Vonovia’s business model is based on the rental of good-quality, modern and, most importantly, affordable living space, the development and construction of new apartments, both for its own portfolio and for sale to third parties, and the provision of housing-related services. These housing-related services mainly relate to cable TV, energy services, automated meter reading and senior-friendly apartment modernization. This is supported by our caretakers and by our established craftsmen’s and residential environment organizations.
Vonovia’s business model has proven to be robust and largely resilient in the face of the impact of the war in Ukraine and the coronavirus pandemic. The high level of digitalization meant that business processes were maintained practically without any disruption – also thanks to the options for working from home for back office functions. There were no significant interruptions on our building sites.
The aim is to make the business model future-fit in the long run by using sustainable new construction and refurbishment approaches, CO2 reduction in the real estate portfolio and innovations relating to emissions reduction, renewable energies and sustainable construction materials to contribute to solutions for climate protection objectives.
Our neighborhoods, the main areas of action for creating a socially responsible housing industry, are to provide housing that responds to tenants’ needs as part of a process aimed at tenant participation so as to boost customer satisfaction and also contribute to the integration of our increasingly diverse society. In the initial phase of every neighborhood development project, residents are involved in the plans as part of a civic participation process so as to arrive at a shared vision.
In addition to the strategic neighborhoods (urban quarters), there are unique strategic properties (urban clusters) to which the options for action of the strategy and business model are adaptively applied. The large number of urban quarters and urban clusters in urban areas allows Vonovia to use its strategy to address the challenges arising from the megatrends.
Around 75% of Vonovia’s portfolio is located in contiguous urban quarters, i.e. neighborhoods that generally include more than 150 apartments. At Vonovia, designing homes that offer real quality of life always involves identifying what the relevant social structures need, taking into account the history of these neighborhoods. Neighborhoods are also a key implementation level for the initiatives aimed at climate protection.
As well as allowing social projects to be implemented, meeting places to be created, doctors or supermarkets to move into the area and cultural events to be offered, urban quarters offer an ideal platform for the implementation of new and innovative products. The development business is also consistent with the sustainable neighborhood concept.
Vonovia aims to be an attractive employer for its employees, ensuring equal opportunities and supporting staff members in their personal and professional development. Trustworthy, reliable and transparent corporate governance will lay the foundation for this.
Vonovia manages a housing stock of around 488,000 of its own apartments in almost all of Germany’s attractive cities and regions. It also manages a portfolio of around 39,000 units in Sweden and approximately 21,000 in Austria. The total fair value comes to around € 94.7 billion, with net assets based on the EPRA definition coming to approximately € 45.7 billion (European Public Real Estate Association: EPRA). In addition to its own apartments, Vonovia manages around 73,000 apartments for third parties. This makes Vonovia one of the leading residential real estate companies in Germany, Austria and Sweden, albeit with a low market share of around 2.1% in Germany due to the highly fragmented nature of the market.
Vonovia’s roots and those of its predecessor companies extend back into the 19th century and lie in not-for-profit housing and housing for factory workers. Deutsche Annington and GAGFAH have their roots in housing construction companies that built low-cost homes for workers, salaried employees and civil servants. Many of the housing developments and neighborhoods built in that era were model projects of the time and are now covered by preservation orders. Living in neighborhoods known as “workers’ settlements” was about much more than just affordable living space. The residents were colleagues and neighbors; they worked and lived together. The approximately 780 neighborhoods (including Deutsche Wohnen) that the company has today are one of Vonovia’s USPs and a focal point of the answers to the megatrends facing us. The story of Vonovia’s roots continued in 2021 with the merger with the Deutsche Wohnen Group. Deutsche Wohnen’s roots go back to 1863, with the real estate held by the pension fund of the company Hoechst. Via the non-profit company GEHAG, which was established in 1924, Deutsche Wohnen has properties that are exceptional examples of architectural history from the Bauhaus and expressionist movements. These included new housing concepts that helped to shape the idea of a neighborhood and were even listed as UNESCO world heritage sites. Examples include the “Hufeisensiedlung”, “Wohnstadt Carl Legien”, “Weiße Stadt” and “Ringsiedlung Siemensstadt” developments. BUWOG, which created by the Austrian government as a housing company for civil servants and was eventually privatized, represent the company’s roots in Austria. It was in this time that BUWOG evolved into a leading real estate developer in Germany and Austria. The Swedish properties originate from the “Million Program” public housing program of the 1960s and 1970s, the aim of which was to create simple, low-rent homes. A need for modernization and development meant that selected properties in and around Stockholm, Malmö and Gothenburg were ultimately acquired by Victoria Park and Hembla as investors. Vonovia operates under the name Victoriahem in Sweden.
The integration of Deutsche Wohnen’s systems and processes into Vonovia’s structures was one of the key tasks on the management agenda in 2022. This process was consistent with Deutsche Wohnen’s decision to work with Vonovia to achieve harmonization effects and economies of scale. As there is no control agreement between Vonovia SE and Deutsche Wohnen SE, the requirements of a de facto group, as a result, minority rights were always to be upheld. This was supported by corresponding contractual agreements.