| | 2015 | 2014 | 2013 |
At the beginning of the year | 10,134 | 10,477 | 11,870 |
Transfers from investment property under construction | 8,567 | - | - |
Investments | 10,509 | - | - |
Disposals | (5,543) | - | - |
Net gain (loss) from fair value adjustments on investment properties (like for like) | (3) | (343) | (1,393) |
Net gain (loss) from fair value adjustments on investment properties | 215 | - | - |
In profit and loss | 212 | (343) | (1,393) |
In other comprehensive income | - | - | - |
Transfers out of level 3 | - | - | - |
Total investment property (level 3) | 23,879 | 10,134 | 10,477 |
Lease incentives | 181 | 192 | 204 |
At the end of the year | 24,060 | 10,326 | 10,681 |
The Fund’s investment properties are valued by an external valuation expert on a quarterly basis.
The Fund’s investment properties are valued by an external valuation expert on a quarterly basis. On 31 December 2015, these properties were revalued by independent professionally qualified valuation experts with experience in the locations and categories of the investment properties valued (level 3). The carrying values of investment property as at 31 December 2015, and 1 January 2015, are in line with the valuations reported by the external valuation experts. In estimating the fair value of the properties, the highest and best use of the properties is their current use. There has been no change to the valuation technique during the year and there were no transfers between levels 2 and 3 during the year.
The lease incentives granted are included in the total fair value of investment properties. For the year 2015 the amount of lease incentives is € 0.2 million (2014: € 0.2 million).
The significant assumptions made relating to the valuations are set out below.
| | 2015 | 2014 |
Current average rent (€/m²) | 213 | 74 |
Estimated rental value (€/m²) | 214 | 74 |
Gross initial yield | 7.0% | 9.4% |
Net initial yield | 6.6% | 8.3% |
Current vacancy rate | 2.0% | 4.7% |
Long-term growth rental rate | 1.5% | 1.9% |
Average 10-years inflation rate (IPD Nederland) | 1.5% | 1.9% |
The valuation of the investment properties takes into account a rent-free period/rental incentives of 2 months after occupation. Incentives to enter into rental agreements are spread evenly over the rental term, even if the payments are not made on such a basis.
The total gain (loss) for the year included an unrealised gain of € 215 (2014: nihil) relating to investment properties that are measured at fair value at the end of the reporting period.
Investment property includes buildings held under finance leases of which the carrying amount is nil (2014: nil).
Sensitivity analysis
The appraisal of the portfolio implies a net initial yield of 6.6% (2014: 8.3%). If the yields used for the appraisals of investment properties on 31 December 2015 had been 100 basis points higher than was the case at that time, the value of the investments would have been 13.1% lower. In this situation, the Fund’s shareholders’ equity would have been € 3.3 million lower.