Results of Operations

Overview

Vonovia started the new fiscal year with a first quarter that was largely in line with expectations. Core business in the Rental segment showed positive economic development, bolstered by strong demand for rental apartments and positive rental price development. The overall conditions for the other segments remained subdued and virtually unchanged.

The following key figures provide an overview of the development of Adjusted EBT and other value drivers in the reporting period.

Any analysis of the figures reported has to consider the fact that the prior-year figures are reported based on the current segmentation.

The sale of the Care business activities has since been initiated by the Management Board of Deutsche Wohnen and this segment is expected to be sold before December 2024. Accordingly, the majority of the Care segment is presented as a discontinued operation. A small part of the original Care segment (25 properties operated by third parties) was transferred to the Rental segment and generated a business volume of € 6.1  million in segment revenue in the first quarter of 2024 (first quarter of 2023: € 6.0 million).

Adjusted EBT

Adjusted EBT

in € million

3M 2023*

3M 2024

Change in %

12M 2023

Revenue in the Rental segment

806.3

824.2

2.2

3,253.4

Expenses for maintenance

-117.4

-113.6

-3.2

-426.2

Operating expenses in the Rental segment

-104.7

-117.7

12.4

-425.5

Adjusted EBITDA Rental

584.2

592.9

1.5

2,401.7

Revenue in the Value-add segment

345.4

325.1

-5.9

1,224.7

thereof external revenue

35.7

28.2

-21.0

130.9

thereof internal revenue

309.7

296.9

-4.1

1,093.8

Operating expenses in the Value-add segment

-319.0

-313.6

-1.7

-1,119.2

Adjusted EBITDA Value-add

26.4

11.5

-56.4

105.5

Revenue in the Recurring Sales segment

69.8

74.6

6.9

319.3

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

-44.7

-60.9

36.2

-239.4

Adjusted result Recurring Sales

25.1

13.7

-45.4

79.9

Selling costs in the Recurring Sales segment

-3.3

-4.6

39.4

-16.5

Adjusted EBITDA Recurring Sales

21.8

9.1

-58.3

63.4

Revenue from disposal of
Development to sell properties

30.2

30.6

1.3

348.6

Cost of Development to sell

-25.0

-27.3

9.2

-300.9

Gross profit Development to sell

5.2

3.3

-36.5

47.7

Rental revenue Development

1.2

1.7

41.7

5.1

Operating expenses in the Development segment

-10.9

-11.5

5.5

-39.6

Adjusted EBITDA Development*

-4.5

-6.5

44.4

13.2

Adjusted EBITDA Total (continued operations)*

627.9

607.0

-3.3

2,583.8

Adjusted net financial result

-150.3

-160.8

7.0

-625.1

Intragroup profit/-losses

-1.5

-1.9

28.4

17.7

Straight-line Depreciation**

-27.0

-27.8

3.0

-110.2

Adjusted EBT (continued operations)

449.1

416.5

-7.3

1,866.2

Adjusted EBT (continued operations per share in €***

0.56

0.51

-9.4

2.31

Minorities

27.6

41.3

49.6

136.0

Adjusted EBT (continued operations) after minorities

421.5

375.2

-11.0

1,730.2

Adjusted EBT (continued operations) after minorities
per share in €***

0.53

0.46

-13.0

2.12

  1. *Previous year's values (2023) adjusted to current key figure and segment definition.
  2. **Depreciation on concessions/property rights/licenses, self-developed software, self-used real estate, technical equipment and machinery, as well as other equipment/operating and business equipment.
  3. ***Based on the weighted average number of shares carrying dividend rights.

As of March 31, 2024, Vonovia had a workforce of 11,999 employees (March 31, 2023: 12,009) in its continuing operations.

As of the end of the first quarter of 2024, Vonovia managed a portfolio comprising 543,427 of its own residential units (end of the first quarter of 2023: 548,368), 163,230 garages and parking spaces (end of the first quarter of 2023: 164,985) and 8,523 commercial units (end of the first quarter of 2023: 8,817). Vonovia also managed 69,879 residential units (end of the first quarter of 2023: 70,583) on behalf of third parties.

Details on Results of Operations by Segment

Rental Segment

At the end of March 2024, the portfolio in the Rental segment had a vacancy rate of 2.2% (end of March 2023: 2.2%), meaning that it was nearly fully occupied.  

Rental segment revenue increased by 2.2% (3M 2023: 2.5%), from € 806.3 million in the first three months of 2023 to € 824.2 million in the first three months of 2024.   Of the Rental segment revenue, in the 2024 reporting period rental income in Germany accounted for € 704.3 million (3M 2023: € 692.0 million), rental income in Sweden for € 89.8 million (3M 2023: € 85.7 million) and rental income in Austria for € 30.1 million (3M 2023: € 28.6 million). Organic rent growth (twelve-month rolling) totaled 3.8% (3.4% as of March 31, 2023).   The current rent increase due to market-related factors came to 2.1% (1.2% as of March 31, 2023), while the increase from property value improvements translated into a further 1.4% (1.5% as of March 31, 2023).     All in all, this corresponds to a like-for-like rent increase of 3.5% (2.7% as of March 2023).   New construction and vertical expansion measures also contributed 0.3% (0.7% as of March 31, 2023) to organic rent growth.  

The average monthly in-place rent within the Rental segment at the end of March 2024 came to € 7.78 per m², compared to € 7.54 per m² at the end of March 2023. The monthly in-place rent at the end of March 2024 amounted to € 7.67 € per m² in Vonovia’s German portfolio (end of March 2023: € 7.46  per m²), to € 10.21 per m² in its Swedish portfolio (end of March 2023: € 9.70 per m²) and to € 5.51 per m² in its Austrian portfolio (end of March 2023: € 5.26 per m²). The rental income from the portfolio in Sweden is derived from inclusive rents, meaning that the amounts contain operating, heating and water supply costs. Moreover, the rental income from the Austrian real estate portfolio includes maintenance and improvement contributions (EVB).

We have adapted our modernization, new construction and maintenance strategy to reflect the current overall financial conditions in the 2024 fiscal year. The overview below provides details on maintenance, modernization and new construction.

Maintenance, Modernization and New Construction

Maintenance, Modernization and New Construction

in € million

3M 2023*

3M 2024

Change in %

12M 2023

Expenses for maintenance

117.4

113.6

-3.2

426.2

Capitalized maintenance

51.5

47.4

-8.0

296.3

Maintenance measures

168.9

161.0

-4.7

722.5

Modernization & Portfolio Investments

122.0

107.8

-11.6

470.8

New construction (to hold)

54.0

47.8

-11.5

291.2

Modernization, Portfolio Investments and
New Construction

176.0

155.6

-11.6

762.0

Total Sum of Maintenance, Modernization,
Portfolio Investments and New Construction

344.9

316.6

-8.2

1,484.5

  1. *Previous year's values (

    2023) adjusted to current key figure and segment definition.

Operating expenses in the Rental segment in the first three months of 2024 were up by 12.4% on the figures for the first three months of 2023, from € 104.7 million to € 117.7 million.  All in all, Adjusted EBITDA Rental came to € 592.9 million in the first three months of 2024, up by 1.5% on the prior-year value of € 584.2 million. 

Value-add Segment

Developments in the Value-add segment were dominated by the current overall conditions for our own craftsmen’s organization. The reduced volume of modernization work, general price increases for construction services and materials, as well as productivity losses due to smaller-scale investments and increased costs due to a change to new technology (switch from gas heating to heat pumps) had a negative impact on economic development.

All in all, revenue from the Value-add segment came to € 325.1 million in the 2024 reporting period, down by 5.9% on the value of € 345.4 million seen in the first three months of 2023.  External revenue from our Value-add activities with our end customers in the first three months of 2024 declined by 21.0% by comparison with the first three months of 2023, from € 35.7 million to € 28.2 million.  This is mainly attributable to the trend in the area of energy sales. Intra-group revenue fell by 4.1%, from € 309.7 million in the first three months of 2023 to € 296.9 million in the first three months of 2024. 

Operating expenses in the Value-add segment in the first three months of 2024 were down by 1.7% on the figures for the first three months of 2023, from € 319.0 million to € 313.6 million. 

Adjusted EBITDA Value-add came to € 11.5 million in the first three months of 2024, which represents a significant decrease on the figure of € 26.4 million reported for the first three months of 2023.

Recurring Sales Segment

In the Recurring Sales segment, income from the disposal of properties in the first three months of 2024 came to € 74.6 million, which was 6.9% higher than the prior-year value of € 69.8 million in the first three months of 2023. 407 residential units were sold (3M 2023: 282), of which 340 were located in Germany (3M 2023: 143) and 67 in Austria (3M 2023: 139). Of this amount, income from sales in Germany accounted for € 57.3 million (3M 2023: € 31.8 million) and income from sales in Austria for € 17.3 million (3M 2023: € 38.0 million).

In the first three months of 2024, the fair value step-up in the portfolio came to 22.4% and was thus lower than the value of 56.0% seen in the first three months of 2023. This was due primarily to lower step-ups for sales in Germany.

Selling costs in the Recurring Sales segment came in at € 4.6 million in the first three months of 2024, up by 39.4% on the prior-year value of € 3.3 million seen in the first three months of 2023.  Adjusted EBITDA Recurring Sales amounted to € 9.1 million in the first three months of 2024, down considerably on the value of € 21.8 million for the first three months of 2023.

Moreover, in the first three months of 2024, 2,409 residential units from the Non-core/Other portfolio (3M 2023: 381) were sold as part of our portfolio adjustment measures, with proceeds totaling € 265.6 million (3M 2023: € 46.0 million). At 0.1%, the fair value step-up for Non-core/Other disposals in the 2024 reporting period was significantly lower than the figure for the first three months of 2023 (19.7%).  

Development Segment

Economic development in the Development segment was adversely affected above all by the rise in construction costs and interest rates in the reporting period.

In the “Development to sell” area, a total of 692 units were completed in Germany in the 2024 reporting period (3M 2023: 104 units). Proceeds from the sale of development properties to sell amounted to € 30.6 million (3M 2023: € 30.2 million) in the first three months of 2024. Of this amount, € 23.3 million was attributable to project development in Germany (3M 2023: € 18.3 million) and € 7.4 million to project development in Austria (3M 2023: € 11.9 million). The resulting gross profit for Development to sell came to € 3.3 million in the first three months of 2024, with a margin of 10.8% (3M 2023: € 5.2 million, margin of 17.2%).

Development operating expenses came to € 11.5 million in the first three months of 2024, which was 5.5% higher than the value of € 10.9 million for the first three months of 2023.

Adjusted EBITDA in the Development segment amounted to € -6.5 million in the 2024 reporting period (3M 2023: € -4.5 million).

In the “Development to hold” area, a total of 153 units were completed in the first three months of 2024 (3M 2023: 675 units), of which 153 were in Germany (3M 2023: 307 units), none were in Austria (3M 2023: 296 units) and none were in Sweden (3M 2023: 72 units).

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 Deutsche Wohnen

The Adjusted EBITDA Deutsche Wohnen is calculated by deducting the operating expenses of the Deutsche Wohnen segment and the carrying amount of properties sold from the segment revenue of the Deutsche Wohnen Group.

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.

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.

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 (in € per square meter) on a like-forlike basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-forlike 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 (in € per square meter) on a like-forlike basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-forlike 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 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.

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 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.

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).