Taking into account mutually offsetting one-off effects, the negative deviation from the forecast at single-entity annual financial statement level mainly results from the fact that, as part of a profit transfer agreement with the subsidiary IC Objekt8 Frankfurt GmbH, InCity AG absorbed a loss amounting to a total of approximately EUR 2.0 m in the past fiscal year. This loss absorption results primarily from the non-liquidity-related extraordinary depreciation of the portfolio property held by IC Objekt8 Frankfurt GmbH located at “Stiftstrasse 18/20” in Frankfurt am Main in the amount of approximately EUR 1.8 m. The depreciation became necessary based on the market valuation of an external third party as of the cut-off date 31 December 2022.

At Group level, this unplanned, extraordinary and non-liquidity-related depreciation on the portfolio property located at “Stiftstrasse 18/202” in Frankfurt am Main was largely compensated for through considerably lower investments than were originally planned in the portfolio properties that would not have been capitalised (EUR +1.0 m to EUR +1.5 m). Further one-off effects, for example a non-liquidity-related risk provision for a completed project participation (EUR -0.4 m), were largely more than offset by operating surpluses in the portfolio companies, as well as by other operating expenses of InCity AG that were lower than forecast. Overall, the market valuation of an external third party as of the cut-off date 31 December 2022 can be summarised as follows. The market valuation of all seven portfolio properties owned by InCity amounts to approximately EUR 207.0 m as of December 2022 (31 December 2021: approx. EUR 227.2 m). This decrease mainly relates to an increase in the capitalisation interest rates used (or the decrease of the multipliers used on the achievable market rents for the portfolio properties). For “Stiftstrasse 18/20” in Frankfurt am Main alone, an extraordinary and non-liquidity-related depreciation – as described above – became necessary for HGB accounting, as the currently determined market value is below the HGB carrying amount in this case (at amortised cost: acquisition costs reduced by the standard amortisation according to the expected useful life). For the six other portfolio properties, the market values determined as of the cut-off date remain – in part significantly – above the acquisition costs at amortised cost. The difference between the market value and the carrying amount – known as hidden reserves – amounts to approximately EUR 58.3 m as of December 2022 (31 December 2021: approx. EUR 75.0 m). Despite the decrease in market values as of the balance sheet date, the market values are therefore about 39% higher than the HGB carrying amounts overall.

Due to the reduction of the portfolio properties’ market values as of 31 December 2022 compared to the previous year, the net asset value per share also decreased to EUR 1.66 (31 December 2021: EUR 1.88; 30 June 2022: EUR 1.89).

All the figures published here are provisional and have not been audited. The InCity Immobilien AG annual report for 2022 with the final figures will be published according to schedule on 27 April 2023.