Shares in Vonovia

In the first nine months of 2019, the price of Vonovia’s shares as well as the DAX 30 rose by approximately 18%, whereas the EPRA Europe index exhibited slightly weaker performance, increasing by approximately 16%. We particularly see external factors as drivers of the share performance: The favorable interest rate environment supports the increase in the Vonovia share price. This positive performance of the share price 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.

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 and Europe is the right strategy.

Even though concerns surrounding an international economic recession, potential trade conflicts and Brexit are, in our view, responsible for global share price growth only being moderate, we believe that the environment for the German residential real estate market 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 positive interest rate environment.

Vonovia’s market capitalization amounted to around € 25.2 billion as of September 30, 2019.

Share Price Development