Rental

As of the end of September 2017, our apartments were virtually fully occupied. The apartment vacancy rate of 2.9% was up slightly on the value of 2.8% seen at the end of the third quarter of 2016 due to our extensive investment program. Rental income in the Rental segment rose by 8.1% from € 1,156.1 million in the first nine months of 2016 to € 1,249.4 million in the same period of 2017. This corresponds to an average monthly in-place rent of € 6.19/m2 at the end of September 2017, compared with € 5.94 /m2 at the end of September 2016, and to an overall increase in rent per square meter of 4.2%. The increase in rent due to market-related factors came to 1.7%. We were also able to achieve an increase in rent of 2.1% thanks to property value improvements achieved as part of our modernization program. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at an organic increase in rent of 3.9% in total. The corresponding like-for-like increase in rent came to 3.8% in the first nine months of 2017. The average monthly in-place rent in the conwert portfolio came to € 6.02/m2 at the end of the third quarter of 2017.

In the 2017 reporting period, we successfully implemented our modernization and maintenance strategy and significantly expanded the volume from € 516.7 million in the first nine months of 2016 to € 752.8 million in the first nine months of 2017. This was driven by a € 224.0 million increase in the modernization volume, bringing it up from € 284.6 million in the first nine months of 2016 to € 508.6 million in the first nine months of 2017. In the 2017 reporting period, a volume of € 36.5 million was attributable to modernization and maintenance measures in the conwert portfolio.

Maintenance and Modernization

in € million

 

9M 2017

 

9M 2016

 

Change in %

 

12M 2016

 

 

 

 

 

 

 

 

 

*

Incl. intra-Group profits for 9M 2017: € 53.3 million (thereof € 1.7 million capitalized maintenance and € 16.8 million modernization); 9M 2016: € 36.1 million (thereof € 0.7 million capitalized maintenance and € 5.8 million modernization); new construction in 9M 2017 € 22.8 million, new construction in 9M 2016: € 11.8 million (included in modernization measures)

Maintenance expenses

 

192.2

 

184.1

 

4.4

 

247.4

Capitalized maintenance

 

52.0

 

48.0

 

8.3

 

72.7

Modernization work

 

508.6

 

284.6

 

78.7

 

472.3

Total cost of modernization and maintenance*

 

752.8

 

516.7

 

45.7

 

792.4

In relation to the average number of apartments managed, this corresponds to spending on modernization and maintenance of € 34.01/m2 in the first nine months of 2017 (9M 2016: € 23.83/m2).

Operating expenses in the Rental segment in the 2017 reporting period were up by 7.5% on the figures for the first nine months of 2016, from € 177.9 million to € 191.3 million, mainly due to acquisitions. All in all, adjusted EBITDA Rental increased by 9.0% from € 794.1 million in the 2016 reporting period to € 865.9 million in the first nine months of 2017.