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41 Non-derivative Financial Liabilities

Non-derivative Financial Liabilities

Dec. 31, 2021

Dec. 31, 2022

in € million

non-current

current

non-current

current

Non-derivative financial liabilities

Liabilities to banks

16,997.3

4,266.1

17,086.4

1,021.4

Liabilities to other creditors

23,174.6

2,418.3

24,183.3

2,558.4

Deferred interest from non-derivative financial liabilities

172.7

210.2

40,171.9

6,857.1

41,269.7

3,790.0

Accounting Policies

Vonovia recognizes non-derivative financial liabilities, which mainly include liabilities to banks and to investors, at their fair value on the day of trading, less the directly attributable transaction costs (this generally corresponds to the acquisition cost). These liabilities are subsequently measured at amortized cost using the effective interest method. Financial liabilities are derecognized when Vonovia’s obligations specified in the contract expire or are discharged or canceled.

Liabilities bearing no interest or interest below market rates in return for occupancy rights at rents below the prevailing market rates are recorded at present value.

Deferred interest is presented as current in order to show the cash effectiveness of the interest payments transparently. In principle, the deferred interest is part of the non-derivative financial liability. Of the deferred interest from non-derivative financial liabilities, € 173.8 million (December 31, 2021: € 166.2 million) is from bonds reported under non-derivative financial liabilities to other creditors.

The non-derivative financial liabilities developed as follows in the fiscal year under review:

Development of non-derivative financial liabilities in the fiscal year

in € million

As of
Jan. 1, 2022

First-time consoli- dation

New loans

Scheduled repayments

Unscheduled repayments

Adjusted for effective interest method

Other adjustments

Exchange rate differences

As of
Dec. 31, 2022

Bond (US dollar)

219.3

13.9

233.2

Bond (SEK)

121.2

-8.4

112.8

Bond (EMTN)

24,110.3

-1,600.0

-1,511.8

28.8

-32.9

20,994.4

Bond (EMTN Green Bond)

596.6

1,600.0

-16.8

2,179.8

Bond (EMTN Social Bond)

2,400.0

-20.0

2,380.0

Promissory note loan

230.0

1,010.0

-0.1

1,239.9

Bridge financing

3,481.6

-3,490.0

8.4

Commercial paper

500.0

-500.0

Mortgages

8,126.7

1,132.0

*

-514.3

-188.5

-38.2

-0.7

-106.6

8,410.4

Deferred interest

139.6

37.2

176.8

Deutsche Wohnen

Other financing***

10,091.8

40.0

-302.3

**

-437.1

-82.1

-11.3

9,299.0

Deferred interest

33.1

0.3

33.4

47,029.0

6,803.2

-6,406.6

-2,137.4

-114.5

-7.4

-106.6

45,059.7

  1. * New mortgages include capitalized interest not affecting cash in the amount of € 0.5 million.
  2. ** Repayments include debt servicing not yet rendered not affecting cash in the amount of € 3.9 million.
  3. *** This includes mortgages, convertible bonds, registered bonds and bearer bonds.

The non-derivative financial liabilities developed as follows in the previous year:

Development of non-derivative financial liabilities in the previous year

in € million

As of
Jan. 1, 2021

First-time consoli- dation

New loans

Scheduled repayments

Unscheduled repayments

Adjusted for effective interest method

Other adjustments

Exchange rate differences

As of
Dec. 31, 2021

Bond (US dollar)

202.0

17.3

219.3

Bond (EMTN)

15,186.5

9,500.0

-500.0

-76.2

24,110.3

Bond (EMTN Green Bond)

600.0

-3.4

596.6

Promissory note loan

49.9

224.0

-4.0

-40.0

0.1

230.0

Bridge financing

12,950.0

*

-9,460.0

*

-8.4

3,481.6

Mortgages

8,531.2

12.3

523.2

**

-469.0

***

-287.3

-24.2

-123.7

-35.8

8,126.7

Deferred interest

115.1

24.5

139.6

Deutsche Wohnen

Other financing****

10,752.0

150.2

-61.4

-723.7

-23.8

-1.5

10,091.8

Deferred interest

25.8

7.3

33.1

24,084.7

10,790.1

23,947.4

-10,494.4

-1,051.0

-118.6

-93.4

-35.8

47,029.0

  1. * This includes a short-term bridge financing from Société Générale of € 1,500.0 million.
  2. ** New mortgages include capitalized interest not affecting cash in the amount of € 2.1 million.
  3. *** Repayments include repayment grants or repayment waivers not affecting cash in the amount of € 11.4 million.
  4. **** This includes mortgages, convertible bonds, registered bonds and bearer bonds.

The U.S. dollar bond issued in 2013 is translated at the exchange rate at the end of the reporting period in line with applicable IFRS provisions. Allowing for the hedging rate prescribed through the interest hedging transaction entered into, this financial liability would be € 50.0 million (December 31, 2021: € 36.1 million) lower than the recognized value.

The maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors are as follows during the fiscal year:

Maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors in the fiscal year

Repayment of the nominal obligations is as follows:

in € million

Nominal obligation Dec. 31, 2022

Maturity

Average interest rate

2023

2024

2025

2026

2027

from 2028

Bond (US dollar)*

185.0

2023

4.58%

185.0

Bond (SEK)*

48.5

2024

1.02%

48.5

Bond (SEK)*

72.7

2027

1.47%

72.7

Bond (EMTN)*

500.0

2025

1.50%

500.0

Bond (EMTN)*

876.8

2023

2.25%

876.8

Bond (EMTN)*

500.0

2026

1.50%

500.0

Bond (EMTN)*

890.4

2024

1.25%

890.4

Bond (EMTN)*

500.0

2027

1.75%

500.0

Bond (EMTN)*

500.0

2025

1.13%

500.0

Bond (EMTN)*

373.2

2024

0.75%

373.2

Bond (EMTN)*

500.0

2028

1.50%

500.0

Bond (EMTN)*

700.0

2026

1.50%

700.0

Bond (EMTN)*

500.0

2030

2.13%

500.0

Bond (EMTN)*

500.0

2038

2.75%

500.0

Bond (EMTN)*

391.6

2023

0.88%

391.6

Bond (EMTN)*

500.0

2025

1.80%

500.0

Bond (EMTN)*

500.0

2029

0.50%

500.0

Bond (EMTN)*

500.0

2034

1.13%

500.0

Bond (EMTN)*

403.4

2023

0.13%

403.4

Bond (EMTN)*

500.0

2027

0.63%

500.0

Bond (EMTN)*

500.0

2039

1.63%

500.0

Bond (EMTN)*

389.7

2024

1.63%

389.7

Bond (EMTN)*

500.0

2030

2.25%

500.0

Bond (EMTN)*

750.0

2026

0.63%

750.0

Bond (EMTN)*

750.0

2030

1.00%

750.0

Bond (EMTN)*

500.0

2041

1.00%

500.0

Bond (EMTN)*

278.3

2024

0.00%

278.3

Bond (EMTN)*

1,000.0

2027

0.38%

1,000.0

Bond (EMTN)*

1,000.0

2029

0.63%

1,000.0

Bond (EMTN)*

1,000.0

2033

1.00%

1,000.0

Bond (EMTN)*

500.0

2041

1.50%

500.0

Bond (EMTN)*

351.9

2023

0.00%

351.9

Bond (EMTN)*

1,250.0

2025

0.00%

1,250.0

Bond (EMTN)*

1,250.0

2028

0.25%

1,250.0

Bond (EMTN)*

1,250.0

2032

0.75%

1,250.0

Bond (EMTN)*

750.0

2051

1.63%

750.0

Bond (EMTN Green Bond)*

600.0

2031

0.63%

600.0

Bond (EMTN Green Bond)*

850.0

2032

2.38%

850.0

Bond (EMTN Green Bond)*

750.0

2030

5.00%

750.0

Bond (EMTN Social Bond)*

850.0

2026

1.38%

850.0

Bond (EMTN Social Bond)*

800.0

2028

1.88%

800.0

Bond (EMTN Social Bond)*

750.0

2027

4.75%

750.0

Promissory note loan*

1,240.0

2029

2.07%

120.0

50.0

309.0

761.0

Mortgages**

8,464.2

2034

1.57%

784.7

1,001.8

830.9

494.3

787.5

4,565.0

Deutsche Wohnen

Other financing***

8,993.5

2029

1.63%

466.8

201.1

1,518.2

888.3

882.5

5,036.6

44,759.2

3,580.2

3,183.0

5,099.1

4,232.6

4,801.7

23,862.6

  1. * Under the conditions of existing loan agreements, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  2. ** For a portion of the mortgages, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  3. *** This includes mortgages, convertible bonds, registered bonds and bearer bonds. For a portion of the financing, Deutsche Wohnen is obliged to fulfill certain financial covenants, which it fulfilled.

In the previous year, the maturities and average interest rates of the nominal obligations were as follows:

Maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors in the previous year

Repayment of the nominal obligations is as follows:

in € million

Nominal obligation Dec. 31, 2021

Maturity

Average interest rate

2022

2023

2024

2025

2026

from 2027

Bond (US dollar)*

185.0

2023

4.58%

185.0

Bond (EMTN)*

500.0

2022

2.13%

500.0

Bond (EMTN)*

500.0

2025

1.50%

500.0

Bond (EMTN)*

1,000.0

2023

2.25%

1,000.0

Bond (EMTN)*

500.0

2022

0.88%

500.0

Bond (EMTN)*

500.0

2026

1.50%

500.0

Bond (EMTN)*

1,000.0

2024

1.25%

1,000.0

Bond (EMTN)*

500.0

2022

0.75%

500.0

Bond (EMTN)*

500.0

2027

1.75%

500.0

Bond (EMTN)*

500.0

2025

1.13%

500.0

Bond (EMTN)*

500.0

2024

0.75%

500.0

Bond (EMTN)*

500.0

2028

1.50%

500.0

Bond (EMTN)*

600.0

2022

0.79%

600.0

Bond (EMTN)*

700.0

2026

1.50%

700.0

Bond (EMTN)*

500.0

2030

2.13%

500.0

Bond (EMTN)*

500.0

2038

2.75%

500.0

Bond (EMTN)*

500.0

2023

0.88%

500.0

Bond (EMTN)*

500.0

2025

1.80%

500.0

Bond (EMTN)*

500.0

2029

0.50%

500.0

Bond (EMTN)*

500.0

2034

1.13%

500.0

Bond (EMTN)*

500.0

2023

0.13%

500.0

Bond (EMTN)*

500.0

2027

0.63%

500.0

Bond (EMTN)*

500.0

2039

1.63%

500.0

Bond (EMTN)*

500.0

2024

1.63%

500.0

Bond (EMTN)*

500.0

2030

2.25%

500.0

Bond (EMTN)*

750.0

2026

0.63%

750.0

Bond (EMTN)*

750.0

2030

1.00%

750.0

Bond (EMTN)*

500.0

2041

1.00%

500.0

Bond (Green Bond)*

600.0

2031

0.63%

600.0

Bond (EMTN)*

500.0

2024

0.00%

500.0

Bond (EMTN)*

1,000.0

2027

0.38%

1,000.0

Bond (EMTN)*

1,000.0

2029

0.63%

1,000.0

Bond (EMTN)*

1,000.0

2033

1.00%

1,000.0

Bond (EMTN)*

500.0

2041

1.50%

500.0

Bond (EMTN)*

500.0

2023

0.00%

500.0

Bond (EMTN)*

1,250.0

2025

0.00%

1,250.0

Bond (EMTN)*

1,250.0

2028

0.25%

1,250.0

Bond (EMTN)*

1,250.0

2032

0.75%

1,250.0

Bond (EMTN)*

750.0

2051

1.63%

750.0

Bridge financing

3,490.0

2022

0.65%

3,490.0

Promissory note loan*

230.0

2025

0.12%

120.0

50.0

60.0

Mortgages**

8,142.3

2034

***

1.17%

***

814.5

782.9

1,016.6

734.0

502.0

4,292.3

Deutsche Wohnen

Other financing****

9,704.1

2028

***

1.33%

***

279.9

744.7

202.4

1,562.0

889.2

6,025.9

46,651.4

6,684.4

4,332.6

3,719.0

5,046.0

3,391.2

23,478.2

  1. * Under the conditions of existing loan agreements, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  2. ** For a portion of the mortgages, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  3. *** The calculation includes financial liabilities that will be transferred to Berlin housing companies in 2022 as part of the sale of residential units. These financial liabilities are included in the “Assets and liabilities held for sale” as at December 31, 2021.
  4. **** This includes mortgages, convertible bonds, registered bonds and bearer bonds. For a portion of the financing, Deutsche Wohnen is obliged to fulfill certain financial covenants, which it fulfilled.

The loan repayments shown for the following years contain contractually fixed minimum repayment amounts.

Of the nominal obligations to creditors, € 12,287.4 million (December 31, 2021: € 13,060.3 million) are secured by land charges and other collateral (account pledge agreements, assignments, pledges of company shares and guarantees of Vonovia SE or other Group companies). In the event that payment obligations are not fulfilled, the securities provided are used to satisfy the claims of the banks.

Financial liabilities to banks and other creditors have an average interest rate of approximately 1.48%. The financial liabilities as a whole do not contain any significant short-term interest rate risks as they relate either to loans with long-term fixed interest rates or variable-interest liabilities that are hedged using suitable derivative financial instruments (see [G54] Financial Risk Management).

Repayment of Bonds Under the European Medium-Term Notes Program (EMTN)

A bond in the amount of € 500.0 million issued in 2017 was repaid as scheduled in January 2022.

May 2022 saw the early repayment of a € 500.0 million bond from 2014 that was set to mature in July 2022.

In June 2022, a € 500.0 million bond from 2016 was repaid as scheduled.

In November 2022, Vonovia published a tender offer to buy back bonds maturing in 2023 and 2024. € 1,044.7 million relating to eight different bonds was bought back early within this context.

In December 2022, Vonovia repaid a floating rate bond from 2018 in the amount of € 600.0 million as planned.

Repayment of Bonds and Bearer Bonds of Deutsche Wohnen

Deutsche Wohnen repaid registered bonds worth € 150.0 million and a bearer bond in the amount of € 100.0 million as scheduled in January 2022.

In addition, an unscheduled repayment was made on a registered bond in the amount of € 76.3 million in February 2022.

Repayment of Secured Financing of Deutsche Wohnen

Deutsche Wohnen repaid secured financing in the amount of € 284.2 million pro rata and ahead of schedule in December 2022.

Issue of Bonds Under the European Medium-Term Notes Program (EMTN)

On March 21, 2022, Vonovia SE placed two social bonds in a total amount of € 1,650.0 million with maturities of 3.85 and 6.25 years, as well as a green bond worth € 850.0 million with a maturity of ten years. The bonds, which have a total amount of € 2,500.0 million, bear interest at a rate of 1.375%, 1.875% and 2.375%.

On March 30, 2022, Vonovia issued two variable-rate SEK bonds worth a total of SEK 1,250.0 million with maturities of two and five years that were disbursed on April 8, 2022.

On November 10, 2022, Vonovia SE issued two social and green bonds in a total amount of € 1,500.0 million with maturities of 4.5 and 8 years. The bonds bear interest at 4.75% and 5.00%.

Promissory Note Loan

On February 16, 2022, Vonovia SE issued promissory note loans of € 1,010.0 million with terms of between 5 and 30 years and an average interest rate of 1.13%.

Commercial Paper

On January 18, 2022, Vonovia SE took out a commercial paper of € 500.0 million with a maturity of 3 months. This was repaid in full on April 21, 2022.

Secured Financing

On February 25, 2022, Vonovia took out secured financing with Landesbank Baden-Württemberg in the amount of € 175.0 million with a maturity of ten years.

On April 1, 2022, Vonovia took out secured financing with Berlin Hyp in the amount of € 175.0 million with a maturity of ten years.

On April 12, 2022, Vonovia took out secured financing with Bayern LB in the amount of € 150.0 million with a maturity of ten years.

Unsecured Financing

On February 25, 2022, Vonovia SE took out an unsecured loan with Caixabank S.A. in the amount of € 142.0 million with a maturity of five years.

On February 25, 2022, Vonovia SE took out an unsecured loan with DZ Bank AG in the amount of € 250.0 million with a maturity of seven years.

Bridge Financing

The bridge facility taken out in connection with the acquisition of Deutsche Wohnen was valued at € 3,490.0 million and repaid in full as of March 1, 2022

Working Capital Facility

With an agreement dated September 30, 2021, Commerzbank, Bank of America, BNP Paribas, Deutsche Bank, ING, Morgan Stanley, Société Générale and UniCredit provided Vonovia with a working capital facility of € 2,000.0 million with an initial term of three years; on December 13, 2021, the facility was increased to € 3,000.0 million with the addition of Goldman Sachs, JPMorgan, Citibank and UBS. Citibank left the contract and was replaced by Mizuho Bank as of November 18, 2022. This credit line had not been used as of December 31, 2022.

Subsidy Loan

The European Investment Bank provided Vonovia with an unsecured loan of up to € 600.0 million on November 10, 2022.

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.