44 Leases
Accounting Policies
IFRS 16 “Leases,” which has applied as a mandatory requirement since January 1, 2019, introduces only one accounting model (right-of-use model) for lessees, based on which all leases are to be recognized in the balance sheet as a matter of principle. The distinction between operating and finance leases only remains in place for accounting as the lessor.
All contracts that give the Vonovia Group the right to control the use of an identified asset over a certain period of time in return for consideration are considered leases within the meaning of IFRS 16.
For all lease contracts that meet the definition of leases according to IFRS 16, Vonovia recognizes lease liabilities equal to the present value of the future lease payments, discounted using the term-specific incremental borrowing rate. Correspondingly, right-of-use assets are recognized in the amount of the lease liabilities, plus any advance payments or any initial direct costs.
The lease liabilities are adjusted in line with financial principles. They are increased by the periodic interest expenses and reduced by the lease payments made.
The right-of-use assets are generally recognized at amortized cost, taking depreciation and impairments into account. Right-of-use assets that meet the definition of investment properties (IAS 40) are recognized at fair value in line with the recognition and measurement rules set out in IAS 40.
Changes within the lease term or within the lease payments lead to a remeasurement of the present value and, as a result, to an adjustment of the lease liability and the right-of-use asset.
Periods resulting from extension or termination options granted on a unilateral basis are assessed on a lease-by-lease basis and are only taken into account if their use is sufficiently probable – for example, due to financial incentives.
There is an accounting option available for short-term leases and leases of low-value assets. Vonovia makes use of this option, meaning that such leases are not recognized. As far as rented IT equipment and metering technology is concerned, portfolios are set up for leases with similar terms and a single discount rate is applied to these portfolios.
Such variable lease payments, which are not included in the measurement of the lease liabilities, as well as lease payments associated with short-term leases, with leases of low-value assets and with lease contracts that do not meet the definition of leases according to IFRS 16 are recognized as expenses on a straight-line basis over the lease term.
In addition to conventional vehicle leasing over a fixed lease term of three to five years, the Vonovia Group also leases IT equipment (IT leasing), rented residential, commercial and nursing care properties for subleasing (interim rental agreements; rented nursing care properties reported under the assets/liabilities of discontinued operations as of December 31, 2023), heat generation plants to supply the Group’s own properties with heat (contracting), water and heat meters (metering technology), leasing of land for the construction of owner-occupied commercial properties, as well as office buildings, office spaces, warehouse spaces and parking spaces (lease agreements for commercial premises). Under license agreements with public-sector institutions, Vonovia is granted the right to use public properties as storage locations or parking spaces, to lay heating pipes or cables, or to construct playgrounds. Long-term leasehold contracts have the biggest impact on the company’s net assets, financial position and results of operations. These involve Vonovia leasing land for the rental of constructed residential and commercial properties. These contracts generally have a term of 99 years.
Development of Right-of-use Assets
Development of Right-of-use Assets
in € million | Dec. 31, 2022 | Dec. 31, 2023 | |||
Right-of-use assets | |||||
Leasehold contracts | 2,016.8 | 1,798.0 | |||
Interim rental agreements | 3.0 | 0.5 | |||
Right-of-use assets within investment properties | 2,019.8 | 1,798.5 | |||
Leasing of land for the construction of owner-occupied commercial properties | 30.9 | 32.2 | |||
Lease agreements for commercial premises | 41.7 | 48.3 | |||
Contracting | 91.8 | 78.0 | |||
Vehicle leases | 4.7 | 4.9 | |||
License agreements | 0.5 | 0.0 | |||
Leases of IT equipment | 1.5 | 1.0 | |||
Metering technology | 22.6 | 22.1 | |||
Right-of-use assets within property, plant and equipment | 193.7 | 186.5 | |||
2,213.5 | 1,985.0 | ||||
As of December 31, 2023, the right-of-use assets resulting from leases amount to € 1,985.0 million (2022: € 2,213.5 million).
The majority of the right-of-use assets amounting to € 1,798.5 million is reported under investment properties and does not only result from interim lease agreements (leased and subleased residential and commercial properties), but mainly from leasehold contracts (€ 1,798.0 million). The other right-of-use assets totaling € 186.5 million are reported under property, plant and equipment and mainly include right-of-use assets resulting from heat contracting (€ 78.0 million), concluded lease agreements for commercial premises (€ 48.3 million), the leasing of land for the construction of owner-occupied commercial properties (€ 32.2 million), contracts connected with leased metering technology (€ 22.1 million) and vehicle leases (€ 4.9 million).
Development of Lease Liabilities
Development of Lease Liabilities
Dec. 31, 2022 | Dec. 31, 2023 | ||||||||||||
in € million | Due within one year | Due in 1 to 5 years | Due after 5 years | Due within one year | Due in 1 to 5 years | Due after 5 years | |||||||
Lease liabilities | |||||||||||||
Leasehold contracts (IAS 40) | 12.2 | 39.5 | 430.6 | 12.2 | 40.4 | 428.9 | |||||||
Interim rental agreements | 1.4 | 1.7 | – | 0.5 | 0.0 | 0.0 | |||||||
Leasing of land for the construction of owner-occupied commercial properties | 0.1 | 0.6 | 31.3 | 0.2 | 0.7 | 32.7 | |||||||
Lease agreements for commercial premises | 10.3 | 21.3 | 10.7 | 11.7 | 28.8 | 9.7 | |||||||
Contracting | 11.4 | 40.1 | 41.8 | 11.8 | 30.7 | 36.4 | |||||||
Vehicle leases | 2.2 | 2.5 | – | 2.4 | 2.6 | 0.0 | |||||||
License agreements | – | – | 0.5 | 0.0 | 0.0 | 0.0 | |||||||
Leases of IT equipment | 0.7 | 0.8 | – | 0.5 | 0.5 | 0.0 | |||||||
Metering technology | 3.2 | 12.4 | 7.2 | 4.7 | 13.8 | 4.0 | |||||||
41.5 | 118.9 | 522.1 | 43.9 | 117.5 | 511.8 | ||||||||
As of December 31, 2023, the lease liabilities amount to € 673.2 million (2022: € 682.5 million).
The year-on-year decrease in lease liabilities of € -9.3 million is mainly due to lower lease liabilities from heating supply contracts (€ -14.3 million), especially as a result of repayments made and prematurely terminated contracts in the 2023 reporting year. On the contrary, lease liabilities from lease agreements for commercial premises increased (€ +7.9 million), mainly due to index-based price increases and newly concluded leases, thereof € 7.0 million in connection with an office building in Berlin leased in January 2023 for Vonovia’s customer service.
Totaling € 511.8 million, the majority of the lease liabilities recognized as of December 31, 2023 are due after more than five years. Of this amount, € 428.9 million is attributable to lease liabilities from leasehold contracts. € 43.9 million is due within the next year. € 12.2 million of this amount is attributable to leasehold contracts, € 11.8 million is attributable to heating supply contracts.
The following table shows the development of the right-of-use assets reported under property, plant and equipment:
Development of the right-of-use assets reported under property, plant and equipment in the fiscal year
in € million | Carrying amount of right-of-use assets Jan. 1, 2023 | Additions 2023 | Depreciation 2023 | Transfer into discontinued operations | Carrying amount of right-of-use assets Dec. 31, 2023 | Interest expenses 2023 | |||||||
Leasing of land for the construction of owner-occupied commercial properties | 30.9 | 1.8 | -0.4 | – | 32.2 | 0.9 | |||||||
Lease agreements for commercial premises | 41.7 | 20.7 | -12.4 | -1.2 | 48.3 | 1.0 | |||||||
Contracting | 91.8 | 4.5 | -13.3 | -0.7 | 78.0 | 2.1 | |||||||
Vehicle leases | 4.7 | 3.6 | -2.7 | -0.3 | 4.9 | 0.1 | |||||||
License agreements | 0.5 | – | – | – | – | – | |||||||
Leases of IT equipment | 1.5 | 0.5 | -0.7 | – | 1.0 | 0.1 | |||||||
Metering technology | 22.6 | 14.8 | -3.7 | – | 22.1 | 0.7 | |||||||
193.7 | 45.9 | -33.2 | -2.2 | 186.5 | 4.9 | ||||||||
Development of the right-of-use assets reported under property, plant and equipment in the previous year
in € million | Carrying amount of right-of-use assets Jan. 1, 2022 | Additions 2022 | Depreciation 2022 | Carrying amount of right-of-use assets Dec. 31, 2022 | Interest expenses 2022 (adjusted) | |||||
Leasing of land for the construction of owner-occupied commercial properties | 27.4 | 4.0 | -0.4 | 30.9 | 0.8 | |||||
Lease agreements for commercial premises | 45.1 | 16.4 | -12.2 | 41.7 | 0.4 | |||||
Contracting | 56.8 | 49.4 | -12.2 | 91.8 | 1.3 | |||||
Vehicle leases | 4.8 | 2.7 | -2.5 | 4.7 | 0.0 | |||||
License agreements | 0.5 | 0.0 | -0.0 | 0.5 | 0.0 | |||||
Leases of IT equipment | 2.1 | 1.7 | -1.0 | 1.5 | 0.0 | |||||
Metering technology | 38.2 | 0.8 | -5.4 | 22.6 | 0.2 | |||||
174.9 | 75.0 | -33.7 | 193.7 | 2.7 | ||||||
The interest expenses recognized in the 2023 fiscal year resulting from leases pursuant to IFRS 16 amounted to € 19.9 million in total (2022: € 17.6 million), mainly from leasehold contracts (€ 15.0 million).
In the 2023 fiscal year, a total of 207 lease contracts (2022: 161) were classified as short-term leases and thus were not recognized in line with the accounting option available. The corresponding expenses, recognized in the 2023 fiscal year, amounted to € 0.9 million (2022: € 0.6 million). Expenses relating to leases of low-value assets amounting to € 2.7 million in the 2023 fiscal year (2022: € 1.2 million) mostly result from leased bicycles/e-bikes. Expenses totaling € 38.8 million were incurred in connection with variable lease payments in the 2023 fiscal year (2022: € 33.1 million), basically due to energy costs under heat supply contracts. Variable lease payments have not been included in the measurement of lease liabilities.
In addition to variable lease payments as well as payments resulting from short-term leases and leases of low-value assets, each included in the cash flow from operating activities, interest payments and repayments of lease liabilities totaling € 58.8 million were incurred in the 2023 fiscal year (2022: € 59.2 million). Thus, the total cash outflow for leases in the reporting period amounted to € 101.2 million (2022: € 94.1 million).
Total income from subleasing, mostly from subleasing of right-of-use assets in connection with rented residential, commercial and care home properties, amounted to € 15.0 million in the reporting period (2022: € 14.4 million). As of the reporting date, there were no significant non-cancelable subleases on the Spree-Bellevue property.
The loss arising from the rental of the sold Spree-Bellevue property (sale and leaseback transaction) in fiscal year 2023 amounted to € 1.2 million (2022: loss of € 1.2 million). This does not have any material impact on the Group’s cash flows.
Adjusted EBT
Adjusted EBT is the Group’s leading indicator of profitability as of 2024. The IFRS profit for the period is reconciled to earnings before taxes (EBT). This EBT is adjusted to reflect special effects based on the definition that has applied to date (effects that do not relate to the period, recur irregularly or are atypical for business operations). The net financial result is also adjusted to reflect non-cash and actuarial valuation effects that recur irregularly. The further adjustments to reflect the effects of IAS 40 measurement, writedowns, other (Non Core/Other result), net income from non-current financial assets accounted for using the equity method and effects from residential properties held for sale produce the Group’s Adjusted EBT.
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 Recurring Sales
The Adjusted EBITDA Recurring Sales compares the proceeds generated from the privatization business with the fair values of assets sold and also deducts the related costs of sale. In order to disclose profit and revenue in the period in which they are incurred and to report a sales margin, the fair value of properties sold, valued in accordance with IFRS 5, has to be adjusted to reflect realized/unrealized changes in value.
Adjusted EBITDA Rental
The Adjusted EBITDA Rental is calculated by deducting the operating expenses of the Rental segment and the expenses for maintenance in the Rental segment from the Group’s rental income.
Adjusted EBITDA Total
Adjusted EBITDA Total is the result before interest, taxes, depreciation and amortization (including income from other operational investments and intragroup profits) adjusted for effects that do not relate to the period, recur irregularly and that are atypical for business operation, and for net income from fair value adjustments to investment properties. These non-recurring items include the development of new fields of business and business processes, acquisition projects, expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments. The Adjusted EBITDA Total is derived from the sum of the Adjusted EBITDA Rental, Adjusted EBITDA Value-add, Adjusted EBITDA Recurring Sales, Adjusted EBITDA Development and Adjusted EBITDA Deutsche Wohnen.
Adjusted EBITDA Value-add
The Adjusted EBITDA Value-add is calculated by deducting operating expenses from the segment’s income.
COSO
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a private-sector U.S. organization. It was founded in 1985. In 1992, COSO published the COSO model, an SEC-recognized standard for internal controls. This provided a basis for the documentation, analysis and design of internal control systems. In 2004, the model was further developed and the COSO Enterprise Risk Management (ERM) Framework was published. Since then, it has been used to structure and develop risk management systems.
Covenants
Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the bond obligor to meet specific requirements or to refrain from undertaking certain activities.
EPRA Key Figures
For information on the EPRA key figures, we refer to the chapter on segment reporting according to EPRA.
EPRA NTA
The presentation of the NTA based on the EPRA definition aims to show the net asset value in a long-term business model. NTA stands for Net Tangible Assets. The equity attributable to Vonovia’s shareholders is adjusted by deferred taxes, real estate transfer tax and other purchasers’ costs in relation to the existing portfolio and the fair value of derivative financial instruments after taking deferred taxes into account. Stated goodwill and other intangible assets are also deducted.
European Public Real Estate Association (EPRA)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
European Public Real Estate Association (EPRA)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
GAV
The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.
GAV
The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.
Group FFO
Group FFO reflects the recurring earnings from the operating business. In addition to the adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows for recurring current net interest expenses from non-derivative financial instruments as well as current income taxes. This key figure is not determined on the basis of any specific international reporting standard but is to be regarded as a supplement to other performance indicators determined in accordance with IFRS.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
LTV Ratio (Loan-to-Value Ratio)
The LTV ratio shows the extent to which financial liabilities are covered. It shows the ratio of non-derivative financial liabilities pursuant to IFRS, less foreign exchange rate effects, cash and cash equivalents less advance payments received by Development (period-related), receivables from disposals, plus purchase prices for outstanding acquisitions to the total fair values of the real estate portfolio, fair values of the projects/land currently under construction as well as receivables from the sale of real estate inventories (period-related) plus the fair values of outstanding acquisitions and investments in other real estate companies.
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 that are not proving profitable (MFH Sales).
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Sustainability Performance Index (SPI)
Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.
Sustainability Performance Index (SPI)
Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.
Net Debt/EBITA
Net Debt/EBITDA reflects average adjusted net debt in relation to the Adjusted EBITDA Total.
Non-core Disposals
We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.
Recurring Sales
The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums from our portfolio. It does not include the sale of entire buildings or land (Non-core Disposals). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of our operating business within the narrower sense of the term. Therefore, these sales will be reported under “Other” in our segment reporting.
Fair Value Step-up
Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
Fair Value Step-up
Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
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 Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.
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 Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.