The biggest German owner Vonovia wants to merge with the number two in the real estate market, now CEO Rolf Buch is increasing the pressure on the shareholders of competitor Deutsche Wohnen: “This is the last offer”, says Buch. “It works now or it just doesn’t work then.”
The national real estate group Vonovia has been trying since June to take over its Berlin rival. But an offer of 52 euros per Deutsche Wohnen share just failed two weeks ago. According to Buch, “hedge funds and short-term speculators” especially hoped to be able to make more money at a later date. But such behavior is incompatible with the housing industry in Germany, criticizes the boss of Vonovia: “Housing companies are not suited to short-term speculation.
After a failed merger, companies actually have to wait a year before they can try again. But the Federal Financial Supervisory Authority (Bafin) allows an exception in this case, since the board of directors of Deutsche Wohnen also approves the plan.
Vonovia wants to submit a new offer in August, says Buch, this time for more than 53 euros per share. “We have learned from our mistakes.” Both groups want to advertise more intensively to accept the offer on time. Vonovia now owns almost 30 percent of Deutsche Wohnen’s shares, so it still lacks 20 percent to take control.
Meanwhile, Vonovia’s 400,000 homes in Germany, Austria and Sweden continued to appreciate in the first half of this year. The group estimates the increase at around 4.2 billion euros. The background is the high demand for real estate in metropolitan areas – due to the influx of people in recent years, but also thanks to low interest rates. Of course, Vonovia also increases the value of the portfolio itself by modernizing apartments, adding floors or constructing new buildings. For the rest of the year, another increase in value is expected, Buch says.
On average, households in Vonovia recently paid a monthly rent of 7.29 euros per square meter. That’s a whopping 3.7% more than a year ago – no corona crisis, no rent control. This increase is also mainly explained by the fact that the Group can rent renovated or newly built apartments more expensive than existing properties.
Regardless of the outcome of the buyout plans, Vonovia has now revised upward its profit forecast for the full year of 2021 by € 50 million. On the stock market, the Dax group temporarily gained 1% in value on Friday, but again lost the most in the afternoon.