Following the successful integration of the GAGFAH, Franconia and SÜDEWO subportfolios, which were acquired in the previous year, into the Vonovia real estate portfolio, our Rental segment developed positively in the 2016 fiscal year. These acquired subportfolios were included with a full fiscal year volume for the very first time in 2016.
Adjusted EBITDA Rental rose by 13.2% from € 924.4 million in 2015 to € 1,046.2 million in 2016.
Rental income in the Rental segment rose by 8.7% from € 1,414.6 million in 2015 to € 1,538.1 million in 2016. The GAGFAH portfolio contributed € 562.5 million (March to December 2015: € 479.3 million) to this amount, with the Franconia portfolio contributing € 19.6 million (April to December 2015: € 14.5 million) and the SÜDEWO portfolio contributing € 104.6 million (July to December 2015: € 52.3 million). If we leave the addition of the acquired portfolios of GAGFAH, Franconia, SÜDEWO and the portfolio acquired in the first quarter of 2016 out of the equation, then rental income came to € 838.0 million in 2016, down slightly on the level seen in the previous year of € 868.4 million as a result of sales.
The monthly in-place rent per square meter rose by 4.7% from € 5.75/m2 as of December 2015 to € 6.02/m2 in December 2016. At the end of December 2016, the GAGFAH portfolio was included in the Group value at a monthly in-place rent of € 5.74/m2 (end of December 2015: € 5.55/m2), the Franconia portfolio at a monthly in-place rent of € 6.07/m2 (end of December 2015: € 5.89/m2), and the SÜDEWO portfolio at a monthly in-place rent of € 7.04/m2 (end of December 2015: € 6.87/m2). The monthly in-place rent per square meter, on a like-for-like basis (incl. GAGFAH, Franconia and SÜDEWO), came to € 6.01/m2 at the end of 2016. This corresponds to an increase of 3.3% compared to € 5.82/m2 the end of December 2015.
We further reduced our vacancy rate in the 2016 reporting period. The vacancy rate dropped from 2.7% at the end of 2015 to 2.4% at the end of 2016. This development also had a positive impact on rental income. Accordingly, the EPRA vacancy rate fell from 2.5% at the end of 2015 to 2.2% at the end of 2016.
We consistently continued our modernization and maintenance strategy in the 2016 fiscal year as planned. Expenses for maintenance totaled € 247.4 million in 2016 and were therefore up by 2.1% over the expenses for maintenance incurred in 2015, namely € 242.2 million, largely due to acquisitions.
In 2016, expenses for maintenance totaling € 94.4 million were attributable to the GAGFAH portfolio (March to December 2015: € 82.3 million), with € 3.6 million attributable to the Franconia portfolio (April to December 2015: € 3.4 million) and € 11.9 million attributable to the SÜDEWO portfolio (July to December 2015: € 3.9 million). Expenses for maintenance in the subportfolio, excluding the acquired GAGFAH, Franconia and SÜDEWO portfolios, came in at € 137.5 million in 2016, down by around 10% on the figure for 2015 (€ 152.6 million), mainly due to sales. We increased our value-enhancing modernization program by more than 32.8% in the 2016 fiscal year, from € 355.6 million in 2015 to € 472.3 million in 2016. This means that, including capitalized maintenance of € 72.7 million (2015: € 88.5 million), we invested a total volume of € 792.4 million (2015: € 686.3 million) in maintenance and modernization work on our properties in the 2016 fiscal year.
The capitalized maintenance and modernization measures in the Rental segment can be derived largely from the reported capitalized modernization costs for investment properties, plus the interim profits made by our own craftsmen’s organization, which is responsible for performing/coordinating services. The term “capitalized maintenance” refers to the capitalizable expenses that help maintain the value of the real estate portfolio. The term “modernization measures” refers to the capitalizable expenses that help increase the value of the real estate portfolio.
In relation to the average number of square meters of living area, this corresponds to spending on modernization and maintenance of € 36.18/m2 in the 2016 reporting period (2015: € 33.04/m2).
In the 2016 fiscal year, operating expenses in the Rental segment came to € -244.5 million, up by 1.4% on the prior-year value of € -248.0 million due to acquisitions.