22. Investment properties
Investment properties are recognised at depreciated cost. They are reported at €97 million as of 30 September 2018 (30/9/2017: €126 million). The development of these properties is shown in the following table:
€ million |
|
Investment properties |
Acquisition or production costs |
|
|
As of 1/10/2016 |
|
488 |
Currency translation |
|
1 |
Additions to consolidation group |
|
0 |
Additions |
|
2 |
Disposals |
|
−75 |
Reclassifications in accordance with IFRS 5 |
|
0 |
Transfers associated with property, plant and equipment |
|
11 |
As of 30/9 and 1/10/2017 |
|
426 |
Currency translation |
|
−2 |
Additions to consolidation group |
|
0 |
Additions |
|
2 |
Disposals |
|
−20 |
Reclassifications in accordance with IFRS 5 |
|
−128 |
Transfers associated with property, plant and equipment |
|
19 |
As of 30/9/2018 |
|
297 |
Depreciation |
|
|
As of 1/10/2016 |
|
324 |
Currency translation |
|
0 |
Additions, scheduled |
|
9 |
Additions, impairment |
|
2 |
Disposals |
|
−36 |
Reclassifications in accordance with IFRS 5 |
|
0 |
Reversals of impairment losses |
|
0 |
Transfers associated with property, plant and equipment |
|
1 |
As of 30/9 – 1/10/2017 |
|
300 |
Currency translation |
|
0 |
Additions, scheduled |
|
5 |
Additions, impairment |
|
1 |
Disposals |
|
−6 |
Reclassifications in accordance with IFRS 5 |
|
−98 |
Reversals of impairment losses |
|
−2 |
Transfers associated with property, plant and equipment |
|
1 |
As of 30/9/2018 |
|
200 |
Carrying amount as of 1/10/2016 |
|
163 |
Carrying amount as of 30/9/2017 |
|
126 |
Carrying amount as of 30/9/2018 |
|
97 |
The decline of €29 million was mainly the result of reclassifications from investment properties to assets held for sale in the amount of €30 million. Of this amount, €19 million are attributable to the reclassification of a single real estate property of METRO PROPERTIES in Germany and €11 million to reclassifications in relation to the disposal of the hypermarket business.
The fair values of these investment properties total €205 million (30/9/2017: €248 million). These values are determined on the basis of internationally recognised measurement methods, particularly the comparable valuation method and the discounted cash flow method (level 3 of the 3-level valuation hierarchy of IFRS 13 (Fair Value Measures)). This measurement is based on a detailed planning period of 10 years. Aside from market rents, market-based discount rates were used as key valuation parameters. The discount rates are determined on the basis of analyses of relevant real estate markets as well as evaluations of comparable transactions and market publications issued by international consulting firms. The resulting discount rates reflect the respective country and location risk as well as the property-specific real estate risk. In addition, project developments are considered to determine the best use.
The fair value is usually assessed by METRO PROPERTIES employees. External expert reports are used where available.
Rental income from continuing operations amounts to €20 million, with finance leases accounting for €7 million of this total (2016/17: €22 million, thereof €8 million from finance leases). The related expenses amount to €12 million, with finance leases accounting for €4 million (2016/17: €15 million, thereof €6 million from finance leases). Expenses of €0 million were incurred for properties without rental income, €0 million of which are attributable to finance leases (2016/17: €0 million, thereof €0 million from finance leases).
Restrictions on titles in the form of liens and encumbrances amounted to €0 million (30/9/2017: €0 million). As in the previous year, no contractual commitments for the acquisition of investment properties were made.