Financial Opportunities

Vonovia has benefited from good conditions on the capital and banking market in recent years to establish a very stable capital structure. We now have a broad range of financing instruments that are balanced and stable in the long term. This is reflected in a consistently high credit rating. The latest bond issues show that our company still has good opportunities available to it, even in a difficult capital market environment, to successfully realize upcoming (re)financing measures or to raise necessary liquidity. During this phase, we are responding to the continued high level of trust placed in us by investors by paying particular attention to cost discipline and a forward-looking capital structure policy. Together with the diversification strategy for liquidity procurement that we have been pursuing for many years now, we still have the opportunity in the current capital market environment to optimize the structure and conditions of our financial liabilities.

Rising inflation and interest rates recently forced us to reassess the profitability of our investments. Ongoing pursuit of our sustainability targets and investments remained a non-negotiable during this process.

Given our solid balance sheet structure and the return to a positive market trend that is emerging, our sales program, as a source of internal financing, will focus on the Recurring Sales segment and sales in the Non Core portfolio.

We are also tapping into new sources of financing. These include private equity joint ventures in which long-term investors acquire minority stakes in selected portfolios, with Vonovia retaining a buy-back option for these properties, as well as the establishment of fund structures with a positive impact in terms of boosting our financing power.

Now that interest rates are returning to normal, Vonovia believes it is well positioned for new growth based on its optimized capital and portfolio structure. All in all, stronger internal financing potential means that the company can get back to making investment decisions to boost its overall profitability or to allow it to pursue more growth initiatives and earnings potential.

The active, dynamic management of capital allocation is and remains the catalyst for the successful implementation of our strategy. Based on our updated “Capital Allocation Framework”, we are optimizing how we allocate investment funds to our various investments. This is a significant value driver that opens up opportunities for return-oriented sustainable investment.

Strengthening of financial position, boosting the profitability of our (sustainability) investments and expanding our market share in urban areas could 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.