Germany's Vonovia posts Q1 profit after record annual loss

By Matthias Inverardi and Tom Sims

DUESSELDORF, Germany (Reuters) -Vonovia returned to profit in the first quarter, Germany's largest real estate group reported on Tuesday, despite the sector grappling with its worst crisis in decades.

Shares in early trade were up 2.3% in Vonovia, which also said it expects property values to bottom out this year.

It posted a profit of 335.5 million euros ($359 million), bouncing back from a loss of 2.088 billion a year earlier.

"Return to growth track is in sight. From 2025 at the latest, we want to shift gears and focus on increasing our earnings again," the company said.

Last month, Vonovia reported its biggest annual loss ever, a second consecutive year in the red after years of steady profit.

German property firms are undergoing a major change of fortune after an end to the cheap money era that fuelled a decade-long boom.

Vonovia has been trying to sell property to reduce debt. Last week it announced the sale of a portfolio of 4,500 apartments for 700 million euros.

($1 = 0.9352 euros)

(Reporting by Matthias Inverardi and Tom Sims; editing by Miranda Murray and Jason Neely)