Vonovia Bouncing Back After Weathering the Housing Storm
- Vonovia initiates its role in exacerbating the ongoing housing predicament.
Vonovia, the leading residential real estate giant in Germany, is primed for a resurgence, navigating past the storm of the housing crisis. "We're leaving the crisis behind faster than many others," stated CEO Rolf Buch while discussing the 2024 financial figures.
Like all landlords, Vonovia revels in the high demand for urban housing. Rents swelled by an average of 8.01 euros per square meter in 2024, equating to a 3.5% increase from the previous year. In Germany, the average monthly rent per square meter was 7.89 euros by year-end.
Operationally, the company has thrived. The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 1.6% annually to reach €2.63 billion, attributable to the thriving business of additional services. By 2028, Vonovia expects to escalate its operating profit by approximately 30%, aiming for a range of €3.2 to €3.5 billion.
Although reporting a loss of over €962 million in 2024, this was substantially lower than the previous year. In 2023, the company encountered repeated write-offs due to the housing crisis,culminating in a deficit of nearly €6.8 billion.
In 2024, the board has proposed a dividend of €1.22 per share. Compared to the €0.90 per share dividend paid out in 2023, this represents a noteworthy increase.
- Residential Real Estate
- Vonovia
- Housing Crisis
- Crisis Recovery
- Germany
- Bochum
- Housing Market
- Rolf Buch
Insights:
- Vonovia's financial health has stabilized considerably since the housing crisis, demonstrating improvement with a lower loss in 2024 compared to the previous year [2].
- The company's EBITDA grew by 1.6% to over €2.63 billion, and rental income increased by 3.5%, surpassing the national average [2].
- Vonovia has built a considerable cash buffer of around €11 billion through property sales, enabling continued investments in modernization and new construction [2].
- Vonovia aims to construct approximately 70,000 new apartments by building on its own land, but it requires political support to reduce construction costs, currently hovering at €5,000 per square meter [1][2].
- The company anticipates a 30% increase in Adjusted EBITDA by 2028, aiming for a range of €3.2 billion to €3.5 billion, supported by expanding non-rental revenue streams [1][2].
- Vonovia plans to invest approximately €1.2 billion in modernization and new construction projects, such as expanding photovoltaic installations, in 2025 [1][2].
- Vonovia has set a roadmap for long-term carbon reduction, targeting a net-zero standard beyond 2045 [1].
- While the outlook is positive, Vonovia faces challenges such as high leverage and regulated rents, which could restrain its growth potential in a competitive market [1].
- Vonovia, having weathered the housing crisis, demonstrates a significant improvement in its financial health, as evidenced by the reduced loss in 2024 compared to the previous year.
- In 2024, Vonovia's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 1.6% to over €2.63 billion, surpassing the national average, and rental income increased by 3.5%.
- To continue investments in modernization and new construction, Vonovia has built a cash buffer of around €11 billion through property sales, with plans to construct approximately 70,000 new apartments by building on its own land, but it requires political support to reduce construction costs currently hovering at €5,000 per square meter.
