Fair Values

Major market developments and valuation parameters that have an impact on the fair values of Vonovia are assessed on an ongoing basis. Due to the market momentum recognized across Germany in the first half of 2019, Vonovia arranged for a new valuation to be performed for the locations that have been affected the most, i.e., on around two-thirds of the portfolio. This led to net income from the valuation of € 2,258.7 million.

In addition, buildings under construction (new construction/development to hold) were completed during the reporting period. A fair value measurement is performed for the first time when the properties are completed. This results in a valuation effect of € 17.7 million for the period from January 1 to June 30, 2019 (H1 2018: € 2.7 million from new construction VTS and BUWOG).

In June, the Berlin State Government decided some basic points on a white paper for a rent freeze, which intends to freeze rents in the city for a period of five years, with only a small number of exceptions. A corresponding law is to be developed in the fall of 2019 and promulgated in early 2020. The exact details of the law and its constitutionality are currently unclear. It remains to be seen how the market will react. There is no evidence of any impact on fair values at the time of the half-year financial statements.

The recognition and valuation of investment properties are explained in detail in the consolidated financial statements for 2018.