Expected Development of Business

Comparison of the Forecast with the Results from the 2017 Fiscal Year

The 2017 fiscal year was once again a very successful year for Vonovia overall. We were systematic in the implementation of our corporate strategy: the expansion of our investment program, the further improvements to efficiency when managing our properties and the expansion of our Value-add Business. Bolstered by the acquisition of conwert, we once again further expanded our leading market position in 2017.

At the level of the Group as a whole, we were able to achieve a significant further improvement in our most meaningful performance indicators within the meaning of DRS 20 in the 2017 fiscal year, namely adjusted NAV per share, FFO1 and , far exceeding the forecast we published in the 2016 Annual Report and achieving the forecast values most recently published in the Interim Report for the third quarter of 2017.

The table below provides an overview of the development of our forecast performance indicators and the target achievement level for these indicators in 2017.

 

 

Actual 2016

 

Forecast for 2017*

 

Last Forecast for 2017 in the 2017 Q3 Report

 

Actual 2017

 

Forecast 2018

*

According to the Group management report 2016, excl. conwert

 

 

 

 

 

 

 

 

 

 

 

Adjusted NAV/share

 

€ 30.75

 

€ 31–32

 

suspended

 

€ 38.49

 

suspended

EPRA NAV/share

 

€ 36.58

 

€ 37–38

 

suspended

 

€ 43.88

 

suspended

FFO 1

 

€ 760.8 million

 

€ 830–850 million

 

€ 910–920 million (upper end)

 

€ 920.8 million

 

€ 960–980 million

FFO 1/share

 

€ 1.63

 

€ 1.78–1.82

 

€ 1.88–1.90

 

€ 1.90

 

€ 1.98–2.02

CSI

 

Increase of 8%

 

Similar CSI as 2016

 

Similar CSI as 2016

 

Increase of 1.6%

 

Similar CSI as 2017

Rental income from property management

 

€ 1,538 million

 

€ 1,530–1,550 million

 

€ 1,660–1,680 million

 

€ 1,667.9 million

 

€ 1,660–1,680 million

Organic rent increase

 

3.3%

 

Increase of 3.5–3.7%

 

Increase of approx. 4.0%

 

4.2%

 

Increase of 4.6–4.8%

Vacancy rate

 

2.4%

 

< 2.5%

 

approx. 2.5%

 

2.5%

 

< 2.5%

Maintenance incl. capitalized maintenance

 

€ 320.1 million

 

approx. € 340 million

 

approx. € 350 million

 

€ 346.2 million

 

approx. € 360 million

Modernization and new construction

 

€ 472.3 million

 

€ 700–730 million

 

approx. € 750 million

 

€ 778.6 million

 

approx. € 1,000 million

Number of units sold Privatize

 

2,701

 

approx. 2,300

 

approx. 2,600

 

2,608

 

approx. 2,300

Step-up Privatize

 

36.2%

 

approx. 35%

 

approx. 30%

 

32.6%

 

approx. 30%

Number of units sold Sell portfolio

 

23,930

 

Continue opportunistic sales

 

up to 10,000

 

9,172

 

Continue opportunistic sales

Step-up Sell portfolio

 

5.4%

 

> 0%

 

approx. 7%

 

7.9%

 

> 0%

Our adjusted NAV per share came in at € 38.49 in 2017, up by 25.2% on the prior-year value of € 30.75. This includes effects from adjustments of investment properties in the amount of € 3.4 billion in total. The distribution of the dividend – taking into account the scrip dividend (acceptance rate 49.9%) of € 263.3 million to our shareholders in 2017 had the opposite effect. Our NAV increased by 24.9%, from € 17,047.1 million at the end of 2016 to € 21,284.6 million as of December 31, 2017.

FFO 1 rose by 21.0% to € 920.8 million in 2017 (2016: € 760.8 million), putting it slightly ahead of the most recent forecast for the upper forecast range value of between € 910 million and € 920 million, and well ahead of the forecast range of between € 830 million and € 850 million announced at the beginning of the year in the 2016 Annual Report. This is largely due to the acquisition of conwert, the acquisition of an additional real estate portfolio including 1,032 units as of July 1, 2017, and business developments that were, in general, better than expected at the time in the 2016 Annual Report was published.

We were also able to further improve our customer satisfaction. The CSI, which we had expected to be on a par with the 2016 fiscal year in 2017, was exceeded by 1.6%.

CSI (Customer Satisfaction Index)
The CSI is determined at regular intervals by means of systematic customer surveys and reflects how our services are perceived and accepted by our customers. The CSI is determined on the basis of points given by the customers for our properties and their neighborhood, customer service and commercial and technical support as well as maintenance and modernization management.
Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
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.