We also focus on non-financial operating performance indicators as drivers for our key financial figures and supporting control parameters.
Our business activities focus on our customers. We aim to offer them affordable homes that meet their needs together with housing-related services and reliable customer support. As a result, the fourth most meaningful performance indicator at overall Group level, in addition to the financial performance indicators Group FFO, Adjusted EBITDA Total and Adjusted NAV per share, is the Customer Satisfaction Index (CSI). It is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Our company’s economic success and, in particular, the success of our Value-add strategy are directly linked to the satisfaction level of our customers. We are aware of this fact and implement a wide variety of measures with the goal of improving our services in the interest of our tenants.
The organic rent increase refers to the increase in the monthly in-place rent for the residential portfolio that was already held by Vonovia twelve months previously, plus the increase in rent resulting from the construction of new apartments and the addition of stories to existing properties. The monthly in-place rent per square meter gives information on the average rental income from the rented properties. In particular, over the course of time, the average rent increase achieved in the rented properties can be derived from this figure.
The vacancy rate also shows the proportion of units in our own portfolio that are not rented and therefore generate no rental income. It can serve as an early-warning indicator, e.g. to identify non-marketable apartments.
The vacancy rate and the average rent are key drivers for the development of our key figures related to the management of rental income. Together with the CSI they serve as essential early warning indicators.
The number of units sold from Recurring Sales shows our ongoing efforts in the privatization business. In addition to this, we report the “Non-core Disposals”.
The fair value step-up represents the difference between the income from the sale of a residential unit and its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
Group FFO reflects the recurring earnings from the sustained operating business. In addition to the Adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows for recurring cash-effective net interest expenses from non-derivative financial instruments as well as income taxes. This key figure is not determined on the basis of any specific international reporting standard but is to be regarded as a supplement to other performance indicators determined in accordance with IFRS.
Adjusted EBITDA Total
Adjusted EBITDA Total is the result before interest, taxes, depreciation and amortization (including income from other operational investments and intragroup profits) adjusted for effects that do not relate to the period, recur irregularly or that are atypical for business operation, and for net income from fair value adjustments to investment properties. These non-recurring items include the development of new fields of business and business processes, acquisition projects, expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments. The Adjusted EBITDA Total is derived from the sum of the Adjusted EBITDA Rental, Adjusted EBITDA Value-add, Adjusted EBITDA Recurring Sales and Adjusted EBITDA Development.
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.
Monthly In-place Rent
The monthly in-place rent is measured in euro per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. The rental income from the Austrian real estate portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the Swedish real estate portfolio shows inclusive rents, meaning that the rental amounts include operating and heating costs. The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent (in €/m2) on a like-for-like basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-for-like basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian real estate portfolio also includes maintenance and improvement contributions (EVB). The rental income from the Swedish real estate portfolio shows inclusive rents, meaning that the rental amounts include operating and heating costs.
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.