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## 22.2 Investments in real estate 

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In 2013, 77% of the value of Aegon’s properties, both for general account and for account of policyholders, were appraised (2012: 89%), of which 99% was performed by independent external appraisers (2012: 99%). 

Aegon USA has entered into commercial property portfolio, consisting of office, retail and industrial buildings. These non-cancellable leases have remaining lease terms of between 9 months and 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 51 for description of non-cancellable lease rights. 

Rental income of EUR 52 million (2012: EUR 48 million; 2011: EUR 93 million) is reported as part of investment income in the income statement. Direct operating expenses (including repairs and maintenance) arising from investment property that generated rental income during the period amounted to EUR 80 million (2012: EUR 74 million; 2011: EUR 78 million). In 2013, none of direct operating expenses is related to investment properties that did not generate rental income during the period (2012: EUR 6 million; 2011: EUR 7 million). 

Transfers from other headings mainly reflect the properties that were foreclosed during the year. The associated mortgage loans were previously reported as part of investments. 

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

Refer to note 51 for a summary of contractual obligations to purchase investment property or for repairs, maintenance or enhancements. 

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