Vonovia News

This topic is centered around Vonovia and our investment in it.

Discussion about Vonovia in archived discord channel

Original posts in archived discord channel

  1. Pirate Captain 03/13/2023 9:18 PM

I just doubled the Vonovia position which is now approx. 40% of the Deutsche Wohnen position given interest rates came down by a lot and further rate hikes are now less certain than before. (1) https://finanzmarktwelt.de/ezb-unter-druck-zinsschritt-von-05-prozentpunkten-nicht-sicher-264121/

finanzmarktwelt.de

EZB unter Druck: Zinsschritt von 0,5 Prozentpunkten nicht sicher

Vor wenigen Tagen galt eine Zinserhöhung der EZB am Donnerstag noch als sicher. Doch die Banken-Krise in den USA hat die Zinserwartungen…

  1. [9:18 PM]

price 20.38€

March 16, 2023

Aron~Bluesky 03/16/2023 8:27 PM

SI=-4%, I=10 -Vonovia 2022 revenue grew by 19.9% to 6.26 billion euros, putting its revenue at the lower end of the guidance given by the management during Q3 2022 earnings. The management had forecasted revenue to come in between 6.2 and 6.4 billion euros(+21% at the midpoint). -Adjusted EBITDA was 2.76 billion euros(+23%). Also at the lower end of the guidance, which was 2.75-2.85 billion euros(+24% at the midpoint) -Group FFO grew 20.1% in 2022 to 2.04 billion euros(2021: 1.69 billion euros) in-line with management guidance of 2.0-2.1 billion euros (+21% at the midpoint). -Vonovia said it will propose a dividend of 0.85 euros per share(2021: 1.66 euros per share). -It said it expects revenue in 2023 to be between 6.4 billion and 7.2 billion euros(+8.6% at the midpoint). -It also said it expects adjusted EBITDA to be between 2.6 and 2.85 billion euros(-1.3% at the midpoint). -Group FFO is being guided to be between 1.75 and 1.95 billion euros(-9.3%). -CEO Rolf Buch said,

“The consequences of Russia’s war of aggression meant that central banks across the globe had to raise interest rates at an unprecedented speed. In a regulated market, our business model, which is stable in the long run, reacts to changes like these with a time delay. This also has an impact on some of our key figures.” “The demand for housing will continue to rise this year, but the market environment will remain challenging.” He added

Presentations - Vonovia - Investor Relations (edited)

Vonovia - Investor Relations

Presentations - Vonovia - Investor Relations

All relevant information on the latest presentations of Vonovia SE.

1

March 22, 2023

Aron~Bluesky 03/22/2023 10:24 AM

SI=-3%, I=6 -Morgan Stanley lowered Vonovia’s rating to “underweight” from “equal-weight” while also cutting its price target to 19 euros from 30 euros. -Analyst Bart Gysens said that for continental European real estate companies yields are too low yet rental income risks are high. -He noted that Vonovia’s measures to strengthen its balance sheet is looming after it failed to eliminate dividends completely. Morgan Stanley downgrades Vonovia to 'Underweight' - Target 19 euros -March 22, 2023 at 04:05 am EDT | MarketScreener

Morgan Stanley downgrades Vonovia to ‘Underweight’ - Target 19 euro…

U.S. investment bank Morgan Stanley downgraded Vonovia to underweight from equal-weight and cut its price target to 19 euros from 30 euros. In continental European real estate companies, yields are… | March 22, 2023

March 27, 2023

  1. @Aron~Bluesky

SI=-3%, I=6 -Morgan Stanley lowered Vonovia’s rating to “underweight” from “equal-weight” while also cutting its price target to 19 euros from 30 euros. -Analyst Bart Gysens said that for continental European real estate companies yields are too low yet rental income risks are high. -He noted that Vonovia’s measures to strengthen its balance sheet is looming after it failed to eliminate dividends completely. Morgan Stanley downgrades Vonovia to 'Underweight' - Target 19 euros -March 22, 2023 at 04:05 am EDT | MarketScreener

Pirate Captain 03/27/2023 10:01 AM

I don’t like the fact they did not eliminate their dividends. What i could imagine is that funds have a requirement for dividends but from a company perspective it is not wise to distribute cash to investors at this time (edited)

2

  1. @Pirate Captain

I don’t like the fact they did not eliminate their dividends. What i could imagine is that funds have a requirement for dividends but from a company perspective it is not wise to distribute cash to investors at this time (edited)

Aron~Bluesky 03/27/2023 5:38 PM

-It plans to dispose assets valued at €2bn during FY2023. -Its €2.2bn of unsecured bonds will mature in 2023. Vonovia/German property: stately pile of debt needs underpinning

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April 26, 2023

Aron~Bluesky 04/26/2023 9:37 AM

SI=4%, I=8 -Vonovia to sell its Suedewo residential portfolio to U.S. investor Apollo for 1 billion euros ($1.10 billion). -Suedewo portfolio is currently valued at 3.3 billion euros, a 5% discount to its fair value in December 31. -Vonovia targets to generate 2 billion euros free cash flow from its portfolio sales. -In summer, it earmarked properties worth 13 billion euros for sale. 12ft

1

May 4, 2023

Aron~Bluesky 05/04/2023 9:29 AM

SI=-3%, I=8 -Vonovia Q1 2023 revenue declined 12.2% to € 1.43 billion. -EBITDA declined 10% y/y to €728.7 million. -Rental revenue grew 2.6% y/y to €800.2 million. -Group FFO per share declined 17.8% to €0.73.

“The housing market was tense in the first three months of the year. Our core business - residential property management - is healthy and developed positively even in this difficult environment. The sales business declined as expected,” CEO Rolf Buch said.

-Market value of its real estate portfolio declined 3.7% Q/Q to €91.2 billion from €94.7 billion.

“Our valuation certainly offers the greatest possible transparency with regard to the challenging situation in Q1 2023. However, this valuation is a snapshot. Especially since we are seeing larger transactions again for the first time in the second quarter. Furthermore, the following applies unreservedly: The current market environment with increased capital and construction costs accelerates the megatrends that we are using as the basis of our business,” says Buch.

-Vonovia sold today five real estate portfolios( 1,350 residential units in Frankfurt, Berlin and Munich) to CBRE Investment Management for around €560 million. -The company is now able to cover 2023’s refinancing needs in full as well as two-third of the refinancing due in 2024.

“Amounting to a total of more than €1.5 billion, we already have almost reached our sales target for this year. Furthermore, we assess the results of our negotiations as a positive signal for the entire business: after a very difficult first quarter 2023 with little movement, the market is cautiously opening. Buyers and sellers can come to an agreement again. This in itself is a cause for optimism,” Buch said

-Vonovia maintained its 2023 revenue, EBITDA and Group FFO. – Company Announcement - FT.com Presentations - Vonovia - Investor Relations (edited)

EQS-News: Vonovia makes a solid start into the new financial year w…

The latest company information, including net asset values, performance, holding & sectors weighting, changes in voting rights, and directors and dealings.

Vonovia - Investor Relations

Presentations - Vonovia - Investor Relations

All relevant information on the latest presentations of Vonovia SE.

ThreadQ1/23 Vonovia results2 Messages ›

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  1. Pirate Captain started a thread: Q1/23 Vonovia results. See all threads. 05/04/2023 11:04 AM

May 10, 2023

Aron~Bluesky 05/10/2023 3:52 PM

SI=0%, I=7 -Vonovia offered a series of sweeteners to have Apollo purchase its 30% of portfolio. -Apollo will get around 70% of the dividends and will not pay asset-management fees. -This will take the discount to 30% of the book value, way above the 5% discount announced by the company when closing the deal. -The revelation casts a shadow on the deal that suggested that pricing was firming and confidence was returning to the German property market. -Chief Executive Officer Rolf Buch said during the earnings call that Apollo was getting higher dividends from the portfolio because it “has no minority protection rights in the deal.” -He added that the sale included a call option that will allow Vonovia to buy the assets back at a price that caps the private equity firm’s return, meaning it could claw the properties back at a discount in future. -Vonovia also sold properties to CBRE Investment Management for €535 million after taxes and transaction costs, reflecting a discount of 11%. Vonovia Offered Hidden Sweeteners to Get €1 Billion Apollo Deal - Bloomberg (edited)

1

May 12, 2023

  1. @Aron~Bluesky

SI=0%, I=7 -Vonovia offered a series of sweeteners to have Apollo purchase its 30% of portfolio. -Apollo will get around 70% of the dividends and will not pay asset-management fees. -This will take the discount to 30% of the book value, way above the 5% discount announced by the company when closing the deal. -The revelation casts a shadow on the deal that suggested that pricing was firming and confidence was returning to the German property market. -Chief Executive Officer Rolf Buch said during the earnings call that Apollo was getting higher dividends from the portfolio because it “has no minority protection rights in the deal.” -He added that the sale included a call option that will allow Vonovia to buy the assets back at a price that caps the private equity firm’s return, meaning it could claw the properties back at a discount in future. -Vonovia also sold properties to CBRE Investment Management for €535 million after taxes and transaction costs, reflecting a discount of 11%. Vonovia Offered Hidden Sweeteners to Get €1 Billion Apollo Deal - Bloomberg (edited)

Pirate Captain 05/12/2023 9:44 PM

oh that’s bad. I’d say it’s a 8 or 9 in terms of importance as those are news that significantly deviate from what was communicated before

1

May 18, 2023

Aron~Bluesky 05/18/2023 11:46 AM

SI=0%, I=7 Yesterday, Vonovia held its 2023 annual general meeting. Here is a summary of what happened during the meeting; -Shareholders approved the €0.85 per share dividend. -Shareholders elected a new chairperson of Supervisory board. -Union Investment, one of the major shareholders heavily critised the company on matters to do with communication and capital position. -CFO Philip Grosse defended the company’s capital position. -CEO Rolf Buch said they are ready to sell apartments to avoid further capital increase. Read more here: Vonovia: Anual General Meeting /2023 - InvestmentWiki (edited)

InvestmentWiki

2023

May 24, 2023

Pirate Captain 05/24/2023 2:24 PM

Cool summary @Aron~Bluesky. Can you find out at which LTV % Bond Covenants trigger for Vonovia? My guess would be 60%

1

Aron~Bluesky 05/24/2023 3:33 PM

SI=-1%, I=5 -Warburg Research lowered price target on Vonovia from 40 euros to 38.60 euros but left the rating on Buy. -The company is making progress on real estate disposals aimed at improving its balance sheet and liquidity, analyst Simon Stippig wrote. ANALYSE-FLASH: Warburg Research senkt Ziel für Vonovia auf 38,60 Euro - 'Buy' | 24.05.23 | finanzen.at

  1. @Pirate Captain

Cool summary @Aron~Bluesky. Can you find out at which LTV % Bond Covenants trigger for Vonovia? My guess would be 60%

Aron~Bluesky 05/24/2023 3:52 PM

yeah, 60% https://static.seekingalpha.com/uploads/sa_presentations/360/93360/original.pdf (page 39)

Aron~Bluesky 06/12/2023 12:13 PM

SI=-1-2%, I=5 -Goldman Sachs lowers Vonovia price target to 38.20 euros from 35.40 euros but maintained the buy rating. -The price target adjustment reflects a higher cost of capital. -He noted that the real estate industry correlates negatively with rising bond yields. -He added that debt concerns in the real estate sector also weighs in. GOLDMAN SACHS stuft Vonovia auf 'Buy' - 12.06.2023

wallstreet-online.de

GOLDMAN SACHS stuft Vonovia auf ‘Buy’

Vonovia believes that the Commission’s conclusion that the state of Berlin could enact expropriation legislation is not feasible due to;

  • Substantial constitutional hurdles.
  • Economics surrounding compensation.
  • Investments relating to new constructions(€100bn p.a.) cannot be met by the government alone.
  • Energy efficient modernization investment(€120bn p.a.) will also not be shouldered by the government alone.

Vonovia - InvestmentWiki.
@moritz what’s your take on this regulation?

Analyst Reactions originally posted on Discord

Link to messages on Discord.

  1. Aron~Bluesky 06/27/2023 1:19 PM

SI=1-2%, I=5 -Warburg Research maintains buy rating for Vonovia and left price target at 38.60 euros. -Analyst Simon Stippig said that the possible expropriation of large housing companies in Berlin is not expected to affect Vonovia’s price in the short term. -This is because the legality of the law is difficult to determine and would be the subject of the Federal Constitutional Court and the European Court of Justice, which should take time. https://www.finanzen.ch/analyse/vonovia-se-ex-deutsche-annington-buy-892517

June 29, 2023

Aron~Bluesky 06/29/2023 2:24 PM

SI=0%, I=5 -In light of the legal possibility of expropriating housing in the state of Berlin, DZ Bank analyst, Karsten Oblinger, has left their buy rating and price target of 27.50 euros on the stock. -He believes that;

A post was merged into an existing topic: Meta

I don’t think it’s an issue at all. Berlin is now conservatively led which makes expropriations even more unlikely than it was before. If anything an expropriation could help Vonovia/Deutsche Wohnen in current market conditions given that approx. market prices would be paid.

1 Like

That’s right. To add,

  • The commission was formed by the former red-red-green coalition of SPD, The Left Party and the Greens.

  • The commission has established that expropriation of 240,000 houses in Berlin is constitutional.

  • It has also established that the government won’t have to pay the current market price; hence won’t face financial ruin.

  • The current CDU-SPD coalition agreement stipulates that if the commission finds that expropriation of housing in the state of Berlin is constitutional, they will make it a law.

  • However, the law will only come into effect two years after promulgation. That will give the affected companies humble time to sell the properties. Not forgetting the expected legal battles.

  • But, yeah. The CDU-SPD coalition housing plan seems to differ from the Deutsche Wohnen & Co Enteignen referendum.

SI=-2%, I=5

  • Stifel analysts expects German real estate companies to enter a recessionary period.

  • They have downgraded Vonovia from hold to sell.

“After a seemingly endless party of growth fuelled by ever cheaper finance, the sector will now face a “protracted hangover” with higher rates that are more than likely not transitory,” they said.

“We think this means that unless there is a recapitalisation or a substantial decline in financing costs, share prices will continue pricing in significant risks to asset values,” they added.

A post was split to a new topic: Vonovia Discussions

  • According to insiders, Vonovia has started preparations for the partial sale of 18,000 apartments belonging to its subsidiary, Buwog.
  • Buwog bought the apartments in 2014 for 900 million euros.
  • It is estimated that Vonovia could get around 3 billion euros from the sale.
1 Like

I=7

  • Vonovia CEO Rolf Buch said they will halt sale of residential properties “as soon as valuations have bottomed out" to capitalize on rent increase but is looking to sale care homes and commercial properties in 2024.

  • The company plans to sell off €3 billion ($3.3 billion) of commercial properties in 2024.

  • Buch said that the sector will benefit from a halt in new construction as well as strong demand for rentals.

    “The construction crisis is going to get worse until at least 2025,” he said in an interview at the company’s headquarters.

  • He pointed out that rent will go up if they don’t get state subsidy to upgrade old buildings to become energy-efficient.

    “If we don’t get this subsidy to pass on to tenants, rents will need to go up,” Buch said

I=5
Vonovia now done with big writedowns, CEO said

  • Vonovia CEO Rolf Buch said the company is now done with big writedowns though further small adjustments are expected.

  • He, however, warned that more bankruptcies in the sector are to be expected.

    “We’re going to see an extreme number of bankruptcies over the next few months, maybe over the next few years. We’re already seeing them today,” Buch told journalists on Tuesday.

@Magaly what’s your assessment of German’s real estate industry? Are we going to see a large number of bankruptcies?

I=4
Buy, €37.50->40.50: Analyst Thomas Neuhold of Kepler Cheuvreux believes that German residential market is poised for further above-average development. He expects the start of ECB rate cut cycle to support real estate prices. Neuhold also sees other tailwinds such as population growth, low vacancy rates, the slow growth in supply and rising rents.