Our Strategy

Market Environment

Vonovia operates in an environment determined by four megatrends that will influence the business positively in the long term:

The Value Drivers of Our Strategy

• Climate Change: The effects of global climate change caused by rising temperatures are already being felt. Vonovia's investment strategy along its climate pathway is underpinned by a reduction in CO₂ emissions and adaptation to irreversible effects such as extreme weather events. Energy-efficient refurbishments, smart energy solutions for neighborhoods and climate-resilient new construction will become increasingly sought-after business models in the long term.
• Urbanization: The ongoing large gap between supply and demand for housing, particularly in urban areas, alongside migration to attractive regions and cities, will lead to strong utilization of Vonovia's rental business as well as guaranteed high demand for new housing.
• Demographic Change: The trend toward more and smaller households is boosting demand for homes further; meanwhile there is a need for custom services, particularly for elderly people, and vibrant, sustainable neighborhoods.
• Technological Progress: Digitalization, automation and AI offer great opportunities. Vonovia can make processes more efficient and, as a digital pioneer, further expand its current competitive advantage with new technologies.

These developments will secure the basis of Vonovia's business in the long term and create an attractive starting position for generating sustainable growth.

Basis: Proven 4+2 Strategy

Vonovia's growth continues to be based on the proven 4+2 strategy. This strategy has been refined in the recent years of crisis and has evolved into a stakeholder value strategy, reflecting the importance of all of the company’s major stakeholders. The revision of the materiality assessment in accordance with the ESRS (European Sustainability Reporting Standards) in 2024, and identifying the opportunities, risks and impacts that Vonovia’s activities have on stakeholders, has enhanced transparency, laying the foundation for even more integrated business activities. The materiality assessment forms the basis for the company’s sustainability reporting.

The property management strategy represents a mature, efficient and scalable management platform. In this respect, Vonovia makes use of a mix of regional and local services and the Group-wide bundling of services in central service centers. Vonovia also applies this expertise to the property management business in Austria and Sweden in line with the requirement profiles that apply in those markets. The property management strategy is being enhanced, in particular, by digitalization measures in the underlying business processes and at the customer interface.

The financing strategy aims to establish a well-balanced and sustainable financing structure. Thanks to its broad range of equity and borrowed capital providers and the investment grade ratings awarded to our company by the rating agencies S&P, Moody’s, Fitch and Scope, Vonovia has excellent access to the international capital markets. As well as managing the challenges emerging from the current interest rate environment, our priority remains to maintain these credit ratings, optimize the financing structure and maturity profile, diversify our financing sources and carry out financial risk management. We are also currently monitoring other focal areas, such as the earnings-to-debt and earnings-to-interest burden ratios.

The portfolio management strategy is focused on the targeted optimization of the portfolio: non-strategic holdings disposed of through privatization and disposal, while modernization, new construction, development and targeted acquisitions help increase the value. The respective economic conditions determine what action the company takes. Vonovia invests in its strategic holdings in urban quarters and urban clusters, especially in line with its climate pathway to promote sustainability and its innovation strategy. Densification creates new homes using a combination of vertical expansion and new construction on existing land. The portfolio management strategy also includes development activities on specially acquired land, thus extending the value chain. The development business includes the construction of owner-occupied apartments for sale, as well as the construction of rented apartments to be managed by the company itself.

With the Value-add strategy, Vonovia is expanding its core business to include customer-oriented services related to renting. Innovative approaches and business models are continually reviewed and integrated in the company’s offerings for the purpose of enhancing customer satisfaction. The established service areas of the Value-add strategy include the craftsmen’s and residential environment organization, multimedia services, and energy and measurement services, as well as insurance services. Thanks to its own organization, Vonovia can flexibly cover maintenance services across its entire portfolio, thus increasing the attractiveness of its apartments and enhancing customer satisfaction.

Vonovia pursues acquisitions when opportunities present themselves in light of current return and financial conditions, and only if they are expected to yield an increase in value. The valuation is based on strategic fit, increase in EBITDA rental yield and EPRA NTA neutrality, assuming a financing mix of 60% equity and 40% borrowed capital. Furthermore, an acquisition must not pose any risk to the company’s stable BBB+ long-term issuer credit rating. Until the interest rate turnaround three years ago, Vonovia had achieved profitable growth thanks to a large number of acquisitions. The scalable operational management system allows the swift integration of newly acquired companies and portfolios, thereby achieving harmonization and generating economies of scale. Vonovia analyzes potential synergies using market knowledge and the property management and development platform, as well as integration expertise. This means that acquisitions supplement our four core strategic areas.

Vonovia will pursue its internationalization strategy as and when opportunities present themselves. Activities on other European markets must not impact on the established business and must entail risk potential that can be controlled or limited.

With its size and innovative technologies, Vonovia can also make a significant contribution toward resolving the housing shortage in Germany and decarbonizing the building sector. In the environment of higher capital costs and lower stock prices in recent year, the corporate strategy was therefore further developed to achieve these objectives.

Further Development: the “Accelerate” Growth Strategy

Supplementary growth strategies (“Accelerate”) were released in 2025 to respond to changes in the market and develop additional sources of income. One thing the initiatives have in common is that they build on the basis of standardized and scaled business processes. They facilitate the expansion of business relationships with existing end customers (B2C), while also making it possible to tap into new business areas in the business customer sector (B2B).

The program was developed by the Group Strategic Committee (GSC), which was established in 2024, specifically to identify new growth opportunities outside the core business. The GSC comprises select executives from the entire company and the Management Board. The growth program is actively managed by the Transformation Management Office (TMO) of the new Strategy, Corporate Development & Sustainability division.

The strategic growth initiatives are focused on three areas:

Strategic growth initiatives

In the area of “Return to Performance”, the focus is on new strengths in the core business. Areas that were scaled back in recent years because of crises will be sustainably reinforced and refocused on growth:

• Vonovia Technischer Service (VTS): Vonovia is expanding its own craftsmen’s organization to ensure exclusive access to well-qualified tradespeople. VTS and its specialists ensure that refurbishment and maintenance work can be carried out reliably and in line with high quality standards.
• Development: Vonovia is building attractive and cost-effective housing projects for its own portfolio and for sale. In light of the ongoing need to optimize construction costs, Vonovia is focusing on the Basic House approach, among other things, in order to build sustainable and affordable housing for different target groups. Structurally high construction costs continue to necessitate the implementation of a design-to-cost principle and the systematic pursuit of serial construction.
• Recurring Sales: Vonovia sells residential units from existing and new ownership communities, thus monetizing past increases in value. Vonovia can reinvest some of these sales proceeds in refurbishing its core portfolio, straightening its internal financing power.

The Accelerated tech-supported investments department aims to significantly accelerate portfolio investments in line with Vonovia’s climate pathway. Innovative technologies are transferred to industrial manufacturing processes through standardization and industrialization:

• Serial Modernization: Vonovia uses prefabricated facade elements, in particular, to improve its buildings’ energy efficiency, thereby allowing for quicker and more efficient refurbishment.
• Energy Cube: With Cube heat pumps, Vonovia uses an innovative “plug & heat” solution for buildings that are to be fitted with heat pumps in the future, thereby driving forward the heat transition in neighborhoods suitable for this technology, especially in combination with photovoltaics.
• Energy Plan & Build: Vonovia is developing its own photovoltaics installation team, with the additional aim of creating an internal basis for further value creation in the area of renewable energies.

New sources of growth explore new business models at all stages in the value chain. Vonovia has developed innovative ideas that significantly expand its existing business or extend it to include totally new areas. The focus here is on the transformation to a B2C and B2B service business model.

• Operate Energy: Vonovia connects decentralized, sustainable energy producers and storage systems in the neighborhood and sells locally produced electricity. It controls and optimizes energy flows with an intelligent energy management system.
• Manage to Green: Vonovia buys energy-inefficient portfolios in good locations and invests in their energy-efficient refurbishment, to subsequently dispose of them at a profit. In doing so, Vonovia uses its own expertise and price advantages.
• Occupancy Rights: Vonovia offers corporate customers and institutions occupancy rights for their employees, thereby rethinking the concept of housing for workers.
• Operating Platform: Vonovia offers its in-house management platform to external B2B customers, thereby utilizing its own platform with a larger number of residential units. The objective is to gradually expand the range of services, starting with property management, so that the entire Vonovia platform can also be successfully offered to external property owners and investors in the future.

A qualified workforce is an essential basis for successfully implementing the business model and growth initiatives. Vonovia’s HR strategy aims to recruiting a sufficient number of suitable employees for the company and its new business areas, as well as providing current employees with further training. This allows the HR strategy to support change processes within the company and support the company along its transformation in enabling its growth initiatives.