Adler Group S.A. achieves transformational milestone

• Sale of approx. 15,500 units at premium to book value
• Upfront payment of EUR 82.5m for sale of c.7% stake in BCP
• Tender commitment of EUR 157 per share (EUR 765m) for remaining Adler holding in BCP in event of cash public offer by LEG prior to 30 September 2022
• Achieved major milestones in strategy of significantly reducing leverage and focussing on top 7 German cities

Adler Group S.A. achieves transformational milestone with the signing of a portfolio disposal of c.15,500 units generating net cash proceeds of EUR 800m, alongside the sale of 7% stake in BCP to LEG, while granting LEG an irrevocable tender commitment for all its remaining BCP shares until 30 September 2022 totalling EUR 850m

Berlin, 1 December 2021 - Adler Group S.A. ("Adler Group") today announced the signing of two transactions with LEG Immobilien SE and its subsidiaries ("LEG")

Portfolio disposal

Today, Adler Group S.A. ("Adler Group") signed an SPA with a subsidiary of LEG IMMOBILIEN SE ("LEG") for the sale of 15,362 residential and 185 commercial units. The portfolio disposal for these units to LEG includes a premium on the book value reported as of 30 September.

The properties, which are predominantly located in small and medium-sized cities in Northern Germany, will be sold as part of a share deal with the closing of the transaction expected by year-end. LEG will acquire 100% of the shares in the companies that are sold, which will result in around EUR 800m of net cash proceeds and a pro forma reduction of the loan to value ratio ("LTV") by 4.3% points from 57.0% to 52.7%. In addition, the sale will result in a reduction of the receivables from RETT blockers by EUR 65m.

LEG has undertaken detailed due diligence on the portfolio, and the signed agreement is in line with the term sheet agreed on 11 October 2021. The sale at a level above book value clearly evidences the balance sheet values of Adler Group's portfolio.

BCP transaction

In addition, the parties have entered into an agreement regarding the sale of all Brack Capital Properties N.V. ("BCP"). shares held by ADLER Real Estate (holds circa 70% of outstanding shares).

The agreement is in two parts. Approximately 7% of BCP (10% of Adler Group's stake in BCP)_were sold immediately upon conclusion of today's agreement to LEG for a purchase price of EUR 75 million, which together with a payment of EUR 7.5 million premium for a tender commitment will result in total immediate cash proceeds of EUR 82.5 million.

In the second part of the agreement, ADLER Real Estate has irrevocably undertaken vis-à-vis LEG to tender its remaining shares as part of a public tender or takeover offer for cash by LEG for shares in BCP, provided that the price per share offered is not less than EUR 157.00 (Q3 2021 EPRA NRV), i.e. a total of approximately EUR 850 million, and that the first acceptance period ends no later than 30 September 2022.

Strategic rationale

With both transactions, Adler Group is taking major steps in the implementation of its strategy: accelerated reduction of leverage and an increased focus on residential properties in Germany's top 7 cities, whilst streamlining corporate structure in the process. The two transactions generate combined net cash proceeds of EUR 1.65 billion, thereby providing significant liquidity to the group and materially reducing leverage. In this context, Adler Group signed another term sheet on 26 October 2021 to sell 14,300 units with a leading alternative investment firm to further reduce leverage. The properties concerned are mainly located in eastern Germany. Adler Group expects to sign this transaction by the end of the year.

These transactions, executed in a space of two months, will provide significant liquidity to the group, and demonstrated the fundamental strength of Adler's balance sheet. The management will continue to work to further reduce leverage, strengthen the balance sheet, and demonstrate the underlying intrinsic value in the group.

Investor call

In order to elaborate further on the details of these two transactions, management will today host an investor call on Thursday, 2 December, at 15.00 CET. Dial-in data will be sent around shortly.

Contact

Investor Relations:
T +352 278 456 710
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