EPRA Reporting
Vonovia SE has been a member of EPRA 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, EPRA has developed a framework for standardized reporting that goes beyond the scope of the IFRS.
Vonovia reports the EPRA key figures 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 Performance Measures).
We would like to point out that the EPRA BPRs refer generally to both residential and commercial real estate companies. On the other hand, Vonovia is active almost exclusively in the area of housing. Vonovia’s business model is based on the rental of homes, the development and construction of new apartments, both for its own portfolio and for sale to third parties, and the provision of 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 rental income.
The Development segment was expanded further in the 2019 fiscal year. This business still relates almost exclusively to residential units. Further information on the Development segment can be found in the chapter Portfolio in the Development Business.
in € million |
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2018 |
2019 |
Change in % |
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EPRA Performance Indicators |
Definition |
Target |
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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. |
685.3 |
785.8 |
14.7 |
EPRA NAV |
Net Asset Value adjusted to include properties and other investment interests at fair value 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. |
26,105.0 |
29,654.6 |
13.6 |
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. |
17,669.5 |
18,554.8 |
5.0 |
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. |
3.5 |
3.3 |
-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). |
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3.5 |
3.3 |
-0.2 pp |
EPRA vacancy rate 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 |
2.4 |
0.1 pp |
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. |
25.9 |
25.8 |
-0.1 pp |
EPRA cost ratio excl. direct vacancy costs in % |
Administrative & operating costs (excluding costs of direct vacancy) divided by gross rental income. |
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24.6 |
24.5 |
-0.1 pp |
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