Reside
Real estate devalued: Vonovia posts billions in losses
Vonovia owns a total of around 548,000 apartments in Germany, Sweden and Austria. photo
© Bernd Thissen/dpa
When money was cheap, Vonovia bought many apartments. Now, with rising interest rates, the debt is pressing. And the apartments are worth less.
Germany’s largest residential real estate group Like the entire industry, Vonovia is struggling with rising interest rates. That’s why Vonovia wants to reduce its debts by selling real estate, for example.
Due to the difficult market environment, the company is again devaluing its real estate portfolio. The bottom line is that there is also a loss in the billions in the second quarter.
The development of Vonovia’s real estate values also declined in the second quarter, the Dax group announced in Bochum in the morning. However, the trend has weakened compared to the previous quarter. Vonovia had already carried out an unscheduled revaluation of the portfolio in the first quarter.
“We see cautious signs of market stabilization in most price segments that affect us,” said company boss Rolf Buch of the financial news agency dpa-AFX.
Vonovia wants to sell 66,000 apartments
Efforts to reduce financing costs have top priority, Buch said. An important step was the repurchase of bonds with a total value of one billion euros that took place a few weeks ago. Together with the sale of 1,350 apartments for around 560 million euros and the sale of almost 30 percent of its Südewo portfolio for one billion euros, this gives the company good financial leeway. According to earlier information, after years of expansion, Vonovia wants to sell around 66,000 apartments and use the proceeds to reduce debt.
In the second quarter, the company posted another billion-dollar loss. The bottom line was a loss of a good two billion euros due to a further devaluation of the real estate in the books. In the same period last year, Vonovia had reported a profit of EUR 1.8 billion.
Vonovia announced that the value of the rental portfolio was around EUR 88.2 billion at the end of June. At the end of March, the properties were still valued at 91.2 billion euros and at the end of 2022 even at 94.7 billion euros.
Meanwhile, day-to-day business was getting a little better. After a significant decline in the first quarter, the operating profit remained almost at the previous year’s level at EUR 502.2 million. While business with project development and additional services in particular was weaker, the Group did significantly better in letting due to the continued high demand for affordable housing in the metropolitan areas.
Average rent of EUR 7.51 per square meter
In Germany, the average rent at Vonovia at the end of June was EUR 7.51 per square meter. Sales increased in the three months to the end of June by 1.5 percent to almost 1.5 billion euros. The company confirmed its annual targets.
In the past few years of low interest rates, Vonovia had grown strongly, primarily through acquisitions in Germany and abroad. In addition, the group benefited from rising rents in large cities and new buildings. In total, Europe’s largest private housing company owns around 548,000 apartments in Germany, Sweden and Austria.