At the end of 2017, the net asset value (NAV), in accordance with EPRA standards, amounted to € 21,284.6 million, 24.9% higher than the level at the end of 2016 (€ 17,047.1 million). This is largely due to net income from fair value adjustments of investment properties in the 2017 fiscal year. Net income from fair value adjustments amounted to € 3,434.1 million in 2017 (2016: € 3,236.1 million). By contrast, the goodwill impairment of € 337.3 million reduced the EPRA NAV. The need for impairment arose for the East region due to a further increase in property values due to further yield compression, particularly in Berlin, in connection with a rise in the cost of capital (WACC) as a result of an increased base interest rate and a lower level of indebtedness of the peer group. The adjusted NAV rose from € 14,328.2 million to € 18,671.1 million. This represents an increase in the adjusted NAV per share from € 30.75 to € 38.49.
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.
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 NAV/Adjusted NAV
The presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business model. The equity attributable to Vonovia’s shareholders is adjusted to reflect deferred taxes on investment properties/assets held for sale, the fair value of derivative financial instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted NAV, which involves eliminating goodwill in full, is also reported.