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The large German real estate group Vonovia records losses of 6.7 billion euros and falls on the stock market

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We have another real estate group in Germany that is in big trouble, and we are talking about the large company Vonovia . The German group posted a loss of around 6.7 billion euros last year following the devaluation of its properties, it announced on Thursday. The group's CEO, Rolf Buch, wants to keep the cash and sell the real estate packages to reduce the debt ratio.

This rose to 47.3 percent last year – the target is actually a maximum of 45 percent. However, shareholders will receive a dividend of 0.90 euros. However, the Group intends to change its dividend policy in the future. Another sign that

The real estate industry in Europe, especially in the central area, is struggling with the consequences of high interest rates and exploding construction costs. Almost no new apartments are built anymore. Furthermore, no major transactions have been recorded for a long time, making it difficult for many market players to assess the true value of the real estate portfolios on their books. This fuels further uncertainty. Property prices have fallen . Many real estate developers have gone bankrupt. For real estate companies, the devaluation of their portfolios has led to heavy losses. As a result, dividends have been cut or canceled altogether. The crisis is in Germany and it suits us quite well.

The boss of Vonovia's smaller competitor, LEG Immobilien, Lars von Lackum, said 2023 was an "annus horribilis" for the sector. At LEG, 2023 writedowns resulted in a loss of approximately €1.5 billion. At Hamburg-based TAG Immobilien, the loss was 410.9 million euros, while at Grand City Properties it was 638 million euros. Millions of times are expected, but in the meantime the disaster is here, and it can also be seen in the stock market prices: Vonovia was overvalued, but now it has taken a fair beating. Here are his ratings in February

“Industry voices are becoming increasingly insistent that values ​​may have already hit rock bottom,” Buch said. “As soon as the market stabilizes, we will focus more on increasing our earnings,” he announced. Vonovia owns around 546,000 apartments in Germany, Sweden and Austria. The Group had to write down its portfolio by 6.6 percent in the first half of the year, compared to 4.2 percent in the second half.

Regarding operational activities, Vonovia was able to increase rental income in 2023, with a vacancy rate of approximately two percent., i.e. a very good result. However, income from operating activities fell to 1.8 billion euros due to interest rate developments.

The company's performance will depend on the economic situation in Germany: if there is growth, the properties will return to being occupied and sought after and therefore the company will grow. However, at this moment, the outlook does not look positive and I believe that we will see further devaluations in 2024. There is no light at the end of the tunnel yet.


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The article The large German real estate group Vonovia records 6.7 billion euros in losses and falls on the stock market comes from Economic Scenarios .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-grande-gruppo-immobiliare-tedesco-vonovia-registra-67-miliardi-di-euro-di-perdite-e-cade-in-borsa/ on Sun, 17 Mar 2024 11:00:01 +0000.