Details on Results of Operations by Segment
Rental Segment
At the end of December 2024, the portfolio in the Rental segment had a vacancy rate of 2.0 % (end of December 2023: 2.0 %), meaning that it was again nearly fully occupied.
In the 2024 fiscal year, revenue in the Rental segment increased by 2.2 % year-on-year (2023: 2.1 %) to € 3,323.5 million (2023: € 3,253.4 million). Of the segment revenue in the Rental segment in the 2024 fiscal year, € 2,837.6 million is attributable to rental income in Germany (2023: € 2,790.1 million), € 360.7 million to rental income in Sweden (2023: € 341.6 million) and € 125.2 million to rental income in Austria (2023: € 121.7 million). Organic rent growth (twelve-month rolling) totaled 4.1 % at the end of December 2024 (3.8 % at the end of December 2023). The current rent increase due to market-related factors came to 2.8 % at the end of December (2.3 % at the end of December 2023), while the increase from property value improvements translated into a further 0.9 % (1.0 % at the end of December 2023). All in all, this produced a like-for-like rent increase of 3.7 % at the end of December 2024 (3.3 % at the end of December 2023). New construction and vertical expansion measures also contributed 0.4 % to organic rent growth at the end of December 2024 (0.5 % at the end of December 2023).
The average monthly in-place rent in the residential real estate portfolio within the Rental segment at the end of 2024 came to € 8.01 per m² compared to € 7.74 per m² at the end of 2023. The monthly in-place rent in the German portfolio at the end of 2024 came to € 7.89 per m² (end of 2023: € 7.63 per m²), with a figure of € 10.48 per m² (end of 2023: € 10.18 per m²) for the Swedish portfolio and € 5.71 per m² for the Austrian portfolio (end of 2023: € 5.47 per m²). The rental income from the portfolio in Sweden reflects all-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).
Total maintenance, modernization, investments in the existing portfolio and new construction in the 2024 fiscal year came in at € 1,601.0 million, up by around 5% on the prior-year value of € 1,527.0 million.
Maintenance, Modernization/Portfolio Investments and New Construction (continuing operations)
Maintenance, Modernization – portfolio investments and New Construction (continuing operations)
in € million | 2023 | 2024 | Change in % | |||
Expenses for maintenance | 426.2 | 470.5 | 10.4 | |||
Capitalized maintenance | 296.3 | 294.2 | -0.7 | |||
Maintenance measures | 722.5 | 764.7 | 5.8 | |||
Modernization & portfolio investments* | 513.3 | 611.8 | 19.2 | |||
New construction (to hold) | 291.2 | 224.5 | -22.9 | |||
Modernization, portfolio investments and new construction | 804.5 | 836.3 | 4.0 | |||
Total sum of maintenance, modernization, portfolio investments and new construction* | 1,527.0 | 1,601.0 | 4.8 | |||
- *Previous year’s values (2023) adjusted to current key figure definition, incl. portfolio investments.
Operating expenses in the Rental segment in the 2024 fiscal year amounted to € -467.3 million and were thus up by 9.8 % on the figure for 2023 of € -425.5 million.
At € 2,385.7 million, Adjusted EBITDA in the Rental segment in the 2024 fiscal year was almost on a par with the previous year (2023: € 2,401.7 million) despite the sales completed in 2024 and higher maintenance expenses.
Value-add Segment
In the 2024 fiscal year, the Value-add segment was hit by the general price increases for construction services and materials, as well as productivity losses due to smaller-scale investments. Modernization and continuous investments in the existing portfolio showed positive development, up by 19.2 % on the 2023 value in the 2024 fiscal year. This was also thanks to our increased investment in new photovoltaic facilities and heat pumps. In the multimedia business, the conclusion of an agreement to lease the existing coax network had a positive effect of € 58.0 million in the 2024 fiscal year.
All in all, revenue from the Value-add segment came to € 1,359.4 million in the 2024 fiscal year, up by 11.0 % on the value of € 1,224.7 million seen in 2023. External revenue from our Value-add activities with our end customers in the 2024 fiscal year amounted to € 179.6 million and had thus increased by 37.2 % on 2023, when the figure was € 130.9 million. This was mainly due to a positive effect in the multimedia business resulting from the leasing of coax networks. Intra-Group revenue came to € 1,179.8 million in the 2024 fiscal year, 7.9 % higher than the value of € 1,093.8 million for 2023.
Operating expenses in the Value-add segment in the 2024 fiscal year amounted to € -1,191.0 million and were thus up by 6.4 % on the figure for 2023 of € -1,119.2 million.
Adjusted EBITDA Value-add came to € 168.4 million in the 2024 fiscal year, up significantly on the figure of € 105.5 million reported in 2023.
Recurring Sales Segment
In the Recurring Sales segment, the income from disposal of properties came to € 441.3 million in the 2024 fiscal year with 2,470 units sold (2023: 1,590), up by 38.2 % on the value of € 319.3 million reported in 2023; with 2,037 units sold in Germany (2023: 1,201) and 433 in Austria (2023: 389). Income of € 339.5 million is attributable to sales in Germany (2023: € 214.6 million) and € 101.8 million to sales in Austria (2023: € 104.7 million).
The fair value step-up was down by 22.6 % on the previous year’s value of 33.4 % due to a decision to prioritize liquidity and profitability in the 2024 fiscal year. This was also due to lower step-ups for sales in Germany and Austria.
Selling costs in the Recurring Sales segment came in at € -23.9 million in the 2024 fiscal year, up by 44.8 % on the value of € -16.5 million for the previous year.
Adjusted EBITDA Recurring Sales came in at € 57.6 million in the 2024 fiscal year, down by 9.1 % on the prior-year value of € 63.4 million.
In the 2024 fiscal year, 5,184 units from the No Core/Other portfolio (2023: 2,248) were also sold as part of our portfolio adjustment measures, with proceeds totaling € 662.5 million (2023: € 553.7 million). At 2.3 %, the fair value step-up for Non Core/Other disposals in the 2024 fiscal year was higher than the figure for the previous year (1.1 %).
Development Segment
The Development segment was impacted primarily by high construction costs and high interest rates for construction in the 2024 fiscal year.
In the Development to sell area, a total of 2,471 units were completed in the 2024 fiscal year (2023: 1,128 units), all of them in Germany (2023: 769). No units were completed in Austria in 2024 (2023: 359). In the 2024 fiscal year, income from the disposal of Development to sell properties amounted to € 889.4 million (2023: € 348.6 million), with € 795.4 million attributable to project development in Germany (2023: € 296.7 million) and € 94.0 million to project development in Austria (2023: € 51.9 million). The resulting gross profit for Development to sell came to € 47.8 million in the 2024 fiscal year with a margin of 5.4 % (2023: gross profit of € 47.7 million, margin of 13.7 %).
Development operating expenses came to € -41.7 million in the 2024 fiscal year, 5.3 % above the comparative value of € -39.6 million seen in the previous year.
Adjusted EBITDA in the Development segment amounted to € 13.4 million in the 2024 reporting period (2023: € 13.2 million).
In the “Development to hold” area, a total of 1,276 units were completed in the 2024 fiscal year (2023: 1,332 units), of which 1,264 were in Germany (2023: 851 units), with none in Austria (2023: 307 units) and 12 in Sweden (2023: 174 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.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g. , facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Sustainability Performance Index (SPI)
Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.
Sustainability Performance Index (SPI)
Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.
Non-core 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.
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).
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.