FOR PEOPLE. FOR TOMORROW.

Dear readers,

Housing had a key role in people’s lives even before the coronavirus pandemic, but it has become even more important in these challenging times. Contact restrictions have meant that life took place inside the home to an even greater extent than before, with people increasingly learning, working and spending their leisure time there. This means that people’s expectations of their own home and thus also the demands they make of the property market are changing: many would currently like to have more space for a home office or an apartment with access to a garden. For us as landlords the crisis also means protecting our tenants in these difficult times: we are not terminating contracts or sending reminders for rent arrears, and our coronavirus relief fund provides support to tenants and partners experiencing financial distress.

Resilience through a time of change

This unusual year 2020 was not only defined by the COVID‑19 pandemic – our inclusion in the DAX®30 and DAX®50 ESG was also a crucial milestone. It means higher expectations of our commercial success, but also raises the bar for what is considered a sustainable business model. Policymakers, the general public and our investors are increasingly talking to us about how we can address together the major challenges facing society now and in the future, which will still be relevant when the coronavirus pandemic is over – whether it is climate change or the shortage of housing in big cities. This trend is accompanied by regulatory changes in the context of the European Green Deal, particularly the EU taxonomy for sustainable financial products or the forthcoming supply chain legislation. This gives us confidence that we are on the right path with our sustainability programme, and encourages us to keep refining it and integrate it even more closely with our strategic processes.

Accept challenges

Protecting the climate is one of the most urgent responsibilities of our age and concerns the whole of society. We have therefore have begun analysing the risks that climate change poses to our business model on the basis of the recommendations of the Task Force on Climate‑related Financial Disclosures (TCFD). Our aim is to show transparently the extent to which our company is prepared for a climate‑neutral future, as called for by the Paris Agreement. We will make adjustments wherever they are necessary and make sense. And we want to anticipate to a greater, more forward‑looking extent what active contribution we make to a low‑carbon economy. This year we are also presenting a climate strategy in which we commit to a climate‑neutral property portfolio by 2040 and define the concrete milestones on the way to this objective.

Creating affordable housing in metropolitan areas remains one of the core challenges for our contemporary society. There is no doubt that more has to be built and faster – in a way that respects both the climate and the environment. For this reason we will be investing over EUR 7 billion in the development of sustainable neighbourhoods in the years ahead. On top of this, we are thoroughly refurbishing our properties to make them more energy‑efficient. In a process of dialogue with the industry and policymakers we hope to find a common path towards a fair cost‑sharing arrangement to finance the necessary measures in the property sector. We have drawn up a concrete proposal to this end and presented it to the Editorial by the Management Board 3 relevant policymakers as our concept for socially responsible climate action. Because only by acting together can we reach the federal government’s target of a climate‑neutral property sector by 2050.

We do not neglect our strategic sustainability targets in the management of our own portfolio either. Housing itself has to consume fewer resources and become more energy‑efficient. The way forward encompasses smart buildings that make use of digitalisation, the internet of things and 5G. We want to leverage the technological innovation that is taking place in this area and make it available to all our tenants.

In this report we not only want to give you some insights into our current activities, but also show how we contribute now and in the years ahead to making the property market fit for the future and to achieving global sustainability targets.

We wish you an interesting read.

Berlin, April 2021

Michael Zahn                                                                Philip Grosse
Chief Executive Officer (CEO)                                Chief Financial Officer (CFO)
of Deutsche Wohnen

Henrik Thomsen                                                          Lars Urbansky
Chief Development Officer (CDO)                         Chief Operating Officer (COO)

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