Financing Strategy

The financing strategy pursues various yet complementary goals: These are centered on ensuring adequate, but also optimized, liquidity at all times, a balanced structure and maturity of debt capital, optimization of financing costs and credit . Our aim is to maintain an ideal level of debt of between around 40% and 45% measured in terms of the loan-to-value ratio key figure.

Thanks to its broad range of equity and debt capital providers and the BBB+/Stable/A-2 long-term corporate credit ratings awarded to our company by S&P, our company has excellent access to the international debt and equity capital markets. This gives us flexible access to capital based on favorable financing conditions at all times, securing Vonovia’s liquidity on a permanent basis.

This comprehensive access to the international debt and equity capital markets gives a German residential real estate company a clear strategic competitive edge. This was recently evident time and again in the context of our acquisitions and the that have been implemented. Without fast and free access to the equity and debt capital markets, it would not have been possible to carry out these measures.

The latest acquisitions expose Vonovia to country risks, and it is also exposed to a currency risk due to the acquisition of the stake in Victoria Park in Sweden. The new challenges arising from this have been incorporated into the financing strategy.

Rating
Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.
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.
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 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.