Vonovia, Germany's largest housing group, is halting the new construction projects it has planned for the year. This applies above all to plans in Berlin and Dresden. "We will not have a start of new construction projects this year. Inflation and interest rates have risen enormously and we cannot close our eyes to this," Vonovia Management Board member Daniel Riedl told the Westdeutsche Allgemeine Zeitung.

Jonas Jansen

Business correspondent in Düsseldorf.

  • Follow I follow

In order to refinance the costs of EUR 5000,20 per square meter, Vonovia would have to "go in the direction of EUR 12" in the cold rent, and that for properties that would previously have cost EUR 700 cold rent per square meter. However, these rents are "completely unrealistic" in large parts of Germany. In order to cover the needs of 000,<> apartments, rents of eight or nine euros are also required.

However, this does not change the investment planning for this year, as a Vonovia spokeswoman explained when asked. Already in November, the Dax group had evaporated its investments for new construction and modernization due to rising interest rates and high construction costs. Vonovia is investing half a billion euros in modernization and 350 million euros in new construction, significantly less than in previous years. For the past year, the Bochum-based company had calculated 800 to 900 million euros for modernization and half a billion euros for new construction.

What the company has already started will be built to the end, which is why it remains at the planning of 350 million euros. As early as November, Vonovia CEO Rolf Buch said that a new building on "reasonable terms" was no longer possible. Of course, this contradicts the federal government's new construction targets of 400,000 apartments per year, which, according to Buchs, requires investments of 150 billion euros every year.