Group’s Business Development

The 2017 fiscal year developed very successfully for Vonovia on the whole. We were able to pick up exactly where we left off in 2016, continuing with our positive business development. We continued to pursue our corporate strategy unchanged. All key figures showed positive development.

In the Rental segment, we implemented our modernization and new construction measures as planned. Our innovative new building solutions using a standardized series construction system are our way of underpinning the role in which we see ourselves, namely as a company that provides impetus for the industry as a whole. We believe that these solutions provide us with an opportunity to build new, affordable and needs-oriented rental apartments and we are convinced that cost awareness and quality are not mutually exclusive. Our housing stock continued to increase in value in the 2017 fiscal year.

In the Value-add Business segment (previously known as “Extension”), we forged ahead with the continued expansion of our housing-related services. We successfully expanded the services provided by the craftsmen’s organization and our residential environment services, in particular. Business activities were also intensified in the field of condominium administration services, the supply of cable TV to tenants, and metering and insurance services. The services offered as part of the Value-add Business are being well received by our customers.

In the Sales segment, we continued to pursue our strategy of selective sales. We reduced our housing stocks considerably in less attractive regions.

Key Events

The first-time consolidation of the conwert Group, comprising 208 companies, in the first quarter of 2017 allowed us to lay the foundation for the targeted management of the acquired portfolio. The creation of the necessary exchange shares increased our total equity by € 88.9 million in net terms. The first-time consolidation resulted in goodwill of € 231.9 million.

In the second quarter of 2017, we stepped up our efforts to achieve the organizational integration of conwert into Vonovia’s organization. Furthermore, a squeeze-out process regarding the remaining conwert shares was initiated by Vonovia SE and concluded by way of the corresponding resolution passed at conwert’s Annual General Meeting held on August 29, 2017.

On May 16, 2017, the Annual General Meeting of Vonovia SE passed a resolution to distribute an amount of € 525,052,568.32, or € 1.12 per share, using the profit for the 2016 fiscal year. Shareholders could opt for either a cash dividend or a non-cash dividend in the form of new shares created using authorized capital, with an exchange ratio of 30.5:1.

A resolution on the merger of Gagfah S. A. with Vonovia SE was passed on June 27, 2017. This means that we performed a key task that will create a more efficient legal structure within the Vonovia Group.

Finally, in the second quarter of 2017, we completed a contract regarding the acquisition of the PROIMMO AG portfolio. The acquisition took place in the third quarter of 2017.

In the third quarter of 2017, we added the real estate portfolio of PROIMMO AG, including 1,032 apartments and 24 commercial units, located mainly in Hanover to our portfolio as of July 1, 2017.

In August 2017, we commissioned our new tenant online customer portal, taking a further step towards improving our service quality in the digital environment. Our customers can easily access the portal using any end device. It enables damage to be reported online, provides an insight into ancillary expenses and tenant accounts, and allows apartment viewing appointments to be booked, for example.

We also activated our Vonovia Immobilien Treuhand app in August 2017. It gives property owners, whose properties are managed by Vonovia Immobilien Treuhand, convenient online access, allowing them to view and manage their own data and contracts, report damage or issue orders online at any time. The app is our way of promoting customer loyalty and making our processes and interfaces more transparent.

In the fourth quarter of 2017, we concluded a partnership agreement with the French Group SNI in October. The SNI Group is the public-sector real estate subsidiary of the state financial institution Caisse des Dépôts and is the biggest social housing building contractor in France. The portfolio comprises around 348,000 apartments, 262,000 of which are classed as social housing and around 86,000 of which are temporary homes. The agreement aims to consolidate the expertise and market knowledge of the two companies and identify joint growth and investment opportunities. Among other things, an agreement was reached on the following collaboration areas: Benchmarks for the processes of both companies, an investigation into the interaction between digital and conventional approaches in a real estate context, consolidating information so as to identify the most efficient use of resources in a mutually beneficial manner, identification of the potential for energy-saving solutions, identification of services for private customers as a key growth driver, customer satisfaction, dialog on the experience of both companies with portfolio management, discussion of the opportunities available for cross-border investments on the real estate market and sounding out potential investment partnerships.

On December 18, 2017, BUWOG AG, which has its registered headquarters in Vienna, and Vonovia signed a business combination agreement. Based on this agreement, Vonovia has announced its intention to make the shareholders in BUWOG a voluntary public takeover offer for the purchase of all BUWOG shares. The BUWOG shareholders are to be offered a price of € 29.05 in cash for each share in BUWOG. BUWOG has valued this cash offer, which was published on February 5, 2018, at around € 5.2 billion, taking into account the potential shares from the conversion of the convertible bonds issued by BUWOG.

On December 31, 2017, we performed another valuation of our real estate portfolio due to the current market situation. All in all, the value of the residential real estate portfolio amounted to € 3,434.1 million.