In the valuation of the Gerresheim site, ADLER Real Estate AG incorrectly recognised a property value that, as at 31 December 2019, was not representative of the price that could have been received for the sale as part of an orderly transaction between market participants. The reported values for the balance sheet items “Non-current assets held for sale” and “Income from fair value adjustments of investment properties” were therefore too high.

The overvaluation identified of at least EUR 170 million corresponds to the difference between the recognised value of EUR 375 million and the book value as at 30 June 2019 (EUR 205 million). Measured against the initial acquisition costs of EUR 142 million, the overvaluation corresponds to a maximum of EUR 233 million. The correct fair value (within the meaning of the International Financial Reporting Standards – IFRS) should have been calculated within this range. The property value implicitly agreed in the purchase agreement regarding shares in the owner of the Gerresheim site, which was taken as the basis for the valuation, does not correspond to the fair value. The valuation by ADLER Real Estate AG was based on the assumption that the Gerresheim site could be developed as planned in spite of the fact that the required planning permissions had not yet been granted. The valuation was therefore based on assumptions regarding possible uses for the site that were not certain as at 31 December 2019. Furthermore, the share purchase agreement did not constitute an orderly transaction between market participants.

This error finding by BaFin is a partial error finding. The examination of the consolidated financial statements and the consolidated management report for the 2019 financial year is still ongoing. The same applies to the audits for the 2020 and 2021 financial years. BaFin is making use of the option to issue a partial error finding for the first time. This allows BaFin to inform the capital markets of accounting errors while financial reporting enforcement procedures are still ongoing.

In August 2021, BaFin ordered the Financial Reporting Enforcement Panel (FREP), which was responsible for financial reporting enforcement up until the end of 2021, to examine the accounting of ADLER Real estate AG for the financial years 2019 and 2020. In June 2022, after the auditor issued a disclaimer of opinion for the consolidated accounts, BaFin launched an examination of the consolidated financial statements and consolidated management report for the 2021 financial year.
ADLER Real Estate AG, which is domciled and listed in Germany, is a 96.72% subsidiary of Adler Group S.A. domiciled in Luxembourg. The Commission de Surveillance du Secteur Financier (CSSF) is the competent authority for financial reporting enforcement with regard to Adler Group S.A.