HAMBORNER
AKTIENGESELLSCHAFT
ANNUAL REPORT 2008
* Details per share for 2006 converted for the purpose of comparability with 2007 and 2008 (1:3 after share split). ** The price in relation to the result from activities to be continued produces a p/e ratio of 11.51 for 2007.
2006 (in TE) 2007 (in TE) 2008 (in TE) From the profit and loss account
Income from rent and leases 12,597 13,239 19,437
Operating results 9,074 10,642 20,768
Result from participations 413 449 643
Financial result -65 -35 -2,927
EBITDA 16,398 48,325 30,975
EBIT 13,836 45,148 21,643
Consolidated surplus 11,277 52,226 17,341
From the balance sheet
Balance sheet total 178,932 290,197 281,346
Non-current assets 162,546 203,051 225,848
Equity capital 136,226 155,507 160,050
Equity ratio in % 76.1 53.6 56.9
From the cash flow statement
Cash flow from operating activity 8,152 23,528 10,283
Cash flow from investment activity -2,278 -73,103 41,696
Cash flow from financing activity -7,281 58,428 -10,998
Change in liquidity -1,407 8,852 40,981
The HAMBORNER share *
Earnings per share in E 0.50 2.29 0.76
Funds from Operations (FFO) per share in E - - 0.37
Dividend per share in E 0.30 0.35 0.35
Stock market prices per no-par-value share in E (XETRA)
Highest share price 11.53 12.49 9.30
Lowest share price 9.10 8.45 5.10
Year-end share price 10.67 8.94 5.75
Dividend yield in relation to the year-end share price in % 2.81 3.91 6.09
Price/earnings ratio** 21.34 3.90 7.57
Market capitalisation at the year-end 242,956 203,564 130,928
Net asset value per share in E - 11.36 10.57
Other data
Market value of the property portfolio 185,696 281,020 273,100
Number of employees at the year-end including the Managing Board 22 25 26
HAMBORNER at a glance:
To our shareholders
6 Letter to shareholders
8 Managing Board and Supervisory Board
10 Report of the Supervisory Board
14 Corporate Governance at HAMBORNER AG
20 The HAMBORNER share
Management report
28 General economic conditions
32 Economic report
50 Report on opportunities and risks
54 Final declaration on the report regarding relationships with affiliated companies (Art. 312 of the German Stock Company Act [Aktiengesetz])
54 Report on additional information under company law (Art. 289 Para. 4 of the German Commercial Code [HGB] in conjunction with Art. 315 Para. 4 of the German Commercial Code)
57 Remuneration of the Managing Board and Supervisory Board
60 Supplementary report
61 Forecast report
Consolidated financial statement
67 Consolidated profit and loss account
68 Consolidated balance sheet
70 Consolidated cash flow statement
71 Consolidated statement of changes in equity
72 Consolidated fixed asset movement schedule
74 Notes to the consolidated financial statements
105 Assurance of the legal representatives
106 Declaration of the Managing Board
107 Audit certificate of the statutory auditor
Supplementary information
110 Important terms and abbreviations
113 General information
To our shareholders
Letter to shareholders
6
Managing Board and Supervisory Board
8
Report of the Supervisory Board
10
Corporate governance at HAMBORNER AG
14
66
To our shareholders:77
The world economy is in a deep recession, the most serious for decades. Negative news dominates the financial press and pessimism is everywhere. Whereas it appeared at the outset that only the financial markets were affected, the crisis has meanwhile encroached into virtually every industry. What consequences does this have for HAMBORNER AG? Firstly, economic conditions and the letting market have not become easier for our company either, of course. Secondly, however, opportunities also present themselves – opportunities to play to our strengths and to differentiate ourselves positively from the competition.
As a long-term owner of a commercial property portfolio, HAMBORNER has a clearly focused business model. With the discontinuation of the special securities fund, the disposal of the purely residential properties and the sale of our share-holding in Wohnbau Dinslaken, we have made our structures even leaner, and can focus entirely on our core businesses. In addition, HAMBORNER is showing significant financial strength. With an equity ratio of 56.9% and high liquid reserves, the terms “credit squeeze“ or “refinancing problems“ are foreign words for our company. The balanced composition of our asset portfolio and the sound tenant structure ensure that rental income, which has risen by 46.8% year-on-year to
€ 19.4 million, remains highly stable. Our investments over the past two years in particular have contributed to this.
As unpleasant as the overall economic situation currently appears, HAMBORNER has recorded another successful year: in the reporting year, we achieved an operating result in the Group amounting to € 20.8 million and a profit for the
financial year of € 17.3 million. The consolidated surplus results in earnings per share of € 0.76. For the first time in our
annual report, we have mentioned the FFO (Funds from Operations), a key figure that forms an element of our control system. It is the benchmark for the liquid funds generated from ongoing operating activity. The FFO for 2008 amounts to € 0.37 per share.
In light of this positive business development, we will be proposing a dividend of € 0.35 per share for 2008 to the general
shareholders‘ meeting. In doing so we have taken a balanced approach both to the justified demand for an appropriate distribution of profit and to our obligation to strengthen HAMBORNER’s internal financing ability. The year-end share price of € 5.75 has given rise to an attractive dividend yield of 6.1%.
The persistence of difficult economic conditions notwithstanding, we are optimistic that the course of business will be positive in 2009. Our financial strength, the current attractive interest rates and the temporary further easing of property prices all offer HAMBORNER opportunities which we will be exploiting to the full.
We thank all of our shareholders for their trust in HAMBORNER AG, and look forward to your continued support of the company in its future development.
Kind regards
Dr. Rüdiger Mrotzek Hans Richard Schmitz
To our shareholders:
8
Erfurt, Neuwerkstraße 2 To our shareholders:
9
Managing Board
Dr. Rüdiger Mrotzek, Hilden
born 1957,
member of the Managing Board since 8 March 2007, appointed until 7 March 2010,
responsible for the areas of
finance/accounting, taxes, properties, EDP, risk management/controlling
Roland J. Stauber, Essen
Spokesperson, born 1962,
member of the Managing Board from 15 May 2007 until 15 August 2008,
responsible for the areas of
properties, legal matters, personnel, corporate governance, public relations, insurance
Hans Richard Schmitz, Bonn
born 1956,
member of the Managing Board since 1 December 2008, appointed until 30 November 2011,
responsible for the areas of
legal matters, personnel, corporate governance, investor relations/public relations, insurance
Supervisory Board Dr. jur. Josef Pauli, Essen
Honorary Chairman
-Dr. rer. pol. Eckart John von Freyend, Bad Honnef
Chairman
-Shareholder of Gebrüder John von Freyend Vermögens- und Beteiligungsgesellschaft m.b.H.
Dr. rer. pol. Marc Weinstock, Kelkheim-Fischbach
Deputy Chairman
-Chairman of the Managing Board of HSH Real Estate AG
Volker Lütgen, Wentorf
Managing Director of HSH Capitalpartners GmbH
Robert Schmidt, Datteln
Managing Director of Evonik Immobilien GmbH
Edith Dützer, Moers *)
Clerical employee
Hans-Bernd Prior, Dinslaken *)
Technician
*) employee representatives
Managing Board and Supervisory Board
To our shareholders:
10
Report of the Supervisory Board
Dear Shareholders,
2008 was another successful business year for HAMBORNER AG. The company is well prepared for the continuing difficult market conditions. Armed with a healthy balance sheet and high liquidity, in our opinion HAMBORNER AG will also be able to overcome the huge challenges of 2009.
Monitoring the conduct of business and cooperation with the Managing Board
We have thoroughly and regularly monitored the Managing Board’s management of the busi-ness in the reporting year 2008, informing ourselves in depth about all significant busibusi-ness transactions and upcoming decisions. For this, in accordance with Art. 90 Paras 1 and 2 of the German Stock Company Act, the Managing Board has reported in good time and com-prehensively, both orally and in writing, on the strategic orientation of the company as well as all relevant aspects of the business plan, including financial, investment and personnel planning. In addition, we were informed about the economic position and the profitability of the company and of the Group as well as about the course of transactions, including the risk position and risk management.
Five meetings of the Supervisory Board were held in the financial year 2008. Additionally, we effected resolutions outside meetings in the case of seven urgent transactions predominantly relating to the buying and selling of properties. Each meeting was attended by all members of the Supervisory Board. Furthermore, as Chairman of the Supervisory Board, I was in regular contact with the Managing Board in order to inform myself about current developments in the business’s position, important transactions and upcoming decisions.
Main focus of work in the Supervisory Board plenum
The turnover, earnings and personnel development of the Group, the financial position as well as the letting rate and the current situation with regard to purchases and sales were explained to us in detail by the Managing Board in all meetings and then discussed collec- tively by us. We also thoroughly discussed numerous individual issues with the Managing Board in the meetings.
In the financial statements meeting of 7 March 2008, the Supervisory Board approved the annual and consolidated financial statements of HAMBORNER AG as of 31 December 2007 after its own review and discussion of significant aspects with the statutory auditor, BDO Deutsche Warentreuhand Aktiengesellschaft Wirtschaftsprüfungsgesellschaft. We also approved the Managing Board‘s proposal for the appropriation of profits. Furthermore, we adopted the resolution proposals to be submitted to the ordinary Annual General Meeting 2008 and discussed the subject of REITs.
The focal points of the meeting on 14 May 2008 were the preparation for the general shareholders‘ meeting 2008 and authorisation for the sale of the Osnabrück property, Große Straße 61.
To our shareholders:
Report of the Supervisory Board
Dr. rer. pol.
Eckart John von Freyend, Bonn (Chairman of the Supervisory Board)
11
The constitutive meeting of the Supervisory Board took place on 5 June 2008 following the general shareholders‘ meeting. In that meeting, I was re-elected as Chairman, and Dr. Weinstock as Deputy Chairman of the Supervisory Board. In addition, the appointments of all members of the Executive, Audit and Nominating Committees were confirmed. The meeting on 18 September 2008 predominantly dealt with a yield-orientated control con-cept for the HAMBORNER Group. Possible portfolio transactions within the framework of the corporate strategy were also discussed.
The Group’s budget and medium-term plan for the years 2009 - 2013 were the main areas explored at the planning meeting on 20 November 2008. Planned growth in turnover and earnings was discussed thoroughly with the Managing Board. At the same time, the Manag-ing Board explained the nine-month report.
Report from the committees
Part of the Supervisory Board’s activities also take place in committees. Three committees were in place during the financial year 2008.
The Executive Committee met twice to discuss the determination of the variable Managing Board remuneration and personnel matters.
The Audit Committee convened four times in the reporting year with the involvement of the statutory auditor. It discussed the annual and consolidated financial statements 2007 in detail and had the 1st quarter, half-year and 3rd quarter interim reports 2008 explained by the Man-aging Board. In addition, it occupied itself with the preparation of the Supervisory Board’s electoral proposal to the general shareholders‘ meeting for the appointment of the statutory auditor.
There was no reason for the Nominating Committee to convene in the reporting year. At the start of each of its meetings the Supervisory Board was informed about the activity of the committees by the respective Chairman.
Corporate governance – an important part of our work
The Supervisory Board and Managing Board also dealt in depth with the progression of intra-company corporate governance in the financial year 2008. We report on this together with the Managing Board in the Corporate Governance report for 2008 in accordance with Art. 3.10 of the German Corporate Governance Code.
On 7 February 2008, in order to avoid a conflict of interest, Messrs. Weinstock and Lütgen abstained from voting in connection with the conclusion of an intermediary agreement with HSH Capitalpartners GmbH, a 100% subsidiary of HSH Real Estate AG, for the purpose of purchasing two commercial properties in Hamburg.
To our shareholders:
12
Equally, they did not participate in the voting with regard to a consultancy contract for HSH Real Estate AG on 18 September 2008. Similarly, Mr Schmidt abstained from the written vote of 11 November 2008, the object of which was the sale of Wohnbau Dinslaken to an affiliated company of Evonik Immobilien GmbH. No other conflicts of interest within the meaning of Art. 5.5.3 of the German Corporate Governance Code have arisen with any of our members. The statutory auditor submitted a declaration of independence in accordance with Art. 7.2.1 of the German Corporate Governance Code, which gave no cause for doubts in our view. The Supervisory Board together with the Managing Board submitted an updated declaration of compliance with the German Corporate Governance Code on 3 December 2008, in accord-ance with Art. 161 of the German Stock Company Act. This declaration of compliaccord-ance is pub-lished on the company‘s website www.hamborner.de (Unternehmen/Corporate Governance/ Entsprechenserklärung gemäß § 161 AktG).
Conclusion of the annual and consolidated financial statements
On 19 March 2009, the annual financial statements 2008 were examined in detail with the participation of the auditor, initially in the Audit Committee and then in the Supervisory Board meeting. In preparation, copies of the audit reports were sent to all members of the Super-visory Board in advance. The auditors certifying the annual financial statements reported on the audit results and were available to the Supervisory Board to answer questions. The Supervisory Board examined in detail the annual and consolidated financial statements of HAMBORNER AG with the consolidated management report as well as the proposal for the appropriation of profits. There was no cause for objections so the Supervisory Board ap-proved the annual and consolidated financial statements 2008 in its meeting on 19 March 2009. As a result, the annual financial statements 2008 prepared by the Managing Board are adopted. The Supervisory Board endorsed the Managing Board‘s proposal for distribution of the unap-propriated surplus.
Unqualified audit certificate of the statutory auditor
The annual financial statements of HAMBORNER AG as of 31 December 2008, prepared by the Managing Board in accordance with the rules of the German Commercial Code and the German Stock Company Act, as well as the Management Report of the public limited com-pany and of the Group, consolidated pursuant to Art. 315 Para. 3 of the German Commercial Code, were audited by Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Dusseldorf. The Supervisory Board had appointed this auditor on foot of a resolution approved at the general shareholders‘ meeting of 5 June 2008. The statutory auditor issued an unqualified audit certificate.
The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS). The additional preparation of consolidated financial statements in accordance with the German Commercial Code was waived pursuant to Art. 315 Para. 1 of the German Commercial Code. The statutory auditor also granted an unqualified audit certificate to both the consolidated financial statements submitted and the consolidated report regarding the position of the company and of the Group.
To our shareholders:
13
Report on relationships with associated companies
The report to be prepared by the Managing Board, pursuant to Art. 312 of the German Stock Company Act, regarding the company‘s relationships with associated companies has been audited by the statutory auditor and furnished with the following unqualified audit certificate: “Following our compulsory audit and evaluation, we confirm that:
1. The factual details of the report are correct;
2. In the case of the transactions recorded in the report, the company‘s payment was not unduly high.“
The statutory auditor‘s representative was also available for explanation of this report in the Supervisory Board meeting on 19 March 2009. After undertaking its own examination, the Supervisory Board approved the audit result of the statutory auditor. There was also no cause for objection with regard to the statement of the Managing Board at the end of the report regarding relationships with associated companies.
Changes in the Managing Board
The Supervisory Board revoked the appointment of Dipl.-Kfm. Roland J. Stauber as a member of the Managing Board on 15 August 2008 with immediate effect on compelling grounds. The lawyer Mr. Hans Richard Schmitz was appointed as a member of the Managing Board as of 1 December 2008.
The Supervisory Board thanks the directors Dr. Rüdiger Mrotzek and Hans Richard Schmitz as well as all employees for their great personal dedication, their efforts and their continuing commitment.
Duisburg-Hamborn, 19 March 2009 The Supervisory Board
Dr. Eckart John von Freyend (Chairman)
To our shareholders:
14
Corporate Governance at HAMBORNER AG
Corporate Governance Report
Commensurate with the recommendations in Art. 3.10 of the German Corporate Governance Code in the version of 6 June 2008, the Managing Board and Supervisory Board report on corporate governance at HAMBORNER AG as follows:
Transparency and good company management traditionally rank very highly for the Managing Board and Supervisory Board of HAMBORNER AG. For this reason, we regularly, promptly and comprehensively inform our shareholders, all other capital market participants, financial market analysts, the relevant media, and also our employees, about the position of the com-pany and any significant changes.
We use a wide variety of potential information and communication channels for this pur-pose, whereby special mention should be made of our regular quarterly, interim and annual reports, our announcements for disclosure under capital market legislation such as “ad-hoc announcements“ or notifications on “directors‘ dealings“, but also our participation in events with financial analysts such as the “Real Estate share initiative“ or the publication of press releases on current issues relating to HAMBORNER AG. In the process, we primarily use the internet to distribute information. All of the above-mentioned corporate information is avail-able to interested parties on our website.
Since the German Corporate Governance Code entered into force, the Managing Board and Supervisory Board have addressed the Code’s recommendations at regular intervals and – as far as possible and necessary – implemented them promptly. The objective was and always is to ensure good and responsible corporate development geared to sustainability which is in the interests of all stakeholders.
The Code as such was most recently the subject of the Supervisory Board meeting on 18 Sep-tember 2008 at which the amendments to the Code, contained in the new version of 6 June 2008, published in the electronic German Federal Gazette on 8 August 2008 and valid since that date, were discussed in depth. The recommendation in Art. 4.2.2 of the Code, according to which the Supervisory Board plenum, on the suggestion of the committee that deals with the management contracts, should approve the remuneration system including the basic contract components and regularly review it, has already been implemented in the case of the appointment of Hans Richard Schmitz to the Managing Board of our company. The recently incorporated recommendation in Clause 2 to Art. 7.1.2 of the Code, that the Supervisory Board or its Audit Committee and the Managing Board discuss half-yearly and possible quarterly financial reports prior to publication, corresponds with existing practice at HAMBORNER and will be complied with in the future as well.
To our shareholders:
15
The Managing Board and Supervisory Board of HAMBORNER AG therefore adopted the following declaration of compliance in December 2008 in accordance with Art. 161 of the German Stock Company Act. According to that, apart from minor qualifications the company has complied with the recommendations of the German Corporate Governance Code in the reporting year. Reference is made to the text of the declaration of compliance with regard to the explanations on the deviations from the Code’s recommendations:
Current declaration of compliance from December 2008
Declaration of the Managing Board and Supervisory Board of HAMBORNER AG
on the recommendations of the
“Government Commission for the German Corporate Governance Code“ pursuant to Art. 161 of the German Stock Company Act
“The Managing Board and Supervisory Board of HAMBORNER AG declare that, up to 15 August 2008, HAMBORNER AG has fully complied with the recommendations of the Government Commission for the German Corporate Governance Code (“Code“) in the Code version of 14 June 2007 as well as the recommendations in the Code version of 6 June 2008 since submission of its last declaration of compliance in November 2007. The Code has been complied with since then with the exception of the recommendation in Art. 4.2.1 Clause 1. HAMBORNER AG will comply with the Code in the future with the slight qualification of the recommendation in Art. 4.2.1 Clause 1.“
Explanation: Art. 4.2.1 Clause 1 of the Code states that the Managing Board should consist of several persons and have a Chairman or spokesperson. Since the departure of the prev-ious spokesperson for the company, Roland J. Stauber, with effect from 15 August 2008, the Managing Board was occupied by just one person until 30 November. With the appointment of Hans Richard Schmitz as a member of the Managing Board as from 1 December 2008, it once again consists of two persons. The nomination of a Chairman or spokesperson was waived on account of the Managing Board consisting of just two persons.
Duisburg-Hamborn, December 2008
HAMBORNER Aktiengesellschaft
Managing Board Supervisory Board
To our shareholders:
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To our shareholders:Corporate governance at HAMBORNER AG
Internet information for our shareholders
Both the current declaration of compliance and all declarations from previous years are available on our website www.hamborner.de at “Unternehmen/Corporate Governance/ Entsprechenserklärung gemäß § 161 AktG“.
In addition, shareholders may obtain information at “Investor Relations/IR-News/Finanz-kalender“ regarding the dates on which recurring publications such as financial reports will appear, and on the date of the general shareholders‘ meeting. On our website, the annual report also informs our shareholders in detail about the previous financial year, in advance of the general shareholders’ meeting.
In addition the website offers all interested parties access to other corporate information published by the company, such as notifications in accordance with the German Securities Trading Act and the German Securities Prospectus Act [Wertpapierprospektgesetz], press releases or the latest corporate presentation.
Collaboration between the Managing Board and the Supervisory Board
The Managing Board and Supervisory Board work together closely for the benefit of the company. At regular intervals, the Managing Board promptly and comprehensively notifies the Supervisory Board about all relevant issues of the business plan, about the course of transactions and the position of the Group including the risk position. Questions on strategic orientation and further development are discussed jointly between Supervisory Board and Managing Board. Important Managing Board decisions are linked to the agreement of the Supervisory Board in accordance with the former‘s procedural rules and the Articles of Association.
No consultancy or other service or work contracts were concluded directly between HAMBORNER AG and individual members of the Supervisory Board in the financial year 2008. However, one brokerage agreement was concluded with HSH Capitalpartners GmbH, a 100% subsidiary of HSH Real Estate AG, in connection with the purchase of two commercial prop-erties in Hamburg. In addition, an agreement was signed with HSH Real Estate itself regard-ing transaction consultancy in connection with the takeover of a larger property portfolio. When approval was sought from the Supervisory Board on this issue, Messrs. Weinstock and Lütgen abstained from voting. Similarly, Mr. Schmidt abstained from the written vote of 11 November 2008, the object of which was the sale of the Wohnbau Dinslaken GmbH share-holding to an affiliated company of Evonik Immobilien GmbH.
Other potential or actual conflicts of interest of members of the Managing Board and Super-visory Board, requiring immediate disclosure to the SuperSuper-visory Board, did not arise during the reporting period.
In accordance with Art. 15a of the German Securities Trading Act, a duty of disclosure is incumbent on the members of the Managing Board and Supervisory Board, as well as per-sons who perform management functions with the issuers of shares, regarding the purchase and sale of securities of the company as soon as the total value of transactions by a person
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To our shareholders:
Corporate governance at HAMBORNER AG
with management functions and individuals in a close relationship with that person reaches or exceeds the total negligible value of € 5,000 by the end of the calendar year. The following
completed transactions were notified to HAMBORNER AG during the reporting year 2008:
• On 7 July 2008, Dr. Rüdiger Mrotzek (member of the Managing Board) purchased 1,500
no-par-value shares at a weighted average price of € 8.18 per share.
• On 24 October 2008, Dr. Rüdiger Mrotzek (member of the Managing Board) purchased
1,500 no-par-value shares at a weighted average price of € 6.28 per share.
• On 12 December 2008, Dr. Rüdiger Mrotzek (member of the Managing Board) purchased
2,500 no-par-value shares at a weighted average price of € 5.532 per share.
The company did not receive any further notifications regarding transactions of management staff pursuant to Art. 15a of the German Securities Trading Act during the reporting year. All of these notifications are permanently available on our website www.hamborner.de at “Unternehmen/Corporate Governance/Meldepflichtige Wertpapiergeschäfte“.
As at 31 December 2008 there was no ownership subject to disclosure requirements pursuant to Art. 6.6 of the German Corporate Governance Code in the version of 6 June 2008.
In compliance with the requirements of the German Investor Protection Improvement Act [Anlegerschutzverbesserungsgesetz], the company has created an insider list, in which all relevant persons are included.
The mandates of members of the Managing Board and Supervisory Board are shown in the notes to the consolidated financial statements on page 104 and relationships with associated persons are shown on page 102.
Responsible risk management
The company‘s responsible handling of risks is also part of good corporate governance. Systematic risk management within the framework of our value-oriented corporate man-agement ensures that risks are identified and assessed early, and risk positions optimised. HAMBORNER AG‘s early risk identification system is also subject to review by the statutory auditor. It is continuously enhanced and adapted to changing economic conditions. For information on risk management and the current risk position, please refer to the report on opportunities and risks.
The statutory auditor Deloitte & Touche
The statutory auditor proposed to the general shareholders‘ meeting for election for the financial year 2008, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Dusseldorf, submitted its declaration of independence in accordance with Art. 7.2.1 of the German Corporate Governance Code in a letter dated 28 March 2008. It was agreed with the statutory auditor that the Chairman of the Audit Committee should be immediately informed regarding grounds for exclusion or lack of impartiality which arise during the audit, in so far as they are not immediately eliminated. It was further agreed that the Chairman of the Supervisory Board
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To our shareholders:Corporate governance at HAMBORNER AG
and the Chairman of the Audit Committee would be immediately informed in the event that specific findings or incidents arise in the execution of the audit of financial statements, which could be of significance for the proper discharge of the functions of the Supervisory Board. This includes the discovery of any facts demonstrating that the declarations submitted by the Managing Board and Supervisory Board pursuant to the Code contain some inaccuracy.
Remuneration report
The objective of the German Corporate Governance Code is to promote the confidence of national and international investors, clients, employees and the general public in the man-agement and monitoring of German quoted companies. To this end, the German Corporate Governance Code provides for, inter alia, disclosure of the remuneration granted to members of the Managing Board and members of the Supervisory Board.
The emoluments of the Managing Board and Supervisory Board are oriented to the annual corporate profit of HAMBORNER AG. They are made up of fixed and variable parts. Detailed explanations on the remuneration system and on the remuneration of the Managing Board and Supervisory Board may be found in the management report on page 57 et seq. The state-ments quoted there are part of the corporate governance report.
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To our shareholders:
Corporate governance at HAMBORNER AG
20
The HAMBORNER share
General position in the share market
2008 was an extremely difficult stock market year and brought severe price reversals to the international stock markets. The global economic downturn triggered by the worsening financial market crisis took its toll. After getting off to a weak start, leading international stock exchanges were unable to recover and the German leading share indices were not spared either. Standing at around 8,000 points at the beginning of the year, the DAX then slipped down to almost 4,000 points. Thanks to share gains at the year-end, losses ultimately amounted to approximately 40.4%. As a result, the DAX remained slightly behind 2002’s all-time low (-44.0%). While the MDAX lost 43.2% over the year, the SDAX even lost 46.3%.
Financial shares were particularly hard hit. In view of the effects of the US mortgage crisis and the resulting precariousness of the international financial markets, bank and insurance shares produced the weakest performance by far of all the leading shares. Property shares were also unable to escape this negative trend. Measured by the DAX All Real Estate sub-sector, European property shares have lost approximately 71% of their value.
The situation on the stock markets will remain overshadowed in the coming months by the global economic downturn and companies’ downward revision of profit forecasts.
The HAMBORNER AG share
The HAMBORNER share is officially listed on the stock markets in Frankfurt am Main, Dusseldorf, Berlin, Munich and Hamburg with variable prices. It is traded in the regulated market in Stuttgart and in the unofficial market in Hanover. The share is listed under the security identification number 601300 (ISIN: DE0006013006). The company has conferred a mandate on DZ-Bank AG, Frankfurt am Main, to act as designated sponsor. The bank com- menced its activities in November 2007. As the designated sponsor, the DZ-Bank ensures negotiability of the HAMBORNER share at all times through the day-to-day quotation of bid/ ask prices.
HAMBORNER continues to have a stable shareholder structure since the change of the main shareholder in 2007. In addition to HSH Real Estate AG, Hamburg, which has a share of 52.7% in the company, another shareholder - Prof. Dr. Siegert, Dusseldorf - continues to hold more than 10% of the shares. The free float currently amounts to approximately 36%.
Stock market listing in Germany
Stable shareholder structure To our shareholders:
21
Share price movement of the HAMBORNER share in 2008
The negative economic environment in 2008 also had an impact on the share price perform-ance of the HAMBORNER share, even though the share still performed comparatively well in the sectoral comparison. After a 2007 year-end share price of € 8.94, the share was able to
remain relatively stable, with a value of € 8.01 at the half-year point. However, it too suffered
a setback, particularly during the second half of the year, to close at € 5.75. This corresponds
to a reduction of 35.7% on the price at the beginning of the year.
By comparison, the German property share index published by the banking firm Ellwanger und Geiger, “E&G DIMAX“, fell by around 24% in the first half-year 2008 and in fact ultimately recorded a loss of approximately 50% as of 30.12.2008. The EPRA index lost approximately 51% in the same period.
To our shareholders:
The HAMBORNER share
11.60 % Prof. Dr. Siegert, Dusseldorf,
indirectly via de Haen-Carstanjen & Söhne GmbH, Dusseldorf, and SIEGERT & CIE GmbH, Dusseldorf
35.69 % free floating
52.71 % HSH Real Estate AG, Hamburg,
2.39% directly and a further 50.32% indirectly via the subsidiary HSH-RE Beteiligungs GmbH
HAMBORNER AG - 35.7 % E&G-DIMAX - 50.3 % EPRA index - 50.7 % DAX - 40.4 % HAMBORNER AG/XETRA share prices:
Year-end share price 5.75 E
Highest share price 9.30 E
Lowest share price 5.10 E
Development of the HAMBORNER share
95% 75% 45% 35% 65% 55% 85% 105%
HAMBORNER AG EPRA E&G DIMAX
1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 10/08 11/08 12/08 12/07
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After the overall pleasing performance of the HAMBORNER share in recent years, share price performance in the reporting year has been disappointing and unsatisfactory. The causes for the current considerable losses in net asset value (“NAV“) may be sought in the general stock market environment, but not in the company’s earnings and financial situation. We therefore see our transparent corporate policy with its corresponding investor relations work as a sound basis for renewed positive share performance in the future.
To our shareholders:
The HAMBORNER share
Investor Relations
The objective of our investor relations work is to convey, by means of ongoing, open and active communication with the capital market, a sound and transparent picture of our com-pany, thereby facilitating a fair company valuation. Within the scope of this work, we see it as a central task to foster relationships with shareholders, analysts and investors in order to thus reinforce confidence in HAMBORNER AG.
As a consequence, we extended our investor relations activities in 2008. In addition to host-ing our first balance sheet press conference, we showcased ourselves for the second time at the “Real Estate share initiative“ in Frankfurt am Main, receiving a very positive response. We have maintained close contact with the capital market at all times through individual discussions with analysts, investors and shareholders. We have also restructured our home-page and created a separate investor relations area, containing all important details on the share and the company’s key figures.
We will be introducing additional measures to further expand our investor relations activities in 2009. You will find information on our share as well as publications and dates, including those for analyst and investor conferences, on our website www.hamborner.de.
10 E 8 E 12 E 5 E 7 E 6 E 9 E 11 E 13 E 1/97 1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07 1/08 1/09 Development of the HAMBORNER share – start 1997 to end 2008 (monthly prices)
23
Net asset value per share
HAMBORNER AG has again engaged the experts Jones Lang LaSalle, Frankfurt to determine the market and fair values of its property portfolios. After a net asset value (“NAV“) was determined in 2007 for the first time using the latest fair values of properties, the properties were subjected to a subsequent assessment in 2008. The valuation method applied in the process corresponds to the principles of the International Valuation Standards. The NAV represents the benchmark for the underlying strength of a company and, within the frame-work of value-oriented corporate management, is an important indicator for us, also relative to other companies.
It is our objective to increase the NAV through a value-enhancing corporate policy. However, the strained economic and financial market environment in 2008 resulted in lower fair values for the portfolios overall in virtually all companies and thus also to losses in net asset values. A NAV of € 10.57 per share is calculated for HAMBORNER as of 31 December 2008.
Compared with the year-end share price of € 5.75, this corresponds to a reduction of 45.6%.
To our shareholders:
The HAMBORNER share
NAV calculation (in accordance with EPRA) 31.12.08
(in TE)
31.12.07 (in TE)
Non-current balance sheet assets * 223,934 202,895
+ Current balance sheet assets 55,368 7,863
+ Non-current assets held for disposal 130 19,813
+ Assets from activities to be discontinued 0 59,470
- Non-current liabilities and provisions * -91,785 - 58,167
- Current liabilities -8,516 -56,955
- Liabilities from activities to be discontinued * 0 -195
Balance sheet NAV * 179,131 174,724
+ Hidden reserves of non-current assets ** 61,579 70,297
+ Hidden reserves in the case of non-current assets held for disposal 0 13,597
NAV 240,710 258,618
NAV per share in E 10.57 11.36
* Excluding deferred taxes and derivative financial instruments
** Determination of hidden reserves in the property portfolio based on the Jones Lang LaSalle fair value assessment; own assumptions in the case of agricultural and silvicultural land.
24
FFO
The FFO (Funds from Operations) is a key financial ratio not determined in accordance with IFRS. It is used within the framework of value-oriented corporate management to represent the funds generated which are available for investments and dividend payouts to share-holders. We determined the FFO for the first time in 2008.
To our shareholders:
The HAMBORNER share
The FFO per share disregarding sales proceeds amounts to approximately € 0.37 for 2008.
Based on the year-end share price of € 5.75, this gives rise to an FFO yield of 6.4%.
FFO calculation 31.12.08
(in TE)
EBITDA from activities to be continued 30,722
+ Interest income 1,717
- Interest payments -4,644
- Taxes paid -1,347
FFO including sales activity 26,448
- Result from sales activity -17,914
FFO excluding sales activity 8,534
25
Dividend proposal: E 0.35 per share
Dividend development at HAMBORNER
It will be proposed to the general shareholders‘ meeting on 9 June 2009 to once again dis-tribute a dividend of € 0.35 per no-par-value share for the financial year 2008. A dividend
yield of 6.1% results from this in relation to the share price at the end of 2008.
HAMBORNER AG has increased the dividend steadily in previous years from € 0.15 to € 0.35
per no-par-value share.
1) Basis: XETRA year-end share price
2) All figures in EUR per no-par-value share, converted for comparability (1:3 after the share split in August 2007) 3) Basis: consolidated surplus in accordance with IFRS; the price in relation to the result from activities to be continued
produces a p/e ratio of 11.51 for 2007
If the company‘s situation permits, we also propose to maintain high payout ratios and to increase the dividend further in the future.
To our shareholders:
The HAMBORNER share
The HAMBORNER share at a glance
2006 2007 2008
Subscribed capital EUR million 19.43 22.77 22.77
Market capitalisation 1) EUR million 243.0 203.6 130.9
Year-end share price 2) EUR 10.67 8.94 5.75
Highest share price 2) EUR 11.53 12.48 9.30
Lowest share price 2) EUR 9.10 8.36 5.10
Dividend per share 2) EUR 0.30 0.35 0.35
Total dividend EUR million 6.83 7.97 7.97
Dividend yield 1) % 2.81 3.91 6.09 Price/earnings ratio 1), 3) 21.54 3.89 7.57 0.40 E 0.35 E 0.30 E 0.25 E 0.20 E 0.15 E 0.10 E 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 Ordinary dividend Bonus payment
0.05 E
0.00 E
Dividend development
Management report
General economic conditions
28
Economic report
32
Report on opportunities and risks
50
Final declaration on the report regarding relationships
with affiliated companies
(Art. 312 of the German Stock Company Act [Aktiengesetz])
54
Report on additional information under company law
(Art. 289 Para. 4 of the German Commercial Code [HGB]
in conjunction with Art. 315 Para. 4 of the
German Commercial Code)
54
Remuneration of the Managing Board and Supervisory Board
57
Supplementary report
60
28
Macroeconomic environment
The global economic downturn intensified in the last quarter of 2008, as the turmoil in the financial markets increased again and its effects encroached on the real economy. On the other hand, inflationary pressure has eased globally due to the big drop in commodity prices and lower worldwide demand. Since the middle of 2008, the German economy has also been feeling the adverse effects of the increasingly gloomy world economy and the intensifying crisis in the international financial markets to an ever greater extent.
Whereas the number of unemployed fell to a seasonally-adjusted 3.15 million people in November 2008, the economic crisis now has a firm hold on the labour market as well. The number of unemployed people rose to 3.49 million in January 2009, thus raising the rate of unemployment to 8.3%. In the face of the economic crisis, the European Central Bank (ECB) decided at the beginning of December 2008 to reduce the eurozone base rate by a hitherto un-precedented 0.75 percentage points to 2.5%. At a subsequent meeting in the middle of January 2009, the ECB further reduced the base rate to 2.0%.
The economic prospects for the German economy in 2009 have deteriorated considerably in view of the accelerating downturn. Economic forecasts have become increasingly pes-simistic. Thus, the Kiel Institute for the World Economy is expecting German gross domestic product to contract by 2.7%. A recovery with slight growth is only expected in 2010, whereby it is assumed that by then the international financial crisis will be surmounted.
General situation in the property market in Germany Market for retail properties
In spite of the financial crisis, recession and bad news from other industries, the retail trade largely performed well in 2008. Thus, retail companies were able to increase their turnover by 1.9% to 2.4% nominally on the previous year (minus 0.5% in real terms) according to latest estimates from the German Federal Statistical Office.
We expect that disposable income will increase slightly in 2009 in view of rising wages and monetary social security benefits and in spite of job cuts; that consumer prices will develop considerably below the growth rate of 2008 and that, as a result, personal consumer spend-ing will remain steady in 2009 compared with the previous year. Developments in the labour market will be crucial.
General economic conditions
Management report: As the operating activities of the Group essentially consist of those of HAMBORNER AG, use was made in this management report of the relief option of Art. 315 Para 3 of the German Commercial Code [HGB], according to which the management report of the Group and of the parent company of HAMBORNER AG may be consolidated. Accordingly, the consolidated financial statements and the annual financial statements of the public limited company are jointly disclosed. If figures are commented on, which differ in the consolidated financial statements from those of the annual financial statements of the public limited company, reference is clearly made to which set of figures the respective figures relate. Otherwise, statements are deemed to apply to both the Group and the parent company. Management report:
29
Retail space continues to grow in Germany, although moderately. This growth in space has led to increasingly heightened competition. It is to be expected that many establishments which were carried out solely for the purposes of securing a location and displacement will not be sustainably successful. There is a trend towards large outlets across all sectors. Due to nominally rising retail sales, productivity levels per space will not fall further in the medium-term but rather will stabilise despite further growth in space.
Concentration in the German retail trade continues to increase so that the lion’s share of the market is held by a low number of businesses. The most significant changes in 2008 took place in German food retailing. Thus, the German monopolies commission approved the takeover of the Plus supermarket chain by EDEKA subsidiary Netto in July 2008. On the acquisitions side, the REWE Group was also successful with its takeover of the “extra“ discount stores from the METRO Group.
Discounters were able to increase their market shares further, even if growth rates were lower. The traditional, non-chain speciality shops, whose market share again fell consider-ably in 2008, still have structural difficulties. Department stores and emporia once again suffered losses in market share, as highlighted by the recent insolvencies of Wehmeyer, Hertie and SinnLeffers.
The letting market for retail premises in premium locations lost momentum somewhat in 2008. Nevertheless, successful retailers with a good credit rating and innovative con-cepts continue to drive on their expansion notwithstanding, focusing on first-class shopping streets. Competition for retail premises falling vacant remains high due to the short supply of space. The textile trade remains the most important interested party by far for retail premises on Germany‘s shopping streets. The losers in this trend are, once again, the non-premium and ancillary sites. Because of low demand, permanent vacancies may be expected at such second-class locations even in the event of sustained good economic development.
Rent increases in Germany‘s most important shopping locations in 2008 can be described as moderate.
Management report:
30
Market for office space
The effects of the financial market crisis and the continuing poor prospects for macro- economic development in 2009 adversely affected the German office markets in 2008. According to the leading brokers, in the nine most important German office locations of Berlin, Dusseldorf, Essen, Frankfurt, Hamburg, Cologne, Leipzig, Munich and Stuttgart, approximately 3.5 million m² of office space were transacted in 2008, 5% less than in 2007. Nevertheless, the result was the third-best on record. Still on a record-breaking course up to the middle of 2008, German office letting markets were then hit by the financial crisis in the second half of the year. With the exception of Cologne (take-up approximately 290,000 m², plus 5%), Leipzig (approxi-mately 89,000 m², plus 1%) and Stuttgart (approxi(approxi-mately 189,000 m², plus 18%), the take-up in the “Big Nine“ decreased. The biggest take-up was achieved once again in Munich with approximately 786,000 m² (minus 6%), followed by Frankfurt with approximately 566,000 m² (minus 10%) and Hamburg with approximately 544,000 m² (minus 4%).
Viewed across all “Big Nine” locations, vacancies have reduced by almost 320,000 m² in 2008 to a good 8.4 million m² (minus 3.7%) at present.
With the exception of Berlin, Frankfurt and Leipzig, prime rents in the “Big Nine“ rose by approximately 4% on average last year. The 10% increase in Munich turned out to be the most striking, raising current prices to a good € 34/m².
Larger, modern spaces in the top locations are still in short supply in many places. Nor will this situation change significantly during 2009. At the same time, the financing of new projects is proving difficult, so that even a medium-term surplus of new, modern spaces is not very likely.
Situation in the property investment market in Germany
Investment turnover registered nationwide in 2008 for commercial properties was approxi-mately 65% below the record result of the previous year, at almost € 20.7 billion, according
to figures from Germany’s leading brokers. In the six most important German investment loca-tions of Berlin, Dusseldorf, Frankfurt, Hamburg, Cologne and Munich, a transaction volume of a good € 9.2 billion was recorded, which corresponds to a drop of approximately 70%
compared with 2007.
The global recession practically brought the German investment market to a standstill in the last few months of the year 2008. The greatly reduced volume of transactions is attributable less to a lack of buyer interest than to the current, almost complete absence of financing options.
Almost 64% of commercial investment turnover in 2008 was apportioned to individual trans- actions, whereas only 36% was invested in portfolios. This demonstrates that buyers are once again focusing more on the quality of properties, while the quantity approach of pur-chasing as much property as possible is now taking a back seat.
Management report:
31
The spotlight was on both retail trade properties with a total turnover of a good € 7.2 billion
(approximately 35%) and office buildings, in which approximately € 6.9 billion was invested
(approximately 33%). At around € 1.9 billion, a good 9% of the transaction volume was
appor-tioned to logistics properties.
The share of foreign investors has decreased further in 2008 and now stands at only around 57%. In the case of individual transactions, German buyers are once again already the big-gest group of investors at 56%. It may be seen that investors with sufficient equity capital, such as open-ended funds, insurers, pension funds and private individuals are increasingly pressing to the fore, with the result that speculative investments are losing ground.
After the prime yields for German top office properties had fallen almost to the level of large European metropolises in 2007, since this low they rose by between 50 and 105 basis points, bringing yields back up to the 5% mark in Germany’s six most important investment markets. As a result, the average level of the past 20 years has once again been achieved. Yields on commercial buildings in premium locations in pedestrian zones have largely remained stable, given that such buildings are highly inflation-proof and uniquely sited.
Management report:
32
Management report:Economic report
Economic report
Earnings, financial and asset situation of the HAMBORNER Group
The HAMBORNER Group performed well in 2008 in an overall difficult market environment and can again look back at an operationally successful financial year. The result for ordinary activities in the Group improved by € 7.4 million to approximately € 18.5 million. Revenue
from the management of properties and buildings of € 21.3 million was around € 6.8 million
up on the previous year. Investments in 2007, which made a full-year contribution to rent income for the first time, had a particular impact here. Other operating income increased by € 11.9 million to € 19.5 million compared with the previous year largely due to the sale
of our 14.1% shareholding in Wohnbau Dinslaken GmbH and the resulting book profit achieved of approximately € 11.2 million. In addition, portfolio properties were sold achieving a profit
of € 6.7 million. Personnel costs amounted to around € 3.0 million overall and increased by
453 T€ compared with the previous year, essentially because of personnel changes in the
last two years. The other operating expenses rose from approximately € 2.3 million in the
previous year to approximately € 2.7 million in tandem with an increasing volume of business.
The financial result amounted to € -2.9 million in the reporting year. Interest payments
of € -4.6 million for acquisition financing were offset by interest income amounting to € 1.7 million.
Group tax expenses amount to € -1.5 million in 2008 after a positive sum of € 6.6 million in
the previous year. In 2007, however, this item was affected by a non-cash once-off effect on account of a revaluation of the deferred taxes shown in the balance sheet on both the assets and liabilities side made necessary as a consequence of the tax law amendment.
The consolidated surplus from activities to be continued amounts to approximately € 17.0 million
in the financial year and is thus roughly at the level of the previous year (€ 17.7 million). The
result from activities to be discontinued, amounting to 374 T€, includes the income and
ex-penses from the special securities fund up to its closure in February 2008.
The “Properties held as financial investments“ show a value of € 223.3 million in the balance
sheet, compared with € 201.7 million in the previous year. In 2007, we had shown properties
with a value of € 19.8 million in the balance sheet as “Non-current assets held for disposal“.
Since we did not sell all of these properties in the financial year due to the market situation and the dates of further possible sales are currently uncertain, we have reclassified these properties as “Properties held as financial investments“. In addition, changes in this item compared with the previous year are largely due to depreciations. We enter our properties in the balance sheet at the amortised acquisition and construction costs. According to the IFRS accounting rules, these valuations should be compared to the current market values. In view of the economic and financial market crisis with the current difficult environment for property transactions, our portfolio properties also suffered a reduction in value to some extent, and this has been taken into account through appropriate depreciations. Deprecia-tions for the financial year amount to € 10.3 million in total, composed of € 5.6 million of
33
Management report:
Economic report
On the liabilities side of the balance sheet, financial liabilities and derivative financial instru-ments amount to € 91.1 million and are € 6.7 million above the previous year (€ 84.4 million).
If the financial liabilities are related to the fair values of the portfolio, an LTV (loan to value) of 31% arises. The balance sheet equity capital of the Group increased by € 4.5 million to € 160.0 million. The Group thus has an equity ratio of 56.9%, which even exceeds the high
value of 53.6% of the previous year.
In addition to the high equity ratio, the HAMBORNER Group has liquid assets amounting to
€ 54.0 million, which significantly exceeds the value for the previous year (€ 6.4 million).
A net financial debt of € 37.1 million arises taking these liquid funds into account. A
debt-equity ratio of just 16.4% is calculated from this in relation to the total non-current assets. The highly positive earnings situation as well as the Group’s comfortable financial and asset situation in a difficult market environment are an endorsement of HAMBORNER‘s measures and strategy over the last two years. By discontinuing the financial assets segment, we have removed a risk-laden line of business, and the reinvestment of the resources in easily let retail and office properties ensures sustainable and stable cash flows.
The conservative accounting of properties at acquisition and construction costs is also advantageous in phases of economic weakness. The influencing of results through write- ups or write-downs due to revaluations is far lower than with accounting at market values and therefore the result is less volatile overall. Furthermore, the high liquid funds and the low net indebtedness are proof of the Group’s underlying financial soundness.
34
Management report:Economic report
Earnings, financial and asset situation of HAMBORNER AG
In the individual financial statements of the company, the result for ordinary activities has increased considerably year-on-year by € 52.5 million to € 62.3 million. The increase results
essentially from the sale of our shares in the special securities fund terminated in the finan-cial year and the resulting capital gains (€ 45.7 million), higher rent income as well as the
sale of shares in Wohnbau Dinslaken GmbH. The effect on results from the termination of the special securities fund had already been reflected in the consolidated financial statements in accordance with IFRS in the previous year with the realisation of the share price gains within the fund. In this respect, the 2008 result under commercial law differs significantly from the consolidated result.
Income taxes amount to € 6.0 million following € 2.0 million in the previous year. This includes
the final levying of taxes and reserve allocations for additional tax payments amounting to
€ 0.5 million resulting from the sale of the special securities fund, as indicated by a tax field
audit carried out for previous years.
A profit for the financial year of € 56.2 million (previous year: € 7.8 million) results in the
individual financial statements after tax. Of this amount, € 28.1 million is allocated to the
other retained earnings, resulting in an unappropriated surplus of € 28.1 million (previous
year: € 8.0 million).
The balance sheet total has risen by € 39.7 million to € 283.9 million. In this regard, equity
capital has increased by € 48.3 million to € 87.8 million as a consequence of the high profit
for the financial year, excluding pro rata allocation of the special account with reserve char-acteristics. The special account with reserve characteristics amounts to € 95.6 million and
has increased by € 5.9 million year-on-year. The equity capital and the medium-term and
long-term borrowed funds cover the fixed assets in full.
Overall opinion on the economic position
Overall, the Managing Board assesses the economic position of the Group to be good on the date of the preparation of the consolidated management report. As the business development in the first weeks of the new financial year is going in accordance with expectations in the case of transactions for rents and leases, the Managing Board assumes a positive progres-sion overall.
35
Management report:
Economic report
36
Management report:Economic report
Business development in the property sector Overview of the HAMBORNER property portfolio
The HAMBORNER property portfolio contained 54 port- folio properties at the end of the reporting year. The properties are predominantly in large and medium- sized towns at 41 different locations in Germany and have a total usable floor space of 159,040 m², of which 149,035 m² are commercially used and 10,005 m² used as residential space. More detailed information on the year of purchase, location, size, nature of the respec-tive use and on the fair value of all the properties may be found in the following portfolio register.
Further information with the respective property data is also available online at www.hamborner.de.
37
Management report:
Economic report
Map of Germany with locations as of 31 December 2008
Bavaria
Baden-Württemberg
Saarland
Thuringia
Rhineland-
Palatinate
Hessen
NRW
Lower Saxony
Bremen
Hamburg
Schleswig-
Holstein
Saxony
Brandenburg
Berlin
Mecklenburg-
West Pomerania
Saxony-
Anhalt
Cologne St. Augustin Leverkusen Krefeld Moers Duisburg Essen Solingen Lüdenscheid Hamburg Bremen Lüneburg Osnabrück Minden Hanover Meppen Rheine Münster Oldenburg Düren Frankfurt Wiesbaden Neuwied Kaiserslautern Mosbach Villingen-Schwenningen Augsburg Freital Kassel Erfurt Berlin Oberhausen Dortmund Dinslaken Hamm Geldern Bad Oeynhausen Gütersloh Wuppertal Herford Freiburg38
Management report:Property portfolio register (position at: 31 December 2008)
Property portfolio register (position at: 31 December 2008) Year of
purchase Property Building use Property size(in m2) Usable floor space(in m2)
1976 Solingen Friedenstraße 64 T 27,344 7,933 1980 Krefeld Krützpoort 1 O 1,056 1,417 1981 Cologne v.-Bodelschwingh-Straße 6 T 7,890 2,630 1982 Frankfurt Cronstettenstraße 66 O 1,246 1,828 1982 St. Augustin Einsteinstraße 26 C 8,610 2,417 1982 Krefeld Emil-Schäfer-Straße 22-24 C 5,196 2,793 1983 Wiesbaden Kirchgasse 21 T/R 461 1,214
1983 Moers Homberger Straße 41-41c T/R 1,291 2,079
1984 Frankfurt Steinweg 8 T/O 167 607
1984 Essen Hofstraße 10-12 T/O 2,320 2,266
1984 Duisburg Rathausstraße 18-20 T/O/R 4,204 2,310
1985 Solingen Kirchstraße 14-16 T/R 1,119 3,059
1986 Frankfurt Königsteiner Straße 69a and 73-75 T 6,203 2,639
1987 Oberhausen Marktstraße 69 T/R 358 522
1987 Lüdenscheid Wilhelmstraße 9 T 136 425
1988 Dortmund Westfalendamm 84-86 O/R 1,674 2,633
1988 Wuppertal Turmhof 6 T/O/R 403 1,324
1989 Duisburg Fischerstraße 91 T/R 421 625
1991 Hamm Weststraße 11 T/O/R 407 946
1991 Oberhausen Marktstraße 116 T/R 461 1,339
1991 Dortmund Königswall 36 T/O/R 1,344 2,846
1991 Erfurt Neuwerkstraße 2 T/O/R 579 2,231
1992 Erfurt Marktstraße 2 T/O/R 495 1,343
1992 Erfurt Marktstraße 7-9 T/O 365 545
1995 Bad Oeynhausen Klosterstraße 11 T/R 348 582
1995 Berlin Schloßstraße 23 T/R 305 542
1996 Duisburg Fischerstraße 93 T/R 421 433
1996 Hanover Karmarschstraße 24 T/O/R 239 831
1997 Augsburg Bahnhofstraße 2 T/O/R 680 1,437
1998 Dinslaken Neustraße 60-62 / Klosterstraße 8-10 T/O/R 633 1,210
1999 Kaiserslautern Fackelstraße 12-14 / Jägerstraße 15 T/O/R/U 853 1,433
1999 Kassel Quellhofstraße 22 T 5,000 1,992
2000 Gütersloh Berliner Straße 29-31 T/R 633 1,292
2001 Hamburg An der Alster 6 O 401 1,408
2002 Düren Wirtelstraße 30 T/R 202 518
2002 Osnabrück Große Straße 82-83 T 322 750
2003 Leverkusen Wiesdorfer Platz 33 T/R 809 588
2004 Oldenburg Achternstraße 47/48 T 391 847
39
Management report:
Property portfolio register (position at: 31 December 2008)
Rents
2008 Ø Residual term of the rental agreements (in months)
Fair value* Discounting
rate (in %) Capitalisation rate (in %) Other notes 1,379,406 136 14,790,000 6.30 7.40 Leasehold property 82,426 27 950,000 8.00 7.50 276,499 59 3,860,000 6.50 6.55 339,352 60 5,900,000 6.75 5.75 428,852 24 3,530,000 10.25 8.75 162,000 21 1,570,000 7.50 8.50 549,427 114 11,010,000 5.30 5.00 241,883 23 3,100,000 7.20 7.00 316,242 55 5,730,000 5.10 4.90 303,353 51 3,680,000 6.70 6.65 178,545 27 2,120,000 7.60 7.00 379,265 34 4,420,000 7.15 6.85 325,767 58 4,470,000 6.50 6.65 114,719 25 1,570,000 7.10 6.85 66,000 63 970,000 5.85 6.50 281,610 84 4,100,000 6.65 6.15 244,274 49 3,300,000 6.10 6.35 82,401 48 1,010,000 7.40 7.10 95,974 24 1,170,000 7.10 7.00 116,341 25 1,410,000 7.35 7.20 313,895 95 4,680,000 6.75 6.40 181,220 40 2,130,000 7.80 6.85 136,539 73 1,950,000 7.50 6.75 272,728 11 1,260,000 7.75 6.60 46,907 29 530,000 7.50 7.50 212,160 84 3,890,000 5.55 5.35 52,541 26 650,000 7.30 7.00 236,510 83 4,500,000 5.45 5.40 448,619 38 6,920,000 6.00 5.75 167,725 34 2,220,000 7.00 6.90 443,805 39 7,100,000 5.95 5.80 182,310 84 2,490,000 7.00 7.30 341,778 49 3,670,000 5.95 5.75 Leasehold property 120,358 55 3,690,000 6.50 5.75 177,271 21 2,440,000 6.35 6.20 306,000 120 5,490,000 5.80 5.60 161,033 52 2,610,000 6.45 6.00 237,344 111 4,150,000 6.20 5.90 503,873 61 8,190,000 6.70 6.20
40
Management report:Property portfolio register (position at: 31 December 2008)
Property portfolio register (position at: 31 December 2008) Year of
purchase Property Building use Property size(in m2) Usable floor space(in m2)
2006 Minden Bäckerstraße 8-10 T/R 982 1,007
2007 Münster Johann-Krane-Weg 21-27 O 10,787 9,499
2007 Neuwied Allensteiner Straße 61 and 61a T 8,188 3,548
2007 Freital Wilsdruffer Straße 39 T 15,555 7,940
2007 Geldern Bahnhofstraße 2 T 12,390 8,749
2007 Lüneburg Am Alten Eisenwerk 2 T 13,319 4,611
2007 Meppen Am Neuen Markt 1 T 13,111 10,205
2007 Mosbach Hauptstraße 96 T 5,565 6,493
2007 Villingen-Schwenningen Auf der Steig 10 T 20,943 7,270
2007 Rheine Emsstraße 10-12 T/O/R 909 2,250
2007 Bremen Hermann-Köhl-Straße 3 O 9,994 7,157
2007 Osnabrück Sutthauser Straße 285 / 287 O 3,701 3,843
2007/08 Bremen Linzer Straße 7, 9 and 9a O 9,276 10,141
2008 Herford Bäckerstraße 24-28 T 1,054 1,783
2008 Freiburg Robert-Bunsen-Straße 9a T 26,926 9,253
Total 238,851 159,040
O Office spaces, medical practices
T Commercial spaces (retail trade, self-service markets, emporia, catering) C Other commercial and production spaces
S Storage areas R Residential spaces U Undeveloped reserve spaces
41
Management report:
Property portfolio register (position at: 31 December 2008)
Rents
2008 Ø Residual term of the rental agreements (in months)
Fair value* Discounting
rate (in %) Capitalising rate (in %) Other notes 348,740 23 5,210,000 6.20 5.90 1,004,185 29 14,850,000 6.90 6.50 386,274 65 4,890,000 7.00 7.20 738,453 154 10,320,000 6.30 6.95
813,615 130 8,120,000 6.30 6.30 Partial leasehold property
428,790 154 6,010,000 6.30 6.90 949,040 130 13,590,000 6.30 6.35 Co-ownership share 603,825 130 8,570,000 6.30 6.55 319,498 49 3,820,000 7.10 7.10 280,417 65 5,250,000 6.50 6.25 593,373 48 9,880,000 6.95 6.60 349,855 55 6,890,000 6.85 6.60 1,142,571 44 16,470,000 6.85 6.50 160,538 92 4,220,000 6.40 6.00 129,196 114 7,790,000 6.50 6.90 Leasehold property 18,755,321 273,100,000
