Annual Report 2020

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EPRA NAV Key Figures

The EPRA NAV key figures make adjustments based on the IFRS equity to provide stakeholders with information that is as clear as possible on the fair value of a real estate company’s assets and liabilities in various scenarios.

The Net Reinstatement Value (NRV) is calculated based on the assumption that residential properties are never sold. It represents the asset value that would be required to rebuild the company from scratch. The equity attributable to Vonovia’s shareholders is adjusted by the deferred taxes in relation to fair value gains of investment properties and the fair value of financial instruments after taking deferred taxes into account. The fair value of intangible assets is also added. At Vonovia, this refers to the additional value of the Value-add and Development segments, which is calculated in an appraisal that is updated every year. In addition, the real estate transfer tax and other purchasers’ costs, deducted as part of the property valuation process, are added back.

The EPRA NTA (Net Tangible Assets) is calculated based on the assumption that properties are purchased and sold. This means that part of the deferred taxes on the real estate assets is inevitably realized as a result of the sale process. At Vonovia, the Recurring Sales and Non-core Disposals portfolio clusters, as well as the portfolio in Austria, are not to be allocated to the real estate portfolio that is held in the long term. The deferred taxes on these portfolios are calculated in proportion to the fair values and reduce the total deferred taxes recognized. Similarly, the real estate transfer tax and other purchasers’ costs for these portfolios are calculated and taken into account without any value-enhancing effect. The fair value of financial instruments, after taking deferred taxes into account, is adjusted and the intangible assets (goodwill and other intangible assets) are eliminated in full.

The EPRA Net Disposal Value (NDV) determines the value of the equity in a sale scenario. The fair values of the deferred taxes and financing instruments are realized as in IFRS equity. Goodwill is eliminated and the fixed-interest financial liabilities are stated at fair value, taking the resulting tax effects into account.

The tables below show the new EPRA NAV key figures as of December 31, 2020, and the corresponding previous year, and compare them with the previous key figures, EPRA NAV, EPRA NNNAV and Adjusted NAV.

Dec. 31, 2020 (in € million)

EPRA NRV

EPRA NTA

EPRA NDV

EPRA NAV

EPRA
NNNAV

Adj. NAV

 

 

 

 

 

 

 

IFRS equity attributable to Vonovia shareholders

23,143.8

23,143.8

23,143.8

23,143.8

23,143.8

23,143.8

Deferred tax in relation to fair value gains of IP

11,947.7

10,466.8

–

11,947.7

–

11,947.7

Fair value of financial instruments*

54.9

54.9

–

54.9

–

54.9

Goodwill as per the IFRS balance sheet

–

–1,494.7

–1,494.7

–

–

–1,494.7

Intangibles as per the IFRS balance sheet

–

–117.0

–

–

–

–

Fair value of fixed interest rate debt

–

–

–1,105.8

–

–1,105.8

–

Revaluation of intangibles to fair value

4,610.0

–

–

–

–

–

Real estate transfer tax

3,920.8

3,434.8

–

–

–

 

NAV

43,677.3

35,488.6

20,543.4

35,146.5

22,038.1

33,651.8

Fully diluted number of shares (millions)

565.9

565.9

565.9

565.9

565.9

565.9

NAV per share (in €)

77.18

62.71

36.30

62.11

38.94

59.47

* Adjusted for effects from cross currency swaps.

Dec. 31, 2019 (in € million)

EPRA NRV

EPRA NTA

EPRA NDV

EPRA NAV**

EPRA
NNNAV

Adj. NAV

 

 

 

 

 

 

 

IFRS equity attributable to Vonovia shareholders

19,308.3

19,308.3

19,308.3

19,308.3

19,308.3

19,308.3

Deferred tax in relation to fair value gains of IP

10,288.9

8,881.2

–

10,288.9

–

10,288.9

Fair value of financial instruments*

–4.7

–4.7

–

–4.7

–

–4.7

Goodwill as per the IFRS balance sheet

–

–1,392.9

–1,392.9

–

–

–1,392.9

Intangibles as per the IFRS balance sheet

–

–111.3

–

–

–

–

Fair value of fixed interest rate debt

–

–

–753.5

–

–753.5

–

Revaluation of intangibles to fair value

3,903.4

–

–

–

–

–

Real estate transfer tax

3,570.0

3,081.6

–

–

–

–

NAV

37,065.9

29,762.2

17,161.9

29,592.5

18,554.8

28,199.6

Fully diluted number of shares (millions)

542.3

542.3

542.3

542.3

542.3

542.3

NAV per share (in €)

68.35

54.88

31.65

54.57

34.22

52.00

*

Adjusted for effects from cross currency swaps.

**

Adjusted (see note [A2] Adjustment to Prior-year Figures).
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.
European Public Real Estate Association (EPRA)
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.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Non-core Disposals
We also report on 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.
Recurring Sales
The Recurring 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.