shall receive their remuneration pro rata. In accordance with section 8 (5) of the Articles of Association, expenses are also reimbursed. No pensions are paid to former members of the Executive or Super- visory Boards or to their dependants. ACQUISITION REPORTING Deutsche EuroShop shares are traded on the Frankfurt Stock Exchange and other exchanges. As of 31 December 2018, 18.83% of shares were owned by Alexander Otto (previous year: 17.08%). The share capital is €61,783,594, comprised of 61,783,594 no-par-value registered shares. The notional value of each share is €1.00. According to Article 5 of the Articles of Association, the Executive Board is authorised, with the Supervisory Board’s approval, to increase the share capital by up to a total of €11,680,999 through one or multiple issues of new no-par-value registered shares against cash and / or non-cash contributions before 27 June 2022 (Authorised capital 2017). As at 31 December 2018, no use had been made of this authorisation. In addition, the Executive Board was authorised by a resolution of the Annual General Meeting held on 28 June 2018 to acquire treasury shares in the Company constituting up to 10% of the share capital available on the entry into force of or – if this is lower – on exercise of the authorisation by 27 June 2023. As at 31 December 2018, no use had been made of this authorisation. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 5 1

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SHOW ROOM d n a A change-of-control arrangement has been agreed with two employ- ees. Under this arrangement, if and insofar as the Company informs them that they will no longer be employed in their current positions, these employees will have a special right of termination with a notice period of one month up to the end of the quarter, which will be valid for twelve months from the date the change-of-control takes effect. A change-of-control arises if Deutsche EuroShop AG merges with another company, if a public takeover bid has been made under the German Wertpapiererwerbs- und Übernahmegesetz (WpÜG – Securi- ties Acquisition and Takeover Act) and accepted by a majority of share- holders, if the Company is integrated into a new group of companies or if the Company goes private and is delisted. In the event of such termination of the employment relationship, these employees will receive a one-time payment amounting to three months’ gross salary multiplied by the number of years that they have worked for the Company, but limited to a maximum of 24 months’ gross salary. Deutsche EuroShop Group does not currently have any other com- pensation agreements with members of the Executive Board or other employees for the event of a change-of-control. The material provisions governing Deutsche EuroShop AG, which include a change-of-control clause, primarily relate to bilateral credit facilities and various loan agreements. In the event of a takeover, the relevant lenders are entitled to terminate the facility and where appli- cable demand immediate repayment. A takeover is defined as a third party taking control of Deutsche EuroShop AG; the takeover may also be made by a group acting jointly. DECLARATION ON CORPORATE GOVERNANCE (SECTION 289F HGB) The declaration on corporate governance, in conformity with sec- tion 3.10 of the Deutscher Corporate Governance Kodex (German Corporate Governance Code) and section 289f of the Handelsgesetz- buch (HGB – German Commercial Code) has been published on the Deutsche EuroShop website: www.deutsche-euroshop.de/ezu Hamburg, 28 March 2019 REPORTING ON THE SEPARATE FINANCIAL STATEMENTS OF DEUTSCHE EUROSHOP AG As the Group managing company, Deutsche EuroShop AG is responsi- ble for corporate strategy, portfolio and risk management, financing and communication. As the holding company, the economic develop- ment of Deutsche EuroShop AG depends primarily on the business development of the Group’s operating companies. Deutsche EuroShop AG also directly participates in and shares the opportunities and risks of the Group companies. Therefore, please also refer to the report- ing on the Group in sections “Macroeconomic and Sector-Specific Conditions”, “Risk report” and “Opportunity report” in this combined management report. The annual financial statements of Deutsche EuroShop AG were pre- pared in accordance with the rules of the German Commercial Code (HGB), in compliance with the German Stock Corporation Act (AktG), while those of the Group were drawn up according to IFRS rules. T R O P E R T n E M E g a n a M D E n i b M O C / e c n a n r e v o g e t a r o p r o c n o n o i t a r a l c e D 2 5 1

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RESULTS OF OPER ATIONS OF DEUTSCHE EUROSHOP AG (HGB) in € thousand Other operating income Personnel expenses Depreciation / amortisation and other operating expenses Investment income Financial gains or losses Income taxes Net profit Withdrawal from capital reserves Unappropriated surplus 01.01. – 31.12.2018 01.01. – 31.12.2017 268 -1,905 -2,055 68,681 -4,105 -12,326 48,558 44,117 92,675 139 -1,922 -3,370 76,632 -6,072 -12,885 52,522 37,064 89,586 + / - 129 17 1,315 -7,951 1,967 559 -3,964 7,053 3,089 Financial year 2018 was a positive one for Deutsche EuroShop. Although earnings before taxes, at €60.9 million, were €4.5 million below the previous year (€65.4 million), they were €16.6 million above expectations (€44.3 million). A principal component of the Compa- ny’s earnings is investment income, at €68.7 million (previous year: €76.6 million), which exceeded the forecast by €16.4 million. The post- ponement of planned maintenance and investment until subsequent years, lower write-downs and the improved results of operations in individual investments largely explain these positive differences. The decrease in depreciation / amortisation and other operating expenses by €1.3 million to €2.1 million is primarily due, at €1.4 million, to the costs incurred in the previous year for the cash capital increase in March 2017. Financial gains or losses in the previous year still included interest and costs for the convertible bond in the amount of €2.1 million, which were omitted in the year under review due to the almost full conversion and repayment of the non-converted part, contributing substantially to an improvement in the financial result. Income taxes stood at €12.3 million, compared with €12.9 million in the previous year. Of this, €4.9 million (previous year: €9.2 million) was attributable to additions to deferred taxes and €7.4 million (previous year: €3.7 million) to taxes to be paid. A major reason for the rise in taxes to be paid is the consumption of the corporation tax loss carry- forwards in the previous year. Change in % 93 1 39 -10 32 4 -8 19 3 Change D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 5 3 NE T A SSE TS OF DEUTSCHE EUROSHOP AG (HGB) in € thousand 31.12.2018 31.12.2017 + / - Non-current financial assets 1,216,741 1,256,051 -39,310 Other non-current assets 222 227 -5 Receivables and other assets Cash and bank balances Assets Equity Provisions Liabilities 1,643 50,403 1,315 47,307 328 3,096 1,269,009 1,304,900 -35,891 1,067,067 1,108,096 -41,029 3,634 2,805 104,312 104,945 829 -633 4,942 Deferred tax liabilities 93,996 89,054 Liabilities 1,269,009 1,304,900 -35,891 The decline in non-current financial assets is due partly to distribu- tions that exceed the proportional net profits of the investees, as deter- mined under commercial law, and partly to withdrawals. The change in equity was the result of the profit for the financial year at €48.5 million and the dividend of €89.6 million paid in July 2018. The equity ratio of Deutsche EuroShop AG declined slightly from 84.9% to 84.1%, but remained at a very high level.

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FINANCIAL POSITION OF DEUTSCHE EUROSHOP AG (HGB) Outflows from financing activities were the result of scheduled repay- ments of long-term bank loans. 01.01. – 31.12.2018 01.01. – 31.12.2017 48,558 52,522 Taking into account the cash changes in net working capital (€1.0 mil- lion) and the dividend paid in July 2018 of €89.6 million, liquidity ended the year at €50.4 million. SHOW ROOM d n a T R O P E R T n E M E g a n a M D E n i b M O C / s t n e m e t a t s l a i c n a n i f e t a r a p e s e h t n o g n i t r o p e R 4 5 1 in € thousand Net profit Cash distributions on investees recognised in equity Release of prepaid expense items for convertible bond Addition / reversal for deferred income taxes 1. Free cash flow from operating activities 2. Outflows for new investments Equity injections from share issues Inflows from sales Repayment of granted shareholder loans 3. Inflows from equity Repayment of convertible bond 39,962 37,119 0 1,401 4,942 9,154 93,462 100,196 0 0 0 0 0 0 -211,862 165,000 13 100,000 265,013 -500 Inflows / outflows from bank loans -1,730 -51,994 4. Inflows / outflows from financing activities 5. Other cash changes in the balance sheet -1,730 -52,494 951 816 6. Dividend for the previous year -89,586 -81,766 Liquidity at the start of the year Cash changes in liquidity (subtotal 1. – 6.) Liquidity at the end of the year 47,307 3,096 50,403 27,404 19,903 47,307 Free cash flow from operating activities fell from €100.2 million in 2017 to €93.5 million in the year under review (-6.7%). The main reason for this were scheduled reductions in distributions at individual investees to finance ongoing and / or future investments. For the past financial year, there was a return on the equity paid in (including equity from the convertible bond) amounting to €1,369.0 million of 6.8% compared with 7.3% in the previous year. Free cash flow per share fell from €1.72 to €1.51. Forecast for Deutsche EuroShop AG (HGB) In financial year 2019, we are expecting income from investments to decline from €68.7 million in 2018 to €54.9 million due to ongoing extensive investment measures at the property companies as part of the “At Your Service” and “Mall Beautification” programmes, among other things. According to our forecasts, this income will climb again in 2020 to around €61.5 million. The forecast for earnings before taxes for 2019 is €49.3 million (2018: €60.9 million). For 2020, we are expecting earnings before taxes to rise to around €53.0 million. In 2019, we are planning cash distributions from ongoing leasing activ- ity at our investees of €116.9 million (2018: €108.6 million), of which €54.9 million will be recognised in the income statement as income from investments and €62.0 million will be paid out with no impact on income. For 2020, we are planning distributions from investees of €119.3 million. Free cash flow (FCF) from operating activities is expected to amount to €105.2 million in 2019 and €105.7 million in 2020. Based on the equity paid in to date (including equity from the convert- ible bond) (€1,369.0 million), the FCF returns would be 8.4% for 2019 and 7.7% for 2020. Forward-looking statements This combined management report contains forward-looking state- ments based on estimates of future developments by the Executive Board. The statements and forecasts represent estimates based on all of the information available at the current time. If the assumptions on which these statements and forecasts are based do not materialise, the actual results may differ from those currently being forecast. Rounding and rates of change Percentages and figures stated in this report may be subject to round- ing differences. The rates of change are based on economic consid- erations: improvements are indicated by a plus (+); deterioration by a minus (-).

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SHOW ROOM d n a CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET ASSETS in € thousand ASSETS Non-current assets Intangible assets Property, plant and equipment Investment properties 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 TOTAL ASSETS Note 31.12.2018 31.12.2017 8. 8. 9. 10. 11. 12. 13. 53,736 213 3,891,700 531,044 31 53,746 208 3,924,157 526,728 39 4,476,724 4,504,878 5,268 10,274 106,579 122,121 6,643 10,526 116,335 133,504 4,610,228 4,626,999 S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t e e h s e c n a l a b d e t a d i l o s n o C 6 5 1

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D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 5 7 LIABILITIES in € thousand EQUITY AND LIABILITIES Equity and reserves Issued capital Capital reserves Retained earnings Total equity Non-current liabilities Financial liabilities Deferred tax liabilities Right to redeem of limited partners Other liabilities Non-current liabilities Current liabilities Financial liabilities Trade payables Tax liabilities Other provisions Other liabilities Current liabilities Note 31.12.2018 31.12.2017 14. 15. 17. 18. 16. 15. 19. 16. 61,784 1,217,560 950,404 2,229,748 1,496,313 452,642 343,648 34,297 61,784 1,217,560 958,032 2,237,376 1,517,773 439,800 337,479 37,919 2,326,900 2,332,971 26,080 3,543 2,384 7,413 14,160 53,580 28,899 2,242 2,201 6,354 16,956 56,652 TOTAL EQUITY AND LIABILITIES 4,610,228 4,626,999

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SHOW ROOM d n a CONSOLIDATED INCOME STATEMENT in € thousand Revenue Property operating costs Property management costs Net operating income (NOI) Other operating income Other operating expenses Earnings before interest and taxes (EBIT) Share in the profit or loss of associated companies and joint ventures accounted for using the equity method Interest expense Profit / loss attributable to limited partners Other financial income and expenditure Interest income Income from investments Financial gains or losses Measurement gains / losses Earnings before tax (EBT) Income taxes CONSOLIDATED PROFIT Earnings per share (€), undiluted and diluted Note 01.01. – 31.12.2018 01.01. – 31.12.2017 20. 21. 22. 23. 24. 10., 25. 18. 26. 27. 28. 225,047 -11,690 -10,493 202,864 1,828 -5,557 199,135 27,602 -52,726 -18,448 2,256 30 0 -41,286 -55,715 102,134 -22,739 79,395 1.29 218,491 -11,168 -10,371 196,952 2,035 -6,619 192,368 34,451 -54,023 -18,522 2,968 36 1 -35,089 8,550 165,829 -31,496 134,333 2.31 S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t n e m e t a t s e m o c n i d e t a d i l o s n o C 8 5 1

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STATEMENT OF COMPREHENSIVE INCOME in € thousand Consolidated profit Items which under certain conditions in the future will be reclassified to the income statement: Actual share of the profits and losses from instruments used to hedge cash flows Measurement of investments (IAS 39 – available for sale) Deferred taxes on changes in value offset directly against equity Total earnings recognised directly in equity TOTAL PROFIT Share of Group shareholders Note 01.01. – 31.12.2018 01.01. – 31.12.2017 79,395 134,333 14. 14. 14. 3,238 0 -675 2,563 81,958 81,958 6,651 22 -1,440 5,233 139,566 139,566 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 5 9

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SHOW ROOM d n a CONSOLIDATED CASH FLOW STATEMENT in € thousand Consolidated profit Income taxes Financial gains or losses Amortisation / depreciation of intangible assets and property, plant and equipment with a finite life Unrealised changes in fair value of investment property and other measurement gains / losses 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, plant and equipment Inflows from the disposal of financial assets Acquisition of a subsidiary less acquired cash and cash equivalents Cash flow from investing activities Inflows from financial liabilities Outflows from the repayment of financial liabilities Payments to limited partners Inflows from capital increases 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 Note 01.01. – 31.12.2018 01.01. – 31.12.2017 27. 24. 26. 10. 11., 12. 19. 16. 27. 9. 30. 15., 23. 15. 18. 14. 14. 13. 13. 79,395 22,739 41,286 58 55,715 23,286 -1,627 1,059 377 222,288 -52,726 30 -10,390 159,202 -20,862 0 -53 0 0 -20,915 0 -24,279 -14,666 0 -89,586 -128,531 9,756 106,579 116,335 134,333 31,496 35,089 56 -8,550 22,914 994 -290 -1,302 214,740 -52,622 36 -6,130 156,024 -9,624 27 -14 170 -201,573 -211,014 130,000 -97,710 -16,587 163,587 -81,767 97,523 42,533 64,046 106,579 S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t n e m e t a t s w o l f h s a c d e t a d i l o s n o C 0 6 1

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Number of shares out- standing Note Share capital Capital reserves Other retained earnings Statutory reserve Available for sale reserve Cash flow hedge reserve Total 53,945,536 53,945 961,970 932,109 2,000 0 0 134,333 Capital increase 14. 4,459,460 4,460 159,583 in € thousand 01.01.2017 Total profit Capital increase through con- version of bonds Dividend payments 31.12.2017 01.01.2018 Total profit Dividend payments 31.12.2018 0 0 0 0 0 0 14. 14. 14. 3,378,598 3,379 96,007 0 0 -81,767 61,783,594 61,784 1,217,560 984,675 2,000 61,783,594 61,784 1,217,560 984,675 2,000 0 0 0 0 79,395 -89,586 0 0 61,783,594 61,784 1,217,560 974,484 2,000 -22 22 -33,854 1,916,148 5,211 139,566 0 0 0 0 0 0 0 0 0 0 0 164,043 99,386 -81,767 -28,643 2,237,376 -28,643 2,237,376 2,563 81,958 0 -89,586 -26,080 2,229,748 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 6 1

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SHOW ROOM d n a NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR FINANCIAL YEAR 2018 PRINCIPLES UNDERLYING THE CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL DISCLOSURES The Group parent company is Deutsche EuroShop AG, Hamburg, Germany. The Company’s registered office is Heegbarg 36, 22391 Ham- burg, Germany, and it is entered in the Hamburg commercial register under HRB 91799. Deutsche EuroShop AG focuses on acquiring, managing, using and selling investments of all kinds, and in particular investments in retail properties. The consolidated financial statements of Deutsche EuroShop AG have been prepared in accordance with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), including the interpretations of the Inter- national Financial Reporting Interpretations Committee (IFRIC) and the supplementary provisions of German commercial law required to be applied under section 315a (1) of the Handelsgesetzbuch (HGB – German Commercial Code). All IFRSs and IFRIC interpretations endorsed by the European Commission and required to be applied as at 31 December 2018 have been applied. The Executive Board pre- pared the consolidated financial statements as at 31 December 2018 on 28 March 2019 and forwarded them to the Supervisory Board for examination and approval. In addition to the consolidated balance sheet, consolidated income statement and consolidated statement of comprehensive income, the consolidated financial statements comprise the consolidated state- ment of changes in equity, the consolidated cash flow statement and the notes to the consolidated financial statements. Amounts are mainly presented in thousands of €. The preparation of the consolidated financial statements necessitates the use of estimates and assumptions. These affect the reported amounts of assets, liabilities and contingent liabilities as at the report- ing date, as well as the recognition of income and expenses during the reporting period. The actual amounts can differ from these estimates. Expected cash flows and the discount factor in particular are critical parameters for the measurement of investment properties (see the notes to section “9. Investment Properties”). A detailed list of the companies included in the consolidated financial statements forms part of the notes. The annual financial statements of the consolidated companies were prepared on 31 December 2018, the reporting date of the consolidated financial statements. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c e h t g n i y l r e d n u s e l p i c n i r P 2 6 1

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2. BASIS OF CONSOLIDATION Fully consolidated subsidiaries As at 01.01.2018 Additions Disposals As at 31.12.2018 Domestic 1 Abroad 1 Total 10 0 0 10 4 0 0 4 14 0 0 14 Joint ventures included in consolidated financial statements in accordance with the equity method As at 01.01.2018 Additions Disposals As at 31.12.2018 Associates included in consolidated financial statements in accordance with the equity method As at 01.01.2018 Additions Disposals As at 31.12.2018 Domestic 1 Abroad 1 Total 4 0 0 4 3 0 0 3 7 0 0 7 Domestic 1 Abroad 1 Total 0 0 0 0 1 0 0 1 1 0 0 1 1 Companies are allocated in accordance with the segment allocation based on the loca- tion of the respective shopping center. This may be different from the company domicile. Subsidiaries The consolidated financial statements include the financial state- ments of the parent company and of the companies controlled by it. Deutsche EuroShop AG gains control when it: • • • is in a position to take decisions affecting another company, is exposed to fluctuating returns and reflows from this holding, and is able, by reason of its decision-making capacity, to influence such returns. At every reporting date, a new assessment is carried out to establish whether or not an investee is controlled, by reference to whether cir- cumstances indicate that one or more of these criteria have changed. Financial information of subsidiaries with significant non-controlling interests Deutsche EuroShop AG holds a stake of 52.01% in Main-Taunus- Zentrum KG, Hamburg and exercises a controlling influence over the company. The other 47.99% of shares are in free float. The Company posted non-current assets of €743,000 thousand (previous year: €731,000 thousand) and current assets of €15,973 thousand (previ- ous year: €14,404 thousand) as at the reporting date. Non- current liability items amounted to €216,064 thousand (previous year: €218,256 thousand) and current liability items totalled €6,108 thousand (previous year: €5,919 thousand). The Company generated revenue of €36,030 thousand (previous year: €35,655 thousand) and net profit (after earnings due to limited partners) of €18,761 thousand (previ- ous year: €21,829 thousand). A dividend of €9,838 thousand (previous year: €11,664 thousand) was paid to limited partners in the year under review. Joint ventures Joint ventures in which Deutsche EuroShop AG has a majority of the voting rights together with third parties are classified as joint opera- tions and accounted for using the equity method. Deutsche EuroShop AG has a 75% stake in Stadt-Galerie Passau KG, Hamburg. On the basis of corporate agreements, Deutsche EuroShop AG does not hold the majority of voting rights or exercise sole control of this Company. Associates In accordance with IAS 28, where Deutsche EuroShop AG can exercise a significant influence but not control over companies, these invest- ments are measured using the equity method. Investees Investments over which Deutsche EuroShop AG has neither significant influence nor control are measured at fair value in principle. In line with IFRS 9, for initial recognition of an investment, the Group has the irrevocable right to choose to record the fair value adjustment in other income as well. As at 31 December 2018, there was only the investment in Ilwro Holding B.V., Amsterdam for which this right had not been exercised. Shareholdings The list of shareholdings as required by section 313 (2) HGB forms part of the notes to the consolidated financial statements. The list of shareholdings also includes a conclusive list of all subsidiaries that meet the conditions of section 264b HGB and have exercised the option of exemption from specific provisions regarding the preparation, audit- ing and disclosure of the annual financial statements or management report. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 6 3

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SHOW ROOM d n a 3. CONSOLIDATION METHODS Under the purchase method, the cost is eliminated against the parent company’s interest in the re-valued equity of the subsidiaries at the date of acquisition or initial consolidation. Any remaining excess of identified net assets acquired over cost of acquisition is recognised as goodwill in intangible assets. Any negative differences are recognised in income following a reassessment. Joint ventures and associates are measured using the equity method. The cost of acquiring the investment is recognised here in income at an amount increased or reduced by the changes in equity corresponding to the equity interest of Deutsche EuroShop AG. Intragroup transactions are eliminated as part of the consolidation of intercompany balances, income and expenses. 4. ACQUISITIONS DURING THE PREVIOUS YEAR On 7 March 2017, Deutsche EuroShop AG acquired all shares of Olympia Brno s.r.o., Prague (Czech Republic). Olympia Brno is the owner of the Olympia shopping center located in Brno in the Czech Republic. The transfer of benefits and encumbrances took place on 31 March 2017 upon payment of the provisional purchase price to the seller. The definitive purchase price (including a payment obligation assumed for the seller) of €203 million was determined on the basis of the audited interim financial statements of Olympia Brno as at 31 March 2017. The fair values of the identifiable assets and liabilities of Olympia Brno were as follows at the time of acquisition: in € thousand Non-current assets Investment properties Current assets Trade receivables Cash and cash equivalents Other current assets Non-current liabilities Financial liabilities Deferred taxes Current liabilities Financial liabilities Shareholder loans Other current liabilities Total identifiable net assets at fair value Consideration Purchase price Assumed payment obligations of seller Goodwill Fair value at the time of acquisition 374,000 332 7,421 2,324 -164,283 -53,941 -2,502 -5,941 -8,224 149,186 201,633 1,420 53,867 In addition to the shares in Olympia Brno, the loan already in place between the seller and Olympia Brno was also acquired at the carry- ing amount. The investment was financed through equity from a cash capital increase (approx. €165 million) and long-term loans. The goodwill arose exclusively from deferred tax liabilities which had to be generated within the scope of the acquisition but which will not be realised due to the intention to hold them over the long term. The goodwill is not tax deductible. The fair value of the trade receivables corresponded to the previously reported carrying amount, which included write-downs in the amount of €475 thousand. The transaction costs associated with the acquisition in the previous year, at €276 thousand, were recognised in the income statement under Other operating expenses. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c e h t g n i y l r e d n u s e l p i c n i r P 4 6 1

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During the period from its initial inclusion in the Group, as at 31 March 2017, until the end of financial year 2017, Olympia Brno contributed €15,265 thousand to the revenue and €9,174 thousand to the con- solidated profit. If Olympia Brno had been acquired on 1 January 2017, it would have increased the consolidated revenue by a further €5,033 thousand and the consolidated profit by a further €3,433 thou- sand in the previous year. In addition, the Group acquired all the shares of City-Point Beteiligungs GmbH for €15 thousand in the fourth quarter of 2017. Increasing the shareholding from 40% to 100% meant that City-Point Beteiligungs GmbH was included in the Group as a fully consolidated company from the fourth quarter of 2017. The acquisition did not result in any excess, and there was no material impact on the presentation of the net assets, results of operations and financial position of the Group. 5. NEW ACCOUNTING STANDARDS The following new or amended standards and interpretations relevant for the business activities of the Group are required to be applied for the first time to the financial years ending on 31 December 2018: Amendments / standard Date applied (EU) Amendments IFRS 9 Financial Instruments 01.01.2018 IFRS 15 Revenue from Contracts with Customers 01.01.2018 IFRS 9 standardises the specifications for classifying and measuring financial assets and financial liabilities, provides a new impairment model and also contains new rules for the application of hedge accounting. IFRS 9 will replace the previous provisions of IAS 39. IFRS 15 provides a five-step model for determining and recognising revenue that is to be applied to all contracts with customers. Impact on the net assets, financial position and results of operations or cash flow of Deutsche EuroShop AG The impact of IFRS 9 on the Group is explained at the foot of this table. The impact of IFRS 15 on the Group is explained at the foot of this table. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 6 5

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SHOW ROOM d n a IFRS 9 Financial Instruments The new IFRS 9 replaces IAS 39 and standardises the specifications for classifying and measuring financial assets and financial liabilities. The standard uses cash flow properties and the business model according to which they are managed as a basis in this regard. The allocation of financial assets and liabilities to the new IFRS 9 measurement cate- gories had no material effect on the net assets, financial position and results of operations of the Group and the following table provides a comparison of these with the previous IAS 39 categories: in € thousand Financial assets Non-current financial assets Trade receivables Other assets Cash and cash equivalents Financial liabilities Financial liabilities S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c e h t g n i y l r e d n u s e l p i c n i r P 6 6 1 0 0 0 0 0 0 0 0 0 0 Measurement category Carrying amounts as at 01.01.2018 IAS 39 IFRS 9 IAS 39 IFRS 9 Difference Recognised at fair value in other income Recognised at fair value in profit or loss FVTPL AfS LaR LaR LaR Amortised costs Amortised costs Amortised costs Amortised costs Amortised costs AC AC AC Amortised costs 106,579 106,579 39 5,268 6,047 39 5,268 6,047 FLAC Amortised costs FLAC Amortised costs 1,546,672 1,546,672 Right to redeem of limited partners FLAC Amortised costs FLAC Amortised costs 337,479 337,479 Trade payables Other liabilities FLAC Amortised costs FLAC Amortised costs FLAC Amortised costs FLAC Amortised costs Interest rate hedges that do not meet the criteria of hedge accounting Interest rate hedges that meet the criteria of hedge accounting HfT n. a. Recognised at fair value in profit or loss Recognised at fair value in profit or loss FVTPL 2,242 9,169 2,242 9,169 2,256 2,256 36,784 36,784 Measurement categories in accordance with IFRS 9: Financial assets measured at amortised cost (AC), at fair value through other comprehensive income (FVOCI), Financial liabilities measured at amortised cost (FLAC), at fair value through profit and loss (FVTPL) Measurement categories in accordance with IAS 39: Loans and Receivables (LaR), Available-for-Sale (AfS), Financial Liabilities measured at amortised cost (FLAC), Financial liabilities measured at fair value (FVTPL), Held for Trading (HfT) IFRS 9 also replaces the previous IAS 39 impairment model for incurred losses with the model for expected losses. In order to deter- mine the expected credit losses for trade receivables and other liabil- ities to tenants, the Group will use the simplified IFRS 9 impairment model. The change in the method of determination did not result in a departure from the previous method. IFRS 9 also includes new provisions regarding the application of hedge accounting in order to better represent a company’s risk manage- ment activities. All of the Group’s existing hedging relationships fulfil the requirements of IFRS 9 as regards hedge accounting and can be continued in their current form. The Group applied IFRS 9 on the first application date of 1 January 2018 prospectively and forewent the restatement of comparative information. IFRS 15 – revenue The standard provides a five-step model for recognising revenue that is to be applied to all contracts with customers. This specifies when (or over what time period) and what amount of revenue is to be recognised. The standard replaces the previous provisions set out under IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a series of revenue-related interpretations. The Group mainly generates rental income through the leasing of shopping center space. This income is considered as a leasing com- ponent under the provisions of IAS 17 (from 2019 onwards, under the provisions of IFRS 16). Furthermore, the portion of the operating costs transferred to the tenants for which the tenants do not receive a separate service is to be regarded as a leasing component (e. g. real property tax and building insurance). All other operating costs trans- ferred to tenants must be recognised in accordance with IFRS 15. Here, it must be distinguished whether the Group acts as the primary responsible service provider (“Principal”) or as an agent for a service

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(“agent”) vis-à-vis the tenants. The analysis of the Group has shown that the Group primarily acts as an “agent” and that the proceeds from such transfers and the associated expenses must therefore continue to be shown netted in the income statement. The following new or amended standards and interpretations relevant for the business activities of the Group are not yet compulsory and have not been applied prematurely: Amendments / standard Expected date of application (EU) IFRS 16 Leases 01.01.2019 Expected amendments The core requirement of IFRS 16 is that all leases and their associated contractual rights and obligations are to be recognised in the lessee’s balance sheet as a general principle. The lessee is required to account for lease liabili- ties for all future lease payments. At the same time, the lessee is conferred the right to use the underlying asset, which generally corresponds to the cash value of the future lease payments plus any direct costs incurred by the lessee. During the term of the lease, the lease liability is upheld financially on a similar basis to the provisions of IAS 17 for finance leases, while the right of use is amortised according to schedule, which generally leads to higher expenses at the beginning of a lease. In the case of lessors, meanwhile, the provisions of the new standard are similar to the previous provisions of IAS 17. Impact on the net assets, financial position and results of operations or cash flow of Deutsche EuroShop AG The Group only has a limited number of lease obligations as a lessee. Accounting according to the provisions of IFRS 16 as at 31 December 2018 would have led to the recognition of rights of use with corresponding liabilities of approximately €0.3 million. 01.01.2019 Clarifications of numerous published standards No material impact Annual Improve- ments to IFRS- 2015 – 2017 Cycle In addition, further standards and interpretations were adopted which are not expected to have any impact on the Group. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 6 7

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SHOW ROOM d n a 6. CURRENCY TRANSLATION The Group currency is the euro (€). The companies located outside the eurozone that are included in the consolidated financial statements are treated as legally independent, but economically dependent, integrated companies. The reporting cur- rency of these companies is therefore different from the functional currency (€). Under IAS 21, annual financial statements prepared in foreign currencies are translated using the functional currency method, with the result that the balance sheet is to be translated as if the transactions had arisen for the Group itself, as the local currency of the integrated companies is deemed to be a foreign currency for these companies themselves. Monetary values are therefore translated at the closing rate and non-monetary items at the rate that applied at the time of initial recog- nition. Non-monetary items to be reported at fair value are translated at the closing rate. Items in the consolidated income statement are translated at average rates for the year or, in the event of strong fluc- tuations, using the rate that applied on the date of the transaction. Any translation differences arising if the translation rates of the balance sheet and consolidated income statement differ are recognised in profit or loss. Translation was based on the following exchange rates: 1 € = 31.12.2018 31.12.2017 Closing rate Average rate Closing rate Average rate Hungarian forint (HUF) 321.51 318.87 310.14 309.21 Polish zloty (PLN) 4.30 4.26 4.17 Czech koruna (CZK) 25.73 25.54 25.54 4.26 27.02 7. SIGNIFICANT ACCOUNTING POLICIES AND VALUATION METHODS Revenue and Expense Recognition Revenue from leasing the investment properties is recognised on a straight-line basis over the term of the lease. Other revenue and other operating income are recognised once the relevant service has been rendered or once the risk has passed to the customer. Operating expenses are recognised once the service has been utilised or at the time when they are booked through profit and loss. Interest income and expense are accrued. Determination of fair values The Group regularly reviews the determination of fair values for finan- cial and non-financial assets and liabilities. It also conducts a regular assessment of significant, non-observable input factors and carries out valuation adjustments. When determining the fair value of an asset or liability, the Group uses observable market data wherever possible. Based on the input factors used in the valuation techniques, the fair values are categorised into different levels of the fair value hierarchy in accordance with IFRS 13: Level 1: Fair values determined using quoted prices in active markets. Level 2: Fair values determined using valuation methods for which the input factors that are relevant for the fair value are based on directly or indirectly observable market data. Level 3: Fair values determined using valuation methods for which the input factors that are relevant for the fair value are based on unob- servable market data. In the case of assets or liabilities that are recognised at fair value on a regular basis, it is determined based on a reassessment at the end of the financial year whether reclassifications between the hierarchical levels occurred. In 2018, as in the previous financial year, no reclassi- fications between the hierarchical levels occurred. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c e h t g n i y l r e d n u s e l p i c n i r P 8 6 1

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Intangible assets Intangible assets include acquired software and software licenses of Deutsche EuroShop AG as well as goodwill. Software additions are measured at cost. These are amortised at 33% using the straight-line method over the expected useful life of three years. The method of depreciation and the depreciation period are reviewed annually at the end of each financial year. Goodwill within the context of a company takeover arose as a positive difference between the fair value of the assets, liabilities and contin- gent liabilities at the time of acquisition as well as the deferred taxes of the acquired company and the consideration paid for it by the Group. Goodwill is not subject to amortisation. Subsequently, all properties must be measured at their fair value and the annual net changes recognised in income under measurement gains / losses (recurring fair value measurement). Investment property is property held for the long term to earn rental income or capital gains. Under IAS 40, investment property measured using the fair value model is no longer depreciated. Borrowing and initial rental costs that are directly attributable to the acquisition, construction or production of a qualifying asset are included in the cost of that asset until the time at which the asset is largely ready for its intended use. Income realised from the temporary investment of specifically borrowed funds up to the point when these are used to obtain qualifying assets is deducted from the capitalisable costs of these assets. General administrative costs are not added to the costs of these assets. Property, plant and equipment Property, plant and equipment is reported at cost, less depreciation and, where applicable, impairment charges. All other borrowing costs are recognised in income in the period in which they occur. Operating and office equipment comprises office equipment, tenant fixtures, fittings and technical equipment belonging to Deutsche EuroShop AG, and is depreciated using the straight-line method over three to 13 years. The method of depreciation and the depreciation period are reviewed annually at the end of each financial year. Impairment losses on intangible assets and property, plant and equipment The value of the goodwill is reviewed at least once a year (as at 31 December) at the level of the cash-generating units of the Group to which goodwill was allocated at the time of acquisition. The impair- ment loss test as at 31 December 2018 did not result in a need for write-downs. For intangible assets with finite useful lives as well as for property, plant and equipment, the value is only reviewed if there are actual indi- cations of impairment. An impairment loss is recognised in income in the measurement gains / losses provided that the recoverable amount of the assets is lower than the carrying amount. The recoverable amount is the higher value from the fair value less costs of disposal and value in use. In the financial year, there were no indications of impairment for the intangible assets with finite useful lives or for property, plant and equipment. Investment properties Under IAS 40, investment property must initially be measured at cost at the date of acquisition. Property that is under construction and intended to be used as investment property following its completion also falls under the scope of IAS 40. Property held as a financial invest- ment can be recognised either at amortised cost (cost model) or using the fair-value model. Maintenance measures relating to property, plant and equipment are recognised as an expense in the financial year in which they occur. Lease Agreements In line with IAS 17, the tenancy agreements in the Deutsche EuroShop Group are classified as operating leases. The operating lease agree- ments relate to investment property owned by the Group with long- term leases. Rental income from operating leases is recognised in income on a straight-line basis over the term of the corresponding lease. The lessee has no opportunity to acquire the property at the end of the term. Financial instruments Financial assets and liabilities are recognised in the consolidated balance sheet when the Group becomes a party to the contractual provisions governing the financial instrument. Financial instruments are allocated to an IFRS 9 measurement cate- gory when they are recognised for the first time. With financial assets, the measurement category is dependent on the cash flow property of the financial instrument and the business model of the Group which holds the financial asset. Non-current financial assets Non-current financial assets include an investment in a Dutch corpo- ration that is a joint venture controlled by Deutsche EuroShop jointly with partner companies. As Deutsche EuroShop, under the provisions of the shareholders’ agreement, exercises neither significant influence nor control over this company, the investment is measured at fair value in line with the provisions of IFRS 9. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 6 9

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SHOW ROOM d n a Receivables and other current assets Receivables and other current assets are recognised at amortised cost less write-downs. The Group applies the simplified approach permitted under IFRS 9 and measures the write-down on the basis of the credit losses expected over the life of the asset. Receivables are written off if they become uncollectable. Right to redeem of limited partners The distinction between equity and liabilities under international accounting standards is set out in IAS 32 Financial Instruments: Presentation. In accordance with this standard, the equity interests of third-party shareholders in commercial partnerships are reclassified as liabilities due to the shareholders’ potential right of redemption. According to sections 131 et seq. HGB, shareholders in commercial partnerships have an ordinary legal right of termination of six months with effect from the end of the financial year, which the share holders’ agreement can define from a long-term perspective, but cannot exclude. As a result of this stipulation, a liability rather than equity is recognised in the balance sheet. This liability must be measured at fair value. Financial liabilities Liabilities to banks / bank loans and overdrafts are reported at amor- tised cost. Discounts are deducted, which under IFRS 9 must be amor- tised over the term of the loan agreement and recognised annually as an expense. The debt component of convertible bonds is measured using the market interest rate for a similar, non-convertible bond. This debt component is measured as a liability at amortised cost using the effective interest method until converted or repayment becomes due. The remaining proceeds from the issue represent the value of the conversion rights. This is recognised in equity within the capital reserves. The financial liability increases over time, with an effect on net income, by the difference between the actual interest expense and the nominal interest rate. Trade payables Trade payables are recognised at their repayment amount. Other liabilities Other liabilities are recognised at amortised cost. Cash and cash equivalents Cash and cash equivalents include cash and bank balances (terms of up to three months) at their principal amounts. Derivative financial instruments Derivatives that qualify for hedge accounting in accordance with IFRS 9 are used to hedge interest rate risks. These are fixed-rate swaps to limit the interest rate risk of variable interest rate loans, which have terms extending to 2027. The interest rate hedges are recognised at fair value (recurring fair value measurement) under “Other assets” or “Other liabilities”. Changes are recognised directly in equity, provided that the conditions of the underlying and hedge transaction are identical. The effectiveness of the hedging measures is verified regularly using the degree of harmony between the contract terms for the hedged item and the hedge (“Critical Term Match”). If the effectiveness between the hedged item and the hedge does not exist, the hedge is measured as a derivative at fair value in profit or loss. Present value is calculated based on discounted cash flows using current market interest rates. The final maturities of the interest rate hedges and loan agreements are identical. Investments Accounted for using the Equity Method Investments in associates and joint ventures are initially recognised at cost in the balance sheet and adjusted by changes in the Group’s share of the equity of the associate / joint ventures after the date of acquisition. At every reporting date, the Group reviews whether there are indications that the shares need to be impaired in relation to the amortised carrying amounts. Deferred taxes In accordance with IAS 12, deferred taxes are recognised for all dif- ferences between the tax accounts and the IFRS balance sheet, using the currently enacted tax rate. At present, deferred taxes are primarily formed on the differences between the IFRS carrying amounts of the properties and their carrying amounts for tax purposes. A uniform cor- porate tax rate of 15% plus the solidarity surcharge of 5.5% was used for German companies, and in some cases a rate of 16.45% for trade tax. For Hungarian taxes, a tax rate of 9% was taken, while for Polish taxes the rate was 19%, for Czech taxes it was 19% and for Austrian taxes it was 25%. In accordance with IAS 12.74, deferred tax assets on existing loss carryforwards are offset against deferred tax liabilities. Other provisions Under IFRS, other provisions may only be recognised if a present obli- gation exists towards a third party and payment is more likely than not. Non-current provisions are discounted. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t e e h s e c n a l a b d e t a d i l o s n o c e h t o t s e t o N 0 7 1

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NOTES TO THE CONSOLIDATED BALANCE SHEET 8. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT in € thousand Costs as at 1 January Additions Acquisition of a subsidiary Disposals as at 31 December Depreciation as at 1 January Additions Disposals as at 31 December Carrying amount at 1 January Carrying amount at 31 December Goodwill Software and software licenses Operating and office equipment 2018 53,867 0 0 0 53,867 -140 0 0 -140 53,727 53,727 2017 2018 0 0 53,867 0 53,867 0 -140 0 -140 0 53,727 82 4 0 -14 72 -63 -14 14 -63 19 9 2017 77 5 0 0 82 -48 -15 0 -63 29 19 2018 414 49 0 -23 440 -206 -44 23 -227 208 213 2017 455 9 0 -50 414 -188 -41 23 -206 267 208 The goodwill arose from deferred tax liabilities for the real estate assets that had to recognised at the time of the initial consolidation (31 March 2017) of Olympia Brno. 9. INVESTMENT PROPERTIES in € thousand 2018 2017 Carrying amount at 1 January 3,924,157 3,520,824 Additions Recognised construction measures Additions to basis of consolidation Unrealised changes in fair value 1,336 19,526 0 -53,319 1,333 8,291 374,000 19,709 Carrying amount at 31 December 3,891,700 3,924,157 Among the additions to the basis of consolidation in the previous year is the Olympia Center in Brno, which was acquired on 31 March 2017. Unrealised changes in market value related to appreciation and depre- ciation in accordance with IAS 40. The fair values of the properties in the period under review as at 31 December 2018 were determined by appraisers from Jones Lang LaSalle GmbH (JLL) in accordance with the guidelines of the Royal Institution of Chartered Surveyors (RICS). As in previous years, the discounted cashflow method (DCF) was used. The remuneration fixed contractually for the appraisal reports prior to preparation of the appraisals is independent of the measurement gain / loss. This method entails the calculation of the present value of future cash flows from the property in question as at the valuation date. In addition, the net income from the property in question is determined over a detailed planning period of (usually) ten years and a discount rate applied. A residual value is forecast for the end of the ten-year detailed planning phase by capitalising the stabilised cash flows of the last budgeted year using an interest rate (the capitalisation interest rate). In a second step, the residual value is discounted back to the measurement date. JLL applied the equated yield model in order to arrive at the discount and capitalisation interest rates. The capitalisation interest rate was derived for each property individually from initial rates of return from comparable transactions. At the same time, such determinants of value as inflation and changes in rent and costs were implicitly taken into account in the capitalisation interest rate. The risk pro- file specific to each property was also adjusted by reference to the relevant individual indicators. Examples of such indicators include the quality of the property’s location and position, market trends and developments in the competitive environment. JLL likewise derived the D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 7 1

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discount interest rates from comparable transactions, albeit making adjustments for projected increases in rent and costs, since these had been explicitly shown in the relevant cash flow. JLL applied the same methods in valuing domestic and foreign real properties. The following shows details and disclosures in accordance with IFRS 13 for the hierarchical levels of the fair values of the Group’s investment properties as at 31 December 2018: The following overview shows the key assumptions used by JLL to determine the market values: IFRS 13 hierarchy levels in € thousand Level 1 Level 2 Level 3 Investment properties 0 0 3,891,700 Valuation parameters in % Rate of rent increases Cost ratio Discount rate Capitalisation interest rate 31.12.2018 31.12.2017 1.33 10.20 5.90 5.07 1.47 10.14 5.90 5.11 The properties are secured by mortgages. There are land charges in the amount of €1,522,393 thousand (previous year: €1,546,672 thou- sand). The rental income of the properties valued in accordance with IAS 40 was €225,047 thousand (previous year: €218,491 thousand). Directly associated operating expenses were €22,183 thousand ( previous year: €21,539 thousand). A 25 bp change in a material parameter (sensitivity analysis) of real estate appraisals would have the following pre-tax impact on measure ment gains / losses (including the share attributable to at- equity consolidated companies): 10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD in € thousand 2018 2017 Carrying amount at 1 January 526,728 515,361 Basis Change in parameter in € million Distributions and capital repayments received in % Share of profit / loss + 0.25 percentage points 159.9 3.9 Disposals -23,286 27,602 0 -22,914 34,451 -170 Sensitivity analysis – Valuation parameters Rate of rent increases -3.2 -0.3 0.2 Carrying amount at 31 December 531,044 526,728 Joint ventures in which Deutsche EuroShop AG has a majority of the voting rights together with third parties are included in the consoli- dated financial statements in accordance with the equity method. They are important for the Group as a whole and operate shopping centers. SHOW ROOM d n a S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t e e h s e c n a l a b d e t a d i l o s n o c e h t o t s e t o N 2 7 1 1.33 - 0.25 percentage points -131.5 + 0.25 percentage points -10.8 Cost ratio 10.20 - 0.25 percentage points 9.8 + 0.25 percentage points -75.2 -1.8 Discount rate 5.90 - 0.25 percentage points 79.0 1.9 Capitalisation interest rate + 0.25 percentage points -122.1 -3.0 5.07 - 0.25 percentage points 136.1 3.3 Over the forecast period, rents were assumed to increase on aver- age over the long term at 1.33% (previous year: 1.47%). On average, management and administrative costs at 10.2% (previous year: 10.1%) were deducted from the forecast rents. This resulted in an average net income of 89.8% (previous year: 89.9%). Actual management and administrative costs amounted to 9.9% of rental income in the year under review (previous year: 9.9%). The appraisal showed that, for financial year 2018, the real property portfolio had an initial yield before deduction of transaction costs of 5.32% compared with the previous year’s 5.23%, and an initial rate of return net of transaction costs (net initial yield) of 5.01%, the figure for the previous year having been 4.93%.

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The joint ventures material to the overall Group posted the following asset and liability items and income items for the reporting year. The values do not correspond to the share attributable to the Group, but the total amounts: in € thousand Non-current assets Current assets thereof cash and cash equivalents Non-current liabilities thereof financial liabilities Current liabilities thereof financial liabilities Revenue Net interest income EBT (excl. measurement gains / losses) Measurement gains / losses Income taxes Net profit Other income Total profit in € thousand Non-current assets Current assets thereof cash and cash equivalents Non-current liabilities thereof financial liabilities Current liabilities thereof financial liabilities Revenue Net interest income EBT (excl. measurement gains / losses) Measurement gains / losses Income taxes Net profit Other income Total profit Allee-Center Magdeburg KG, Hamburg Immobilienkommandit- gesellschaft FEZ Harburg, Hamburg Stadt-Galerie Passau KG, Hamburg 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017 253,000 254,000 274,000 277,000 182,000 178,000 2,913 2,148 0 0 625 0 15,745 2 13,663 -5,647 0 8,016 0 8,016 4,821 3,621 0 0 1,045 0 15,901 1 13,913 -1,765 0 12,148 0 12,148 5,106 4,391 119,146 119,146 3,786 2,519 14,465 -3,719 8,897 -3,322 0 5,575 0 5,575 5,792 5,031 120,875 120,875 3,881 2,463 14,059 -3,986 8,387 2,759 0 11,146 0 11,146 3,345 2,794 0 0 471 0 9,459 0 8,589 3,018 0 11,607 0 11,607 2,545 1,991 0 0 458 0 9,594 0 8,794 -390 0 8,404 0 8,404 Saarpark Center Neunkirchen KG, Hamburg EKZ Eins Errichtungs- und Betriebs Ges.m.b.H. & Co. OG, Vienna 1 Einkaufs-Center Arkaden Pécs KG, Hamburg 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017 219,000 225,000 229,934 228,967 105,000 100,000 2,260 1,345 54,123 52,089 4,839 4,037 12,517 -593 10,788 -6,253 0 4,535 0 4,535 2,462 1,845 58,642 55,912 5,136 4,299 12,417 -439 10,612 -850 0 9,762 0 9,762 3,848 2,875 92,596 48,227 2,793 493 13,258 -2,040 9,735 798 0 10,533 0 10,533 2,526 1,569 93,617 48,759 1,966 481 12,834 -2,039 9,415 4,233 0 13,648 0 13,648 4,688 3,586 35,078 28,050 1,988 600 7,777 -905 5,662 4,681 -1,207 9,136 0 9,136 4,440 3,624 34,724 28,650 1,798 605 7,558 -927 5,735 4,999 -1,145 9,589 0 9,589 1 Includes the figures for the immaterial joint venture CAK City Arkaden Klagen- furt KG, Hamburg. The equity method valuation amounted to €934 thousand (previous year: €967 thousand) and the net loss for the year €14 thousand (previous year: €37 thousand). D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 7 3

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SHOW ROOM d n a S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t e e h s e c n a l a b d e t a d i l o s n o c e h t o t s e t o N 4 7 1 Under the equity method, the joint ventures changed as follows in the period under review: Allee-Center Magdeburg KG, Hamburg Immobilien- kommandit- gesellschaft FEZ Harburg, Hamburg Stadt-Galerie Passau KG, Hamburg Saarpark Center Neunkirchen KG, Hamburg EKZ Eins Errichtungs- und Betriebs Ges.m.b.H. & Co. OG, Vienna Einkaufs- Center Arkaden Pécs KG, Hamburg in € thousand Equity method valuation as at 01.01.2018 Share of profit / loss - of which EBT (excl. measurement gains / losses) - of which measurement gains / losses Deposits / withdrawals 128,888 4,008 6,832 -2,824 -5,252 79,018 2,787 4,449 -1,661 -3,718 135,066 8,705 6,442 2,264 -5,115 81,842 2,268 5,394 -3,127 -2,961 81,149 67,955 5,266 4,868 399 -4,024 69,197 33,959 4,568 2,831 2,341 -2,216 36,311 Equity method valuation as at 31.12.2018 127,644 78,087 138,656 Receivables in € thousand Trade receivables Other assets (previous year’s figures) Total Up to 1 year Over 1 year 6,643 (5,268) 10,526 (10,274) 17,169 (15,542) 6,643 (5,268) 10,526 (10,274) 17,169 (15,542) 0 (0) 0 (0) 0 (0) Trade receivables (after value adjustments) and other assets were, as in the previous year, not overdue as at the reporting date. 13. CASH AND CASH EQUIVALENTS in € thousand 31.12.2018 31.12.2017 Short-term deposits / time deposits 5,565 5,879 Current accounts Cash 110,769 100,692 1 8 116,335 106,579 11. TRADE RECEIVABLES in € thousand Trade receivables as at 31.12. Write-downs as at 01.01. Utilisation Change in write-downs for expected losses Write-downs as at 31.12. 2018 8,364 -1,649 323 -395 -1,721 6,643 2017 6,917 -1,908 616 -357 -1,649 5,268 Receivables arose primarily from rental invoices and services for which charges are passed on. These were predominantly paid at the time the consolidated financial statements were prepared. The trade receivables recognised at the reporting date are largely protected by means of guarantees, cash security deposits and letters of comfort. 12. OTHER CURRENT ASSETS in € thousand 31.12.2018 31.12.2017 Other receivables from tenants Other current assets 3,029 7,497 3,605 6,669 10,526 10,274 Other receivables from tenants mainly comprise receivables for heat- ing and ancillary costs. Other current assets primarily consist of cash security deposits received as collateral, prepaid marketing costs for centers and tax receivables.

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14. EQUITY AND RESERVES Changes in equity are presented in the statement of changes in equity. The share capital is €61,783,594, comprised of 61,783,594 no-par-value registered shares. All shares have been issued in full and have been fully paid up. The notional value of each share is €1.00. According to Article 5 of the Articles of Association, the Executive Board is authorised, with the Supervisory Board’s approval, to increase the share capital by up to a total of €11,680,999 through one or multiple issues of new no-par-value registered shares against cash and / or non-cash contributions before 27 June 2022 (Authorised capital 2017). As at 31 December 2018, no use had been made of this authorisation. In addition, the Executive Board was authorised by a resolution of the Annual General Meeting held on 28 June 2018 to acquire treasury shares in the Company constituting up to 10% of the share capital available on the entry into force of or – if this is lower – on exercise of the authorisation by 27 June 2023. As at 31 December 2018, no use had been made of this authorisation. At the Annual General Meeting on 12 June 2019, the Executive Board and Supervisory Board will propose that Deutsche EuroShop AG’s entire unappropriated surplus for 2018 of €92,675 thousand be used to fund a dividend distribution of €1.50 per eligible share. The previous year’s unappropriated surplus of €89,586 thousand was distributed in full to the shareholders. The dividend paid was €1.45 per share. The capital reserves contain amounts in accordance with sec- tion 272 (2) nos. 1, 2 and 4 of the Handelsgesetzbuch (HGB – German Commercial Code). In addition, the capital reserves include costs of capital increases and their corresponding deferred tax assets. Retained earnings consist of the remeasurement reserves, currency items and accumulated profits carried forward at the time of transition to IFRS. On 7 March 2017, in order to finance the equity required for the previous year’s acquisition of Olympia Brno (see section “4. Acquisitions during the previous year”), the Executive Board decided, with the Supervisory Board’s approval, to increase the share capital by utilising some of the authorised capital 2013 against cash contributions. A total of 4,459,460 new shares were issued at a subscription price of €37.00 per share. The Group obtained from this around €165 million in the previous year (before deduction of transaction costs amounting to €1.4 million). The transaction costs were recognised against the capital reserves, taking into account deferred tax assets. The capital increase was entered in the commercial register on 8 March 2017. By a resolution of the Annual General Meeting dated 28 June 2017, the remaining authorisa- tion based on the authorised capital 2013 was cancelled. According to Article 6 of the Articles of Association, the Executive Board was authorised, subject to the approval of the Supervisory Board and until 15 June 2016, to issue convertible bonds with a total nominal value of up to €200,000,000 and to grant the holders conversion rights to new no-par-value shares up to a total of 10,000,000 shares (€10.0 million) (conditional capital 2011). As part of this authorisation, Deutsche EuroShop AG issued a convertible bond in the amount of €100 mil- lion on 20 November 2012. By the time the conversion deadline of 6 November 2017 was reached, nearly all holders of the convertible bonds had exercised their option to convert these bonds into shares of Deutsche EuroShop AG. A total nominal value of €99,500 thousand of the convertible bond was converted into 3,378,598 shares in the previous year and €500 thousand was repaid. Article 6 of the Articles of Association was repealed without replacement. Other total profit is divided into the following components: 2018 in € thousand Before taxes Cash flow hedges 3,238 Taxes -675 Net 2,563 2017 in € thousand Measurement of invest- ments (AfS) IAS 39 Cash flow hedges Before taxes Taxes Net 22 6,651 6,673 0 -1,440 -1,440 22 5,211 5,233 15. NON-CURRENT AND CURRENT FINANCIAL LIABILITIES in € thousand Bank loans and overdrafts 31.12.2018 31.12.2017 Non- current Current Non- current Current 1,496,313 26,080 1,517,773 28,899 Bank loans and overdrafts relate to loans raised to finance property acquisitions and investment projects. Land charges on Company prop- erties totalling €1,522,393 thousand (previous year: €1,546,672 thou- sand) serve as collateral. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 7 5

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SHOW ROOM d n a Discounts are amortised over the term of the loan. In the year under review, €29 thousand (previous year: €6 thousand) was recognised in income. A total of €52,726 thousand (previous year: €51,939 thou- sand) was recognised in financial gains or losses as interest expense for bank loans and overdrafts. In the previous year, financial gains or losses also included interest expense of €2,084 thousand for a convertible bond. 13 of the 19 loan agreements currently contain arrangements regard- ing covenants. There are a total of 21 different conditions on different debt service cover ratios (DSCR), interest cover ratios (ICR), changes in rental income, the equity ratio and loan-to-value ratios (LTV). The loan conditions have not been breached thus far and will not, according to current plans, be breached in future either. On 20 November 2012, Deutsche EuroShop AG issued convertible bonds with a five-year maturity and total value of €100 million. The coupon was 1.75% per year and was payable semi-annually in arrears. The convertible bond was converted almost entirely into shares of Deutsche EuroShop AG prior to its expiry in November 2017. The amount of the convertible bond was divided into equity and debt components. The equity component accounted for a total amount of €7,140 thousand which was placed in capital reserves. Non-current and current financial liabilities arose from the following changes affecting liquidity and not affecting liquidity: 16. OTHER NON-CURRENT AND CURRENT FINANCIAL LIABILITIES in € thousand Interest rate swaps Rental deposits Other liabilities to tenants Value added tax Debtors with credit balances Other 31.12.2018 31.12.2017 Current Non- current Current 0 36,784 3,309 6,210 2,379 792 1,470 0 0 0 0 1,135 2,256 3,567 6,412 3,124 422 1,175 Non- current 33,546 0 0 0 0 751 34,297 14,160 37,919 16,956 In connection with borrowing, interest rate hedges (interest rate swaps) were concluded to hedge against higher capital market interest rates. Their present value totalled €33,546 thousand as at the report- ing date (previous year: €39,040 thousand). Other liabilities to tenants mainly comprise liabilities for heating and ancillary costs as well as prepaid rent. 2018 Liabilities in € thousand 2017 Bank loans and over- drafts Bank loans and over- drafts Con- vertible bond 1,546,672 1,346,901 98,680 -24,279 32,986 -696 Financial liabilities Trade payables Tax liabilities Other liabilities (previous year’s figures) 0 0 0 166,785 0 0 0 -99,386 1,402 1,522,393 1,546,672 0 in € thousand Carrying amount at 1 January Changes affecting liquidity Changes not affecting liquidity Acquisition of Olympia Brno Conversion Other Carrying amount at 31 December Total Current Non-current 1,522,393 (1,546,672) 26,080 (28,899) 1,496,313 (1,517,773) 3,543 (2,242) 2,384 (2,201) 48,457 (54,875) 1,576,777 (1,605,990) 3,543 (2,242) 2,384 (2,201) 14,160 (16,956) 46,167 (50,298) 0 (0) 0 (0) 34,297 (37,919) 1,530,610 (1,555,692) S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t e e h s e c n a l a b d e t a d i l o s n o c e h t o t s e t o N 6 7 1

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17. DEFERRED TAX LIABILITIES Deferred tax assets and liabilities are the result of tax effects of tem- porary differences and tax loss carryforwards: 31.12.2018 31.12.2017 Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred tax liabilities in € thousand Investment properties 0 374,343 0 367,365 As at the reporting date, there were taxable temporary differences of €7,155 thousand (previous year: €6,005 thousand) between the net assets of Group companies recognised in the consolidated financial statements and the tax basis of the shares in these Group companies (outside basis differences) for which no deferred taxes were recog- nised since the differences are not expected to be reversed in the foreseeable future. 18. RIGHT TO REDEEM OF LIMITED PARTNERS Investments accounted for using the equity method Other liabilities Interest swaps (not recognised in profit or loss) Interest swaps (recognised in profit or loss) Other Corporation tax loss carryforwards Deferred taxes before netting 0 7,466 0 1,132 53 86,950 0 0 0 0 0 8,141 357 1,132 423 in € thousand 82,488 Settlement claim as per 01.01. 2018 2017 337,479 324,559 0 0 0 0 Earnings contributions Share of measurement gains / losses Outflows Settlement claim as per 31.12. 18,448 2,387 -14,666 343,648 18,522 10,985 -16,587 337,479 The right to redeem of limited partners includes the equity interests of third-party providers in the companies: Main-Taunus-Zentrum KG, Forum Wetzlar KG and Einkaufs-Center Galeria Baltycka G.m.b.H. & Co. KG, which are to be reported in accordance with IAS 32 as debt capital. 8,651 461,293 10,053 449,853 Balance -8,651 -8,651 -10,053 -10,053 Deferred taxes after netting 0 452,642 0 439,800 19. OTHER PROVISIONS in € thousand Maintenance and construction work already performed but not yet invoiced Fees Other As at 01.01.2018 Utili- sation Rever- sal Addition As at 31.12.2018 2,584 2,073 332 3,189 73 64 3,697 2,876 6,354 5,013 3 260 595 117 3,361 6,667 3,368 123 3,922 7,413 As in the previous year, all provisions have a term of up to one year. In measuring deferred taxes, the tax rates applicable in accordance with IAS 12 are those valid under current legislation at the date at which the temporary differences will probably reverse. In the year under review, a corporate tax rate of 15% was used for the companies in Germany. In addition, a solidarity surcharge of 5.5% on the calculated corporate tax and, in part, 16.45% in trade tax were recognised. The respective local tax rates were applied for foreign companies. The deferred taxes on interest rate swaps recognised in profit or loss related to an interest rate swap for the Altmarkt-Galerie in Dresden which had to be recognised in profit or loss following the acquisition of the remainder of the Altmarkt-Galerie in Dresden. The initial consolidation of Olympia Brno on 31 March 2017 resulted in the previous year in an addition to deferred tax liabilities of €53,941 thousand. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 7 7

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SHOW ROOM d n a NOTES TO THE CONSOLIDATED INCOME STATEMENT Ancillary costs which cannot be fully allocated are essentially operat- ing costs which cannot be completely passed on to tenants as well as heating and ancillary costs in arrears for preceding years. 20. REVENUE 22. PROPERTY MANAGEMENT COSTS in € thousand 2018 2017 in € thousand 2018 2017 Minimum rental income 222,024 215,320 Turnover rent Other 2,227 796 2,447 724 225,047 218,491 Center management / agency agreement costs of which directly attributable operating expenditure in accordance with IAS 40 Investment Properties -10,493 -10,371 -10,493 -10,371 of which directly attributable rental income in accordance with IAS 40 Investment Properties 225,047 218,491 23. OTHER OPERATING INCOME Other revenue relates primarily to settlement payments made by former tenants as well as compensation for use. The rental income reported here derives from operating leases and relates to rental income from investment properties with long-term leases. The future minimum leasing payments from non- terminable rental agreements classified as investment properties have the following maturities: in € thousand Maturity within 1 year Maturity from 1 year to 5 years Maturity after 5 years 2018 214,457 571,499 165,825 2017 214,727 644,521 214,329 in € thousand Income from the reversal of provisions Exchange rate gains Other 2018 595 50 1,183 1,828 2017 423 12 1,600 2,035 Other operating income primarily consists of receivables already value-adjusted in previous years. 24. OTHER OPERATING EXPENSES 951,781 1,073,577 in € thousand Personnel expenses Legal, consulting and audit expenses 21. PROPERTY OPERATING COSTS Marketing costs 2018 -1,905 -1,084 -494 -312 -274 -187 -165 -58 -1,078 -5,557 2017 -1,921 -1,543 -494 -312 -293 -238 -149 -56 -1,613 -6,619 2018 2017 Appraisal costs Supervisory Board compensation -4,099 -3,511 -1,746 -1,034 -587 -713 Exchange rate losses Fees and contributions Write-downs Other -5,057 -2,869 -1,130 -876 -597 -639 in € thousand Operating costs that cannot be passed on Center marketing Maintenance and repairs Write-downs of rent receivables Real property tax Other of which directly attributable operating expenditure in accordance with IAS 40 Investment Properties -11,690 -11,168 Legal, consulting and audit expenses include €303 thousand (previous year: €302 thousand) for the audit of Group companies. -11,690 -11,168 S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t n e m e t a t s e m o c n i d e t a d i l o s n o c e h t o t s e t o N 8 7 1

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25. SHARE OF THE PROFIT OR LOSS OF ASSO- CIATES AND JOINT VENTURES ACCOUNTED FOR USING THE EQUITY METHOD in € thousand Profit / loss from joint ventures Profit / loss from associates Profit / loss from equity-accounted companies 2018 27,602 0 2017 34,450 1 in € thousand 27,602 34,451 Consolidated profit before income tax The profit / loss of equity-accounted companies includes a measure- ment loss before deferred taxes of €-2,608 thousand (previous year: €4,396 thousand). EBT (excl. measurement gains / losses) for equi- ty-accounted companies amounts to €30,815 thousand (previous year €30,629 thousand). 26. MEASUREMENT GAINS / LOSSES in € thousand Unrealised changes in fair value 2018 -53,319 2017 19,709 Profit / loss attributable to limited partners Goodwill write-down Write-down of other financial assets -2,387 -10,985 0 -9 -55,715 -140 -34 8,550 The goodwill write-down in the previous year was based on the adjust- ment of deferred taxes for the real estate assets of Olympia Brno. The write-down of other financial assets was undertaken on the investment in ILWRO Holding B.V. 27. TAXES ON INCOME AND EARNINGS in € thousand Current tax expense Domestic deferred tax expense Foreign deferred tax expense 2018 -10,573 -8,741 -3,425 -22,739 2017 -5,984 -22,030 -3,482 -31,496 Tax reconciliation Income taxes in the amount of €-22,739 thousand in the year under review are derived as follows from an expected income tax expense that would have resulted from the application of the parent company’s statutory income tax rate to the profit before tax. This was calculated using a tax rate of 32.28%. Theoretical income tax 32.28% Tax rate differences for foreign Group companies Tax rate differences for domestic Group companies Tax-free income / non-deductible expenses Tax effect from investments accounted for under the equity-accounted method Aperiodic tax expense / income Other 2018 102,134 -32,969 2017 165,829 -53,530 3,576 7,282 5,633 13,216 -457 1,474 0 4 37 1,547 -26 -22 Current income tax -22,739 -31,496 In financial year 2018, the effective income tax rate was 22.3%. 28. EARNINGS PER SHARE in € thousand 2018 2017 Group shareholders’ portion of prof- its / losses (€ thousand) Weighted number of no-par-value shares issued Undiluted and diluted earnings per share (€) 79,395 134,333 61,783,594 58,248,007 1.29 2.31 Basic earnings per share are determined by dividing the net income for the period to which shareholders of Deutsche EuroShop AG are entitled by the weighted average number of shares outstanding within the reporting period. There is no potential dilution as of the reporting date, e.g. through convertible bonds or share options, with the result that diluted earnings correspond to undiluted earnings. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 7 9

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SHOW ROOM d n a SEGMENT REPORTING Segment reporting by Deutsche EuroShop AG is carried out on the basis of internal reports that are used by the Executive Board to man- age the Group. Internal reports distinguish between shopping centers in Germany (“domestic”) and other European countries (“abroad”). As the Group’s main decision-making body, the Deutsche EuroShop AG Executive Board first and foremost assesses the performance of the segments based on revenue, EBIT and EBT excluding measurement gains / losses. The measurement principles for segment reporting correspond to those of the Group. In order to assess the contribution of the segments to the individual performance indicators as well as to the Group’s success, the income, expenditure, assets and liabilities of the joint ventures are included in internal reporting in proportion to the Group’s share therein. Similarly, for subsidiaries in which the Group is not the sole shareholder, income, expenditure, assets and liabilities are likewise only consolidated pro- portionately according to the corresponding Group share. This results in the segments being divided as followed: Breakdown by geographical segment in € thousand Revenue EBIT Profit / losses of joint ventures and associates Interest income Interest expense EBT (excl. measurement gains / losses) Domestic 196,070 174,360 0 19 -45,414 131,568 Abroad 43,118 40,349 0 9 -7,226 33,131 Total Reconciliation 01.01. – 31.12.2018 239,188 214,709 0 28 -52,640 164,699 -14,141 -15,574 27,602 2 -86 -3,765 225,047 199,135 27,602 30 -52,726 160,934 31.12.2018 Investment properties 3,346,684 741,558 4,088,242 -196,542 3,891,700 Additions and recognised construction measures for investment properties Goodwill Investments accounted for using the equity method Other segment assets Segment assets Segment liabilities 20,046 2,751 22,797 0 0 51,285 3,397,969 1,244,755 0 0 30,071 771,629 339,385 0 0 81,356 4,169,598 1,584,140 -1,935 53,727 531,044 52,401 440,630 796,340 20,862 53,727 531,044 133,757 4,610,228 2,380,480 S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / g n i t r o p e r t n e m g e S 0 8 1

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in € thousand Revenue EBIT Profit / losses of joint ventures and associates Interest income Interest expense EBT (excl. measurement gains / losses) Domestic 195,676 174,406 0 27 -48,860 129,014 Abroad 36,854 33,426 0 7 -5,475 27,958 Total Reconciliation 01.01. – 31.12.2017 232,530 207,832 0 34 -54,335 156,972 -14,039 -15,464 34,451 2 312 -3,664 218,491 192,368 34,451 36 -54,023 153,308 31.12.2017 Investment properties 3,388,343 735,415 4,123,758 -199,601 3,924,157 Additions and recognised construction measures for investment properties Goodwill Investments accounted for using the equity method Other segment assets Segment assets Segment liabilities 8,202 375,954 384,156 0 0 42,082 3,430,425 1,272,618 0 0 31,733 767,148 343,052 0 0 73,815 4,197,573 1,615,670 -532 53,727 526,728 48,572 429,426 773,953 383,624 53,727 526,728 122,387 4,626,999 2,389,623 The adjustment of the proportionate consolidation of the joint ventures and subsidiaries in which the Group does not own a 100% stake is carried out in the reconciliation column. Deferred tax liabilities are considered by the Executive Board of Deutsche EuroShop AG in a cross-segment manner and are therefore included in the reconcilia- tion column of the segment liabilities. Accordingly, the goodwill from the acquisition of Olympia Brno was allocated to the reconciliation column of the segment assets. The reconciliation column also contains the companies which are not allocated to either of the two segments (Deutsche EuroShop AG, DES Management GmbH). These do not gen- erate any revenue and are included in the reconciliation column after intra-Group eliminations with their EBIT and EBT (excl. measurement gains / losses) of €-3,654 thousand (previous year: €-3,536 thousand) as well as in the segment assets with €52,341 thousand (previous year: €48,927 thousand) and in the segment liabilities with €4,366 thousand (previous year: €3,865 thousand). In view of the geographical segmentation, no further information pur- suant to IFRS 8.33 is given. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 8 1

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SHOW ROOM d n a OTHER DISCLOSURES 29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT Measurement category in accordance with IFRS 9 Carrying amounts 31.12.2018 Amortised cost Fair value recognised in income Fair value recognised in equity Fair value 31.12.2018 Amount stated in line with IFRS 9 31 6,643 6,351 6,643 6,351 116,335 116,335 1,522,393 1,522,393 343,648 343,648 3,543 9,547 0 3,543 9,547 31 0 31 6,643 6,351 116,335 1,601,010 343,648 3,543 9,547 0 33,546 33,546 in € thousand Financial assets Non-current financial assets 3 Trade receivables Other assets Cash and cash equivalents Financial liabilities Financial liabilities 2 Right to redeem of limited partners Trade payables Other liabilities Interest rate hedges recognised in profit or loss 2 Interest rate hedges not recognised in profit or loss 2 FVTPL AC AC AC FLAC FLAC FLAC FLAC FVTPL n. a. 33,546 1 Corresponds to level 1 of the IFRS 7 fair value hierarchy 2 Corresponds to level 2 of the IFRS 7 fair value hierarchy 3 Corresponds to level 3 of the IFRS 7 fair value hierarchy Measurement categories in accordance with IFRS 9: Financial assets measured at amortised cost (AC), at fair value through other comprehensive income (FVOCI), Financial liabilities measured at amortised cost (FLAC), at fair value through profit and loss (FVTPL) S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s e r u s o l c s i d r e h t O 2 8 1

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in € thousand Financial assets Non-current financial assets 3 Trade receivables Other assets Cash and cash equivalents Financial liabilities Financial liabilities 2 Right to redeem of limited partners Trade payables Other liabilities Interest rate hedges recognised in profit or loss 2 Interest rate hedges not recognised in profit or loss 2 Measurement category in accordance with IAS 39 Carrying amounts 31.12.2017 Amortised cost Fair value recognised in income Fair value recognised in equity Fair value 31.12.2017 Amount stated in line with IAS 39 AfS LaR LaR LaR FLAC FLAC FLAC FLAC HfT n. a. 39 5,268 6,047 5,268 6,047 106,579 106,579 1,546,672 1,546,672 337,479 337,479 2,242 9,169 2,256 36,784 2,242 9,169 2,256 39 39 5,268 6,047 106,579 1,629,002 337,479 2,242 9,169 2,256 36,784 36,784 1 Corresponds to level 1 of the IFRS 7 fair value hierarchy 2 Corresponds to level 2 of the IFRS 7 fair value hierarchy 3 Corresponds to level 3 of the IFRS 7 fair value hierarchy Measurement categories in accordance with IAS 39: Loans and Receivables (LaR), Available-for-Sale (AfS), Financial Liabilities measured at Amortised Cost (FLAC), Financial liabilities measured at fair value (FVTPL), Held for Trading (HfT) Carrying amounts, valuations and fair values according to measurement category With the exception of derivative financial instruments and other finan- cial investments measured at fair value, financial assets and liabilities are measured at amortised cost. Due to the predominantly short-term nature of trade receivables, other assets and liabilities and cash and cash equivalents, the carrying amounts as at the reporting date do not deviate significantly from the fair values. The fair values of financial liabilities measured at amortised cost cor- respond to the cash values of debt-related payments based on current interest rate yield curves (Level 2 in accordance with IFRS 13). The derivative financial instruments measured at fair value are inter- est rate hedges. Here the fair value is equivalent to the cash value of future net payments expected to be received from hedging trans- actions (Level 2 in accordance with IFRS 13) based on current interest rate yield curves. Changes in the value of interest rate hedges meas- ured at fair value in profit or loss in the amount of €2,256 thousand (previous year: €2,968 thousand) are reported under other financial income. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 8 3

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SHOW ROOM d n a S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s e r u s o l c s i d r e h t O 4 8 1 Risk management In risk management, the emphasis is on ensuring compliance with the strategy and, building on this, on identifying and assessing risks and opportunities, as well as on the fundamental decision to manage these risks. Risk management ensures that risks are identified at an early stage and can then be evaluated, communicated promptly and miti- gated. Risk analysis involves the identification and analysis of factors that may jeopardise the achievement of goals. Market risks Liquidity risk The liquidity of the Deutsche EuroShop Group is continuously mon- itored and planned. The subsidiaries regularly have sufficient cash to be able to pay for their current commitments. Furthermore, credit lines and bank overdrafts can be utilised at short notice. A short-term credit line of €150,000 thousand may be used if required. As at 31 December 2018, this credit line had not been used. The credit line is partially secured. The contractually agreed future interest and principle repayments of the original financial liabilities and derivative financial instruments are as follows at 31 December 2018: in € thousand Bank loans and overdrafts Carrying amounts 31.12.2018 Cash flows 2019 Cash flows 2020 to 2023 Cash flows from 2024 1,522,393 76,944 930,360 740,985 The maximum default risk in relation to trade receivables and other assets totalled €17,169 thousand as at the reporting date (previous year: €15,542 thousand). Currency and measurement risk The Group companies operate exclusively in the European Economic Area and conduct the greater part of their business in euro. This does not entail currency risks. With respect to the measurement risk of investment properties, please refer to the sensitivity analysis in section “9. Investment Properties”. Interest rate risk A sensitivity analysis was implemented to determine the effect of potential interest rate changes. Based on the financial assets and liabilities subject to interest rate risk as at the reporting date, this shows the effect of a change on the Group’s equity. As at the reporting date, interest rate risks existed only for credit borrowed and the asso- ciated interest rate hedges. An increase in the market interest rate of 100 basis points would lead to an increase in equity (before taxes) of €8,846 thousand (previous year: €10,498 thousand). The vast majority of loan liabilities have fixed interest terms. As at the reporting date, loans totalling €119,900 thousand (previous year: €195,951 thousand) were hedged using derivative financial instruments. Capital management The Group’s capital management is designed to maintain a strong equity base with the aim of ensuring that its ability to repay its debts and financial well-being are maintained in the future. The Group’s financial policies are also based on the annual payment of a dividend. The amounts relate to all contractual commitments existing as at the reporting date. The variable interest payments from interest rate hedges were determined on the basis of the most recently defined interest rates prior to 31 December 2018. The majority of the trade payables and other financial liabilities reported at the end of the finan- cial year will fall due in 2019. in € thousand Equity Equity ratio (%) Net financial debt 31.12.2018 31.12.2017 2,573,396 2,574,855 55.8% 55.6% 1,406,058 1,440,093 Credit and default risk There are no significant credit risks in the Group. The trade receivables recognised as at the reporting date were predominantly paid up to the date of preparation of the financial statements. Equity is reported here including the compensation claims by limited partners. Net financial debt is determined from the financial liabilities as at the reporting date less cash and cash equivalents. Write-downs on trade receivables are determined on the basis of the credit losses expected over the term. Unless the reasons for doing so can be refuted in individual cases, receivables that are more than 90 days overdue, taking into account the collateral provided by the tenant and valuable collateral, are written down fully. In addition, if information exists that points to an increased risk of default for a tenant, checks are made to decide whether receivables that are less than 90 days overdue should also be written down. During the report- ing year, write-downs of rent receivables of €1,034 thousand (previous year: €876 thousand) were recognised under property operating costs.

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30. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT 33. AUDITOR’S FEES The cash flow statement has been prepared in accordance with IAS 7 and is broken down into operating cash flow, cash flow from operat- ing activities, cash flow from investing activities, and cash flow from financing activities. Cash flow from operating activities is derived from consolidated profit using the indirect method. Net cash flow from operating activities, cash flow from investment activities and cash flow from financing activities are calculated using the direct method. The total fees invoiced by the auditor for the consolidated financial statements for financial year 2018 amounted to €308 thousand ( previous year: €306 thousand), of which €303 thousand (previous year: €302 thousand) related to auditing services. Other audit-related services were also provided by the auditor in the amount of €5 thou- sand (previous year: €4 thousand). 34. DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE The acquisition of Olympia Brno in the previous year is reported under the item “Acquisition of a subsidiary less acquired cash and cash equiv- alents” under Cash flow from investment activity. The item comprises the acquisition costs paid for the stake and the loan less the acquired cash and cash equivalents of €7,421 thousand of Olympia Brno. The transaction costs paid are included in cash flow. The Declaration of Conformity with the German Corporate Govern- ance Code required by section 161 of the Aktiengesetz (AktG – German Public Companies Act) has been issued jointly by the Supervisory Board and the Executive Board, and was made available to share- holders via publication on the Internet in November 2018. Cash and cash equivalents comprise cash and cash equivalents that may be converted into cash at any time. As in the previous year, the financial resources fund as at the reporting date corresponds to the cash and cash equivalents (see section “13. Cash and cash equivalents”). 31. OTHER FINANCIAL OBLIGATIONS There are other financial obligations of €85.4 million arising from service contracts. There are financial obligations of €4.1 million which will arise in 2019 in connection with investment measures in our shopping centers. In addition, as at the reporting date, other financial obligations in the amount of €0.3 million consisted of the rental of office space and car leases. 32. NUMBER OF EMPLOYEES An average of five (previous year: five) staff members were employed in the Group during the financial year. 35. RELATED PARTIES FOR THE PURPOSES OF IAS 24 Deutsche EuroShop’s subsidiaries, joint ventures and associates as well as the members of its Executive Board and Supervisory Board and their close family members are regarded as related parties for the purposes of IAS 24. The remuneration of the Supervisory Board and the Executive Board is described in section “37. Supervisory Board and Executive Board” and also in the remuneration report portion of the combined management report. Fees for service contracts with the ECE Group totalled €20,476 thou- sand (previous year: €16,934 thousand) in the year under review. This amount was partially offset by income from lease agreements with the ECE Group in the amount of €7,280 thousand (previous year: €6,899 thousand). Receivables from ECE were €2,948 thousand, while liabilities were €1,351 thousand. Transactions with related parties involving the provision of goods and services were at standard market rates. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 8 5

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SHOW ROOM d n a 36. VOTING RIGHTS NOTICES In line with section 160 (1) no. 8 AktG, we give notice that the following investments and changes to voting rights have been registered to our Company in conformity with the duty of disclosure in accordance with section 21 of the Wertpapierhandelsgesetz (WpHG – Securities Trading Act). The disclosures were taken from the latest notice by those subject to reporting requirements. It should be noted that the number of voting rights might have since changed within the respective thresholds, with no reporting obligation arising: Shareholder Alexander Otto Johannes Schorr State Street Corporation, Boston, MA, United States of America AROSA Vermögensverwaltungs- gesellschaft m.b.H., Hamburg BlackRock, Inc., Wilmington, DE, United States of America Shareholding report as at 28.05.2015 08.02.2016 08.02.2017 15.12.2017 19.12.2018 Event … (in %) New voting share (in %) of which held as treasury shares (in %) of which indirectly attributable (in %) ... exceeds threshold (15) ... exceeds threshold (3) ... exceeds threshold (3) ... exceeds threshold (15) ... exceeds threshold (3) 17.33 3.37 3.03 15.05 3.18 0.65 1.12 0.00 0.00 0.00 16.68 2.25 3.03 15.05 3.18 1 1 We were also notified by BlackRock, Inc. of a securities lending transaction (1.88%) and contracts for differences (0.55%). All voting rights notices received by Deutsche EuroShop AG can be found on the website of Deutsche EuroShop AG under Investor Rela- tions > Share > Significant voting interests. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s e r u s o l c s i d r e h t O 6 8 1

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Dr. Henning Kreke, Hagen / Westphalia Managing partner, Jörn Kreke Holding KG, Hagen / Westphalia and Kreke Immobilien KG, Hagen / Westphalia • Douglas GmbH, Düsseldorf (Chair) • Thalia Bücher GmbH, Hagen / Westphalia • ENCAVIS AG, Hamburg • Axxum Holding GmbH, Wuppertal • Püschmann GmbH & Co. KG, Wuppertal • Con-Pro Industrie-Service GmbH & Co. KG, Peine • NoventicGmbH, Hamburg • Perma-tec GmbH & Co. KG, Euerdorf • Ferdinand Bilstein GmbH & Co. KG, Ennepetal Alexander Otto, Hamburg CEO, Verwaltung ECE Projektmanagement G.m.b.H., Hamburg • DDR Corp. Inc., Beechwood, USA • Peek & Cloppenburg KG, Düsseldorf • Sonae Sierra Brasil S.A., São Paulo, Brazil • Verwaltungsgesellschaft Otto mbH, Hamburg Klaus Striebich, Besigheim Managing Director, RaRe Advise Klaus Striebich • MEC Metro-ECE Centermanagement GmbH & Co. KG, Düsseldorf (Chair) (until 31.03.2019) • Unternehmensgruppe Dr. Eckert GmbH, Berlin • Klier Hairgroup GmbH, Wolfsburg (since 01.08.2018) • Sinn GmbH, Hagen (since 01.08.2018) • The Food Chain Investor Holding SE, Hamburg (since 01.08.2018) Roland Werner, Hamburg Chairman of the Board of Management, Bijou Brigitte modische Acces- soires AG, Hamburg The remuneration of the members of the Supervisory Board totalled €312 thousand in the period under review (previous year: €312 thousand). 37. THE SUPERVISORY BOARD AND EXECUTIVE BOARD Supervisory Board The Supervisory Board of Deutsche EuroShop AG is composed of nine members. As at 31 December 2018, the following members with membership of other statutory supervisory boards and membership of comparable supervisory bodies of business enterprises in Germany or other countries made up the Supervisory Board: Reiner Strecker, Wuppertal, Chairman Personally liable partner, Vorwerk & Co. KG, Wuppertal • akf Bank GmbH & Co. KG, Wuppertal Karin Dohm, Kronberg im Taunus, Deputy Chairwoman Global Head of Government & Regulatory Affairs, Deutsche Bank AG, Frankfurt • Deutsche Bank Europe GmbH, Frankfurt (Chair) • Deutsche Bank Luxembourg S.A., Luxembourg • Ceconomy AG, Düsseldorf Thomas Armbrust, Reinbek Member of Management, CURA Vermögensverwaltung G.m.b.H., Hamburg • ECE Projektmanagement G.m.b.H. & Co. KG, Hamburg (Chair) • TransConnect Unternehmensberatungs- und Beteiligungs AG, Munich (Chair) • Platinum AG, Hamburg (Chair) • Paramount Group Inc., New York, USA • Verwaltungsgesellschaft Otto mbH, Hamburg Beate Bell, Cologne Managing partner, immoAdvice GmbH, Cologne • Hochtief AG, Essen Manuela Better, Munich Member of the Board of Management, Deka Bank Deutsche Girozen- trale, Frankfurt and Berlin • Deka Investment GmbH, Frankfurt (Deputy Chair) • Deka Immobilien GmbH, Frankfurt (Dep. Chair) • Deka Immobilien Investment GmbH, Frankfurt (Dep. Chair) • Deka Vermögensmanagement GmbH, Frankfurt (formerly: Landesbank Berlin Investment GmbH, Berlin) (Dep. Chair) • S Broker AG & Co. KG, Wiesbaden (Deputy Chair) • S Broker Management AG, Wiesbaden (Deputy Chair) • WestInvest Gesellschaft für Investmentfonds mbH, Düsseldorf (Dep. Chair) • DekaBank Deutsche Girozentrale Luxembourg S.A., Luxembourg D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 8 7

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SHOW ROOM d n a Executive Board Wilhelm Wellner, Hamburg, CEO Olaf Borkers, Hamburg, Member of the Executive Board The remuneration of the Executive Board totalled €1,232 thousand (previous year: €1,113 thousand), which includes performance- related compensation in the amount of €666 thousand (previous year: €642 thousand). The outgoing CEO, Claus-Matthias Böge, is to receive a total of €1,712 thousand under the Long-Term Incentive 2010, which covered the period to 30 June 2015. Since 2017, this amount has been paid at the start of each year in five equal instalments, finishing in 2020. An old-age pension contribution of €83 thousand for Mr Böge was also recognised under expenditure in the previous year. On 1 July 2018, the term of a new Long-Term Incentive (LTI 2018) commenced which did not result in a liability as at the reporting date. For further details, please see the supplementary disclosures on remuneration in the combined management report. 38. EVENTS AFTER THE REPORTING DATE Until 2012, Deutsche EuroShop AG as a holding company had partici- pations in tax-exempt partnerships purely engaged in asset manage- ment, and in this context, took advantage of the so-called “extended trade tax deduction”. In a ruling dated 19 October 2010, the German Federal Fiscal Court (BFH) rejected any option to claim the extended trade tax deduction for cases in which the property is not held by the company itself but through non-commercial, asset management partnerships as is the case with Deutsche EuroShop AG. Applying this ruling, the extended trade tax deduction was denied for the years 2007 to 2011 and Deutsche EuroShop AG was assessed for the corresponding trade tax. Deutsche EuroShop AG appealed against this tax assessment. In a resolution adopted on 25 September 2018 (published on the BFH website on 27 March 2019), the Grand Senate of the Federal Fiscal Court ruled contrary to the decision handed down on 19 October 2010 as part of pending appeal proceedings that it is permissible to claim the extended trade tax deduction even if the property is held through a partnership purely engaged in asset management. As a result of the resolution adopted by the Grand Senate of the BFH, we expect our appeals against the relevant tax assessments to be successful. Based on a provisional calculation, this would result in a trade tax refund (including interest on the refund until 31 March 2019) of around €9.6 million. No further significant events occurred between the balance sheet date and the date of preparation of the financial statements. Hamburg, 28 March 2019 Deutsche EuroShop AG The Executive Board Wilhelm Wellner Olaf Borkers S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / s e r u s o l c s i d r e h t O 8 8 1

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SHAREHOLDINGS List of shareholdings in accordance with section 313 (2) of the Handelsgesetzbuch (HGB – German Commercial Code) as at 31 December 2018: Company name and domicile Fully consolidated companies: DES Verwaltung GmbH, Hamburg DES Management GmbH, Hamburg DES Shoppingcenter GmbH & Co. KG, Hamburg 1 A10 Center Wildau GmbH, Hamburg Main-Taunus-Zentrum KG, Hamburg Forum Wetzlar KG, Hamburg Objekt City-Point Kassel GmbH & Co. KG, Hamburg 1 Stadtgalerie Hameln GmbH & Co. KG, Hamburg 1 Altmarkt-Galerie Dresden GmbH & Co. KG, Hamburg 1 Einkaufs-Center Galeria Baltycka G.m.b.H. & Co.KG, Hamburg Einkaufs-Center Galeria Baltycka G.m.b.H. & Co. KG, Sp. kom., Warsaw, Poland CASPIA Investments Sp. z o.o., Warsaw, Poland City-Point Beteiligungs GmbH, Hamburg Olympia Brno s.r.o., Prague, Czech Republic Joint ventures: Allee-Center Magdeburg KG, Hamburg Stadt-Galerie Passau KG, Hamburg CAK City Arkaden Klagenfurt KG, Hamburg Saarpark Center Neunkirchen KG, Hamburg EKZ Eins Errichtungs- und Betriebs Ges.m.b.H. & Co OG, Vienna, Austria Immobilienkommanditgesellschaft FEZ Harburg, Hamburg Einkaufs-Center Arkaden Pécs KG, Hamburg Associates: EKZ Vier Errichtungs- und Betriebs Ges.m.b.H., Vienna, Austria Investees: Ilwro Holding B.V., Amsterdam, Netherlands 2 1 For these companies, exemption from the disclosure obligation in accordance with section 264b HGB was made use of. 2 As at 31 December 2018, the Company reported equity of €93 thousand and a loss of €26 thousand. Interest in equity 100% 100% 100% 100% 52.01% 65% 100% 100% 100% 74% 99.99% 100% 100% 100% 50% 75% 50% 50% 50% 50% 50% 50% 33.33% D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 8 9

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SHOW ROOM d n a BASIS FOR OPINION We conducted our audit of the consolidated financial statements and combined management report in accordance with section 317 HGB and the EU Audit Regulation (No 537 / 2014; hereinafter “EU AR”), taking into account the German generally accepted standards for the auditing of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Our responsibility pursuant to these provisions and principles is described in more detail in the “RESPONSIBILITY OF THE AUDITOR FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND COMBINED MANAGEMENT REPORT” section of our auditor’s report. We are independent from the Group companies in line with the provisions of European and German commercial and professional law and have fulfilled our other professional duties under German law in line with these requirements. Furthermore, in accordance with article 10 (2) point f) EU AR, we hereby declare that we have not provided any prohibited non-audit services pursuant to article 5 (1) EU AR. We believe that the audit evi- dence we have obtained is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements and combined management report. KEY AUDIT MATTERS IN THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Key audit matters are those matters that, in our professional judge- ment, were of most significant impact in our audit of the consolidated financial statements for the financial year from 1. Januar 2018 to 31. Dezember 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, but we do not provide a separate opinion on these matters. We identified the following as key audit matters 1. Measurement of investment properties 2. Recognition and measurement of deferred taxes INDEPENDENT AUDITOR’S REPORT To Deutsche EuroShop AG, Hamburg AUDIT REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AND COMBINED MANAGEMENT REPORT Opinion We have audited the consolidated financial statements of Deutsche EuroShop AG, Hamburg and its subsidiaries (the Group), comprising the consolidated balance sheet as at 31. Dezember 2018, the consoli- dated income statement, the statement of comprehensive income, the statement of changes in equity, the consolidated cash flow statement for the financial year from 1. Januar 2018 to 31. Dezember 2018 as well as the notes to the consolidated financial statements, including a summary of relevant accounting methods. We have also audited the combined management report (Company management report and Group management report) of Deutsche EuroShop AG for the finan- cial year from 1. Januar 2018 to 31. Dezember 2018. In accordance with the provisions of German law, we have not audited the content of the statements listed under “OTHER INFORMATION” in the combined management report. In our opinion, based on the findings of our audit: • • the enclosed consolidated financial statements comply in all material respects with IFRS as adopted by the EU and the sup- plementary provisions of German law required to be applied under section 315e (1) HGB and give a true and fair view of the net assets and financial position of the Group as at 31. Dezember 2018 as well as its results of operations for the financial year from 1. Januar 2018 to 31. Dezember 2018 in accordance with these requirements; and the enclosed combined management report as a whole provides a suitable understanding of the Group’s position. This combined management report is consistent with the consolidated financial statements in all material respects, complies with the provisions of German law and suitably presents the opportunities and risks of future development. Our opinion on the combined manage- ment report does not extend to the content of the statements listed under “OTHER INFORMATION” in the combined manage- ment report. In accordance with section 322 (3) sentence 1 HGB, we hereby declare that our audit has not led to any reservations with respect to the reg- ularity of the consolidated financial statements or combined manage- ment report. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t r o p e r s ’ r o t i d u A t n e d n e p e d n I 0 9 1

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D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1. MEASUREMENT OF INVESTMENT 2. RECOGNITION AND MEASUREMENT PROPERTIES OF DEFERRED TAXES Matter Deutsche EuroShop AG reports investment properties totalling €3,891.7 million in its consolidated financial statements as at 31. Dezember 2018 and holds a participating interest in further material investment properties through its stakes in joint ventures and associates. The shopping center properties held as investment property are measured at fair value in accordance with IAS 40. In financial year 2018, expenses from this measurement of €53.3 million was recognised in the income statement. In addition, the profit / loss of equity-accounted joint ventures and associates includes a measure- ment loss of €2.6 million. The respective fair value measurements in accordance with IFRS 13 are determined on the basis of the discounted cash flow method by one of the external appraisers appointed by Deutsche EuroShop AG. They are level 3 measurements pursuant to IFRS 13 that are based on input factors not materially observable on the market. Forecasts about future cash flows from rental income and management, maintenance and administrative costs as well as the derivation of the capitalisation interest rate involve significant decisions based on personal judge- ment and estimates that have a material effect on the consolidated financial statements. The disclosures provided by Deutsche EuroShop AG on the measure- ment of investment properties are included in the sections “7. Sig- nificant accounting policies and valuation methods / Investment properties” and “9. Investment properties” of the notes to the consol- idated financial statements. Matter Deutsche EuroShop AG reports deferred tax liabilities totalling €452.6 million in its consolidated financial statements as at 31. Dezem- ber 2018. The recognition and measurement of deferred taxes in the consolidated financial statements of Deutsche EuroShop AG take account of complex tax matters in connection with property companies under the legal form of commercial partnerships. The disclosures provided by Deutsche EuroShop AG on the determi- nation and measurement of deferred taxes are included in sections “7. Significant accounting policies and valuation methods / Investment properties” and “17. Deferred tax liabilities” of the notes to the consol- idated financial statements. Auditor’s review We acknowledged the calculation of deferred taxes with respect to their compliance with IAS 12. We also analysed the confirmation let- ter of the tax consultant. We are satisfied with the competence and independence of the tax consultant assisting Deutsche EuroShop AG in the determination of deferred taxes. We also examined the determi- nation method used to measure and report deferred taxes, whereby we compared the values used with the tax calculations of the company and the tax consultant by means of samples and verified the validity of the tax bases utilised. In auditing the deferred taxes, we consulted internal specialists in the field of deferred taxes. OTHER INFORMATION Auditor’s review As part of our audit, we obtained evidence of the externally appointed appraiser’s competence and independence. The legal representatives are responsible for other information. This includes: We examined the appraisals in respect of their appropriateness, consistency, correct implementation of measurement methods and validity of input factors (leased space and rental income) by means of samples. In addition, we acknowledged the projected values and parameters (rental income, future vacancy rates, management, maintenance and administrative costs and interest rates) used in the valuation and are satisfied with the suitability of the decisions based on personal judgement and estimates. In performing the audit, we consulted internal specialists in the field of real estate valuation. • • • • the separately published declaration on corporate governance referred to in the “Declaration on corporate governance” section of the combined management report; the Corporate Governance Report referred to in the “Declaration on corporate governance” section of the combined management report pursuant to No. 3.10 of the Deutscher Corporate Govern- ance Kodex (German Corporate Governance Code), the other sections of the annual report, with the exception of the audited consolidated financial statements and combined man- agement report as well as our auditor’s report; the responsibility statement in accordance with section 297 (2) sentence 4 HGB for the consolidated financial statements and responsibility statement in accordance with section 315 (1) sen- tence 5 HGB for the combined management report. Our opinion on the consolidated financial statements and combined management report does not extend to the other information and we do not provide an opinion or any other form of audit conclusion in this regard. 1 9 1

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SHOW ROOM d n a In connection with our audit of the consolidated financial statements, we have a responsibility to read the other information and determine whether the other information The supervisory board is responsible for monitoring the Group’s accounting process for the preparation of the consolidated financial statements and combined management report. RESPONSIBILITY OF THE AUDITOR FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS AND COMBINED MANAGEMENT REPORT Our objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatements, whether due to fraud or error, and whether the com- bined management report as a whole provides a suitable understand- ing of the Group’s position, is consistent with the consolidated financial statements and the findings of the audit in all material respects, complies with the provisions of German law and suitably presents the opportunities and risks of future development, and to provide an auditor’s report containing our opinion on the consolidated financial statements and combined management report. Reasonable assurance is a high level of assurance, but is not a guar- antee that an audit performed in accordance with section 317 HGB and the EU AR, taking into account the German generally accepted standards for the auditing of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW), will always detect a material misstatement. These can arise from fraud or error and are consid- ered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and combined management report. • contains material discrepancies with the consolidated financial statements, combined management report or the knowledge acquired through our own audit; or • appears to be misstated in any other way. If, on the basis of the work we have carried out, conclude that this other information contains a material misstatement, we are obliged to report this. We have nothing to report in this regard. RESPONSIBILITY OF THE LEGAL REPRESENT- ATIVES AND SUPERVISORY BOARD FOR THE CONSOLIDATED FINANCIAL STATEMENTS AND COMBINED MANAGEMENT REPORT The legal representatives are responsible for preparing the consol- idated financial statements in compliance with IFRS as adopted by the EU and the supplementary provisions of German law required to be applied under section 315e (1) HGB, and for ensuring that the consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. Further, the legal represent- atives are responsible for any internal control they deem relevant to the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the legal repre- sentatives are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. In addition, they are responsible for recognising the ability to continue as a going concern on the going concern basis of accounting, unless there is an intent to liquidate the Group or discontinue business operations or there is no realistic alternative to these options. Furthermore, the legal representatives are responsible for preparing a combined management report that as a whole provides a suitable understanding of the Group’s position, is consistent with the consol- idated financial statements in all material respects, complies with the provisions of German law and suitably presents the opportunities and risks of future development. The legal representatives are also responsible for any precautions and measures (systems) they deem necessary to enable the combined management report to be prepared in accordance with the applicable provisions of German law, and to enable sufficient and appropriate evidence to be provided for the state- ments in the combined management report. S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / t r o p e r s ’ r o t i d u A t n e d n e p e d n I 2 9 1

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As part of our audit, we exercise professional judgement and maintain professional scepticism. We also: • identify and assess the risks of material misstatement of the consolidated financial statements and combined management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opin- ion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrep- resentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit of the consolidated financial statements and precautions and measures relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opin- ion on the effectiveness of these systems; • evaluate the appropriateness of accounting policies used and the reasonableness of estimates and related disclosures made by the legal representatives; • conclude on the appropriateness of the legal representatives’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the consoli- dated financial statements and combined management report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; • evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that gives a true and fair view of the net assets, financial position and results of operations of the Group in compliance with IFRS as adopted by the EU and the supplementary provisions of German law required to be applied under section 315e (1) HGB; • obtain sufficient and appropriate audit evidence for the account- ing information of the companies or business activities within the Group in order to express an opinion on the consolidated financial statements and combined management report. We are responsible for providing guidance on, monitoring and perform- ing the audit of the consolidated financial statements. We bear sole responsibility for our opinion; • evaluate the consistency of the combined management report with the consolidated financial statements, its legal counterpart and the understanding it provides of the Group’s position; • perform audit procedures for the forward-looking statements made by the legal representatives in the combined manage- ment report. On the basis of sufficient and appropriate audit evi- dence, we acknowledge in particular the significant underlying assumptions of the forward-looking statements made by the legal representatives and evaluate the appropriate derivation of the forward-looking statements based on these assumptions. We do not express a separate opinion on the forward-looking statements or the underlying assumptions. There is a significant unavoidable risk that future events will differ materially from the forward-looking statements. We communicate with those responsible for monitoring regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any deficiencies in internal control that we identify during our audit. We provide those responsible for monitoring with a statement that we have fulfilled the relevant independence requirements and commu- nicate with them regarding all relationships and other matters which might reasonably be considered to have an effect on our independence as well as the associated precautions taken. From the matters communicated with those responsible for monitor- ing, we determine those matters that were of most significance in the audit of the consolidated financial statements for the current reporting period and are therefore the key audit matters. We describe these mat- ters in the auditor’s report unless law or regulation precludes public disclosure about the matter. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 9 3

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SHOW ROOM d n a OTHER APPLICABLE LEGAL REQUIREMENTS Other disclosures according to article 10 EU AR We were elected as auditor by the Annual General Meeting on 28 June 2018. We were appointed by the Chairman of the Audit Committee on 28 August 2018. We have audited the consolidated financial statements of Deutsche EuroShop AG over a continuous period since the 2005 financial year. We hereby declare that the opinion in this auditor’s report is consist- ent with the supplementary report issued to the Audit Committee in accordance with article 11 EU AR (audit report). RESPONSIBILITY STATEMENT BY THE EXECUTIVE BOARD We declare that to the best of our knowledge, in line with the account- ing policies to be applied, the consolidated financial statements pres- ent a true and fair view of the net assets, financial position and results of operations of the Group and the Group management report presents the situation of the Group and the course of business including busi- ness performance which is a fair and accurate view, and describes the essential opportunities and risks of the likely development of the Group. RESPONSIBLE AUDITOR Hamburg, 28 March 2019 The auditor responsible for the audit is Christoph Hyckel. Hamburg, 11 April 2019 BDO AG Wirtschaftsprüfungsgesellschaft (signed) Reese (signed) Hyckel Auditor Auditor Wilhelm Wellner Olaf Borkers S T n E M E T a T S l a i C n a n i F D E T a D i l O S n O C / d r a o B e v i t u c e x E e h t y b t n e m e t a t S y t i l i b i s n o p s e R 4 9 1

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SHOW ROOM d n a GLOSSARY Adverstising value equivalence Index number for the assessment of the monetary value of an editorial article. It is based on the advertising rate of the medium. Annual financial statement Under German (HGB) accounting principles, the annual financial state- ments consist of a company’s balance sheet, profit and loss account, the notes to the financial statements and the manage ment report. The annual financial statements of a public company are prepared by its executive board, audited by a certified public accountant (in Germany: Wirtschaftsprüfer) and adopted by the super visory board. Coverage Information provided on a listed public company by banks and financial analysts in the form of studies and research reports. DAX Germany’s premier equity index. The composition of the DAX is estab- lished by Deutsche Börse AG on the basis of the share prices of the 30 largest German companies listed in the Prime Standard in terms of market capitalisation and market turnover. Discounted-cashflow-modelL (DCF) Method for the assessment of companies which is used to determine the future payments surplusses and discount them to the valuation date. Benchmark A standard of comparison, e.g. an index which serves as a guideline. Dividend The share of the distributed net profit of a company to which a share- holder is entitled in line with the number of shares he or she holds. Cash flow per share (CFPS) The cash flow per share is calculated by dividing the cash flow by the number of shares issued by a company. The cash flow per share is taken as the basis for calculating the price / cash flow ratio. EBIT Earnings before interest and taxes. DES calculation: EBT excluding net finance costs and measurement gains / losses (also see the consolidated income statement). Class of assets Division of the capital and real estate market into different classes of assets or asset segments. EBT Earnings before Taxes. Consumer price index Also called the cost-of-living index, this is calculated in Germany by the Federal Statistical Office on a monthly basis. The CPI is the most important statistical indicator of a change in prices; the price of a basket of goods during a given period is compared with the price of the same basket during the base year. This change is also known as the inflation rate. Core Designation of a real estate investment and / or individual proper- ties as well as the name of an investment style. The term refers to the relationship between risk and return. Core designates mature, transparent, sufficiently large markets or high-quality, wellsituated properties that are fully let on a long-term basis to tenants with strong credit ratings. Other return / risk categories are valueadded and opportunistic. Corporate governance The rules for good, value-driven corporate management. The objective is to control the company’s management and to create mechanisms to oblige executives to act in the interests of their shareholders. Covenants A clause in a loan agreement which pertains to and contractually defines the binding warranties to be adhered to by the borrower during the term of a loan. EBT (excluding measurement gains / losses) DES calculation: EBT less measurement gains / losses (including at-equity profit / loss) and less the deferred taxes included in at- equity profit / loss. E-commerce Direct commercial relationship between supplier and buyer via the internet including the provision of services. EPRA European Public Real Estate Association: EPRA is an Amsterdam-based organisation that represents the interests of the major European real estate companies in the public sphere and supports the development and market presence of European real estate corporations. EPRA earnings EPRA earnings represent sustained operating earnings and thus lay the foundation for a real estate company’s ability to pay a dividend. To cal- culate this, the profit / loss for the year is adjusted to reflect any income components that have no sustained, recurring impact on operational performance. The DES calculation is performed using the currently valid version of the EPRA Best Practice Recommendations, which can be found at http://www.epra.com/regulation-and-reporting/bpr/ E C i v R E S / y r a s s o l G 6 9 1

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EPRA NAV EPRA NAV measures the net asset value of a company based on a busi- ness model with a long-term focus. To do so, Group equity is adjusted for assets and liabilities that are unlikely to be realised if held over the long term. The DES calculation is performed using the currently valid version of the EPRA Best Practice Recommendations, which can be found at http://www.epra.com/regulation-and-reporting/bpr/ International financial reporting standards (IFRS) International Financial Reporting Standards are based on International Accounting Standards (IASs). Since 1 January 2005, listed companies have been required to apply IFRSs. IASs / IFRSs focus on the deci- sion-usefulness of accounts. The key requirement with regard to the annual financial statements is fair presentation that is not qualified by aspects of prudence or risk provision. Fair value The Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Loan-to-value ratio (LTV ratio) Ratio of net financial liabilities (financial liabilities less cash and cash equivalents) to non-current assets (investment properties and invest- ments accounted for using the equity method). Food court Catering area of a shopping center, in which different vendors sell food at stations about a common seating area. Mall Row of shops in a shopping center. Free cash flow The surplus cash generated from operating activities recognised in the profit and loss account. This expresses a company’s internal financing power, which can be used for investments, the repayment of debt, dividend payments and to meet funding requirements. Funds from operations (FFO) Inflow of funds from operations used to finance our ongoing invest- ments in portfolio properties, scheduled repayments on our bank loans and the annual distribution of dividends. DES calculation: Consolidated profit after adjustment for measure- ment gains / losses (including at-equity profit / loss), the non-cash expense of conversion rights and deferred tax expense. Gearing Ratio which shows the relationship between liabilities and equity. Market capitalisation The current quoted price for a share multiplied by the number of shares listed on the stock. MDAX German mid-cap index comprising the 50 most important securities after the DAX members. exchange. Market capitalisation is calculated for individual companies, sectors, and entire stock markets, thus ena- bling comparisons bet ween them. Measurement gains / losses DES calculation: Measurement gains / losses comprise unreal- ised changes in the market value of properties held as a financial investment (investment properties) before taxes. In the case of fully consolidated companies, the portion of the company that does not belong to the Group is deducted. Measurement gains / losses of asso- ciates and joint ventures accounted for using the equity method are contained in the at-equity profit / loss. Hedge accounting Financial mapping of two or more financial instruments that hedge one another. Measurement gains / losses (including at-equity profit / loss) DES calculation: Measurement gains / losses plus the measurement gains / losses included in at-equity profit / loss. Multi channeling Using a combination of online and offline communication tools in marketing. ifo business climate index The ifo Business Climate Index is an important forward indicator for economic development in Germany. In order to calculate the index, the ifo Institute asks approximately 7.000 companies every month for their assessment of the economic situation and their short-term corporate planning. Interest rate swap Exchange of fixed and variable interest pay able on two nominal amounts of capital for a fixed period. By means of an interest rate swap, interest rate risks may be controlled actively. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 9 7

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SHOW ROOM d n a Net asset value (NAV) The value of an asset after deduction of liabilities. With regard to shares, the NAV constitutes their intrinsic value. The net net asset value (NNAV) is calculated by deducting deferred taxes from the NAV. Net finance costs Net finance costs at DES comprise the following income statement items: Share of the profit or loss of associates and joint ventures accounted for using the equity method, interest expense and income, the share of profit attributable to limited partners, income from invest- ments and all other financial income and expenditure. Peer-group A share price performance benchmark consisting of companies from similar sectors, put together on the basis of individual criteria. Performance The term performance describes the percentage appreciation of an investment or a securities portfolio during a given period. Retail space Space in a building and / or an open area that is used for sales by a retail operation and that is accessible to customers. Service areas required for operational and legal purposes are not taken into account, nor are stairways or shop windows. The retail space is part of the leasable space of a business. Roadshow Corporate presentations to institutional in vestors. Savings ratio Share of savings of the income available in households. Subprime Mortgage loan to borrower with a low degree of creditworthiness. TecDAX The successor to the NEMAX 50, comprising the 30 largest German listed technology securities in terms of market capitalisation and market turnover. Volatility Statistical measure for price fluctuations. The greater the fluctuations in the price of a security, the higher its volatility. Xetra An electronic stock ex-change trading system that, in contrast to floor trading, uses and open order book, thus increasing market transpar- ency. The trading hours are currently 9,00 a.m. to 5,30 p.m. E C i v R E S / y r a s s o l G 8 9 1

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LEGAL Published by Deutsche EuroShop AG, Heegbarg 36, 22391 Hamburg Phone.: +49 (0)40 - 41 35 79 0, Fax: +49 (0)40 - 41 35 79 29 www.deutsche-euroshop.com, ir@deutsche-euroshop.com Editor in chief Patrick Kiss Editorial management Nicolas Lissner Editors responsible Rolf Bürkl, Torben Dietrich, Geritt Egg, Richard Haimann, Dr. Ruth Vierbuchen Concept Deutsche EuroShop AG, Hamburg Art Direction & Design Silvester Group, Hamburg Pictures Dina Avila, B8TA, Deutsche EuroShop, ECE, istockpfoto.com, gettyimages, Patrick Kiss, Nicolas Lissner, Axel Martens, Ramoprimo / Cotton Republic, Vorwerk Digital prepress Dahmer & Dörner, Hamburg Responsible for the editorial content Deutsche EuroShop AG, Hamburg DISCLAIMER Information on wording: Wherever any terms indicating the male gender only (he, him, etc.) have, in the interests of simplicity, been used in this Annual Report, such references should be construed as referring equally to the female gender. Author contributions: Sections of text bearing an author’s name do not necessarily reflect the views of Deutsche EuroShop AG. The authors in question are responsible for the content of the texts. Trademarks: All trademarks and brand or prod- uct names mentioned in this Annual Report are the property of their respective owners. This applies in particular to DAX, MDAX, SDAX, TecDAX and Xetra, which are registered trademarks and the property of Deutsche Börse AG. Rounding and rates of change: Percentages and figures stated in this report may be subject to rounding differences. The prefixes before rates of change are based on economic considerations: improvements are indicated by a plus (+); deteriorations by a minus (–). Forward-looking statements: This Annual Report contains for- ward-looking statements based on estimates of future developments by the Executive Board. The statements and forecasts represent estimates based on all of the information available at the current time. If the assumptions on which these statements and forecasts are based do not materialise, the actual results may differ from those currently being forecast. Publications for our shareholder: Annual Report (in English and German), Quarterly Statement 3M 2018, Quarterly State- ment 9M 2018 and Interim Report H1 2018 (in English and German). Online Annual Report: The Deutsche EuroShop Annual Report can be downloaded in PDF format or accessed as an interactive online report at deutsche-euroshop.com. This Annual Report is also available in German. In the event of conflicts the German-language version shall prevail. D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 1 9 9

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SEPTEMBER 05.09. – 06.09. Deutsche EuroShop Real Estate Summer, Frankfurt 20.09. 23.09. Societe Generale Pan European Real Estate Conference, London Goldman Sachs & Berenberg German Conference, Munich Baader Investment Conference, Munich 24.09. NOVEMBER 13.11. 18.11. 21.11. Quarterly Statement 9M 2019 DZ Bank Equity Conference, Frankfurt Roadshow Paris, M. M. Warburg Our financial calendar is updated continuously. Please check our website for the latest events: http://www.deutsche-euroshop.com/ir SHOW ROOM d n a FINANCIAL CALENDAR 2019 JANUARY 10.01. – 11.01. Oddo BHF Forum, Lyon 22.01. Kepler Cheuvreux GCC, Frankfurt FEBRUARY 27.02. Preliminary Results 2018 MARCH 25.03. 27.03. 28.03. 28.03. APRIL 04.04. 29.04. May 15.05. 17.05. 24.05. Roadshow Munich, Berenberg Roadshow Zurich, M. M. Warburg BAML European Real Estate Conference, London Commerzbank German Real Estate Forum, London ESN Market Solutions Forum, Paris Publication of the Annual Report 2018 Quarterly Statement 3M 2019 Kepler Cheuvreux German Property Day, Paris HSBC German Real Estate Conference, Frankfurt JUNE 06.06. 12.06. 18.06. – 19.06. Roadshow Copenhagen & Stockholm, Pareto 26.06. Deutsche Bank dbAccess Conference, Berlin Annual General Meeting, Hamburg EPRA Corporate Access Day, London AUGUST 15.08. 22.08. 29.08. Half-year Financial Report 2019 Montega Hamburg Investment Day, Hamburg Commerzbank Sector Conference, Frankfurt E C i v R E S / 9 1 0 2 r a d n e l a C l a i c n a n i F 0 0 2

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MULTI-YEAR OVERVIEW in € million Revenue EBIT Net finance costs Measurement gains / losses EBT Consolidated profit FFO per share (€) Earnings per share (€) 1 Equity 2 Liabilities Total assets Equity ratio (%) 2 Cash and cash equivalents 2009 127.6 110.7 -55.9 -14.8 40.1 34.4 1.40 0.88 2010 144.2 124.0 -60.2 33.1 97.0 -7.8 1.35 -0.17 2011 190.0 165.7 -79.1 50.1 136.7 99.0 1.61 1.92 2012 5 2013 5 2014 5 2015 5 2016 5 2017 5 2018 5 178.2 151.6 -62.1 13.9 103.4 122.5 1.68 2.36 188.0 165.8 -34.1 56.0 187.6 171.0 2.08 3.17 200.8 177.5 -39.8 77.0 214.7 177.4 2.23 3.29 202.9 176.3 -2.1 220.6 394.7 309.3 2.29 5.73 205.1 178.6 -13.9 116.8 281.5 221.8 2.41 4.11 218.5 192.4 -35.1 8.6 165.8 134.3 2.54 2.31 225.0 199.1 -41.3 -55.7 102.1 79.4 2.43 1.29 1,044.4 1,441.5 1,473.1 1,606.1 1,642.4 1,751.2 2,061.0 2,240.7 2,574.9 2,573.4 1,067.8 1,522.1 1,752.0 1,741.5 1,752.5 1,741.0 1,790.6 1,873.8 2,052.1 2,036.8 2,112.1 2,963.6 3,225.1 3,347.6 3,394.9 3,492.2 3,851.6 4,114.5 4,627.0 4,610.2 49.5 81.9 48.6 65.8 45.7 64.4 48.0 161.0 48.4 40.8 50.1 58.3 53.5 70.7 54.5 64.0 55.6 106.6 55.8 116.3 Net asset value 3 1,006.9 1,361.1 1,427.3 1538,9 1,650.4 1,789.4 2,110.6 2,332.6 2,668.4 2,667.5 Net asset value per share (€) 3 Dividend per share (€) 26.63 1.05 26.36 1.10 27.64 1.10 28,53 1,20 30.59 1.25 33.17 1.30 39.12 1.35 43.24 1.40 43.19 1.45 43.17 1.50 4 1 undiluted 2 incl. non controlling interests 3 since 2010: EPRA 4 proposal 5 at-equity consolidation QUARTERLY FIGURES 2018 in € million Revenue EBIT Net finance costs Measurement gains / losses EBT Consolidated profit EPS (€) 1 1 undiluted Q1.18 Q2.18 Q3.18 Q4.18 56.0 49.0 -9.6 -1.2 38.2 30.4 0.49 55.5 49.0 55.4 48.5 -10.3 -10.5 -7.8 30.9 24.9 0.40 -4.2 33.8 26.9 0.44 58.1 52.6 -10.9 -42.5 -0.8 -2.8 -0.04 D E U T S C H E E U R O S H O P / A n n u a l R e p o r t / 2 0 1 8 2 0 1

Introduction and overview

Content

Shopping

Center overview

Investor relations

Combined management report

Consolidated financial statements

Service