BFW Liegenschaften : Results Half Year 2016

Press Release 13 September 2016

As at 30 June 2016, the real estate portfolio included 45 investment properties and one conversion project. The value of the portfolio increased by 4% to CHF 416.4 million during the first half-year 2016 (31.12.2015: CHF 401.9 million). The change is mainly due to the successful development and the investments into the conversion projects (CHF 1.4 million and CHF 3.5 million, respectively) as well as to positive changes in the fair value of real estate investments (CHF 9.3 million). bfw liegenschaften ag did neither buy nor sell any properties during the first half-year 2016. The conversion project "Schaffhauserstrasse 210" in Zurich was completed in May 2016 and was reclassified to the investment properties during the first half of 2016. Following the conversion, this property generates target rental income of about CHF 1.0 million per annum with approximately 94% of the rental income coming from residential use. The conversion project "Freiestrasse 4" in Weinfelden progresses according to plans and completion of this project is expected by summer 2017. With this project, bfw liegenschaften ag is implementing a new, mainly residential property with 42 apartments, 78 parking spaces and commercial / services areas of about 850 square meters. The total investment volume of this project is about CHF 12 million.

The target rental income of the current portfolio amounts to about CHF 23.5 million per annum. The proportion of rental income generated by residential use is currently around 75%.

Net rental income increased by 5% to CHF 9.9 million during the reporting period (H1 2015: CHF 9.4 million). The positive change is mainly due to additional rental income from the new building projects completed in fiscal year 2015 (Kreuzlingen, Romanshorn, Grenchen and Zweidlen) and the conversion project in Zurich which was completed during the first half of 2016. The net yield of investment properties during the first half-year 2016 was 3.9% and 4.0% without new building / conversion projects, respectively (H1 2015: 4.0% and 4.3%). The vacancy rate excluding new building / conversion projects was 7.5% (H1 2015: 6.9%).

Direct operating expenses for investment properties increased by TCHF 131 to CHF 1.7 million (H1 2015: CHF

1.6 million). The slight increase is mainly due to the property projects that were completed during fiscal year 2015 and the first half-year 2016. As a percentage of net rental income, direct operating expenses were at 17.4% (H1 2015: 16.9%). Consulting expenses as well as administrative expenses remained at the previous year's level and amounted to CHF 0.4 million and CHF 1.0 million.

The valuation of the investment portfolio by KPMG AG, the independent real estate evaluator, resulted in positive changes in the fair value of real estate investments in the amount of CHF 10.7 million (H1 2015: CHF 6.0 million). The increase in market values is mainly due to a reduction of the discount rate applied by KPMG (average discount rate 4.47%) and the successful development of the conversion projects.

bfw liegenschaften ag achieved a solid EBIT of CHF 17.5 million (H1 2015: CHF 12.5 million). The substantial increase of 40% compared to the previous year's period is primarily due to the slightly higher rental income and the profit from the valuation of the investment portfolio.

Net financial expenses were CHF 1.9 million (H1 2015: CHF 1.8 million). The slight increase compared to the first half of 2015 is due to about CHF 4.0 million higher mortgage liabilities in conjunction with the completed project in Zweidlen and negative interest rates charged on the swaps of about CHF 0.2 million (H1 2015: CHF 0.1 million).

The fair value reflection of the interest rate swaps and receiver swaptions led to a negative effect before taxes of CHF 7.9 million (H1 2015: negative effect of CHF 1.8 million). The main reasons were a further decline of the

interest rate level for longer maturities and the high losses on the receiver swaptions. The receiver swaptions give the banks the option to extend the swap maturities at the same interest rates that were agreed upon for the first contract period. As the probability that the banks will execute this option has increased (due to the low interest rate situation), the swaption valuation has received a higher weighting in the calculation. In accordance with IFRS accounting rule IAS 39, the interest rate swaps and receiver swaptions must be valued at the current fair value at each balance sheet date and changes in the fair value have to be reflected in the income statement. These fair value adjustments (positive or negative) do not impact cash flows and do not affect the Company's operating effectiveness or its dividend policy at all.

Taking into account the fair value of the interest rate swaps and receiver swaptions, the earnings including effects from changes in the fair value of real estate investments and deferred taxes amounted to CHF 6.0 million (H1 2015: CHF 7.0 million). Excluding the fair value changes in the interest rate swaps and receiver swaptions, net earnings for the first half-year 2016 were at a very good level of CHF 12.6 million (H1 2015: CHF 8.5 million). Net earnings per share excluding the changes in fair value of the interest rate swaps and receiver swaptions amounted to CHF 2.42 (H1 2015: CHF 1.64).

Total assets increased by 2% compared to year-end 2015 and amounted to CHF 424.2 million (31.12.2015: CHF

416.6 million). This is mainly due to the increase in value of the real estate portfolio.

Mortgage liabilities as at 30 June 2016 were CHF 195.7 million in total (31.12.2015: CHF 196.5 million), which corresponds to a conservative loan-to-value ratio of 47.0% in relation to the real estate portfolio (31.12.2015: 48.9%). Out of the total mortgages CHF 62.0 million are secured long-term through interest rate swaps and receiver swaptions, CHF 27.3 million with fix mortgages of 5.6 years and CHF 41.2 million with fix mortgages of 6 to 8 years. The average remaining life of maturity of mortgages as at 30 June 2016 was 3.5 years (31.12.2015:

3.9 years).

bfw liegenschaften ag has a very solid equity base with equity amounting to CHF 188.9 million and equity ratio of 44.5% as at 30 June 2016 (31.12.2015: 45.6%). Excluding the fair value changes in the interest rate swaps and receiver swaptions, the equity ratio was 48.9% (31.12.2015: 48.5%).

The Net Asset Value reached CHF 36.38 (31.12.2015: CHF 36.58). The change in the Net Asset Value is attributable to the pay-out of capital contribution of CHF 7.0 million as per May 2016 and the earnings contribution of CHF 6.0 million. Excluding the fair value changes in the interest rate swaps and receiver swaptions, the Net Asset Value was at CHF 39.99 (31.12.2015: CHF 38.93).

bfw liegenschaften ag's business model and investment strategy with its focus on residential properties proves successful and the Company remains confident that the real estate market in Switzerland, especially for residential properties, will remain attractive in the long-term.

The balance sheet structure with its high equity ratio and the rather low loan-to-value ratio enables the Company to further expand its portfolio through the purchase of investment properties or the implementation of new projects. As in previous years, bfw liegenschaften ag will remain focused on high quality projects and attractive yields.

For the second half of 2016, the Company expects to achieve similar operating results at the EBIT level (excluding effects from changes in fair value of real estate investments) like in the first half-year 2016.

Beat Frischknecht Reto Borner

Chief Executive Officer Chief Financial Officer

+41 52 728 01 02 +41 52 728 01 06

beat.frischknecht@bfwliegenschaften.chreto.borner@bfwliegenschaften.ch

15 March 2017 Publication results Fiscal Year 2016 and Annual Report 2016

26 April 2017 Ordinary General Meeting of Shareholders

September 2017 Publication results Half-Year 2017 and Half-Year Report 2017

The Half-Year Report 2016 of bfw liegenschaften ag (German version) is available at www.bfwliegenschaften.ch- Investor Relations - Financial Reports. Direct linkhttp://www.bfwliegenschaften.ch/index.php/en/investor-relations/financial-reports

Information on bfw liegenschaften ag

www.bfwliegenschaften.ch

bfw liegenschaften ag is a real-estate company with headquarters in Frauenfeld in the canton of Thurgau, Switzerland. It focuses on attractive residential properties in commuting areas close to business centres in the German-speaking part of Switzerland. The registered A shares of bfw liegenschaften ag are listed on the SIX Swiss Exchange (Symbol BLIN, Securities Number 1820611, ISIN Number CH 001 820 6117).