Fair Values

Major market developments and valuation parameters that have an impact on the fair values of Vonovia are assessed regularly. In addition to the revaluation performed as of June 30, 2018, the entire portfolio was revalued at the end of the year.

As in 2017, Vonovia’s portfolio has shown very positive development. The demand for apartments in metropolitan areas remains stronger than the supply, pushing rent levels up considerably. Rental growth is also being helped along by the extensive investments made in the energy-efficient modernization of our buildings and improvements to the fittings in our apartments. At the same time, the residential real estate market remains particularly dynamic. Since the return expectations of property buyers have dropped further, the increase in market values is ahead of rent developments (yield compression). The positive effects resulting from the increased demand, modernization and yield compression have resulted in a considerable 13.0% increase in the value of our property portfolio compared with the previous year, after adjustments for acquisitions and sales. In addition to the internal valuation, the property assets are also assessed by the independent property appraiser CBRE GmbH and Savills Sweden AB in cooperation with Malmöbryggan Fastighetsekonomi AB. The market value resulting from the CBRE expert opinion deviates from the internal valuation result by less than 0.1%. The net income from the external valuation was adopted for the Swedish, Austrian and German portfolios of BUWOG.

The fair values for each strategic real estate portfolio cluster are as follows:



Residential units


Fair value* (in € million) 



Dec. 31, 2017


Dec. 31, 018


Dec. 31, 2017


Dec. 31, 2018



of the developed land excluding € 1,356.8 million (previous year: € 331.4 million), of which € 405.1 million for undeveloped land and inheritable building rights granted, € 302.5 million for assets under construction, € 492.6 million for development and € 156.6 million for other.



























































Vonovia Germany




















Vonovia Austria










Vonovia Sweden




















Regular Determination of the Fair Values Creates a Transparent Valuation of the Company’s Properties

Calculating and showing the fair values provides a control parameter inside the company and also helps to make the development of the value of our assets transparent to people outside the company.

The fair value of the portfolio of residential properties was determined, in accordance with IAS 40 and IFRS 13, on the basis of the International Valuation Standard Committee’s definition of market value.

The valuation methodology used by Vonovia is based on the discounted cash flow (DCF) methodology. Under the DCF methodology, the fair values are derived from the income and costs associated with a property. Under the DCF methodology, the expected future income and costs of a property are forecast over a period of ten years and discounted to the date of valuation as the net present value. The income mainly comprises expected (current in-place rent, market rents as well as their development) taking vacancy losses into account. These are derived for each location from the latest rent indices and rent tables (empirica and IVD), as well as from studies on spatial prosperity (Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), Prognos, empirica, Bertelsmann Stiftung, etc.).

On the cost side, expenses and management costs, as well as other cost items such as ground rent, non-allocable ancillary costs and rent losses, have been taken into account and inflated in the reporting period. carried out in the housing stocks are factored in by decreasing the current maintenance expenses and adjusting market rents. The commercial properties in the portfolio are mainly small commercial units for the supply of the local residential area. Different cost approaches were used to those for residential properties, and the capitalized interest rates were adjusted to reflect the market specifics.

As far as the foreign portfolios and BUWOG’s German portfolio are concerned, the fair values determined by external and independent appraisers have been used in the annual financial statements. The Austrian portfolio and BUWOG’s German portfolio were valued by CBRE GmbH, while the Swedish portfolio was valued by Savills Sweden AB in collaboration with Malmöbryggan Fastighetsekonomi AB.

The recognition and valuation of investment properties are explained in detail in the Notes to the consolidated financial statements (note [23]).

The fair value of the real estate portfolio of Vonovia comprising residential buildings, commercial properties, garages and parking spaces as well as project developments, undeveloped land and any inheritable building rights granted was € 44,239.9 million as of December 31, 2018 (previous year: € 33,436.3 million). The determination of fair values led overall to net income from adjustments of investment properties of € 3,517.9 million.

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.
Recurring Sales
The Recurring Sales segment (formerly part of the “Sales” segment) includes the regular and sustainable disposals of individual condominiums from our portfolio. It does not include the sale of entire buildings or land (Non-core disposals). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of our operating business within the narrower sense of the term. Therefore, these sales will be reported under “Other” in our segment reporting.
Non-core Disposals
We also report the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.
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.
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
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.