Shares in Vonovia

The global coronavirus pandemic has been dominating the international capital markets since February 2020. Some industries, such as banks, oil/gas and transport/tourism, have been particularly hard hit, with their share prices taking a nosedive in the first half of 2020.

Share price performance in the real estate sector has also been impacted by the coronavirus pandemic. The EPRA index, for example, which serves as a barometer for European real estate stocks, slid by 23.5% in the first six months of 2020. This negative development can be attributed primarily to the drastic share price losses affecting commercial and office real estate companies, which have been dealt a particularly hefty blow by customer rent losses.

Germany’s leading index, the DAX, is starting to show signs of bouncing back. While it shed around 25% in the first quarter of 2020, the loss as against December 31, 2019, came to only 6% by June 30, 2020.

German residential real estate stocks, however, are back on a stable trajectory after the first few months of living with the coronavirus pandemic. After a volatile first quarter and a low of € 38.60 reached on March 18, 2020, the price of Vonovia’s shares rose by 12% in the first six months of 2020 to total € 54.58. On June 5, 2020, Vonovia reached a new all-time high of € 56.38.

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 are optimistic as we look ahead to the future and are confident that we will remain financially successful.

Vonovia’s market capitalization amounted to around € 30 billion as of June 30, 2020.

Share Price Development