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Results of Operations

Overview

The following key figures provide an overview of how Vonovia’s results of operations and their drivers developed in 2022. For information on the limited comparative value of the prior-year figures, we refer to the statements in the chapter on overall business development within the Group.

Key Figures on Results of Operations

in € million

2021

2022

Change in %

Total Segment Revenue

5,216.6

6,256.9

19.9

Revenue in the Rental segment

2,568.5

3,163.4

23.2

Revenue in the Value-add segment

1,176.3

1,272.0

8.1

Revenue in the Recurring Sales segment

491.2

543.4

10.6

Revenue in the Development segment

911.8

998.0

9.5

Revenue in the Nursing Business segment

68.8

280.1

>100

Adjusted EBITDA Total

2,254.4

2,763.1

22.6

Adjusted EBITDA Rental

1,778.5

2,233.5

25.6

Adjusted EBITDA Value-add

153.8

126.7

-17.6

Adjusted EBITDA Recurring Sales

113.2

135.1

19.3

Adjusted EBITDA Development

185.4

183.2

-1.2

Adjusted EBITDA Nursing Business

23.5

84.6

>100

Group FFO

1,694.4

2,035.6

20.1

Monthly in-place rent in €/m²

7.33

7.49

2.2

Average area of own apartments in the reporting period (in thou. m²)

28,784

34,525

19.9

Average number of own units (number of units)

452,868

550,342

21.5

Vacancy rate (in %)

2.2

2.0

-0.2 pp

Maintenance expenses and capitalized maintenance (€/m²)

26.17

24.80

-5.2

thereof expenses for maintenance (€/m²)

13.01

12.85

-1.2

thereof capitalized maintenance (€/m²)

13.16

11.95

-9.2

Number of units bought

155,145

969

-99.4

Number of units sold

6,965

19,760

>100

thereof Recurring Sales

2,803

2,710

-3.3

thereof Non Core/Other

4,162

17,050

>100

Number of new apartments completed

2,200

3,749

29.4

thereof own apartments

1,373

2,071

50.8

thereof apartments for sale

827

1,678

>100

Number of employees (as of December 31)

15,871

15,915

0.3

Total segment revenue rose by 19.9% from € 5,216.6 million in 2021 to € 6,256.9 million in 2022. This increase was due primarily to the additional rental income from Deutsche Wohnen and the income from the Care segment, which are included in 2022 with their full annual contribution, whereas in 2021 they were only included with their quarterly contribution for the fourth quarter.

Total Segment Revenue

Total Segment Revenue

in € million

2021*

2022

Change in %

Rental income

2,571.9

3,168.1

23.2

Other income from property management unless included in the operating expenses in the Rental segment

66.4

118.3

78.2

Other income from property management from the Nursing Business

68.8

280.1

>100

Income from disposals Recurring Sales

477.2

515.7

8.1

Internal revenue Value-add

1,108.6

1,152.4

4.0

Income from disposal of properties

519.6

588.4

13.2

Fair value Development to hold

404.1

433.9

7.4

Total Segment Revenue

5,216.6

6,256.9

19.9

  1. * Prior-year figures Deutsche Wohnen adjusted to new segment definition.

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

2021*

2022

Change in %

Revenue in the Rental segment

2,568.5

3,163.4

23.2

Expenses for maintenance

-377.7

-443.6

17.4

Operating expenses in the Rental segment

-412.3

-486.3

17.9

Adjusted EBITDA Rental

1,778.5

2,233.5

25.6

Revenue in the Value-add segment

1,176.3

1,272.0

8.1

thereof external revenue

67.7

119.6

76.7

thereof internal revenue

1,108.6

1,152.4

4.0

Operating expenses in the Value-add segment

-1,022.5

-1,145.3

12.0

Adjusted EBITDA Value-add

153.8

126.7

-17.6

Revenue in the Recurring Sales segment

491.2

543.4

10.6

Fair value of properties sold adjusted to reflect effects not relating to the period from assets held for sale in the Recurring Sales segment

-355.5

-391.6

10.2

Adjusted result Recurring Sales

135.7

151.8

11.9

Selling costs in the Recurring Sales segment

-22.5

-16.7

-25.8

Adjusted EBITDA Recurring Sales

113.2

135.1

19.3

Revenue from disposal of Development to sell properties

505.6

560.6

10.9

Cost of Development to sell

-370.1

-440.4

19.0

Gross profit Development to sell

135.5

120.2

-11.3

Fair value Development to hold

404.1

433.9

7.4

Cost of Development to hold**

-319.2

-340.6

6.7

Gross profit Development to hold

84.9

93.3

9.9

Rental revenue Development

2.1

3.5

66.7

Operating expenses in the Development segment

-37.1

-33.8

-8.9

Adjusted EBITDA Development

185.4

183.2

-1.2

Revenue in the Nursing Business segment

68.8

280.1

>100

Expenses for maintenance

-2.4

-7.0

>100

Operating expenses in the Nursing Business segment

-42.9

-188.5

>100

Adjusted EBITDA Nursing Business

23.5

84.6

>100

Adjusted EBITDA Total

2,254.4

2,763.1

22.6

FFO interest expense

-397.7

-493.8

24.2

Current income taxes FFO

-65.2

-145.0

>100

Consolidation***

-97.1

-88.7

-8.7

Group FFO

1,694.4

2,035.6

20.1

Group FFO after non-controlling interests

1,654.4

1,944.3

17.5

  1. * Prior-year figures adjusted to new adjusted EBITDA definition (excluding results from at-equity investments), adjustments for Adjusted EBITDA Total/Group FFO: € 14.9 million.
  2. ** Excluding capitalized interest on borrowed capital of € 2.5 million (2021 € 0.9 million).
  3. *** Based on the new 2022 definition, without elimination of IFRS 16 effect, thereof intragroup losses/results: € +4.7 million (2021: € -37.8 million), gross profit Development to hold: € -93.3 million (2021: € -84.9 million), (FFO-at-equity effect Deutsche Wohnen 2021: € 25.6 million).

At the end of 2022, Vonovia managed a portfolio comprising 548,524 of its own residential units (2021: 565,334), 164,330 garages and parking spaces (2021: 168,015) and 8,838 commercial units (2021: 9,289). 68,919 residential units (2021: 71,173) are also managed for other owners.

Details on Results of Operations by Segment

Rental segment

At the end of 2022, the portfolio in the Rental segment had a vacancy rate of 2.0% (2021: 2.2%), meaning that it was once again virtually fully occupied.

Rental segment revenue rose by 23.2% from € 2,568.5 million in 2021 to € 3,163.4 million in 2022. This increase was due primarily to the segment revenue from Deutsche Wohnen, which is included in segment revenue with its full annual contribution in 2022, whereas in 2021 it was only included with the quarterly contribution for the fourth quarter. Of the segment revenue in the Rental segment in the 2022 reporting period, € 2,694.6 million is attributable to rental income in Germany (2021: € 2,100.9 million), € 354.5 million to rental income in Sweden (2021: € 357.0 million) and € 114.3 million to rental income in Austria (2021: € 110.6 million).

Organic rent growth (twelve-month rolling) totaled 3.3% (3.8% as of December 31, 2021). The current rent increase due to market-related factors came to 1.0% (1.6% as of December 31, 2021, with 0.6% due to the Act Governing the Rent Cap for Residential Premises in Berlin (the “rent freeze”) becoming invalid) and the increase from property value improvements translated into a further 1.6% (1.6% as of December 31, 2021). All in all, this produces a like-for-like rent increase of 2.6% (3.2% as of December 31, 2021). New construction measures and measures to add extra stories also contributed 0.7% (0.6% as of December 31, 2021) to organic rent growth.

The average monthly in-place rent within the Rental segment at the end of 2022 came to € 7.49 per m² compared to € 7.33 per m² at the end of December 2021. The monthly in-place rent in the German portfolio at the end of December 2022 came to € 7.40 per m² (December 31, 2021: € 7.19 per m²), with a figure of € 9.73 per m² (December 31, 2021: € 10.31 per m²) for the Swedish portfolio and € 5.18 per m² for the Austrian portfolio (December 31, 2021: € 4.89 per m²). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating, heating and water supply costs.

We adapted our modernization, new construction and maintenance strategy to reflect the current overall conditions in the 2022 fiscal year. We put the brakes on our new construction investments in our own portfolio and postponed investments in “to sell” projects. The overview below provides details on maintenance, modernization and new construction in our own portfolio. It is important to bear in mind that, in 2022, Deutsche Wohnen is included with its contribution for the year as a whole, whereas in 2021 it was only included with the quarterly contribution for the fourth quarter.

Maintenance, Modernization and New Construction

Maintenance, Modernization and New Construction

in € million

2021

2022

Change in %

Expenses for maintenance

374.5

443.6

18.5

Capitalized maintenance

378.8

412.6

8.9

Maintenance measures

753.3

856.2

13.7

Modernization measures

792.4

837.4

5.7

New construction (to hold)

639.9

607.1

-5.1

Modernization and new construction measures

1,432.3

1,444.5

0.9

Total cost of maintenance, modernization and new construction

2,185.6

2,300.7

5.3

Operating expenses in the Rental segment in the 2022 fiscal year were up by 17.9% on the figures for the prior year, from € 412.3 million to € 486.3 million. This was due, in particular, to Deutsche Wohnen being included with its contribution for the year as a whole (2021: quarterly contribution for the fourth quarter) and to higher administrative expenses. All in all, the Adjusted EBITDA Rental came to € 2,233.5  million in the 2022 fiscal year, up by 25.6% on the prior-year value of € 1,778.5 million.

Value-add segment

Developments in the Value-add segment were dominated by the new overall conditions for our own craftsmen’s organization. General price increases for construction services and materials, as well as productivity losses due to the shortage of skilled labor and the coronavirus pandemic had a negative impact on economic development. In addition, short-term changes in the technology for heating modernization measures, coupled with investment activity that had already been reduced in the fourth quarter of 2022, resulted in lower service provision.

In the Value-add segment, income totaled € 1,272.0 million in 2022, up by 8.1% on the prior-year figure of € 1,176.3 million. € 119.6 million of this amount was attributable to external revenue from our Value-add activities with our end customers (2021: € 67.7 million), with € 1,152.4 million attributable to intra-Group income (2021: € 1,108.6 million).

In the 2022 fiscal year, operating expenses in the Value-add segment were up by 12.0% on the figures for the prior year, from € 1,022.5 million to € 1,145.3 million. This was due, in particular, to higher construction costs, the use of more third-party services and higher energy costs.

The Adjusted EBITDA Value-add came to € 126.7 million in the 2022 fiscal year, 17.6% below the prior-year figure of € 153.8 million.

Recurring Sales segment

In the Recurring Sales segment, the income from disposal of properties came to € 543.4 million in the 2022 fiscal year, up by 10.6% on the value of € 491.2 million reported in 2021. A total of 2,710 units were privatized (2021: 2,803), 2,293 in Germany (2021: 2,332) and 417 in Austria (2021: 471). Income of € 430.8 million is attributable to sales in Germany (2021: € 382.1 million) and € 112.6 million to sales in Austria (2021: € 109.1 million).

The fair value step-up came in at 38.8% in the 2022 fiscal year, up on the prior-year value of 38.2%.

Selling costs in the Recurring Sales segment came in at € 16.7 million in 2022, down by 25.8%on the value of € 22.5 million seen in the prior year. This is mainly due to a larger proportion of block sales and to a lower sales volume in 2022. Adjusted EBITDA Recurring Sales came in at € 135.1 million in the 2022 fiscal year, up by 19.3% on the value of € 113.2 million seen in the prior year.

In the 2022 fiscal year, 17,050 residential units from the Non Core/Other portfolio (2021: 4,162) were sold as part of our portfolio adjustment measures, with proceeds totaling € 2,726.8 million (2021: € 645.0 million). This also includes the block sale from Vonovia’s Berlin portfolio as part of the acquisition of Deutsche Wohnen SE. At 1.7% in 2022, the fair value step-up for Non Core/Other was lower than for the previous year (4.1%).

Development segment

In the Development to sell area, a total of 1,678 units were completed in the 2022 fiscal year (2021: 827 units), 484 in Germany (2021: 678 units) and 1,194 in Austria (2021: 149 units). Income from the disposal of development properties to sell came to € 560.6 million in the 2022 fiscal year (2021: € 505.6 million), with € 257.1 million attributable to project development in Germany (2021: € 243.0 million) and € 303.5 million attributable to project development in Austria (2021: € 262.6 million). The increase in proceeds in 2022 was primarily due to a global exit (Gäblerstrasse). The resulting gross profit for “Development to sell” was down from € 135.5 million in the previous year to € 120.2 million in the 2022 fiscal year, largely due to higher construction costs due to inflation.

In the Development to hold area, a total of 2,071 units were completed in the 2022 fiscal year (2021: 1,373 units), 1,338 in Germany (2021: 1,073 units), 592 in Austria (2021: 126 units) and 141 in Sweden (2021: 174 units). In the Development to hold area, a fair value of € 433.9 million was achieved in the 2022 fiscal year (2021: € 404.1 million). € 265.0 million of this amount was attributable to project development in Germany (2021: € 338.4 million), with € 160.5 million attributable to project development in Austria (2021: € 44.3 million) and € 8.4 million attributable to project development in Sweden (2021: € 21.4 million). The gross profit for Development to hold came to € 93.3 million in the 2022 fiscal year (2021: € 84.9 million).

Development operating expenses came to € 33.8 million in the 2022 fiscal year, down by 8.9% on the € 37.1 million reported in the prior year due to a smaller number of certified units. Adjusted EBITDA in the Development segment came in at € 183.2 million in 2022, almost on a par with the prior year (2021: € 185.4 million).

Care segment

The Care segment showed positive development in the 2022 fiscal year. It included 72 nursing care properties at the end of 2022 (2021: 72), with 71 owned by Vonovia (2021: 71). These properties offer a total of 9,540 nursing places (2021: 9,580). Segment revenue came to € 280.1 million in 2022 as against € 68.8 million in 2021 (fourth quarter of 2021). The expenses for maintenance amounted to € 7.0 million in the 2022 fiscal year compared with € 2.4 million in 2021 (fourth quarter of 2021). Operating expenses in the Care segment came to € 188.5 million in the 2022 fiscal year compared with € 42.9 million in 2021 (fourth quarter of 2021).

The Adjusted EBITDA Care amounted to € 84.6 million in the 2022 fiscal year as against € 23.5 million in 2021 (fourth quarter of 2021). Around 70% of Adjusted EBITDA in the Care segment is attributable to nursing care businesses and 30% to nursing care properties.

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 Care

The Adjusted EBITDA Care is calculated by deducting maintenance expenses and operating costs from the segment revenue.

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 (Earnings Before Interest, Taxes, Depreciation and Amortization)

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 Care.

Adjusted EBITDA Total (Earnings Before Interest, Taxes, Depreciation and Amortization)

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 Care.

Adjusted EBITDA Total (Earnings Before Interest, Taxes, Depreciation and Amortization)

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 Care.

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 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 NAV 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 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, Development and Care 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.

ICR (Interest Coverage Ratio)

The interest coverage ratio is the ratio of Adjusted EBITDA Total to net cash interest.

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, as well as loans to companies with holdings of real estate and land.

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.

MFH Sales

We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This portfolio involves the sale of multifamily homes largely located outside of our urban quarters.

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.

Monthly In-place Rent

The monthly in-place rent is measured in euros per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. 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.

The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent on a like-for-like basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia twelve months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-for-like basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.

Monthly In-place Rent

The monthly in-place rent is measured in euros per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. 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.

The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent on a like-for-like basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia twelve months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-for-like basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.

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

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) 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.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Recurring Sales

The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums and single-family houses from our portfolio. It does not include the sale of entire buildings or land (MFH Sales/Non Core). 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)

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)

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)

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)

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)

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.