There are areas of the economy that are benefiting greatly from the Corona crisis. The real estate industry is clearly one of them. The DAX Deutsche Wohnen group is seeing sustained high demand.
Berlin (dpa) – As in previous years, the real estate group Deutsche Wohnen can expect special high income in 2020 from the revaluation of its properties.
The company’s board of directors, which has been listed on the Dax since June, assumes that the valuation of the residential real estate portfolio as of December 31 will likely lead to an appreciation of around six percent of previously reported values. “The positive performance is primarily based on the sustained high demand and price dynamics in the residential real estate transaction market in the German metropolitan regions,” Vonovia’s competitor announced Thursday night in Berlin.
The Group’s real estate portfolio comprises around 162,000 apartments and 2,900 commercial units. Last year, the value of properties increased by 1,400 million euros to around 25,400 million euros. Based on this value, the revaluation in the current year would be around 1,500 million euros.
Meanwhile, Deutsche Wohnen continues to benefit from the increase in rents. However, among other things, higher interest expenses put pressure on the operating result. The Dax Group confirmed the annual target on Friday in Berlin when the nine-month figures were released. Based on this, Vonovia’s competitor LEG Immobilien and TAG Immobilien expects an operating profit of around € 540 million, roughly on par with the previous year.
In the first nine months, contract rents increased 1.9 percent to € 634.5 million. Rents rose an average of 1.6 percent to 6.93 euros per square meter. In Berlin, rents increased less sharply by 0.4 percent to 6.90 euros due to the rent cap. Operating profit fell 1.2 percent to 422.4 million euros, not least due to higher interest expenses.