Net Asset Value (NAV)

The net asset value reflects the economic equity of the company. It is determined by the fair values of the company’s assets – essentially the value of properties – net of the borrowed capital.

Value-oriented corporate governance

Net asset value (NAV) per share is a benchmark for the asset quality of an enterprise and is one of HAMBORNER’s key indicators for value-based corporate management, including as compared to other companies. The goal is to increase NAV per share through value-adding measures.

The company’s management system is geared towards contributing to the achievement of its goals. It extends from standardised investment analyses for individual properties to integrated budget and medium-term planning at company level (earnings, assets and cash flow planning). Monthly controlling reports provide a timely indication of any deviations from planning; corresponding variance analyses are used to devise alternative courses of action. Management at company level is based on the performance indicators calculated using IFRS figures, funds from operations (FFO) and net asset value (NAV) per share. In particular, key operating value drivers and factors influencing development of FFO include rental income, the vacancy rate, staff costs, maintenance and interest expenses. Improvements in efficiency due to growth are expressed by the operating cost ratio, i.e. the ratio of administrative and staff costs to rental income. The market value of the property portfolio also has a material influence on NAV per share. Controlling reports and scorecards ensure internal transparency of developments in key ratios over the year. The short-term remuneration of the Management Board is also based in part on FFO per share.

The calculation of the FFO and NAV figures is shown in the economic report section of the annual report.