The real estate giant Vonovia has limited its loss in the first half of the year.

Vonovia posted a net loss of 529 million euros - compared to 4.1 billion a year ago. The background to this development is that the recent rapid fall in property prices has slowed considerably. The market value of the portfolio fell by 1.7 percent to 82.5 billion euros between the beginning of the year and the end of June, the Bochum-based group announced on Thursday. "The valuation result shows that Vonovia has left the crisis behind and once again delivered a solid performance in a challenging environment," said CEO Rolf Buch. In the past, Vonovia had repeatedly had to write down the value of its real estate portfolio due to the real estate crisis and therefore recorded losses in the billions.

In the operating business, the adjusted profit before taxes amounted to 887.2 (previous year: 945.8) million euros in the first half of the year. Rents rose by 3.8 percent. Vonovia confirmed its forecast for the financial year: adjusted EBITDA is expected to be at the upper end of the range between 2.55 and 2.65 billion euros, while adjusted earnings before taxes will also be at the upper end of the range of 1.7 and 1.8 billion euros.

Vonovia is not alone in its hopes for an end to the real estate crisis. However, some experts doubt that the turnaround has actually been achieved. According to a recently published study, analysts at LBBW expect that "prices in the commercial residential property market will only stabilize towards the end of the year". Only the private real estate market has bottomed out. The situation is different for commercial residential real estate: "We still see downward pressure on prices prevailing here."

The real estate industry is struggling with the consequences of high interest rates and exploding construction costs. Hardly any new apartments are being built. Real estate prices fell significantly last year. Many project developers slipped into bankruptcy. For real estate groups, the devaluation of their portfolios in 2023 resulted in some heavy losses. As a result, dividends were cut in series or even canceled altogether.

Vonovia has around 543,000 apartments. Group CEO Buch wants to sell off packages in order to reduce the billions in debt. In total, sales worth around three billion euros are planned this year. "The sales program for 2024 is keeping the company successfully on track," emphasized the Bochum-based company.

(Report by Matthias Inverardi, edited by Alexander Hübner; if you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets)).