Vonovia SE on the Capital Market

Shares in Vonovia

The assessment of interest rate trends remained the dominant topic on the stock markets in the first half of 2024. To date, the expectation of imminent interest-rate cuts in the USA and Europe that was prevalent in the fourth quarter of 2023 has not been borne out. While the ECB met expectations by cutting its key rate by 25 basis points on June 6, 2024, market expectations regarding the timing and scope of further rate cuts has been pushed back further. In addition to ongoing geopolitical risks, interest rate trends are also likely to play a key role on the capital markets in the second half of the year.

In this environment, while the German DAX 40 stock index posted positive performance of 8.9%, the European real estate sector was on a downward trajectory in the first six months of the year due to its strong negative correlation with interest rates and government bonds, closing the first half of the year having lost 5.2% on the closing price for 2023.  

At the end of the first six months of 2024, shares in Vonovia were trading at € 26.55 and were thus down 7.0% on the closing price for 2023.  In our view, the interest rate situation is once again the key factor here.

As a result, we are still observing an ever-wider gap between capital market expectations on the one hand, and what remains an attractive market situation for residential real estate on the other. The residential property markets in which we operate are characterized by a high level of excess demand, which is increasingly having a positive impact on rental growth.

As a result, we remain confident that the fundamental conditions in our markets will ensure positive development in the long run. Besides the favorable relationship (from an owner’s point of view) between supply and demand in urban regions, the relevant factors here include, above all, structural momentum on the revenue side as well as support from the key megatrends.

The company’s market capitalization amounted to around € 21.8 billion as of June 30, 2024.

Share Price Development