Real Estate

Management report podcast Why the merger of Vonovia and Deutsche Wohnen does not trigger a “market quake”

Vonovia and Deutsche Wohnen play a particularly important role in the Berlin housing market
Vonovia and Deutsche Wohnen play a particularly important role in the Berlin housing marketIMAGO / picture enclosure

With the planned merger of Vonovia and Deutsche Wohnen, the two largest German housing companies will become Europe’s largest real estate group. The merger would have noticeable effects on Berlin’s housing market, where rents have risen particularly sharply in recent years: Vonovia currently owns 40,000 apartments here, Deutsche Wohnen 115,000. This would make the group, which will be called “Vonovia SE” after the deal, the largest private rental company.

Peter Hettenbach and Katharina Invankovic take the merger plans as an opportunity to take a closer look at the influence of the two companies on the Berlin housing market. “The big market quake – neither in one nor the other direction – cannot be seen at first,” sums up Invankovic. Because even with the joint housing stock, only around seven percent of the total of two million apartments in Berlin belong to Vonovia and Deutsche Wohnen. “One can definitely not speak of a monopoly here,” said Ivankovic.

Megafusion as a “great opportunity” for social housing

The offer to sell 20,000 apartments from Deutsche Wohnen’s portfolio to the municipal housing associations will strengthen the housing policy of the Senate, says Invankovic. So far, around 360,000 apartments are in municipal hands. “That would be 20 percent of the market, which is very significant,” she adds. In this way, Berlin could also have an active say in the subject of rent index in the future.

Hettenbach adds that this growth could give the city more leeway, especially when it comes to social housing. Basically, a city needs around a tenth of all social housing. For comparison: by the end of 2021 there could be around 97,000 social housing in Berlin – this corresponds to around five percent of all housing. If Berlin accepts the offer, the city would have “a great opportunity to close gaps relatively easily.”

You can also hear in the eighth episode of the “Management Report”,

  • what Blackrock has to do with Vonovia and the German apartment,
  • what advantages professional housing providers have over private providers,
  • what to think of further plans by Vonovia and Deutsche Wohnen.

You can find all episodes directly at Audio Now, Apple or Spotify or via Google.

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