Annual Report 2023

24. Investment property

Development of investment property

in € thousand

 

Investment property

 

Payments on account and plants under construction

 

Total

Carrying amount as of 1 January 2022

 

172,845

 

39,742

 

212,587

Acquisition or production cost

 

 

 

 

 

 

1 January 2022

 

356,417

 

39,742

 

396,159

Additions

 

13,316

 

8,151

 

21,467

Disposals

 

 

 

- 128

 

- 128

Reclassifications

 

31,616

 

- 31,068

 

548

31 December 2022

 

401,349

 

16,697

 

418,046

Accumulated depreciation, amortisation and impairment

 

 

 

 

 

 

1 January 2022

 

183,572

 

0

 

183,572

Additions

 

7,640

 

 

 

7,640

Disposals

 

 

 

 

 

0

Reclassifications

 

 

 

 

 

0

31 December 2022

 

191,212

 

0

 

191,212

Carrying amount as of 31 December 2022

 

210,136

 

16,697

 

226,834

 

 

 

 

 

 

 

Carrying amount as of 1 January 2023

 

210,136

 

16,697

 

226,834

Acquisition or production cost

 

 

 

 

 

 

1 January 2023

 

401,349

 

16,697

 

418,046

Additions

 

2,183

 

16,289

 

18,472

Disposals

 

- 25,443

 

- 228

 

- 25,671

Reclassifications

 

538

 

- 538

 

0

31 December 2023

 

378,627

 

32,220

 

410,847

Accumulated depreciation, amortisation and impairment

 

 

 

 

 

 

1 January 2023

 

191,212

 

0

 

191,212

Additions

 

7,712

 

 

 

7,712

Disposals

 

- 20,994

 

 

 

- 20,994

Reclassifications

 

 

 

 

 

0

31 December 2023

 

177,930

 

0

 

177,930

Carrying amount as of 31 December 2023

 

200,697

 

32,220

 

232,917

Investment property mainly relates to warehouses converted to office space and other commercial real estate in Hamburg’s Speicherstadt historical warehouse district, as well as logistics warehouses and surfaced areas.

The additions in the reporting period relate mainly to conversion costs in connection with changes of use.

Disposals during the reporting period are generally associated with the sale of a logistics property including the relevant surfacing.

Rental income from investment property at the end of the financial year was € 59,760 thousand (previous year: € 58,477 thousand). The direct operating expenses for investment property, which are fully attributable to rental income, amounted to € 15,456 thousand in the reporting year (previous year: € 15,851 thousand).

There are no contractual obligations to buy, erect or develop investment property, or to repair, maintain or improve such property.

Fair value is calculated and measured annually by HHLA’s Real Estate segment. The associated inputs are classified as level 3 in the fair value hierarchy; see Note 7.

Fair value reconciliation

in € thousand

 

2023

 

2022

As of 1 January

 

584,432

 

588,038

Change in fair value (not realised)

 

- 23,734

 

- 3,606

As of 31 December

 

560,698

 

584,432

The valuation method used to measure the fair value of investment property as well as the key unobservable input factors applied

Valuation method

 

Key unobservable input factors

 

Relationship between key unobservable input factors and fair value measurement:
The estimated fair value would increase (decrease) if

The fair values are determined on the basis of the projected net cash flows from the management of the properties using the discounted cash flow method (DCF method). A detailed planning period of ten years or until the end of the useful life is assumed for properties with a remaining useful life of less than ten years. The discounting of the cash flows is based on customary market discount rates. The determination is made on a property-specific basis using property-specific assessment criteria.

 

Contractual rental income

 

the contractual rental income would be higher (lower)

 

Expected rent increases

 

expected rent increases would be higher (lower)

 

Vacancy periods

 

the vacancy periods would be shorter (longer)

 

Occupancy rate

 

the occupancy rate would be higher (lower)

 

Rent-free periods

 

the rent-free periods would be shorter (longer)

 

Possible terminations of the tenancy agreement

 

possible terminations would not (occur)

 

Follow-up renting

 

the follow-up renting would occur sooner (later)

 

Operating, administrative and maintenance costs

 

the operating, administration and maintenance costs would be lower (higher)

 

Rent for the land

 

the rent would be lower (higher)

 

Discount rate
(5.47 to 9.00 % p. a.)

 

the risk-adjusted discount rate would be lower (higher)

Regarding existing restrictions on the disposal and use of buildings in connection with the renting of associated properties from the Free and Hanseatic City of Hamburg, see the explanatory remarks on leases in Note 45.

Investments
Payments for investments in property, plant and equipment, investment property and intangible assets.

Topic filter