In Germany’s largest housing group, Vonovia, earnings and dividends also increase during the Corona crisis. The rise in rents has slowed down, emphasizes CEO Rolf Buch. Political measures had an impact.
Bochum (dpa) – Vonovia, Germany’s largest housing group, is feeling the rents hold. The market-related increase in Vonovia rents was 0.8 percent, a third below the previous year’s figures, Chief Executive Rolf Buch said when third-quarter business figures were released.
“Policy measures to reduce rent increases seem obvious,” Buch emphasized. However, in the case of rent increases through modernization, the advantage was 2.2%.
Based on the rental price brake introduced on June 1, 2015, the owner can only request the usual local comparative rent plus ten percent. More recently, politicians extended the observation period for the local comparative income and therefore also for the income index from 4 to 6 years. This means that the rental price brake is only now being fully effective, especially for existing rentals, Buch said. According to information provided by Vonovia, the monthly rent in Germany was 6.91 euros per square meter at the end of September.
Vonovia received a total of 1.7 billion euros in rent in the first nine months of the year, almost 12 percent more than in the same period of the previous year. The acquisition of the Swedish real estate Hembla had an impact here. Vonovia owns around 356,000 apartments in Germany, and there are around 60,000 more apartments in Sweden and Austria.
The Dax group business continues to do well. “Corona and the new partial lockdown will have no material effect on our business,” said Buch. With a vacancy rate of 2.6 percent, Vonovia’s apartments are almost fully rented. It will stay that way due to the high demand for housing unchanged.
Vonovia wants to reach the upper limit of the forecast range of € 1,275 to 1,325 million for the annual operating profit target (FFO). Shareholders, who will receive a dividend of 1.69 euros per share for 2020, should also benefit from it. That would be 12 cents more than the year before. In the next year the company wants to earn even more, the operating result will increase by 11 percent.
Berlin’s rent cap won’t have a major impact on Vonovia’s numbers. “Calculated in twelve months, the rent cap costs us 10 million euros,” said Buch. For two-thirds of the 42,000 apartments in Berlin, Vonovia does not have to lower rents at all, because they are below the upper limits. Berlin continues to be an important market for Vonovia, where people are investing heavily in the construction of new apartments.