The real estate giant Vonovia is reacting to the rising cost of capital due to the turnaround in interest rates and wants to reduce its billions in debt. Vonovia intends to part with real estate packages with a volume of around 13 billion euros in the coming years, the group announced on Wednesday in an analyst presentation. In addition, there is the nursing home division of the subsidiary Deutsche Wohnen.
In the new environment there will also be no more acquisitions, said the group, which has become the largest German real estate company through numerous takeovers. Vonovia also wants to open up to joint ventures with investors.
According to its own statements, the group has a portfolio of around 550,000 apartments, 42,000 of which are in Berlin.
The takeover of Deutsche Wohnen has given Vonovia a further boost. The company also benefits from its new buildings. Vonovia confirmed its annual sales and earnings targets on Wednesday in Bochum.
Many people are very concerned that they will no longer be able to bear the increased costs for heating due to the current energy crisis, said company boss Rolf Buch when the quarterly figures were presented. Vonovia will find a solution together with the tenants if someone can no longer afford their apartment due to increased heating and hot water costs. The company has found similar solutions since the beginning of the corona pandemic.
In order to save as much natural gas as possible in the stocks, Vonovia has decided to lower the heating temperature for gas central heating at night within the legally prescribed framework, the company announced. In this way, the real estate group relieves tenants of the foreseeable sharp rise in energy costs and the environment. In addition, Vonovia adjusts the advance payments in order to avoid high additional claims at the end of the year.
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In the first half of 2022, operating profit (FFO) increased by 36 percent year-on-year to EUR 1.06 billion, mainly thanks to the takeover of Deutsche Wohnen. At the end of June, the average rent rose to EUR 7.44 per square meter – that was two percent more than a year earlier. Modernized apartments in particular contributed to the growth.
The companies can partially pass on the costs of energy-related renovations such as thermal insulation and the replacement of old heating systems and windows to the rent. Sales climbed in the first six months by almost 35 percent to 3.1 billion euros.
In addition, it became known that a takeover of the ailing competitor Adler Group is no longer an option for Vonovia. “The markets have changed and that’s why the original idea of ​​taking over the Adler Group is definitely off the table for us,” said company boss Rolf Buch of the financial news agency dpa-AFX on Wednesday. The decision of that time can therefore also be critically questioned.
A few months ago, Vonovia became the largest shareholder in industry rival Adler Group, which had gotten into trouble. Vonovia secured a 20.5 percent stake in the competitor by realizing a pledge.
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Adler has come under the scrutiny of the Federal Financial Supervisory Authority (BaFin) after the real estate company first came under pressure from short seller Fraser Perring in October. His research service Viceroy had raised serious allegations against Adler, including the assessment of real estate projects. Adler had always denied the allegations.
On Monday, the financial regulator Bafin announced that Adler Real Estate’s 2019 annual balance sheet was incorrect. The value of a project to develop a former glassworks in Düsseldorf was estimated at 375 million euros, about twice as high as the market value. Adler, on the other hand, maintains that the audited consolidated financial statements for 2019 are correct and correct in their entirety and intends to appeal against the BaFin decision.
