Luka Mucic, the new CEO of the real estate conglomerate Vonovia, currently sees no devaluation risk for the company’s portfolio due to the global geopolitical climate. Speaking to the “Frankfurter Allgemeine Zeitung” (FAZ), Mucic stated that demand for real estate remains unchanged and robust, predicting a stable growth trend of two to three percent annually. He dismissed current market analyses concerning devaluation risks, stressing that the determining factor is the development of rents based on official rent indexes.
According to Mucic, current assumptions are realistic. While the demand for residential space is enormous, the lack of new construction, particularly in major metropolitan areas, means the immediate housing situation will likely worsen before improving. He noted that the search for adequate housing remains a significant challenge for an increasing number of people.
To reduce the group’s debt burden, Mucic has identified large sections of the real estate portfolio for potential sales. Initial interest has been generated from various interested parties.
The core portfolio consists typically of residences in excellent urban locations, which tend to yield lower returns. These properties are therefore suited for investors with a higher level of equity, such as Family Offices. Mucic confirmed that he has already had preliminary discussions with both domestic and foreign interested buyers. He added that while certain foreign markets might perceive Germany as somewhat “boring” they recognize the country’s overall stability. The group remains open to conversations with municipal providers as well.
Beyond the core business assets are residences located outside the major urban centers, in addition to the care facility segment, which are also potential sale candidates. These peripheral assets usually generate higher yields, though they are often situated in mid-level locations, making them more appealing to financial investors who finance such projects with a higher proportion of borrowed capital.
Mucic suggested that institutional investors would likely participate in the acquisition of the international companies. However, he emphasized Vonovia’s desire to continue managing the operations of certain housing units. He asserted that an investor purchasing properties from the company would be greatly disadvantaged if they were not entrusted with the management services. According to him, no one can match the combination of cost and quality provided by Vonovia in this specific service.