BUWOG AG: Results for the 2017/18 Financial Year

The residential property specialist BUWOG AG, in which the German Vonovia SE holds an investment of over 90%, completed a very successful financial year in 2017/18. Based on the company's most important indicator, Recurring FFO, BUWOG can look back on the most successful year in its history. Recurring FFO rose by 10.4% to EUR 129.4 million and exceeded BUWOG's FFO guidance of at least EUR 125 million. EPRA NAV per share increased by a further 8.2% to EUR 25.85.

'We extended our successful track record for rentals and the management of our portfolio properties. BUWOG's impressive growth in the area of new residential construction also underscores our commitment to the development and construction of new housing. The high-margin trend in the Property Sales business area continued, but the volume of sales from the Austrian portfolio declined. In 2017/18 there were no major deals like the sale of the Tyrolean portfolio in the previous year', explained BUWOG CEO Daniel Riedl.

The results of Asset Management totalled EUR 157.3 million in 2017/18, for a slight year-on-year increase of 0.3%. The standing investment portfolio covered 48,828 units with roughly 3.4 million sqm as of 30 April 2018. Although the total number of units declined slightly (2016/17: 49,597), BUWOG added 100 units in Vienna and, for the first time, also 86 rental apartments in Berlin to the portfolio through its develop-to-hold activities during the past year. The monthly net in-place rent per sqm rose by 3.2% to EUR 5.34 and by 2.8% on a like-for-like basis as of 30 April 2018.

The fair value of the standing investments increased by 6.7% to approximately EUR 4.2 billion according to the appraisal by CBRE. The fair value adjustments to investment property totalled EUR 242.0 million as of 30 April 2018.

The earnings contribution by the Property Sales business area (sale of properties from the BUWOG portfolio) declined by 6.2% to EUR 41.6 million in 2017/18 (2016/17: EUR 44.3 million). In Unit Sales, a total of 567 standing investments were sold at a high margin of roughly 62% on fair value.

Property Development, BUWOG's third business area, recorded outstanding performance in the construction of new apartments. Earnings in this segment more than doubled to EUR 57.7 million (2016/17: EUR 28.3 million). Completions rose by 19.1% to 722 units in 2017/18. The development pipeline grew by 7% to 10,847 units with an estimated total investment volume of EUR 3.2 billion and was further expanded through the acquisition of four new sites in 2017/18. The number of units under construction rose by 59% year-on-year to 2,340 units as of 30 April 2018. BUWOG's stated goal is to further increase new apartment construction, also under the new principal shareholder Vonovia SE.

BUWOG also continued its conservative financing strategy during the 2017/18 financial year. The average interest rate on financial liabilities equalled 2.06% as of 30 April 2018 based on an average term of 11.9 years. The loan to value ratio (LTV) declined to 33.7% (2016/17: 44.1%). Net debt declined substantially in 2017/18 due to the successful cash capital increase, the conversion of convertible bonds and an increase in the carrying amount of investment property based on fair value adjustments as of 30 April 2018.

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