Corporate Governance Statement

Corporate Governance Statement In Accordance With § 289a HGB (German Commercial Code)

In accordance with § 289a HGB, TAG Immobilien AG is obligated to issue a statement on corporate governance, to be incorporated and published either in the Management Report of the company’s annual financial statements or, alternatively, made publicly available on the company’s homepage.

TAG Immobilien AG has chosen the second option and herewith declares:

As a listed German stock corporation, corporate governance at TAG Immobilien AG ("TAG") is primarily determined/defined by the Stock Corporation Act, the other statutory provisions of commercial and corporate law, and the latest version of the German Corporate Governance Code (DCGK).

In German Stock Corporation Law, the "dual leadership system" applies, i.e. there is a strict personnel separation between the Management Board as the governing body of the Company and the Supervisory Board as the monitoring body. However, the Management Board and Supervisory Board work closely together in the Company's interests.

The Management Board is solely responsible for managing the business and is committed to the goal of sustainable value creation by the Company. The principle of overall responsibility applies, in other words the individual members of the Management Board are collectively responsible for overall management and strategy. Strategy is determined in coordination with the Supervisory Board. The principles and details of the cooperation between the Management Board and the Supervisory Board of TAG are set out in the Rules of Procedure for the Management Board. The Rules of Procedure specify the allocation of responsibilities of individual Management Board members, as well as matters reserved for the full Management Board and the transactions and decisions requiring the approval of the Supervisory Board. Mr. Rolf Elgeti is Chairman of the Management Board.

The Management Board shall regularly, promptly and comprehensively notify the Supervisory Board about all significant aspects of the business performance, major business transactions and the current earnings situation, including the risk situation and risk management. This information is regularly provided at the Supervisory Board meetings, of which at least 4 take place per year. In addition, the Chairman of the Supervisory Board is kept regularly and continuously informed about the performance of the business. Information about the business performance, the cooperation with the Supervisory Board and the decisions taken by the Supervisory Board are regularly reported in the Annual Report and the Supervisory Board Report and Management Report contained therein. Furthermore, a separate report on compliance is issued in the annual Compliance Report.

As the supreme body of the Company, the Supervisory Board appoints and dismisses the members of the Management Board, ratifies the remuneration policy for Management Board members and determines the total remuneration for individual members. This is a decision taken by the whole body. Pursuant to the Articles of Association, the Supervisory Board has 6 members, 4 of which are elected by the shareholders, while 2 seats are occupied by employee representatives. As TAG has functioned as a pure holding company in the past, the employee representative seats have not been filled. Because this exclusive holding function has now been given up, Supervisory Board elections will be held in the TAG group workforce during the 1st Quarter of 2010, so that the vacant seats will soon be filled. Internal cooperation within the Supervisory Board is governed by Supervisory Board Rules of Procedure. The Supervisory Board is regularly informed in writing about any risks, at least four times a year. In this reporting, the Management Board uses the risk management system that applies across the whole TAG group. Further details about the Supervisory Board’s actual work may be obtained from the Supervisory Board Report, which is the part of the annual report. The Supervisory Board has not formed any committees.

TAG regards responsible and transparent corporate governance as the basis for long-term business success. Its model is the latest version of the German Corporate Governance Code, which was first introduced in 2002. The Management Board and Supervisory Board are bound by this Code and renew their declaration of compliance in December of each year, in accordance with to § 161 Aktiengesetz (German Stock Corporation Act). The declaration of December 2009 is found below:

Statement of conformity by the Management Board and Supervisory Board
pursuant to Section 161 of the German Stock Corporation Act

The Management Board and the Supervisory Board of TAG Immobilien AG (hereinafter also referred to as the "Company") declare that the Company has conformed and continues to conform to the recommendations on corporate governance drafted by the Government Commission on the German Corporate Governance Code in the version dated 18 June 2009 (hereinafter referred to as "GCGC"), issued by the German Federal Ministry of Justice and published in the official part of the electronic Bundesanzeiger publication save for the following exceptions:

The members of the Supervisory Board and of the Management Board are - currently still - covered by a Group-wide D&O insurance policy, which provides for a small deductible (Article 3.8 of the GCGC). This entails a collective insurance policy which also covers the Group’s other management and executive staff. To date, it has not been considered expedient to make any distinction between the members of the Supervisory Board and the Management Board, on the one hand, and the rest of the Company’s employees, on the other. Accordingly, no such distinction has been provided for in the insurance policy. In accordance with the Management Board Compensation Act, which took effect on 5 August 2009, the deductible applicable to members of the Management Board is to be increased to one-and-a-half times their annual fixed compensation in the course of 2010 within the transitional period expiring on 30 June 2010 in accordance with the Act. The deductibles applicable to members of the Supervisory Board will also be increased to one-and-a-half times their annual fixed compensation within this period.

The Supervisory Board of TAG Immobilien AG has to date not formed any committees. In particular, it has not formed an audit committee (Article 5.3.2 Sentence 1 of the GCGC) or a nomination committee (Article 5.3.3 of the GCGC). The Company’s Supervisory Board takes the view that such committees are neither necessary nor appropriate given the Company’s specific situation, particularly the size of the Supervisory Board, which permits efficient activity.

3. The Company’s consolidated financial statements are not published within 90 days of the end of the financial year (Article 7.1.2 of the GCGC). The consolidated financial statements are published within the first four months of the conclusion of the financial year or eight weeks after the end of the quarter in accordance with the statutory provisions. The Company’s Management Board and Supervisory Board do not consider a shorter publication period to be justified given the differences in the periods and in view of the expense and volume of work involved."

Hamburg, December 2009

Management Board and Supervisory Board
of TAG Immobilien AG

Hamburg, February 2010

TAG Immobilien AG
Management Board