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 2020

 

174,749

 

10,400

 

185,149

Acquisition or production cost

 

 

 

 

 

 

1 January 2020

 

343,573

 

10,400

 

353,973

Additions

 

308

 

20,532

 

20,840

Disposals

 

 

 

- 302

 

- 302

Reclassifications

 

365

 

- 365

 

0

31 December 2020

 

344,246

 

30,265

 

374,511

Accumulated depreciation, amortisation and impairment

 

 

 

 

 

 

1 January 2020

 

168,824

 

0

 

168,824

Additions

 

8,549

 

 

 

8,549

Disposals

 

 

 

 

 

0

Reclassifications

 

 

 

 

 

0

31 December 2020

 

177,373

 

0

 

177,373

Carrying amount as of 31 December 2020

 

166,873

 

30,265

 

197,138

 

 

 

 

 

 

 

Carrying amount as of 1 January 2021

 

166,873

 

30,265

 

197,138

Acquisition or production cost

 

 

 

 

 

 

1 January 2021

 

344,246

 

30,265

 

374,511

Additions

 

2,567

 

20,253

 

22,820

Disposals

 

- 1,172

 

 

 

- 1,172

Reclassifications

 

10,776

 

- 10,776

 

0

31 December 2021

 

356,417

 

39,742

 

396,159

Accumulated depreciation, amortisation and impairment

 

 

 

 

 

 

1 January 2021

 

177,373

 

0

 

177,373

Additions

 

7,371

 

 

 

7,371

Disposals

 

- 1,172

 

 

 

- 1,172

Reclassifications

 

 

 

 

 

0

31 December 2021

 

183,572

 

0

 

183,572

Carrying amount as of 31 December 2021

 

172,845

 

39,742

 

212,587

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.

Rental income from investment property at the end of the financial year was € 52,425 thousand (previous year: € 51,847 thousand). The direct operating expenses for investment property, which are fully attributable to rental income, amounted to € 15,077 thousand in the reporting year (previous year: € 17,988 thousand).

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

 

2021

 

2020

As of 1 January

 

604,489

 

625,006

Change in fair value (not realised)

 

- 16,451

 

- 20,517

As of 31 December

 

588,038

 

604,489

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 measurement at fair value

 
 

The estimated fair value would increase (fall) if

Fair values are measured by applying the discounted cash flow method (DCF method) to the forecast net cash flows from managing the properties. This method is based on detailed forecasts of ten years or up to the end of the useful lives of properties with a remaining useful life of less than ten years. The cash flows are discounted using standard market interest rates. Property-specific fair value is determined on the basis of property-specific measurement criteria.

Contractually agreed rental income

the contractually agreed rental income was higher (lower)

Expected rent increases

the expected rent increases were higher (lower)

Vacancy periods

the vacancy periods were shorter (longer)

Level of occupancy

the level of occupancy was higher (lower)

Rent-free periods

the rent-free periods were shorter (longer)

Possible termination of the tenancy agreement

tenancy agreements were not terminated (were terminated)

Re-leasing

the property was re-leased sooner (later)

Operating, management and maintenance costs

operating, management and maintenance costs were lower (higher)

Rent for the land

the rent was lower (higher)

Discount rate
(4.21 to 7.34 % p.a.)

the risk-adjusted discount rate was lower (higher)

Regarding existing restrictions on the disposal and use of buildings in connection with the renting of the 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.