Capital Market Development and Shares in Vonovia

Inflation, interest rates and views on possible recession scenarios continued to dominate the international capital markets in 2023. Market participants paid particular attention to the interest rate policies pursued by the world’s major central banks. Following a marked drop in inflation, given that interest rates have now peaked, at least according to capital market assessments, and in light of the prospect of initial rate cuts in 2024, sentiment brightened considerably and led to broad-based price increases, particularly at the end of the year. In this environment, the DAX 40 closed 20.3% up, with the EPRA Europe real estate index up by 12.6%. Vonovia also reaped the benefits of the improved macroeconomic environment, with its shares gaining 29.6% over the course of the year. This means that Vonovia’s performance in 2023 was significantly above average. Overall, there was once again a strong correlation in the fiscal year under review between Vonovia’s share price on the one hand, and the capital market’s assessment of future interest rate trends and government bond yields on the other hand.

Despite the positive share price performance in 2023, capital market assessments continue to be subdued, while development on the residential real estate market remains robust. While the capital market is pricing real estate stocks at hefty discounts, the residential property markets in which we operate are relatively robust, with initial signs emerging that prices are starting to stabilize. This is due, in particular, to the favorable relationship, from an owner’s point of view, between supply and demand in urban regions, which have conventionally been long-term financing arrangements, tax aspects as well as the structural momentum on the revenue side.

Sector Development

We continue to believe that shares in Vonovia can reflect the positive operating development and ultimately the success of our business model as a whole in the medium to long term. Our responses to key long-term megatrends – climate change, urbanization and demographic change – remain the dominant factors driving our business. We are optimistic as we look ahead to the future and are confident that we will remain financially successful.

The average daily trading volume for shares in Vonovia SE, expressed as the number of shares traded on XETRA, came to 3.6 million in 2023. Expressed in euros, shares in Vonovia worth € 77.3 million were traded every day on average in 2023, down slightly on the previous year.

Vonovia’s shares reached their highest daily closing price for the year on December 28, 2023, at € 28.85 and their lowest daily closing price on March 28, 2023, at € 15.66.

Vonovia’s market capitalization amounted to around € 23.2 billion as of December 31, 2023.

Share Price Development

Index Memberships: Vonovia SE member of the DAX 50 ESG and DJSI Europe

Vonovia has been a member of various sustainability indices since 2020, in particular the DAX 50 ESG and the Dow Jones Sustainability Index (DJSI Europe), which confirms Vonovia’s successful ESG activities and the progress made in this area.

Long-term Yield

An investor who bought shares in Vonovia when the company went public in 2013 and has held them ever since, reinvesting each dividend in more shares in Vonovia, will have seen the value of their securities deposit account increase by 150% by December 31, 2023, a result that far outstrips the performance of a corresponding investment in the benchmark indices.

Yield since Vonovia IPO