Economic Development in the First Nine Months of 2025
Key Events During the Reporting Period
In the first nine months of 2025, U.S. trade and tariff policies sparked significant reactions on the global capital markets. Many economists believe there is a risk of a prolonged recession if the tariff conflicts continue to escalate.
Vonovia’s business model is not affected directly by protectionist measures. Nevertheless, the Group’s economic development is heavily reliant on other economic parameters, such as interest rate and inflation trends, which are more volatile as a result of the tariff measures. At present, however, it is impossible to either predict or quantify what the specific developments might look like.
Our core business remains characterized by a high level of demand for rental apartments and a positive rent trend. With a vacancy rate of 2.2 % at the end of the third quarter of 2025 (end of the third quarter of 2024: 2.1 %), Vonovia’s residential real estate portfolio was virtually fully occupied.
The first nine months of 2025 saw higher real estate transaction volumes and a slight increase in real estate values. The slight cut in the ECB key rate in June 2025 favored transactions, particularly in the Recurring Sales and Development segments.
The Customer Satisfaction Index (CSI) was 1.2 percentage points below the value seen in the previous quarter as of September 30, 2025. Looking at the average for the year to date, customer satisfaction is up by 1.2 percentage points on the average for 2024.
On September 18, 2024, Vonovia SE and Deutsche Wohnen SE initiated a process to conclude a control and profit and loss transfer agreement between the two companies. This process involved Vonovia making an offer to external shareholders of Deutsche Wohnen SE to acquire their shares in return for compensation in the form of newly issued shares in Vonovia SE, or to offer the remaining shareholders of Deutsche Wohnen SE an annual compensation payment for the term of the intercompany agreement.
The extraordinary general meetings of Vonovia SE and Deutsche Wohnen SE on January 24 and 23, 2025, approved the control and profit and loss transfer agreement between Vonovia SE and Deutsche Wohnen SE dated December 15, 2024. On June 30, 2025, a court settlement pursuant to Section 278 (6) of the German Code of Civil Procedure (ZPO) was reached with all of the parties involved in the action for annulment brought against the resolution passed by the extraordinary Annual General Meeting of Vonovia SE regarding the approval of the conclusion of the control and profit and loss transfer agreement, the creation of the 2025 conditional capital and the corresponding amendment of the Articles of Association to include an Article 6a, ending the action for annulment by court order. As the control and profit and loss transfer agreement took effect upon entry into the commercial register on August 1, 2025, Deutsche Wohnen SE will, in future, transfer its total annual profit to Vonovia SE, or Vonovia SE will cover any losses incurred by Deutsche Wohnen SE. The obligation to transfer profits and losses will apply for the first time for the fiscal year ongoing at the time the control and profit and loss transfer agreement is entered into the commercial register of Deutsche Wohnen SE.
On September 30, 2024, Vonovia and Apollo agreed to establish a company that is to hold 20% of the shares in Deutsche Wohnen SE. In addition to Vonovia, with a 49% stake, long-term investors advised by Apollo are to hold a total stake of 51% in this company. Vonovia’s cash inflow from this transaction amounts to around € 1 billion. The agreement was closed on July 29, 2025. By September 30, a total of 6,448,384 shares in Deutsche Wohnen SE had been exchanged for 5,126,461 new shares in Vonovia SE as part of this transaction.
The sale of a total of 24 nursing care properties and the Katharinenhof nursing care businesses was agreed in October 2024. In January 2025, an agreement was signed regarding the sale of Pflege und Wohnen, comprising a total of 13 nursing care properties and the associated nursing care businesses. The sale of a further two nursing care properties was agreed in the first quarter of 2025. Ownership of 19 nursing care properties and the Katharinenhof nursing care businesses was transferred in the first quarter of 2025. Ownership of a further two nursing care properties was transferred in the second quarter of 2025. Ownership of a further 14 nursing care properties and the PFLEGE & WOHNEN HAMBURG GmbH (P&W) nursing care businesses was transferred in the third quarter.
A notarized sales contract for a portfolio in Berlin was successfully concluded on April 23, 2024. The transaction executed with two state-owned Berlin housing construction companies saw around 4,500 residential units with a value of around € 700 million being sold as part of a share deal. The transaction was closed with the transfer of beneficial ownership on January 1, 2025.
In the first nine months of 2025, apartments and commercial units from the QUARTERBACK Immobilien Group, accounting for a volume of around € 0.3 billion, were transferred to Vonovia’s portfolio. The acquisition of land to build on with a volume of around € 1.2 billion was also completed in the first nine months of 2025, with a further € 0.1 billion outstanding. The impairment test performed as of June 30, 2025, resulted in an impairment loss of around € 0.3 billion being recognized for the purchased land. A provision of € 85.2 million has been set up for land that has not yet been transferred, and will reduce the amount recognized at the time of transfer of ownership. The provision was utilized in the amount of € 47.5 million for those properties transferred as of September 30, 2025.
The Supervisory Board of Vonovia SE decided unanimously on May 6, 2025, to appoint Luka Mucic as Vonovia’s new CEO. Rolf Buch will be handing over the reins as CEO at the end of the year. He will remain responsible as CEO until then and will oversee the onboarding of Luka Mucic in his new role.
The Annual General Meeting held on May 28, 2025, resolved to pay a dividend for the 2024 fiscal year in the amount of € 1.22 per share. As in previous years, shareholders were offered the option of choosing between being paid the dividend in cash or being granted new shares. During the subscription period, shareholders holding a total of 35.53% of the shares carrying dividend rights opted for the scrip dividend instead of the cash dividend. As a result, 12,768,562 new shares were issued using the company’s authorized capital for a total of € 356,728,085.14. The total amount of the dividend distributed in cash therefore came to € 647,152,483.36.
Two new Supervisory Board members were also elected by the Annual General Meeting: Michael Rüdiger and Dr. Marcus Schenck. They will replace Dr. Ute Geipel-Faber and Hildegard Müller, whose mandates ended as scheduled at the end of the Annual General Meeting.
When his contract as Chief Development Officer expires on May 31, 2026, Daniel Riedl will leave the Management Board of Vonovia SE. The Supervisory Board will endeavor to find a suitable successor for him.
On May 13, 2025, Vonovia placed two new convertible bonds with a total volume of € 1.3 billion. The first bond in the amount of € 650.0 million will mature in May 2030 and does not bear any periodic interest. The second bond – also with a volume of € 650.0 million – will fall due in May 2032 and has a coupon rate of 0.875% p.a. The bonds can either be converted into shares in Vonovia or settled in cash. The bond terms and conditions are such that the convertible bonds are treated as borrowed capital in full. For accounting purposes, the conversion rights are separated, as a derivative component, from the debt transaction and are measured and reported separately as a derivative within financial liabilities. Upon initial recognition not affecting net income, the value of the derivative came to € 143.7 million. The value came to € 109.2 million as of September 30, 2025. The change in value since initial recognition was recognized affecting net income in the amount of € 34.5 million in other interest result from derivatives.
Deferred taxes of the Group companies are measured at the tax rates that apply, or are expected to apply, to the period when the tax asset is realized or the liability is settled based on the current legislation in the countries in question. The temporary differences of the Group companies are predominantly attributable to real estate.
The law for a tax-based immediate-action investment program was approved in the Bundestag (lower house of parliament) on June 26, 2025, and in the upper house of parliament (Bundesrat) on July 11, 2025. As a result of the gradual cut in the corporate income tax rate from the current level of 15% to 10% by 2032 adopted by the German government during the period covered by these financial statements, and given the very long-term nature of the temporary differences, deferred taxes are largely to be measured at the corporate income tax rate of 10% that will apply as of 2032.The resulting reduction in deferred tax liabilities resulted in deferred tax income of around € 2.3 billion being recognized as of September 30, 2025.
The partial buyback of bonds with a total volume of € 800 million was completed on June 6, 2025. This involved buying back a social bond with an issue volume of € 750.0 million and a term expiring in 2027 in the amount of € 435.7 million (selling price € 454.3 million). This bond has a 4.75% coupon rate. A further bond, a green bond, with an issue volume of € 750.0 million and a term expiring in 2030 was bought back in the amount of € 364.3 million (selling price € 399.5 million). This bond has a 5.00% coupon rate.
Vonovia issued its first bond denominated in Australian dollars on September 3, 2025. The unsecured bond with an issue volume of AUD 850 million (approx. € 475 million) was issued in two series lasting seven and ten years respectively, with a weighted yield of 3.87% after currency hedging.