Group FFO
The following key figures provide an overview of the development in Group FFO and other value drivers in the reporting period.
Group FFO
Group FFO
in € million | 3M 2021 | 3M 2022 | Change in % | 12M 2021 | ||||
Revenue in the Rental segment | 581.7 | 590.4 | 1.5 | 2,361.6 | ||||
Expenses for maintenance | -80.3 | -83.1 | 3.5 | -332.7 | ||||
Operating expenses in the Rental segment | -98.3 | -100.5 | 2.2 | -380.9 | ||||
Adjusted EBITDA Rental | 403.1 | 406.8 | 0.9 | 1,648.0 | ||||
Revenue in the Value-add segment | 273.8 | 313.5 | 14.5 | 1,165.8 | ||||
thereof external revenue | 14.1 | 17.9 | 27.0 | 58.6 | ||||
thereof internal revenue | 259.7 | 295.6 | 13.8 | 1,107.2 | ||||
Operating expenses in the Value-add segment | -228.0 | -265.5 | 16.4 | -1,017.0 | ||||
Adjusted EBITDA Value-add | 45.8 | 48.0 | 4.8 | 148.8 | ||||
Revenue in the Recurring Sales segment | 192.7 | 138.4 | -28.2 | 477.0 | ||||
Fair value of properties sold adjusted to reflect effects not relating to the period from assets held for sale in the Recurring Sales segment | -141.9 | -94.0 | -33.8 | -343.7 | ||||
Adjusted result Recurring Sales | 50.8 | 44.4 | -12.6 | 133.3 | ||||
Selling costs in the Recurring Sales segment | -3.7 | -3.4 | -8.1 | -19.3 | ||||
Adjusted EBITDA Recurring Sales | 47.1 | 41.0 | -13.0 | 114.0 | ||||
Revenue from disposal of Development to sell properties | 84.2 | 241.8 | >100 | 503.7 | ||||
Cost of Development to sell | -71.4 | -193.4 | >100 | -367.2 | ||||
Gross profit Development to sell | 12.8 | 48.4 | >100 | 136.5 | ||||
Fair value Development to hold | 12.8 | 62.0 | >100 | 362.3 | ||||
Cost of Development to hold* | -10.4 | -43.3 | >100 | -277.4 | ||||
Gross profit Development to hold | 2.4 | 18.7 | >100 | 84.9 | ||||
Rental revenue Development | 0.3 | 1.0 | >100 | 1.8 | ||||
Operating expenses in the Development segment | -5.4 | -6.5 | 20.4 | -35.5 | ||||
Adjusted EBITDA Development | 10.1 | 61.6 | >100 | 187.7 | ||||
Adjusted EBITDA Deutsche Wohnen | – | 172.3 | 170.8 | |||||
Adjusted EBITDA Total | 506.1 | 729.7 | 44.2 | 2,269.3 | ||||
FFO interest expense | -85.8 | -114.3 | 33.2 | -397.7 | ||||
Current income taxes FFO | -20.3 | -24.6 | 21.2 | -65.2 | ||||
Consolidation** | -9.5 | -26.8 | >100 | -97.1 | ||||
Group FFO | 390.5 | 564.0 | 44.4 | 1,709.3 | ||||
Group FFO after non-controlling interests | 386.0 | 545.4 | 41.3 | 1,669.3 | ||||
- * Excluding capitalized interest on borrowed capital in 3M 2022 of € 0.0 million (3M 2021 € 0.0 million), 12M 2021: € 0.9 million.
- ** Based on the new 2022 definition, without elimination of IFRS 16 effect, thereof intragroup profits in 3M 2022: € -8.1 million (3M 2021: € -7.0 million), 12 M 2021: € -37.8 million, gross profit development to hold in 3M 2022: € -18.7 million (3M 2021: € -2.4 million), 12M 2021: € -84.9 million, 12M 2021: FFO-at-equity effect Deutsche Wohnen: € 25.6 million.
As of March 31, 2022, our apartments were once again virtually fully occupied. The apartment vacancy rate of 2.4% was down on the value of 2.8% seen at the end of March 2021. Rental income in the Rental segment rose by 1.5% in total from € 581.7 million in the first three months of 2021 to € 590.4 million in the first three months of 2022, largely due to organic growth resulting from new construction and modernization measures and also taking into account the Berlin portfolio that was disposed of. Of the segment revenue in the Rental segment in the 2022 reporting period, € 475.5 million is attributable to rental income in Germany (3M 2021: € 467.0 million), € 88.2 million to rental income in Sweden (3M 2021: € 88.2 million) and € 26.7 million to rental income in Austria (3M 2021: € 26.5 million).
The current increase in rent due to market-related factors came to 1.6% (3M 2021: 0.7%). We were also able to achieve an increase in rent of 1.6% thanks to property value improvements achieved as part of our modernization program (3M 2021: 1.7%). This includes one-off effects of 0.6 % due to the Act Governing the Rent Cap for Residential Premises in Berlin (the “rent freeze”) becoming invalid. The corresponding like-for-like rent increase came to 3.2% (3M 2021: 2.4%). If we also include the increase in rent due to new construction measures and measures to add extra stories of 0.7% (3M 2021: 0.6%), then we arrive at an organic increase in rent totaling 3.9% (3M 2021: 3.0%). The average monthly in-place rent within the Rental segment at the end of March 2022 came to € 7.42 per m² compared to € 7.18 per m² at the end of March 2021. At the end of March 2022, the monthly in-place rent in the German portfolio (excl. Deutsche Wohnen) came to € 7.23 per m² (March 31, 2021: € 6.98 per m²), with the figure for the Swedish portfolio coming to € 10.28 per m² (March 31, 2021: € 10.18 per m²) and the figure for the Austrian portfolio coming to € 4.90 per m² (March 31, 2021: € 4.79 per m²). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating, heating and water supply costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB).
We have continued with our modernization, new construction and maintenance strategy in the 2022 fiscal year. The total volume of maintenance, modernization and new construction activity increased by 36.7 %, from € 379.9 million in the first three months of 2021 to € 519.3 million in the first three months of 2022. Deutsche Wohnen contributed a volume of € 114.3 million to this figure in the first quarter of 2022. Maintenance measures in the Rental segment came to € 137.4 million in the first three months of 2022, up by 1.3 % on the prior-year value of € 135.7 million. At € 158.6 million, modernization measures were down by 3.9% on the prior-year value of € 165.1 million. At € 109.0 million, new construction in the first three months of 2022 was up by 37.8% on the prior-year value of € 79.1 million.
Maintenance, Modernization and New Construction
Maintenance, Modernization and New Construction
in € million | 3M 2021 | 3M 2022 | Change in % | 12M 2021 | ||||
Expenses for maintenance | 80.3 | 83.1 | 3.5 | 332.7 | ||||
Capitalized maintenance | 55.4 | 54.3 | -2.0 | 333.7 | ||||
Maintenance measures | 135.7 | 137.4 | 1.3 | 666.4 | ||||
Modernization measures | 165.1 | 158.6 | -3.9 | 758.6 | ||||
New construction (to hold) | 79.1 | 109.0 | 37.8 | 526.6 | ||||
Modernization and new construction measures | 244.2 | 267.6 | 9.6 | 1,285.2 | ||||
Cost of maintenance, modernization and new construction Deutsche Wohnen | – | 114.3 | – | 234.0 | ||||
Total cost of maintenance, modernization and new construction | 379.9 | 519.3 | 36.7 | 2,185.6 | ||||
In the first three months of 2022, operating expenses in the Rental segment were up by 2.2% on the figures for the first three months of 2021, from € 98.3 million to € 100.5 million. All in all, Adjusted EBITDA Rental rose by 0.9% from € 403.1 million in the first three months of 2021 to € 406.8 million in the first three months of 2022.
The Value-add segment felt a slight impact of the coronavirus pandemic and cost increases sparked by the war in Ukraine. External revenue from our Value-add activities with our end customers in the first three months of 2022 were up by 27.0% on the first three months of 2021, from € 14.1 million to € 17.9 million. Group revenue rose by 13.8% from € 259.7 million in the first three months of 2021 to € 295.6 million in the first three months of 2022. All in all, revenue from the Value-add segment came to € 313.5 million in the 2022 reporting period, up by 14.5% on the value of € 273.8 million seen in the first three months of 2021. Operating expenses in the Value-add segment in the first three months of 2022 were up by 16.4% on the figures for the first three months of 2021, from € 228.0 million to € 265.5 million. This was due, in particular, to higher energy and construction costs and the use of more third-party services. Adjusted EBITDA Value-add came to € 48.0 million in the first three months of 2022, 4.8% higher than the figure of € 45.8 million reported for the first three months of 2021.
We continued to pursue our selective sales strategy in the first quarter of 2022. In the Recurring Sales segment, we report all business activities relating to the sale of single residential units (Privatize).
In the Recurring Sales segment, the income from disposal of properties came to € 138.4 million in the first three months of 2022, down by 28.2% on the value of € 192.7 million in the first three months of 2021; € 89.1 million of this amount is attributed to sales in Germany (3M 2021: € 149.7 million) and € 49.3 million to sales in Austria (3M 2021: € 43.0 million). We privatized 661 apartments in the first quarter of 2022 (3M 2021: 1,182), thereof 465 in Germany (3M 2021: 982) and 196 in Austria (3M 2021: 200). Adjusted EBITDA Recurring Sales came in at € 41.0 million in the first quarter of 2022, down by 13.0% on the value of € 47.1 million seen in the first quarter of 2021. The fair value step-up for Recurring Sales came in at 47.2% in the first quarter of 2022, up on the comparative value of 35.8% for the first three months of 2021. This was largely the result of sales in Austria.
Outside of the Recurring Sales segment, we made 4,502 Non-core Disposals of residential units as part of our portfolio adjustment measures in the first three months of 2022 (3M 2021: 70) with total proceeds of € 2,526.7 million (3M 2021: € 9.0 million). This also includes the block sale from Vonovia’s Berlin portfolio. At 1.4 %, the fair value step-up for Non-core Disposals in the 2022 reporting period was lower than for the same period in the previous year (64.1%). Sales of land had contributed to the high step-up in the previous year. The sale of the Berlin portfolio reduced the step-up in the first quarter of 2022.
In the first quarter of 2022, the Development segment, with its Development to sell and Development to hold areas, made positive contributions to earnings in Germany, Austria and Sweden, once again allowing it to contribute to Vonovia’s successful growth.
The segment revenue from Development (total of income from the sale of Development to sell properties, fair value from Development to hold and rental income in the Development segment) rose from € 97.3 million in the first quarter of 2021 to € 304.8 million in the first quarter of 2022. This was driven in particular by higher income from disposal of Development to sell properties. At € 241.8 million, it was up considerably on the prior-year value of € 84.2 million.
In the Development to sell area, a total of 511 units were completed in the first quarter of 2022 (3M 2021: 230), thereof 0 in Germany (3M 2021: 230) and 511 units in Austria (3M 2021: 0 units). In the first quarter of 2022, income from the disposal of Development to sell properties amounted to € 241.8 million (3M 2021: € 84.2 million), with € 131.5 million attributable to project development in Germany (3M 2021: € 54.4 million) and € 110.3 million to project development in Austria (3M 2021: € 29.8 million). The increase in proceeds was primarily due to the global exit of a Development to sell project. The resulting gross profit for Development to sell came to € 48.4 million (3M 2021: € 12.8 million).
In the Development to hold area, a total of 266 units were completed in the first three months of 2022 (3M 2021: 149 units), thereof 244 in Germany (3M 2021: 68 units) and 22 units in Sweden (3M 2021: 81 units). In the Development to hold area, a fair value of € 62.0 million was achieved in the 2022 reporting period (3M 2021: € 12.8 million), which was fully attributable to project development in Germany (3M 2021: € 2.5 million; project development in Sweden 3M 2021: € 10.3 million). The gross profit for Development to hold came to € 18.7 million in the first three months of 2022 (3M 2021: € 2.4 million). Development operating expenses came to € 6.5 million in the first quarter of 2022, up by 20.4% on the value of € 5.4 million seen in the first quarter of 2021. The increase is due to higher direct project expenses in 2022. The Adjusted EBITDA for the Development segment amounted to € 61.6 million in the 2022 reporting period (3M 2021: € 10.1 million).
In the Deutsche Wohnen segment, segment revenue in the first quarter of 2022 came to € 286.3 million, with € 190.1 million mainly attributable to rental income, € 68.1 million attributable to income from the nursing and assisted living sector and € 15.0 million to income from disposal of properties. Adjusted EBITDA Deutsche Wohnen came to € 172.3 million in the first quarter of 2022. The average monthly in-place rent in the Deutsche Wohnen portfolio came to € 7.34 m² at the end of March 2022. In the first quarter of 2022, 10,844 residential units were sold from the Deutsche Wohnen portfolio. The vacancy rate in the Deutsche Wohnen portfolio came to 1.9 % at the end of March 2022.
In the first three months of the year, the primary key figure for the sustained earnings power, Group FFO rose by 44.4 % from € 390.6 million (based on the new 2022 definition without the elimination of IFRS 16 effects) in 2021 to € 564.0 million in 2022. This was mainly fueled by the positive development in Adjusted EBITDA Total, which increased by 44.2% from € 506.1 million in the first quarter of 2021 to € 729.7 million in the first quarter of 2022. In the first quarter of 2022, Deutsche Wohnen contributed a total of € 143.5 million to Group FFO.
In the 2022 reporting period, the non-recurring items eliminated in the Adjusted EBITDA Total came to € -2.3 million compared to € 4.4 million in the first quarter of 2021. This was largely due to special effects resulting from the debt recovery action in connection with the loan granted to the Adler Group. The following table gives a detailed list of the non-recurring items:
Non-recurring Items
Non-recurring Items
- * Including one-time expenses in connection with acquisitions, such as HR measures relating to the integration process and other follow-up costs.
Adjusted EBITDA Development
The Adjusted EBITDA Development includes the gross profit from the development activities of “to sell” projects (income from sold development projects less production costs) and the gross profit from the development activities of “to hold” projects (fair value of the units developed for the company’s own portfolio less incurred production costs) less the operating expenses from the Development segment.
Adjusted EBITDA Deutsche Wohnen
The Adjusted EBITDA Deutsche Wohnen is calculated by deducting the operating expenses of the Deutsche Wohnen segment and the carrying amount of properties sold from the segment revenue of the Deutsche Wohnen Group.
Adjusted EBITDA Recurring Sales
The Adjusted EBITDA Recurring Sales compares the proceeds generated from the privatization business with the fair values of assets sold and also deducts the related costs of sale. In order to disclose profit and revenue in the period in which they are incurred and to report a sales margin, the fair value of properties sold, valued in accordance with IFRS 5, has to be adjusted to reflect realized/unrealized changes in value.
Adjusted EBITDA Rental
The Adjusted EBITDA Rental is calculated by deducting the operating expenses of the Rental segment and the expenses for maintenance in the Rental segment from the Group’s rental income.
Adjusted EBITDA Total
Adjusted EBITDA Total is the result before interest, taxes, depreciation and amortization (including income from other operational investments and intragroup profits) adjusted for effects that do not relate to the period, recur irregularly and that are atypical for business operation, and for net income from fair value adjustments to investment properties. These non-recurring items include the development of new fields of business and business processes, acquisition projects, expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments. The Adjusted EBITDA Total is derived from the sum of the Adjusted EBITDA Rental, Adjusted EBITDA Value-add, Adjusted EBITDA Recurring Sales, Adjusted EBITDA Development and Adjusted EBITDA Deutsche Wohnen.
Adjusted EBITDA Value-add
The Adjusted EBITDA Value-add is calculated by deducting operating expenses from the segment’s income.
COSO
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a private-sector U.S. organization. It was founded in 1985. In 1992, COSO published the COSO model, an SEC-recognized standard for internal controls. This provided a basis for the documentation, analysis and design of internal control systems. In 2004, the model was further developed and the COSO Enterprise Risk Management (ERM) Framework was published. Since then, it has been used to structure and develop risk management systems.
Covenants
Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the bond obligor to meet specific requirements or to refrain from undertaking certain activities.
EPRA Key Figures
For information on the EPRA key figures, we refer to the chapter on segment reporting according to EPRA.
EPRA NTA
The presentation of the NTA based on the EPRA definition aims to show the net asset value in a long-term business model. NTA stands for Net Tangible Assets. The equity attributable to Vonovia’s shareholders is adjusted by deferred taxes, real estate transfer tax and other purchasers’ costs in relation to the existing portfolio and the fair value of derivative financial instruments after taking deferred taxes into account. Stated goodwill and other intangible assets are also deducted.
European Public Real Estate Association (EPRA)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
European Public Real Estate Association (EPRA)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
GAV
The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.
GAV
The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.
Group FFO
Group FFO reflects the recurring earnings from the operating business. In addition to the adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows for recurring current net interest expenses from non-derivative financial instruments as well as current income taxes. This key figure is not determined on the basis of any specific international reporting standard but is to be regarded as a supplement to other performance indicators determined in accordance with IFRS.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
LTV Ratio (Loan-to-Value Ratio)
The LTV ratio shows the extent to which financial liabilities are covered. It shows the ratio of non-derivative financial liabilities pursuant to IFRS, less foreign exchange rate effects, cash and cash equivalents less advance payments received by Development (period-related), receivables from disposals, plus purchase prices for outstanding acquisitions to the total fair values of the real estate portfolio, fair values of the projects/land currently under construction as well as receivables from the sale of real estate inventories (period-related) plus the fair values of outstanding acquisitions and investments in other real estate companies.
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Sustainability Performance Index (SPI)
Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.
Sustainability Performance Index (SPI)
Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.
Non-core Disposals
We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.
Recurring Sales
The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums from our portfolio. It does not include the sale of entire buildings or land (Non-core Disposals). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of our operating business within the narrower sense of the term. Therefore, these sales will be reported under “Other” in our segment reporting.
Fair Value Step-up
Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
Fair Value Step-up
Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
Cash-generating Unit (CGU)
The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).