Latest quarterly data reported. - Vonovia returns to profitability.
The leading German residential real estate corporation, Vonovia, recently reported positive financial results in the first quarter. After a billion-euro deficit in the previous year, the firm now generated a net profit of 335.5 million euros. According to an official announcement on Thursday in Bochum, the value depreciation of its real estate portfolio no longer affected the company's profits. At the end of March, the market capitalization of the DAX-listed firm stood at €83.7 billion, barely changed from the previous year.
The company stated, "We're closing in on the turning point in terms of value," and forecasted a resurgence in growth by 2025 at the latest. The Bochum-based corporation plans to re-strategize and seek increased earnings, aiming for annual organic value growth of approximately three billion euros starting from then, primarily driven by the housing shortage and surging demand for urban housing. Their projections do not consider valuation effects.
Although operational performance was slowed in the first quarter of 2024, Vonovia's rental business flourished due to increasing demand for affordable living in metropolitan areas. Average rents jumped to €7.78 per square meter, a 3.2% bump compared to the same period last year. In Germany, the average monthly rent for a square meter in Vonovia's portfolio was €7.67.
Vonovia projects a 3.8-4.1% rise in rents in 2024, rising from the earlier estimation of 3.4-3.6%. They expect a steady 4% rise in rentals in the long term. The management has maintained their set objectives.
Vonovia details the operational income as dropping 3.3% year-on-year to reach €607 million, with a strong rental sector boosted by the sustained urge for affordable accommodations in major cities. Average rents at the end of March came in at €7.78 per square meter, marking a 3.2% increment from last year. Within Germany, Vonovia observed an average of €7.67 monthly rent per square meter as of the same date.
For the current year, the company now predicts a 3.8-4.1% increase in rents independently of market fluctuations. Earlier, the corporation anticipated growth of 3.4-3.6%. Long-term, they project a yearly growth of roughly 4% in rentals. The company has maintained its yearly targets unchanged.
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Source: www.stern.de
