Business Model and Risk Assessment

A Sustainable Business Model

A home is a basic human need. The fundamental availability of living space, needs-based and good living standards, an environment in which we feel comfortable and intact neighborhoods are of crucial importance when it comes to determining whether we feel at home in an apartment in the long run. The object of our business – namely the renting of high-quality, modern and affordable homes combined with housing-related services and the construction of new living space – meets this basic need. As we are aware of the tense situation on numerous regional residential property markets, we are constantly on the lookout for the best solutions so that we can offer all of our tenants homes that meet these very standards in the long term. A home should not be a question of social status.

Within this context, Vonovia is creating new homes as part of its development, new construction and vertical expansion program in order to meet the growing demand. The company is also, however, investing in the maintenance and upgrading of its existing properties. These efforts include, in particular, measures to improve energy efficiency. This allows us to make a significant contribution to protecting our climate. At the same time, well-insulated apartments increase efficiency and simultaneously reduce ancillary expenses for our customers. Compliance with the regulatory requirements of environmental, energy and rental law is always a material component of our business processes. We seek to find mutually agreeable solutions that strike a balance between fair rents, effective climate protection and rising construction prices.

For Vonovia, housing does not end at the front door. A nice, stable and ecologically valuable environment is part of a good residential atmosphere. Therefore, together with other social actors, we become involved beyond our buildings and set trends with cities, companies and city planners, as well as with associations, initiatives and, last but not least, with our local customers for the sustainable and ecological development of entire neighborhoods.

In order to keep the service promise we have made to our customers and provide them with good quality over the long term, we perform as many tasks as possible on our own – via well-trained and committed service employees, caretakers, technicians and gardeners.

In all of our processes, we pay due attention to the impact that our business model has on society and the environment and seek to achieve developments and improvements that are as sustainable as possible.

The corporate strategy and structure of Vonovia SE has been further explained in the section entitled “Fundamental Information About the Group”. The corresponding non-financial performance indicators are set out in more detail under “Corporate Governance”.

An Extensive Risk Assessment

According to CSR-RUG, material risks associated with the corporation’s own business activities which are very likely to occur and which could have challenging negative effects on non-financial topics and, as a result, on the business model must be reported. We identify potential risks relating to areas such as corporate governance, society and the environment as part of our comprehensive risk management system. These risks are identified in both gross and net terms.

In the opinion of Vonovia’s management, there are no risks that meet the materiality criteria pursuant to Section 289c (3) Nos. 3 and 4 HGB in net terms. We have provided detailed information on other risks in the opportunity and risk report of the combined management report.