Management System

Management Model

Our management system is based on our corporate strategy, which continued to apply unchanged in the 2016 fiscal year. Details can be found in the Targets and Strategy chapter above. As part of the management of the company, we make a distinction between three segments: Rental, Extension and Sales.

Our Rental segment bundles all of our core business activities that are aimed at the value-enhancing management of our properties. These activities focus on our customers, whom we want to provide with affordable homes to meet their needs. Our business activities center on increasing the value of the company using a strategy of sustainability and profitability.

The Extension segment combines all of the business activities relating to the expansion of our core business to include additional customer-oriented services, e.g., services that are closely related to and/or influence the rental business. The segment comprises the following activities in detail:

  • Our own craftsmen’s organization
  • Our organization for the upkeep and of the residential environment in which our properties are located
  • The provision of cable TV services to our tenants
  • Condominium administration for our own apartments and for third parties
  • The management of units for other owners
  • Metering services for measuring the consumption of water and heating
  • Insurance services for our own apartments and for third parties

The Sales segment is derived from the active management of our portfolio and bundles all real estate sales from our portfolio. This includes the individual sale of apartments from the subportfolio and the sale of entire buildings or pieces of land from the and Non-Core subportfolios; combined, we report these as Non-Core sales.

Performance Indicators

Our management system has a modular structure and makes a distinction between performance indicators at Group level (most meaningful performance indicators within the meaning of DRS 20) and those at segment level.

In order to ensure that our business activities are focused on growing the value of the company in the long term, we have an integrated Group planning and controlling system in place that is based on central performance indicators. Based on the medium-term plans derived from our strategy, which are subject to an annual review and are updated during the year in the event of significant transactions, we prepare a budget for all areas of the Group. In the course of the fiscal year, current business developments are compared with these targets and the current forecasts on a regular basis for all key figures that are relevant to control. The business is then steered accordingly in a targeted manner, with any necessary countermeasures being initiated and tracked.

Performance Indicators (graph)Performance Indicators (graph)

We make a distinction between financial and non-financial performance indicators.

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.
In the “Privatize” subportfolio, our focus is on generating additional added value by privatizing owner-occupied apartments and single-family houses at a premium compared with their fair value.
In the “Non-Core” subportfolio, our focus is on selling properties in locations that offer below-average development potential in the medium to long term to private and institutional investors. Limited potential is defined, in particular, by below-average property condition combined with a location that is of similarly below-average quality.
The “Non-Strategic” subportfolio contains locations and properties that were identified in the latest extensive review of the overall portfolio as not being absolutely essential for further strategic development. Properties in the “Non-Strategic” portfolio are reviewed on a regular basis and offer further sale potential.