The Company

Vonovia stands for around 333,000 apartments in almost all of Germany’s attractive cities and regions. The total comes to around € 27 billion, with net assets based on the definition coming to approximately € 17 billion (EPRA – European Public Real Estate Association). An additional 59,000 or so apartments are also managed by Vonovia for third parties. This makes Vonovia Germany’s leading nationwide residential real estate company.

As a modern service company, Vonovia focuses on customer orientation and, as a result, on the satisfaction of its tenants. Offering tenants affordable, attractive and livable homes is a prerequisite for the company’s successful development. A central service center together with local caretakers and the company’s own technical and residential environment organization ensure that our tenants’ concerns are attended to in a timely, straightforward and reliable manner.

Vonovia’s business model is based on two pillars: the nationwide rental of good-quality and, most importantly, affordable living space and the provision of fairly priced property-related services. These property-related services mainly relate to cable TV, bathroom renovations in response to tenant requests, automated meter reading and senior-friendly apartment modernization. Finally, Vonovia makes long-term investments in and modernization.

In addition to its successful long-term and modern property management, Vonovia also develops its real estate portfolio through targeted acquisitions and sales. The company will also be using densification and vertical expansion to build an increasing number of new apartments. The goals associated with the company’s new portfolio acquisitions include strengthening its overall regional presence in Germany, realizing operational and financial economies of scale and optimizing structures.

As one of Germany’s leading residential real estate companies, Vonovia enjoys a wide range of close relationships not only with its customers, but also with stakeholder groups that are important for the company’s development. These mainly include its employees, investors, suppliers and service providers, as well as social interest groups, including non-governmental/non-profit organizations.

While this Annual Report is aimed primarily at providing investors with financial information on the company, reporting to the company’s other stakeholders will be achieved as part of the independently published Sustainability Report.

Corporate Structure

The parent company of the Vonovia Group is organized in the legal form of a European company (SE). Vonovia SE is directed by a Management Board, which is responsible for conducting business and developing the Group’s strategy. Implementation occurs in close coordination with the Supervisory Board, which is regularly briefed by the Management Board regarding the development of business, strategy and potential opportunities and risks. The Supervisory Board oversees the activities of the Management Board.

Corporate Structure

Corporate Structure (graph)Corporate Structure (graph)

The parent company, Vonovia SE, performs the function of the management holding company for the Group. In this role, it is responsible for determining and pursuing the overall strategy and implementing the company’s goals. It also performs property management, financing, service and coordination tasks for the Group. Furthermore, it is responsible for the management, control and monitoring system as well as risk management.

Vonovia’s core operating business is currently divided into six business areas. These are split into business units, each of which is responsible for an average of around 9,300 housing units on location as part of a decentralized structure.

Responsibility for product management, new construction and modernization, acquisition and sales, as well as the commercial and operational support functions, are centralized.

To carry out these management functions, Vonovia has established a series of service companies. By pooling the corporate functions on a uniform management platform, Vonovia achieves harmonization, standardization and economies of scale objectives, and the other Group companies thus do not need to perform such functions themselves.

Vonovia SE is based in Germany. Its registered office is in Düsseldorf. The head office (principal place of business) is located at Philippstrasse 3, Bochum.

As of December 31, 2016, 189 legal entities/companies formed part of the Vonovia Group. A detailed list of shareholdings for Vonovia SE is provided in the Notes.

The management of the business is based on the approaches of the company and is conducted via the three segments: Rental, Extension and Sales.

The Rental segment combines all of the business activities that are aimed at the value-enhancing management of the properties.

The Extension segment combines all of the business activities relating to the expansion of the core business to include customer-oriented services, e.g., services that are closely related to and/or influence the rental business.

The Sales segment is derived from the Operate sector of our portfolio and bundles all real estate sales from the portfolio. This includes the individual sale of apartments from the subportfolio and the sale of entire buildings or pieces of land from the and Non-Core subportfolios; combined, these will be reported as Non-Core sales.

Details on the management of our business can be found in the chapter on our management system.

Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
EPRA (European Public Real Estate Association)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
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.
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.
In the “Privatize” subportfolio, our focus is on generating additional added value by privatizing owner-occupied apartments and single-family houses at a premium compared with their fair value.
In the “Non-Core” subportfolio, our focus is on selling properties in locations that offer below-average development potential in the medium to long term to private and institutional investors. Limited potential is defined, in particular, by below-average property condition combined with a location that is of similarly below-average quality.
The “Non-Strategic” subportfolio contains locations and properties that were identified in the latest extensive review of the overall portfolio as not being absolutely essential for further strategic development. Properties in the “Non-Strategic” portfolio are reviewed on a regular basis and offer further sale potential.