OUR BEST IDEAS FOR FUTURE GROWTH Annual Financial Report 2016/17 BUWOG GROUP KEY FIGURES EARNINGS DATA 2016/17 2015/161) Change Net cold rent in EUR million 214.4 199.4 7.5% Results of Asset Management in EUR million 156.9 149.0 5.3% Results of Property Sales in EUR million 44.3 38.2 16.1% Results of Property Development in EUR million 28.3 21.4 31.9% EBITDA2) in EUR million 188.1 187.2 0.5% Fair value adjustments of investment properties in EUR million 335.1 177.9 88.4% Financial results3) in EUR million –69.3 –41.0 –69.1% EBT in EUR million 458.3 308.2 48.7% Net profit in EUR million 366.7 239.9 52.8% Earnings per share4) in EUR 3.59 2.37 51.3% FFO in EUR million 80.1 77.7 3.1% Recurring FFO in EUR million 117.2 112.2 4.4% Recurring FFO per share5) in EUR 1.17 1.13 4.3% Total FFO in EUR million 122.6 115.9 5.8% AFFO in EUR million 77.9 81.2 –4.0% ASSET AND FINANCIAL DATA 30 April 2017 30 April 2016 Change Balance sheet total in EUR million 5,019.7 4,444.1 13.0% Equity ratio in % 39.8% 38.3% 1.5 PP Cash and cash eqivalents in EUR million 211.4 82.5 >100% Net financial liabilities in EUR million 2,040.2 1,970.1 3.6% Loan-to-value (LTV) in % 44.1% 47.6% –3.6 PP EPRA Net Asset Value in EUR million 2,384.8 2,013.2 18.5% Ø Interest rate on financial liabilities in % 1.78% 2.19% –0.4 PP Ø Term of financial liabilities years 11.8 15.9 –4.1 SHARE DATA 30 April 2017 30 April 2016 Change Share price in EUR 24.79 18.38 34.9% Shares issued as of the balance sheet date (excl. treasury shares) Number of shares 99,773,479 99,773,479 0.0% Market capitalisation in EUR million 2,473.4 1,833.8 34.9% Free float5) in % 95% 71% 24.0 PP EPRA Net Asset Value per share4) in EUR 23.90 20.18 18.5% The use of automated calculation systems may give rise to rounding differences. 1) The comparable prior year figures were adjusted (see section 1.3 in the notes to the Consolidated financial statements). 2) Results of operations adjusted to account for valuation effects and deferred periods (IFRS 5). For more details please go to chapter Asset, financial and earnings position. 3) Financial results are influenced by non-cash results from the valuation of financial liabilities at fair value through profit or loss (EUR –10.9 million) and by derivatives (EUR +1.8 million) 4) Base for earnings data: 99,773,479 shares; previous year 99,650,566 shares (both weighted). Base for asset data: 99,773,479 shares; previous year: 99,773,479 shares (both as of balance sheet date) 5) For more detail please go to chapter Investor Relations. KEY PROPERTY PORTFOLIO DATA ASSET MANAGEMENT (STANDING INVESTMENTS) 30 April 2017 30 April 2016 Change Number of units Quantity 49,597 51,058 –2.9% Germany Quantity 27,151 27,072 0.3% Austria Quantity 22,446 23,986 –6.4% Total floor area1) in sqm 3,418,784 3,532,273 –3.2% Germany in sqm 1,690,258 1,684,879 0.3% Austria in sqm 1,728,526 1,847,394 –6.4% Annualised net in-place rent2) in EUR million 205 201 1.9% Germany in EUR million 116 112 3.5% Austria in EUR million 89 89 –0.1% Monthly net in-place rent2) in EUR per sqm 5.18 4.92 5.3% Germany in EUR per sqm 5.85 5.68 3.0% Austria in EUR per sqm 4.50 4.20 7.0% Development of net in-place rent – like-for-like3) in % 4.5% 1.6% 2.9 PP Germany – like-for-like in % 3.2% 2.7% 0.5 PP Austria – like-for-like in % 6.3% 0.3% 6.0 PP Vacancy rate4) in % 3.4% 3.4% 0.0 PP Germany in % 1.9% 2.1% –0.2 PP Austria in % 4.9% 4.7% 0.2 PP Fair value5) in EUR million 3,942 3,716 6.1% Germany in EUR million 1,997 1,651 21.0% Austria in EUR million 1,945 2,065 –5.8% Fair value5) in EUR per sqm 1,153 1,052 9.6% Germany in EUR per sqm 1,182 980 20.6% Austria in EUR per sqm 1,125 1,118 0.7% Gross rental yield6) in % 5.2% 5.4% –0.2 PP Germany in % 5.8% 6.8% –1.0 PP Austria in % 4.6% 4.3% 0.3 PP 2016/17 2015/16 Change Maintenance expense7) in EUR per sqm 7.7 6.7 15.2% Capitalization of modernisation work (CAPEX)7) in EUR per sqm 11.2 8.7 28.2% PROPERTY SALES 2016/17 2015/16 Change Units sold Quantity 1,731 1,119 54.7% thereof Unit Sales Quantity 614 635 –3.3% thereof Block Sales Quantity 1,117 484 >100% Margin on fair value – Unit Sales in % 57% 57% 0.0 PP Margin on fair value – Block Sales in % 5% 14% –9.0 PP PROPERTY DEVELOPMENT 30 April 2017 30 April 2016 Change Units under construction Quantity 1,472 971 51.6% Total investment volume in EUR million 2,932 2,480 18.2% Completed units Quantity 606 420 44.3% thereof defined for sale to third parties Quantity 440 420 4.8% thereof defined to transfer to investment portfolio Quantity 166 0 – The use of automated calculation systems may give rise to rounding differences. 1) Residential floor area approx. 97% 2) Based on monthly net in-place rent (excluding utilities) as of the balance sheet date 3) Comparison: 30 April 2017 vs. 30 April 2016 as well as 30 April 2016 vs. 30 April 2015 on a like-for-like basis (without changes of the portfolio and including effects of vacant units) 4) Based on sqm; Vacancy adjusted by vacancy of unit sales amounts 2.2% 5) Based on fair value of standing investments according to CBRE valuation reports as of 30 April 2017 6) Annualised net in-place rent (based on monthly net in-place rent excluding utilities as of the balance sheet date) in relation to fair value 7) Retrospective adjustment of figures of full year 2015/16 due to the implementation of changed capitalisation policy by Q1 2016/17 according to IAS 8 (see chapter 1.3 consolidated financial statements) TABLE OF CONTENTS HIGHLIGHTS 18 INTERVIEW WITHARD THE22 EXECUTIVE BO BUWOG COMPACT 30 BUWOG business 32 model Company strategy 33 Company history 38 Company structure 40 ASSET MANAGEMENT 42 Attractive investment 44 portfolio Key data of the investment portfolio48 and portfolio structure The vestment in portfolio’s 55 rent models Strategy, success 60 factors, outlook PROPERTY ALES S 68 Sales table – revenues s and70 attractive margins Unit sales 71 Block sales 74 PROPERTY OPMENT DEVEL 76 Added value through78 project development Property development – from 80 the idea to the apartment Completions in 82 Berlin Completions in 83 Vienna Land quisitions ac 84 Develop-to-hold 88 Develop-to-sell 92 Overview of Berlin,94 Hamburg and Vienna Innovations and 98 market opportunities INVESTOR RELATIONS 100 Capital et mark environment 102 Development of 103 the BUWOG share Shareholder structure 105 Investor relations 107 activities Dividend y polic 108 CONTENTS CONSOLIDATED CORPORATE GOVERNANCE 110 REPORT Commitment to the Austrian Code of Corporate Governance 112 Deviations from 112 C-Rules Annual General 113 Meeting Executive Board 113 Supervisory Board 116 Supervisory Board 120 committees Independence of 121the Supervisory Board Cooperation between the Executive Board 122and Supervisory Board Remuneration Report 122 Remuneration of 125the Supervisory Board Compliance 126 Measures to 126 support women Directors’ Dealings 127 Internal audit 127 External evaluation 127 REPORT BY THE CHAIRMAN OF THE SUPERVISORY128 BOARD GROUP MANAGEMENT 130 REPORT General economic 132 environment Development of 134 the property markets Development of 140 the financial markets Portfolio report 142 Property valuation 148 Financing 152 Asset, financial156 and earnings position Overview of tors EPRA 165 performance indica Sustainable management 169 Materiality eholder analysis dialogue&169 stak Management approaches tainabilityfor the issues 173key sus Sustainability programme 182 Additional sustainability 184 activities Working successfullyogether 185and happily t Innovations vironment for and the 191 societyen Sustainability management & reporting 195 Risk and 196 opportunity reporting Internal stem control 200 sy Information on 203 capital Outlook 207 Subsequent events 209 CONSOLIDATED ATEMENTSFINANCIAL 210 ST Auditor’s eport r 308 G4 Reference to the GRI-G4 standards Statement ecutive by Board 314 the Ex SEPARATE TEMENTS FINANCIAL 315 STA Auditor’s eport r 420 Statement ecutive by Board 424 the Ex GRI-G4 Content 425 index Glossary 429 BUWOG ANNUAL FINANCIAL REPORT 2016/17 1 2 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 3 4 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 5 6 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 7 8 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 9 10 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 11 12 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 13 14 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 15 16 BUWOG ANNUAL FINANCIAL REPORT 2016/17 BUWOG ANNUAL FINANCIAL REPORT 2016/17 17 HIGHLIGHTS BUWOG GROUP – Significant increase of Recurring FFO by 4.4% to EUR 117.2 million – Further improvement of EPRA NAV per share by 18.5% to EUR 23.90 – Continued intensification of efforts in Property Development -> Pipeline growth of 25%, 52% more units under construction, 44% more units completed Austrian Public Reporting Award (APRA) – Rise of monthly net in-place rent per sqm by 5.3% with simultaneous for the BUWOG annual report in the improvement of like-for-like rental growth category “Design & Communication”.