Shares in Vonovia

The international capital markets have been dominated by concerns over the global coronavirus pandemic since February 2020 in particular. Vonovia’s shares shed 7% in the first three months of 2020, with the DAX 30 plummeting by 25%. Whereas some sectors, such as transport, aviation, retail and the automotive industry have been hit particularly hard, shares of listed residential real estate companies in Germany are on a much more stable trajectory. The EPRA index, which serves as a barometer for European real estate stocks, also showed negative performance and dropped by 27%. This drop is due primarily to the substantial share price losses reported by retail and office real estate companies, which have been particularly troubled by fears of recession.

The first eight weeks of 2020 remained positive for the international stock markets, with the German leading index DAX, for example, reaching a new all-time high of 13,640 points on February 22, 2020. Shares in Vonovia also touched on a new all-time high of € 54.06 on February 19, 2020. Then, however, the coronavirus pandemic plunged stock markets across the globe into one of the worst crises in history within the space of only a few days. Drastic slumps in profit, surging unemployment figures and general fears of a recession sent share prices plummeting in some cases, with hefty setbacks on the stock exchange. Even extensive interventions on the part of numerous central banks did little to alleviate the situation. The price gains made on the DAX 30 over the past few years, for example, were lost within a very short space of time. The index reached a level of 8,442 points. This is the lowest it has seen in six and a half years. Uncertainty remains extremely high and is fueling record levels of volatility, with share prices fluctuating wildly from one day to the next. There have been incidences of trading on the New York Stock Exchange being temporarily halted in response to the dramatic situation.

Although the international capital markets are likely to remain characterized by volatility and fears of recession, we believe that the environment for the German residential real estate sector remains positive overall. As a residential real estate company, Vonovia is only partially affected by the coronavirus pandemic. Particularly on the demand and income side, we do not expect the crisis to have any impact to speak of. Rather, the main long-term megatrends will remain the dominant forces driving our business: urbanization and the resulting imbalance between supply and demand, climate change and the reduction of CO₂ emissions in the housing stock, demographic change and senior-friendly apartment conversion. We look ahead to the future with optimism and are confident that we will remain financially successful.

Vonovia’s market capitalization amounted to around € 24 billion as of March 31, 2020.

Share Price Development