Fair Values

Major market developments and valuation parameters that have an impact on the fair values of Vonovia are assessed every quarter. The entire portfolio was revalued as of June 30, 2025 and as of December 31, 2025.

The demand for housing remains high and rent development is positive. Our assessment is that this trend will continue in the coming years. Based on market data, we therefore assume an average increase in market rents of 2.4% over the next ten years in the valuation of the portfolio. The market values of our properties are also being helped along by the investments made in the energy-efficient modernization of our buildings and improvements to the fittings in our apartments. On the market, the higher rents met with stabilizing return expectations among property buyers, particularly in the first half of the year. Overall, the fair value of our real estate portfolio was higher than in the previous year and, after adjustments for acquisitions and sales, and excluding currency effects, changed by 2.9%. The positive trend in real estate values has stabilized both across the two valuation periods and across all three countries.

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

Vonovia’s project developments for subsequent management within its own portfolio are measured at acquisition and production costs until the construction work is complete as the fair value cannot be reliably calculated on a continuing basis. This is subject to a review of the values applied if triggering events occur. The fair value for the nursing care properties was assessed by the external appraiser W&P Immobilienberatung GmbH.

Regular Determination of the Fair Values Creates a Transparent Valuation of the Company’s Properties

Calculating and showing the fair values provides a control parameter inside the company and also helps to make the development of the value of our assets transparent to people outside the company.

The fair value of the portfolio of residential properties was determined, in accordance with IAS 40 and IFRS 13, on the basis of the International Valuation Standard Committee’s definition of market value.

Vonovia, in principle, measures its portfolio on the basis of the discounted cash flow (DCF) method. Under the DCF methodology, the expected future cash inflows and outflows associated with a property are forecast and discounted to the date of valuation as the net present value. The cash inflows in the DCF model mainly comprise expected rental income (current in-place rent, current inclusive rent in Sweden, market rents as well as their development) taking vacancy losses and also sales revenues for an Austrian subportfolio into account. The expected rental income is derived for each location from the latest rent indices and rent tables (including Value AG, Immobilienverband Deutschland [IVD] and the Austrian Economic Chamber [WKÖ]) as well as from studies on spatial prosperity (Federal Institute for Research on Building, Urban Affairs and Spatial Development [BBSR], Prognos, Value AG, Federal Statistical Office, Statistics Austria, etc.). In Sweden, rents and rent increases are defined as part of negotiations with the Swedish tenants’ association (“Hyresgästföreningen”) and are reflected accordingly in the valuation model. The expected sales revenues in Austria are derived from historical sale prices as well as market data (e. g., the Austrian Economic Chamber [WKÖ], EHL). 

On the cash outflow side, maintenance expenses and administrative costs are taken into account. Further cash outflows include, for example, ground rents, non-allocable ancillary costs, rent losses and, in Austria, selling costs. In the Swedish valuation, further expenses to be borne by the owner are also taken into account in the DCF model due to the inclusive rents that are a special feature of this market. All cash outflows are inflated in the reporting period. Modernization measures carried out in the housing stocks are factored in by decreasing the current maintenance expenses and adjusting market rents. The commercial properties in the portfolio are mainly small commercial units for the supply of the local residential environment. Different cost approaches are used to those for residential properties, and the capitalized interest rates were adjusted to reflect the market specifics. 

The recognition and valuation of investment properties are explained in detail in the notes to the consolidated financial statements (see [D27] Investment Properties).

The fair value of Vonovia’s real estate portfolio comprising residential buildings, commercial properties, garages and parking spaces as well as project developments, existing areas with construction potential and land areas with hereditary building rights granted, as well as nursing care facilities, was € 84,448.2 million as of December 31, 2025 (2024: € 81,971.4 million). Net income from fair value adjustments of investment properties in the income statement comes to € 1,390.0 million (2024: € -1,559.0 million).