EPRA Reporting

Vonovia SE has been a member of since 2013. The eponymous 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.

In order to make it easier to compare real estate companies and to reflect special features that apply to the real estate sector, EPRA has developed a framework for standardized reporting that goes beyond the scope of the IFRS.

As already reported in the previous year, Vonovia reports the based on the Best Practice Recommendations (BPRs). Vonovia only uses some of the EPRA key figures as performance indicators, which is why they are reported outside of the report on economic position. They are non-GAAP measures.

We would like to point out that the EPRA BPRs refer generally to both residential and commercial real estate companies. Vonovia’s business model is based primarily on renting out homes and offering housing-related services. Unlike companies with a commercial portfolio and, as a result, a relatively small number of properties, Vonovia’s portfolio features a large number of fairly similar residential units. This means that it does not make sense for a company specializing in residential real estate to report much of the information recommended in the EPRA BPRs, which focus in particular on significant individual properties. This is why, with regard to the current real estate portfolio, we have opted not to report an analysis of the lease expiration profile (the lease agreements tend to be concluded for an indefinite period), the estimated market rent upon the expiry of the lease or the ten biggest tenants in terms of .

When it comes to real estate development, too, an area that can be taken to include Vonovia’s new apartment construction area, the resulting properties tend, as in the existing portfolio, to be fairly similar residential units on the whole. As a result, we do not publish separate information on individual large properties. In general, the development projects are executed on the company’s own land and do not involve third-party owners.

EPRA Key Figures

in € million

 

 

 

 

 

2016

 

2015

 

Change in %

 

 

 

 

 

 

 

 

 

 

 

EPRA-Performance Measure

 

Definition

 

Purpose

 

 

 

 

 

 

EPRA Earnings

 

Earnings from operational activities.

 

A key measure of a company’s underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.

 

448.5

 

329.2

 

36.2

EPRA NAV

 

Net Asset Value adjusted to include properties and other investment interests at fair value and exclude certain items not expected to crystallize in a long-term investment property business model.

 

Makes adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment strategy.

 

17,047.1

 

13,988.2

 

21.9

EPRA NNNAV

 

EPRA NAV adjusted to include the fair values of financial instruments, debt and deferred taxes.

 

Makes adjustments to EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company.

 

12,034.4

 

9,739.8

 

23.6

EPRA Net Initial Yield in %

 

Annualized rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers´costs.

 

A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y.

 

4.1

 

4.5

 

-0.4 pp

EPRA topped-up Net Initial Yield in %

 

This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents).

 

 

 

4.1

 

4.5

 

-0.4 pp

EPRA Vacancy rate in %

 

Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio.

 

A “pure” (%) measure of investment property space that is vacant, based on ERV.

 

2.2

 

2.5

 

-0.3 pp

EPRA Cost Ratio (incl. direct vacancy costs) in %

 

Administrative & operating costs (including costs of direct vacancy) divided by gross rental income.

 

A key measure to enable meaningful measurement of the changes in a company´s operating costs.

 

28.4

 

31.9

 

-3.5 pp

EPRA Cost Ratio (excl. direct vacancy costs) in %

 

Administrative & operating costs (excluding costs of direct vacancy) divided by gross rental income.

 

 

 

27.0

 

30.2

 

-3.2 pp

EPRA (European Public Real Estate Association)
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.
EPRA Key Figures
For information on the EPRA key figures, we refer to the chapter on "segment.
EPRA (European Public Real Estate Association)
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.
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding rent agreements before the deduction of non-transferable ancillary costs.