NOTE 6. RENTAL INCOME AND RENTAL-RELATED EXPENSES
Except in some rare cases, the leases contracted by the Group are
subject to indexation.
The Group leases out its properties under operating leases and
finance leases. Only revenues from operating leases appear under
rental income.
The amount under the item “Writeback of lease payments sold and
discounted” represents the difference between the discounted
value, at the beginning and at the end of the year, of the future infla-
tion-linked payments on the lease contracts which receivables have
been sold. The writeback through the income statement allows for a
gradual reconstitution of the gross initial value of the concerned build-
ings at the end of the lease. It is a recurring and non-cash income
item. (See Note 2: “Significant accounting methods under I Properties
leased for long periods; III sale of future lease payments under a long
lease not qualifying as a finance lease”).
The change in the fair value of these buildings is determined by the
independent real estate expert and is taken as profit or loss under the
item “Changes in the fair value of investment properties”. This time, it
is a non-recurring item as it depends on the expert’s assumptions as
to future market conditions.
Total rental income
When a lease is classified as a finance lease, the property is
considered to be disposed of, and the Group is considered to have an
interest in a finance lease instead. Payments received on the finance
leases are split between “capital” and “interests”: the capital element
is taken to the balance sheet and offset against the Group’s finance
lease receivable and the interest element to the income statement.
Hence, only the part of the rents relating to interests flows through
the income statement.
1
The gross potential income corresponds to the sum of the real rents received and the estimated rents attributed to unlet spaces.
2
The rental vacancy is calculated on unlet spaces based on the rental value estimated by the independent real estate experts.
3
Early termination compensations are recognised directly in full on the income statement.
(x 1,000 EUR)
2015
2014
Rental income
202,612
195,918
Rents
205,909
197,761
Gross potential income
1
216,027
209,112
Vacancy
2
-10,118
-11,351
Cost of rent-free periods
-3,718
-2,933
Concessions granted to tenants
-567
-558
Indemnities for early termination of rental contracts
3
988
1,648
Writeback of lease payments sold and discounted
10,214
15,931
Rental-related expenses
-709
-91
Rent payable on rented premises
-174
-88
Writedowns on trade receivables
-535
-44
Writeback of writedowns on trade receivables
0
41
TOTAL
212,117
211,758
Total income generated from the Group’s properties, through operating and finance leases
(x 1,000 EUR)
2015
2014
Rental income from operating leases
202,612
195,918
Interest income in respect of finance leases
4,699
4,040
Capital receipts in respect of finance leases
3,374
1,652
TOTAL
210,685
201,610
Total minimum future rental receivables under non-cancellable operating leases and finance leases in effect at December31
st
(x 1,000 EUR)
2015
2014
Operating lease
2,375,282 2,342,313
Less than one year
212,527
208,942
Between one and five years
536,613
531,266
More than five years
1,626,142
1,602,105
Finance lease
77,308
79,636
Less than one year
1,656
1,618
Between one and five years
23,086
21,467
More than five years
52,566
56,551
TOTAL
2,452,590 2,421,949
168
ANNUAL ACCOUNTS /
Notes to the consolidated accounts