DGAP-News: LLoyd Fonds AG

DGAP-News: LLoyd Fonds establishing investment company for affordable housing construction

DGAP-News: Lloyd Fonds Aktiengesellschaft / Key word(s): Product Launch/Real Estate Lloyd Fonds establishing investment company for affordable housing construction

15.11.2016 / 07:44 The issuer is solely responsible for the content of this announcement.

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CORPORATE NEWS

Lloyd Fonds establishing investment company for affordable housing construction

- High need for subsidized housing in Germany

- Newly founded company Lloyd WohnWert GmbH & Co KGaA to open up the market for the first time

- Attractive returns of 3 percent per year

- First asset already acquired in Hamburg via co-investment with Lloyd Fonds AG

- Continuation of Lloyd Fonds AG's strategic realignment

November 15, 2016. After 18 months of preparations, Lloyd Fonds AG has established Lloyd WohnWert GmbH & Co. KGaA (Lloyd WohnWert), the first capital market-oriented investment company in Germany offering institutional investors an opening to the growing market of government- sponsored affordable housing construction. The company is a partnership limited by shares (KGaA) in which the shareholders hold limited-partner status and Lloyd Fonds AG acts as the owner of the managing general partner. The shares will initially be placed with institutional investors with a long-term investment horizon. The ensuing market flotation is scheduled for the second half of 2017. Lloyd WohnWert is planning attractive returns of 3 percent per year.

Housing construction company for metropolitan regions

The purpose of the company is to accumulate an attractive portfolio of real estate assets in the subsidized affordable housing construction segment with a long term "buy-to-hold" strategy financed via equity issues over the coming years. In this way, a housing construction company active across Germany is to be established. Investments will focus on metropolitan regions in which the need for affordable housing is particularly pronounced due to growing population numbers and rising rental and housing costs.

In a preliminary step, an attractive initial portfolio comprising projects located in the Hamburg metropolitan region is being financed. "Government- funded housing construction will play a decisive role in all future housing construction projects in metropolitan regions in the future. Lloyd WohnWert offers investors with a long-term investment horizon an opportunity of entering this growth market with low risks and reliable cash flows," says Dr. Torsten Teichert, CEO of Lloyd Fonds AG. "In the medium term, we see Lloyd WohnWert as a key investor in affordable housing construction throughout Germany."

First asset already acquired in Hamburg

At the beginning of November 2016, Lloyd Fonds AG acquired a preliminary asset, which will be contributed to Lloyd WohnWert as a co-investment. Built in 2006 in the Hamburg suburb of Tonndorf, the building is located close to the well-known media company "Studio Hamburg" and comprises 22 subsidized apartments as well as a number of small retail stores. The purchase price is in excess of EUR 3 million.

Qualified management

Lloyd WohnWert has qualified and experienced management comprising Holger Schmitz, general manager of Lloyd Fonds AG, and Timo Wolf, head of real estate at Lloyd Fonds AG and a former member of the management board of TAG Gewerbeimmobilien AG. Michael Sachs, formerly a management board member of the city-owned Hamburg housing construction company SAG GWG and head of the department of urban development until 2015, is chairman of the supervisory board.He has been chairman of the supervisory board of Berlin housing construction company GEWOBAG since 2015 and is currently also chairman of the council of experts established by the German Federal Ministry of Construction for the implementation of the housing construction initiative. Michael Sachs is one of the leading experts in Germany on subsidized housing construction. The other members of the supervisory board are Dr. Torsten Teichert, CEO of Lloyd Fonds AG, Wilfried Jastrembski, head of real estate clients at Haspa, and the real estate expert Hanno Weiß.

Strong demand for investments with sustained stable cash flows in an attractive market

With the establishment of Lloyd WohnWert GmbH & Co. KGaA, Lloyd Fonds AG is positioning itself as a pioneer in a growth market. On the other hand, institutional investors in particular are seeking attractive investments in real assets and are planning to double the investments in this area by 2020 according to a recent study by PwC. On the other hand, all the German states are stepping up efforts to provide affordable housing and are looking for investors for these projects. There is a shortage of affordable housing in the metropolitan regions in particular. In Hamburg, only 65,000 subsidized dwellings are available despite actual demand for 218,000 such dwellings. Given the shortage of affordable housing and the simultaneous increase in the population of cities, the states and municipalities are committed to providing additional housing. In Hamburg alone, 4,000 new subsidized dwellings are to be built each year.

Subsidized housing construction an attractive investment

Whereas subsidized housing construction was originally used to develop outer urban regions, modern urban planning is emphasizing the integrative development of large mixed residential areas in inner-city regions in particular. Thus, for example, Hamburg has introduced the "one-third mix" formula under which new construction projects generally comprise one third subsidized housing construction, one third free housing construction and one third owner-occupied dwellings. Nearly all German cities have adopted comparable targets. This is giving rise to mixed affordable residential areas which make good affordable sense and are also economically attractive. With an occupancy rate of close to 100 percent as a rule, subsidized housing construction in large cities generates stable long-term cash flows, offering a unique opportunity/risk profile in the real estate segment.

Lloyd Fonds AG continuing its realignment as announced, generating earnings of around EUR 2.2 million as of September 30, 2016

With the establishment of Lloyd WohnWert GmbH & Co. KGaA, Lloyd Fonds AG is continuing to reposition itself as an innovative asset and investment manager in line with previous announcements. "Driven by the planned growth of Lloyd WohnWert , the assets managed by Lloyd Fonds AG will rise from a current figure of around EUR 1.4 billion to EUR 3 billion in the medium term, thus driving its sustained profit growth.

Lloyd Fonds AG generated post-tax earnings of EUR 2.2 million as of the end of the third quarter. On this basis, the company has confirmed its full- year guidance for 2016 of earnings at the upper end of a range of two to three million euros.



Important note:

This press release is provided solely for information purposes and constitutes neither an offer to sell nor an invitation to buy securities. An offer is made solely via and on the basis of a published selling prospectus. A decision to invest in any securities publicly offered by the issuer should only be made on the basis of the published prospectus.

This press release is not intended for publication in the United States and does not constitute an offer to buy securities in the United States of America, Australia, Canada, Japan or any other jurisdictions in which such an offer is not permitted by law . Securities may only be sold or offered for sale in the United States of America subject to prior registration under the U.S. Securities Act of 1933 in its present form ("U.S. Securities Act") or, in the absence of prior registration, only on the basis of an order of exception. The Company's shares are not and will not be registered in accordance with the provisions of the U.S. Securities Act or in accordance with any legislation in force in any state of the United States of America and are not sold or offered for purchase in the United States of America.

This press release is addressed solely to persons who (i) are outside the United Kingdom of Great Britain, or (ii) have professional experience with investment matters coming within the definition of "investment professionals" as provided for in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as most recently amended (the "Order") or come within the definition of Article 49 (2) (a) to (d) of the Order ("high net worth companies, unincorporated associations, etc.") or another exception provided for in the Order (these persons collectively known as "qualified persons"). All securities referred to herein are only available to qualified persons for investment and any request, offer or agreement to subscribe to, buy or otherwise acquire such securities may only be made towards qualified persons. Persons who are not qualified persons should under no circumstances rely or act on any part of this press release.

This press release contains forward-looking statements. These statements reflect the current views, expectations and assumptions of the company's management and are based on information known to it on the present date. Forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties. Actual future results and developments affecting the company may differ materially from the expectations and assumptions presented here due to various factors. These factors include but are not limited to changes in the general economic and competitive situation. In addition, future results and developments could be affected by the performance of financial markets, fluctuations in exchange rates, changes in national and supranational law and other risks and uncertainties. The company assumes no obligation to update any of the forward-looking statements contained in this report.

About Lloyd Fonds AG:

As an investment- and assetmanager, Lloyd Fonds AG has been specialising in alternative real assets-based investments and capital investments and their professional management for more than 20 years. It currently manages investments of around EUR 3.5 billion, particularly in the areas of shipping, real estate, aircraft and renewable energies. To date the Hamburg-based company has initiated capital investments with an investment volume of around EUR 5 billion. Lloyd Fonds has been listed on the Frankfurt Stock Exchange since 2005 (WKN A12UP2, ISIN DE000A12UP29).

Contact: Susanne Maack Lloyd Fonds AG Amelungstraße 8-10 20354 Hamburg Tel: +49-40-325678-132 Fax: +49-40-325678-99 Mail: ir@lloydfonds.de

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15.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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Language: English Company: Lloyd Fonds Aktiengesellschaft Amelungstr. 8-10 20354 Hamburg Germany Phone: +49 (0)40 32 56 78-0 Fax: +49 (0)40 32 56 78-99 E-mail: info@lloydfonds.de Internet: www.lloydfonds.de ISIN: DE000A12UP29 WKN: A12UP2 Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Open Market (Entry Standard) in Frankfurt End of News DGAP News Service ---------------------------------------------------------------------------

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