Long-term Growth

Management Approach

A home is a fundamental human need. It provides security and shelter and is an expression of a person’s lifestyle. Housing has become a scarce resource for many people in Germany in recent years, however. Particularly in metropolises and conurbations, the pressure on the housing markets has increased dramatically.

Vonovia aims to contribute toward a long-term solution to the housing problem in metropolitan areas by providing modern and affordable homes. Developing our real estate portfolio through acquisitions and sales as well as densification and vertical expansion are important elements of our strategy.

Vonovia’s business model is built on two pillars: renting out affordable homes and providing housing-related services at fair prices. These pillars are boosted by our construction and acquisition activities and the efficient management of the portfolio. This allows us to ensure that rents remain affordable and ancillary costs remain low in the long term. 203-1

Corporate Strategy

We have pursued a corporate strategy based on the 4+2 pillars since 2013. The sixth pillar, our internationalization strategy, was added in 2017.

1. Property management: Improving key operating figures through efficient property management and digitization, improving quality and efficiency in our customer services; efficiently managing maintenance and modernization measures.

2. Financing: Securing sufficient, optimized liquidity, a balanced structure and maturity of debt, and the optimization of financing costs with an internationally competitive financing structure and safeguarding ratings.

3. Portfolio management: Renting out properties in a manner that increases value by optimizing existing properties and investing in maintenance and modernization; improving energy efficiency in the portfolio; expanding the development business and the established new construction and vertical expansion activities; pooling capacities by focusing on strategic regions.

4. Value-add: Adding customer-oriented services with a close relationship to rental business (e. g., technical services, managing the residential environment, property management, multimedia services, metering services, decentralized energy supply, caretaker services, managing outdoor and green spaces) to the core business.

5. Acquisition: Boosting the effectiveness of the core strategies through continual checks and including suitable portfolios in the list of existing properties.

6. Internationalization: Transferring knowledge and analyzing potential target markets in Europe.

The 4+2 Pillars of our Strategy

The 4+2 Pillars of our Strategy (graph)

Our annual report contains a detailed description of our 4+2 corporate strategy (see AR 2018, chapter Strategy).

Corporate Governance

Vonovia’s corporate governance is based on our corporate strategy and is aligned with our sustainable business activities. In the 2018 fiscal year, we expanded our business activities outside of Germany with the acquisition of BUWOG AG and Victoria Park AB. The acquisition of BUWOG also added development activities to the scope of our business. We adjusted our management system in the fourth quarter of 2018 and added the Development segment in the course of this business expansion. The segment formerly known as the Sales segment was renamed Recurring Sales, and the sale of buildings and properties is now shown as a separate business activity. We thus have four segments now: Rental, Value-add, Recurring Sales and Development.

  • Rental: This segment covers all business activities related to the management of our portfolio in a way that increases value.
  • Value-add (formerly “Value-add Business”): This segment pools all housing-related services performed by the craftsmen’s and residential environment organization, the condominium administration business, the cable TV business, metering services, energy supplies and our insurance services.
  • Recurring Sales (formerly part of the “Sales” segment): This segment covers all regular sales of individual condominiums and single family homes.
  • Development: This segment covers project development in new residential buildings

We align our business activities effectively with the aim of sustainably increasing company value using an integrated planning and control system based on central performance indicators.

You can find out more about our corporate governance in our annual report. AR 2018, Management System