Sales

We continued our selective sales strategy in the Sales segment in the first half of 2018. 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 ( cluster).

In the first half of 2018, income from the disposal of properties came to € 354.2 million, down by 49.5% on the value for the first half of 2017 (€ 701.9 million). This development is primarily due to the sale of a large commercial real estate package by conwert in the first quarter of 2017. We sold a total of 6,115 apartments in the 2018 reporting period (first half of 2017: 4,484). 1,030 of these apartments were attributable to the Privatize portfolio (first half of 2017: 1,160) and 5,085 were attributable to the Sell portfolio cluster (first half of 2017: 3,324).

came in at € 48.3 million in the 2018 reporting period, up by 9.0% on the value of € 44.3 million seen in the same period of 2017. In the first half of 2018, the in the Privatize portfolio came to 30.5%, down on the value of 31.3% seen in the first half of 2017. This was due to the higher property values in the 2017 fiscal year. In addition, 168 privatizations were achieved as part of block sales. If these sales are left out of the equation, the fair value step-up in the portfolio comes to 33.4%.

At 15.4%, the fair value step-up in the Sell portfolio cluster was higher than for the same period in the previous year (by 4.3%). This increase was primarily due to a block sale in Zwickau with above-average margins and the sale of commercial properties in Berlin.

Adjusted EBITDA Sales

in € million

 

H1 2017

 

H1 2018

 

Change in %

 

12M 2017

 

 

 

 

 

 

 

 

 

Income from disposal of properties

 

701.9

 

354.2

 

-49.5

 

1,206.4

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

 

-644.8

 

-294.5

 

-54.3

 

-1,065.5

Adjusted profit from disposal of properties

 

57.1

 

59.7

 

4.6

 

140.9

thereof Privatize

 

34.0

 

29.0

 

-14.7

 

75.3

thereof Sell portfolio cluster

 

23.1

 

30.7

 

32.9

 

65.6

Selling costs

 

-12.8

 

-11.4

 

-10.9

 

-30.1

Adjusted EBITDA Sales

 

44.3

 

48.3

 

9.0

 

110.8

Privatize
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.
Privatize
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.