Development of the Economy and the Industry
The European Commission describes the EU economy as faced with a complex and challenging environment. In its fall forecast, the Commission expects GDP growth of 0.9% in the EU and 0.8% in the eurozone for 2024. Nevertheless, the overall conditions for gradual, sustainable economic growth are in place, driven by domestic demand. Employment is strong, real incomes are recovering and financing conditions are easing. Meanwhile, the growth outlook is clouded by the aftereffects of high inflation. This is compounded by mounting geopolitical risks and political uncertainty. The German Federal Statistical Office (Destatis) estimates that the German economy shrank by 0.2% in terms of gross domestic product (GDP) in 2024 compared to the previous year and, according to the Kiel Institute for the World Economy (IfW), it is proving unable to break out of stagnation. There is an alternating pattern of quarters with rising and falling economic output. Overall, only the service sectors are on an upward trend, while the manufacturing and construction industries are shrinking. According to the National Institute of Economic Research (NIER), gross domestic product in Sweden is estimated to have risen by 0.5% in 2024. One of the main reasons behind the subdued growth is the continuing reluctance of Swedish households to spend. According to the Institute of Economic Research, Austrian GDP is expected to have contracted by 0.9%. The global slump in demand for industrial goods is weighing on Austrian manufacturing, value creation in the construction industry is declining, and consumer spending by private households has fallen again. For 2025, GDP growth of 0.0% is forecast for Germany (IfW Kiel), 1.2% for Sweden (National Institute of Economic Research, NIER) and 0.6% for Austria (Institute of Economic Research, WIFO).
According to the German Federal Employment Agency, economic stagnation has impacted the labor market in Germany. Unemployment and underemployment (excluding short-time work) increased in 2024 on average for the second year running. At the same time, however, the number of people in employment in 2024 was up compared to the previous year, putting the figure at a new high. The average unemployment rate based on the total civilian labor force rose by 0.3 percentage points year-on-year in 2024 to 6.0%. The NIER estimates the unemployment rate in Sweden at 8.4% in 2024, which is approx. 0.7 percentage points more than in the previous year. According to national calculations by the Austrian Public Employment Service (AMS), the unemployment rate in Austria in June 2024 was 7.0% and thus 0.6 percentage points higher than in the previous year. Based on respective national definitions, the average unemployment rate expected in 2025 is 6.3% for Germany (IfW Kiel), 8.5% in Sweden (NIER) and 7.4% in Austria (WIFO).
Inflation slowed further over the course of 2024, with falling energy prices playing a particular role in this trend in all three countries. Measured against the respective national Consumer Price Indexes (CPI), the average inflation rate was 2.2% in Germany, 2.8% in Sweden and 2.9% in Austria, based on figures from the national statistical offices. Based on respective national definitions, a CPI increase of 2.2% is expected for Germany (IfW Kiel), 1.7% for Sweden (NIER) and 2.3% for Austria (WIFO) for 2025 on average.
In a quest to make a timely return to its 2% medium-term inflation target, the European Central Bank (ECB) had raised key rates in 2023. The interest rate for the deposit facility, which the ECB Governing Council uses to steer the monetary policy course, rose in several steps to 4.00%. June 2024 saw the ECB begin to loosen the monetary reins somewhat, when it lowered its key interest rate in several steps, most recently in December 2024 to 3.00% and to 2.75% on February 5, 2025. High inflation also prompted the Swedish Riksbank to take further steps to lift its policy rate to 4.00% in the course of 2023. After the inflation rate started to move closer to the inflation target again, the policy rate was lowered in several steps, starting in May 2024, to 2.75% by the end of 2024, and 2.50% on January 8, 2025. Further interest rate cuts by the ECB and the Swedish Riksbank are likely to follow this year. In this overall environment, interest rates for construction in Germany, Sweden and Austria recently fell slightly, but were considerably higher in 2024 than before the interest rate turnaround of 2022.
The real estate market paints a mixed picture: Prices on the residential property market have largely stabilized, with prices on an upward trajectory again in some places. The real estate investment market remained relatively subdued, although transaction volumes in the residential segment have started rising again of late. The situation for project developers was a challenging one. Meanwhile, the overall conditions on the rental market in Germany remain favorable from a landlord’s perspective. Given the combination of high demand for housing and a decline in the number of building permits granted, Savills does not expect the rental momentum to come to a standstill. Stubborn supply shortages and rising rents are also likely to translate into rising capital values. Quoted rents continued to increase across Germany; empirica reports that they were 4.7% higher on average over all years of construction in the fourth quarter of 2024 (new construction 5.1%) than in the same quarter of the previous year. According to DB Research, rents for existing contracts increased by more than 2%. Further rent increases are expected for 2025. According to data supplied by Statistics Sweden (SCB), rents in Sweden rose by an average of 5.0% in 2024. The initial data on rent negotiations for 2025 from “Hem & Hyra,” the member magazine published by the Swedish tenants’ association (Hyresgästföreningen), point towards a further sharp rise in rents. In Austria, rents (including newly let apartments) increased in 2024 compared to the previous year by 6.7% according to the Austrian statistical office. According to RE/MAX, rents not subject to rent restrictions will continue to rise in 2025 due to demand.
House prices had cooled down considerably in Germany, Sweden and Austria since their peak in 2022. The drop in prices in Germany came to a standstill in the course of the year on average. The empirica price index for condominiums (all years of construction) was 0.7% lower in the fourth quarter of 2024 compared to the same period of the previous year. In a quarter-on-quarter comparison, prices were up slightly again, by 0.1%, in the fourth quarter. Other market observers are reporting that prices for existing apartments (Immowelt) and condominiums (Europace) are already up slightly on the prior-year levels on average at the turn of the year. In the new construction segment, the empirica price index for condominiums was up by 2.1% year-on-year in the fourth quarter of 2024. Experts from DB Research, Fitch Ratings and Immowelt expect prices to continue to rise in 2025. According to Svensk Mäklarstatistik, purchase prices for tenant-owned apartments (Bostadsrätter) in Sweden were already 5.9% higher in December 2024 compared with the same month of the previous year. A clear recovery has been emerging since the beginning of the year, which was only briefly interrupted by a slump in the middle of the year and cooled off somewhat towards the year-end. Experts at Swedbank expect residential real estate prices to rise by around 5% in 2025. In Austria, the values of the current residential real estate price index of the Austrian central bank (OeNB) on the basis of new and used condominiums and single-family residences show a decrease in the third quarter of 2024 of 2.2% compared with the previous year. Measured in terms of quarter-on-quarter increases, prices more or less stagnated in the second and third quarters of 2024, with movements of -0.1% and -0.2% respectively. According to RE/MAX, the price trend for condominiums in Austria depends to a considerable degree on their location, with an increase expected in central locations in 2025.
The size of the population in Germany, Sweden and Austria is estimated to have risen again in 2024 and is expected to increase further. A large number of large cities and metropolitan areas are affected by housing shortages. Meanwhile, construction activity is on the decline. Residential construction is in a difficult phase in all three countries due to the combination of higher interest rates, less favorable financing conditions and increased/high construction costs. The GdW estimates that only 256,000 apartments will have been completed in Germany in 2024, compared to 294,400 in 2023. The figure could fall to 229,000 in 2025. The German federal government had set itself the goal of building 400,000 new apartments per year in Germany. As any rapid increase in new construction activity is unlikely according to Savills, homes will remain in very short supply for some time to come. Boverket estimates that 52,300 apartments will have to be built per year in Sweden by 2033. Around 40,000 apartments are expected to have been completed in 2024, a figure that is only likely to total 33,000 in 2025. This means that the additional annual need will not be met. The number of construction starts could, however, rise again in 2025 given the slight improvement in the overall conditions. Following an ongoing decline in the number of building permits granted, the number of completions in residential construction in Austria is also likely to be much lower in 2024 and 2025, according to Bank Austria and Exploreal. Given the sustained high demand for housing, CBRE Austria anticipates a structural undersupply in the coming years, particularly in metropolitan areas.
The German residential investment market grew again in 2024. CBRE put the transaction volume at € 8.7 billion, around 50% higher than in the previous year. While the transaction volume was still subdued in the first half of the year, there was a year-end rally in the final quarter with a volume of € 3.9 billion. According to CBRE, the main trends were sales in the context of refinancing rounds, primarily by listed portfolio holders, and also the sale of project developments, particularly to public housing companies. The core and core-plus risk categories accounted for a share of just over 50% in 2024. The proportion of Value-add and opportunistic investments increased significantly. Prime yields at the end of 2024 were 3.4% or 0.05 percentage points higher than in the previous year. CBRE expects the residential real estate investment market to gain momentum in 2025, with a transaction volume of up to € 10 billion. According to Colliers, properties worth € 11.1 billion were traded across all segments on the Swedish transaction market in 2024, representing a year-on-year increase of approx. 44%. In terms of transaction volume, residential properties were the strongest asset class with a share of 32%. According to CBRE, the Austrian real estate investment market saw a transaction volume totaling € 2.7 billion in 2024, 7% less than in the previous year. The share of the residential segment stood at around 25%. Due to high demand, prime yields in the residential segment fell and stood at 4.25% at the end of 2024, 50 basis points lower than in the previous year. EHL reported in the third quarter that residential real estate remains a popular asset class, especially as far as well-let properties in Austria’s urban centers are concerned.
Housing policy developments in Germany in 2024 included changes to the German Buildings Energy Act (GEG) and to the Federal Funding for Efficient Buildings (BEG). On January 1, 2024, a GEG amendment came into force aimed at increasing the proportion of renewable energies in heating systems and at reducing emissions. At the same time, the BEG introduced a guideline that supports the replacement of fossil fuel heating systems with environmentally friendly heating systems by subsidizing the investment costs involved. After the BEG “Climate-friendly new construction” promotional program had been briefly closed to applicants, the German state-owned development bank KfW started accepting applications for subsidized loans again in February 2024. In October, the “Climate-friendly new construction in the low-price segment” promotional program was then launched to create incentives for the construction of apartments in the lower and middle price segments. The program, which will run for a limited period until the end of 2025, requires properties to meet Efficiency House 55 standards. In March 2024, declining balance depreciation was adopted for apartment construction in the context of the German Growth Opportunities Act (Wachstumschancengesetz). This applies for a limited period to newly constructed residential buildings and apartments, or those acquired in the year of completion provided that construction work starts between October 1, 2023, and September 30, 2029. In December 2024, the German government passed a bill to extend the rent cap. The bill is still, however, being considered by parliament and is not making any progress. With the 2024 Annual Tax Act, the German government introduced a new non-profit housing structure from January 1, 2025, providing support to companies that build affordable apartments and rent them out on a long-term basis. At the end of May 2024, the new version of the EU Energy Performance of Buildings Directive came into force, which, among other things, provides for a reduction in energy consumption in residential buildings. The EU is waiving the obligation to refurbish poorly insulated private residential buildings. The beginning of 2025 also saw the entry into force of the land tax reform and adjustments to housing benefit to reflect price and rent trends. The CO2 price will also rise from € 45 to € 55 per metric ton. New building regulations will come into force in Sweden on July 1, 2025. In Austria, a rent cap has applied since 2024 that limits the increase in indicative rents, category-based rents and rents for non-profit apartments. This does not include unrestricted rental agreements. A residential construction package adopted in the spring of 2024 is intended to revive the construction industry and provide more favorable conditions for residential construction loans.
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.