BUWOG AG: Results for the first six months of 2017/18

BUWOG AG continued its successful business development during the first half of the 2017/18 financial year. All three business areas recorded a year-on-year improvement in earnings, with particularly strong growth in Property Development - the business area which covers the company's new residential construction activities. Recurring FFO, BUWOG's central management indicator, rose by 32.4% year-on-year to EUR 76.3 million. EPRA NAV per share equalled EUR 24.87 as of 31 October 2017, for an increase of 4.0% since the end of the previous financial year (EUR 23.90).

Fair value adjustments for the first six months of 2017/18 totalled EUR 148.6 million and reflect, in particular, the high yield compression as well as the continuing upward trend for market rents in the core regions of Germany.

The Asset Management business area contributed EUR 80.4 million to earnings for the reporting period, which represents an increase over the EUR 78.5 million recorded in the first half of the previous financial year. The monthly net in-place rent improved slightly during the first half of 2017/18 to EUR 5.23 per sqm (30 April 2017: EUR 5.18) with like-for-like rental growth equalling 1.8%. The gross rental yield equalled 5.0% and the vacancy rate 3.9% (2.7%, excl. the vacancies required for unit sales).

Earnings in the Property Sales business area rose by 9.7% year-on-year to EUR 28.0 million in the first six months of 2017/18. These results were supported by Unit Sales of 366 apartments with a high margin of 63% on fair value.

The Property Development business area was further intensified and generated strong net operating income of EUR 30.3 million in the first half of 2017/18. Earnings were influenced, above all, by the transfer of the exclusive 'Pfarrwiesengasse 23' project (Vienna), the 'Southgate' project (Vienna) and the 'Seefeld I' project (Berlin). A total of 204 units were transferred and recognised to income during the reporting period. As of 31 October 2017, the development pipeline held 10,227 units.

BUWOG's financing structure was further optimised during the first half of 2017/18. The equity ratio rose by 5.1 percentage points to 44.8%, among others, as a result of the EUR 305.6 million cash capital increase with subscription rights that was carried out at the beginning of June. Two key indicators remained low as of 31 October 2017: the average interest rate at 1.79% and the loan-to- value ratio at 38.8% (30 April 2017: 44.1%).

After the end of the reporting period on 31 October 2017, BUWOG received an investment grade rating of 'BBB+ with stable outlook' from Standard & Poor's. In addition, Vonovia SE issued an announcement after the end of the reporting period that it intends to make a voluntary takeover offer for all outstanding shares and convertible bonds of BUWOG AG. Transparent information on both these subjects can be found on the BUWOG website under www.buwog.com.

The report by BUWOG AG on the first half of 2017/18 is now available for download on the company's website under https://www.buwog.com/en/investor-relations/financial-reports