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Financial statements

13 Investment property under construction

  

2019

 

2018

At the beginning of the year

 

558,704

 

463,040

First time adoption IFRS16

 

30,272

 

-

Investments

 

238,688

 

423,175

Transfers to investment property

 

(504,447)

 

(406,226)

Net gain (loss) from fair value adjustments on investment property under construction

65,712

 

78,715

 

In profit or loss

 

65,712

 

78,715

In other comprehensive income

 

-

 

-

Transfers out of level 3

 

-

 

-

Leasehold ground movement

 

(626)

 

-

At the end of the year

 

388,303

 

558,704

The right of use of land is included as an integrated part of the investment property under construction. To compare the externally appraised values of the Investment property under construction the lease liabilities are deducted from the Total investment property value.

 

2019

2018

Investment Property

388,303

558,704

Less: lease liabilities

(24,551)

-

Valuation as per internal valuation

363,752

558,704

The investment property under construction relate to acquisitions and is being developed by third parties. For a list of the investment properties under construction and investment commitments, see Note 21.

The net valuation gain (loss) for the year included a positive fair value adjustment of € 80,650 (2018: € 106,805) relating to investment properties under construction that are measured at fair value at the end of the reporting period.

The as if completed value of the investment property under construction is determined by independent external valuation experts.

The specifications of investments and the transfers to investment property are set out below.

Investments

2019

2018

Randstad

186,204

343,626

Mid East

27,726

40,620

Brabantstad

24,758

32,822

Non-core regions

-

6,107

Total investments

238,688

423,175

Transfers to investment property

2019

2018

Randstad

(425,142)

(341,156)

Mid East

(46,076)

(37,536)

Brabantstad

(33,229)

(27,534)

Non-core regions

-

-

Total transfers to investment property

(504,447)

(406,226)

The significant assumptions with regard to the valuations are set out below.

2019

    
 

Randstad

Mid East

Brabantstad

Total

Gross initial yield

4.2%

4.7%

4.1%

4.2%

Net initial yield

3.6%

3.9%

3.5%

3.6%

Long-term growth rental rate

1.7%

1.5%

2.3%

1.7%

Average 10-year inflation rate (NRVT)

0.4%

0.4%

0.4%

0.4%

Estimated average development profit on completion

3.1%

0.2%

12.4%

3.9%

Estimated average percentage of completion

50.3%

56.1%

55.6%

51.0%

Current average rent per unit (in €)

1,158

1,042

1,046

1,140

Construction costs (€/m²)

4,298

3,032

3,219

4,089

2018

    
 

Randstad

Mid East

Brabantstad

Total

Gross initial yield

4.4%

4.7%

4.6%

4.4%

Net initial yield

3.8%

3.8%

3.9%

3.8%

Long-term growth rental rate

2.5%

2.5%

2.4%

2.5%

Average 10-year inflation rate (NRVT)

0.5%

0.5%

0.5%

0.5%

Estimated average development profit on completion

12.9%

6.9%

13.5%

12.5%

Estimated average percentage of completion

48.6%

56.9%

68.7%

50.2%

Current average rent per unit (in €)

1,162

979

1,011

1,136

Construction costs (€/m²)

3,635

2,139

2,515

3,411

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