Shares in Vonovia

The global coronavirus pandemic has been dominating the international capital markets since February 2020. The German leading share index DAX is now showing clear signs of a recovery. While it shed around 25% in the first quarter of 2020, the loss as against December 31, 2019 came to only 3% by September 30, 2020. The DAX moved largely sideways in the third quarter of 2020.

Share price performance in the real estate sector is still being impacted by the coronavirus pandemic. The EPRA index, for example, which serves as a barometer for European real estate stocks, slid by 23% in the first nine months of 2020. This negative development can be attributed primarily to the drastic share price losses affecting commercial, hotel and office real estate companies, which have been dealt a particularly hefty blow by income losses.

German residential real estate stocks, on the other hand, are back on a stable trajectory after the first nine 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 22% in the first nine months of 2020 to total € 58.58. On September 2, 2020, Vonovia even reached a new all-time high of € 62.74 (intraday).

As a residential real estate company, Vonovia’s operating business is only marginally affected by the coronavirus pandemic. Particularly on the demand and income side, we still 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 € 33 billion as of September 30, 2020.

Vonovia SE Member of the EURO STOXX 50

Vonovia SE was included in the European blue chip stock index EURO STOXX 50 effective September 18, 2020. Vonovia is the only real estate asset currently in Europe’s leading index, as well as the first residential real estate asset overall.

The basis for the classification is the free float market capitalization based on the closing price at the end of August 2020. Seven years after its initial listing in July 2013 (approximately € 0.4 billion) and five years after its promotion to the DAX 30 (approximately € 13 billion), Vonovia’s free float market capitalization has increased to more than € 30 billion.

Capital Increase

On September 3, 2020, Vonovia issued 17 million new shares with an issue volume of approximately € 1 billion as part of an ABB (accelerated book building procedure). This replaced the equity credit that Standard & Poor‘s had assigned to the hybrid bond issued in 2014 with equity. As a result, Vonovia is now able to replace in full the hybrid bond, which can be redeemed for the first time in the fourth quarter of 2021, with debt financing. The company’s imminent admission to the EURO STOXX 50 in early September and a share price level that was around 10 % above the adjusted NAV presented a good opportunity for the capital increase, with the threefold oversubscription highlighting the success of the transaction.

The proceeds from this capital increase will be used to repay debt due in the fourth quarter of 2020. The additional proceeds from the issue are to be used for future growth opportunities that arise in the current environment and which Vonovia intends to pursue in line with its investment criteria.

Share Price Development