Vonovia has benefited from extremely favorable conditions on the capital and banking markets in recent years thanks to its favorable ratings, allowing it to establish a financing foundation that is stable and balanced in the long run. The latest bond issue shows that this continues to give Vonovia the opportunity to access relatively more advantageous (re)financing options, even in market environments that may be more disadvantageous in the future.
Together with the diversification strategy for liquidity procurement that we have been pursuing for many years now, we also have the opportunity, particularly given the current capital market environment, to optimize the structure and conditions of our financial liabilities on an ongoing basis.
Rising inflation rates and interest rates in the current market environment have forced us to reevaluate investments in terms of their profitability against the backdrop of our sustainability objectives. Within this context, we are paying more attention to strengthening our internal financing. This means that we are increasing selling selected unfavorable portfolios and exploring alternative sources of financing in the form of minority private equity investments. More intensive sales efforts for our development projects will also have a positive effect on our internal financing power. All in all, stronger internal financing potential could allow for investment decisions, where appropriate opportunities arise, to boost the company’s overall profitability or to allow it to pursue more sustainability initiatives and earnings potential.
The strengthening of our financial position, the profitability of our (sustainability) investments and our market share in urban areas could, as a result, also have a positive impact on how our investors and ratings agencies assess us, resulting in a further improvement in our attractive financing options.
Our investments in affordable homes are associated with a cash flow that is largely independent of economic factors. The resulting stability allows us to service our financial liabilities with a relative degree of certainty, even in times of economic or political crisis. This is evident, in particular, from the fact that our rent default rate, which was already low to begin with, has not increased to any significant degree, even in the year dominated by the war in Ukraine and the supply chain disruption that was 2022.