| | | 2019 | | 2018 |
At the beginning of the year | | 558,704 | | 463,040 |
First time adoption IFRS16 | | 30,272 | | - |
Investments | | 238,688 | | 423,175 |
Transfers to investment property | | (504,447) | | (406,226) |
Net gain (loss) from fair value adjustments on investment property under construction | 65,712 | | 78,715 | |
In profit or loss | | 65,712 | | 78,715 |
In other comprehensive income | | - | | - |
Transfers out of level 3 | | - | | - |
Leasehold ground movement | | (626) | | - |
At the end of the year | | 388,303 | | 558,704 |
The right of use of land is included as an integrated part of the investment property under construction. To compare the externally appraised values of the Investment property under construction the lease liabilities are deducted from the Total investment property value.
| | 2019 | 2018 |
Investment Property | 388,303 | 558,704 |
Less: lease liabilities | (24,551) | - |
Valuation as per internal valuation | 363,752 | 558,704 |
The investment property under construction relate to acquisitions and is being developed by third parties. For a list of the investment properties under construction and investment commitments, see Note 21.
The net valuation gain (loss) for the year included a positive fair value adjustment of € 80,650 (2018: € 106,805) relating to investment properties under construction that are measured at fair value at the end of the reporting period.
The as if completed value of the investment property under construction is determined by independent external valuation experts.
The specifications of investments and the transfers to investment property are set out below.
Investments | 2019 | 2018 |
Randstad | 186,204 | 343,626 |
Mid East | 27,726 | 40,620 |
Brabantstad | 24,758 | 32,822 |
Non-core regions | - | 6,107 |
Total investments | 238,688 | 423,175 |
Transfers to investment property | 2019 | 2018 |
Randstad | (425,142) | (341,156) |
Mid East | (46,076) | (37,536) |
Brabantstad | (33,229) | (27,534) |
Non-core regions | - | - |
Total transfers to investment property | (504,447) | (406,226) |
The significant assumptions with regard to the valuations are set out below.
2019 | | | | |
| | Randstad | Mid East | Brabantstad | Total |
Gross initial yield | 4.2% | 4.7% | 4.1% | 4.2% |
Net initial yield | 3.6% | 3.9% | 3.5% | 3.6% |
Long-term growth rental rate | 1.7% | 1.5% | 2.3% | 1.7% |
Average 10-year inflation rate (NRVT) | 0.4% | 0.4% | 0.4% | 0.4% |
Estimated average development profit on completion | 3.1% | 0.2% | 12.4% | 3.9% |
Estimated average percentage of completion | 50.3% | 56.1% | 55.6% | 51.0% |
Current average rent per unit (in €) | 1,158 | 1,042 | 1,046 | 1,140 |
Construction costs (€/m²) | 4,298 | 3,032 | 3,219 | 4,089 |
2018 | | | | |
| | Randstad | Mid East | Brabantstad | Total |
Gross initial yield | 4.4% | 4.7% | 4.6% | 4.4% |
Net initial yield | 3.8% | 3.8% | 3.9% | 3.8% |
Long-term growth rental rate | 2.5% | 2.5% | 2.4% | 2.5% |
Average 10-year inflation rate (NRVT) | 0.5% | 0.5% | 0.5% | 0.5% |
Estimated average development profit on completion | 12.9% | 6.9% | 13.5% | 12.5% |
Estimated average percentage of completion | 48.6% | 56.9% | 68.7% | 50.2% |
Current average rent per unit (in €) | 1,162 | 979 | 1,011 | 1,136 |
Construction costs (€/m²) | 3,635 | 2,139 | 2,515 | 3,411 |