EUR 250 million Convertible Bonds due 2020 Convertible into Ordinary Shares of Deutsche Wohnen AG

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1 This is not an offering memorandum or offering circular or prospectus and should not be treated as offering material of any sort and is for information purposes only. NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES OF THE SECURITIES WOULD BE PROHIBITED BY APPLICABLE LAW Final terms / 19 November 2013 This indicative term sheet comprises only a summary of the terms of the proposed issue of convertible bonds (the "Bonds"). The information herein is indicative only. Although the indicative information herein is reflective of the terms of the Bonds contemplated as of the time of this communication, there is no assurance that the Bonds will actually be issued. The Bonds will be issued on the basis of expanded Terms and Conditions that are expected to be delivered to investors prior to or upon settlement. Before making any investment decision and entering into any transaction in relation to the Bonds, you should take steps to ensure that you understand the transaction and have made an independent assessment of the appropriateness of the transaction in the light of your own objectives. You should make sure that you have sufficient information available in relation to Deutsche Wohnen AG before making an investment in the Bonds, since this term sheet and the final Terms and Conditions will be the only information made available prior to or upon settlement. EUR 250 million Convertible Bonds due 2020 Convertible into Ordinary Shares of Deutsche Wohnen AG Issuer: Securities Offered: Status of the Bonds: Deutsche Wohnen AG (the Company, or the Issuer ) Euro denominated convertible bonds (the Bonds ), convertible into new and/or existing ordinary bearer shares of Deutsche Wohnen AG (the Offering ) Direct, unconditional, unsecured and unsubordinated obligations of the Issuer, ranking pari passu with all other present and future senior unsecured obligations of the Issuer Launch Date: 19 November 2013 Expected Pricing/Allocation Date: Maturity Date: Issue Size: Underlying Shares: Denomination: Form and Denomination: 19 November November 2020 (7 years) Euro 250 million Ordinary bearer shares with no par value, each representing a notional value of Euro 1.00, of Deutsche Wohnen AG (the Shares ) Bloomberg ticker: DWNI GY Euro 100,000 (the Principal Amount ) The Bonds will be in bearer form, represented by a global certificate to be held permanently by Clearstream Banking AG, Frankfurt, in its book-entry system, with a register of holders Coupon: 0.50% per annum (Act/Act) payable semi-annually in arrears on 22 May and 22 November of each year, commencing on 22 May 2014 Yield to Maturity: 0.50% Issue Price: Redemption Price: 100% of Principal Amount 100% of Principal Amount Page 1 of 8

2 Reference Share Price: Conversion Premium: Conversion Price: Conversion Right: Cash Payment in Lieu of Delivery of Shares Dividend Entitlement: Early Redemption at the Option of the Issuer for Reasons of Share Price: Clean-Up Call: Tax Call/Gross-Up: Anti-Dilution Protection: Dividend Protection: Early Redemption at the Option of the Bondholder: Euro (the volume-weighted average price ( VWAP ) of a Share on XETRA between launch and pricing) 30% above the Reference Share Price Euro , subject to adjustment as provided in the Terms and Conditions Unless previously redeemed or repurchased and cancelled, and subject to the Cash Payment in Lieu of Delivery of Shares (below), the Bonds will be convertible into Shares at the option of the Bondholder from (and including) 41 calendar days after the Issue Date until (and including) the Business Day immediately preceding the 25 th Trading Day before Maturity Date, subject to certain excluded periods, or in the event of early redemption, until the close of business on the Business Day immediately preceding the 10 th Trading Day before the date fixed for redemption The Issuer shall have the right upon conversion to pay a cash amount in Euro (the Cash Payment ) instead of the delivery of the Shares. The Cash Payment is based on the arithmetic average of the daily VWAP of the Shares over a period of 15 consecutive Trading Days beginning with and including the second Trading Day following the day on which the notification is dispatched by the Issuer, as described in the Terms and Conditions. If the Issuer decides to make a Cash Payment for some, but not all Bonds with the same Conversion Date, such Bonds with the same Conversion Date shall be entitled to participate equally in the distribution of Shares on a pro rata basis. The Shares to be delivered by the Issuer upon conversion will be entitled to profits (to be paid out by way of dividends, if any) for the then current and all following financial years as from the beginning of the financial year of the Issuer in which such Shares are issued. On or after 7 December 2017, by giving not less than 30 nor more than 60 days' notice, the Issuer may at any time redeem the Bonds in whole, but not in part, at the Principal Amount, plus interest accrued thereon until (but excluding) the date of redemption, if the daily VWAP of a Share on at least 20 out of 30 consecutive Trading Days ending not earlier than 5 Trading Days prior to the publication of the redemption notice exceeds 130% of the then applicable Conversion Price. The Issuer shall effect the redemption in cash, subject to the Share Settlement Option. The Issuer may redeem all, but not some only, of the outstanding Bonds at their Principal Amount (plus accrued interest) at any time, if less than 20% of the aggregate Principal Amount of the Bonds originally issued and any additional Bonds (as described in the Terms and Conditions) remain outstanding and held by persons other than the Issuer and its Subsidiaries, by giving not less than 30 nor more than 60 calendar days notice. The Issuer shall effect the redemption in cash, subject to the Share Settlement Option. None Standard German market anti-dilution provisions For the avoidance of doubt, the voluntary takeover offer announced by the Issuer on 20 August 2013 to the shareholders of GSW Immobilien AG and its implementation will not trigger any adjustment under the Bonds. Full Conversion Price adjustment for any cash dividend paid On giving not less than 30 nor more than 60 calendar days written notice, each Bondholder may request the Issuer to redeem any or all of its Bonds on 22 November 2018 at their Principal Amount, plus interest accrued thereon until (but excluding) the date of redemption. The Issuer shall effect the redemption in cash, subject to the Share Settlement Option. Page 2 of 8

3 Share Settlement Option: Acceptance Event Upon a Tender Offer for the Shares: The Issuer shall have the right to redeem each Bond on the relevant Due Date (the "Share Settlement Option") at its discretion, by (i) delivering the Redemption Shares and (ii) if the Principal Amount is higher than the Share Market Value, paying the Additional Cash Amount, if any, as well as (iii) any interest accrued to (and not including) the relevant Due Date, if any. The exercise of the Share Settlement Option is subject to the condition subsequent that the Continuous Average on any day of the Valuation Period does not fall below the VWAP of the Shares on the day of the Share Settlement Option Notice (as defined in the Terms and Conditions) less 15%. If such condition subsequent occurs, the relevant Bonds shall be redeemed for cash. "Share Market Value" means per Bond the product (rounded up to the nearest full cent) of (i) the Current Market Price and (ii) the number of full Redemption Shares. Current Market Price (per Share) means the arithmetic average of the daily VWAPs on XETRA during the 15 consecutive Trading Days prior to the fourth Trading Day immediately preceding the relevant Due Date (the Valuation Period ). "Redemption Shares" means, per Bond, the number of Shares with a Share Market Value up to the Principal Amount. The Redemption Shares per Bond will be no higher than the prevailing Conversion Ratio per Bond. "Additional Cash Amount" means the amount per Bond corresponding to the difference between (i) the Principal Amount and (ii) the Share Market Value. The Continuous Average on the nth day of the Valuation Period means the arithmetic average of the daily VWAPs per Share from and including the first until and including the nth day of the Valuation Period. If a voluntary or mandatory tender offer for shares of the Issuer is made, the Issuer will as soon as possible after becoming aware thereof give notice. If an Acceptance Event occurs the Issuer will as soon as possible after becoming aware of the occurrence of such event give notice of the Acceptance Record Date. If the Issuer gives notice of a voluntary or mandatory tender offer for shares of the Issuer, Holders have the right to convert their Bonds by giving a conversion notice specified to be a conditional conversion notice (the Conditional Conversion Notice ) during the Conditional Conversion Notice Period at a Conversion Price adjusted pursuant to the following formula: where: CP a = the adjusted Conversion Price; CP = the Conversion Price on the day preceding the day on which the Acceptance Event occurs; Pr = the initial Conversion Premium of 30%; c = the number of days from the date on which the Acceptance Event occurs (including in each case) to the Maturity Date (excluding); t = the number of days from the Issue Date (including) to the Maturity Date (excluding). Any Shares to be delivered upon a Conditional Conversion Notice are to be delivered as soon as possible, at the latest five Trading Days after the day on which the Conditional Conversion Notice becomes effective. An Acceptance Event occurs if upon a tender offer for shares of the Issuer, whether voluntary or mandatory, until the expiry of the acceptance period the bidder publishes an announcement about the received acceptance declarations from which it can be derived that the minimum percentage of the total shares or the minimum number of shares of the Issuer or the minimum percentage of the voting rights, the acquisition of which has been made by the bidder a condition Page 3 of 8

4 Change of Control Protection: Merger: Negative Pledge: for the effectiveness of the offer, has been reached (irrespective of the fulfilment of other offer conditions); provided, however, that an Acceptance Event cannot occur anymore if another offer condition cannot be fulfilled (already before or at the same time) any longer and the offer has, thus, failed. Acceptance Record Date means the last day of the additional acceptance period pursuant to 16(2) German Securities Acquisition and Takeover Act. Conditional Conversion Notice Period means the period from and including the day on which the Issuer gives notice until, but excluding the Acceptance Record Date. If a Change of Control occurs the Issuer will as soon as possible after becoming aware of the occurrence of such event give notice of the Change of Control, specifying whether it is a Change of Control without Tender Offer, and the Change of Control Record Date, as well as, in case of a Change of Control, the termination period. If the Issuer gives notice of a Change of Control, each Holder may terminate all or part of his Bonds that have not previously been converted or redeemed with a prior notice of not less than 10 days with effect as of the Change of Control Record Date. In such case, the Issuer will redeem such Bonds at the Principal Amount plus accrued interest thereon, if any, up to, but excluding the Change of Control Record Date, on the Change of Control Record Date. The Issuer shall effect such redemption in cash (the Share Settlement Option shall not apply). If the Issuer gives notice of a Change of Control without Tender Offer and Holders submit a Conversion Notice on or prior to the Change of Control Record Date, the Conversion price shall be adjusted pursuant to the formula set out above under Acceptance Event Upon a Tender Offer for the Shares. Control means direct or indirect (within the meaning of 22 of the German Securities Trading Act) legal or beneficial ownership of shares carrying in aggregate 30% or more of the voting rights for the Issuer. A Change of Control occurs if (i) after the Issue Date, any person or persons acting in concert acquire Control of the Issuer (unless the acquiror is a credit institution, financial service provider or agent that acquires Control only temporarily in a transitory function in connection with the implementation of a capital measure or corporate action) without a prior Acceptance Event having occurred (a "Change of Control without Tender Offer") or (ii) in the event of a tender offer for shares of the Issuer, whether voluntary or mandatory, a situation occurs in which (x) shares already in control of the bidder and/or persons acting in concert with the bidder and shares that have already been tendered to the bidder and/or persons acting in concert with the bidder carry in aggregate 30% or more of the voting rights for the Issuer and (y) the offer has become unconditional. Change of Control Record Date means the Business Day determined by the Issuer, which shall be no less than 40 but no more than 60 days after the notice of the Change of Control. Yes, merger put as described further in the Terms and Conditions Yes, for Capital Market Indebtedness only, as described in the Terms and Conditions. Capital Market Indebtedness means a present or future obligation of the Issuer or its subsidiaries for the repayment of money (including obligations by reason of any guarantee or other liability agreement for obligations of third parties) borrowed through the issuance of notes/bonds, debentures, or other similar debt securities which are or capable of being quoted, listed, or traded on a regulated or unregulated securities market at any stock exchange. Page 4 of 8

5 Events of Default: Cross Default: Selling Restrictions: Offering Documents: Use of Proceeds: Governing Law: Lock-up: Closing/Settlement/Issue Date: Listing: Standard Euro-market events of default in relation to the Issuer, as described in the Terms and Conditions, including among others: (i) failure to pay interest or principal with respect to the Bonds or deliver Shares for 30 days (ii) failure to perform material obligations arising from the Bonds for more than 30 days (iii) announcement of inability to meet financial obligations (iv) opening of insolvency proceeding which is not abrogated or stayed within 60 days) Yes, in respect of Financial Indebtedness, subject to a Euro 30 million threshold. Financial Indebtedness means any obligation of the Issuer or its subsidiaries for the payment of borrowed money which constitutes a Capital Market Indebtedness or is a loan from one or more credit institutions. Private placement to institutional investors only in compliance with Reg S (Category 1), no TEFRA restrictions No sale/distribution in the U.S., to investors in Canada, Australia, or Japan Standard selling restrictions apply elsewhere The Offering is being conducted solely on a private placement basis with institutional investors. No prospectus, offering circular or similar offer prospectus will be prepared in respect of this offering. Investors will only receive this indicative term sheet, the Terms and Conditions of the Bonds prior or upon settlement, and after pricing, the pricing terms. Investors will need to take their investment decision based solely on publicly available information Separate from the Offering, the Company has announced today to authorize Credit Suisse Securities (Europe) Limited, Deutsche Bank AG and UBS Limited, acting on behalf of the Company as Joint Dealer Managers, to invite holders of convertible bonds issued by GSW Immobilien AG on 20 November 2012 (ISIN: DE000GSW1CB6/ WKN: GSW1CB, GSW-Convertible Bonds ) to make offers to sell their GSW-Convertible Bonds. If and to the extent that the Company purchases GSW-Convertible Bonds via this reverse bookbuilding process, part of the proceeds from the placement of DWAG-Convertible Bonds will be used for this purchase. Any remaining proceeds will be used by the Company for general corporate purposes. German law Yes, for the Issuer, until 3 months after the Closing Date Expected on or around 22 November 2013 Application is intended to be made for the Bonds to be included on the unregulated Open Market segment (Freiverkehr) of the Frankfurt Stock Exchange Clearing System: Clearstream Banking AG Frankfurt, Euroclear Brussels and Clearstream Luxembourg. Book-entry Joint Bookrunners and Joint Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, UBS Limited Lead Managers: Paying and Conversion The Bank of New York Mellon, Frankfurt Branch Agent: Calculation Agent: Conv-Ex Advisors Limited Settlement Agent: Deutsche Bank AG Security Codes: ISIN: DE000A1YCR02 German WKN: A1Y CR0 Common code: Page 5 of 8

6 Stock Symbols: ISIN: DE000A0HN5C6 German WKN: A0HN5C Bloomberg: DWNI GY Reuters: DWNG.DE This indicative term sheet should be read together with the full text of the Terms and Conditions of the Bonds which are attached Page 6 of 8

7 Important Note THIS TERM SHEET IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES OF THE SECURITIES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS TERM SHEET MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS INDICATIVE TERM SHEET IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN VIOLATION OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") OR THE APPLICABLE LAWS OF ANY SUCH OTHER JURISDICTION. THE BONDS AND THE SHARES TO BE DELIVERED ON CONVERSION OF THE BONDS MENTIONED IN THIS TERM SHEET HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OR ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION, EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR ORHTER SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES. IN THE UNITED KINGDOM, THIS TERM SHEET IS ONLY BEING DISTRIBUTED TO AND IS ONLY DIRECTED AT (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE ORDER ) AND (II) HIGH NET WORTH ENTITIES FALLING WITHIN ARTICLE 49(2) OF THE ORDER AND (III) PERSONS AT OR TO WHOM IT CAN OTHERWISE LAWFULLY BE DISTRIBUTED OR DIRECTED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS ). THE SECURITIES ARE ONLY AVAILABLE TO, AND ANY INVITATION, OFFER OR AGREEMENT TO SUBSCRIBE, PURCHASE OR OTHERWISE ACQUIRE SUCH SECURITIES WILL BE ENGAGED IN ONLY WITH, RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS NOTIFICATION OR ANY OF ITS CONTENTS. THIS DOCUMENT IS NOT A PROSPECTUS WITHIN THE MEANING OF DIRECTIVE 2003/71/EC OF THE EUROPEAN PARLIAMENT AND THE COUNCIL OF 4 NOVEMBER 2003 AS AMENDED NOTABLY BY THE DIRECTIVE 2010/73/UE (THE "PROSPECTUS DIRECTIVE") AS IMPLEMENTED IN EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (THE "MEMBER STATES"). IN MEMBER STATES THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"). ANY PERSON IN THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN "INVESTOR") OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR AND THAT IN THE CASE OF ANY SECURITIES ACQUIRED BY IT AS A FINANCIAL INTERMEDIARY, AS THAT TERM IS USED IN ARTICLE 3(2) OF THE PROSPECTUS DIRECTIVE, (I) THE SECURITIES ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF, NOR HAVE THEY BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE TO, PERSONS IN ANY RELEVANT MEMBER STATE OTHER THAN QUALIFIED INVESTORS, AS THAT TERM IS DEFINED IN THE PROSPECTUS DIRECTIVE; OR (II) WHERE SECURITIES HAVE BEEN ACQUIRED BY IT ON BEHALF OF PERSONS IN ANY RELEVANT MEMBER STATE OTHER THAN QUALIFIED Page 7 of 8

8 INVESTORS, THE OFFER OF THOSE SECURITIES TO IT DOES NOT REQUIRE THE PUBLICATION BY THE ISSUER OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE. The offering of the Bonds has not been registered with the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian securities legislation and, accordingly, the Issuer and any of the Joint Lead Managers has represented and agreed that, save as set out below, (i) it has not made and will not make an offering (or "offerta al pubblico") of any Bonds in the Republic of Italy, and (ii) sales of the Bonds in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulations; as such, no Bonds have been or may be offered, sold or delivered, nor copies of any offering material relating to any Bonds have been or may be distributed or otherwise made available in the Republic of Italy, except (a) to qualified investors ("investitori qualificati"), as defined pursuant to Article 100 of the Financial Laws Consolidated Act and Article 34-ter, paragraph 1(b) of CONSOB Regulation No of 14 May 1999, as amended from time to time ("Regulation No ") or any other relevant implementing regulations; or (b) in any other circumstances which are exempted from public offerings restrictions pursuant to the Italian Legislative Decree No. 58 of 24 February 1998 (as amended from time to time) ("Financial Laws Consolidated Act"), Regulation No and any other applicable laws and regulations. Any offer, sale or delivery of the Bonds or distribution of copies of offering material relating to the Bonds in the Republic of Italy will be made (i) by an investment firm, bank or financial intermediary permitted to conduct such activities in the Republic of Italy in accordance with the Financial Laws Consolidated Act, CONSOB Regulation No of 29 October 2007 (as amended from time to time), the Italian Legislative Decree No. 385 of 1st September 1993 ("Consolidated Banking Act"); and (ii) in compliance with any other applicable laws and regulations or requirement imposed by CONSOB, the Bank of Italy or any other Italian authority. NO ACTION HAS BEEN OR WILL BE TAKEN BY THE JOINT LEAD MANAGERS OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT A PUBLIC OFFERING OF THE BONDS, OR POSSESSION OR DISTRIBUTION OF ANY OFFERING DOCUMENT IN RELATION THERETO, IN ANY JURISDICTION WHERE ACTION FOR THE PURPOSE IS REQUIRED. PURCHASERS AND PERSONS WHO RECEIVE THIS TERM SHEET ARE REQUIRED BY JOINT LEAD MANAGERS OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT A PUBLIC OFFERING AND THEIR RESPECTIVE AFFILIATES TO COMPLY AT THEIR OWN EXPENSE (AND WILL BE DEEMED TO REPRESENT THAT THEY WILL COMPLY) WITH ALL APPLICABLE LAWS AND REGULATIONS IN EACH JURISDICTION IN WHICH THEY PURCHASE, OFFER, SELL OR DELIVER THE BONDS OR HAVE IN THEIR POSSESSION THIS TERM SHEET. Any investor purchasing the Bonds in the offering shall be solely responsible to ensure that any subsequent resale of the Bonds and/or of the Shares occurs in compliance with any applicable law and regulations. This information has been prepared solely for information purposes and is not an offer (or a solicitation of an offer) to buy or sell the Bonds. No representation or warranty is given with respect to the accuracy or completeness of the information, or with respect to the terms of any future offer of Bonds conforming to the terms hereof. In the event of any such offering, this information shall be deemed superseded, amended and supplemented in its entirety by the terms and conditions of the Bonds, and any decision to invest in such Bonds should be made solely in reliance upon such document. The Joint Lead Managers and their respective affiliates disclaim any and all liability relating to this information, including without limitation any express or implied representations or warranties for, statements contained in, and omissions from, this information. Additional information is available upon request. The Joint Lead Managers (and any of their respective affiliates) may make markets, have positions, and effect transactions in Bonds and instruments of the Issuer and may also provide advice to such entities. Past performance is not necessarily indicative of future results. Price and availability of the Bonds are subject to change without notice. Page 8 of 8