By selling the nursing care division and other housing stocks, Vonovia CEO Rolf Buch wants to reduce the group’s financial burden. picture alliance/dpa | Annette Riedl
According to “Handelsblatt”, Vonovia is about to sell its nursing division to its subsidiary Deutsche Wohnen.
The sales agreement is to be concluded this summer, but not as a package, but in individual parts.
Vonovia CEO Rolf Buch wants to use the sale to reduce the financial burden on the group, which is suffering from high levels of debt.
According to a press report, Germany’s largest residential real estate group Vonovia is about to sell its care division. A sales agreement for the care division located at the subsidiary Deutsche Wohnen is expected to be concluded this summer, writes the “Handelsblatt“.
The business media outlet cites people familiar with the negotiations. The separation will not be completed as a package, but in individual parts. The news was well received on the stock market. Vonovia shares gained 2.5 percent to 31.30 euros by early afternoon on Monday, making them the top performer in the DAX.
This is how Vonovia shares have developed in recent months. Finanzen.Net
The stock thus continued the recovery of the past weeks and months. Since the multi-year low of around 15 euros in March 2023, the price has now more than doubled. However, Vonovia shares are still a long way from their record high of just under 60 euros.
The shares of the subsidiary Deutsche Wohnen rose by almost 2 percent. Spokesmen for Vonovia and Deutsche Wohnen declined to comment on the “Handelsblatt” report. Vonovia recently sold six nursing properties worth a good 90 million euros. The rest of the nursing division was still on the books at around 800 million euros.
Vonovia wants to reduce the financial burden
The group had already announced at the end of April that the remaining properties could not be sold as a complete package. When the half-year figures were published, it was then stated that the sale of the discontinued business area should take place by the end of the current year.
By selling the nursing care division and other housing stocks, Vonovia CEO Rolf Buch wants to reduce the financial burden on the group, which is struggling with its relatively high debts. In the spring, Vonovia sold around 4,500 apartments and a plot of land in Berlin to two municipal housing companies for around 700 million euros. In July, almost 2,000 apartments followed in the greater Frankfurt area and the Rhine-Main region.
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Rolf Buch is generally rather skeptical about the future of the real estate industry. “We will see a lot of bankruptcies in the coming months and possibly next year,” he fears. However, the management board is optimistic about his company itself. “We’re through it,” says the Vonovia boss. The company has stumbled in recent years. With a portfolio of 543,000 properties valued at around 80 billion euros, Vonovia had relied on loans for years.
The group’s debts amount to 62 billion euros. When interest rates were still low, the concept was a complete success. But since the interest rate turnaround, loans have become more expensive, the value of real estate has fallen and investors expect higher returns. For this reason, Vonovia had to pay almost 810 million euros in interest last year alone and write down the value of its apartments by almost eleven billion euros. The bottom line was a loss of 6.8 billion euros.
