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Annual Statements

Home Annual Statements Financial Statements 2013 Notes to the consolidated financial statements Notes to the consolidated income statement Fair value gains and losses on property

3. Fair value gains and losses on property

(in thousands of euros)

2013

New long leases granted

471

Fair value adjustments: land

19,047

Fair value adjustments: buildings

- 16,973

2,545

The gains from granting new long leases were connected with the change in measurement of leasehold land from historical cost to fair value upon release. Fair value is calculated by discounting the annual ground rents from the leases concerned (DCF method), using a discount rate based on the interest rate on Dutch government bonds plus a risk premium.

The fair value of all the properties is assessed each year and adjusted as necessary on the basis of in-house and external appraisals taking into account any lease incentives granted. The resulting adjustments to fair value are included in market value adjustments for land and buildings.

The fair value adjustments for land arose from an improvement in the appraisal methods for leaseholds, reflecting the actual development and infrastructure in place.

The fair value adjustments of buildings arose from increased vacancies in existing buildings and investment in buildings undergoing redevelopment.