Sales Segment

We successfully continued our selective sales strategy in the Sales segment in the 2017 fiscal year. The segment covers all business activities relating to the sale of single residential units () and the sale of entire buildings or land and commercial units ( previously known as Non-Core/Non-Strategic).

In the 2017 fiscal year, income from the disposal of properties came to € 1,206.4 million, down by 1.8% on the value for 2016 (€ 1,227.9 million). This was driven by the sales from the conwert portfolio in 2017, which accounted for a volume of € 600.1 million, whereas sales in the previous year were characterized primarily by a block sale of 13,570 units to LEG. We sold a total of 11,780 apartments in the 2017 fiscal year (2016: 26,631). 2,608 of these apartments were attributable to the Privatize portfolio (2016: 2,701) and 9,172 to the Sell portfolio (2016: 23,930). We sold 2,779 apartments and 865 commercial units from the conwert portfolio in the 2017 fiscal year. The sale of commercial units from the conwert portfolio were achieved mainly in the context of a block sale in the first quarter of 2017.

In the reporting period, came to € 110.8 million, 19.8% above the comparative value of € 92.5 million. At 32.6%, the in the Privatize portfolio was lower than for the previous year (36.2%). This was due to the higher property values at the end of 2016 and as of 30 June, 2017. In addition, 392 privatizations were achieved as part of block sales. If these sales are left out of the equation, then the step-up in the portfolio comes to 35.0%.

The fair value step-up in the Sell portfolio, on the other hand, came in at 7.9%, up on the comparative value of 5.4% for 2016.

Adjusted EBITDA Sales

in € million

 

2016

 

2017

 

Change in %

 

 

 

 

 

 

 

Income from disposal of properties

 

1,227.9

 

1,206.4

 

-1.8

Fair value of properties sold adjusted to reflect effects not relating to the period from assets held for sale

 

-1,107.7

 

-1,065.5

 

-3.8

Adjusted profit from disposal of properties

 

120.2

 

140.9

 

17.2

thereof Privatize

 

71.1

 

75.3

 

5.9

thereof Sell portfolio

 

49.1

 

65.6

 

33.6

Selling costs

 

-27.7

 

-30.1

 

8.7

Adjusted EBITDA Sales

 

92.5

 

110.8

 

19.8

Privatize portfolio
In the “Privatize” portfolio, 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.
Sell portfolio
In the “Sell” portfolio, 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. It 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.
Adjusted EBITDA Sales
The adjusted EBITDA Sales is calculated by subtracting all operating expenses (excl. overheads) incurred in connection with sales activities from the profit on the disposal of properties generated by the Group and by adjusting the profit on the disposal of properties to reflect certain reclassification and time effects.
Fair Value Step-up
Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
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.
Privatize portfolio
In the “Privatize” portfolio, 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.