Aroundtown : Remuneration Report FY 2023 (2023%20AT%20Remuneration%20Report)

Aroundtown SA

Société Anonyme

37, Boulevard Joseph II

L-1840 Luxembourg

R.C.S. Luxembourg: B217868

(the "Company")

REMUNERATION REPORT

for the

Financial Year 2023

Remuneration Report

This Remuneration Report (the "Report") provides detailed information about the remuneration received by members of the board of directors and the senior management of Aroundtown SA (the "Company" or "Aroundtown") during the financial year 2023 for their service in the Company and its consolidated subsidiaries (together with the Company, the "Group"). In accordance with article 7ter of the Luxembourg law of 24 May 2011 on the exercise of certain rights of shareholders in general meetings

of listed companies, as amended (the "2011 Law"), implementing the Shareholder Rights Directive II (EU) 2017/828 (the "Directive"), the Company's fixed and variable remuneration for the financial year

2023 is presented below.

This Report is submitted to the advisory vote of the Company's shareholders in connection with agenda item 9 of the annual general meeting of the Company's shareholders to be held on 26 June 2024 (the

"AGM").

Remuneration Policy

In accordance with article 7ter of the 2011 Law, the Company, on the recommendation of the Company's remuneration committee, implemented a remuneration policy (the "Policy") with respect to the

remuneration paid by the Company to the members of its board of directors and the senior management. The Policy was acknowledged by the board of directors, approved by advisory vote of the Company's shareholders at the Company's AGM in 2022 and took effect as of the financial year 2022.

The Company has undertaken since the financial year 2022 to align the board of directors' and senior management's remuneration with the provisions of the Policy. During financial year 2023, the Company

has conformed the total remuneration package (consisting of base salary, allowances as well as short term and long term incentive remuneration) of its executive directors and senior management with the requirements of the Policy. Due to former contractual obligations, some of the changes agreed are scheduled to take effect as of financial year 2023 and some in 2024 .

The Company has summarized below the fixed and variable compensation components, the sum of which constitutes to total remuneration of the Company's executive directors and senior management.

	Compensation Type			Performance Criteria
				individuals'
	Fixed Compensation	Fixed base compensation		Executive	performance	are	not
				considered.
					individuals'
		Allowances		Executive	performance	are	not
				considered.

Variable Remuneration

	Short-term	Incentive			Financial Performance Targets:
	Program ("STIP")			• FFO I per share
					•	Adjusted EBITDA
					Non-Financial Performance Targets:
					• Emissions Reduction (based on the reduction
						targets laid out in the Group's CO2 reduction
						pathway)
					•	Green Building Certification
	Long-term	Incentive			Financial Performance Targets:
	Program ("LTIP")			• FFO I per share
					• EPRA NTA per share
					• Relative Shareholder Return (RTSR) (Peer
						Comparison Group - FTSE EPRA/NAREIT
						Germany Index members)
					Non-Financial Performance Targets:
					• Corporate ESG Rating (measured against S&P
						Global Corporate Sustainability Assessment)
					• Gender Equality (improving gender balance in
						terms of positions within the Group and
						remuneration)

For further information on the Company's remuneration policy, please see

https://www.aroundtown.de/fileadmin/user_upload/04_investor_relations/agm/2022/AGMEGM/AT_ Remuneration_Policy.pdf.

2023 has been a challenging year for the real estate sector, marked by a rapid hike in interest rates, increasing geopolitical tensions, and heightened economic uncertainty. The Company's pro-active

management, diverse portfolio, conservative capital structure, and flexible business model enabled it to navigate these uncertain times and capitalize on some opportunities in this heightened market volatility. The Company executed strategic measures to strengthen its liquidity, balance sheet and operating platform.

Net rental income amounted to €1.2 billion in 2023, slightly lower year-over-year, as a result of the ca. €2.8 billion of disposals since the start of 2022. The Company recorded like-for-like rental growth of 3.2%, driven by the solid in-place rent growth of 3.6%, mainly by indexations and high reversionary potential, offsetting the negative 0.4% occupancy like-for-like decrease. Adjusted EBITDA remained stable year-over-year at €1 billion as organic growth and efficiencies offset impact of disposals. Higher

rent collection from the hotel portfolio further supported the FFO I which amounted to €332 million and €0.30 per share, lower compared to €363 million and €0.33 per share in 2022 due to higher finance

expenses and perpetual notes attribution.

Proactive Balance Sheet Management Maintains Conservative Leverage

The Company continued its proactive liability measures and reduced net debt by €0.9 billion during the year. In 2023, the Company completed over €1.2 billion of disposals and repurchased approx. €1.3 billion of mostly shorter-term bonds at a discount. 16% of total debt maturing in 2024 to 2026 has been repurchased extending the debt maturity profile and reducing the refinancing risk. The current liquidity position covers the debt maturities until mid-2026. Additionally, the Company signed ca. €1 billion in new bank debt during 2023 from a variety of different banks, utilizing the strong banking relationships. The new bank debt was raised at an average maturity of over 7 years and margin of 1.4% over Euribor, of which €0.9 billion has been drawn in 2023.

The full portfolio was revalued by independent and certified third-party appraisers for the 2023 annual report, resulting in a like-for-like revaluation loss of 11%, of which 5% was recorded in H2 2023. The revaluation loss is the result of the higher discount and cap rates driven by the higher interest rates.

Despite the negative revaluations, LTV increased by only 3% as the proactive deleveraging measures counteracted the impact. Collectively these measures will continue to support the Company's strategy

in strengthening the balance sheet and reducing leverage.

ESG Progress in 2023

The Company continued to make progress on its ESG targets. 100% of the Dutch office portfolio has now been green certified. 36% of the total office portfolio has been green certified, up from 15% last year. The Company aims to gradually increase the share of certified properties within its portfolio. Installations of solar panels and energy efficient heating measures continued, reaching a maximum capacity of 6 million kWh pa and approx. 400 EV charging sockets have been cumulatively installed across the portfolio. The Company continued to invest in energy efficient refurbishments such as roof, facade, window and lighting replacements. On the social front, the Company continued to engage with communities and contributed to over 90 charity projects. On the governance front, the Company further improved processes, policies and sustainability reporting which was recognized through numerous awards and the (re-)inclusion in indices such MDAX and MDAX ESG+, Bloomberg Gender Equality Index and Dow Jones Sustainability Index Europe. Aroundtown received the EPRA BPR Gold award for the 7th time and EPRA sBPR Gold award for the 6th time consecutively. Further details on sustainability measures can be found in the FY 2023 Consolidated Report which is now integrating the non-financial reporting alongside the comprehensive financial report.

Operational and Financial Highlights 2023

• Disposals completed of over €1.2 billion in 2023, increasing liquidity and reducing leverage. Signed disposals amounted to €0.9bn in 2023.
• Pro-activeliability management, including the repurchase of €1.3 billion shorter-term bonds at a discount.
• New bank debt of ca. €1 billion signed in 2023.
• Liquidity balance increased to €3 billion and net debt reduced by €0.9 billion during 2023.
• Property revaluations amounted to negative €3.2 billion, reflecting a like-for-like devaluation of 11%.
• LTV of 43% as of December 2023, increased by 3% during the year as disposals and pro-active liability management partially mitigated the devaluation impact.
• Net rental income of €1.2 billion in 2023, 2% lower year-over-year, as a result of net disposals, offset by total like-for-like rental income growth of 3.2%.
• Adjusted EBITDA amounted to €1 billion in 2023, stable compared to 2022.
• FFO I amounted to €332 million and €0.30 per share in 2023, lower by 8% and 9% respectively compared to 2022. Top range of 2023 guidance achieved and guidance for 2024 published.
• Net loss of €2.4 billion and basic loss per share of €1.82 in 2023 mainly due to negative property revaluations.
• EPRA NTA of €8.1 billion and €7.4 per share as of December 2023 compared to €10.1 billion and €9.3 per share as of December 2022.
• Unencumbered assets ratio of 74%, reflecting a value of €17.9 billion and ICR of 4.2x in 2023.
• Gradual progress in green building certifications: 100% of the Dutch office and 36% of total office portfolio green certified.
• Due to current macro-economic environment, the Company does not propose to pay dividend for 2023.

Main Considerations of the Remuneration

The Company's remuneration structure for its executive directors and senior management is based on

fixed and variable compensation and involves long-term and short-term incentives. The independent directors' remuneration is based on a fixed amount only.

The overall aim of the Company's remuneration structure is to provide a total compensation to motivate

executive directors and senior management towards the achievement of long-term goals and short-term milestones which promote long-term goals in order to support the Company's business strategy, long-

term value creation and sustainability. It shall provide adequate compensation in consideration of the responsibilities, competency, commitment, workload, time spent and performance of each individual. The Company aims to ensure that the Company continues to attract and retain those individuals who consistently perform at or above expected levels and contribute to the success of the Company. The

remuneration structure shall further ensure a close link between the interests of the executive management and the interests of the Company's stakeholders.

I. Short Term Remuneration

1. Fixed Remuneration

1. Base Remuneration, Fees and Allowances

During the financial year 2023, the Company paid the following fixed remuneration to its executive directors and members of the senior management:

1.1. Barak Bar-Hen(Co-CEO and COO)

Mr. Bar-Hen received a fixed compensation for his executive management role within the Company and its Group of annual 705 TEUR gross plus 70 TEUR of allowances.

1.2. Eyal Ben-David (CFO)

Mr. Ben-David received a fixed compensation for his executive management role within the Company and its Group of annual 750 TEUR gross plus 19 TEUR of allowances.

1.3. Oschrie Massatschi (CCMO)

Mr. Massatschi received a fixed compensation for his executive management role within the Company and its Group of annual 380 TEUR gross plus 24 TEUR of allowances.

1.4. Executive Directors:

• Mr. Frank Roseen received a fixed compensation for his executive management role within the Company and its Group of annual 280 TEUR gross related to his corporate duties as member of the Board of Directors, including for his role as Chairman of the supervisory boards of TLG Immobilien AG and WCM Beteiligungs- und Grundbesitz Aktiengesellschaft.
• Mrs. Jelena Afxentiou received a fixed compensation for her executive management role within the Company and its Group of annual 250 TEUR gross and 37 TEUR of allowances related to her corporate duties as member of the Board of Directors.

1.5. Independent and Non-Executive Directors:

The independent directors Mr. Markus Kreuter, Mr. Markus Leininger and Ms. Simone Runge-Brandner received a gross base remuneration of annually 75 TEUR, 75 TEUR and 65 TEUR gross, respectively, for their mandate as independent directors in the financial year 2023. In addition, Mr. Markus Kreuter, Mr. Markus Leininger and Ms. Simone Runge-Brandner received an additional 50 TEUR, 50 TEUR and 10 TEUR gross, respectively, for their mandates as members of the audit committee. Ms. Simone

Runge-Brandner and Mr. Markus Leininger received an additional amount of 112 TEUR and 25 TUER (prorated) gross, respectively, for their service as independent directors in the Company's listed

subsidiary, Grand City Properties S.A.

Mr. Daniel Malkin, whom is allowable nomination period elapsed in 2023, has stepped down from the board of directors as an independent director of the Company's listed subsidiary, Grand City Properties

S.A received a prorated gross base remuneration of 63TEUR gross until end of June and after that joined the Company's board of directors as an independent director following the Company's annual general

meeting in June 2023, and received an additional prorated gross base remuneration of 49TEUR gross for his mandate as an independent director of the Company.

The non-executive director Mr. Ran Laufer received during 2023 a base remuneration of 170 TEUR gross for his non-executive management role and other duties within the Company and its Group, including for his role as Vice-Chairman of the supervisory board of TLG Immobilien AG and member of the supervisory board of WCM Beteiligungs- und Grundbesitz Aktiengesellschaft.

2. Allowances

The term "allowances" refers to one or more of the following: company car, accommodation, communication, health insurance, pension arrangements and other benefits.

Travel expenses have been reimbursed according to the Company's travel expense policy.

3. Variable Remuneration - Short-term Incentive Payments

The Company granted the following short-term incentive remuneration to its executive directors and members of the senior management each with applicable change of control clauses. The final amount of the short-term incentive remuneration awarded to the relevant executive individual under their respective program is at the discretion of the Board of Directors and subject to the fulfillment of certain performance criteria provided for in the Remuneration Policy.

3.1 Barak Bar-Hen(Co-CEO and COO)

The Company recorded an expenses of 750 TEUR gross to Mr. Bar-Hen as a bonus for his performance in 2023 with respect to the successful operational and financial results of the Company, as well as successful improvements of the non-financial performance parameters.

During financial year 2023, the Company granted Mr. Barak Bar-Hen a short-term incentive remuneration program to take effect as of financial year 2024. Mr. Bar-Hen's short-term incentive remuneration program is structured as follows:

Short-term Incentive Remuneration starting 1/1/2024

	Short-term incentive value per annum			EUR150,000*
	Duration of the program			four (4) years, until 31 December 2027
	Performance Period			one (1) year
	Performance Criteria			• FFO I per share (49%)
				•	Adjusted EBITDA (21%)
				•	Emission reduction (15%)
				• Green building certification (15%)
	Payment			Each annual STIP award to be paid within one (1)
				month after the publication the Company's annual
				financial results, upon recommendation and vote by
				the Company's board of directors.
				*The final amount of the short-term incentive
				remuneration awarded to the relevant executive
				individual under their respective program is at the
				discretion of the Board of Directors and subject to the

fulfillment of certain performance criteria provided for in the Remuneration Policy.

3.2. Eyal Ben-David (CFO)

In 2023, Mr. Ben-David had only long term incentive program and therefore did not receive short-term incentive remuneration.

During financial year 2023, the Company granted Mr. Ben-David a short-term incentive remuneration program to take effect as of financial year 2024. Mr. Ben-David's short-term incentive remuneration

program is structured as follows:

Short-term Incentive Remuneration

	Short-term incentive value per annum			EUR150,000*
	Duration of the program			four (4) years, until 31 December 2027
	Performance Period			one (1) year
	Performance Criteria			• FFO I per share (49%)
				•	Adjusted EBITDA (21%)
				•	Emission reduction (15%)
				• Green building certification (15%)
	Payment			Each annual STIP award to be paid within one (1)
				month after the publication the Company's annual
				financial results, upon recommendation and vote by
				the Company's board of directors.
				*The final amount of the short-term incentive
				remuneration awarded to the relevant executive
				individual under their respective program is at the
				discretion of the Board of Directors and subject to the
				fulfillment of certain performance criteria provided for
				in the Remuneration Policy.

3.3. Oschrie Massatschi (CCMO)

During financial year 2023, the Company granted Mr. Massatschi a short-term incentive remuneration program to take effect as of financial year 2023. Mr. Massatschi's short-term incentive remuneration

program is structured as follows:

Short-term Incentive Remuneration

	Short-term incentive value per annum		EUR 120,000*
	Duration of the program		three (3) years, until 31 December 2025
	Performance Period		one (1) year
	Performance Criteria		• FFO I per share (49%)
			•	Adjusted EBITDA (21%)
			•	Emission reduction (15%)

• Green building certification (15%)

Payment

Each annual STIP award to be paid within one (1) month after the publication the Company's annual

financial results, upon recommendation and vote by the Company's board of directors.

*The final amount of the short-term incentive remuneration awarded to the relevant executive individual under their respective program is at the discretion of the Board of Directors and subject to the fulfillment of certain performance criteria provided for in the Remuneration Policy.

For financial year 2023, the Company recorded an expense of 120 TUER gross of short-term incentive remuneration to Mr. Massatschi.

3.4. Mr. Frank Roseen (Executive Director)

During financial year 2023, the Company granted Mr. Roseen a short-term incentive remuneration program to take effect as of financial year 2023. Mr. Roseen's short-term incentive remuneration

program is structured as follows:

Short-term Incentive Remuneration

	Short-term incentive value per annum		EUR 80,000*
	Duration of the program		three (3) years, until 31 December 2025
	Performance Period		one (1) year
	Performance Criteria		• FFO I per share (49%)
			•	Adjusted EBITDA (21%)
			•	Emission reduction (15%)

• Green building certification (15%)

Payment

Each annual STIP award to be paid within one (1) month after the publication the Company's annual

financial results, upon recommendation and vote by the Company's board of directors.

*The final amount of the short-term incentive remuneration awarded to the relevant executive individual under their respective program is at the discretion of the Board of Directors and subject to the fulfillment of certain performance criteria provided for in the Remuneration Policy.

For financial year 2023, the Company recorded an expense of 80 TEUR gross of short-term incentive remuneration to Mr. Roseen.

3.5. Jelena Afxentiou (Executive Director)

During financial year 2023, the Company granted Mrs. Afxentiou a short-term incentive remuneration program to take effect as of financial year 2023. Mrs. Afxentiou's short-term incentive remuneration

program is structured as follows:

Short-term Incentive Remuneration

	Short-term incentive value per annum		EUR 50,000*
	Duration of the program		four (4) years, until 31 December 2026
	Performance Period		one (1) year
	Performance Criteria		• FFO I per share (49%)
			•	Adjusted EBITDA (21%)
			•	Emission reduction (15%)

• Green building certification (15%)

Payment

Each annual STIP award to be paid within one (1)month after the publication the Company's annual

financial results, upon recommendation and vote by the Company's board of directors.

*The final amount of the short-term incentive remuneration awarded to the relevant executive individual under their respective program is at the discretion of the Board of Directors and subject to the fulfillment of certain performance criteria provided for in the Remuneration Policy.

For financial year 2023, the Company recorded an expense of 50 TEUR gross of short-term incentive remuneration to Mrs. Afxentiou.

4. Reclaim

The Company did not reclaim variable remuneration during the financial year 2023.

1. Variable Long Term Inventive Remuneration

5. Long-term share incentive plan ("LTIP")

The Company granted the following share-basedlong-term incentive remuneration to its executive directors and members of the board of directors each with applicable change of control clauses. The final amount of the long-term incentive remuneration awarded to the relevant executive individual under their respective program is at the discretion of the Board of Directors and subject to the fulfillment of certain performance criteria provided for in the Remuneration Policy.

5.1 Barak Bar-Hen(Co-CEO and COO)

Due to former contractual agreements, Mr. Bar-Hen received no long-term incentive remuneration for the financial year 2023.

During financial year 2023, the Company granted Mr. Bar-Hen a long-term incentive remuneration program to take effect as of financial year 2024. Mr. Bar-Hen's long-term incentive remuneration

program is structured as follows:

Long-term Incentive Remuneration

	Long-term incentive value per annum			350,000 shares*