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28 Investment Properties

Investment Properties

in € million

As of Jan. 1, 2023

92,300.1

Additions

228.7

Capitalized modernization costs

820.5

Grants received

-66.0

Transfer to property, plant and equipment

-45.9

Transfer from property, plant and equipment

48.5

Transfer to down payments made

-1.6

Transfer from down payments made

161.9

Transfer from real estate inventories

649.8

Transfer to real estate inventories

-384.5

Transfer from assets held for sale

0.9

Transfer to assets held for sale

-740.4

Transfer to discontinued operations

-619.4

Other transfers

-14.2

Disposals

-319.5

Net income from fair value adjustments of investment properties

-10,844.2

Impairment of investment properties measured at cost

-68.4

Revaluation of assets held for sale

18.4

Revaluation from currency effects

-4.4

As of Dec. 31, 2023

81,120.3

As of Jan. 1, 2022

94,100.1

Additions

961.8

Capitalized modernization costs

1,248.9

Grants received

-12.1

Transfer to property, plant and equipment

-31.5

Transfer from property, plant and equipment

29.4

Transfer to down payments made

-417.2

Transfer from down payments made

105.0

Transfer from real estate inventories

143.3

Transfer to real estate inventories

-1,450.1

Transfer to assets held for sale

-416.5

Other transfers

-8.4

Disposals

-153.7

Net income from fair value adjustments of investment properties

-1,269.8

Revaluation of assets held for sale

68.0

Revaluation from currency effects

-597.1

As of Dec. 31, 2022

92,300.1

Accounting Policies

When Vonovia acquires properties, whether through a business combination or as part of a separate transaction, the intended use determines whether such properties are classified as investment properties or as owner-occupied properties.

Investment properties are properties that are held for the purpose of earning rental income or for capital appreciation or both and are not owner-occupied or held for sale in the ordinary course of business. Investment properties include undeveloped land, land and land rights including buildings and land with hereditary building rights of third parties. Investment properties also include right-of-use assets from rented, developed and undeveloped land (hereditary building rights) and from rented residential and commercial properties (interim leasing) within the meaning of IFRS 16 that are classified as investment properties.

Investment properties are initially measured at cost. Related transaction costs, such as fees  for legal services or real estate transfer taxes, are included in the initial measurement. If properties are purchased as part of a business combination and if the transaction relates to a “business,” then IFRS 3 applies as far as recognition is concerned. Transaction costs are recognized as an expense.

Following initial recognition, investment properties are measured at fair value. Any change therein is recognized as affecting net income in the income statement. If, during the land or project development phase, reliable measurement at fair value is not possible due to the lack of marketability and the lack of comparable transactions, recognition is at acquisition cost. In such cases, the cost model is continued until a reliable measurement can be carried out, but at the latest until the property in question is completed.

Investment properties are transferred to property, plant and equipment when there is a change in use evidenced by the commencement of owner-occupation. The properties’ deemed cost for subsequent measurement corresponds to the fair value at the date of reclassification.

The values as of December 31, 2023, include assets of € 304.1 million (December 31, 2022: € 663.7 million) that are measured at cost, as their fair value cannot be reliably calculated on a continuing basis. In the reporting period, a need for impairment identified as part of the ad hoc goodwill impairment test resulted in impairment losses of € 47.6 million being recognized on these project developments. These were reported under depreciation and amortization losses.

The additions in the 2023 reporting year include € 291.2 million (2022: € 572.4 million) in production costs for new construction activities.

The total amount reported for investment properties as of December 31, 2023, includes right-of-use assets from recognized hereditary building rights and interim leasing arrangements in the amount of € 1,798.5 million (December 31, 2022: € 2,019.8 million). In this respect, we also refer to chapter [E44] Leases.

The majority of € 1,798.0 million is attributable to right-of-use assets from hereditary building rights (December 31, 2022: € 2,016.8 million). This includes right-of-use assets amounting to € 124.1 million (December 31, 2022: € 97.3 million) relating to the Spree-Bellevue (Spree-Schlange) property in Berlin, which comprises the leasehold land and the rented properties. The properties have been leased from the fund company DB Immobilienfonds 11 Spree-Schlange von Quistorp KG until 2044. The lease agreement includes an obligation to pay compensation for loss of use as agreed by contract. At the end of 2028, each fund subscriber is entitled to return their share to the property fund at a fixed redemption price. If all of the fund investors make use of this option, Vonovia is obliged to acquire the properties at a fixed purchase price after deduction of borrowings. If more than 75% of the shares are returned in this way, Vonovia has a call option for the purchase of all fund shares.

For the investment properties encumbered with land charges in favor of various lenders, see chapter [E41] Non-derivative Financial Liabilities.

Directly Attributable Operating Expenses

Rental income from investment properties amounted to € 3,259.6 million during the fiscal year (2022: € 3,191.4 million). Operating expenses directly relating to these properties amounted to € 395.3 million during the fiscal year (2022: € 415.5 million). These include expenses for maintenance, ancillary costs that cannot be passed on to the tenants, personnel expenses from the caretaker and craftsmen’s organizations, and capitalized internal expenses from charges passed on from the internal craftsmen’s organization. The capitalized internal expenses relate to the work performed by the Group’s own craftsmen’s organization and the management costs for major modernization projects.

Long-term Leases

Vonovia as a lessor has concluded long-term leases on commercial properties. These are non-cancelable leases. The minimum future lease receipts from these leases are due as follows:

Long-term Leases

in € million

Dec. 31, 2022

Dec. 31, 2023

Total minimum lease payments

95.6

167.4

Due within 1 year

29.3

49.0

Due in 1 to 5 years

59.9

104.6

Due after 5 years

6.4

13.8

Fair Values

Accounting Policies

The fair values of the portfolio of residential properties were determined on the basis of the International Valuation Standard Committee’s definition of market value. Portfolio premiums and discounts, which can be observed when portfolios are sold in market transactions, were not included. Nor were time restrictions in the marketing of individual properties. Vonovia determines fair value in accordance with the requirements of IAS 40 in conjunction with IFRS 13.

Vonovia, in principle, measures its portfolio on the basis of the discounted cash flow (DCF) method. Under the DCF methodology, the expected future income and costs of a property are forecast over a detailed period of ten years and discounted to the date of valuation as the net present value. Due to the particular market situation in Austria and in order to reflect the extensive Austrian rent restrictions, a sales scenario involving the recurring sales of apartments is assumed for a subportfolio. In order to present these sales in the correct accounting period, the detailed period for the Austrian DCF model has been extended to 100 years.

The income in the DCF model mainly comprises expected rental income (current net rent excl. ancillary costs, current incl. rent in Sweden, market rents as well as their development) taking vacancy losses and also sales revenues for an Austrian subportfolio into account. The expected rental income is derived for each location from the latest rent indices and rent tables (including Value AG, IVD, the Austrian Economic Chambers [WKÖ]) as well as from studies on spatial prosperity (Federal Institute for Research on Building, Urban Affairs and Spatial Development [BBSR], Prognos, Value AG, the Federal Statistical Office of Germany, the Austrian statistical office, Statistik Austria, etc.). In Sweden, rents and rent increases are defined as part of negotiations with the Swedish tenants’ association (“Hyresgästföreningen”) and are reflected accordingly in the valuation model. The expected sales revenues in Austria are derived from historical sale prices as well as market data (e.g.,  WKÖ, EHL).

On the cost side, maintenance expenses and administrative costs are taken into account. In Germany, these are taken into account in accordance with the II. Berechnungsverordnung. The II. Berechnungsverordnung (BV) is the German Regulation on Calculations for Residential Buildings in accordance with the Second Housing Construction Law, which stipulates how economic viability calculations for homes are to be performed. These cost approaches are also transferred to the Austrian market. Further cost items are, for example, ground rents, non-allocable ancillary costs, rent losses and, in Austria, selling costs. In the Swedish valuation model, further expenses to be borne by the owner are also taken into account in the DCF model due to the inclusive rents that are a special feature of this market. All cost items are inflated in the reporting period. Modernization measures carried out in the housing stocks are factored in by decreasing the current maintenance expenses and adjusting market rents.

On this basis, the forecast cash flows are calculated on an annual basis and discounted to the date of valuation as the net present value. Furthermore, the terminal value of the property at the end of the ten-year period is determined using the expected stabilized net operating income and again discounted to the date of valuation as the net present value. The discount rate applied reflects the market situation, location, type of property, special property features (e.g., hereditary building rights, rent restrictions), the yield expectations of a potential investor and the risk associated with the forecast future cash flows of the property. The present value calculated in this way is reconciled to the market value by deducting standard market transaction costs, such as real estate transfer taxes, agent and notary costs. As the detailed period in the Austrian DCF model has been extended to 100 years in order to present the sales scenarios in the correct accounting period, no terminal value is applied here.

The commercial properties in the portfolio are mainly small commercial units for the supply of the local residential environment. Different cost approaches are used to those for residential properties, and discount rates were adjusted to reflect the market specifics. 

The valuation is, in principle, performed on the basis of homogeneous valuation units. These meet the criteria of economically cohesive and comparable land and buildings. They include:

  • Geographical location (identity of the microlocation and geographical proximity)
  • Comparable types of use, building class, construction year class and condition of property
  • Same property features such as rent restrictions, hereditary building rights and full or part ownership

The Vonovia portfolio also contains project developments, existing areas with construction potential and land areas with inheritable building rights granted, as well as nursing care facilities. Project developments for subsequent management within its own portfolio are measured using the cost approach until the construction work is complete – subject to a review of the values applied if triggering events occur. Once the construction work is complete, measurement is at fair value using the DCF procedure described above. Existing areas with construction potential are valued using a comparable method on the basis of the local standard land value evaluated. Deductions are taken into account in particular for the readiness for construction and potential use as well as for likelihood of development and the development situation. Inheritable building rights granted are valued in the same way as the property portfolio using a DCF method. The input parameters here are the duration and amount of ground rent and the value of the land. The right-of-use assets from leasehold contracts are recognized at their fair value. The fair value of the leasehold contracts corresponds to the present value of the standard market leasehold fee payments up until the end of the term of the hereditary building right in question. These are calculated based on the current amount of the ground rent. In order to calculate the present value, the leasehold fee payments are discounted using a property-specific interest rate.

Vonovia determines the fair values of its real estate portfolio in Germany, Sweden and Austria in its in-house valuation department on the basis of the methodology described above.

In addition to the internal valuation, Vonovia’s real estate portfolio was also valued by the independent property appraisers CBRE GmbH, Jones Lang LaSalle SE and Savills Sweden AB. The market value resulting from the external report was consistent with the internal valuation result.

The fair value for the nursing care properties was calculated by the independent expert W&P Immobilienberatung GmbH using a DCF method.

The contractually fixed remuneration for the valuation report is not linked to the valuation results.

The real estate portfolio of Vonovia is to be found in the items investment properties, property, plant and equipment (owner-occupied properties), real estate inventories, contract assets and assets held for sale. The fair value of the portfolio comprising residential buildings, commercial properties, garages and parking spaces, project developments and undeveloped land, hereditary building rights granted and nursing care facilities was € 83,927.7 million as of December 31, 2023 (December 31, 2022: € 94,694.5 million). This corresponds to a net initial yield for the real estate portfolio of 2.8% (total portfolio including Sweden and Austria; December 31, 2022: 2.5%). For Germany, this results in an in-place rent multiplier of 25.1 for the portfolio (December 31, 2022: 29.2) and a fair value per m² of € 2,297 (December 31, 2022: € 2,590 per m²). The in-place rent multiplier and fair value for the Austrian portfolio come to 22.5 and € 1,612 per m² (December 31, 2022: 25.8 and € 1,742 per m²), with the figures for Sweden coming to 17.9 and € 2,088 per m² (December 31, 2022: 20.1 and € 2,248 per m²). We report the net rents excluding ancillary expenses, as well as other key indicators relevant to the valuation of our portfolio in the Portfolio Structure section of the management report, broken down by regional market.

The material valuation parameters for the investment properties (Level 3) in the real estate portfolio are as follows as of December 31, 2023, broken down by regional markets:

Material valuation parameters for the investment properties (level 3) – Fiscal year

Valuation results*

Valuation parameters for investment properties (Level 3)

Regional market

Fair value
(in € million)

thereof investment properties (in € million)

thereof other asset classes (in € million)

Manage­ment costs residen­tial
(€/resi­den­tial unit p. a.)

Maintenance costs total residential (€/m² p. a.)

Market rent residential (€/m² per month)

Market rent increase residential

Stabilized vacancy rate residential

Discount rate total

Capitalized interest rate total

Dec. 31, 2023

Berlin

23,881.0

23,782.6

98.4

307

16.67

8.62

2.3%

0.9%

4.9%

2.8%

Rhine Main Area

6,610.7

6,587.0

23.7

331

16.30

10.17

2.2%

1.2%

5.1%

3.2%

Southern Ruhr Area

5,168.6

5,157.5

11.1

326

14.39

7.79

1.8%

2.6%

4.8%

3.3%

Rhineland

5,045.8

5,022.0

23.9

328

15.86

9.16

2.1%

1.7%

5.2%

3.4%

Dresden

5,031.5

4,902.7

128.9

295

15.97

7.20

2.1%

2.2%

5.1%

3.3%

Hamburg

3,229.2

3,221.0

8.2

317

15.97

9.24

2.1%

1.2%

5.0%

3.2%

Hanover

2,886.6

2,868.0

18.6

316

15.85

8.11

2.0%

2.0%

5.2%

3.5%

Kiel

2,774.6

2,759.5

15.1

319

16.65

8.47

2.0%

1.6%

5.4%

3.7%

Munich

2,743.7

2,736.8

6.9

318

16.44

13.07

2.3%

0.6%

5.2%

3.1%

Stuttgart

2,249.5

2,243.1

6.5

333

16.86

9.98

2.2%

1.3%

5.3%

3.4%

Northern Ruhr Area

2,044.6

2,038.7

6.0

328

14.95

6.93

1.6%

3.2%

5.1%

3.9%

Leipzig

1,890.6

1,863.4

27.2

312

16.87

7.29

2.0%

2.7%

4.9%

3.2%

Bremen

1,439.3

1,435.6

3.6

325

14.99

7.61

2.0%

2.0%

4.9%

3.2%

Westphalia

1,091.3

1,086.3

4.9

324

14.81

7.99

2.0%

2.0%

5.4%

3.7%

Freiburg

727.1

717.2

9.9

331

16.73

9.42

2.0%

0.9%

4.9%

3.1%

Other strategic locations

3,394.9

3,387.1

7.8

324

16.02

8.16

2.0%

2.5%

5.3%

3.6%

Total strategic locations

70,209.1

69,808.4

400.6

316

16.05

8.53

2.1%

1.7%

5.0%

3.2%

Non-strategic locations

409.0

390.8

18.2

341

16.96

7.99

1.9%

2.2%

6.0%

4.2%

Vonovia Germany

70,618.1

70,199.3

418.9

317

16.06

8.53

2.1%

1.7%

5.1%

3.2%

Vonovia Sweden**

6,402.5

6,402.5

0.0

373

14.03

10.23

2.2%

1.6%

6.1%

4.0%

Vonovia Austria**

2,771.6

2,724.3

47.2

n.a.

21.04

6.32

1.7%

2.5%

6.1%

n.a.

  1. * Fair value of the developed land excl. € 4,135.4 million for development, undeveloped land, inheritable building rights granted and other; € 1,343.1 million of this amount relates to investment properties. The investment properties balance sheet item also includes the present value in connection with payments for right-of-use assets in the amount of € 451.1 million.
  2. ** The valuation methods used for the portfolio in Austria and Sweden use and provide valuation parameters that are only partially comparable.

Material valuation parameters for the investment properties (level 3) – Previous year

Valuation results*

Valuation parameters for investment properties (Level 3)

Regional market

Fair value
(in € million)

thereof investment properties (in € million)

thereof other asset classes (in € million)

Manage­ment costs resi­den­tial
(€/resi­den­tial unit p. a.)

Maintenance costs total residential (€/m² p. a.)

Market rent residential (€/m² per month)

Market rent increase residential

Stabilized vacancy rate residential

Discount rate total

Capitalized interest rate total

Dec. 31, 2022

Berlin

27,793.9

27,424.6

369.3

287

15.92

8.24

2.0%

1.0%

4.1%

2.3%

Rhine Main Area

7,545.4

7,452.2

93.2

311

15.74

9.92

1.9%

1.1%

4.4%

2.8%

Southern Ruhr Area

5,509.3

5,499.1

10.1

305

13.74

7.43

1.6%

2.6%

4.2%

3.0%

Rhineland

5,631.7

5,624.8

6.9

308

15.21

8.89

1.8%

1.7%

4.5%

3.0%

Dresden

5,769.2

5,730.4

38.9

276

15.29

6.93

1.8%

2.3%

4.3%

2.9%

Hamburg

3,653.7

3,648.7

5.0

297

15.45

8.95

1.7%

1.2%

4.2%

2.7%

Hanover

3,211.9

3,209.0

2.9

296

15.27

7.87

1.7%

2.0%

4.4%

3.1%

Kiel

3,137.3

3,132.0

5.3

299

15.92

8.06

1.7%

1.7%

4.5%

3.1%

Munich

3,062.1

3,047.6

14.5

298

15.63

12.45

2.0%

0.6%

4.4%

2.7%

Stuttgart

2,514.2

2,509.5

4.7

312

16.03

9.67

1.9%

1.2%

4.6%

3.0%

Northern Ruhr Area

2,227.0

2,219.7

7.4

307

14.35

6.73

1.3%

3.3%

4.4%

3.6%

Leipzig

2,161.3

2,160.0

1.3

292

16.26

7.07

1.7%

3.1%

4.1%

2.7%

Bremen

1,559.5

1,557.0

2.5

304

14.38

7.42

1.8%

2.0%

4.3%

2.9%

Westphalia

1,235.8

1,234.5

1.3

303

14.31

7.72

1.7%

2.0%

4.5%

3.2%

Freiburg

802.1

800.5

1.6

309

16.58

9.03

1.7%

0.9%

4.2%

2.7%

Other strategic locations

3,750.2

3,740.5

9.7

303

15.44

7.91

1.7%

2.5%

4.5%

3.2%

Total strategic locations

79,564.5

78,990.1

574.4

296

15.39

8.22

1.8%

1.7%

4.3%

2.7%

Non-strategic locations

504.6

496.5

8.1

323

16.11

7.64

1.6%

2.6%

5.0%

3.6%

Vonovia Germany

80,069.1

79,486.6

582.5

296

15.40

8.21

1.8%

1.7%

4.3%

2.7%

Vonovia Sweden**

6,876.3

6,876.3

379

12.83

9.78

2.1%

1.5%

5.6%

3.6%

Vonovia Austria**

3,026.5

2,972.0

54.6

n.a.

21.34

5.88

1.7%

2.6%

5.5%

n.a.

  1. * Fair value of the developed land excl. € 4,722.5 million for development, undeveloped land, inheritable building rights granted and other; € 2,502.2 million of this amount relates to investment properties. The investment properties balance sheet item also includes the present value in connection with payments for right-of-use assets in the amount of € 463.0 million.
  2. ** The valuation methods used for the portfolio in Austria and Sweden use and provide valuation parameters that are only partially comparable.

The inflation rate applied to the valuation procedure comes to 2.0%. For the Austrian portfolio, a sales strategy with an average selling price of € 2,426 per m² was assumed for 48.9% of the portfolio.

Net income from the valuation of investment properties amounted to € -10,651.2 million in the 2023 fiscal year (December 31, 2022: € -1,177.6 million).

Sensitivity Analyses

The sensitivity analyses performed on Vonovia’s real estate portfolio show the impact of value drivers dependent upon market developments. Those influenced in particular are the market rents and their development, the amount of recognized administrative and maintenance expenses, cost increases, the vacancy rate and interest rates. The effect of possible fluctuations in these parameters is shown separately for each parameter according to regional market in the following.

Interactions between the parameters are possible but cannot be quantified owing to the complexity of the interrelationships. The vacancy and market rent parameters, for example, can influence each other. If rising demand for housing is not met by adequate supply developments, then this can result in lower vacancy rates and, at the same time, rising market rents. If, however, the rising demand is compensated for by a high vacancy reserve in the location in question, then the market rent level does not necessarily change.

Changes in the demand for housing can also impact the risk associated with the expected cash flows, which is then reflected in adjusted discounting and capitalized interest rates. The effects do not, however, necessarily have to have a favorable impact on each other, for example, if the changes in the demand for residential real estate are overshadowed by macroeconomic developments.

In addition, factors other than demand can have an impact on these parameters. Examples include changes in the portfolio, in seller and buyer behavior, political decisions and developments on the capital market. Due to the effect that changes in inflation will have on future rent increases in Sweden, it has been assumed, for the purposes of calculating sensitivities, that one-third of any change in inflation will spill over into rental growth.

The table below shows the percentage impact on values in the event of a change in the valuation parameters. The absolute impact on values is calculated by multiplying the percentage impact by the fair value of the investment properties.

Change in parameters for the investment properties – Fiscal year

Change in value as a % under varying parameters

Change in value as a % under varying parameters

Management costs residential

Maintenance costs residential

Cost increase/inflation

Market rent residential

Market rent increase residential

Stabilized vacancy rate residential

Discounting and capitalized interest rates total

Regional market

-10%/10%

-10%/10%

-0.5%/+0.5% points

-2%/+2%

-0.2%/+0.2% points

-1%/+1% points

-0.25%/+0.25% points

Dec. 31, 2023

Berlin

0.6/-0.6

1.9/-1.9

5.2/-5.3

-2.4/2.4

-8.7/10.4

1.5/-1.8

10.3/-8.6

Rhine Main Area

0.5/-0.5

1.6/-1.6

3.6/-3.7

-2.4/2.3

-7.1/8.2

1.2/-1.6

8.6/-7.3

Southern Ruhr Area

0.9/-0.9

2.4/-2.4

5.5/-5.5

-2.6/2.6

-7.8/9.1

2.0/-2.0

8.5/-7.3

Rhineland

0.6/-0.6

1.9/-1.9

4.1/-4.2

-2.4/2.4

-7.2/8.3

1.7/-1.7

8.4/-7.2

Dresden

0.8/-0.8

2.4/-2.4

5.4/-5.4

-2.6/2.5

-7.5/8.7

1.9/-1.9

8.5/-7.3

Hamburg

0.6/-0.6

1.8/-1.8

4.2/-4.3

-2.4/2.3

-7.5/8.8

1.3/-1.7

9.0/-7.6

Hanover

0.7/-0.7

2.2/-2.2

4.7/-4.8

-2.5/2.5

-7.2/8.4

1.9/-1.9

8.1/-7.0

Kiel

0.8/-0.8

2.2/-2.3

4.5/-4.6

-2.5/2.5

-6.9/7.8

1.9/-1.9

7.5/-6.5

Munich

0.4/-0.4

1.2/-1.2

3.2/-3.4

-2.1/2.1

-7.3/8.5

0.8/-1.5

9.5/-8.0

Stuttgart

0.6/-0.5

1.7/-1.7

3.5/-3.7

-2.4/2.4

-6.8/7.9

1.5/-1.6

8.1/-7.0

Northern Ruhr Area

1.2/-1.1

3.1/-3.1

5.9/-5.9

-2.8/2.8

-7.0/8.0

2.3/-2.3

7.0/-6.1

Leipzig

0.8/-0.8

2.7/-2.7

6.0/-6.0

-2.5/2.5

-7.9/9.2

2.0/-2.0

8.8/-7.5

Bremen

0.9/-0.9

2.4/-2.4

5.8/-5.8

-2.5/2.5

-8.0/9.4

1.9/-2.0

8.8/-7.6

Westphalia

0.8/-0.8

2.3/-2.3

4.8/-4.8

-2.4/2.4

-6.9/7.9

1.8/-1.9

7.4/-6.5

Freiburg

0.6/-0.6

1.9/-1.9

4.2/-4.3

-2.5/2.4

-7.6/8.9

1.2/-1.7

8.9/-7.5

Other strategic locations

0.8/-0.8

2.3/-2.3

4.6/-4.7

-2.6/2.5

-7.0/8.0

1.8/-1.9

7.7/-6.7

Total strategic locations

0.7/-0.7

2.0/-2.0

4.8/-4.9

-2.4/2.4

-7.8/9.1

1.6/-1.8

9.0/-7.6

Non-strategic locations

0.7/-0.7

2.2/-2.2

3.9/-4.0

-2.3/2.3

-6.0/6.8

1.7/-1.7

6.9/-6.1

Vonovia Germany

0.7/-0.7

2.0/-2.0

4.8/-4.9

-2.4/2.4

-7.8/9.1

1.6/-1.8

9.0/-7.6

Vonovia Sweden*

0.6/-0.6

1.7/-1.7

4.5/-4.8

-2.8/2.8

-7.8/8.9

0.6/-1.1

7.1/-6.2

Vonovia Austria*

n.a./n.a.

0.4/-0.4

0.3/-0.4

-0.5/0.4

-0.9/1.0

0.9/-1.0

4.0/-3.7

  1. * The valuation methods used for the portfolio in Austria and Sweden use and provide valuation parameters that are only partially comparable.

Change in parameters for the investment properties – Previous year

Change in value as a % under varying parameters

Change in value as a % under varying parameters

Management costs residential

Maintenance costs residential

Cost increase/inflation

Market rent residential

Market rent increase residential

Stabilized vacancy rate residential

Discounting and capitalized interest rates total

Regional market

-10%/10%

-10%/10%

-0.5%/+0.5% points

-2%/+2%

-0.2%/+0.2% points

-1%/+1% points

-0.25%/+0.25% points

Dec. 31, 2022

Berlin

0.7/-0.7

2.2/-2.2

6.5/-6.4

-2.6/2.5

-10.3/12.7

1.6/-1.8

12.5/-10.1

Rhine Main Area

0.6/-0.6

1.7/-1.7

4.1/-4.2

-2.4/2.4

-8.0/9.5

1.0/-1.6

10.0/-8.3

Southern Ruhr Area

1.0/-1.0

2.6/-2.6

6.2/-6.2

-2.6/2.6

-8.6/10.2

2.1/-2.1

9.5/-8.0

Rhineland

0.7/-0.7

2.0/-2.0

4.7/-4.8

-2.5/2.5

-8.1/9.5

1.7/-1.8

9.6/-8.1

Dresden

0.9/-0.9

2.7/-2.7

6.4/-6.3

-2.6/2.6

-8.6/10.2

1.9/-2.0

9.9/-8.3

Hamburg

0.7/-0.7

2.1/-2.1

5.2/-5.3

-2.5/2.4

-8.7/10.6

1.3/-1.8

10.7/-8.8

Hanover

0.8/-0.8

2.4/-2.4

5.4/-5.4

-2.5/2.5

-8.0/9.4

1.9/-1.9

9.2/-7.8

Kiel

0.9/-0.9

2.5/-2.5

5.5/-5.5

-2.6/2.5

-7.9/9.3

1.9/-1.9

8.9/-7.6

Munich

0.4/-0.4

1.4/-1.4

3.9/-4.0

-2.2/2.2

-8.4/10.1

0.8/-1.5

11.1/-9.1

Stuttgart

0.6/-0.6

1.8/-1.8

4.1/-4.2

-2.4/2.4

-7.8/9.1

1.5/-1.7

9.3/-7.9

Northern Ruhr Area

1.2/-1.2

3.4/-3.4

6.6/-6.6

-2.8/2.8

-7.7/8.9

2.3/-2.3

7.8/-6.7

Leipzig

0.9/-0.9

3.0/-3.0

7.4/-7.2

-2.6/2.7

-9.1/11.1

2.0/-2.0

10.6/-8.8

Bremen

0.9/-0.9

2.6/-2.6

6.6/-6.4

-2.5/2.5

-8.7/10.4

2.0/-2.0

9.8/-8.2

Westphalia

0.9/-0.9

2.6/-2.6

5.7/-5.8

-2.5/2.5

-7.9/9.3

1.9/-2.0

8.8/-7.5

Freiburg

0.7/-0.6

2.2/-2.2

5.1/-5.1

-2.5/2.5

-8.6/10.3

1.2/-1.8

10.3/-8.5

Other strategic locations

0.8/-0.8

2.5/-2.5

5.3/-5.3

-2.6/2.6

-7.8/9.1

1.9/-1.9

8.7/-7.5

Total strategic locations

0.7/-0.8

2.3/-2.3

5.7/-5.7

-2.5/2.5

-9.0/10.8

1.6/-1.9

10.7/-8.8

Non-strategic locations

0.8/-0.8

2.4/-2.4

4.7/-4.8

-2.3/2.3

-6.7/7.8

1.7/-1.8

8.0/-6.9

Vonovia Germany

0.8/-0.8

2.3/-2.3

5.7/-5.7

-2.5/2.5

-8.9/10.8

1.6/-1.9

10.6/-8.8

Vonovia Sweden*

0.7/-0.7

1.6/-1.7

4.7/-5.1

-2.9/2.8

-8.8/10.2

0.6/-1.2

8.3/-7.1

Vonovia Austria*

n.a.

0.4/-0.4

0.4/-0.5

-0.4/0.4

-1.0/1.1

0.9/-0.9

4.4/-4.0

  1. * The valuation methods used for the portfolio in Austria and Sweden use and provide valuation parameters that are only partially comparable.

Contractual Obligations

In connection with major acquisitions, Vonovia entered into contractual obligations or assumed such obligations indirectly via acquired companies, among other things in the form of Social Charters, which could limit its ability to freely sell parts of its portfolio, increase rents or terminate existing rent agreements for certain units and which, in the event of a breach, could give rise to substantial contractual penalties in some cases.

In many cases, in the event that all or part of a portfolio is transferred or individual residential units are sold, the aforementioned obligations are to be assumed by the buyers, who are in turn subject to the obligation to pass them on to any future buyers. After a certain period of time, the obligations often cease to apply either in full or in part.

All contractual obligations that have a material impact on the market value were taken into account accordingly in the valuation.

Under financing agreements, Vonovia may be subject to fundamental restrictions regarding mandatory investments for maintenance or improvements, or on the use of excess property disposal proceeds, such restrictions being particularly in the form of mandatory minimum capital repayments.

Although the non-current financial liabilities are subject to certain covenants, Vonovia is not subject to any restrictions regarding how it can use its investment properties.

Excess cash from property management is restricted to a certain extent.