Calculating and disclosing the fair values of our real estate portfolio provides an internal control parameter and also helps to make the development of the value of our assets transparent to external stakeholders. The value of the entire portfolio of residential properties was determined on the basis of the International Valuation Standard Committee’s definition of market value.
Major market developments and valuation parameters that have an impact on the fair values of Vonovia are assessed every quarter. Due to the market momentum recognized across Germany in the first half of 2018, Vonovia performed a new valuation for around two-thirds of the portfolio in the middle of the year. As far as the portfolio of BUWOG and the portfolio of non-German real estate of conwert are concerned, the result of the valuation of the external appraiser CBRE was applied to the interim financial statements. Due to the particular situation regarding data on the Swedish real estate market, it was possible to arrive at a valid value for the parameters relevant to real estate valuation of the Swedish portfolio for the reporting date as of September 30, 2018. The resulting valuation effect was recognized as of September 30, 2018. The next valuation of the entire portfolio will be performed at the end of the year.
The recognition and valuation of investment properties are explained in detail in the consolidated financial statements and the Notes to the consolidated financial statements for 2017.