56 Cash Flow Hedges and Stand-alone Hedging Instruments
On the reporting date, the nominal volume of cash flow hedges held in euros, including swaptions, amounts to € 1,501.7 million (December 31, 2021: € 1,109.5 million). Interest rates on hedging instruments are between 0.064% and 3.760% with original swap periods of between 5.25 and 20 years.
In order to partially hedge a secured fixed-rate loan issue in favor of Vonovia SE for an expected amount of € 1.2 billion, with a planned issue date of April 13, 2023 and a term of 10 years, three zero-cost swaption collars (financial options on three interest rate swaps) with a total nominal volume of € 1.0 billion were concluded with different banks in each case between December 5, 2022 and December 8, 2022. Annual interest payments are planned for the hedged item, and no contractual agreements have been reached on repayments during the term. The conclusion of the derivatives caps Vonovia’s interest expense from the financing at 3.00% for the term of 10 years. The hedge only relates to the interest rate risk. In order to maximize hedge effectiveness, only the intrinsic value of the options is designated in the hedge. The fair value of the swaption is not part of the hedge and is recognized periodically in the income statement affecting net income. The option on the interest rate swap can only be exercised on the option expiry date. All swaptions concluded are cash-settled, i.e., the market values of the derivatives are settled on the option due date.
For the hedging instruments that are maintained within a so-called passive hedge accounting, € 7.9 million was reclassified affecting net income in the reporting year in line with the expected cash flows from the underlying hedged items. This reduced the value recognized in other comprehensive income to € 10.8 million.
All derivatives are included in netting agreements with the issuing banks.
Due to the current interest rate environment, both the cross currency swaps and the other euro interest rate swaps are reported with positive market values as of the reporting date.
No economic or accounting offsetting was performed in the reporting year.
Key parameters of the interest rate swaps were as follows:
Key parameters of the interest rate swaps
Carrying amount Dec. 31, 2022 | Balance sheet item including the hedging instrument | Face value | Beginning of term | End of term | Current average interest rate (incl. margin) | Changes in the value of the hedging instrument recognized in other comprehensive income | Ineffectiveness of the hedging instrument recognized in profit or loss | Profit or loss item including hedge ineffectiveness | Reporting year reclassification | Profit or loss item including the reclassification of the hedge | Change in fair value of the hedged item | |||||||||||||||
in € million | (+) Increase of equity | (+) Increase of equity | ||||||||||||||||||||||||
Bank of America (future fixed interest loan issue) | ||||||||||||||||||||||||||
Hedged item | 400.0 | Apr. 12, 2023 | Apr. 11, 2033 | 6-M-EURIBOR Marge 0.0% | ||||||||||||||||||||||
Swaption | 11.9 | Financial assets | 400.0 | Dec. 05, 2022 | Apr. 06, 2023 | 3.00%/ 2.299% | 7.4 | 4.5 | Interest expenses | n.a. | n.a. | n.a. | ||||||||||||||
Deutsche Bank (future fixed interest loan issue) | ||||||||||||||||||||||||||
Hedged item | 300.0 | Apr. 13, 2023 | Apr. 12, 2033 | 6-M-EURIBOR Marge 0.0% | ||||||||||||||||||||||
Swaption | 9.2 | Financial assets | 300.0 | Dec. 08, 2022 | Apr. 11, 2023 | 3.00%/ 2.2275% | 5.6 | 3.6 | Interest expenses | n.a. | n.a. | n.a. | ||||||||||||||
BNP Paribas (future fixed interest loan issue) | ||||||||||||||||||||||||||
Hedged item | 300.0 | Apr. 14, 2023 | Apr. 13, 2033 | 6-M-EURIBOR Marge 0.0% | ||||||||||||||||||||||
Swaption | 9.1 | Financial assets | 300.0 | Dec. 07, 2022 | Apr. 12, 2023 | 3.00%/ 2.286% | 5.6 | 3.5 | Interest expenses | n.a. | n.a. | n.a. | ||||||||||||||
HELABA | ||||||||||||||||||||||||||
Hedged item | 146.6 | Jan. 28, 2019 | Apr. 30, 2024 | 1-M-EURIBOR Marge 0.0% | -6.3 | |||||||||||||||||||||
Interest rate swaps | 5.6 | Financial assets | 146.6 | Jan. 28, 2019 | Apr. 30, 2024 | 0.390% | 6.3 | 0.0 | n.a. | 0.1 | Interest expenses | |||||||||||||||
Berlin Hyp | ||||||||||||||||||||||||||
Hedged item | 146.6 | Jan. 28, 2019 | Apr. 30, 2024 | 1-M-EURIBOR Marge 0.0% | -6.3 | |||||||||||||||||||||
Interest rate swaps | 5.6 | Financial assets | 146.6 | Jan. 28, 2019 | Apr. 30, 2024 | 0.390% | 6.3 | 0.0 | n.a. | 0.1 | Interest expenses | |||||||||||||||
Norddeutsche Landesbank | ||||||||||||||||||||||||||
Hedged item | 75.9 | June 28, 2013 | June 30, 2023 | 3-M-EURIBOR Marge 1.47% | -3.3 | |||||||||||||||||||||
Interest rate swaps | 0.2 | Financial assets | 75.9 | June 28, 2013 | June 30, 2023 | 2.290% | 3.9 | -0.6 | Interest expenses | 1.7 | Interest expenses | |||||||||||||||
UniCredit Bank AG | ||||||||||||||||||||||||||
Hedged item | 43.1 | Oct. 01, 2018 | Nov. 30, 2038 | 3-M-EURIBOR Marge 1.32% | -11.6 | |||||||||||||||||||||
Interest rate swaps | 6.5 | Financial assets | 43.1 | Oct. 01, 2018 | Nov. 30, 2038 | 1.505% | 10.9 | 0.7 | Interest expenses | 0.7 | Interest expenses | |||||||||||||||
UniCredit Bank Austria AG | ||||||||||||||||||||||||||
Hedged item | 89.5 | Jan. 02, 2015 | Dec. 31, 2034 | 3-M-EURIBOR Marge 1.12% | -16.0 | |||||||||||||||||||||
Interest rate swaps | 17.6 | Financial assets | 89.5 | Sep. 18, 2020 | Dec. 31, 2034 | 0.064% | 15.5 | 0.5 | Interest expenses | 0.1 | Interest expenses | |||||||||||||||
In 2013, two cross currency swaps were contracted in equal amounts with each of JP Morgan Limited and Morgan Stanley Bank International Limited; these hedging instruments (cross currency swaps/CCS) became effective on the issuance of two bonds for a total amount of USD 1,000 million. The CCS, each for an amount of USD 375.0 million, fell due in October 2017 in line with the bonds. The hedging instruments, each for an amount of USD 125.0 million, originally had a term of ten years. This means that the EUR/USD currency risk resulting from the coupon and capital repayments was eliminated for the entire term of the bonds.
Key parameters of the cross currency swaps were as follows:
Key parameters of the cross currency swaps
On February 22, 2022, control of 20.5% of the shares in the Adler Group, which were previously held by Aggregate Holdings Invest S.A., passed to Vonovia as part of a debt recovery action. At the time of the debt recovery action, the shares in the Adler Group had been reported at their market value of € 251.4 million as investments in associates accounted for using the equity method. Within this context, the call option discussed at this point last year was lost.
As of the reporting date, Deutsche Wohnen Group recognized 16 stand-alone interest rate swaps. The hedged nominal volume amounted to € 704.8 million as of December 31, 2022 (December 31, 2021: € 652.9 million), while the positive market values amount to a total of € 66.4 million (December 31, 2021: € -20.8 million).
The hedged nominal volume of currently 13 stand-alone interest rate swaps of BUWOG amounted to € 299.9 million as of December 31, 2022 (December 31, 2021: € 312.3 million).
On the reporting date, the Victoriahem Group recognized 15 stand-alone interest rate swaps and three interest rate caps. The nominal volume hedged in Swedish krona amounted to € 1,296.9 million as of December 31, 2022 (December 31, 2021: € 1,668.2 million), while the positive market values amount to a total of € 23.8 million (December 31, 2021: € -1.0 million).
The designation of the cash flow hedges as hedging instruments is prospectively determined on the basis of a sensitivity analysis, retrospectively on the basis of the accumulated dollar offset method. The fair value changes of the hedged items are determined on the basis of the hypothetical derivative method. In the reporting year – as in the prior year – the impact of default risk on the fair values is negligible and did not result in any adjustments of the balance sheet item.
In the reporting year, the cash flow hedges held in euros, including swaptions, were shown at their clean fair values totaling € 65.7 million as of December 31, 2022 (December 31, 2021: € -12.3 million). At the same time, positive market values from cross currency swaps in the amount of € 47.0 million (December 31, 2021: € 35.2 million) and positive market values totaling € 99.8 million (December 31, 2021: € 30.6 million) from stand-alone interest rate derivatives of Deutsche Wohnen, BUWOG and Victoriahem were recognized.
In the previous year, financial liabilities still included negative fair values from stand-alone interest rate derivatives in the amount of € -53.9 million.
The total deferred interest came to € 1.1 million in the reporting year (December 31, 2021: € -1.4 million).
The impact of the cash flow hedges (after income taxes) on the development of other reserves is shown below:
Impact of the cash flow hedges (after income taxes) on the development of other reserves
The impact of the cash flow hedges (including income taxes) on total comprehensive income is shown below:
Cash Flow Hedges
Cash Flow Hedges
In the reporting year, after allowing for deferred taxes, positive cumulative ineffectiveness for cash flow hedges amounts to € 8.1 million (2021: € -0.1 million), improving net interest by € 8.2 million. On the basis of the valuation as of December 31, 2022, Vonovia used a sensitivity analysis to determine the change in equity given a parallel shift in the interest rate structure of 50 basis points in each case:
Change in equity
A further sensitivity analysis showed that a change in the foreign currency level of -5% (+5%) would lead, after allowance for deferred taxes, to a change in the other reserves not affecting net income of € -0.4 million (or € 0.4 million), while ineffectiveness affecting net income in the amount of € 0.3 million (or € -0.3 million) would result at the same time. In the previous year, a change in the other reserves not affecting net income of € -1.1 million (or € -0.9 million) was recognized in connection with ineffectiveness affecting net income in the amount of € +1.6 million (or € +0.5 million).
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.
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.
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.