EPRA Reporting

Vonovia SE has been a member of since 2013. The eponymous European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments.

In order to make it easier to compare real estate companies and to reflect special features that apply to the real estate sector, has developed a framework for standardized reporting that goes beyond the scope of the IFRS.

As reported in the previous year, Vonovia reports the based on the EPRA Best Practice Recommendations (BPRs). Vonovia only uses some of the EPRA key figures as performance indicators, which is why they are reported outside of the management report. They are non-GAAP measures or also APMs (Alternative Perfomance Measures).

We would like to point out that the EPRA BPRs refer generally to both residential and commercial real estate companies. Vonovia’s business model is based primarily on renting out homes and offering housing-related services. Unlike companies with a commercial portfolio and, as a result, a relatively small number of properties, Vonovia’s portfolio features a large number of fairly similar units. This means that it does not make sense for a company specializing in residential real estate to report much of the information recommended in the EPRA BPRs, which focus in particular on significant individual properties.

This is why, with regard to the current real estate portfolio, we have opted not to report an overview of lease agreement terms (the lease agreements tend to be concluded for an indefinite period), the estimated market rent upon the expiry of the lease or the ten biggest tenants in terms of .

The new construction/Development business was expanded further in the fiscal year under review and has been additionally strengthened by the takeover of BUWOG. Furthermore almost exclusively residential units are built. As a result, we do not publish separate information on individual large properties.

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EPRA Key Figures

in € million

 

 

 

 

 

2017

 

2018

 

Change in %

 

 

 

 

 

 

 

 

 

 

 

EPRA Performance Indicators

 

Definition

 

Target

 

 

 

 

 

 

EPRA Earnings

 

Earnings from operational activities.

 

A key measure of a company’s underlying operating results and an indication of the extent to which current dividend payments are supported by earnings.

 

572.6

 

685.3

 

19.7

 

Net Asset Value adjusted to include properties and other investment interests at and exclude certain items not expected to crystallize in a long-term investment property business model.

 

Make adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment strategy.

 

21.284.6

 

26.105.0

 

22.6

EPRA NNNAV

 

EPRA NAV adjusted to include the fair values of financial instruments, debt and deferred taxes.

 

Make adjustments to EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company.

 

14.657.5

 

17.669.5

 

20.5

EPRA net initial yield in %

 

Annualized rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs.

 

A comparable measure for portfolio valuations. This measure should make it easier for investors to judge for themselves how the valuation of portfolio X compares with portfolio Y.

 

3.7

 

3.5

 

-0.2 pp

EPRA topped-up net initial yield in %

 

This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and tiered rents).

 

 

 

3.7

 

3.5

 

-0.2 pp

EPRA in %

 

Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio.

 

A “pure” (%) measure of investment property space that is vacant, based on ERV.

 

2.3

 

2.3

 

-

EPRA cost ratio incl. direct vacancy costs in %

 

Administrative & operating costs (including costs of direct vacancy) divided by gross rental income.

 

A key measure to enable meaningful measurement of the changes in a company’s operating costs.

 

26.3

 

25.9

 

-0.4 pp

EPRA cost ratio excl. direct vacancy costs in %

 

Administrative & operating costs (excluding costs of direct vacancy) divided by gross .

 

 

 

24.8

 

24.6

 

-0.2 pp

 

 

 

 

 

 

 

 

 

 

 
EPRA (European Public Real Estate Association)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
EPRA (European Public Real Estate Association)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
EPRA Key Figures
For information on the EPRA key figures, we refer to the chapter on segment reporting according to EPRA.
Rental Income
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.
EPRA NAV/Adjusted NAV
The presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business model. The equity attributable to Vonovia’s shareholders is adjusted to reflect deferred taxes on investment properties, the fair value of derivative financial instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted NAV, which involves eliminating goodwill in full, is also reported.
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.
Vacancy rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Rental Income
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.