Key Events During the Reporting Period
The coronavirus pandemic is having a pronounced adverse impact on the world’s economies, plunging them into a full-fledged recession. At present, the ongoing infection levels in key global economies make it impossible to arrive at any reliable positive outlook regarding an economic recovery, despite the fact that both the EU and the German government have launched aid packages of historical proportions in response to the crisis. To date, Vonovia’s business model has proven to be robust and resilient throughout the crisis. As the impact on its net assets, financial position and results of operations is not material, Vonovia is able to confirm its forecast for the 2020 fiscal year.
The focal point of Vonovia’s work of late has been the quest to successfully maintain its business processes and protect its employees and customers. Digitalized processes allow employees to switch seamlessly between working on location and working from home.
The Act on Rent Controls in the Housing Sector in Berlin (“rent freeze”), which came into force in February 2020 and whose constitutionality is still subject to question, has also had no material impact on our business.
After Vonovia initiated a squeeze-out for Hembla as well, corresponding 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 GmbH, 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. The Bien-Ries business was included in the consolidated interim financial statements for the first time in the second quarter.
Vonovia placed two bonds with a total volume of € 1 billion on March 31, 2020, with the bond placement being completed in early April. Two further bonds with a total volume of € 1.5 billion were placed on July 3, 2020. This means that Vonovia enjoys unrestricted access to the capital market even in times of COVID-19.
Vonovia acquired a 2.6% stake in the Dutch Vesteda Residential Fund on June 26, 2020. Vesteda’s portfolio comprises more than 27,000 apartments in the middle-range price segment, mainly in the Randstad region in the Netherlands. The region is home to the major cities of Amsterdam and Rotterdam, among others. Vonovia is aiming to use the investment to gain practical first-hand experience on the Dutch market and compare the environment with the markets it currently covers.
The Annual General Meeting held on June 30, 2020, resolved to pay a dividend for the 2019 fiscal year in the amount of € 1.57 per share. Once again, shareholders can opt to receive a scrip dividend as an alternative to a cash dividend. The Annual General Meeting was held as a virtual event for the first time, with shareholders able to follow the Annual General Meeting via a live stream.
Customer satisfaction, measured based on the Customer Satisfaction Index (CSI), rose by 3.7 percentage points in the second quarter of 2020 and by 5.6 percentage points compared with the second quarter of 2019. The main reasons behind the improvement included, in particular, an improved assessment of the service provided on the whole, ancillary costs bills that are easy to understand, Vonovia’s response to tenant concerns and the manner in which it complies with any agreements reached. Measures to design both interior and outdoor areas also had a positive impact on the CSI.