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Deutsche Wohnen: Berlin concrete gold in the Dax

D.he Deutsche Wohnen SE is the second largest German real estate group after Vonovia. The development of the German real estate market in recent years is shown, among other things, by the fact that two real estate companies have been represented in the first German stock exchange league since June 22, 2020 with Deutsche Wohnen’s rise to the DAX. In addition, 14 years after the Schering takeover by the Bayer Group, the federal capital got a company in the top stock exchange league again.

Dax rise reflects success

Investors who have already bet on real estate stocks have done everything right, at least in the past six months. You are one of the big winners of the crisis. No other Dax stock has risen more sharply in the last 6 months than Deutsche Wohnen. The rise in the Dax has more than made up for the price losses of the share in the wake of the Corona crisis.

Since the Corona crash in March, the share has gained around 60 percent. Since the beginning of the year there has been an increase of more than a fifth. The Deutsche Wohnen share ended the first half of 2020 with a price gain of 12.1 percent and thus also developed significantly better than the German share indices Dax (minus 7.1 percent) and M-Dax (minus 8.7 percent) or the EPRA Europe real estate index (minus 22.7 percent).

Berlin peculiarities

In general, the stock market success of Vonovia, Deutsche Wohnen & Co. is an expression of the boom on the German and European real estate market, which was fueled by the low interest rate policy of the ECB. Although Deutsche Wohnen is much smaller than Vonovia, it was the number two on the market that was the focus of discussions about rents that are too high and the Berlin rent brake. After all, unlike the market leader Vonovia, Deutsche Wohnen is particularly heavily involved in the German capital.

Deutsche Wohnen earns money with the management and development of its own real estate portfolio, which is mainly located in German metropolitan regions. The portfolio comprises around 164,300 units, including 161,500 residential units and 2,800 commercial units, with a total value of around 24.2 billion euros, as well as care properties with 12,200 care places and apartments for assisted living with a value of 1.3 billion euros.

When the balance sheet for the second quarter was published, the management was confident that the Federal Constitutional Court will overturn the law that has been in force in the capital since February. “We firmly believe that Berlin will remain a very dynamic growth story,” said CEO Michael Zahn.

In the course of the corona crisis, Deutsche Wohnen has once again come into focus. The economic crisis is causing higher unemployment rates. So what happens to the people who can no longer pay their rents?

Own corona aid fund

Deutsche Wohnen’s answer to the difficult situation as a result of the corona pandemic is a corona aid fund amounting to 30 million euros. With the help of this, commercial and apartment tenants as well as business partners who have got into financial difficulties as a result of the Corona crisis are to be helped unbureaucratically.

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