ESRS 1 (Annex A, AR2) / ESRS2 (MDR-A / MDR-T / MDR-M) – Objectives, Actions Taken and Metrics Related to Neighborhood Development and Contribution to Infrastructure

In order to apply our strategic neighborhood concept with regard to the actual material impact associated with “increased quality of living for tenants through contribution to neighborhood development and infrastructure,” the following targets have been set, and corresponding measures are being implemented and recorded using the following metrics:

Environmental and social aspects go hand in hand as part of our central, holistic neighborhood approach. Vonovia is equally committed to both aspects and to promoting social interaction in the local community. Measures to strengthen shared living and measures to drive the greenhouse gas-neutral transformation of the housing stock only become manageable, effective and efficient through the neighborhood approach. In the context of our multidimensional neighborhood development approach, various strategic components – chosen individually for each neighborhood – are used:

• Energy-efficient building upgrades and the expansion of photovoltaics in our own properties: Sequential energy-efficient upgrades to our own housing stock in line with our climate pathway, the use of innovative heating and electricity concepts (e.g., district heating grids), the expansion of renewable energy supply systems (especially using photovoltaics) and establishing smart links between these systems within the neighborhood are central elements of our climate strategy, which are particularly effective in the neighborhood thanks to the exploitation of synergy effects and economies of scale. Our neighborhood developments are designed to comply with clear climate change mitigation requirements as part of our climate pathway. Energy-efficient upgrades and the expansion of photovoltaics are ongoing measures that we are implementing on a large scale. In 2024, we once again stepped the pace of solar power expansion up considerably and lifted our capacity targets (see section ESRS E1).
• Expansion of neighborhood infrastructure (green and communal areas, playgrounds, establishment of local suppliers, educational and social facilities, …): Various neighborhood services are provided on location (e.g., by regional employees, real estate managers, neighborhood managers, caretakers and technicians), as are social and infrastructural measures – e.g., the establishment of needs-based supply services (supermarkets, medical practices, bakeries, etc.), new green spaces or communicative neighborhood centers (recreational areas). A large number of diverse measures are developed in order to meet the needs of the neighborhood concerned. The measures described here are to be understood as part of our permanent mission and in line with the needs of the relevant neighborhood. They include both measures taken in the past and in the reporting year and measures to be performed in the future.
• Provision of premises for social facilities: Freely accessible space that can be used by the public can be seen as a key criterion for neighborhoods that offer quality of living and, thanks to additional opportunities for networking and the diverse ways in which spaces can be used, increases the variety of services on offer and quality of life for all users (children and young people, families, older people or people with particular needs) in the immediate vicinity. This is why, in the 2024 fiscal year, we made 100,000 m² or 14.0% of our commercial space available for social and community purposes (e.g., senior citizens’ centers, day-care centers, rooms for childcare, etc.). With our flexible “freiRaum” neighborhood concept, we also offer free, low-threshold locations for local initiatives and groups to allow people to get involved in social events and to network in our neighborhoods. Corresponding models are already in place in Dresden, Bremen and Hamburg and are designed to serve as a blueprint for the establishment of more central meeting spaces in various Vonovia neighborhoods.
• Measures to promote state-of-the-art mobility concepts: Our measures support the mobility transition towards lower-emissions (electric) mobility in our neighborhoods. When designing new construction projects, we pay attention to good public transport connections, focus increasingly on bicycle parking spaces and consider providing charging facilities for electric mobility right back at the planning stages. To date, we have installed around 30 neighborhood charging stations for electric mobility in our existing neighborhoods. For further expansion, implementation possibilities for approximately 100 additional locations were examined during the reporting year. 96 of these locations are currently under development, and we expect their completion over the course of 2025. Car and bike sharing services (including for electric vehicles) round off our offering. We are also focusing increasingly on cycling-related services. We are aiming to gradually connect our neighborhoods to municipal cycle path networks. With the establishment of the Group’s own start-up NEARBYK in 2023, we are offering e-bikes for purchase or hire as well as service points for bike repairs and maintenance in response to growing customer demand for this type of mobility. The service will initially be tested for a period of 16 months at three locations in Essen, Dresden and Bremen. Freely accessible repair stations and the rental of cargo bikes round off our range of services in selected other neighborhoods.
• Customer surveys on tenant satisfaction with their immediate residential environment: In our quarterly customer surveys, we ask our tenants to rate the local infrastructure (e.g., proximity to shopping facilities, schools, etc.), their subjective feeling of safety and the social environment in the neighborhood in which they live, in addition to a large number of other questions about their living and rental situation. We evaluate the responses at the neighborhood level wherever possible and incorporate the feedback into our actions. The average annual value of this subindicator for “tenant satisfaction with the neighborhood environment” has been reported as a new metric since this reporting phase to also allow us to quantify, evaluate and monitor the success of our actions to upgrade the neighborhood environment as a whole. The aim is to maintain this satisfaction figure at a consistently high level (> 80%) in the medium term.

These initiatives are planned to continue into the future.

Due to the varied nature and the number of measures tailored to meet individual neighborhood requirements, it is possible to describe concrete results for specific neighborhoods, but not at the level of the Group as a whole. As a result, we use three selected metrics (see below) as an approximation to describe the development of our neighborhood measures and their effectiveness at Group level in Germany.

The measures relate to the German market and focus on the clustering by neighborhoods (urban quarters) described above in our strategic portfolio. These clusters make up around 77% of Vonovia’s housing stocks in Germany. We consider all measures that serve to upgrade urban quarters to be neighborhood activities. These measures relate to Vonovia’s core business area and to the downstream value chain, focusing on tenants’ and residents’ utilization of the initiatives.

All measures in the neighborhood are aimed at improving the quality of living for residents in the medium to long term. While they can span different time periods, their effectiveness is generally intended to extend beyond the immediate duration of the measure (e.g., energy-efficient modernization, upgrading of green spaces, etc.). These actions are treated as ongoing responsibilities without fixed timelines for completion, given the detailed and granular nature of individual measures.

In the 2024 fiscal year, we invested a total of € 510 million in our urban quarters in Germany.

Faced with an investment climate that remained challenging, we performed more differentiated neighborhood development measures in the previous year, developing smaller packages of measures. We scrapped the originally independent “Neighborhood development” investment program to give us greater management flexibility, meaning that all other investment programs (for information on the detailed types of investment, see MDR-P) are now also included in the neighborhood perspective. The key figure “investment volume for neighborhood development in Germany” that was reported in previous years has been replaced by what is now a broader perspective, and uses the same data collection approach that we use in the management report in the section Report on Economic Position/Financial performance for expenditure on modernization work.

For 2025, we expect to invest approximately € 785 million in urban quarters.

Metric “Neighborhood Investments in Germany”

This metric is based on the approach set out in GRI (2016) 203-1, which reflects the status of the development of major infrastructure investments and services supported. It describes the investments in euros that Vonovia made in its strategic portfolio located in urban quarters in Germany as of the reporting date of December 31, 2024. It is calculated as the sum of investments made within this portfolio structure during the reporting year in building upgrades (measures for modernization of energy efficiency and heating), refurbishment of vacant apartments (partial or full modernizations of apartments for full accessibility), capitalized maintenance, new construction completed for our own portfolio (including added stories to existing buildings), and the expansion of photovoltaics. Based on this definition, Vonovia invested € 510 million in neighborhoods in Germany in 2024.

Metric “Tenant Satisfaction with the Neighborhood Environment (in Germany)”

“Tenant satisfaction with the neighborhood environment (in Germany)” comprises a subset of three questions from the CSI questionnaire for measuring customer satisfaction (see S4-5). These are added up – with equal weightings – to produce a score. The figure is expressed as a percentage of the average annual value of all “rather good” or “very good” responses from the four CSI questionnaires in a given year. Only Vonovia tenants in Germany are included in the survey. The value for 2024 came in at 83.4%. As this indicator was newly introduced in the reporting year, there is no baseline value from the previous year.

Metric “Share of Socially Used Commercial Space (in Germany)”

This metric is derived from an analysis of the usage type of commercial units. It extracts data covering all types of use of commercial units actively rented out by Vonovia in Germany that were classified in advance as “social.” These include types of use such as a neighborhood office, community meeting place, day-care center or use of a space for other educational purposes. These are expressed in relation – in terms of square meters of space – to all rented commercial units in Germany with confirmed usage type. Large commercial units are excluded from this metric. The metric is based on the approach taken in GRI (2016) 413-1, which shows the percentage of operations (in this case rented commercial units) with local community engagement. According to this calculation, 100,000 m² of commercial units were allocated to social facilities in 2024 as of the reporting date of December 31, 2024. This corresponds to 14.0% of all rented out commercial units in Germany. As this classification of commercial units was not introduced systematically until 2024, there is no reference value from the previous year.

Investments in neighborhoods make up the central framework for action in connection with the material sustainability aspect of “neighborhood development” and the associated impact: “Increased quality of living for tenants through contribution to neighborhood development and infrastructure.” Vonovia has not set any targets for this metric due to the varied nature and number of the various individual measures, which are taken depending on the needs of the neighborhoods concerned. We consider the planned budget targets for the following year, however, to be a suitable approximation tool for investments in neighborhoods in Germany. Successful infrastructure projects and the resulting improved quality of living in cities and neighborhoods can be quantified most specifically – alongside other meaningful indicators – by the investments made in their development. As a result, we use the metric “neighborhood investments in Germany” to illustrate the progress made in neighborhood development.

As this was introduced as a new metric in the 2024 reporting year, no historical values are available. Vonovia plans to invest approximately € 785 million in neighborhoods in Germany in 2025. This planned value is derived from the percentage share of strategic urban quarters (77% of the German portfolio) in the planned total investments.