Independent Auditor’s Report

Report on the Audit of the Consolidated Financial Statements and of the Combined Management Report

Opinions

We have audited the consolidated financial statements of Vonovia SE, Bochum, and its subsidiaries (the Group), which comprise the consolidated balance sheet as of December 31, 2022, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the financial year from January 1 to December 31, 2022, and notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the management report of the Company and the Group (combined management report) of Vonovia SE for the financial year from January 1 to December 31, 2022.

In accordance with German legal requirements, we have not audited the content of those components of the combined management report specified in the "Other Information" section of our auditor's report.

In our opinion, on the basis of the knowledge obtained in the audit,

• the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315e (1) HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as of December 31, 2022, and of its financial performance for the financial year from January 1 to December 31, 2022, and
• the accompanying combined management report as a whole provides an appropriate view of the Group's position. In all material respects, this combined management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our opinion on the combined management report does not cover the content of those components of the combined management report specified in the "Other Information" section of the auditor's report.

Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance of the consolidated financial statements and of the combined management report.

Basis for the Opinions

We conducted our audit of the consolidated financial statements and of the combined management report in accordance with Section 317 HGB and the EU Audit Regulation No 537/2014 (referred to subsequently as "EU Audit Regulation") and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). We performed the audit of the consolidated financial statements in supplementary compliance with the International Standards on Auditing (ISAs). Our responsibilities under those requirements, principles and standards are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report" section of our auditor's report. We are independent of the group entities in accordance with the requirements of European law and German commercial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2)(f) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinions on the consolidated financial statements and on the combined management report.

Key Audit Matters in the Audit of the Consolidated Financial Statements

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the financial year from January 1 to December 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Valuation of investment properties

Please refer to Note 13 and 28 to the consolidated financial statements as well as the section on opportunities and risks in the combined management report.

The Financial Statement Risk

Investment properties with a carrying amount of EUR 92.3 billion are recognized in the consolidated financial statements of Vonovia as of December 31, 2022, and represent 91.0% of total assets, a substantial share. Of this amount, EUR 81.9 billion is attributable to properties located in Germany, EUR 3.3 billion to properties located in Austria and EUR 7.1 billion to properties located in Sweden.

Vonovia measures the investment properties at fair value quite predominantly in accordance with IAS 40 in conjunction with IFRS 13. In the financial year a loss of EUR -1.3 billion from the measurement of investment properties was recognized in the consolidated income statement.

Vonovia calculates the fair values using internal valuation models. Nursing care properties and parts of undeveloped land are excluded from this.

The fair values are determined internally by means of a discounted cash flow (DCF) method based on homogeneous valuation units of aggregated commercially related and comparable land and buildings. Appraisals are also prepared by independent experts to confirm the internal valuations. The fair value of the nursing care properties and undeveloped land that are not measured internally is calculated on the basis of appraisals by independent experts using DCF methods and, insofar as they are relevant, under consideration of findings from current market observations and transactions.

The valuation of investment properties is complex and incorporates numerous assumptions and data relevant to measurement that involve considerable estimation uncertainties and judgment. Even minor changes in the assumptions and information relevant to valuation can result in significant changes to the resulting fair value. The most significant assumptions and data are market rents, including the expected trend in rental prices, the planned maintenance costs and discount and capitalization rates. When calculating the discount and capitalization rates, Vonovia also takes into account the different dynamics of real estate prices and rental price trends.

Due to existing estimation uncertainties and judgments, there is the risk for the consolidated financial statements that the fair values of investment properties are not within a reasonable range.

Moreover, there is the risk for the consolidated financial statements that the disclosures on investment properties required in the notes pursuant to IAS 40 and IFRS 13 are not complete and adequate.

Our Audit Approach

With the involvement of our own property valuation experts, using partly control-based and substantive audit procedures, we assessed the accuracy and completeness of the property portfolio data used in the internal valuation models. In addition, we assessed the internal valuation methods regarding compliance with IAS 40 in conjunction with IFRS 13, the homogeneity of the defined valuation units and the appropriateness of the assumptions and data used for measurement. We also used external market data to assess the assumptions and data used for measurement, such as the discount and capitalization rates applied, market rents and the expected trend in rental prices as well as planned maintenance costs.

For a representative selection of valuation units located in Germany and Austria, which were supplemented with a risk-oriented selection of elements, we compared the valuation made by Vonovia with our own calculations. To this end, we used the standardized income approach ("Ertragswertverfahren") in accordance with the German Real Estate Appraisal Regulation [Immobilienwertermittlungsverordnung, ImmoWertV] for the German portfolio and the market comparable method ("Vergleichswertverfahren") in line with ImmoWertV for the Austrian portfolio. In addition, we carried out on-site inspections for the German properties of this sample to assess the condition of the respective property.

Furthermore, we evaluated the computational and mathematical accuracy of the valuation models.

We satisfied ourselves of the qualification, competence and impartiality of the external valuers commissioned by Vonovia; we also evaluated the valuation methods used for the appraisal with regard to compliance with IAS 40 in conjunction with IFRS 13, assessed the material assumptions and data for measurement, and compared the internal measurements with those of the respective external appraisal.

In addition, we assessed the completeness and adequacy of disclosures on investment properties required in the notes to the consolidated financial statements pursuant to IAS 40 and IFRS 13.

Our Observations

The valuation method implemented by Vonovia is appropriate and suitable for determining fair value in compliance with IFRS. The assumptions and data used for valuation of the investment properties are appropriate. The disclosures on investment properties in the notes to the consolidated financial statements pursuant to IAS 40 and IFRS 13 are complete and adequate.

Goodwill Impairment

Please refer to Note 26 in the consolidated financial statements for information on the accounting policies applied and the assumptions used. Disclosures on the amount of goodwill and disclosures on the amount of impairment losses recognized can be found under Note 26. Information on the economic development of the business segments can be found in the combined management report in the section Results of operations.

The Financial Statement Risk

Goodwill in the amount of EUR 1.5 billion is reported in the consolidated financial statements of Vonovia as of December 31, 2022.

Goodwill is allocated pursuant to IAS 36 to groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. At Vonovia, these are the regional business areas in the Rental segment and the Value-add, Development and Nursing Care and Assisted Living segments.

Goodwill is routinely tested for impairment each year at the level of the group of cash-generating units to which the goodwill in question is allocated. If there are indications that the goodwill could be impaired, an ad hoc impairment test is also conducted. The impairment test compares the carrying amount with the recoverable amount of each group of cash-generating units. If the carrying amount exceeds the recoverable amount, there is a need for impairment. The recoverable amount is the higher of the fair value less costs to sell and value in use of the group of cash-generating units.

The reporting date for the routine impairment test is December 31, 2022.

Increased capitalization rates (WACC) and increases in the value of real estate portfolios during the year – where material – may be an indication that goodwill is impaired. For this reason, Vonovia conducted ad hoc impairment testing in Q1 and Q2 of financial year 2022.

For the ad hoc impairment test in Q4 of financial year 2021, the new goodwill arising from the acquisition of Deutsche Wohnen SE in financial year 2021 and determined as part of the (still) preliminary purchase price allocation of EUR 4.7 billion as of December 31, 2021, was provisionally allocated to the respective groups of cash-generating units of Vonovia. As of September 30, 2022, the purchase price allocation was completed, with goodwill being EUR 0.1 billion higher at EUR 4.8 billion. As part of the final allocation of goodwill, EUR 1.3 billion of the goodwill was allocated to the now independent group of cash-generating units consisting of property portfolios of Deutsche Wohnen. On account of the completed purchase price allocation, impairment testing taking account of the final allocation of goodwill was conducted for the reporting dates December 31, 2021, March 31, 2022, and June 30, 2022.

In Q1 of financial year 2022, the increase in the capitalization rate (WACC) and the revaluation of the investment properties and the related increase in carrying amounts for all groups of cash-generating units in the Rental segment resulted in full impairment of the remaining goodwill totaling EUR 918.3 million. Owing to the increase in the capitalization rate (WACC), goodwill of the "Nursing and assisted living" segment was impaired in full in the amount of EUR 36.0 million in Q2 of financial year 2022.

Vonovia determines the value in use as part of a complex calculation model using a DCF method. In this regard, the determination of the WACC is the primary source of judgment apart from cash flow forecasts. As even minor changes in the cash flow forecasts and the WACC may have a material impact on the recoverable amount, the measurement of goodwill is associated with considerable estimation uncertainties.

There is the risk for the consolidated financial statements that an impairment loss is not recognized in the amount required. There is also the risk that the disclosures in the notes to the consolidated financial statements are not complete and adequate.

Our Audit Approach

With the involvement of our valuation experts, we also assessed the appropriateness of Vonovia’s significant assumptions and the calculation methods for both ad hoc and annual impairment testing.

We verified the appropriateness of the future cash flows presented in the model and used for calculation by, among other approaches, reconciling these with the current projected figures from the detailed planning prepared by Vonovia. We also checked that the detailed planning was correctly derived from the five-year plan adopted by the Management Board and acknowledged by the Supervisory Board. In addition, we obtained an understanding of the process of preparing the plans and evaluated the planning process. We also assessed the plausibility of the planning assumptions based on sector-specific market expectations. Furthermore, we assessed the quality of forecasts used for planning in the past by comparing the target figures with actual figures and analyzing deviations.

With regard to the WACCs calculated by Vonovia, we assessed the individual assumptions and data used in detail on the basis of available market data and also critically evaluated them as a whole compared to comparable companies in the real estate sector. Due to the material impact of even minor changes in the WACC, we also focused on the sensitivity analyses conducted by Vonovia and ascertained whether and to what extent a change in the individual WACC assumptions and data would result in the need for further impairment within expected ranges.

To assess whether the valuation methods are applied properly in methodological and mathematical terms, we analyzed the valuation carried out by Vonovia using our own calculations and analyzed discrepancies.

Finally, we assessed whether the disclosures in the notes regarding impairment of goodwill are complete and adequate.

Our Observations

The calculation method used for impairment testing of goodwill is appropriate and in line with the accounting policies to be applied. The Company's assumptions and data used for measurement are within an acceptable range. The disclosures in the notes on impairment testing of goodwill are complete and adequate.

Other Information

Management and/or the Supervisory Board are/is responsible for the other information. The other information comprises the following components of the combined management report, whose content was not audited:

• the Group's non-financial statement contained in its own section of the combined management report and
• the combined corporate governance statement for the Company and the Group referred to in the combined management report, and
• information extraneous to combined management reports and marked as unaudited.

The other information also includes the remaining parts of the annual report. The other information does not include the consolidated financial statements, the combined management report information audited for content and our auditor's report thereon.

Our opinions on the consolidated financial statements and on the combined management report do not cover the other information, and consequently we do not express an opinion or any other form of assurance conclusion thereon.

In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information

• is materially inconsistent with the consolidated financial statements, with the combined management report information audited for content or our knowledge obtained in the audit, or
• otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and the Supervisory Board for the Consolidated Financial Statements and the Combined Management Report

Management is responsible for the preparation of consolidated financial statements that comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position and financial performance of the Group. In addition, management is responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.

Furthermore, management is responsible for the preparation of the combined management report that, as a whole, provides an appropriate view of the Group's position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a combined management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.

The Supervisory Board is responsible for overseeing the Group's financial reporting process for the preparation of the consolidated financial statements and of the combined management report.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated financial statements and on the combined management report.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Section 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) and supplementary compliance with the ISAs will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this combined management report.

We exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements and of the combined management report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting a material misstatement resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
• Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and measures (systems) relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.
• Evaluate the appropriateness of accounting policies used by management and the reasonableness of estimates made by management and related disclosures.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor's report to the related disclosures in the consolidated financial statements and in the combined management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e (1) HGB.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express opinions on the consolidated financial statements and on the combined management report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our opinions.
• Evaluate the consistency of the combined management report with the consolidated financial statements, its conformity with [German] law, and the view of the Group's position it provides.
• Perform audit procedures on the prospective information presented by management in the combined management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, the actions taken or safeguards applied to eliminate independence threats.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.

Other Legal and Regulatory Requirements

Report on the Assurance on the Electronic Rendering of the Consolidated Financial Statements and the Combined Management Report Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB

We have performed assurance work in accordance with Section 317 (3a) HGB to obtain reasonable assurance about whether the rendering of the consolidated financial statements and the combined management report (hereinafter the "ESEF documents") contained in the electronic file „5299005A2ZEP6AP7KM81-2022-12-31-de.zip“ (SHA256-Hashwert: 6d69cd38aa95ce860777b14a917330c1e1dfd167cd9a7ad2fe7295a29d4b92e7) made available and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format ("ESEF format"). In accordance with German legal requirements, this assurance work extends only to the conversion of the information contained in the consolidated financial statements and the combined management report into the ESEF format and therefore relates neither to the information contained in these renderings nor to any other information contained in the file identified above.

In our opinion, the rendering of the consolidated financial statements and the combined management report contained in the electronic file made available, identified above and prepared for publication purposes complies in all material respects with the requirements of Section 328 (1) HGB for the electronic reporting format. Beyond this assurance opinion and our audit opinion on the accompanying consolidated financial statements and the accompanying combined management report for the financial year from January 1 to December 31, 2022, contained in the "Report on the Audit of the Consolidated Financial Statements and the Combined Management Report" above, we do not express any assurance opinion on the information contained within these renderings or on the other information contained in the file identified above.

We conducted our assurance work on the rendering of the consolidated financial statements and the combined management report contained in the file made available and identified above in accordance with Section 317 (3a) HGB and the IDW Assurance Standard: Assurance Work on the Electronic Rendering of Financial Statements and Management Reports Prepared for Publication Purposes in Accordance with Section 317 (3a) HGB (IDW AsS 410 (06.2022)) and the International Standard on Assurance Engagements 3000 (Revised). Our responsibility in accordance therewith is further described below. Our audit firm applies the IDW Standard on Quality Management 1: Requirements for Quality Management in Audit Firms (IDW QS 1).

The Company’s management is responsible for the preparation of the ESEF documents including the electronic rendering of the consolidated financial statements and the combined management report in accordance with Section 328 (1) sentence 4 item 1 HGB and for the tagging of the consolidated financial statements in accordance with Section 328 (1) sentence 4 item 2 HGB.

In addition, the Company's management is responsible for such internal control that they have considered necessary to enable the preparation of ESEF documents that are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB for the electronic reporting format.

The Supervisory Board is responsible for overseeing the process of preparing the ESEF documents as part of the financial reporting process.

Our objective is to obtain reasonable assurance about whether the ESEF documents are free from material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB. We exercise professional judgment and maintain professional skepticism throughout the assurance work. We also:

• Identify and assess the risks of material intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB, design and perform assurance procedures responsive to those risks, and obtain assurance evidence that is sufficient and appropriate to provide a basis for our assurance opinion.
• Obtain an understanding of internal control relevant to the assurance on the ESEF documents in order to design assurance procedures that are appropriate in the circumstances, but not for the purpose of expressing an assurance opinion on the effectiveness of these controls.
• Evaluate the technical validity of the ESEF documents, i.e. whether the file made available containing the ESEF documents meets the requirements of the Commission Delegated Regulation (EU) 2019/815, as amended as of the reporting date, on the technical specification for this electronic file.
• Evaluate whether the ESEF documents provide an XHTML rendering with content equivalent to the audited consolidated financial statements and the audited combined management report.
• Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) in accordance with the requirements of Articles 4 and 6 of the Commission Delegated Regulation (EU) 2019/815, as amended as of the reporting date, enables an appropriate and complete machine-readable XBRL copy of the XHTML rendering.

Further Information pursuant to Article 10 of the EU Audit Regulation

We were elected as group auditor at the Annual General Meeting on April 29, 2022. We were engaged by the Supervisory Board on October 6, 2022. We have been the group auditor of Vonovia SE without interruption since financial year 2013.

We declare that the opinions expressed in this auditor's report are consistent with the additional report to the Audit Committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report).

Other Matter – Use of the Auditor's Report

Our auditor's report must always be read together with the audited consolidated financial statements and the audited combined management report as well as the examined ESEF documents. The consolidated financial statements and combined management report converted to the ESEF format – including the versions to be entered in the company register – are merely electronic renderings of the audited consolidated financial statements and the audited combined management report and do not take their place. In particular, the ESEF report and our assurance opinion contained therein are to be used solely together with the examined ESEF documents made available in electronic form.

German Public Auditor Responsible for the Engagement

The German Public Auditor responsible for the engagement is Maximilian Cremer.

Düsseldorf, March 16, 2023

KPMG AG
Wirtschaftsprüfungsgesellschaft
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