Fundamental Information About the Group

Macroeconomic Environment

Geopolitical circumstances yet again dominated the macroeconomic environment in 2025.

Russia’s war of aggression in Ukraine continued unabated in 2025. Despite international sanctions and diplomatic efforts, a quick solution was not in sight. The tension in East Asia over Taiwan’s independence was another unsettling factor for global supply chains. The general geopolitical situation remained unstable: flash points flared up in the Middle East and rivalry between the superpowers dominated the international agenda. On the whole, 2025 was defined by considerable uncertainty, with existing conflicts and tensions still undermining the confidence of investors and consumers worldwide.

These factors, coupled with the US trade and tariff policy, have led to prolonged distortions in the global economies and therefore also on the international capital markets, which is especially evident in high interest rates and inflation in a long-term comparison. Furthermore, market fluctuation was driven by fears of recession, so that the capital markets continued to be defined by high levels of volatility.

The effects of climate change were felt worldwide in 2025. Europe once again had an exceptionally hot summer with new record temperatures recorded in Southern Europe, in particular. At the same time, Central Europe was hit by heavy storms and flooding. The wildfires in Los Angeles in January 2025 thrust global climate change back into the spotlight. Against this background, many countries are stepping up their climate protection measures. Germany continues to push strict regulation for building efficiency and is channeling substantial subsidies into green infrastructure.

War, climate change and global wealth inequalities are the fuel behind the current migration flows. Policymakers are tasked with promoting affordable housing while reaching climate goals at the same time. All in all, regulatory pressure on the real estate industry increased, which generated pressure to bring about transformation towards sustainable, future-proof business models. There is still a large gap between the demand for, and supply of, housing.

In the real estate industry, these are all leaving a significant mark on business models and the determination of enterprise values. Political clarity with regard to building regulations, tenant legislation, environmental standards, energy policy and housing policy subsidies is crucial to allow real estate companies to assess the status quo and plan ahead, and also to develop strategic and operational responses to the issues of the future.

By contrast, the megatrends of climate change, urbanization, demographic change and technological advances are currently the mainstays of commercial activity. Its sound financial position enabled Vonovia to adapt to the macroeconomic environment and defy the past crisis years. Thanks to its sustainability efforts, in particular, Vonovia considers itself well equipped for new growth based on these megatrends. Its key balance sheet indicators and ratings are stable, the cycle of dwindling values is over and the company is well placed to tackle the years that lie ahead from both a strategic and operational perspective.