Key Events During the Reporting Period
Most economists agree that the coronavirus pandemic will have a substantial impact on the global economy, with a pronounced global recession generally expected to be on the cards. The impact on Vonovia’s business model, however, is not expected to be material. There was practically no significant impact on the company’s business in the first quarter of 2020. Any impact on the course of business as 2020 progresses is also expected to be only moderate. In addition to the immediate financial implications, the current focus is on maintaining service quality, preventing social hardship and, in particular, protecting the health of the company’s customers and employees.
At the end of January 2020, the Berlin House of Representatives passed the Act on Rent Controls in the Housing Sector in Berlin (referred to in short as “rent freeze”). This came into force in February 2020. Since the constitutionality of the law is disputed, several complaints have already been announced, including a complaint before the Federal Constitutional Court. A judicial review can be expected. There are still no signs of any material impact on our business.
The extended acceptance period for the mandatory offer for the acquisition of the majority of the shares in Hembla AB (publ) also ended in January. As Vonovia already held more than 90% of the shares in 2019, it asked the Board of Directors of Hembla to apply for delisting and initiate a squeeze-out in line with the Swedish Companies Act. The shares were delisted with effect from January 10, 2020. Measures aimed at the operational and financial integration of the business in Sweden based on the model of the existing management platform have been implemented and are going to plan based on the company’s experience of integration measures in the past.
Vonovia has strengthened its development business by expanding its activities in the Rhine-Main region with the complete acquisition of the project developer Bien-Ries AG, Hanau, at the beginning of April 2020. It will be integrated into the development organization operating under the BUWOG name in the course of 2020.
Vonovia placed two bonds with a total volume of € 1 billion on March 31, 2020, although the bond placement was not completed until early April. The new bonds will bear interest at an average rate of 1.9% and have a term of four and ten years respectively. April 7, 2020, was agreed as the payout date.
Customer satisfaction, measured based on the Customer Satisfaction Index (CSI), rose by 1.1 percentage points in the first quarter of 2020, an increase of 3.2 percentage points compared to the first quarter of 2019. The strongest improvements were in commercial support, availability and the support provided by caretakers.