Author Topic: VNA.GR - Vonovia  (Read 1259 times)

whiterose

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Re: VNA.GR - Vonovia
« Reply #10 on: August 08, 2018, 12:33:34 AM »
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Is this a regulated business, or is there a general market price mechanism [perhaps "local/per area/city"], that the company can "follow" while offering new contracts to potential tennants?

In general the german rental market is not onerously regulated, at least way less compared to sweden. However the rental law is mostly in favour of the tenants.
There are some limits on how much one can raise rents (15 or 20% every 3 or 5 years, haven't looked into it, changed recently). There is also a public discussion going on on how to cap it, considering the high rents in some areas.
The rent-level can not deviate too much from the local average level in your district/neighborhood.

A landlord can also levy some renovation/modernisation/insulation costs onto the tenants. All in all there are for sure economies of scale to the business. The large companies do most small repairs etc. in-house. They also bought whole blocks (thousands of units) as portfolio-transaction (sometimes from the state) -> cheaper per sqm than bought individually.

There are complaints from tenants of Vonovia for example, where they suggest they underinvest in the buildings and "milk" them for short term profits. Don't know how widespread or serious it is.


petec

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Re: VNA.GR - Vonovia
« Reply #11 on: August 08, 2018, 12:38:18 AM »

A landlord can also levy some renovation/modernisation/insulation costs onto the tenants.


Vonovia are doing an increasing amount of this. I believe tenants can request a new kitchen or bathroom, including ones with facilities for seniors, and Vonovia will install these for a rental pickup. This is profitable for Vonovia as they can buy in bulk.

John Hjorth

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Re: VNA.GR - Vonovia
« Reply #12 on: August 08, 2018, 05:34:10 AM »

The more long term you think about this company, the more reckless the financing appears to be. [Think GGP.]


Can you elaborate? I haven't followed GGP so I don't get the analogy, and Vonovia's financing seemed fairly secure to me: under 45% LTV on residential property that is easily sold, and with very spread maturities.

Pete,

I'm referring to this piece about GGP. GGP had to rely on the kindness of the strangers named BAM & Ackman to get out of that enormous friggin' mess - at a price for the shareholders! Absolute calamity, based on stupid thinking that "it will never happen".

The more long term you think about it, the higher is the probability that you have to refinance some bonds in a frozen bond market.
« Last Edit: August 08, 2018, 05:39:31 AM by John Hjorth »
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petec

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Re: VNA.GR - Vonovia
« Reply #13 on: August 08, 2018, 05:40:27 AM »
The more long term you think about it, the higher is the probability that you have to refinance some bonds in a frozen bond market.

Of course. That's why they have relatively low LTV with maturities spread out over 20 years. But I will read and re-think. Many thanks.