German landlords Vonovia and Deutsche Wohnen reeling after rent control ruling
Germany’s two largest publicly traded residential property firms, Vonovia and Deutsche Wohnen, face major financial setbacks after a key court ruling. The Federal Constitutional Court recently upheld the nationwide Mietpreisbremse, a rent control measure that caps increases in housing costs. Both companies, heavily exposed to the Berlin market, have seen their stock values tumble in response.
The court’s decision to maintain the Mietpreisbremse hits Deutsche Wohnen especially hard. Over 70% of its properties are in Berlin, where rent controls are strictest. The company’s stock has suffered a steeper decline than Vonovia’s over the past ten months, reflecting investor concerns.
Vonovia, though more diversified, has also experienced a sharp drop in share prices since the ruling. The immediate outlook for both firms remains bleak, as Berlin’s rent freeze and the broader Mietpreisbremse squeeze their revenue potential. Analysts now question how much further their stock values could fall. Deutsche Wohnen’s latest reports confirm that the bulk of its portfolio lies in Berlin, with smaller holdings in North Rhine-Westphalia, Hesse, and Lower Saxony. Precise figures for each federal state are not publicly available, but the concentration in Berlin leaves the company particularly exposed to regulatory risks.
The court’s ruling solidifies rent controls, leaving Vonovia and Deutsche Wohnen with limited options to recover lost income. Deutsche Wohnen’s heavy reliance on Berlin apartments makes it more vulnerable than its competitor. Both firms now face an uncertain financial future as the Mietpreisbremse continues to restrict their earnings.
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