Sales

We continued our selective sales strategy in the first nine months of 2018. The Sales 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 Sales segment, the income from disposal of properties came to € 612.1 million in the first nine months of 2018, down by 35.6% on the value of € 951.2 million reported in the same period of 2017. This development is primarily due to the sale of a large commercial real estate block by conwert in the first quarter of 2017. We sold a total of 9,331 apartments in the first nine months of 2018 (9M 2017: 8,304). 1,666 of these apartments were attributable to the Privatize portfolio (9M 2017: 1,704) and 7,665 were attributable to the Sell portfolio cluster (9M 2017: 6,600).

came in at € 87.0 million in the 2018 reporting period, up by 7.0% on the value of € 81.3 million seen in the same period of 2017. In the 2018 reporting period, the in the Privatize portfolio came to 30.3%, down on the value of 32.7% seen in the first nine months of 2017. This was due to the higher property values at the end of the 2017 fiscal year and as of June 30, 2018. In addition, 340 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 33.3%.

At 16.3%, the fair value step-up in the Sell portfolio cluster was higher than for the same period in the previous year (7.0%). 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

 

9M 2017

 

9M 2018

 

Change in %

 

12M 2017

 

 

 

 

 

 

 

 

 

Income from disposal of properties

 

951.2

 

612.1

 

-35.6

 

1,206.4

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

 

-850.1

 

-507.8

 

-40.3

 

-1,065.5

Adjusted profit from disposal of properties

 

101.1

 

104.3

 

3.2

 

140.9

thereof Privatize

 

52.8

 

46.6

 

-11.7

 

75.3

thereof Sell portfolio cluster

 

48.3

 

57.7

 

19.5

 

65.6

Selling costs

 

-19.8

 

-17.3

 

-12.6

 

-30.1

Adjusted EBITDA Sales

 

81.3

 

87.0

 

7.0

 

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.
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
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.