ACCENTRO Real Estate : Annual Report of Accentro Real Estate AG as of December 31, 2022 with management report of the company for the 2022 fiscal year

Content 01

CO M B I N E D M A N AG E M E N T

R E P O RT A N D G R O U P

M A N AG E M E N T R E P O RT

4 Preliminary Remarks

1. Basic Principles of the Group

1. Economic Report

12 Business Performance

22 Report on the Separate Financial Statement of ­ ACCENTRO Real Estate AG

28 Opportunity and Risk Report, Forecast Report

39 Internal Control System and Risk Management in Regard to the Group Accounting Process

41 Disclosures pursuant to Articles 289a, 315a, HGB

48 Corporate Governance Statement pursuant to Articles 289f, 315d, HGB

48 Remuneration Report

48 Closing Statement of the

Management­Board on the

Dependent­Companies Report

02

F I N A N C I A L STAT E M E N TS

A N D N OT E S

50 Balance Sheet

1. Income Statement

1. General Disclosures

1. Recognition and Measurement Policies
2. Explanatory Notes on the
   Statement­ of Financial Position

58 Explanatory Notes on the Income Statement

60 Other Disclosures and Explanatory Notes

68 Appendices to the Annex

1. Responsibility Statement by the Legal Representatives
2. Independent Auditor's Report

1. Imprint

01

COMBINED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT

01 COMBINED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT

• Preliminary Remarks
• Basic Principles of the Group Economic Report Business Performance
  Report on the Separate Financial Statement of
  ACCENTRO­Real Estate AG
  Opportunity and Risk Report, Forecast Report
  Internal Control System and Risk Management in Regard to the Group Accounting Process
  Disclosures pursuant to Articles 289a, 315a, HGB
  Corporate Governance ­ Statement pursuant to Articles 289f, 315d, HGB
  Remuneration Report

Closing Statement of the

Management Board on the

Dependent Companies Report

02 FINANCIAL STATEMENTS AND NOTES

Preliminary Remarks

This Summarising Management Report refers to the consolidated financial statements of ACCENTRO Real Estate AG (hereinafter "ACCENTRO AG") and to the annual financial statements of ACCENTRO AG. In its role as holding company of the ACCENTRO Group, ACCENTRO AG holds interests in associates, and handles central tasks for the Group. Accordingly, the Company's situation is determined by the situation and development of the Group. This is why a Summarising Management Report is prepared. All of its disclosures apply both to the Group and to the separate financial statements of ACCENTRO AG unless specifically stated otherwise. Accord- ingly, this Summarising Management Report is based on the consolidated financial statements of ACCENTRO AG, which have been prepared in accordance with the International Financial Reporting Standards (IFRS) the way they are to be applied in the European Union, and on the financial statements of ACCENTRO AG prepared in accordance with the provisions of the German Commercial Code (HGB).

Currency figures quoted in this report are denominated in euros (EUR).

Both individual and total figures represent the value with the smallest rounding difference. Adding up the values of the individual line items may therefore result in minor differences compared to the reported totals.

Basic Principles of the Group

Group Business Model, Objectives and Strategies

ACCENTRO Real Estate AG (hereinafter "the ACCENTRO Group" or "ACCENTRO") is a listed property company focusing on residential real estate located in Germany. Geographically speaking, the business activities of ACCENTRO and its subsidiaries concentrate exclusively on real estate in economically attractive locations in selected federal states of Germany.

The business activities of the ACCENTRO Group comprise three core divi- sions. They include the tenant-sensitive retailing of apartments to private owner-occupiers and buy-to-let investors as well as the selling of real estate portfolios to institutional investors (the "trading and privatisation business"), and the development and management (letting) of a proprietary real estate portfolio (the "portfolio business"). These are supplemented by services provided to third parties (the "fee-based and service business").

Such services include the selling of real estate, the development and public provision of a digital platform (called PropRate) for finding and appraising or comparing real estate, and the annual compilation and publication of several market analyses and reports on the German housing market.

The long-term growth potential of Germany's residential property market is the foundation of ACCENTRO's business development. In addition to its current core business of apartment privatisation-which comprises the selling of residential units following minor refurbishment and repair work as well as the selling of such units after comprehensive redevelopments and the addition of extra floors along with the procurement of shared ownership deeds for yet non-partitionedmulti-familyhomes-the Company is a residential property investor, property asset holder and service provider. In the process, the Group combines the stable business model of a property asset holder and landlord with the high-yield business model of housing privatisation to maximise the generated cash flow and to tap synergies between the various core divisions.

As of the balance sheet date of 31 December 2022, the overall real estate portfolio of the ACCENTRO Group comprised 5,903 units, including those whose deeds were already notarised while the transfer of benefits and burdens was still pending by the balance sheet date.

01

COMBINED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT

01 COMBINED MANAGEMENT REPORT AND GROUP MANAGEMENT REPORT

Preliminary Remarks

• Basic Principles of the Group Economic Report Business Performance
  Report on the Separate Financial Statement of
  ACCENTRO­Real Estate AG
  Opportunity and Risk Report, Forecast Report
  Internal Control System and Risk Management in Regard to the Group Accounting Process
  Disclosures pursuant to Articles 289a, 315a, HGB
  Corporate Governance ­ Statement pursuant to Articles 289f, 315d, HGB
  Remuneration Report

Closing Statement of the

Management Board on the

Dependent Companies Report

02 FINANCIAL STATEMENTS AND NOTES

Corporate Structure and Control System

ACCENTRO Real Estate AG is the parent company of the ACCENTRO Group. ACCENTRO Real Estate AG acts as an operationally active holding company for a number of member companies in which the residential property stock both of the portfolio business and of the privatisation business is concentrated. Within the Group, ACCENTRO Real Estate AG assumes the top-down responsibilities of corporate controlling and administration. ACCENTRO Real Estate AG's sphere of ownership includes core divisions such as Legal, Accounting, Controlling, Risk Management, Funding, Purchasing, Sales. Marketing, Project Management, Technical and Commercial Asset Management. ACCENTRO AG is controlled via its annual net income.

All companies that ACCENTRO Real Estate AG controls and that are not clearly immaterial due to their structure, e. g. as shelf companies, are fully consolidated in the Consolidated Financial Statements of ACCENTRO. For a list of the individual subsidiaries of ACCENTRO, please see the Notes to the Consolidated Financial Statements.

ACCENTRO holds several strategic investments in property development companies which are not supervised and controlled by ACCENTRO and which are therefore not included as subsidiaries in its consolidated financial statements. The Company's equity investments (normally representing interests of 20% or less) are recognised and measured at their fair value through other comprehensive income (FVOCI).

The at-equity companies (normally representing interests of 20% to 50%) are recognised at their historical cost and subsequently measured at the amortised pro-rata equity and with amortised hidden reserves or encumbrances or goodwill, if any, taken into account. Any changes in fair value are recognised in the income statement. The pro-rata net income of these companies and their changes in value are recognised as at-equity

earnings (or else are recognised as impairments, if necessary) in the Consolidated Income Statement, posted after EBIT within the financial result.

The Management Board controls the Group's investment and sales activi- ties. It defines the strategic development, makes important decisions and monitors the achievement of objectives. On the Group level, a long-term plan covering a four-year period is prepared, renewed and updated annually on the basis of the preceding year's figures, of the market environment and of the strategy. The defined control variables and key ratios integrate assessments of the industry in general. The Company submits its business plan for subsequent years to the Supervisory Board at the beginning of each year. Periodic performance reviews are carried out within the scope of central quarterly reporting. Central Controlling prepares reports and monitors specifically the "consolidated earnings before interest and taxes (EBIT)" and "consolidated revenues" key ratios (performance indicators) as key financial performance indicators for the Group management compared to the planning figures.

In regular meetings with the second-tier management, the Management Board is regularly briefed on the market situation and the business devel- opment, and redirects the Company's course of action together with the relevant segment owners if necessary. Once a year, the planning is subjected to a comprehensive review.

Definitive control of the ACCENTRO Group is exerted not least on the segment level, and may be structured in various ways. The business of ACCENTRO AG divides into three segments in line with the Company's internal control: "trading and privatisation business," "portfolio business" and "fee-based and service business." There has so far been no EBIT breakdown by segments, and the only key ratio monitored and controlled, aside from revenues, is the contribution margin. That said, segment reporting is in the process of being set up and will cover the EBIT level as early as next year.