Vonovia grows in the crisis – rent brake takes effect

Vonovia grows in the crisis - rent brake takes effect

Germany’s largest housing company vonovia gets a taste of the rent brake. At 0.8 percent, the market-related increase in vonovia rents was one-third lower than in the previous year, said CEO rolf buch when presenting the company’s third-quarter figures.

"The political measures to lower rent increases are obviously having an effect," buch emphasized. However, the increase in rent due to modernization was 2.2 percent.

After the announcement of the 1. June 2015, landlords are allowed to charge no more than the local comparative rent plus ten percent. Most recently, politicians extended the period under consideration for the local comparative rent, and thus also for the rent index, from 4 to 6 years. This means that the rent cap is "only now beginning to take full effect," said buch. According to vonovia, the average monthly rent in germany at the end of september was 6.91 euros per square meter.

In total, vonovia took in a good 1.7 billion euros in rents in the first nine months of the year, almost twelve percent more than in the same period of the previous year. This was mainly due to the takeover of the swedish real estate company hembla. In germany, vonovia owns around 356.000 apartments, another 60.000 apartments are in sweden and austria.

The business of the dax group continues to perform well. "Corona and the new partial lockdown will have no significant impact on our business," buch said. With a vacancy rate of 2.6 percent, vonovia’s apartments are almost fully leased. This will remain the case due to the unchanged high demand for housing.

In terms of its annual target for operating profit (FFO), vonovia aims to reach the upper end of the forecast range of 1.275 to 1.325 billion euros. Shareholders are also set to benefit from this, with a dividend of 1.69 euros per share for 2020. That was 12 cents more than a year earlier. In the coming year, the company plans to earn even more, with operating profit increasing by 11 percent.

Berlin’s rent cap will have no major impact on vonovia’s figures. "Calculated over twelve months, the rent cap costs us 10 million euros," said buch. Two thirds of the 42.000 apartments in berlin vonovia did not have to lower rents at all because they were below the upper limits. Berlin remains an important market for vonovia, where it is investing heavily in the construction of new apartments.

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