Portfolio in the Development Business
Vonovia Development Under the BUWOG Brand Name
It is under the BUWOG brand that Vonovia’s property development business is run, primarily in Vienna and Berlin.
The regional distribution of these development activities covers the whole of Germany with a focus on the Berlin, Rhine-Main, Dresden/Leipzig, Hamburg, Stuttgart and Munich regions. The focal region in Austria is Vienna.
Development Business Model
BUWOG provides Vonovia with a development platform spanning the entire value chain – from the purchase of land to its development, project planning, construction and sale.
With its substantial product pipeline of residential construction projects that are currently being built, planned or prepared, Vonovia, with the BUWOG brand, ranks among Germany’s leading real estate developers and is the most active private real estate developer in Austria.
Deutsche Wohnen’s development activities are performed via the structures of the BUWOG organization on the basis of an agency agreement to leverage process harmonization effects and economies of scale. The break with the Quarterback development platform means that Vonovia, together with Deutsche Wohnen, has vast development potential at its fingertips to counter the excess demand in the residential real estate sector by making targeted services available. The development business is well positioned for new growth even after the changes in return requirements.
Development to Sell and Hold (Number of Residential Units)*
Sustainable and Successful Development
Development Business Model
As part of the strategic analysis, Vonovia’s development activities were considered to make an important value contribution, the development business was identified as a key value driver and corresponding initiatives were developed.
The range of products for value creation ranges from the sale of individual new-build condominiums in the context of development projects to new construction projects on land purchased, and land already held, for the company’s own portfolio and global sales of large-scale projects to investors.
Conceptual and technical solutions for the resource-light construction and sustainable operation of neighborhoods make up a key component of the development business model. In line with the three focal issues of urbanization, energy efficiency and demographic change, central aspects of sustainability are already taken into account in the early stages of project development. This includes designing socially diverse neighborhoods that offer housing for all generations, realizing energy-efficient new construction projects for ecologically sustainable operation by buyers, as well as for a carbon-neutral portfolio, and creating barrier-free and accessible housing for an aging society with changing housing needs.
Sustainability is achieved at all stages in the residential real estate value chain – from the selection of ecological and recyclable building materials, to the commissioning of local craftsmen and service providers, and the sustainable operation of the development projects.
Certification is important to ensure that potential improvements can be made back at the planning stage on the basis of criteria for ecological, social and economic sustainability and managed during the construction process.
Value Creation and Project Development
Real estate development activities can be tackled successfully through long-standing experience, extensive market and sector expertise and intensive, ongoing market analysis.
The strategy of incorporating process steps into the company’s own value chain allows Vonovia to provide targeted support to residential construction projects and to exploit cost synergies with regard to technical solutions and the pooling of procurement volumes.
In the Development segment, we make a distinction between two different areas:
- Development to sell includes the units that are sold to investors or to future owner-occupiers directly.
- Development to hold refers to those residential construction projects whose apartments will be added to Vonovia’s rental portfolio upon their completion.
Valuable Contributions to Society and the Group
Development Overview
As of December 31, 2024, the total volume of the development portfolio was 47,840 residential units (a total of 3,736 units from projects under construction and a total of 44,104 units from the pipeline).
As of December 31, 2024, there were 17,560 residential units in the “to sell” development portfolio, 2,491 of which related to projects under construction, 1,699 to projects from the short-term pipeline and 13,370 to projects from the medium-term pipeline. The share attributable to project development in Germany came to 15,994 units (2,491 of which related to projects under construction, 1,171 to projects from the short-term pipeline and 12,332 to projects from the medium-term pipeline). The share attributable to project development in Austria came to 1,566 units (528 units from the short-term pipeline and 1,038 from the medium-term pipeline). There is also further potential of 4,176 units that have not been realized yet in connection with planned land sales in the development-to-sell portfolio.
As of December 31, 2024, there were 30,280 residential units in the ”Development to hold” portfolio, 1,245 of which related to projects under construction, 1,357 to projects from the short-term pipeline and 27,678 to projects from the medium-term pipeline. The share attributable to Germany came to 24,171 units (1,005 of which related to projects under construction, 914 to projects from the short-term pipeline and 22,252 to projects from the medium-term pipeline). The share attributable to Austria came to 3,350 units (235 of which related to projects under construction, 443 to projects from the short-term pipeline and 2,672 to projects from the medium-term pipeline). The share in Sweden came to 2,759 units (5 units related to projects under construction and 2,754 from the medium-term pipeline). A total of 1,276 residential units were completed in this area with 1,264 in Germany and 12 in Sweden.