Vonovia SE - ADR

Return to Growth Phase: Vonovia is transitioning from a phased focus on defensive strategies to a return to growth, emphasizing non-rental EBITDA expansion and leveraging its scale. The goal is to grow rental EBITDA by 4% and non-rental EBITDA by 30% by 2028, leading to a combined total EBITDA growth of approximately 8%.

Market Stability and Rent Growth: The company noted a stabilization in property values, with Q4 2024 showing no decline in multifamily home values and initial signs of price growth for condos. Rent growth is expected to be solid due to a significant gap between regulated rent levels and market demand, with ongoing rent increases driven by a healthy occupancy rate and full rent collection.

Investment and Cash Flow Strategy: Vonovia plans to ramp up its investment program from EUR1 billion to EUR2 billion by 2028, focusing on cost-effective and capital-light growth initiatives. The projected operating yields on these investments are between 6% and 7%, paving the way for continued cash generation and profitability.