Fair Values

Major market developments and valuation parameters that have an impact on the fair values of Vonovia are assessed on an ongoing basis. The positive development of known parameters observed in the first quarter of 2021, and the continued positive market environment generally indicate an increase in value. This reliable development is continuously examined for the purposes of presenting it in the interim consolidated financial statements on June 30, 2021. As in the previous year, Vonovia will be performing a new valuation for major parts of the portfolio at the end of the first half of the year.

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 resulted in a valuation effect of € 2.4 million for the period from January 1 to March 31, 2021 (3M 2020: € 4.1 million).

At the end of January 2020, the Berlin House of Representatives had passed the Act on Rent Controls in the Housing Sector in Berlin (referred to in short as “rent freeze”). This was declared unconstitutional and, as a result, null and void by the German Federal Constitutional Court on April 15, 2021. It is impossible to predict the potential effects of this decision on the development of real estate values at the present time. Any effects will materialize in transaction activity subject to a time lag. Vonovia will be keeping an eye on this process and incorporating any findings into the regular calculation of market values. The potential implications can be estimated via the sensitivities shown in the notes to the consolidated financial statements for 2020.

The recognition and valuation of investment properties are explained in detail in the consolidated financial statements for 2020.