Report on Economic Position
Key Events During the Reporting Period
In the 2025 fiscal year, geopolitical conditions, especially the war in Ukraine and a confrontational trade and tariff policy, led to heightened uncertainly on capital markets worldwide and dampened growth prospects and investment. 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 2.1% at the end of the fourth quarter of 2025 (end of the fourth quarter of 2024: 2.0%), Vonovia’s residential real estate portfolio was virtually fully occupied.
The 2025 fiscal year 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.
At 76.8%, the Customer Satisfaction Index (CSI) as of December 31, 2025 was 0.8 percentage points higher quarter-on-quarter. Looking at the average for the year to date, customer satisfaction is up 1.3 percentage points on the average for 2024 as a whole.
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 the future, transfer its total annual profit to Vonovia SE, or Vonovia SE will cover any losses incurred by Deutsche Wohnen SE. This obligation to transfer profits and assume losses shall apply for the first time in the 2025 fiscal year.
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 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 December 31, 2025, a total of 15,842,652 shares in Deutsche Wohnen SE had been exchanged for 12,594,898 new shares in Vonovia SE as part of this transaction. This corresponds to 4.0% of the share capital of Deutsche Wohnen.
As part of a strategic review, the management decided in 2023 to sell the Care segment. In the course of 2024 and at the beginning of 2025, the properties and nursing care businesses were successfully sold as planned. Ownership of a further 39 nursing care properties and the PFLEGE & WOHNEN HAMBURG GmbH and Katharinenhof nursing care businesses was transferred in the 2025 fiscal year. These transactions successfully completed the sale of the discontinued nursing care business.
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 2025 fiscal year, apartments and commercial units from the QUARTERBACK Immobilien Group, accounting for a volume of around € 0.4 billion, were transferred to Vonovia’s portfolio. The acquisition of land to build on with a volume of around € 1.1 billion was also completed in the 2025 fiscal year. The impairment test performed resulted in an impairment loss of around € 0.3 billion being recognized for the purchased land. A provision of € 57.6 million had been set up as of June 30, 2025 for land that has not yet been transferred, and will reduce the amount recognized at the time of transfer of title. The provision was utilized in the amount of € 47.6 million for those properties transferred as of December 31, 2025.
In addition, impaired receivables with a nominal volume of € 258.3 million were sold for one euro to the QUARTERBACK Immobilien Group. In addition, impaired receivables with a nominal volume of € 52.0 million (2024: € - million) were transferred to the capital reserves of QUARTERBACK Immobilien Group.
The Supervisory Board of Vonovia SE decided unanimously on May 6, 2025 to appoint Luka Mucic as Vonovia’s new CEO. Rolf Buch transferred the management of the company to Luka Mucic at the start of 2026.
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 (CDO) expires on May 31, 2026, Daniel Riedl will leave the Management Board of Vonovia SE by amicable and mutual consent. On December 9, 2025, the Supervisory Board unanimously agreed to appoint Katja Wünschel as the new CDO as of July 1, 2026. Katja Wünschel will join the company on April 1, 2026.
In addition, the Supervisory Board extended the contract of Ruth Werhahn as Chief Human Resources Officer (CHRO) ahead of schedule until September 30, 2029.
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.
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 Bundesrat (upper house of parliament) 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 € 2.5 billion being recognized in the 2025 fiscal year.
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.
Vonovia issued a € 2,250 million bond on November 12, 2025 in three tranches with terms of 7, 11 and 15 years. The tranche with an 11-year term was issued as a green note. The average coupon is 3.96% p.a.
Another buyback of an outstanding bond in the amount of € 559.6 million was completed on November 17, 2025.
In addition, Vonovia concluded the scheduled repayment of a bond with an outstanding volume of € 1,250 million on December 1, 2025.