Vonovia, Germany’s (and Europe’s) largest residential homeowner, has been given the green light by Sweden’s antitrust authorities to take over the remaining shares it does not already own in Swedish housing company Hembla. The move will see the Bochum-based Vonovia also becoming the largest housing company in Sweden.
The green light allows Vonovia to buy 69.3% of the voting rights (61.2% of the capital) in Hembla for about €1.14bn, giving it an automatic majority. The seller is private equity group Blackstone. Vonovia will then still have to make a public takeover offer for the rest of the share which, if successful, will put an overall price for buying the Swedish company at €1.88bn. Hembla’s housing stock is located mainly in the capital, Stockholm.
This is Vonovia’s second major takeover on the Swedish market after buying Victoria Park in 2018. Adding Hembla’s stock of 21,400 apartment units to the Victoria Park holdings will bring Vonovia’s total Swedish holdings to about 38,000 units, located in the three biggest Swedish cities of Stockholm, Gothenburg and Malmö.
Vonovia currently owns about 395,600 residential units across Germany, Austria and Sweden. In addition, it manages around 78,350 apartments on behalf of third parties. In total, its portfolio is worth approximately €47.8 bn.
The DAX-30 listed Vonovia recently posted strong quarterly figures, and expects a full-year operating profit of between €1.17bn and €1.22bn, after 2018’s figure of €1.13bn. This year’s rental income is expected to rise by 9% to €2.07bn, after several years of strongly rising rents and upgrading of its housing stock.
However, CEO Rolf Buch has made it clear that voter, tenant and political resistance to rising rents in Germany means that Vonovia will now invest less in energy-saving modernization of its apartments and will shift its investment focus to new modular housing construction and refurbishment in Sweden. It is not clear what will happen to Vonovia’s much-heralded solar energy program for its German holdings, which we reported on last year in REFIRE.
