Housing-Related Services/Extension

2016 was characterized by the expansion of Vonovia Mess Service GmbH (VMSG). This company bundles all activities relating to the Group’s own meter reading service and the provision of energy services.

VMSG successfully expanded the number of properties it is responsible for in 2016. At the end of the year, automated meter reading (smart metering) was being used for 30,000 apartments. This also includes the performance of ancillary expense settlement services. The company is to continue to grow in this area in the years to come, too. Tenants benefit from automated remote meter reading, rendering the need for them to be at home on “meter-reading day” obsolete. The remote testing of the meter devices at periodic intervals allows device faults to be picked up on early on, meaning that consumption estimates are becoming increasingly superfluous.

We are tapping into further potential by investing in decentralized power generation. Our own photovoltaic facilities have generated more than 2,300 MWh of electricity. Our 29 decentralized cogeneration units allowed us to generate more than 170,000 kWh of electricity – the heat generated in the process is used to heat the drinking water within the building. We believe that this area offers further growth potential as well. Our additional efforts aim to allow our tenants to participate even more directly in the energy transition, ideally in the form of electricity which has been generated locally.

One service that is already well-established is Vonovia’s cable TV business. This business area was launched at the end of 2011, when a partnership was entered into with Deutsche Telekom. Further partnerships with other cable network operators followed and today, Vonovia’s multimedia subsidiary already supplies more than 75 % of Vonovia’s properties with TV signals and high-bandwidth telecommunications connections offering Internet bandwidths of 50 Mbit/s and more. We plan to expand our existing cooperation with Deutsche Telekom to include further service offerings.

We are also expanding the level of support we provide to our older tenants within the Extension segment: In particular, senior-friendly apartment conversions and bathroom design based on our tenants’ wishes respond to the needs of our tenants. We are currently also collaborating with another provider on a pilot project trialling a mobile home emergency system in one particular region.

In addition, we are currently running a pilot project on ambient assisted living systems, which we expect to result in a significant increase in quality of life and safety for our older tenants. Among other things, we are also involved in a number of research projects on “decentralized SmartHome” systems. We are also analyzing the market for outpatient care and household services. Specific models for the implementation of a high-quality service offering for Vonovia’s older tenants are already in the planning stages.

The issue of “burglary protection” is relevant for many tenants. We are counteracting an increase in burglaries by allowing our customers to request that the security features of critical windows and doors be structurally reinforced. These are being coordinated with the State Criminal Police Agency of North Rhine-Westphalia.

Vonovia has established its own efficient craftsmen’s organization, which assumes responsibility for almost all repair and work for those companies in the Vonovia Group with real estate holdings. This craftsmen’s organization also realizes a large part of the Upgrade Buildings and Upgrade Apartments programs independently, or coordinates the use of subcontractors.

Vonovia also ensures compliance with the environmental, health and safety (EHS) regulations by scheduling regular safety inspections that are performed in all units. The specialized department plans the implementation of corrective measures without delay as and when required and monitors amendments to EHS legislation.

As well as saving costs, the purpose of Vonovia’s own craftsmen’s organization is to ensure that the customer service that the Group offers adheres to uniform quality standards and increases these standards on an ongoing basis, as well as to exploit the procurement advantages resulting from bundling and standardization. The fact that the Group is able to influence quality and scheduling directly also helps to improve customer satisfaction.

In the 2016 fiscal year, the craftsmen’s organization performed around 679,000 (2015: 449,000) smaller repairs and renovated around 40,000 (2015: 14,300) vacant units. As of December 31, 2016, the craftsmen’s organization as a whole had a workforce of 3,765 employees (2015: 2,568), with 2,989 craftsmen (2015: 1,625) working in 18 locations (2015: 16) across Germany.

Measures were taken to expand our insourcing efforts relating to the residential environment in the form of the gardening and landscaping service, particularly in conurbations, in 2016. More than 400 employees are now responsible for managing the outdoor areas. The plan is to expand this service further, particularly as far as maintenance is concerned. The standardization of residential environment modules such as playgrounds and refuse collection points serves to boost efficiency and generate additional cost advantages. In addition to the higher quality of the services provided, cost savings can also be achieved in this area by bundling and standardizing procurement processes (consumer materials, playgrounds, etc.).

Via its wholly-owned subsidiary Vonovia Immobilien-Treuhand GmbH (VIT), Vonovia offers condominium administration services for homeowners’ associations. The subsidiary operates in 22 office locations across Germany, split into six regional teams. As of December 31, 2016, VIT supported 2,240 homeowners’ associations (2015: 1,250) accounting for 72,247 residential and commercial units (2015: 41,051), 17,208 units (2015: 13,191) of which belonged to Vonovia, and also managed 55,039 units for third parties (2015: 27,860).

VIT is one of Germany’s biggest property managers. It now also works for external homeowners’ associations in order to manage communal property in line with the German Condominium Act (Wohnungseigentumsgesetz) and offers full property management services for self-contained properties. In addition to these services, Vonovia offers its customers access to nationwide framework agreements with craftsmen and other service providers at special conditions. VIT also offers services relating to technical building evaluation for external owners.

Strategic
The “Strategic” subportfolio contains locations that offer development potential that is above average and for which we are pursuing a value-enhancing property management strategy.
Modernization Measures
Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or handicapped-accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.
Maintenance
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.