content_image/179894.jpg content_image/179904.jpg
## NOTE 7.2 INVESTMENTS IN REAL ESTATE 

<img src='content_image/179894.jpg'>

In 2010, 88% of the value of AEGON’s properties, both for general account and for account of policyholders, were appraised (2009: 89%), of which 91% was performed by independent external appraisers (2009: 92%). 

AEGON USA has entered into commercial property leases on its investment property portfolio, consisting of office, retail and industrial buildings. These non-cancellable leases have remaining lease terms up to 20 years. Most leases include a clause to enable upward revision of the rental charge on an annual basis according to either a fixed schedule or prevailing market conditions. 

AEGON The Netherlands has entered into long-term residential property leases that can be terminated subject to a short-term notice. Under Dutch law, the maximum annual rent increase on residential property rented in the affordable housing segment is specified by the Dutch national government and equals the annual inflation rate plus a small margin. 

Refer to note 48 for description of non-cancellable lease rights. 

Rental income of EUR 100 million (2009: EUR 86 million; 2008: EUR 96 million) is reported as part of investment income in the income statement. EUR 3 million (2009: 7 million; 2008: nil) is attributable to rent on foreclosed real estate. Direct operating expenses (including repairs and maintenance) arising from investment property that generated rental income during the period amounted to EUR 72 million (2009: EUR 65 million; 2008: EUR 53 million). EUR 9 million (2009: EUR 2 million; 2008: EUR 1 million) of direct operating expenses is related to investment property that did not generate rental income during the period. 

There are no restrictions on the realizability of investment property or the remittance of income and proceeds of disposal. 

Refer to note 48 for a summary of contractual obligations to purchase investment property or for repairs, maintenance or enhancements. 

<img src='content_image/179904.jpg'>

