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basic information about the group/economic review 0 2 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 basic information about the group group business model 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 deutsche euroshop is an aktiengesellschaft (public company) under business procedures are laid down in its rules of procedure and in its german law. the company’s registered office is in hamburg. deutsche schedule of responsibilities. euroshop is the only public company in germany to invest solely in shopping centers in prime locations. a total of 21 shopping centers in the management indicators are based on the targets of having shopping germany, austria, poland, hungary and the czech republic are held in centers with sustainable and stable value growth and a high liquidity the real estate portfolio. the group generates its reported revenue from surplus generated by long-term leases. these indicators are revenue, rental income on the space it lets in the shopping centers. ebit (earnings before interest and taxes), ebt (earnings before taxes) excluding measurement gains / losses and ffo (funds from operations). 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. the operational management economic review of the shopping centers is contracted out to external service providers under agency agreements. macroeconomic and sector-specific conditions the group managing company is deutsche euroshop ag. it is responsi- the positive outlook on a labour market that remains robust and low ble for corporate strategy, portfolio and risk management, financing and interest rates are keeping private consumption at a high level. the communication. the deutsche euroshop group has a central structure unemployment rate at the end of july 2018 stood at 3.4%. private and lean personnel organisation. consumption remains a driver of economic development in germany. the share capital amounted to €61,783,594 on 30 june 2018 and was online spending) rose by 1.4% year-on-year in real terms in the first composed of 61,783,594 no-par value registered shares. the notional six months of 2018. online retail continued to make a significant con- according to the federal statistical office, german retail sales (including value of each share is €1.00. objectives and strategy tribution towards growth in this context. in contrast, brick-and-mortar retail operations recorded a markedly slower rate of growth and also drops in revenue in some segments. the management focuses on investments in high-quality shopping revenue growth thanks to portfolio expansion centers in city centers and established locations offering stable long- revenue rose in the reporting period by 5.5% to €111.6 million, thus term value growth. a key investment target is the generation of high meeting our expectations. this growth was attributable in the main to surplus liquidity from long-term leases in shopping centers, much of the olympia center in brno, which has been included in the consoli- which is paid out to shareholders in the form of an annual dividend. to dated figures since 31 march 2017 and contributed €5.4 million of the this end, the company invests its capital in shopping centers in different rise in revenue. the revenue generated by our portfolio properties rose european regions in accordance with the principle of risk diversification. by €0.4 million (+0.4%) in comparison with the first six months of the germany is the main focus for investment. indexed and turnover-linked previous year. commercial rents ensure that high earnings targets are achieved. the company may invest up to 10% of equity in joint ventures in shop- center operational costs in the reporting period, comprised mainly of ping center projects in the early stages of development. center management fees, non-allocable ancillary costs, maintenance and write-downs of rent receivables, rose by €0.7 million to €11.1 million new investments should be financed from a balanced mix of sources, and were in line with projections. operating and administrative costs for property on target 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.

0 4 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 other operating expenses of €3.0 million increase in income taxes other operating expenses totalled €3.0 million, €0.2 million lower than taxes on income and earnings amounted to €14.0 million (previous the previous year’s level. in the prior-year period, higher consultancy year: €14.2 million). of this, €3.4 million (previous year: €2.6 million) costs in particular were recorded in connection with the acquisition of was attributable to taxes to be paid and €10.6 million (previous year: the olympia center in brno. €11.6 million) to deferred taxes. ebit grows at same rate as revenue operating profit growth recorded earnings before interest and taxes (ebit) at €98.0 million were greater operating profit excluding measurement effects (epra earnings) grew than the figure for the previous year (€92.5 million), to a significant by €68.0 million to €73.6 million. due to the higher number of no-par- extent due to the acquisition of the olympia center. value shares issued, epra earnings, at €1.19 (previous year: €1.20), financial gains or losses excluding measurement effects on the up remained at the prior-year level. the increase in operating profit is not reflected in the consolidated profit as a result of the measurement loss. standing at €55.3 million, consolidated profit was €0.9 million down financial gains or losses (excluding measurement gains / losses) on the previous year (€56.2 million) and earnings per share fell from changed by €0.3 million from €-19.5 million to €-19.2 million. the €0.99 to €0.89. at-equity profit recognised in financial gains or losses, at €15.1 million, remained almost at the prior-year level. the interest expense of group epra earnings companies declined by €0.3 million. lower interest costs due to loan repayments and the cessation of interest payments on the convertible bond stood in contrast to the additional interest expense for the financ- ing of the olympia center. other financial gains or losses of €1.5 million, which consisted mainly of a measurement gain on an interest rate swap for the financing of the altmarkt-galerie dresden, remained on par with the same period in the previous year. ebt (excluding measurement gains / losses) up significantly by 8.0% ebt (excluding measurement gains / losses) rose from €73.0 million to €78.9 million (+8.0%) due in particular to portfolio expansions. measurement gains / losses investment properties * measurement gains / losses derivative financial instruments * 01.01. – 30.06.2018 01.01. – 30.06.2017 in € thou- sand per share in € in € thou- sand consolidated profit 55,270 0.89 56,233 per share in € 0.99 9,635 0.16 2,608 0.05 measurement gains / losses influenced by modernisation in- vestments and reassessment of the expansion of galeria baltycka deferred taxes in respect of epra adjustments ** 10,335 0.17 10,607 the measurement loss of €-9.6 million (previous year: €-2.6 million) epra earnings 73,572 1.19 67,973 acquisition costs 0 0.00 276 -1,668 -0.03 -1,751 -0.03 0.00 0.19 1.20 includes investment costs incurred by our portfolio properties (includ- ing the at-equity portion). in the second quarter, these costs were comparably higher due to the start of the “at-your-service” and “mall beautification” programmes. due to the current project and approval weighted number of no-par-value shares issued 61,783,594 56,754,256 status, we also decided not to proceed with the expansion concept for * the galeria baltycka to the extent originally planned. part of the pre- liminary costs, amounting to €5.0 million, was therefore written down ** including the share attributable to equity-accounted joint ventures and associates affects deferred taxes on investment properties and derivative financial instruments on a one-off basis. 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. ffo rose from €70.9 mil- lion to €75.5 million, while ffo per share declined slightly from €1.25 to €1.22 because of the higher number of shares.

report on events after the reporting date/outlook 0 6 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 report on events after the reporting date according to the gfk market research institute, the uncertainty is also reflected in consumers’ economic expectations, which are continuing to fall. in contrast to this, income expectations have not changed and no further significant events occurred between the balance sheet date remain positive thanks to a labour market that remains robust. the gfk of 30 june 2018 and the date of preparation of the financial statements. therefore reaffirms its forecast and expects a real increase in consumer outlook economic conditions spending in germany of 1.5%. in terms of revenues in the bricks-and- mortar retail trade, the gfk anticipates real growth of 1.0% in germany, 3.0% in austria, 5.6% in poland, 6.5% in the czech republic and 6.0% in hungary. all in all and in light of the good economic conditions in our core market the ifo institute revised its gdp growth forecast for 2018 from 2.6% to of germany, we remain cautiously optimistic and expect that deutsche 1.8% in june. although real salary and price increases continue to be euroshop’s business will continue to perform positively and according reported thanks to the healthy employment situation, which underpins to plan this year. the domestic economy, the global economy is losing momentum and foreign demand is therefore contributing less to economic growth. the main reasons for this are the introduction of import tariffs on aluminium by the us and the countermeasures implemented by the eu and china. even though the impact of these tariffs has been relatively low to date, they are causing considerable uncertainty on the markets, as it cannot be ruled out that the trade conflict will escalate further. revenue in € million ebit in € million ebt * in € million ffo in € million result goal 148.1 148 145 per share in € goal 151 148 result 218.5 goal goal 220 – 224 222 – 226 goal 192.4 goal goal 193 – 197 194 – 198 result 153.3 goal goal 154 – 157 158 – 161 result 2.54 goal goal 2.35 – 2.39 2.40 – 2.44 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 * excluding measurement gains / losses number of shares in million 58.25 61.78 61.78

consolidated balance sheet 0 8 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 consolidated balance sheet liabilities 30.06.2018 31.12.2017 in € thousand 30.06.2018 31.12.2017 61,784 61,784 1,217,560 1,217,560 924,991 958,032 2,204,335 2,237,376 1,506,558 1,517,773 450,615 439,800 336,425 337,479 37,264 37,919 2,330,862 2,332,971 31,541 28,899 2,419 1,740 7,198 101,858 144,756 2,242 2,201 6,354 16,956 56,652 4,679,953 4,626,999 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 equity and liabilities equity and reserves 53,741 210 53,746 issued capital 208 capital reserves 3,918,172 3,924,157 retained earnings 527,942 526,728 39 39 4,500,104 4,504,878 1,820 9,741 168,288 179,849 5,268 10,274 106,579 122,121 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 total equity and liabilities total assets 4,679,953 4,626,999

consolidated statement of changes in equity/consolidated cash flow statement 10 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 consolidated statement of changes in equity number of shares outstanding 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 -22 -33,854 1,916,148 in € thousand 01.01.2017 total profit 0 0 56,233 capital increase 4,459,460 4,460 159,583 0 dividend payments 0 0 -81,767 0 0 0 0 0 0 3,742 0 0 59,975 164,043 -81,767 30.06.2017 58,404,996 58,405 1,121,553 906,575 2,000 -22 -30,112 2,058,399 01.01.2018 total profit dividend payments 61,783,594 61,784 1,217,560 984,675 2,000 0 0 0 0 55,270 -89,586 0 0 30.06.2018 61,783,594 61,784 1,217,560 950,359 2,000 0 0 0 0 -28,643 2,237,376 1,275 0 56,545 -89,586 -27,368 2,204,335 consolidated cash flow statement in € thousand consolidated profit income taxes financial gains or losses amortisation / depriciation of intangible assets and property, plant and equipment with a finite life unrealised changes in fair value of investment property distributions and capital repayments received changes in trade receivables and other assets changes in current provisions changes in liabilities cash flow from operating activities interest paid interest received income taxes paid net cash flow from operating activities outflows for the acquisition of investment properties inflows from disposal of intangible assets and property, plant and equipment outflows for the acquisition of intangible assets and property, plant and equipment 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 01.01. – 30.06.2018 01.01. – 30.06.2017 55,270 13,878 19,935 28 8,933 13,117 3,981 844 -2,046 113,940 -26,583 12 -3,869 83,500 -5,128 0 -25 0 -5,153 0 -8,573 -8,065 0 0 -16,638 61,709 106,579 168,288 56,233 14,074 19,980 28 2,209 13,041 5,988 -743 -3,654 107,156 -26,060 20 -4,056 77,060 -3,250 27 -9 -201,573 -204,805 130,000 -93,440 -9,221 163,587 0 190,926 63,181 64,046 127,227

12 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 ifrs 9 also replaces the previous ias 39 impairment model for incurred losses with the model for expected losses. in order to determine the disclosures on the consolidated balance sheet and the consolidated income statement expected credit losses for trade receivables and other liabilities to ten- ants, the group will use the simplified ifrs 9 impairment model. as the investment properties majority of liabilities to tenants are secured by deposits and guarantees, property held as a financial investment (ias 40) is measured at fair the change in the method of determination will not result in a significant value. in the absence of special events (such as a new acquisition), fair departure from the previous method. values are determined by an external appraiser on an annual basis as ifrs 9 also includes new provisions regarding the application of hedge accounting in order to better represent a company’s risk management jones lang lasalle gmbh performed this appraisal as at 31 decem- activities. all of the group’s existing hedging relationships fulfil the ber 2017 using the discounted cash flow method (dcf). the approach requirements of ifrs 9 as regards hedge accounting and can be con- used under this method as well as the related valuation parameters at the 31 december reporting date. tinued in their current form. ifrs 15 – revenue are explained in the consolidated financial statements as at 31 decem- ber 2017 (2017 annual report, pp. 156 and 159 ff.). this is a valuation method from level 3 of the fair value hierarchy as set out in ifrs 13. the standard provides a five-step model for recognising revenue that financial instruments is to be applied to all contracts with customers. this specifies when (or with the exception of derivative financial instruments and other finan- over what time period) and what amount of revenue is to be recognised. cial investments measured at fair value, financial assets and liabilities are measured at amortised cost. due to the predominantly short-term the standard replaces the previous provisions set out under ias 18 nature of trade receivables, other assets and other liabilities and cash “revenue”, ias 11 “construction contracts” and a series of revenue-re- and cash equivalents, the carrying amounts on the reporting date do lated interpretations. not deviate significantly from the fair values. the group mainly generates rental income through the leasing of shop- the fair values of financial liabilities measured at amortised cost cor- ping center space. this income is considered as a leasing component respond to the cash values of debt-related payments based on current under the provisions of ias 17 (from 2019 onwards, under the provisions interest rate yield curves (level 2 in accordance with ifrs 13) and of ifrs 16). furthermore, the portion of the operating costs transferred amount to €1,613.7 million as at 30 june 2018 (31 december 2017: to the tenants for which the tenants do not receive a separate service is €1,629.0 million). to be regarded as a leasing component (e.g. real property tax and build- ing insurance). all other operating costs transferred to tenants must be the derivative financial instruments measured at fair value are inter- recognised in accordance with ifrs 15. here, it must be distinguished est rate hedges. here the fair value is equivalent to the cash value of whether the group acts as the primary responsible service provider future net payments expected to be received from hedging transactions (“principal”) or as an agent for a service (“agent”) vis-à-vis the tenants. (level 2 in accordance with ifrs 13) based on current interest rate yield the analysis of the group has shown that the group acts as an “agent” curves. liabilities from interest rate hedges came to €35.9 million as at and that the proceeds from such transfers and the associated expenses 30 june 2018 (31 december 2017: €39.0 million). must therefore continue to be shown netted in the income statement. the interim financial statements were not audited in accordance with section 317 of the handelsgesetzbuch (hgb – german commercial code), nor were they reviewed by a person qualified to carry out audits. in the opinion of the executive board, the report contains all of the nec- essary adjustments required to give a true and fair view of the results of operations as at the date of the interim report. the performance of the first six months up to 30 june 2018 is not necessarily an indication of future performance.

the shopping center share 14 d e u t s c h e e u r o s h o p / h a l f - y e a r f i n a n c i a l r e p o r t d a t e d 3 0 j u n e 2 0 1 8 other disclosures dividend interim management report of the group includes a fair review of the development and performance of the business, and the position of the group, together with a description of the principal opportunities and on 28 june 2018, distribution of a dividend of €1.45 per share that was risks associated with the expected development of the group for the paid out on 3 july 2018 was approved for financial year 2017. remainder of the financial year. responsibility statement by the executive board hamburg, 14 august 2018 to the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim con- solidated financial statements give a true and fair view of the assets, wilhelm wellner olaf borkers liabilities, financial position and profit or loss of the group, and the the shopping center share key share data following a year-end closing price for 2017 of €33.96, deutsche euro- shop shares started the new year in a weak market overall with an ongoing downward trend, particularly for commercial real estate stocks. this meant that the high for the reporting period was recorded on 2 jan- uary 2018 at €33.96. on 25 april 2018, the share closed on xetra at €28.68, the lowest price in the first six months of the year. in the weeks that followed, the share price recovered slightly and closed at €30.26 on 29 june 2018. this equates to a performance of -6.6% for the reporting period. the mdax fell by 1.3% over the same period. deutsche euro- shop’s market capitalisation stood at €1.87 billion at the end of the first half-year of 2018. sector / industry group financial services / real estate share capital as at 30.06.2018 €61,783,594.00 € number of shares as at 30.06.2018 (no-par-value registered shares) dividend for 2017 (paid on 03.07.2018) share price on 29.12.2017 share price on 29.06.2018 low / high for the period under review 61,783,594 €1.45 €33.96 €30.26 €28,68 / €33,90 market capitalisation on 29.06.2018 €1.87 billion deutsche euroshop vs. mdax and epra comparison, january to august 2018 (indexed, base of 100, in %) prime standard otc markets deutsche euroshop mdax epra 105 100 95 90 85 indices isin frankfurt and xetra berlin-bremen, düsseldorf, hamburg, hanover, munich and stuttgart mdax, epra, gpr 250, epix 30, msci small cap, haspax, f.a.z.-index de 000748 020 4 jan. feb. mar. apr. may june july aug. ticker symbol deq, reuters: deqgn.de