2022 was a good year for real estate giant Vonovia. Two factors in particular were decisive for this.
The largest German real estate group Vonovia benefited last year primarily from the takeover of Deutsche Wohnen and higher rental income. Sales and operating results increased significantly. The group remains cautious for the current year.
The demand for apartments will also increase in 2023, but the market environment will remain challenging, said company boss Rolf Buch after the stock exchange closed. In the current year, segment revenues are expected to increase to between EUR 6.40 and 7.20 billion. Management is targeting 2.60 to 2.85 billion euros for earnings before interest, taxes, depreciation and amortization (Ebitda) and 1.75 to 1.95 billion euros for operating profit (FFO).
In 2022, operating profit (FFO) increased by a fifth to 2.04 billion euros year-on-year, mainly thanks to the acquisition of Deutsche Wohnen. At the end of December, the average rent rose to EUR 7.49 per square meter – that was 2.2 percent more than a year earlier. Modernized apartments in particular contributed to the growth. Landlords can partially pass on the costs of energy-related renovations such as thermal insulation and the replacement of old heating systems and windows to the rent.
The bottom line is that depreciation is a loss
Sales climbed last year by almost a fifth to 6.26 billion euros. The bottom line is that Vonovia reported a loss of EUR 669 million after a profit of a good EUR 2.4 billion a year earlier. Buch justified the shortfall with write-downs on the real estate portfolio, the development business and the nursing subsidiary totaling almost 1.3 billion euros.
Management will propose a dividend of 85 cents per share at the annual general meeting. A year earlier, the group had distributed 1.66 euros.