Aberdeen Property Investors Unternehmensgruppe DEGI GLOBAL BUSINESSAnnual Report as of June Nonbinding Translation CologneGermany gures for EUR mProperty assets total market valu ID: 843990
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1 DEGI BERICHTJahresbericht zum TT. Monat
DEGI BERICHTJahresbericht zum TT. Monat JJJJund Verkaufsprospekt Aberdeen Property Investors Unternehmensgruppe DEGI GLOBAL BUSINESSAnnual Report as of June Non-binding Translation Cologne,Germany, gures for .EUR mProperty assets, total (market values).EUR mof which held directly .EUR mof which held via real estate companies .EUR mForeign component ) .%Europe ).%North America (Canada). le cation deadline cations Dresdner Bank AG served as custodian bank for DEGI GLOBAL BUSINESS until May . As a result of the acquisition of Dresdn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 le. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . 6 gures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Development of DEGI GLOBAL BUSINESS . . . . . . . . . . . . . . 7Macroeconomic conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Property market development. . . . . . . . . . . . . . . . . . . . . . . . . 10Detailed
2 information on our investment locations
information on our investment locations . . . . . . . 10Investment strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Property portfolio management . . . . . . . . . . . . . . . . . . . . . . . 18Portfolio structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Letting situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Fund return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Development of sales revenue. . . . . . . . . . . . . . . . . . . . . . . . . 23Liquid assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Capital gains tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Risk management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Changes in the Management Board . . . . . . . . . . . . . . . . . . . . 24Change of cu
3 stodian bank. . . . . . . . . . . . . .
stodian bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 . . . . . . . . . . . . . . . . . . . . 26 . . . . . . . . . . . . . . . . . . . . . . . . 27. . . . . . . . . . . . . . . . . . . . . . . . . . . 29 . . . . . . 32. . . . . . . . . . . . . . . . . . . . . 36 . . . . . . . . . . . . . . . . . 38 . . . . . . . . . . . 40 . . . . . . . . . . . . . . . . . . . . . . . . . . 44of properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47. . . . . . . . . . . . . . . . . . . . . 49 . . . . . . . . 52 . . . . . . . . . . . . . . . 56 . . . . . . . . . . . . . . . . . . . . . . 57. . . . . . . . . 58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 t and fund equity pro. . . . 69. . . . . . . . . . . . . . . . . . . . .
4 . . . . . . . . . . . . 71the General an
. . . . . . . . . . . . 71the General and Special Terms of Contract . . . . 117 . . . . . . . . . . . . . . . . . . 119 . . . . . . . . . . . . . . . . . . . 126und Asset Management e.V. (BVI) . . . . . . . . . . . . 133 . . . . . . . 134 nancial year DEGI GLOBAL BUSINESS cult open-ended property fund benefited from its le, due among cation. ce property in the Czech to in Europe and Canada. This largely corresponds ned investment strategy. Further property nancial year /. Individual investors have made gures for the past and the ected in netted-out sales revenue of EUR . m in nancial year /. ts from the international real estate expertise of the holding company Aberdeen With effect from August , Aberdeen Property Aberdeen Property Investors Holding GmbH, a % gures for W The Funds net assets decreased from EUR . m W .One property was added to the property W nancial year /, taking the ve are directly held and W June to . % as of June .The letting ratio calculat
5 ed on the basis of W June .As of
ed on the basis of W June .As of June , the cash ratio amounted to W As of October , the distribution amounts W assets of around . %, or as operating assets In accordance with the calculation method of the BVI Bundesverband Investment and Asset Management e.V. (see also page , foot For further shareholder information see page . June June June June .. .EUR m . . . EUR m . . . EUR m . . . EUR m . . .EUR m . . . EUR m . . . EUR m. ..m pcs. . . . EUR . . .EUR . .. EUR . . . EUR . . . EUR. ..EUR October October October cation Number (ISIN): DEAETSR cation Number (WKN): AETSR Value as of 1 November 2005 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 510,000 515,700557,582587,235597,325 Change in value in the rst half of the abridged nancial year / from November (date of launch of DEGI GLOBAL BU
6 SINESS) to December (two-month p
SINESS) to December (two-month period) Change in value in the abridged nancial year / from November (date of launch of DEGI GLOBAL BUSINESS) to June (eight-month period) As far as medium-term growth is concerned, it is scal and monetary policy. Our base scenario of a gradual global economic nancial crisis scal policy measures is cult to create forecast models. nal policy transmission mechanism. The deterioration of nancial situation, the drop in asset prices and the ected in negative global The upside scenario expects to see the global economy scal measures that which would put a slight damper on growth momentum in Current developments After the strongest decline in gross domestic product the global economic crisis appears to have bottomed out in the second quarter of . Extreme monetary easing, extensive fiscal policy incentives, and cantly to stopping the downward ation have also dissipated considerably. The markets for high-risk investments such as equities or corporate bonds are experiencing a the insolv
7 ency of US investment bank Lehman We ex
ency of US investment bank Lehman We expect expanded trade financing and moves to start building up inventory levels again in the from . % to . % in a year-on-year comparison, cient to spark a dence dence in capital consolidation in will continue to mount because the high level of public-sector debt in relation to GDP nanced in the long term. as of June Canada Guyancourt(greater Paris region)LLuxembourgBelgiumLiègeGermanyCologneBonnBad HomburgHelsinkiFinlandItalyBrindisiCroatiaZagrebRomaniaBucharestFrance Czech RepublicPrague nancial markets is a trend that can be observed on the property markets too. Whereas in , rental ect ever further on all European property markets, although the extent of the slump varied from nanced crisis, and equity investors shied away from ce properties cult time lies ahead for the European market the economy gradually recovers and the property further return corrections. In some markets, e.g. The commercial rental market in Canada showed solid performance throughout most of , despite
8 nancial crisis. It was not until the fou
nancial crisis. It was not until the fourth On the Asian commercial property market, the prices rst quarter with declining investment locationsEuropeBelgium Due to the global economic crisis, negative GDP growth of cit of . % space and the high demand for space of approximately Bad Homburg vor der Höhe and administration centre for the Hochtaunus district ts from very good regional transport connections within the Rhine-Main metropolitan ce property market (area of ts from the towns nancial centre of Frankfurt am uctuations in the individual key of ce market gures (vacancy, rentals, net initial yields). ce market is supported rst quarter and is thus one of Frankfurt. We expect relatively stable market activity in Europe. Bonn is transitioning from being an Telekom headquarters, the CAESAR research institute etc.), in which the tertiary sector dominates, accounting for approximately % of the citys economy. ts from being the former capital Calgary, ts Agency, the current rate of unemployment is . %. cantly fewer
9 short to uctuations. ce space supply o
short to uctuations. ce space supply of approximately Germany, Paris As an international business centre, Paris is also suffering as a result of the global financial crisis. Nevertheless, the highly diversified corporate ce space turnover in the rst quarter of gure for the fourth the city centre to cheaper sub-markets on the tting from this trend: The vacancy rate there gure for class-A properties is likely to be far lower. nancing growth, decline in the unemployment rate and cant surplus in public-sector budgets. However, ecting the global trend, the Finnish economy is currently in recession once again. Recovery is expected % of the countrys working population, continues ux of people from rural areas.With office space of . million m², the HMA is home to more than half of the whole countrys office space. Space supply increased in the first rst quarter amounted to EUR ./m²/month and was achieved Zagreb Like the entire south-eastern European region, Croatia has also been hit extremely hard by the global rst cant
10 ly after especially due to foreign
ly after especially due to foreign direct investments, Brindisi Thanks to its excellent accessibility in terms of private transportation, the retail location Brindisi (population approx. ,) in Apulia attracts around two thirds of the relevant customer population of the surrounding area (approx. , people) in the province of Brindisi. Italian consumers particularly value state-of-the-art shopping centres with a balanced assortment of well-known Italian and Although purchasing power in the province of Brindisi is lower than in northern Italy, the portion of much higher than in the economic centres of comparative national average ( m²/, people). ce market achieved record turnover of nancial sector, another key pillar of the of ce nancial crisis. In Q , the nancial sectors focus on fund cance of debt capital-oriented products. cantly after ce space, Bucharest nancing for new nancial crisis.to lower demand. Due to the restrictions on the supply Prague ce space in Prague currently amounts to that are well conn
11 ected by public transport t from this.
ected by public transport t from this. There was no area rst time. The Prague rental market proved to be very dynamic The reason for this lies in the capital citys development nancial centre. This move is related to further diversification of the Czech Canada cient Canada consistently generated a budget surplus between and . The global economic and financial crisis began to hit the exporters (class A, downtown), the return rate is higher than ow. Calgary nancial centre Calgary in the province of Alberta The wealth of commodities has allowed the economy Calgary has space totalling over . million m², making ce market in Canada. After ve years of continuous rental rate increases, early rst time. Despite being sf = square foot (approx. . m²) Value-AddedOpportunitylowmoderatehigh . %� . % and %&#x %;&#x-984;�.20; % and &#x ;&#x%-41;D.9; . % and nancing % % and % %Source: Based on INREV * () * European Association for Investors in Non-listed Real Estate Vehicles 100
12 908050403020100 30 ReturnShare of outsid
908050403020100 30 ReturnShare of outside capital 26 20 18 16 14 12 10 8 6 4 2 CoreValue-addedOpportunity Debt nancing Equity nancing ces, cation, as well as a tiered exit charge in line with the holding cation means that the Fund their strategic plans at an early stage. The redemption cation deadline is six months for investments investments of EUR m and over. The exit charges, ow into the fund assets, amount to . % in rst year after acquisition, . % in the second ed property portfolio by ce properties. cult situation in the cation. ned by research analysis of cyclical and structural market risks as well as the development potential of countries, market segments, property sites and overall locations. c peculiarities of nancing and for development in the exchange rate as well as available under reviewEuropeCzech RepublicPrague, V Parku /,The Park I, Building ce building/, m² usable space Both office buildings, which were added to the cantly from ce markets. Thanks to the excellent infrastructure Pro
13 perty portfolio management ce buildings
perty portfolio management ce buildings in Bad Homburg, ce buildings in Bucharest, Calgary, ce building in Prague. The Fund is now invested The Czech Republic,The Park ce space, the submarket, in which the complex is located, has developed into Pragues primary business ce submarket in Prague by far. employed here and of the Fortune companies ces there. A c times. All important places in the city centre are accessible within minutes from the Chodov underground station. The property includes ce buildings equipped to a high level (including full air-conditioning) with an abundance of natural light, and is exibility. The tness centre. Property disposals during the periodunder review based on gross nominal rentals amounted to . % proportion of the market value accounted for. CountryProportion of . , ,. . ,,. . ,,. . , ,. . , , . . , ,. . , ,. . , ,. . , ,. . ,,. . ,,
14 . gure above highlights the unchang
. gure above highlights the unchanged broad regional diversi cation of the property assets. This geographical cation contributes, among other things, to stabilising long-term pro tability and maintaining a balanced le for DEGI GLOBAL BUSINESS. It also compensates to a large extent the local variations in Percentage of annual net nominal rentalsin %until December . . . . . after January A balanced distribution of the residual terms of lease is also key to a solid rental income situation. In this respect, DEGI GLOBAL BUSINESS attaches importance to avoiding what are known as cluster risks for lease agreements that are expiring. As of the reporting date, . % of leases were due to run beyond December , . % ce . . . . nancial ce counted for. . , , . . , ,. . ,,. (based on the economic residual life) including real estate companies counted for. Age structureProportion of . ,
15 , . . , ,.
, . . , ,. y. . , ,. . ,,. gure re ects the economic age on the basis of the total nancial services, Retail . Telecommunications .Public-sector institutions . Consumer goods industry .Technology and software companies Hotel/catering sector . Vehicle manufacturing and engineering Legal, tax and management consultancy Media . Transport .Other ce space is primarily user-neutral, which means the properties can be nancial year /, which runs from July until June , DEGI GLOBAL BUSINESS ow of funds from unit sales of EUR ows amounting to EUR . m from unit redemptions. ow of funds minus ow of funds) thus came to EUR . m in this cult market environment for nancial crisis, the and refers to the average property assets held directly expenditure ( . %), net income amounts to . %. ( . %) and provisions for deferred taxes ( . %). gure for the provisions recognised for deferred nanced property assets in the period un
16 der review, nancing. After accounting f
der review, nancing. After accounting for currency-related changes DEGI GLOBAL BUSINESS for the period under review, from July to June , which is calculated BUSINESS as of June ) AccumulatedAverage p. a.in %in % year . years . .Since launch. . Calculation method of BVI Bundesverband Investment und Asset Management e. V. (cf. footnote on page ). The liquid assets correspond to the rounded liquid assets in the Statement of Assets and Liabilities. The management fee amounts to . %. There are neither front-end loads nor exit charges. dbi = dresdnerbank investment management Kapitalanlagegesellschaft mbH and dit = DEUTSCHER INVESTMENT-TRUST Gesellschaft für PIMCO = Paci c Investment Management Company. PIMCO, a member of Allianz Global Investors, is one of the worlds most renowned companies Further information on capital gains tax can be found ts from disposals (capital gains cantly improving its rating over le. In addition to an ed and reported on by the competent employees in the individual specialist T
17 he central unit assists the departments
he central unit assists the departments with the integrated and systematic assessment and management of all relevant risks, such as counterparty, interest rate and currency risks as well as other market price risks, operational and liquidity risks. This individual risks are managed in a competent manner, An overview showing the current composition of the Management Board and the Supervisory Board banking contracts with DEGI with effect from The rating scale comprises categories, ranging from AAA (the best) to D (the worst). The AA category is the second-hi have placed in us during the period under review.Yours sincerely,Deutsche Gesellschaft für Immobilienfonds mbH Bärbel Schomberg Michael Determann Malcolm R. Morgan Roger Welz ects the high letting ratio of the high- nancial cult global economic Opportunities on the property market are associated with risk. In particular, the following should be borne uctuate uctuations may result from uctuations, all DEGI mutual funds have recorded positive performance possibility cannot be
18 excluded that a DEGI open-ended cation;
excluded that a DEGI open-ended cation; however, it is associated with uence individual performance c questions, particularly regarding the investors the investors individual situation should also be taken into account when making an investment decision. Moreover, exit charges for unit redemptions in average rental rates, the demand and the purchase at least once a year for each property by an cially appointed and sworn experts. special circumstances The liquidity of open-ended property funds is subject uctuations due to variations in the amount of ows and out ows. In the event of sudden ows, which can thus ows, liquid assets to service unit redemption and to cient to Foreign = outside Germany Loans in foreign currency were converted at the mean rate of exchange on June . Loan volume (direct) Loan volume (indirect via property companies) nancial year /. The loan volume (indirect nancial year /. Expressed as a proportion Loan volumeLoan (direct)(indirect via all fund propertiesFund assetsproperty companies)(net)
19 (net)in EUR sin EUR sin %in % ,
(net)in EUR sin EUR sin %in % , , . . EUR loans (Germany) , .. , .. , , . . xed rate period as of June years years years years years years years years years under year Germany under Germany years Germany years Canada under year . % nal maturity of the loan agreements as of June xed-rate period and by nal maturity of the loan agreements. ed in terms of both xed rates and nal maturities. Both the xed-rate period and the nal maturity of the loans are determined by the planned holding period of the properties, taking into account the risk diversi cation of . % . % . % . % . % . % Luxembourg, Luxembourg, Assets Currency hedging Canadian dollars (CAD) Canada in Canadian dollars uenced. Real estate CAD . m . % . % Other assets CAD . m Other liabilities CAD . m Provisions CAD . m Unhedged CAD . m Loans CAD .
20 m Currency forwards CAD . m Passi
m Currency forwards CAD . m Passive currency hedging (risk-offsetting, but not controllable) Active currency hedging (risk-offsetting, controllable) Open currency in local currency in EUR sCAD (Canada)(CAD ,) . .ential changes Bucharest,Romania,Calea Vitan a,PGV Tower (returns on properties and liquid assets, weighted according to capital invested) I. PropertiesBelgiumGross income . All indirectly held properties in Canada, Croatia, the Czech Republic, Finland, Italy, Luxembourg and Romania are shown in agg ciently differentiated basis in line with the holding period of the properties. In terms of the average directly held property assets in the respective country In terms of the funds average equity- The average gures for nancial year / (from July to June ) have been calculated using month-end gures. All indirectly held properties in Canada, Croatia, the Czech Republic, Finland, Italy, Luxembourg and Romania are shown in agg ciently differentiated basis in line with the holding p
21 eriod of the properties. The fund assets
eriod of the properties. The fund assets (net) correspond to the sum of the equity- nanced property assets and liquid assets. gures) PropertiesBelgiumProperties held directly ,. , . , . ,. , . Total properties ,. , . , . ,. , . nanced , . ,. , . , .,. nanced(loan volume), . , . , . , . , . for the portfolio. . . . .the portfolio. . ...Positive changes in value as per expertise. . . . . Other positive changes in value . . . . .Negative changes in value as per expertise . . . . . Foreign deferred taxes . . . . . Other negative changes in value . . . . .Changes in value as per expertise . . . . .. Other changes in value . . . . .. ce/practices . . . . . Annual rental income retail/catering . . .. . Annual rental income industry (warehouses, halls). . . . .Annual rental income car parking .. . . . Annual rental income other . . . . .Annua
22 l rental income total . . . .
l rental income total . . . .. . According to equity interest. There is no further breakdown by individual country, as this cannot be shown on a suf ciently differentiated basis in line with the holding period of the properties. The value of interests reported in the Statement of Assets and Liabilities, which totals EUR . m, corresponds to the net a In terms of net nominal rentals from directly held properties in the individual country In terms of total net nominal rentals from directly held properties In terms of total net nominal rentals corresponding to the interest in the properties that are held indirectly In terms of gross nominal rentals from directly held properties in the individual country In terms of total gross nominal rentals from directly held properties In terms of total gross nominal rentals corresponding to the interest in properties that are held indirectly All indirectly held properties in Canada, Croatia, the Czech Republic, Finland, Italy, Luxembourg and Romania are shown in agg ciently differentiated basis i
23 n line with the holding period of the pr
n line with the holding period of the properties. In terms of net nominal rentals from directly held properties in the individual country In terms of total net nominal rentals from directly held properties In terms of total net nominal rentals corresponding to the interest in the properties that are held indirectly ce/practices . . . .. Vacancy retail/catering . . . . .Vacancy industry (warehouses, halls) . . . . . Vacancy car parking . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . + . . . . . . . . . . ... . . . . . . . . . . .. . . . . . . .Total return in fund currency .II.Liquid assets.III.Total fund return before deduction of fund costs . fund costs (BVI method). ... Return ratios for the period November to June (eight-month period) Earned on an average i
24 nvested total property share for the per
nvested total property share for the period under review amounting to . % of the fund assets Earned on an average invested total property share for the period under review amounting to . % of the fund assets Earned on an average invested total property share for the period under review amounting to . % of the fund assets Earned on an average invested total property share for the period under review amounting to . % of the fund assets In terms of the funds average liquid assets. Earned on an average liquidity share in the period under review amounting to . % of the funds assets Earned on an average liquidity share in the period under review amounting to . % of the funds assets Earned on an average liquidity share in the period under review amounting to . % of the funds assets Earned on an average liquidity share in the period under review amounting to . % of the funds assets In terms of the average fund assets Helsinki,Finland, Kyllikinportti , Tekes in EURin EURin EUR nancial yearAdjustment for units issued or retu
25 rned before the distribution date ,
rned before the distribution date , . ows from unit sales ows from unit redemptions ows/out ows (net)(of which in foreign currency . )(of which in foreign currency , , . )(of which in foreign currency . )(of which in foreign currency . )(of which in foreign currency , . )(of which in foreign currency . ) nancial year companies, the in value of unrealised losses sessed value nancial year. gains changes in the prices of the securities, money market instruments As far as gure shows gure shows the difference between the valuation at the rate uctuations on currency forwards not nancial year. tion amount set out in the Annual Report for the previous year The nancial year and the distribu- ows in the prior-year reporting redemptions are not taken into account as fund out ows in the ows from unit sales ows from unit plied by the number of units sold or redeemed. The redemption value includes the income per unit designated as the ows and out ows of funds are reduced by these equalisa- ect the change in assets. Expendi
26 ture. proceeds from the sale and the boo
ture. proceeds from the sale and the book values that apply for tax pur-liquid assets. Realised gains and losses from currency forwards during the period under review are taken into account excluding the results of ad- items. in EURin EURin EURI,Properties. Commercial properties , , . (of which in foreign currency . ) , , . .(total in foreign currency . )II.Interests in property companies. Majority interests , , . , , . . (total in foreign currency , , . )III. Liquid assets.Cash at bank(of which in foreign currency. ).Investment units, ,. (of which in foreign currency . )(of which in foreign currency . ) , , . .(total in foreign currency. )IV. Other assets.Receivables from property management , , .(of which in foreign currency . ). Receivables from real estate companies , , . (of which in foreign currency . ).Interest accrued(of which in foreign currency . )(of which in foreign currency . ) , , . . (total in foreign currency . )Total I. IV. , , .
27 . (of which in foreign currency , ,
. (of which in foreign currency , , . ).Loans(total in foreign currency . ).Property management ,, .(of which in foreign currency . ). Other reasons (of which in foreign currency . ) , , . . (total in foreign currency . )VI.Provisions , , . . (of which in foreign currency, . ) , ,. . Unit value . EURUnits in circulation, , pcs. xing. Foreign currency items are deemed to comprise all non-EUR items.Canadian dollar (CAD) CAD = EUR . EUR = CAD .Czech koruna (CZK) CZK = EUR . EUR = CZK .Croatian kuna (HRK) HRK = EUR . EUR = HRK .Romanian leu (RON) RON = EUR . EUR = RON . Fund assets During the period under review ( July to June ), decreased from EUR . m to EUR . m. Units were sold in the amount of EUR . m and redeemed (,, as of June ), this gives a unit value on No directly held properties were acquired or sold during the period under review. Accordingly, the Fund continued to possess
28 five directly held rose from EUR .
five directly held rose from EUR . m ( June ) to Please consult the property portfolio on pages to for Investment was made in the form of a new majority interest In September , the company acquired a . % stake in the real estate company SPC Prague Park k.s. in Prague As of June , the Fund held a majority interest in a total For details on the interests in real estate companies, consult as of the reporting date amount to EUR . m. stood at EUR . m as of the reporting date. in dbi DEGI Bonds amounted to EUR . m includes all officially traded securities and totalled EUR . m as of the reporting date. Additional information on the liquid assets is provided on Other assets of EUR . m comprise rentals owing (EUR . m), rental deposits (EUR . m) and receivables from allocations yet to be settled (EUR . m). totalling EUR . m relate to the shareholder loans granted, of EUR . m to DEGI Brindisi S.r.l., of EUR . m to DEGI Jankomir d.o.o., of EUR . m to DEGI Kirchberg S.A., of EUR . m to DEG
29 I Helsinki CBD Oy, of EUR . m to DEGI
I Helsinki CBD Oy, of EUR . m to DEGI PGV Tower SRL. and of EUR . m to SPC Prague Park k.s. of EUR . m relates to interest accrued from shareholder loans granted of EUR . m and other interest accrued of EUR . m. item (EUR . m) essentially comprises receivables from holding companies of EUR . m, amounts owed by the tial financing of the directly held properties in Germany, France and Belgium, and partial financing of the equity investment in stood at EUR . m rental deposits (EUR . m), advance allocation payments amounted to EUR . m. As of the reporting nies (EUR . m), liabilities from loan interest (EUR . m), thorities (EUR . m). This item also includes liabilities to DEGI Deutsche Gesellschaft für Immobilienfonds mbH arising from fund management (EUR . m) and liabilities to the custodian Various procedures are currently used by open-ended property funds to take account of deferred taxes on any foreign profits Until a standard regulation is put in place, we will determine the provisions for deferred taxes on any
30 foreign profits from disposals relating
foreign profits from disposals relating to direct acquisitions of foreign properties for The recognition of provisions shall be based on the difference between the market value and the residual book value of the tion date, taking into account any foreign tax losses carried forward. The country-specific tax rate on capital gains is then A provision for deferred taxes on foreign profits from disposals ing costs from acquisitions (EUR . m), construction services (EUR . m), maintenance (EUR . m), for foreign income taxes There are provisions of EUR . m for deferred taxes on (any) foreign profits from disposals (capital gains tax) of the directly held properties in the portfolio (also refer to the notes on the ts eign properties or shares in foreign real estate companies can only be incurred for realised capital gains. This means that an open-ended property fund is only charged tax on profits from tial foreign taxation in the event of future disposal transactions Guyancourt, France,, Rue Arnold Schoenberg,Le Gershwin as of June O =
31 Of ce buildingS = Shopping centreG = G
Of ce buildingS = Shopping centreG = GarageAC = Air-conditioningL = Lift Ser.Location ofPro-No.Type ofPurchasePurchaseConstr./Pro-Usable spaceSpecialno.propertypertyofusedatedateconver-pertycom-resi-featurestype oorsof theof thesionsizemercialdentialpropertyinterestyearin %in m²in m²in m² O/ /, , G, AC, LO / / , , G, AC, L O / / , , G, L Strässchensweg O / , , G, AC, L O / , , G, AC, L O/ / /, , G, LFabianinkatu / Fabiansgatan Bad Homburg, Strässchensweg ,HollandhausCologne, Germany,Guyancourt,France,, Rue Arnold Schoenberg, Le Gershwin Ser.Location ofPro-No.Type ofPurchasePurchaseConstr./Pro-Usable spaceSpecialno.propertypertyofusedatedateconver-pertycom-resi-featurestype oorsof theof thesionsizemercialdentialpropertyinterestyearin %in m²in m²in m² O / / /, , G, AC, LKyllikinportti / S / / / , , G, AC O / / /, , G, AC, L , Circuit de la Foi
32 re Internationale / No breakdown is
re Internationale / No breakdown is stated if the main use accounts for more than % of the rental income. Areas subject to heritable building rights (Erbbau) Oy = Osakeyhtiö (similar to a public limited company (Aktiengesellschaft) under German law) The company was founded by DEGI, whereupon the property was acquired by the company. S. r. l. = Società a responsibilità limitata con unico socio under Italian law (similar to a private limited company (Gesellsc Part-owned S.A. = Société Anonyme (similar to a public limited company (Aktiengesellschaft) under German law) Luxembourg,, Circuit de la Foire,Internationale Brindisi, Ser.Location ofPro-No.Type ofPurchasePurchaseConstr./Pro-Usable spaceSpecialno.propertypertyofusedatedateconver-pertycom-resi-featurestype oorsof theof thesionsizemercialdentialpropertyinterestyearin %in m²in m²in m² O / / , , G, AC, L S / / , , G, AC O / / , , G, AC, L Company: DEGI PGV Tower SRL ), BucharestCapital: RON , , . Shareholder loan: E
33 UR , , . Interest: . % )Cz
UR , , . Interest: . % )Czech Republic O / / , , G, AC, L No breakdown is stated if the main use accounts for more than % of the rental income. The company was founded by DEGI, whereupon the property was acquired by the company. Limited Partnership (similar to a limited partnership (Kommanditgesellschaft) under . % is held by DEGI for own account via the company DEGI Citadel West General d.o.o. = drutvo s ogranienom odgovornou (similar to a limited liability company Part-owned SRL = Societate comercial cu r spundere limitat (similar to a limited liability company The second shareholder is DEGI Beteiligungs GmbH. Areas subject to heritable building rights (Erbbau) k.s. = Komanditní spolenost (similar to a limited partnership (Kommanditgesellschaft) The second shareholder is DEGI Prag Park GmbH. O = Of ce buildingS = Shopping centreG = GarageAC = Air-conditioningL = Lift Calgary, Canada, ce building Only those properties added to the fund during the period under review have been taken into account
34 . Consecutive numbering in the sequence
. Consecutive numbering in the sequence of the transfer of rights and obligations during the period under review. If properties Date of agreement Purchase price of property exclusive of ancillary costs k.s. = Komanditní spolenost (similar to a limited partnership (Kommanditgesellschaft) under German law) The second shareholder is DEGI Prag Park GmbH. I.PurchasesPur-Location ofPro-UsablePurchasePurchaseTransfer Purchase Appraiser-spacedate of thedate of theof use andprice incl. typepropertyinterestencumbranceancillary costsmarket valuein m²in EUR sin EUR s CZ- Prague O , / / . . , , Company: SPC Prague Park k.s. ), PragueCapital: CZK , . Interest: . % ) II.Disposals in the period July to June Brindisi, Certi cates of deposit: Money market instruments issued by banks Foreign issuers: This refers to issuers based outside of Germany. EUR . m . % EUR . m . % EUR . m. % MaturityFixed-rate .Certi cates of deposit . Allianz SE MC CP Tr. , . Deutsche Po
35 stbank AG MC CP , cates of deposit,
stbank AG MC CP , cates of deposit, total ,..)( )( )( )( . )( . )Money market instruments, total ,..)( )( )( )( . )( . )II.Investment unitsSecurities fund dbi DEGI Bonds , , . Investment units, total ,, . .III.Securities.Exchange-traded securities (interest-bearing securities)MTN R v. / , , . . . (interest-bearing securities), total ,,..)( )( )( ) . ( . )Securities, total ,,..)( )( )( ) . ( . ) ,, . . a)Purchases and sales of nancial instruments that were concluded during the period under review and no longer appear in the Statement of Assets and LiaSales (market CAD . m . . . CAD . m, . , . .CAD . m, . , . .CAD . m, . , . .CAD . m, . ,. .CAD . m, ., . .CAD . m, . , ..Canada, totalCAD . m,.,. . b)Open positionsCAD . m, . , . . Canada, totalCAD . m, ., .. t/loss from foreign currencie
36 s ts/losses of currency forward sale ts
s ts/losses of currency forward sale ts/losses of the currency position. On the date of sale of the currency, the deal is closed either using funds arising Hedging against currency exposure The duration is the average minimum lock-up period of the capital invested in a security. Due to interest payments in the mean in %in years ed duration AAA:Best quality, lowest default riskAA:High quality, but somewhat higher risk than top groupA:Good quality, many good investment aspects but also elements that could have a negative impact if economic development were tBBB:Average quality, but lack of protection against the impact of a change in economic development as of June BBB: . %AA: . %AAA: . % . % Corporate bonds. %Mortgage bonds . % The investment company uses the management fee paid to it in order to grant trail fees to intermediaries, e.g. banks, usually in EURin EURin EURin EUR.Income from property(of which in foreign currency . ).Income from interests held(of which in foreign currency . ) .Income from liquid assets .In
37 come from cash at bank ,.(of whic
come from cash at bank ,.(of which in foreign currency . ) .Income from fund units , . (of which in foreign currency . ) . Income from securities , . (of which in foreign currency . ).Other income(of which in foreign currency,.)(of which in foreign currency, . )II.Expenses.Management costs. Operating costs, ,. (of which in foreign currency . ).Maintenance costs , . (of which in foreign currency . ). Property management costs , .(of which in foreign currency . ).Other costs, . (of which in foreign currency . ).Interest expenses(of which in foreign currency . ) .Foreign taxes(of which in foreign currency , .).Fund management costs pursuant to section of the Special Terms of Contract.Management fee , , .(of which in foreign currency . ).Custodian fee , .(of which in foreign currency . ). Appraiser costs, . (of which in foreign currency . ).Other expenses , . (of which in foreign currency, . )(of which in foreign currency ,.) for the
38 period July to June
period July to June The total expense ratio (TER) expresses the total costs and charges as a percentage of the average fund volume within a nancial year and encompasses all charges and costs incurred in Percentage transaction-related fees are the fees that the company has received in accordance with section () of the Specia gure can vary considerably as a result of different investment activity. Percentage transaction-related fees are no indication in EURin EURin EURin EURIII.Ordinary net income(of which in foreign currency , . )IV.Realised gains .on currency transactions(of which in foreign currency . ).on liquid assets(of which in foreign currency . )(of which in foreign currency . )V.Realised losses.on currency transactions.on liquid assets(of which in foreign currency . )VI.Disposal gains/losses(of which in foreign currency . )VII.Equalisation(of which in foreign currency . )(of which in foreign currency , . ) Management costs that cannot be passed on to tenants (EUR . m), (EUR . m) and (E
39 UR . m). The property management Inte
UR . m). The property management Interest expenses nancing of the directly held properties in the amount of nancing of the holding Foreign taxes EUR . m. fund management costs include the management fee, custodian corresponds to . % of the average fund assets during the The . % of the average fund assets during the period under review.The nancial year. Other expenses the Special Terms of Contract comprise costs for auditing the accounts, legal and tax consultancy costs as well as the costs of nancial year from July to June increased in the year under review by EUR . m to nancial year /. Income from property nancial year /. Income from real estate companies Income and Expenditure in the year under review, as no distributions Income from liquid assets bank Taking into account the Realised gains less unrealised changes in Other income of provisions for non-third party liabilities (Aufwandsrückstellungen) nancial year /. from the difference between the income and expenditure. t of EUR .
40 m. ordinary net income plus realised
m. ordinary net income plus realised gains and losses and the The distribution and amount of income distributed is to be stated to four decimal places pursuant to section () no. of th , ,.. .on currency transactions , . . .on liquid assets , . . ,. . , , . . ,, . . , . . Reversal of retained surpluses pursuant to section () of the Special Terms of Contract ,. . Retention of surpluses pursuant to section () of the Special Terms of Contract ,. . ,,. . , , . . , , .. ts carried forward of ciently sound basis Hornschu Strässer(Wirtschaftsprüfer) (Wirtschaftsprüfer) nancial year from July nancial statements promulgated by the German Institute of Auditors (Institut der Wirtschaftsprüfer gures disclosed in the Units are held as private assets (private assets). W W Units are held by corporations as operating W Units are held by insurance companies as W nancial year from
41 July to June For tax purpo
July to June For tax purposes, the distribution is treated as follows: held as assets held as operating assets I For units held as operating assets IIin EURFor units held as operating assets IIIin EURDistribution per unit . . . . . . . . ts from the sale of securities subject to taxation in operating assets) . . . . . . . . or section b KStG tax-exempt . . . . or section b KStG subject to taxation . . . . ) . . . . Total exempt from tax/not subject to tax. . . . Distribution subject to tax . . . . nal withholding tax . . . . . . . . The income exempted from tax under the double taxation agreements with Belgium, France, Italy, Canada and the Czech Republic and which is either on rule in accordance Since the Investment Tax Act (InvStG) came into effect, the income exempted from tax under the double taxation agreement is no Excluding solidarity surcharge
42 nal withholding tax covers all tax d
nal withholding tax covers all tax debts arising nal), nal withholding tax rate of %. nancial ling the income tax return (e.g. nal withholding tax rate of % or EUR p.a. (for single persons or separately assessed If the income stems in whole or in part from dependent income, an income tax assessment is only performed subject to tax) amounts to more than EUR in each German and foreign dividends also from real estate nal of % (plus solidarity surcharge and, where Rental income from this property is generally accrued tax-free in Germany as a result of the existing double Distributed gains from the sale of domestic properties, nal withholding tax. foreign properties shall also remain tax-free provided investors with effect from January . If reinvested, accrued by the investor and are therefore not subject Gains realised at fund level from the sale of domestic treated as subject to tax at investor level. This applies Asset payouts (e.g. in the form of interest for building nance) are not subject to tax. rate of %. M
43 oreover, there are a number of cases in
oreover, there are a number of cases in which it could make sense to disclose this information When paying out the distribution to private customers for holding the units in safe custody must, in principle, The investor shall receive a record of the final cate or evidence of non-residency nal withholding tax on interest income nal withholding tax on interest at-rate income-related expenses nal nal withholding tax if cient amount or cate has been submitted. cate is not submitted in time, the investor nal withholding tax and cate from the ce. nal withholding tax attributable to the individual the instructions issued by the tax authorities: Initially, German and foreign dividends also from real estate nal withholding tax (Abgeltungssteuer) of % (plus solidarity surcharge and, where appropriate, church tax) by investors liable for income tax (abolition of the half-income procedure). For investors subject to For tax purposes, an adjustment item on the liabilities side is to be taken into account for domestic deductions for wear and tear. At
44 the time of disposal Income that is tax
the time of disposal Income that is tax-exempt in accordance with double t according to the commercial and tax balance nal burdens can be stated in the tax return. Furthermore, ts ts are the payments included in the sale xed-income securities). The interest and interest accrued by the Fund are subject nal withholding tax on capital yields when the units are redeemed or sold by resident nal withholding tax on the interim t amounts to % if the units are held with nal withholding tax in each case). The tax t paid when purchasing units can be reduction in tax. In addition, the tax is not withheld if there is an exemption application, or upon submission cate. In this case too, t, the following are ignored: Income from t is determined at ts to be t per unit concerned by the number ts for nancial year ts can also be regularly found in the distribution for each unit is multiplied by the nal withholding tax is to be cate. cate. Solidarity surcharge The solidarity surcharge (Solidaritätszuschlag SolZ) nal withholding tax, the reta
45 ined nal withholding cate; it is impu
ined nal withholding cate; it is imputed to the nal solidarity surcharge determined as part of the income or corporation tax assessment. Any solidarity surcharge ts from the sale of investment units by a private nal withholding Nevertheless, fund units purchased before t on the t on the date of sale, to preclude ts (see below). However, exemption criteria apply to some investors; We recommend that you contact a French tax advisor t and fund equity pro t are only t is also t includes foreign rentals not foreign property held by the fund, insofar as Germany The investment company publishes the fund property t as a percentage of the value of the investment t contains the dividend income ts and losses from t on each trading day as a percentage of the t and fund equity pro t. Interest deduction ceiling determining interest for the interest deduction ceiling distributed investment income is counted as interest The amount of interest in investment income is other than Germany nancial consequences cation means of recording mea
46 sures between the EU member limits for i
sures between the EU member limits for investments in interest-bearing assets, both ts), is determined and made available ts for nancial t and equity t that is relevant for tax purposes. t.For investors whose units are held as operating assets ts; % of non-tax deductible operating expenses. For investors subject to income tax whose units are held as operating assets, the gains from the sale of investment ts. t and fund equity t for nancial year / can be found on a)Distribution amount per unit . . . . )Deemed distribution income . . . . distributions not covered by income not subject to tax . . . . b)Amount of income distributed . . . . c aa)Deemed distribution income from previous years . . . . c bb)Pro ts from the sale of securities, subscription rights and futures that are tax-free in private assets . c cc)Ordinary income (as per section no. EStG) . c dd)Ordinary income as per section b () KStG . c ee)Capital gains
47 (as per section no. EStG) .
(as per section no. EStG) . c ff)Capital gains as per section b () KStG . c gg)Tax-exempt income from the disposal of subscription rights to available units in investment companies . . . c hh)Tax-exempt gains from the sale and purchase of domestic and foreign properties outside the -year period . c ii)Income which is tax-exempt on the basis of double taxation agreements (especially foreign rental income and gains from . . . . c jj)Foreign income on which foreign withholding tax has been treated as income-related expenditure . . . . c kk)Foreign income on which foreign withholding tax is deemed to have been retained (notional withholding tax) . . . . c II)Income as per section (a) InvStG . . . d)Assessment basis for % withholding tax on capital yields. . . . e) % withholding tax to be credited/refunded . . . . f aa)Foreign withholding tax eligible for crediting or deduction . . . . f bb)D
48 eductible foreign withholding tax .
eductible foreign withholding tax . . . . f cc)Notional foreign withholding tax . . . . g)Depreciation or reduction in asset value (properties) . . . . section ( ) sentence no. InvStG . . . . and of the German Investment Tax Act (InvStG)for the investment fund DEGI GLOBAL BUSINESS for the period from July to June investments, income and expenses for tax purposes, cation of such investments, gures for these target funds, which were provided by third parties, correctly in accordance cates. We did not audit gures. nancial statements as promulgated by the German Institute of Auditors (Institut der Wirtschaftsprüfer gures are gures in gures in the accounts and the Annual Report The audit includes an assessment of the interpretation ndings ciently sound basis for our assessment.The Company commissioned us, in accordance gures to be published by the Company in ed were calculated in accordance with The responsibility for determining the tax disclosures and of t
49 he German Investment Tax Act in of the G
he German Investment Tax Act in of the German Investment Act (InvG) for the relevant period. It comprises a reconciliation statement based gures made available to it for these target funds.Our responsibility is to give an opinion, based on the gures accordance with section () of the German reconciliation statement and the information intended particular, our audit examines the characterisation of cate for the Figures in accordance with Section () cate for the Figures in accordance with Section () Sentence No. of the German Investment Tax Act (InvStG) accordance with section () sentence no. InvStG gures in accordance with section () ppa.Jürgen Bauderer Marco MüthTax Advisor Tax Advisor DateInterim . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . .. . .. . . . . .. . . . . . . . .. . . .
50 . . . . . .. .
. . . . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. ... . .. . .. . .. ... ... . .. ... . DateInterim .. . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . .. . . . . .. . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . .. .
51 . . . . . . .. .
. . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . .. . . . . . . . .. . .. . . . . . . . . . . . DateInterim . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . .. . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . ..
52 . . . . . . . .
. . . . . . . . . . .. . .. . . . . .. . .. . . . . .. . . . . . DateInterim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . .. . .. . . DateInt
53 erim . . .. . . . .
erim . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . .. . .. . . . . .. . . . . . . . .. . . . . . . . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. ... . .. . .. . .. ... ... . .. ... . DateInterim .. . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . .
54 . . . . . .. . .
. . . . . .. . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . .. . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . .. . . . . . . . .. . .. . . . . . . . . . . . DateInterim . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . .. . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .
55 . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . .. . .. . . . . .. . .. . . . . .. . . . . . DateInterim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56 . . . . . . . . .
. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . .. . .. . . t and fund equity pro DateFund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . ..
57 . . .. . . .. .
. . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . DateFund .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58 . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DateFund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . ... . . .. . .. . . . .. . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59 . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . t and fund equity pro DateFund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60 . . . . .. . . .
. . . . .. . . . . . . .. . . .. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. . . .. . . . . DateFund . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . t per trading day shown above takes Prospectusincluding Terms of Contracteffective from May DEGI Deutsche Gesellschaft für Immobilienfonds m.b.H. cates is effected on cates that is citizens can also be partnerships or stock corporations and the investor, and the precontractual relationships ce of the Company shall be the place of jurisdiction for disputes arising from the contractual relationship, unless the investor has a g
61 eneral place of jurisdiction (Bürgerlich
eneral place of jurisdiction (Bürgerliches Gesetzbuch BGB) concerning distance nancial services, parties ce of Deutsche fax: + ()/-. The right to bring the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 The investment company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Custodian bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Committee of Appraisers and valuation procedure. . . . . . . 77Pre-purchase valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Valuation method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77The Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 le of the typical investor. . . . . . . . . . . . . . . . . . . . . . . . . . 78policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80Interests in property
62 companies . . . . . . . . . . . . . .
companies . . . . . . . . . . . . . . . . . . . . . . . 80Encumbrance with a heritable building right. . . . . . . . . . . . . 81with heritable building rights. . . . . . . . . . . . . . . . . . . . . . . . . . 81Liquid assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Cash at bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Money market instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 84money market instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Minimum liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86Risks associated with investments in liquid assets. . . . . . . . 86Borrowing and encumbrance of assets . . . . . . . . . . . . . . . . . 86Derivatives for hedging purposes. . . . . . . . . . . . . . . . . . . . . . . 87Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63 . . . . . . . . 89Swaps . . . . . . .
. . . . . . . . 89Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Swaptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Credit default swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Securitised derivatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Listed and unlisted derivatives. . . . . . . . . . . . . . . . . . . . . . . . . 89Properties as an underlying for derivative transactions. . . . 90for hedging them . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90Summary of the loss risks in derivative transactions. . . . . . 90Securities lending. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91Securities sale and repurchase (repo) agreements . . . . . . 91Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91Stock exchanges and markets . . . . . . . . . . . . . . . . . . . . . . . . . 92Management and other
64 expenses. . . . . . . . . . . . . . . .
expenses. . . . . . . . . . . . . . . . . . . . . . 92acquisition of investment units . . . . . . . . . . . . . . . . . . . . . . . . 93Stating a total expense ratio TER. . . . . . . . . . . . . . . . . . . . . 93Sub-fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Unit classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93Issue of units, minimum investment amount . . . . . . . . . . . . 93Redemption of units, period of notice . . . . . . . . . . . . . . . . . . 94Order acceptance deadline. . . . . . . . . . . . . . . . . . . . . . . . . . . . 94Valuation/issue and redemption prices . . . . . . . . . . . . . . . . . 95Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Construction work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Interests in property companies . . . . . . . . . . . . . . . .
65 . . . . 95Liquid assets . . . . . . .
. . . . 95Liquid assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Special valuation rules for individual assets . . . . . . . . . . . . . 96Unlisted bonds and borrowers note loans . . . . . . . . . . . 96Money market instruments . . . . . . . . . . . . . . . . . . . . . . . . 96Derivatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96Options and futures contracts. . . . . . . . . . . . . . . . . . . . . . 96securities loans and liabilities. . . . . . . . . . . . . . . . . . . . . . . 96Assets denominated in foreign currencies. . . . . . . . . . . . 96Securities sale and repurchase (repo) agreements. . . 96Composite assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96Initial charge and exit charge. . . . . . . . . . . . . . . . . . . . . . . . . . 96Publication of issue and redemption prices. . . . . . . . . . . . . . 97Costs of issuing and redeeming units. . . . . . . . . . . . . . . . . . . 97Suspension of redemption . . . . . . . . . .
66 . . . . . . . . . . . . . . . . . . 97C
. . . . . . . . . . . . . . . . . . 97Calculation of income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Income equalisation procedure . . . . . . . . . . . . . . . . . . . . . . . . 98Appropriation of income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Effect of the distribution on the unit value . . . . . . . . . . . . . . 99Crediting the distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99tax regulations for investors. . . . . . . . . . . . . . . . . . . . . . . . . . . 99Units in private assets (taxpaying residents). . . . . . . . . . . . . 99interest-related income . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 ts from the sale of domestic and foreign properties after expiry ten years of purchase . . . . . . . . . 99 ts from the sale of domestic properties within ten years from the time of purchase. . . . . . . . . . . . . . . . . . . . 99 ts ten years of purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 ts from the sale of securities ts from fu
67 tures . . . . . . . . . . . . . . . . .
tures . . . . . . . . . . . . . . . . . . . . . . . . . . . 100estate investment companies). . . . . . . . . . . . . . . . . . . . . . 100foreign property partnerships . . . . . . . . . . . . . . . . . . . . . . 100Negative tax income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Asset payouts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Capital gains at investor level . . . . . . . . . . . . . . . . . . . . . . 100Units in business assets (resident tax payers). . . . . . . . . . . . 100interest-related income . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Foreign rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 ts from the sale of domestic and foreign properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 ts from the sale of securities ts from futures . . . . . . . . . . . . . . . . . . . . . . . . . . . 101(particularly from property stock corporations). . . . . . . 101and foreign property partnerships. . . . . . . . . . . . . . . . .
68 . . 101Negative tax income. . . . . .
. . 101Negative tax income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Asset payouts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102Capital gains at investor level . . . . . . . . . . . . . . . . . . . . . . 102Withholding tax on interest income. . . . . . . . . . . . . . . . . . . . 102Withholding tax on capital yields . . . . . . . . . . . . . . . . . . . . . . 103Solidarity surcharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Non-resident individuals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Foreign withholding tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Separate determination, external audit . . . . . . . . . . . . . . . . . 104 ts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 104and non-transparent taxation . . . . . . . . . . . . . . . . . . . . . . . . . 104EU Savings Directive/Interest Information Ordinance. . . . . 104Merging funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69 . . 105Land transfer tax. . . . . . . .
. . 105Land transfer tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Legal and tax risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106New tax regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Units in private assets (taxpaying residents). . . . . . . . . . . . . 107 ts from the sale of domestic properties within ten years from purchase. . . . . . . . . . . . . . . . . . . . . 107 ts from the sale of domestic and foreign properties after expiry of ten years from purchase. . . . . . . . . . . . . . 108 ts from the sale of foreign properties within ten years of purchase . . . . 108 ts from the sale of securities ts from futures . . . . . . . . . . . . . . . . . . . . . . . . . . . 108real estate investment companies). . . . . . . . . . . . . . . . . . 108foreign property partnerships . . . . . . . . . . . . . . . . . . . . . . 108Negative tax income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Asset payouts . . . . . . . . . . . . .
70 . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 109Capital gains at investor level . . . . . . . . . . . . . . . . . . . . . . 109Non-resident individuals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Church tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 ts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Units in business assets (resident tax payers). . . . . . . . . . . . 110and interest-related income. . . . . . . . . . . . . . . . . . . . . . . . 110Foreign rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 ts from the sale of domestic and foreign properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 ts from the sale of securities ts from futures . . . . . . . . . . . . . . . . . . . . . . . . . . . 111(particularly from property stock corporations). . . . . . . 111and foreign property partnerships. . . . . . . . . . . . . . . . . . . 111Negative tax income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Asset
71 payouts . . . . . . . . . . . . . . . .
payouts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Capital gains at investor level . . . . . . . . . . . . . . . . . . . . . . 111Solidarity surcharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Foreign withholding tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Separate determination, external audit . . . . . . . . . . . . . . . . . 112and non-transparent taxation . . . . . . . . . . . . . . . . . . . . . . . . . 112EU Savings Directive/Interest Information Ordinance. . . . . 112Merging funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Land transfer tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Legal and tax risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Consultancy and operations outsourced to third parties . . 114Preconditions for winding up the Fund. . . . . . . . . . . . . . . . . . 114Procedure for winding up the Fund. . . . . . . . . . . . . . . . . . .
72 . . 114Transferring all assets of the F
. . 114Transferring all assets of the Fund . . . . . . . . . . . . . . . . . . . . . 114Procedure for transferring all assets of a fund. . . . . . . . . . . . 115Other funds managed by the Company. . . . . . . . . . . . . . . . . 115 Act (InvG) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116as of 1 October 2008 . . . . . . . . . . . . . . . . . . . . . . . 117 General Terms of Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . 119Section 1 Fundamentals. . . . . . . . . . . . . . . . . . . . . . . . . . 119Section 2 Custodian Bank . . . . . . . . . . . . . . . . . . . . . . . . 119Section 3 Committee of Appraisers. . . . . . . . . . . . . . . . 119Section 4 Fund management . . . . . . . . . . . . . . . . . . . . . 120Section 5 Investment principles . . . . . . . . . . . . . . . . . . . 120Section 6 Liquidity, investment and issuer limits . . . . 120Section 7 Securities lending. . . . . . . . . . . . . . . . . . . . . . . 121Section 8 Securities sale and repurchase (repo) transactions . . .
73 . . . . . . . . . . . . . . . . 122Sec
. . . . . . . . . . . . . . . . 122Section 9 Borrowing and encumbrance of properties. . . . . . . . . . . . . . . . . . . . . . . . . . . 122 to another fund. . . . . . . . . . . . . . . . . . . . . . . . . 122 cates. . . . . . . . . . . . . . . . . . . . . . . . . 123 suspension of redemption . . . . . . . . . . . . . . . 123Section 13 Issue and redemption prices. . . . . . . . . . . . . . 124Section 14 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Section 15 Rendering of accounts. . . . . . . . . . . . . . . . . . . 124Sections 16 Termination and liquidation of the Fund . . 124Section 17 Amendments to the Terms of Contract. . . . 125Section 18 Place of performance/place of jurisdiction . 125Special Terms of Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126Section 1 Custodian Bank. . . . . . . . . . . . . . . . . . . . . . . . . . 126Section 2 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 1 October 2008 until 31 March 2009). . . . . . 126 (effective
74 from 1 April 2009) . . . . . . . . . .
from 1 April 2009) . . . . . . . . . . . . . . 127Section 4 Encumbrance with a heritable building right 127Section 5 Maximum liquidity. . . . . . . . . . . . . . . . . . . . . . . 127Section 6 Foreign exchange risk . . . . . . . . . . . . . . . . . . . . 128Section 7 Derivatives for hedging purposes . . . . . . . . . . 128 and repurchase (repo) agreements. . . . . . 129Section 9 Unit classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Section 10 Issue and redemption prices. . . . . . . . . . . . . . 129 until 31 March 2009. . . . . . . . . . . . . . . . . . . . . 129Section 11 Costs (effective from 1 April 2009). . . . . . . . 130Section 12 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131Section 13 Financial year . . . . . . . . . . . . . . . . . . . . . . . . . . 131Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Prospectus as the Fund) is DEGI Deutsche Gesellschaft für Immobilienfonds mbH, founded on October (hereinafter referr
75 ed to as the Company). Established on
ed to as the Company). Established on October and with its registered ce in Frankfurt am Main, it is an investment company ned under the German Investment Act (InvG) in the legal form of a German limited liability company Detailed information on the Company, the composition of ce in Commerzbank AG is a credit institution in accordance deposit and lending business, as well as the securities Funds real properties, holdings in property companies nancial institutions, money market instruments, the regulations of the German Investment Act (InvG), which requires that the management and the cates of deposit of the Fund nancial institutions. To nancial real property without the Custodian Banks approval. the validity of disposal limitation in another suitable below, for holdings in property companies. The Banks approval is required for the cates and determines, cates. In transactions entered into for the joint account of the counterpart of transactions entered into is received the income of the Fund is applied in compliance with valuati
76 on procedure ed fth calendar rst appo
on procedure ed fth calendar rst appointment. This period can involved in each case has not exceeded % of rmed this to the Company by the properties held in the Funds portfolio or the properties that the Company or a property Furthermore, the Committee of Appraisers shall, within two months of the creation of the heritable building right, ascertain the value of the A property may only be acquired for the Fund or nancial statements or in rmed before that the ground purchased shall determine the market value of the property, using a valuation method that is The market value will generally be determined in accordance with the net income value method on the basis of the German Valuation Ordinance (Wertermittlungsverordnung). This method is Prospectus uencing the value of a c valuation methods in another country. . Discounted Cash Flow Method ow method ows expected from the properties are discounted c rates over a ows and the discounted . Investment method. Direct Value Comparison Method nite period. The net assets belonging to t
77 he le of the typical investor investor
he le of the typical investor investors of high net worth and asset managers ces). It is aimed at both experienced ve years; investors should be in a position investment policy t ed property portfolio. nancial and location-related risks c particularities of nancing and (in In order to achieve the investment objective, the rst priority is to establish a setup portfolio characterised cation in is to invest in commercial properties such as business ce buildings used for administrative, retail ed in terms of cation can only c features of the individual properties nancing of the properties will be effected, for example, if in so doing an increase in the return on equity can be achieved or if this nancing quota, the c nancing conditions, the exchange nancial advantages be amended by the Company. Amendments to additionally on the Companys website under . The Company may acquire on behalf of the Fund a) residential properties for letting, commercial b) land under development;c) undeveloped land intended and suitable for d) heri
78 table building rights and foreign rights
table building rights and foreign rights e) other properties, heritable building rights . The Company may acquire for the Fund, within . The Company may acquire properties within the ed in the a) an appropriate regional distribution of b) free transfer of ownership of the properties is lment of the rights and obligations of the Before any acquisition, as part of the proper The countries and the respective maximum ed . None of the properties may, at the date of their the Funds net assets. In calculating the value of the Funds net assets, borrowings will not be . The Company may exceed the investment limits rst four . The investment objective is to achieve regular . In selecting properties on behalf of the Fund, the . The Company may also acquire on behalf of the . The latest Annual and Semi-Annual Reports . The Company may acquire and hold interests in a) is limited in its corporate object to the b) may only acquire those assets within the c) may acquire a property or an interest in property company, does not exceed % of the value
79 of the Funds net assets.. Furthermore
of the Funds net assets.. Furthermore, the acquisition of an interest in a . The capital contributions of the shareholders of a property company in which the Company . If the investment company holds an interest in . The value of the assets owned by all property of the assets of property companies in which the Company does not hold for the account of the Fund the majority of the voting rights The Company may exceed the investment limits rst four years after the . In calculating the value of the Funds net assets, . The Company may, for the account of the to a property company in granted to the individual property company do not exceed in total % of the value of the also apply if a third party, acting on the instructions right with heritable building rights held for the account of the Fund to exceed % of the value of the disadvantages for the Fund are thereby avoided or if these encumbrances allow the property to be interests in property companies and Besides changes in general economic conditions, nancial standing of tenants. The ph
80 ysical foreseen. In order to limit t
ysical foreseen. In order to limit these risks, the Company When acquiring usufructuary rights in public-may be a risk that the income will not correspond Risks of damage from re and storm as well as by natural forces ( ood, earthquake) are internationally covered by insurance insofar as this is economically viable and objectively Properties, particularly in large conurbations, concerned is lastingly worsened, and the cult or nancially Risks of inherited contamination (such as soil appropriate survey reports if necessary), especially Depending on the nature of the relevant project development stage of acquiring a property, Properties may have building defects. These risks When buying properties abroad, risks arising culties, including transfer risk exchange risks which should, however, be limited When selling a property or a usufructuary right, When acquiring interests in property companies, cult to recognise. Finally, any intended sale of the interest may be hindered by the absence of a suf ciently liquid secondary Propert
81 y investments abroad are as a rule nanc
y investments abroad are as a rule nanced with borrowed funds. This is done rstly nancing, changes in the properties value will affect the Funds capital nancing arrangement, for example, the effect nancing with in-house capital, as acquisitions. Changes in value thus have a greater cance when debt nancing is employed (which is frequently the case abroad) than is nanced properties. The ts more substantially from However, extensive outside financing of liquidity bottlenecks, e.g. as the result of massive There are currency risks on investments in foreign currencies. Risks not exceeding % of the value of the Funds net assets are legally permissible. These risks can manifest If a property is encumbered with heritable building rights, this creates a risk that the holders nd cult on some occasions. The The Company may maintain not more than % of the Funds net assets (maximum liquidity) in bank deposits; money market instruments; securities which have been accepted by the investment units as laid down in section InvG ed
82 under Dashes to ; securities that h
under Dashes to ; securities that have been admitted to trading on xed-income securities, equities of REIT companies or similar shares held Investment in investment units in accordance the monies required for assuring due and the monies required for the next distribution; funds needed to meet liabilities under legally The Company may invest only up to % of the Funds net assets in cash with any one bank. Money market instruments are instruments that le corresponds to that of the securities just . If they have been admitted for trading to a stock . If they have been admitted for trading to one of . If they have been issued or are guaranteed by another central, regional or local authority, or by a central bank of a member state of the Agreement on the European Economic Area, . If they have been issued by a company the . If they have been issued or are guaranteed by a . If they have been issued by another issuer and a) a company whose equity capital amounts to nancial statements nancial statements of companies exhibiting b)
83 a legal entity which is responsible with
a legal entity which is responsible within a nancing of this group, orc) a legal entity that is to nance securitisation vehicles by using a liquidity line granted by the bank; Article of the Directive l the conditions set out in protection must exist, e.g. in the form of an investment lled. The term investment grade denotes a ed market instruments securities and money market instruments issued deposits with this institution, capital charges for the counterparty risk relating The Company may invest in bonds, borrowers case up to % of the Funds net assets in mortgage if the banks by reason of statutory regulations for the invested in accordance with the statutory regulations in assets which throughout the maturity of the bonds from the investments in liquid assets which equals assets include securities, money-market paper or money and capital markets or particular developments xed-income securities are in uenced xed-income uenced by the maturities of xed-income securities. xed-income securities with xed- uence of the
84 performance of the capital markets or pa
performance of the capital markets or particular developments at their respective issuers. Even with careful stock nancial culties. Borrowing and encumbrance of assets investors, borrow funds up to the amount equivalent in the Fund if this is compatible with proper business Company may, for the joint account of the investors, take out short-term loans worth up to % of to the Fund and assign and encumber claims of properties. Altogether, the respective encumbrances the properties owned by the Fund. Encumbrances in connection with the suspension of redemption of units in accordance with section ( ) of the . The Company can, within the scope of managing ed ed in section () InvG for the use If the Company employs the simple approach, it may invest only in derivatives that are derived from assets that may be purchased in accordance with section () indents b) to f) of the General a) futures contracts on assets in accordance b) options or warrants on assets in accordance General Terms of Contract and on properties aa) exercise is pos
85 sible either during the entire bb) the o
sible either during the entire bb) the option value depends at the time of c) interest rate swaps, foreign-exchange swaps d) options on swaps pursuant to indent c), e) credit default swaps on assets in accordance General Terms of Contract and on properties ably for hedging the f) Futures contracts, options or warrants on nancial futures contracts is calculated in options or warrants whose underlying is a options or warrants whose underlying are ed In addition, the values determined must be multiplied ed approach, it may nancial futures contracts mentioned transactions deviate from the investment ed approach le within the meaning of the DerivateV. It may, ed approach. A change of this kind does Transactions involving derivatives may be performed change and foreign exchange risks held in the market risk potential of a fund by the use of derivatives. purchase from a third party against payment (option ned ned period, at a price cally, the following applies:of a premium, to demand from the seller the in the Fund can be hedged against
86 price losses below the strike price, the
price losses below the strike price, the put option can be exercised t.This has to be set against the risk that option premiums paid will be lost if exercising the put option at the strike price previously specified does not appear financially expedient, since the prices, contrary to expectations, have not fallen. Price changes of this kind for the underlying securities may reduce the value of the option t expectations, out) have to be taken into account. If the expectations lled, so that the Company refrains from ed date, the expiry ned period a de ned quantity ned base value (e.g. bonds, stocks) at a price If the Company concludes deals of this kind, the Fund must, if the Companys expectations fail to materialise, bear the difference between the price on which the deal was based and the market price on the date of closing out or the contract expires. This is where the Fund can make a loss. The loss risk cannot be determined in advance, and may extend beyond any collateral provided. It must also be borne in mind that the sale of futures and
87 any conclusion of a counter-deal (closin
any conclusion of a counter-deal (closing out) will Swap deals are barter transactions in which the assets ed date or ned period to enter into a swap that has ned in terms of its conditions. Credit default swaps are credit derivatives that enable nancial instruments another organised market (OTC transactions) may be nancial services institutions on the basis of cult or contractual partner is a bank domiciled in the supervision, the counterparty risk may comprise up to % of the Funds net assets. Derivative cantly reduced, but not eliminated. transactions out derivative transactions, based on a property transactions for hedging them make use of these options. In addition, the Company transactions ts from transactions of the time-limited rights from futures, for example, the loss risk may not be determinable and may it may prove impossible to conclude the loss risk will increase if money is borrowed nancial futures), additional risks may the absence of an organised market may lead to problems when trying to sell nancial thi
88 rd parties; because of the individual na
rd parties; because of the individual nature of the agreement, the settlement of obligations cult or entail considerable the nancial success of the OTC transaction be limited to the price paid for an option right or far exceed the collateral furnished (e.g. margins) result in indebtedness, thereby creating a charge able in advance. nite ve trading terminated, either because it has reached the end of its term or because it has been called in, the to pay to the Custodian Bank for the account of not exceed % of the value of the Funds net assets. within the meaning of section InvG in the currency nancial circumstances. It may not, however, be less than the collateral value, which is calculated on the basis of the market value of the securities agreements nancial services institutions for the account of the Fund, with a maximum term of twelve months. ed date or one to ed by the repo seller. If the Fund is acting report from the Funds management under the heading Performance of DEGI GLOBAL BUSINESS. cial) trading on a stoc
89 k exchange. Nor are the the units are no
k exchange. Nor are the the units are not being traded on organised exchanges: The Company is paid an annual fee for the If properties are acquired, developed, converted or sold on behalf of the Fund, the Company may claim a the interests in property companies directly or the Fund and their properties. The value of the its services amounting to . % of the average In addition to the aforementioned fees, the following ancillary costs (including taxes) incurred in costs of borrowed funds and running expenses costs for asserting and enforcing legal claims ed, ed; costs incurred in connection with the acquisition custody fees charged in line with normal banking costs for the Committee of Appraisers and other costs of preparing and mailing of the Annual and costs of the public notices of the Annual and costs of the audit of the Fund by the Companys rmation that the tax any taxes which may be incurred in connection account of the Fund and their properties. The of the property company and the value of the properties held shall be valu
90 ed pro rata in Instead of a pro rata sha
ed pro rata in Instead of a pro rata share of the expenses corresponding to the Companys percentage interest, costs relating specifically to the Fund arising from its position as shareholder are borne by the Fund in full (section ( ) of the Special own expenses in accordance with the aforementioned acquisition of investment units cant direct or indirect holding, or a foreign Report and are shown as a percentage of the average or TER). These are composed of the fee for managing the Fund, the Custodian Banks fee and the expenses that can additionally be charged to the Fund Non-cash benefits (broker research, financial with transactions for the account of the Fund. The investors rights at the time of the establishment cates. These collective certi cates cates. The purchase of Fund units is only Issue of units, minimum investment In principle, the number of units issued shall be unlimited. The units can be purchased from the cates temporarily or completely.his/her own name in one or several securities accounts) ve thousand euros). U
91 nit redemptions that result in the inves
nit redemptions that result in the investment amount falling below the minimum investment must be followed, at a later date, with unit purchases cient to bring the investment amount back up to the minimum investment amount. uctuations that result in the an amount below the minimum investment amount, amount or that this minimum amount will be reached rmation from the custodian institution cates may also be accepted.In the event that the investment amount falls uctuations alone, the investor is under no means that lower investment amounts are permissible ed above. Redemption of units, period of notice Investors may at any time ask the Company to redeem their units by submitting a redemption application. The redemption agent shall be the Custodian Bank. Units can also be redeemed through the intermediary of third parties; in this case, costs may be incurred. The Company is obliged cally for institutional investors, individuals of Repeated high-volume unit redemptions implemented nancial and ts any planned unit redemptions in an amount of EUR ,
92 or more six months in advance, or
or more six months in advance, or The Company complies with the principle of equality ed a time by which the orders for issuing and redeeming units have to be submitted acceptance deadline are published on the Companys cally, the procedures are as follows: months, they are shown at the value most recently determined every twelve months, at the latest, for the year in order to avoid any materially alter the value of a property, the re-valuation is necessary. If a piece of real estate is encumbered valuation is based on the property companies monthly statement of assets and liabilities by an auditor within the meaning of section of the German Commercial cost basis until the next valuation date. If circumstances ected through amortisation, Assets admitted to a stock exchange or traded in an organised market organised market, plus subscription rights for the Fund, ed under Special valuation rules. markets, or assets without a tradable price ed under Special valuation rules. Unlisted bonds and borrowers note loans For valuing bonds
93 not traded on a stock exchange or an or
not traded on a stock exchange or an organised market (e.g. unlisted bonds, cates), and (e.g. management fee, Custodian Banks fee, auditing Options and futures contracts third party, which are admitted to trading on a Fund. The margins paid by the Fund are added to the provided a contract to this effect has been concluded xed-term deposit to be callable at any ed in individual cases Receivables, e.g. accrued interest claims, and For the reimbursement claims arising from securities Assets denominated in foreign currency are basis of the exchange rate for the currency in xing. Securities sale and repurchase (repo) agreements If securities are sold for the account of the Fund under such agreements, they will continue to be taken into account for valuation purposes. In addition, the sum received for the account of the Fund under the repo agreement will be shown under liquid assets (cash at bank). Furthermore, for valuation purposes any liability arising from repo agreements is to be shown at the amount of the If securities are bought for the acco
94 unt of the Fund under such agreements, t
unt of the Fund under such agreements, they will not be taken into account for valuation purposes. Because of the payment made by the Fund, for valuation purposes any claim on the party selling the securities will be taken into account to the amount of the discounted An exit charge shall be deducted from the unit Notwithstanding the above, the following exit Insofar as the investor can provide written rmation, at the time of redemption, stating charge shall stand at % of the unit value. If the units rmation, at the Proof of adherence to these holding periods can be provided in the form of a corresponding written rmation from the custodian institution with cates may also be accepted. t on selling ce and the Custodian Bank. respectively without further charge.If units are issued or redeemed through the intermediary of third parties, additional costs arise which make suspension appear to be necessary, an exchange on which a signi cant proportion of assets cannot be freely bought or sold; the proceeds of sales cannot be transferred; it
95 is not possible to determine the net as
is not possible to determine the net asset or major assets cannot be valued. The Company will inform investors of the suspension period (section ( ) of the General Terms of Contract) if it cient to meet the cost of redemptions and The Company reserves the right not to redeem units at the redemption price then prevailing until it has sold appropriate assets without undue delay while still safeguarding investors interests. The Company may refuse to cient to cover redemptions, no longer than one year after the units were presented which must be published in the electronic under www.degi.com, the above-mentioned one-year period can be extended by another year. At the end of ed in section of the General Terms of The Company will inform investors of the suspension anzeiger and the Companys website, www.degi.com. imputed interest and not the normal market interest for each individual sale or each individual redemption. nancial year up to the time of the units are paid as part of the redemption price, is the income statement as a distribut
96 able item. The income equalisation proce
able item. The income equalisation procedure serves to protect the distributability per unit in circulation from effects of ows and out ows. Each fund in ow would t due to the increased number of units, with each outflow increasing the amount of distributable profit due to the reduced number of units. This procedure thus prevents dilution of distributability ow and prevents ow. In this context it is in the form of a distribution, even though the capital they invested played no part in generating that . In principle, the Company distributes the income financial year from the properties, interests in and other assets, after deducting the sums required to cover costs and allowing for the related income . Of the income determined, sums required for repairs and upkeep of the Funds properties have to be retained. Sums required to offset diminutions in value of the properties may be ts from sales after allowing for the related ts from disposal of security classes can also be set aside for distribution if . Imputed interest income on capital t
97 ied up in . Interest accrued in the acc
ied up in . Interest accrued in the accounting period on . Distributable income may be carried forward for nancial years if the sum total of the income carried forward does not exceed . In the interest of maintaining the real asset value all of the income may be earmarked for . Income is distributed annually, free of charge, on distribution day (ex-div day) by the amount deposited with other banks or savings banks, regulations for investors to investors who have unlimited liability for tax in Germany. We recommend foreign investors, rst present the current legal situation. nal withholding tax cant changes, we will summarize the future situation if it together with other income from capital exceeds at-rate income-related expenses allowance, of EUR a year (for single persons or for separately assessed married income derived from them will be taxed as corporate ts. German tax legislation requires a differentiated or depletion) is subject to income tax for the investor. This applies irrespective of whether this income is ts from the sal
98 e of domestic and foreign ts from the
e of domestic and foreign ts from the sale of domestic and foreign ts from the sale of domestic properties within ts from the sale of domestic properties within the -year period, achieved at the level of the Fund, are always subject to tax for the investor. This applies ts from the sale of ts from the sale of foreign properties, where Germany has waived taxation on the basis of a double-taxation (exemption method), remain tax-free; ts from the sale of securities ts from futures ts from the sale of securities and pro ts from property stock corporations) investment companies, no income will be recorded Domestic and foreign dividends from the (property) stock corporations that are distributed or reinvested Under certain preconditions, dividends from foreign (property) stock corporations can be fully tax-free with progression proviso as so-called intercompany Income from interests in domestic and foreign nancial year of the must be assessed in line with general taxation income of the same type at the Fund level, the Funds tax incom
99 e is negative overall, this value will b
e is negative overall, this value will be carried forward at the level of the Fund. future positive tax income in subsequent years. negative amounts will not take effect on the investors nancial year ends or the distribution nancial year for which the Asset payouts (e.g. in the form of interest for building nance) gain is tax-free for private investors. When determining t on the date of purchase and t on the ts (see on private sales transactions in the calendar year is less than EUR , it is tax-free (tax-free (resident tax payers)Domestic rental income and interest income and interest-related income business investors. This applies irrespective of whether of investors who are not stock corporations, however, the exemption with progression rule must be the double-taxation agreement concerned, or no ts from the sale of domestic ts from the sale of domestic and ts will not become liable for tax until distributed, with Germany ts (exemption by reason of a double-taxation agreement). ts from the sale of domestic and foreign ts fr
100 om the sale of domestic properties are
om the sale of domestic properties are ts from the sale of foreign (exemption by reason of a double-taxation agreement). In the case of investors who are not stock however, the exemption with the double-taxation agreement concerned, or no income taxes paid in the countries of origin may ts from the sale of securities ts from futures ts from the sale of securities and pro ts from ts are distributed, (for investors who are xed-income securities and Domestic and foreign dividends (particularly from property stock corporations) as business assets or reinvested, are tax-free for nancial year of the must be assessed in line with general taxation nancial year nancial year for which the negative tax income has % of dividends are deemed to be non-tax deductible operating expenses and are therefore subject to tax. % of dividends are deemed to be non-tax deductible operating expenses for corporations and are therefore subject to tax. possible to make any earlier claim for the investors income tax or corporation tax. nance) are not subje
101 ct to tax. For an nancial statements as
ct to tax. For an nancial statements as credited to income, and that they involve foreign rentals not yet accrued or deemed to have not yet accrued and realised and non-realised ts of the Fund from foreign properties, insofar as Germany has waived taxation (what is called t on every valuation date as a percentage of the value of the ts of the Fund from domestic and foreign property stock corporations (fund equity t). t on every some cases be subject to a withholding tax on interest income amounting to % and the solidarity What is involved here is merely an nal income tax debt. It does not, the Funds entire taxable ts and subscription rights to ts from futures, ts from the sale of land and heritable building If the units concerned are in business assets, a waiving on dividends explained below is possible only if a corresponding non-assessment note is submitted. cate ed distribution date an exemption application cient amount in accordance with an cial specimen or a non-assessment note issued ce for a period of three % of the tax-fr
102 ee capital gain from the sale of equitie
ee capital gain from the sale of equities are, however, deemed to be non-tax deductible operating expenses an withholding tax on interest on the reinvested interest, amounting to %, and the solidarity nancial year. If the units are in the custody of a domestic bank, the investor who submits to the bank maintaining cient amount or a non-assessment note before nancial year will have the note is not submitted in good time or at all, the will in any case receive a tax certificate withholding tax on interest income and the tax debt within the scope of assessment. The same applies to If units of distributing (including partially reinvesting) cate, enabling him/her to offset the withholding tax and the solidarity surcharge against his/her the withholding tax as with units in securities accounts is not possible. On the contrary, the investor must attach the requisite documentary evidence when applying in his/her income tax assessment for the withholding tax on interest cient amount or a le there. Only half of in good time, the investor can offs
103 et the withholding tax and the solidarit
et the withholding tax and the solidarity surcharge against his/her personal income tax debt by attaching the tax in the case of reinvestment the withholding tax on cient exemption application, non-assessment partially reinvesting funds in the custody of a domestic in accordance with section () AO (German Fiscal Code), to apply for reimbursement of the withholding ce of the bank or investment company maintaining the portfolio. The extent to which an offset or double-taxation agreement in force between the investors country of domicile and the Federal status. If the application for reimbursement is funds, reimbursement can be applied for in accordance For substantiation of the income allocable to him/her, the investor receives on request a tax cate providing information on the taxes paid The Company can deduct the imputable withholding tax on the level of the Fund as income-related on the investor level is neither imputable nor application by the investor, is deductible when determining the total income or can be offset the Company must s
104 ubmit a determination declaration to ce
ubmit a determination declaration to ce responsible. nancial year in which the altered determination altered determination for the investor is then effected at the end of this financial nancial ts ts are the considerations contained in yet subject to tax for the investor (roughly comparable xed-income securities). subject to income tax and withholding tax on capital yields when the units are redeemed or sold by resident t amounts to % in the case of units held in custody at a bank or % in the case of self-custody t paid when purchasing units can be taken into account for tax deduction, with a application or upon submission of a non-assessment individuals are t, the following are leasing and from t is determined at every establishment of the every valuation date. t per unit concerned by the number of units listed in the interim profits can non-transparent taxation (referred to as the tax disclosure obligation). This shall (target funds within the meaning of section InvStG) guaranteed if the property fund has purchased t of the
105 target fund concerned plus the target fu
target fund concerned plus the target fund involved (but at least % of the Ordinance cial Journal of the cient cross-border interest income received by individuals within the EU. of third countries (in particular Switzerland, In principle, all interest income credited by a countries will be reported by the bank to the ce) and, in turn, to the nancial authorities at reported by the foreign bank to the German nancial authorities. As an alternative, some The Directive thus affects individuals who are associated third countries and who keep their receive interest income in that country. Luxembourg and Switzerland, for example, have agreed to levy a withholding tax of % on the rmation with their tax documents As an alternative, investors may opt out of the disclose the interest income. This authorisation agents, which ultimately rely on the figures reports to the Bundesamt für Finanzen (German ce). Once the % threshold is fund, the share of interest income in any distribution will have to be reported to the Bundesamt für Finanzen. obviou
106 sly only be necessary in case of the red
sly only be necessary in case of the redemption or sale of the Fund units. the level of the investors nor on the level of the with unlimited income tax or unlimited nancial years (e.g. on the occasion of nancial years even t from a correction for nancial years in which the cial for him because he redeems in which they occur due to such a correction, and this may have a negative effect for the individual On July , the German Bundesrat (upper house) nal investors who have unlimited liability for tax in Prospectus, to get in touch with a tax consultant and to individually clarify any possible tax-related consequences in their home country arising from at-rate income-related expenses allowance of subject to a tax rate of % (pus solidarity Income from capital assets also includes distributions ts Income from capital assets also includes distributions ts nal withholding tax will in principle cover all nal), so investors will not have to report their income from capital assets in their income tax nal withholding tax rate of %. r
107 eported in the income tax return. The fi
eported in the income tax return. The financial ling the income tax return (e.g. gains from the sale of fund units held in a securities account abroad) will have to be reported in the income tax return. This income will then be nal withholding tax rate of income derived from them will be taxed as ts. ts from Domestic rental, interest, and interest-related ts from the sale of domestic properties within ten years from the purchase are usually subject to taxation at the ts from the sale of domestic properties within ten years from the purchase of the Fund will be nal withholding tax rate of % (plus solidarity surcharge and church tax, if nal withholding tax may be withheld if the investor is a resident and has submitted an not exceed a total of EUR in the case of submitted or if foreign residents prove their case), the bank maintaining the portfolio as the place of payment will refrain from deducting the nal withholding tax if before the speci ed distribution cient amount in accordance with an of cial specimen or ce for a period of thr
108 ee years is submitted. In this case, the
ee years is submitted. In this case, the investor will be credited with the entire withhold the final withholding tax ( % plus solidarity surcharge) on the taxable reinvested proportion of the fund income. The issue and prices will be correspondingly reduced nancial year. Since the Company his/her portfolio an exemption application for a cient amount or a non-assessment note before nancial year will have the note is not submitted in good time or at all, the investor will in any case receive a tax certificate from the custodian institution, detailing the withholding tax and the solidarity surcharge nal withholding tax of % plus the concomitant solidarity surcharge will be deducted. The investor will on request receive cate, enabling him/her to offset the nal in reinvesting funds in self-custody, the final nal withholding tax as with units in securities nal withholding tax and the solidarity surcharge ts from the sale of domestic and foreign ts from the sale of domestic and foreign ts from the sale of ts from the sale of foreig
109 n properties, where Germany has waived t
n properties, where Germany has waived taxation on the basis of a double-taxation agreement (exemption method), remain tax-free; this is typically the case. The amount flowing in from abroad will ts from ts from the sale of securities ts from futures ts from the sale of securities and pro ts from ts from the sale of securities and pro ts from (plus solidarity surcharge and, if applicable, church tax) if the units are kept in a domestic securities account. ts from the sale of securities and ts from futures are tax-exempt if the securities were bought or if the futures transaction was entered Domestic dividends from the (real estate) investment Fund are subject to tax with the investor. They are subject to the tax rate of % (plus solidarity and foreign property partnerships Income from interests in domestic and foreign nancial year of It must be assessed in line with general taxation If, after offsetting negative income with positive income of the same type at the Fund level, the be offset at the level of the Fund against future positive t
110 ax income in subsequent years. It is not
ax income in subsequent years. It is not amounts will not take effect on the investors income nancial year ends or the distribution is nancial year for which the negative tax income has been offset on the level of the Fund. It is not possible to make any earlier claim Asset payouts (e.g. in the form of interest for building finance) are not subject to tax. bought after December are sold by a nal kept at a domestic securities account, the custodian institution nal withholding tax (plus solidarity nal withholding tax (plus solidarity surcharge and, if purchase (speculation period), capital gains are basically subject to tax as income from private sales transactions. If less than EUR , it is tax-free (tax-free allowance). ts will t on the t on the date of sale, to preclude ts (see below). Moreover, the selling price must be reduced by the already taxed, reinvested ts from the sale of units bought after December are tax-exempt insofar as they are due to income ts). Non-resident individuals or reimbursement of capital gai
111 ns tax from domestic apply for reimburse
ns tax from domestic apply for reimbursement of the tax paid in accordance ce of the custodian If a non-resident individual keeps units of reinvesting funds in the custody of a domestic bank, he will be nal withholding tax of % (apart from taxes on domestic dividends) if he can furnish documentary evidence of his/her non-resident status. If the application for reimbursement is submitted late, then, as with late submission of evidence of non-resident status for the distributing funds, reimbursement can be applied for in accordance with section If the foreign investor does not keep units at domestic banks, and submits coupons for encashment at a nal withholding tax of % will be deducted. If the units involved are from reinvesting funds in self-custody, the interest discount here will be % too. The foreigner in these cases has an option to apply for reimbursement of the tax paid (apart from taxes on domestic dividends) in accordance with section () AO at the permanent-establishment inland ce of the bank or the investment company.For subs
112 tantiation of the income allocable to hi
tantiation of the income allocable to him/her, the investor receives on request a tax certificate deduction made by a domestic custodian institution, is asked to inform the custodian institution in writing which proportion of their total capital income belongs to each spouse so that the church tax can be adequately ts ts are the considerations contained in yet subject to tax for the investor (roughly comparable xed-income securities). are subject to income tax when the units are redeemed or t amounts to % (plus . % solidarity t paid when purchasing units can t is determined ts can also be regularly found in (resident tax payers)Domestic rental income and interest income and interest-related income business investors. This applies irrespective of whether of investors who are not stock corporations, however, ts from the sale of domestic ts from the sale of domestic and ts will not become liable for tax until distributed, with Germany ts (exemption by reason of a double-taxation agreement). ts from the sale of domestic and foreign
113 ts from the sale of domestic propertie
ts from the sale of domestic properties are ts from the sale of foreign the double-taxation agreement concerned, or no income taxes paid in the countries of origin may ts from the sale of securities and pro ts from ts from the sale of securities and pro ts from ts are distributed, stocks are fully tax-free (for investors who are corporations) or tax-free to a proportion of % (in the case of other business investors, e.g. sole proprietorships). Capital gains from the sale of fixed-income securities and capital gains from business assets or reinvested, are tax-free for nancial year of the If, after offsetting negative income with positive income of the same type at the Fund level, the Funds tax income is negative overall, this value will be carried forward at the level of the Fund. This can be offset at the level of the Fund against future positive tax income in subsequent years. It is not possible to directly allocate the negative tax income to the investor. This means that these negative amounts will not take effect on the investor
114 s income tax or corporation tax until t
s income tax or corporation tax until the assessment period (tax year) in which the Funds financial year ends or the distribution is made for the Funds financial year for which the negative tax income has been offset on the level of the Fund. It is not possible to make any earlier claim for the investors income tax or corporation tax. nance) are not subject to tax. For an nancial statements as credited to income, and that ts of the Fund from foreign t). t on every ts of the Fund from domestic and % of the tax-free capital gain from the sale of equities are, however, deemed to be non-tax deductible income-related expens t). Sole proprietorships need to t on every If tax deduction is necessary or if in the case of reinvestment the tax withheld is reimbursed, e.g. in the event of a suf cient exemption application, individual status, no solidarity surcharge need be The Company can deduct the imputable withholding tax on the level of the Fund as income-related expenses. In this case, the foreign withholding tax on the investor level be
115 taken into account in the tax deduction
taken into account in the tax deduction. On application by the investor, the imputable the Company must submit a determination declaration to ce responsible. nancial year in which the altered determination accounting of this altered determination for the effected at the end of this financial year or on nancial year.the correction. The economic effects may be positive or negative. and non-transparent taxation (referred to as the tax disclosure obligation). InvStG) and these meet their tax disclosure guaranteed if the property fund has purchased t of the target fund concerned plus the target fund involved (but at least % of the Ordinance cial Journal of the cient cross-border with a number of third countries (in particular Monaco and Andorra) which are roughly equivalent In principle, all interest income credited by a German ce) and, in nancial authorities at the place of nancial authorities. As an alternative, some rmation with their tax documents gures ce). Once the % threshold is fund, the share of interest income in any distri
116 bution will have to be reported to the B
bution will have to be reported to the Bundesamt für Finanzen. If the Fund is a reinvesting Fund, a report will with unlimited income tax or unlimited corporation guarantee that the assessment of the tax situation nancial years (e.g. on the nancial years even though they may not have held t nancial years in which the investor held units in cial Prospectus for him because he redeems or sells his units before the correction is implemented.Moreover, taxable returns or tax advantages may be assessed in another period of assessment than that outsourced to third parties ed the Federal Financial Supervisory Authority (BaFin) that the operations listed below have been outsourced to another nancial year of the Fund; name of . The Annual and Semi-Annual Reports can be . The Funds nancial year ends on June.. The Funds external auditors are KPMG AG be wound up. The Company may, however, terminate months notice being given by way of an announcement in electronic Bundesanzeiger (German Federal Gazette) Furthermore, the Companys right to ma
117 nage the Fund lapses if insolvency proce
nage the Fund lapses if insolvency proceedings have been instituted against the Companys assets or if an application to institute insolvency proceedings has been rejected for ciency of assets. The Funds assets do not form proportionate to their respective holdings of Fund units. The winding-up of the Fund may take quite a When the Fund has been wound up, investors will be informed by way of public notices in the website under www.degi.com of what liquidation proceeds are being paid out and when and where Unclaimed liquidation proceeds may be deposited with the local court responsible for the Companys The provisions of the Court Deposit Order of March shall apply to investors rights. nancial year. Also, at the nancial year of another fund, all assets cantly from those of the DEGI ed with the consent of BaFin. assets of a fund ed, and the entire transaction The issue of the new units to investors in the DEGI INTERNATIONALDEGI GERMAN BUSINESSMoreover, two special funds are managed. intent to purchase, he will be bound by this de
118 claration ls the requirements in purcha
claration ls the requirements in purchaser has already made payments, the Company acquired, the to the value section of the German Investment Act (InvG) Amendments to the General Terms of Contract of mutual property funds managed by DEGI Deutsche Explanations regarding the amendments to the property funds managed by DEGI Deutsche für Immobilienfonds mbH and the BUSINESS property fund managed by DEGI Deutsche Editorial amendments have been made. In particular, ected in the Terms of General Terms of Contract, but also affect the Special . The regulations regarding property valuation no longer be valued by a committee of appraisers, but by one expert independent of the Committee . Interests in property companies in accordance fund. In addition, the investment limit for minority . For liquidity investment, there will be an additional opportunity of acquiring equities of REIT cation of . The opportunity for interim distribution was ed. cation was then made that the holding Explanations regarding the amendments to the General added
119 together assuming they were documented
together assuming they were documented . Annual reports must now be published no later nancial . Amendments to Terms of Contract can now come investment policy or cost arrangements, this period . The amendment to the Special Terms of cation. cation purposes. governing the legal relationship between investors and DEGI Deutsche Gesellschaft für . The Company is an investment company subject . The investment company invests the monies cates issued by it (unit certi cates).. The assets are owned by the Company. . In the General Terms of Contract and the Special . The legal relationship between the investment . The Company shall appoint a credit institution . It shall be incumbent upon the Custodian Bank . The Company shall appoint at least one committee committee shall consist of at least three members . The appraisers must be independent, reliable and ed persons with specialised know-how as well as adequate practical nancial independence, . It shall be the duty of the Committee of Appraisers c and prompt task of a) the properties
120 held in the Funds portfolio or b) any p
held in the Funds portfolio or b) any properties that the Company or a property . Furthermore, the Committee of Appraisers shall, within two months of the creation of the heritable . A property may only be acquired for the Fund or . An interest in a property company may only be nancial statements or in . The Company shall acquire and manage the . The Company shall be entitled to use the monies . The Company shall decide on the sale of properties or of interests in property companies in accordance with the principles of proper business management . The Company may not grant money loans or . The Company lays down in the Special Terms a) which properties may be acquired for the Fund;b) whether and to what extent for the account c) whether and under what conditions properties of the Fund may be encumbered with heritable d) whether and to what extent for the account cation in Funds (DerivateV) . The properties and interests in property companies earmarked for acquisition must lead a continuous Section Liquidity, investment and issuer
121 . The Company must, when taking assets
. The Company must, when taking assets into the . Unless otherwise provided in the Special Terms a) bank deposits pursuant to section InvG;b) money market instruments pursuant to c) securities which have been accepted by the d) investment units as laid down in section ed under e) Securities that have been admitted to xed-f) Equities of REIT companies or similar shares . The part of the Fund that may be held in bank ed in the Special Terms of . In individual cases, securities and money market . With one and the same institution, only up to securities or money market instruments deposits with this institution, capital charges for the counterparty risk . The Company may invest in such bonds, . The limit in () sentence may be exceeded for . The Company must keep available each day an . The Company may grant a securities loan borrower nite period for the the market value of the securities to be transferred . If the collateral for the securities transferred is . The Company may also make use of an organised ed in the
122 Special Terms of Contract, the cross-b
Special Terms of Contract, the cross-border securities operations for others even of this system ensure that the interests of investors Section Securities sale and repurchase . For account of the fund, and in return for a ned by nancial services institutions.. Such securities sale and repurchase transactions . The securities sale and repurchase (repo) Section Borrowing and encumbrance of . If the Special Terms of Contract do not stipulate . The Company may encumber properties belonging Encumbrances in connection with the suspension Section Transfer of all the Funds assets . The Company may transfer all the assets of this a) both funds are managed by the Company,b) the investment principles and limits in cantly from c) the fees payable to the Company and the cantly from d) the transfer of all assets of the fund is nancial year of ed, . The exchange ratio shall be determined from the ed with the . () indent c) shall not apply to the merging of . The issue of the new units to investors in the cates . The unit
123 s are in bearer form and are issued in a
s are in bearer form and are issued in a . The units may have different rights, in particular regarding the appropriation of income, the initial charge, the exit charge, the currency of the unit, the management charge, the minimum investment or any combination of the aforementioned elements (classes of units). The details shall be laid . The units bear at least the handwritten or duplicated signature of the Company and the Custodian Bank. Furthermore they also bear the handwritten signature of a supervisory controller . The units are transferable. With the transfer of a unit, the vested rights of it pass to the acquirer. In any case, the holder of the unit is deemed by the . If the rights of the investors when setting up the Fund, or the rights of the investors of one unit class when the unit class concerned is introduced, cate but cates or in multiple cates, this shall be laid down in the Special Section Issue and redemption of units, . In principle, the number of issued units and of cates is unlimited. . Units can be acquired from the
124 Company, the . Investors may demand tha
Company, the . Investors may demand that the Company . The Company reserves the right, however, to . In particular, the Company reserves the right, for ce to pay the redemption price and to cient for redemption, nancial journal with a ciently wide circulation or in the electronic ed in the Prospectus. ed in the Special Terms of Contract funds for redeeming the units. When redemption nancial journal with a ciently wide circulation or in the electronic ed in the Prospectus. . In order to compute the issue and redemption . When setting the issue price, an initial charge . Subject to the addition of an exit charge, the . The settlement date is at the latest one bank . The issue and redemption prices shall be of the fees due to the Company, the Custodian Bank and third parties and other expenses which can be method, to what amount and on the basis of what . The Company shall publish an Annual Report, nancial year (no later than nancial . Two months at the latest after the middle of the nancial year, the Company shall publish a
125 . If the right to transfer the Fund to a
. If the right to transfer the Fund to another nancial year, the Company must . The Reports are available from the Company ed in the Prospectus; they are also nancial year that ends nancial ciently wide circulation or in ed in the Sections Termination and liquidation of . The Company can terminate the management of . The Company shall be obliged to terminate . When the termination becomes effective, the . On the day on which its management right Section Amendments to the Terms of . The Company may amend the Terms of Contract.. Amendments to the Terms of Contract, . All amendments envisaged will be announced in nancial journal with a ciently wide circulation or in the electronic ed in the Prospectus . Amendments to provisions relating to the cation is published, ed with the Supervisory Authority. Publication shall be effected . Changes to the Funds existing investment Section Place of performance/place of . The place of performance is the registered of ce . If the investor has no general place of jurisdicti
126 on ce of the relationship between
on ce of the relationship between the investors and DEGI Deutsche am Main (hereinafter referred to as the Company), Section Custodian Bank ce in Frankfurt am Main; LIMITSSection Properties . Within the statutorily permissible limits (section a) residential properties for letting, commercial b) land under development up to % of the c) undeveloped land intended and suitable for d) heritable building rights, subject to the e) other land and other heritable building rights f) usufruct in public-sector properties in . The Company may acquire assets within the . In calculating the value of the Funds net assets . In selecting properties, the Company shall seek . The Company may exceed the limits pursuant to ed in the Annex in the rst four years Section Interests in property companies . Within the statutorily permissible limits (section memorandum and articles of association or by-laws to activities in which the Company is and (), and the means necessary for management of the assets. The interests in property companies the i
127 nvestment restrictions pursuant to secti
nvestment restrictions pursuant to section () Due to the merger of Dresdner Bank AG with Commerzbank AG as of May , Dresdner Bank AGs custodian bank status for the cation . If a property company is granted a loan in accordance with section ( ) sentence of the a) the terms of the loans are in line with prevailing b) the loan is adequately collateralised,c) In the event of interests being sold, it is agreed that the loan shall be repaid within six months d) the sum total of all the loans granted to one e) the sum total of all the loans granted to the Section Interests in property companies . Within the statutorily permissible limits (section to section InvG) the Company may acquire object of which is restricted in their memorandum and articles of association or by-laws to activities may, in accordance with its articles of association or by-laws, acquire assets only within the meaning . If a property company is granted a loan in a) the terms of the loans are in line with b) the loan is adequately collateralised,c) In the
128 event of interests being sold, it is ag
event of interests being sold, it is agreed that the loan shall be repaid within six months d) the sum total of all the loans granted to one e) the sum total of all the loans granted to the Section Encumbrance with a heritable . The Company may encumber fund properties . These encumbrances may be created only if . Up to % of the Funds net assets may be held the monies required for assuring due and the monies required for the next distribution; funds needed to meet liabilities under legally measures and under building contracts insofar . The Funds assets in accordance with () may The assets held on behalf of the Fund may be subject . The Company can, within the framework of ed approach within the meaning of ed in section () InvG. Details can be . If the Company employs the simple approach, it a) futures contracts on assets in accordance General Terms of Contract and on properties b) options or warrants on assets in accordance General Terms of Contract and on properties aa) exercise is possible either during the b
129 b) the option value depends at the time
b) the option value depends at the time of c) interest rate swaps, foreign-exchange swaps d) options on swaps pursuant to indent c), e) credit default swaps on assets in accordance General Terms of Contract and on properties ably to hedge the . Futures contracts, options or warrants on . If the Company utilises the quali ed approach, it nancial futures contracts and . Under no circumstances may the Company in . The Company will use derivatives only for . When determining the market risk limit for using ed ed Company must report such a change immediately Section Securities loans and securities must be complied with for investment principles Section Unit classes shares, as permitted by section () of the General Section Issue and redemption prices . No initial charge shall be levied.. The exit charge shall amount to % of the unit rmation, at the time of redemption, stating units during for a total period of twelve complete following issue, the exit charge shall stand at % rmation, at the time of redemption, stating
130 levied. Details can be found in the Pro
levied. Details can be found in the Prospectus Section Costs effective from October . The Company is paid an annual fee for the management of the Fund of . % of the average . If properties are acquired, developed, converted . The Custodian Bank shall receive an annual fee payments on the fee charged for the management . In addition to the aforementioned fees, the a) ancillary costs (including taxes) incurred in connection with the acquisition, development, b) costs of borrowed funds and running c) costs for asserting and enforcing legal claims ed, ed;d) costs incurred in connection with the e) custody fees charged in line with normal f) cost of the Committee of Appraisers and g) costs of preparing and mailing of the Annual This provision is not subject to approval by the Federal Financial Supervisory Authority (BaFin). h) costs of the public notices of the Annual and Semi-Annual Reports, the issue and redemption prices and (if applicable) dividend i) costs of the audit of the Fund by the rmation that the tax particulars have j) an
131 y taxes which may be incurred in . The
y taxes which may be incurred in . The provisions of () and ( ) shall apply mutatis . The Company must in the Annual and Semi- cant direct or indirect holding, the . In the Annual and Semi-Annual Reports, the cant direct or indirect holding, or a foreign investment . Insofar as the Company charges the Fund for its ) . The Company is paid an annual fee for the management of the Fund of . % of the average . If properties are acquired, developed, converted . The Custodian Bank shall receive an annual fee payments on the fee charged for the management . In addition to the aforementioned fees, the a) ancillary costs (including taxes) incurred in connection with the acquisition, development, b) costs of borrowed funds and running c) costs for asserting and enforcing legal claims ed, ed;d) costs incurred in connection with the e) custody fees charged in line with normal f) cost of the Committee of Appraisers and This provision is not subject to approval by the Federal Financial Supervisory Authority (BaFin). g) costs of preparing and mail
132 ing of the Annual h) costs of the public
ing of the Annual h) costs of the public notices of the Annual and redemption prices and (if applicable) dividend i) costs of the audit of the Fund by the rmation that the tax particulars have j) any taxes which may be incurred in . The provisions of () and ( ) shall apply mutatis mutandis to the direct or indirect interests in property companies held by the Company for the account of the Fund and their properties. For these purposes, the value of any such property company and the properties held shall be applied pro rata, on the basis of the percentage interest held by the Company. Notwithstanding the foregoing, expenses listed under ( ) that are incurred in the case of the property company due to special requirements of the InvG shall be borne . The Company must in the Annual and Semi-Annual Reports disclose the amount of the initial charges and exit charges that have been charged to the Fund in the period under review for the purchase and redemption of units within the meaning of section InvG. When purchasing units that are managed directly or
133 indirectly by the Company itself or anot
indirectly by the Company itself or another company to which cant direct or indirect holding, the Company or the other company may not levy any initial charges and . In the Annual and Semi-Annual Reports, the Company must disclose the fees that have been charged to the Fund by the Company itself, another investment company, an investment stock corporation or a another company with cant direct or indirect holding, or a foreign investment company including its management company as a management fee for the investment units held . Insofar as the Company charges the Fund for its own expenses in accordance with ( ) and ( ) these shall be calculated in a fair and reasonable manner. Such expenses shall be itemised in the Section Distribution . In principle, the Company shall distribute the income accruing for the account of the Fund from nancial year after deducting the sums required to cover costs and allowing for the related income . Of the income determined in accordance with (), sums required for the future repair and upkeep ts from disposals
134 after allowing for the related income
after allowing for the related income equalisation and imputed interest income on capital tied-up in development projects . Distributable income in accordance with () to nancial years if the sum total of the nancial year in question. Income from nancial years may be carried forward . In the interest of maintaining the real asset value . The distribution according to () takes place Annual Report; it is made at the places of payment Section Financial year nancial year begins on July and ends on List of countries outside the EEA pursuant to cation of the acquisition conditions by the Company, property may be acquired on behalf of the DEGI GLOBAL Country Acquisitions up to % of the Funds assetsCroatia %Monaco %Switzerland %Russian Federation %Turkey %Ukraine %Canada %United States of America %Argentina %Brazil %Chile %Mexico %China %Hong Kong %India %Japan %Saudi Arabia %Singapore %South Korea %Thailand %United Arab Emirates %Vietnam %Australia %New Zealand %So
135 uth Africa %Tunisia % Annex BVI
uth Africa %Tunisia % Annex BVI (Bundesverband Investment und Asset Management e. V.), the leading association of the DEGI Deutsche Gesellschaft für Immobilienfonds mbH (DEGI) is systematically implementing the BVI The auditors concluded that DEGIs written set of rules is appropriate to provide standards for the the Bundesverband Investment und Asset für Immobilienfonds mbHCommercial register: HRB Frankfurt am Main Local CourtClient hotline: + () -E-mail: info@degi.comAuthorised and paid-up capitalas of September :Capital resourcesas of September :EUR ,, .Founded: October Aberdeen Property Investors Holding AB, Frankfurt am Main ( %)since August Aberdeen Property Investors Holding GmbH, ) Kaiserplatz Frankfurt am MainAuthorised and paid-up capitalas of December :Capital resourcesas of December : Chairman CEO of Aberdeen Property Investors Holding AB, StockholmDr. Lars OtterbeckReal Estate Advisor,Malin af PetersensMember of the Board of Speaker of the Managem
136 ent BoardMember of the Supervisory Board
ent BoardMember of the Supervisory Board ofWISTA-Management GmbHMichael DetermannMember of the Committee of Appraisers of Pfungstädter Malcolm R. MorganSilvia Schmitten-Walgenbach (until March )Roger Welz Wirtschaftsprüfungsgesellschaft, Dresdner Bank AG served as custodian bank for DEGI GLOBAL BUSINESS until May . As a result of the acquisition of Dresdn Corporate bodies and capital resources cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of land cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of cially appointed and sworn expert for the valuation of land cially appointed and sworn expert for the valuation of land cially appointed and sworn expert for the valuation of cially appointed and sworn