Shares in Vonovia

In the first six months of 2019, the price of Vonovia’s shares rose by approximately 6%, closing the first half of the year 2019 up by 7% on a year-to-date basis, which is similar to the performance shown by the EPRA Europe Index. There were two main factors driving our share price performance: the share price showed a marked increase in the first quarter of 2019, also due to the ECB’s decision not to lift key rates until the end of the year at the earliest. The positive performance of Vonovia’s shares, which had gained as much as 23%, stalled on June 5, 2019 when the Berlin State Government announced its plans to freeze rents in the city for a period of five years. Our comments on the plans currently pursued by the Berlin State Government can be found in the chapter entitled “Our contribution to the current debate,” as well as on our website.

https://investors.vonovia.de/news

As only around 10% of our portfolio is located in Berlin, we believe that the risk for Vonovia is limited. We do consider the current development as confirmation that our approach of investing in various urban growth regions across Germany is the right strategy, and we currently see no reason to change our long-term view on the business.

We believe that the environment for the German residential real estate sector remains positive in general. In our view, the main drivers behind this will be the imbalance between high demand for, and a short supply of, affordable homes in urban locations, the continued keen interest in German residential real estate and the ongoing favorable interest rate environment.

Vonovia’s market capitalization amounted to € 22.8 billion at the end of the first half of 2019.

Share Price Development