Forecast Report

Business Outlook for 2025

The forecast was based on the accounting principles used in the consolidated financial statements, with the adjustments described elsewhere in the management report being made. The forecast takes account of the acquisition of land to build on and property management units from the QUARTERBACK Immobilien Group, as already communicated in the Q3 Interim Statement. Otherwise, the forecast does not take account of any larger acquisitions of real estate portfolios.

Our forecast for the 2025 fiscal year is based on determined and updated corporate planning for the Vonovia Group as a whole, and considers current business developments as well as possible opportunities and risks. It also includes the key overall macroeconomic developments and the economic factors that are relevant to the real estate industry and our corporate strategy. Further information is provided in the sections entitled Development of the Economy and the Industry and Fundamental Information About the Group. Beyond this, the Group’s further development remains exposed to general opportunities and risks (see Opportunities and Risks).

We expect the price increases on the construction and commodity markets, in particular, continue to have a moderate impact on Vonovia and our customers. While these will have a direct impact on ancillary expenses, they will also have an indirect effect on all areas of the economy due to general price increases. We also expect prices for construction materials to remain high, which will affect our construction projects as well. Unchanged high interest rates and inflation are creating increased volatility on the equity and debt capital markets. We therefore assess the overall economic situation and developments on an ongoing basis, particularly with regard to the return requirements for investment and divestment decisions.

The EBITDA contribution for our core Rental business is expected to more or less match the previous year’s level. In a year-on-year comparison, organic rent increases and associated higher rental income will be offset by higher rent losses stemming from sales resulting in a smaller portfolio. As far as the Value-add segment is concerned, we again expect the EBITDA contribution in 2025 to be on a par with the prior-year level. The expected additional earnings contributions made by increased investment activity in our craftsmen’s organization will be offset by a one-off effect in 2024 in the multimedia business resulting from the leasing of coax networks. In the sales-related segments, we expect the market to recover, pushing price expectations up. We predict a very strong increase in the EBITDA contribution provided by our Development segment thanks to the expected increase in demand for new condominiums and the targeted sale of undeveloped land. In the Recurring Sales segment, we will be making a return to the strategy of profitability before liquidity, with margins expected to increase as a result, particularly in Germany, fueling a marked increase in Adjusted EBITDA. At Group level, for 2025 we therefore expect to see an Adjusted EBITDA Total that is slightly higher than in the previous year.

The rise in interest rates over the last two years is resulting in a marked increase in borrowing costs and the associated negative adjusted net financial result. With a slight increase in depreciation and amortization due to greater investment in property, plant and equipment (particularly photovoltaic systems), we therefore anticipate that Adjusted EBT will be roughly level with the previous year.

We also expect the operating free cash flow, before changes in working capital, to be down moderately year-on-year.

Due in particular to heavier investment in our existing portfolio, we expect our investment activity to increase in 2025. In addition, we expect the value of our company to increase further and, as a result, predict a slight increase in EPRA NTA per share, before taking into consideration any further market-related changes in property values.

The values for the individual weighted targets for the 2025 fiscal year produce a standardized forecast of 100% for the Sustainability Performance Index. 

The table below provides an overview of the development of the performance indicators forecast for 2024, their target achievement level in the 2024 fiscal year as well as a forecast for the 2025 fiscal year.