Share price: record high followed by subprime crisis

Our shares began the year at €28.08 and continued the upward trend at the end of 2006. The shares reached their high for the year of €30.09, which was also a new all-time high, on 23 April (Xetra closing prices). In July, our shares were also affected by the sharp price falls on the global stock markets and the price had fallen to €23.22 by 20 August. Despite an excellent recovery phase up until mid- November, Deutsche EuroShop shares could no longer evade the generally poor sentiment for financial and property shares and closed the year at a price of €23.50. The market capitalisation of Deutsche EuroShop thus declined by around €157 million in 2007 from €965 million to €808 million.

Decline in performance for the first time in five years.

Taking into account the dividend paid of €1.05 per share, the performance of Deutsche EuroShop shares amounted to -13.1% year-on-year. The share price decreased by 16.3%. This was the narrowest of decreases in comparison with other German property management companies - but was nevertheless a fall. Our shares have exceeded the European benchmark, the EPRA index (-34.1%) by a substantial margin and in comparison with European peers , they fell in the upper half of the field. Similarly to other property management companies, we are also competing for investor capital, primarily with open-ended property funds from Germany, which last year achieved an average performance of 5.7% (2006: 4.3%) - partly due to considerable gains on disposal - thus enjoying cash flows of almost €6.7 billion (2006: €-7.4 billion).

¹ Corio, Eurocommercial Properties, Klepierre, Liberty International and Unibail-Rodamco

Annual General Meeting grants approval

The Annual General meeting was held on 21 June 2007 in Hamburg. The shareholders present at Hotel Atlantic Kempinski, numbering approximately 450, represented 46.4% of the capital and approved all items on the agenda.

Two-for-one share spilt

On 6 August 2007, we implemented the two-for-one share split adopted at the General Meeting, together with the capital increase from own funds (an increase of €12,374,999.28 to €34,374,998 without issuing new shares). This means that the notional interest in the company represented by each share has been reduced from €1.28 of the share capital to €1.00 and the number of issued shares doubled to 34,374,998 units.

Variety of opinions from analysts

Our share is now regularly followed by 20 analysts (as at 31 March 2008, compared with 19 a year earlier) from well-known German and international financial institutions and their recommendations introduce us to new groups of investors. Additional banks have indicated that they will begin coverage of Deutsche EuroShop shares in 2008. Information on the recommendations is available at: www.deutsche-euroshop.com/research

The majority of analysts give positive recommendations with regard to DES. (As of 31.03.07)

²Aurel Leven, Bankhaus Lampe, Berenberg Bank, Commerzbank, Deutsche Bank, Dresdner Kleinwort, DZ Bank, equinet, Hamburger Sparkasse, HSH Nordbank, Kempen & Co., Lehman Brothers, MainFirst Bank,Merrill Lynch, Metzler, M.M. Warburg & Co, Petercam Bank, Sal. Oppenheim, Sylvia Quandt Bank, Unicredit, WestLB

Investor relations work is ”excellent”

In July, Deutsche EuroShop again received first place in the Capital Investor Relations Prize 2007 in the MDAX category for its investor relations activities, thus repeating last year’s success. Each year, the financial magazine Capital awards this well-known prize for the best communication with the financial markets, judging companies on their target group focus, transparency, track record and extra financial reporting.

Deutsche EuroShop also won at BIRD 2007 (Beste Investor Relations Deutschlands - Germany’s Best Investor Relations). The investor magazine Börse online awarded for the fifth time those companies whose capital market information of private investors is regarded as particularly open, honest and fair. We thus succeeded in 2007 not only in defending our top position in the MDAX, but also in remaining ahead in the overall evaluation of 160 companies from the DAX, the MDAX, the SDAX and the TecDAX.

Deutsche EuroShop’s 2006 Annual Report has been awarded the red dot design award. This is an internationally renowned seal of quality for good design, and is a highly valued award in the sector. With over 7,000 entries from a total of 34 countries, the red dot design award is one of the leading and largest design competitions in the world.

Further awards for our capital market communication can be found on our website at: http://www.deutsche-euroshop.com/ircommunication

Higher proportion of institutional and international shareholders

The number of shareholders rose in 2007 by over 10% from around 6,800 to over 7,700 (as at 31 March 2008). The structural distribution remained almost unchanged; institutional investors hold almost 55% of shares as was the case last year, and private investors hold approximately 26%. The Otto family slightly increased its share via purchase from 19.31% to a current 19.47%. At the end of November, Attfund Ltd of South Africa notified us that its voting rights share had exceeded the threshold of 5% and amounts to 5.29%. These shares are allocatable to the share of institutional investors. Foreign investors’ share remains at 30%. There were only slight changes to the country distribution.

(Stand: 31. März 2008)

(Stand: 31. März 2008)

Dividends stable

The Executive and Supervisory Boards will propose payment of a dividend of €1.05 again per share for the 2007 financial year to the Annual General Meeting of 19 June 2008 in Hamburg. With our longterm strategy of a dividend policy based on continuity, and a comparatively high yield of 4.5% (based on the 2007 yearend closing price of €23.50), we hope to further cement the confidence of our existing shareholders and attract new investors. In future, we also intend to distribute a dividend of at least €1.05 per share.

Would you like further informations?

Then visit our website or call us:

Patrick Kiss and Nicolas Lissner

Tel.: +49 (0)40 - 41 35 79 20 / -22
Fax: +49 (0)40 - 41 35 79 29
E-Mail: ir@deutsche-euroshop.com
Internet: www.deutsche-euroshop.com/ir

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