Major market developments and valuation parameters that have an impact on the fair values of Vonovia are assessed on an ongoing basis. Due to the market momentum recognized in the first half of 2021, Vonovia decided to perform a new valuation on the 20 German locations that account for the largest fair value shares. The list of the locations to be valued was extended to include ten additional German locations in which considerable changes in value had been observed, as well as Vienna and the portfolio in Sweden. This means that around three-quarters of the portfolio, in terms of portfolio value, was revalued in total. This revaluation led to net income from the valuation of € 3,698.6 million (H1 2020: € 1,812.3 million).
The figure includes the valuation result from buildings under construction (new construction/development to hold) that were completed during the reporting period and were moved to the Rental portfolio. A fair value measurement is performed for the first time when the properties are completed. This resulted in a valuation effect of € 18.9 million for the period from January 1 to June 30, 2021 (H1 2020: € 26.5 million).
The Act on Rent Controls in the Housing Sector in Berlin passed by the Berlin House of Representatives 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 possible 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 fair 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.