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Last week, Vonovia made a sale of five properties to CBRE Investment Management for approximately 560 million euros ($620.4 million) due to the negative impact of high interest rates and increasing costs of construction and energy on property values. Among these properties, two have a total of 1,350 residential units and are in the final stages of construction, with the expected completion date being the end of August this year.
According to Vonovia, the selling price of the properties to CBRE Investment Management is lower than their book value as of the end of December, and lower than the expected costs of completion, which were estimated at 600 million euros. Vonovia stated that the sale highlights the inherent value of its portfolio.
Meanwhile, at the end of the first quarter, Vonovia re-evaluated its entire property portfolio, resulting in a total market value that was 3.5 billion euros lower than at the end of December, with a current value of 91.2 billion euros.
Despite a 17.8% decrease in group funds from operations (FFO) to 462.6 million euros in the first quarter, Vonovia’s CEO Rolf Buch expressed optimism for the real estate sector due to the recently closed deal. He noted that the market is slowly starting to open after a challenging first quarter.
Vonovia maintained its full-year guidance for group FFO, expecting it to be within the range of 1.75 billion euros to 1.95 billion euros, which is higher than the 2022 figure of 2.04 billion euros.
Vonovia is a German real estate company that manages and owns residential properties across Germany, Austria, and Sweden. The company is one of the largest residential real estate companies in Europe, with over 415,000 apartments in its portfolio as of 2021.
Vonovia operates as a vertically integrated business, managing everything from property acquisition and development to rental and property management services. The company's main goal is to provide affordable and high-quality housing to its tenants while creating sustainable value for its shareholders. Vonovia is also committed to sustainability and social responsibility, with a focus on energy-efficient buildings, social housing initiatives, and digital innovation.
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