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Germany's Vonovia posts record $7.35 billion loss amid property crisis

Tom Sims and Matthias Inverardi
Updated ·2 min read
FILE PHOTO: A logo of German real estate company Vonovia, is pictured during a news conference in Duesseldorf

By Tom Sims and Matthias Inverardi

FRANKFURT (Reuters) -Vonovia, Germany's largest landlord, on Thursday reported a 6.76 billion euro ($7.35 billion) loss for 2023 - its biggest ever - following further writedowns on the values of its properties, the latest sign of stress in the nation's struggling real-estate sector.

Germany is undergoing a major change of fortune after an end to the era of cheap money that fed a decade-long property boom, hitting property companies like Vonovia hard.

The annual loss compares with a year-earlier loss of 669.4 million euros in 2022, before which the company experienced years of profit going back to at least 2010, according to LSEG data.

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Vonovia said that it wrote down its portfolio of apartments by 4.2% in the second half of the year after a 6.6% writedown during the first half.

"The collapse of valuations is the worst we have ever seen," Chief Executive Officer Rolf Buch told journalists.

He said that he was seeing signs of stabilisation but added: "I am not a prophet."

He said the company would pursue further sales of apartments to reduce its debt.

The figures from Germany's biggest residential landlord come as the nation's real-estate sector is mired in its worst crisis in decades, marked by insolvencies, fizzling transactions, falling prices and a decline in construction jobs.

Germany's 670 billion euro property industry is a critical pillar of its economy, contributing one in 10 jobs, nearly a fifth of output, and eclipsing the country's famous car sector, according to the ZIA industry association.

LEG Immobilien and TAG Immobilien, two of Vonovia's top domestic competitors, also reported annual losses this week, making for a combined loss of 8.7 billion euros for the past year for the three companies.

Vonovia had been scheduled to release its full-year figures on Friday.

($1 = 0.9187 euros)

(Reporting by Tom Sims and Matthias InverardiEditing by Riham Alkousaa, Kirsten Donovan and Lisa Shumaker)