BFW Liegenschaften : Results Fiscal Year 2016

Press Release 15 March 2017

Record results in fiscal year 2016 Frauenfeld, 15 March 2017 - bfw liegenschaften ag (SIX Swiss Exchange: BLIN) achieved record results in fiscal year 2016. EBIT amounted to CHF 27.3 million (2015: CHF 19.5 million) and earnings incl. effects from changes in fair value of real estate investments and deferred taxes increased to CHF 18.2 million (2015: CHF 10.2 million). Excluding the fair value adjustments of interest rate swaps and receiver options, net earnings came to CHF 18.7 million (2015: CHF 12.6 million). The balance sheet structure remains very robust. Total assets mainly include the real estate portfolio amounting to CHF 424.4 million, which reflects the investment properties and one conversion project. Liabilities and equity include mortgage liabilities of CHF 194.9 million and shareholders' equity of CHF 201.1 million. The equity ratio was at 46.7% and 49.6% excluding the fair value changes of the interest rate swaps and receiver swaptions, respectively. The high equity ratio and the robust balance sheet enable the Company, as already announced, to launch a share buyback programme in 2017, in addition to the usual payment out of the capital contribution reserves. The Board of Directors proposes a payment out of the capital contribution reserves of CHF 1.35 per registered shares category "A", and CHF 0.135 per registered shares category "B" and to repurchase a maximum amount of 10% of the share capital. At the Annual General Meeting 2017, all acting members of the Board of Directors stand for re- election. Beat Frischknecht will be proposed for election as Chairman of the Board of Directors. In addition, the Board of Directors shall be extended by election of Serge Aerne as a new member of the Board of Directors. Record results 2016 - Increased net rental income and record profits

The value of the real estate portfolio increased by 5.6% to CHF 424.4 million in 2016 (2015: CHF 401.9 million). The increase is mainly due to the successful development of the conversion project Freiestrasse 4 in Weinfelden and the completion of the conversion project Schaffhauserstrasse 210 in Zurich (CHF 8.4 million) as well as positive changes in the fair value of real estate investments (CHF 13.2 million). Target rental income increased by about CHF 0.9 million to CHF 22.8 million. The percentage of residential use in the portfolio was approximately 76%.

In 2016, net rental income increased by 6.4% to CHF 20.4 million (2015: CHF 19.1 million). The positive change is mainly due to the completion of the conversion project in Zurich, and the completion of the new building projects in Romanshorn, Zweidlen (Glattfelden), Kreuzlingen and Grenchen which were all completed during 2015. The vacancy rate excluding conversion projects was at 7.1% (2015: 7.0%)

Direct operating expenses for investment properties increased by TCHF 241 and amounted to CHF 3.5 million, mainly as a result of slightly higher costs of repair and maintenance. As a percentage of net rental income, direct operating expenses did not change significantly and were at 17.4% (2015: 17.2%). Consulting expenses remained almost unchanged at CHF 0.7 million compared to last year (reduction of TCHF 38). Administrative expenses increased slightly by TCHF 58 to CHF 2.1 million, mainly as a result of a slightly higher management fees due to the increased portfolio value. The management fee for the service agreement with admicasa management ag was CHF 1.8 million (2015: CHF 1.7 million; service agreement with bfw vermögensverwaltung ag).

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 an amount of CHF 13.2 million in 2016 (2015: CHF 6.4 million). The change in market values is mainly due to a further reduction of the discount rate applied by KPMG and the successful completion of the conversion projects.

bfw liegenschaften ag achieved an EBIT of CHF 27.3 million (2015: CHF 19.5 million), which is the highest amount of EBIT that the Company ever reached in its history. The increase compared to the previous year was mainly due to the above mentioned higher rental income and the profit from the valuation of the investment portfolio.

Net financial expenses were at CHF 3.7 million, representing a slight reduction of the expenses by TCHF 49. The fair value reflection of the interest rate swaps and receiver swaptions led to a negative effect before taxes of CHF

0.7 million in 2016 (2015: negative effect of CHF 2.9 million). The main reasons were a further decline of the interest rate level for longer maturities and the 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 18.2 million (2015: CHF 10.2 million). Excluding the fair value changes of the interest rate swaps and receiver swaptions, net earnings were at CHF 18.7 million (2015: CHF 12.6 million). This also represents a record profit. Net earnings per share excluding the changes in fair value amounted to CHF 3.60 (2015: CHF 2.42).

Solid balance sheet structure enables further growth

Total assets increased by 3.4%% compared to previous year and amounted to CHF 430.7 million (2015: CHF

416.6 million). This is mainly due to investments in the conversion projects and the increase in value of the real estate portfolio. Current assets mainly include cash and cash equivalents in the amount of CHF 5.0 million, non- current assets mainly comprise investment properties of CHF 413.7 million and the conversion project in Weinfelden in the amount of CHF 10.7 million.

Liabilities include mortgage liabilities of CHF 194.9 million in total, out of which CHF 62.0 million are secured long- term through interest rate swaps and receiver swaptions, CHF 27.3 million with fix mortgages of 5 years and CHF

64.6 million with fix mortgages of 6 to 10 years. The average remaining life of maturity of mortgages as at 31 December 2016 was 4.3 years (31 December 2015: 3.9 years).

Equity amounted to CHF 201.1 million as at 31 December 2016, representing a very solid equity ratio of 46.7% (31.12.2015: CHF 189.9 million and an equity ratio of 45.6%). Excluding the fair value changes in the interest rate swaps and receiver swaptions, the equity ratio was 49.6% as at year-end 2016.

Conversion projects completed in Zurich, project in Weinfelden progresses according to plan

Due to the completion of the conversion project "Schaffhauserstrasse 210" in Zurich, in May 2017, 46 new apartments, 14 parking spaces and a commercial area on the ground floor of about 194 m2have been created.

First tenancy activities were very successful, and more than 90% of the total tenancy area is already rented since September 2016. The remaining conversion project "Freiestrasse 4" in Weinfelden is progressing according to plan, and completion is expected in late summer 2017.

Proposals to the Annual General Meeting

The Board of Directors maintains its long-term pay-out policy and proposes to the General Meeting of Shareholders on 26 April 2017 a payment in cash out of the capital contribution reserves of CHF 1.35 per registered shares category "A", and CHF 0.135 per registered shares category "B". The proposed pay-out corresponds to a yield of 3.43% (based on the closing price of the registered shares "A" at 31 December 2016).

The acting members of the Board of Directors André Robert Spathelf, Hans Jörg Brun and Beat Frischknecht stand for re-election at the General Meeting of Shareholders 2017. The Board of Directors proposes to elect Beat Frischknecht as Chairman of the Board of Directors. In addition, the Board of Directors will propose to the General Meeting of Shareholders 2017 to elect Serge Aerne as a new member of the Board. André Robert Spathelf and Hans Jörg Brun are proposed as members of the Remuneration Committee.

Share buyback programme

On 9 March 2017, the company announced a share buyback programme in a maximum amount of 10% of the share capital. The aim of the share buyback programme is to return additional capital to shareholders, besides the proposed annual pay-out from capital contribution reserves. Once the share buyback has been completed, the Board of Directors will propose at latest to the General Meeting 2018 to approve the cancellation of the repurchased shares and will reduce the share capital accordingly, once the General Meeting approved the cancellation.

New management team

As already announced on 6 February 2017, Beat Frischknecht has decided to step down from the Executive Board of bfw liegenschaften ag, as of the end of March 2017. The Board of Directors has appointed Reto Borner as successor in the role of CEO and Philipp Hafen as new CFO.

Outlook

bfw liegenschaften ag's investment strategy with its focus on residential properties has been proven successful for many years. The Board of Directors and the Management remain confident that the real estate market in Switzerland, especially for residential properties, will remain attractive in the long-term, despite some economic and political uncertainties.

Contacts

Beat Frischknecht Reto Borner

Chief Executive Officer Chief Financial Officer

[phone] [phone]

[e-mail]

Agenda:

26 April 2017 Ordinary General Meeting of Shareholders

14 September 2017 Publication of Half-Year Results 2017 and Half-Year Report 2017

Information on bfw liegenschaften ag

www.bfwliegenschaften.ch/index.php/en

bfw liegenschaften ag is a real-estate company with headquarters in Frauenfeld in the canton of Thurgau, Switzerland. It focuses on 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).

Key Figures Fiscal Year Results

Income statement	2016	2015
in TCHF
Rental income	20 381	19 147
Total operating income	20 381	19 147
Direct operating expenses for investment properties	- 3 539	- 3 298
Consulting expenses	- 663	- 701
Administrative expenses	- 2 071	- 2 013
Total operating expenses	- 6 273	- 6 012
Changes in fair value of real estate investments	13 158	6 400
EBIT	27 266	19 535
Financial income	8	29
Financial expenses	- 3 664	- 3 734
Amortization interest rate swaps	- 227	- 227
Valuation of the fair value of interest rate swaps	- 658	- 2 887
Taxes	- 4 560	- 2 538
Earnings incl. effects from changes in fair value of real estate investments / deferred taxes	18 164	10 178
Earnings excl. effects from changes in fair value of real estate investments / deferred taxes	8 604	5 979
Earnings excl. fair value adjustments of interest rate swaps / deferred taxes	18 711	12 574
Balance sheet as at 31 December	31.12.2016	31.12.2015
in TCHF
Total assets	430 771	416 645
Total liabilities	229 714	226 744
Equity	201 057	189 900
Equity ratio	46.7%	45.6%
Equity excl. fair value adjustments of interest rate swaps / deferred taxes	213 775	202 072
Equity ratio excl. fair value adjustments of interest rate swaps / deferred taxes	49.6%	48.5%
Net Asset Value (NAV) in CHF	38.73	36.58
Net Asset Value excl. fair value adjustments of interest rate swaps / deferred taxes in CHF	41.18	38.93
Total investment portfolio	31.12.2016	31.12.2015
Total value of real estate portfolio in TCHF	424 443	401 904
Total number of investment properties	45	44
Total number of new building projects	1	2
Yield net	4.0%	3.9%
Yield net excl. new building projects	4.1%	4.2%
Vacancy rate	9.9%	11.7%
Vacancy rate excl. new building projects	7.1%	7.0%
Ø interest rate excl. amortization of interest rate swaps	1.9%	2.0%
Ø interest rate incl. amortization of interest rate swaps	2.0%	2.2%
Ø remaining life to maturity of mortgages	4.3 years	3.9 years

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

For a curriculum vitae of Serge Aerne, please refer to the Annual Report 2016, page 28.