| | 2014 | 2013 |
| At the beginning of the year | 459,494 | 474,978 |
| Additions: | | |
| Transfers from investment property under construction | 9,511 | - |
| Investments | 45,947 | 18,878 |
| Total investments | 55,458 | 18,878 |
| Transfers to investment property under construction | (9,279) | - |
| Disposals | (21,356) | (268) |
| Net gain (loss) from fair value adjustments on investment property (like for like) | (33,841) | (31,821) |
| Net gain (loss) from fair value adjustments on investment property | (4,540) | (2,273) |
| In profit or loss | (38,381) | (34,094) |
| In other comprehensive income | - | - |
| Transfers out of level 3 | - | - |
| Total investment property (level 3) | 445,936 | 459,494 |
| Lease incentives | 373 | 336 |
| Less: classified as held for sale | - | - |
| At the end of the year | 446,309 | 459,830 |
Download XLSThe Fund’s investment properties are valued by an external valuation expert on a quarterly basis. The external valuation expert is changed every three years. On 31 December 2014, these properties were revalued by independent professionally qualified valuation experts who hold a recognised relevant professional qualification and had recent experience in the locations and categories of the investment properties valued. The carrying values of investment property as at 31 December 2014, and 1 January 2014, are in line with the valuations reported by the external valuation experts.
Since the accounting effect of lease incentives granted is included under non-current assets the recognised amount € 373,000 (2013: € 336,000) is deducted from the total fair value of investment properties.
| Investments and investment property under construction | 2014 | 2013 |
| High street retail | 54,765 | 18,878 |
| Shopping centres | 86 | - |
| Other retail location | 607 | - |
| Total Investments and investment property under construction | 55,458 | 18,878 |
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| Disposals | 2014 | 2013 |
| High street retail | - | - |
| Shopping centres | - | - |
| Other retail location | (21,356) | (268) |
| Total disposals | (21,356) | (268) |
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The significant assumptions made relating to the valuations are set out below.
| 2014 | | | | |
| | High street retail | Shopping centres | Other retail location | Total |
| Current average rent (€/m²) | 254 | 209 | 149 | 190 |
| Estimated rental value (€/m²) | 242 | 192 | 145 | 179 |
| Gross initial yield | 6.9% | 7.6% | 5.9% | 7.0% |
| Net initial yield | 5.2% | 6.5% | 7.2% | 5.9% |
| Current vacancy rate (LFA m²) | 4.5% | 3.9% | 26.0% | 7.8% |
| Current financial vacancy rate | 4.3% | 3.1% | 16.4% | 5.9% |
| Long-term vacancy rate | 3.0% | 3.7% | N/A | 3.3% |
| Long-term growth rental rate | 2.0% | 2.1% | 1.6% | 2.0% |
| Average 10-years inflation rate (IPD Nederland) | | | | 1.9% |
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| 2013 | | | | |
| | High street retail | Shopping centres | Other retail location | Total |
| Current average rent (€/m²) | 243 | 206 | 162 | 210 |
| Estimated rental value (€/m²) | 218 | 191 | 154 | 193 |
| Gross initial yield | 6.6% | 7.2% | 7.0% | 6.9% |
| Net initial yield | 5.9% | 6.4% | 5.8% | 6.1% |
| Current vacancy rate (LFA m²) | 2.4% | 4.9% | 21.1% | 7.7% |
| Current financial vacancy rate | 1.5% | 3.7% | 16.2% | 5.0% |
| Long-term vacancy rate | 4.1% | 4.4% | N/A | 4.2% |
| Long-term growth rental rate | 2.2% | 2.2% | 2.0% | 2.1% |
| Average 10-years inflation rate (IPD Nederland) | | | | 2.1% |
Download XLSThe vacancy rate showed an upward trend due to some bankruptcies.
The total gain (loss) for the year included an unrealised gain of € 2,465 (2013: € 921) relating to investment properties that are measured at fair value at the end of the reporting period.
The valuation of the investment properties takes into account a rent-free period/rent incentives ranging from 1 to 3 months after occupation.
As at 31 December 2014, the Fund had unprovisioned contractual obligations for future repairs and maintenance of € 0.1 million (2013: € 0.2 million).
Direct operating expenses recognised in profit or loss include € 0.1 million (2013: € 0.2 million) relating to vacant investment property. Investment property includes buildings held under finance leases. The carrying amount is € nil (2013: € nil).
Sensitivity analysis
The appraisal of the portfolio implies a net initial yield of 5.9% (2013: 6.1%). If the yields used for the appraisals of investment properties on 31 December 2014 had been 100 basis points higher (2013: 100 basis points higher) than was the case at that time, the value of the investments would have been 14.7 % lower (2013: 14.2% lower). In this situation, the Fund’s shareholders’ equity would have been € 92 million lower (2013: € 70 million lower).
The table below presents the sensitivity of the valuation to changes in the most significant assumptions.
| | | 2014 | | 2013 |
| Change rental rates | -5% | 5% | -5% | 5% |
| Value of the investment property change | (24,396) | 25,872 | (20,811) | 20,811 |
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| | | 2014 | | 2013 |
| Change net initial yield | - 25 bps | + 25 bps | - 25 bps | + 25 bps |
| Value of the investment property change | 23,145 | (19,835) | 13,953 | (13,077) |
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