Deutsche Wohnen in the Pivotal Point Check: Real Estate Stock Goes Through the Roof With Over 20% - Vonovia Aims for a Complete Takeover!
- Germany's largest real estate group Vonovia wants to take over its subsidiary Deutsche Wohnen completely.
- Vonovia intends to make its shareholders an offer to purchase their shares.
- Highly indebted real estate companies are likely to benefit in particular from the US Federal Reserve's major interest rate cut of 0.5%.
Germany's largest real estate group Vonovia is currently heading towards a complete takeover of its subsidiary Deutsche Wohnen. Both real estate companies have agreed to hold talks on a full takeover. Whether in Spandau, Friedrichshain-Kreuzberg, Pankow or Marzahn-Hellersdorf - one of Berlin's largest landlords has apartments and commercial units in all twelve districts. With around 140,000 apartments in its portfolio, Deutsche Wohnen offers a variety of different property types.
Vonovia acquired a majority stake in its competitor, which is primarily active in Berlin, in 2021. The group already controls over 87% of the shares in Deutsche Wohnen. The two real estate groups agreed on September 18, 2024 to enter into talks on the conclusion of a domination and profit and loss transfer agreement for Deutsche Wohnen. Vonovia intends to make an offer to the outside shareholders of Deutsche Wohnen to acquire their shares. This is also likely to require a capital increase at Vonovia, as the Deutsche Wohnen shareholders are to be compensated with newly issued Vonovia shares. They would also be granted an annual compensation payment for the duration of the agreement.
Now that the US Federal Reserve has started the interest rate turnaround with a large step downwards, further interest rate moves by the ECB are also to be expected. The US Federal Reserve has now reacted to the slowdown in inflation and announced that it will cut its key interest rate by 0.5 percentage points for the first time since the outbreak of the coronavirus pandemic. The European Central Bank had already initiated a turnaround in interest rates in June. This is good news for the highly indebted real estate companies. Both Deutsche Wohnen and the Vonovia share have already picked up speed again in recent weeks. The tailwind from interest rate cuts should continue to have a positive effect.
Deutsche Wohnen has a market capitalization of €10.96 billion. Analyst consensus expects revenues of €1.12 billion in 2024. Earnings per share should amount to €0.11. In 2027, revenue of €1.23 billion and earnings per share of €1.71 are expected. The forward P/E 2027 ratio is 16.2. The Fed's major interest rate hike, which is expected to lead to further interest rate hikes by the ECB, should have a positive impact. This development would particularly benefit the highly indebted real estate groups. The final form of compensation for Deutsche Wohnen shareholders is still pending. Extraordinary general meetings of Vonovia and Deutsche Wohnen in December 2024 are to decide on the agreement.
Want to keep reading?
You can find the entire story in The Trader Times. Get a 4-week trial subscription now and access the entire archive!