Consus to strengthen position as Germany's largest property developer through acquisition of SSN Group

- Acquisition increases gross development volume to c. EUR10bn and strengthens focus on the highly sought after residential segment

- Ideal addition for Consus through complementary business models, strong development projects and opportunities in digitalisation and mass production

- Meaningful construction economies of scale realizable with 2.1m sqm currently under planning and construction until 2026

- Founders of SSN Group to join Consus Extended Management Board

Berlin, 7 November 2018 - Consus Real Estate AG ('Consus', ISIN DE000A2DA414) announces the acquisition of SSN Group AG. Management Board and Supervisory Board resolved today to acquire 93.4% of the shares in SSN Group AG ('SSN') through a combination of cash and shares, valuing SSN at an implied enterprise value of c. EUR 1.1bn. Through this acquisition, Consus will significantly increase its gross development volume (GDV) from EUR6.2bn to EUR9.6bn as well as the overall number of projects from 53 to 65.

Andreas Steyer, CEO of Consus, said: "With the acquisition of SSN we are significantly strengthening our position as Germany's largest property developer with a GDV of almost EUR10bn, focussing on the highly sought after residential segment. The fragmented development market in Germany provides for significant growth opportunities. Consus will play a leading role to further build out the first fully integrated listed German development platform." Michael Tockweiler, CEO of SSN Group AG, adds: "We are delighted to be joining forces with Consus. The acquisition gives us an excellent access to financing and allows us to continue to build on our strong financial base. This creates exciting growth potential for the entire SSN Group."

The transaction will be funded via a mix of cash and shares. The 93.4% majority stake in SSN Group will be acquired for a total consideration of EUR255m in cash. Simultaneously, Consus will separately acquire 38.9% in SG Development GmbH, a 51% subsidiary of SSN Group, which holds nine out of twelve development projects, as well as a 43% stake in an SSN landmark development in the centre of Berlin from Consus' majority shareholder Aggregate Deutschland S.A, for a total consideration of EUR215m against issuance of new shares in Consus at a price of EUR8.0 per share.

The purchase price will be financed by cash on balance and a EUR250m acquisition facility from J.P. Morgan subject to customary drawdown conditions. J.P. Morgan acts as financial advisor to Consus and provider of the acquisition financing. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft assessed the financial appropriateness of the purchase prices within the meaning of the standard "Principles for the Preparation of Fairness Opinions (IDW S 8)" published by the Institute of Public Auditors in Germany e.V. (IDW).

The transaction is expected to be completed within the fourth quarter of 2018.

Combining two highly complementary development platforms

SSN's GDV amounts to EUR3.4bn and consists of 12 projects focussed on Germany's top-9-cities, including key cities such as Berlin, Hamburg and Frankfurt. The properties and 'quartiers' consist of residential (71%), commercial (26%) and other (3%) segments. Similarly to Consus, SSN focuses on forward sales to institutional investors, which comprise the majority of its GDV, and the development of large city 'quartiers', such as the Holsten quartier in Hamburg and the Vaihingen Campus in Stuttgart. Through the acquisition of SSN, Consus will be adding an additional EUR1.9bn of 'quartier' developments to its overall GDV (c. 43% of the combined GDV are 'quartier' developments). 35% of the GDV of SSN focuses on Stuttgart and Munich in the economically strong cities of the federal states of Baden-Württemberg and Bavaria. The existing development projects of SSN are highly complementary to Consus' GDV and increase the GDV in this region significantly from EUR0.5bn to EUR2.1bn. With the acquisition of SSN, Consus' net floor area currently under construction or planning phase exceeds 2.1m sqm in the coming years. Within that, Consus' focus is on the development of residential space, with a share of c. 60% of the total GDV.

Meaningful synergies from digitalization and mass-production of building components

The combination of two integrated development platforms is expected to generate meaningful synergies. Continuous revenue streams from additional projects and significant increases in forward sales volumes and cash flows will result in an optimized development revenue in the short to mid-term while at the same time a decrease in costs in the medium term is expected due to improved and more efficient financing, centralized planning, risk management, purchasing and digitalization as well as lower administration costs. In the long-term, the planned use of serial production facilities and prefabrication of building parts will enable Consus to develop properties 20% faster while materially reducing the construction and development costs of the entire group.

Management of the combined group

SSN founders Michael Tockweiler and Theo Gorens will join the Extended Management Board of Consus and contribute to the execution of the group's overall targets together with Andreas Steyer, CEO of Consus, Benjamin Lee, CFO of Consus, as well as the Management Board members of CG Gruppe AG, Christoph Gröner and Jürgen Kutz. CG Gruppe and SSN, the operational subsidiaries of Consus will be run as two separate platforms to maintain the entrepreneurial drive and exploit existing successful structures and management. Collaboration across both platforms in the areas of sourcing, acquisition and marketing will be driven by the extended management board. Consus will provide group financing, including the capital market access, improved by this transaction, as well as the group-wide strategy implementation, controlling and digitalization of planning and construction processes.

Outlook and guidance

Consus expects the acquisition to strengthen its market position in the fragmented property developer segment in Germany and further establish the listed real estate development segment on the German capital market.

In the course of the takeover of SSN, Consus raises the mid-term target forecast and expects an EBIT pre-PPA in 2020 of EUR450m, an increase of c. 50% over the previous estimate of EUR300m. Net debt to EBIT pre-PPA target ratio is forecasted at around 3.0x in 2020, falling below 3.0x in 2021.

A detailed presentation on the acquisition of SSN is available at

Invitation to a conference call on 7 November2018

The Management Board of CONSUS Real Estate AG, CEO Andreas Steyer and CFO Benjamin Lee, invites to a conference call at 4pm (CET).

Register for dial-in:

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Germany: 1

Austria:

Switzerland: 1

UK: 3

USA:

Press Contact

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Contact

CONSUS Real Estate AG
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About CONSUS Real Estate AG

CONSUS Real Estate AG ("CONSUS"), based in Berlin, Germany, with its subsidiary CG Gruppe AG, is a leading developer of residential real estate properties in the country's Top 9 cities. With a gross development value of EUR6.2bn CONSUS focuses on the construction of standardised apartment blocks. CONSUS acts along the entire development value chain with institutional forward sales, digitalisation of construction processes and industrial mass production. The shares of CONSUS are listed in the Scale Segment of Deutsche Börse AG and in the m:access segment of the open market (Freiverkehr) of the Munich Stock Exchange (Börse München), and are traded via XETRA in Frankfurt.

About SSN Group

As an independent group of companies, SSN Group has been a real estate property developer with a focus on German cities and Switzerland since its foundation in 2004. Currently, the SSN Group develops a gross development volume of EUR3.4bn. With its subsidiaries, the well positioned SSN Group ensures the high quality of all real estate products and services. The SSN Group offers the complete value-adding chain from planning, execution and handover to real estate management and associated related services. The SSN Group is headquartered in Zug, Switzerland, and employs c. 200 people. The SSN Group and its teams have completed and successfully initiated projects worth over EUR7.5bn.