Vonovia Offers Attractive and Affordable Housing

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Vonovia’s IPO back in July 2013 signaled the start of a long-term growth course, the aim being to create a modern service company that could offer attractive and affordable housing across Germany.

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Vonovia splits its residential portfolio into 15 regional markets that are based on the residential real estate market regions in Germany and are spread across the entire country. These markets are core towns/cities and their surrounding metropolitan areas that are largely similar in terms of the supply of real estate and the real estate market, both at present and in the forecasts. They are also the markets that especially benefit from domestic migration. In relation to the fair value, 91% of our total portfolio is located in these 15 regional markets (see AR 2016, Portfolio Structure).

Vonovia’s six biggest regional markets are Berlin, the Rhineland region (Cologne, Düsseldorf, Bonn), the Rhine-Main region (Frankfurt, Darmstadt, Wiesbaden), the southern Ruhr region (Dortmund, Essen, Bochum), Dresden and Stuttgart, followed by the highly prosperous regions of Hamburg, Munich and Freiburg.

Vonovia offers conditions that, in some cases, are significantly lower than the standard local comparative rents. According to the 2016 F+B rent index, these have increased by 1.8% – as was also the case in the previous year. The difference between cities is quite considerable in some cases, with an average rent of € 6.54 per square meter of living area.

In order to calculate the rent index, the net rents, excluding ancillary expenses, were analyzed for apartments covering an area of 65 square meters with mid-range fittings and in mid-range locations, in municipalities with at least 20,000 inhabitants and published rent indices. As these features also apply to a large number of apartments in our portfolio, the values of the index can be approximately compared with those of Vonovia. Across the entire portfolio, Vonovia’s in-place rent per square meter amounts to € 6.02, and is thereby considerably lower than the average for the cities with rent indices (€ 6.54). (Source: F+B rent index 2016)