Unlike many other industries, the real estate industry is doing well.

The housing group Vonovia, which is listed in the Dax, impressed its shareholders a few days ago with a good interim result.

Even the Berlin rent cap doesn't bother the company, says CEO Rolf Buch.

In contrast, climate protection is a much bigger task.

The Bochum company is working on alternative heat generation for the tenants.

Compared to homeowners, these are at a double disadvantage in the energy transition.


Vonovia increased its operating profit by nine percent in the first three quarters, and the share rose by almost 20 percent.

Is your company benefiting from the corona crisis?


Rolf Buch:

The increase in operating profit is related to our acquisitions in Sweden.

So it wasn't purely organic growth.

The share price reacted more to the fact that the value of our properties rose again.

That even surprised us.


But rental income has also increased by more than eleven percent.



Here too, the absolute number is not very meaningful.

Adjusted for the acquisitions, rental income was even below expectations from the beginning of the year.

We had expected a total of at least 3.3 percent for 2020, now it is 0.2 percentage points less.

The rent index, which we use as a guide, is weaker, in addition to the lower fluctuation due to Corona and the Berlin rent cap.

But in the long run one cannot expect to achieve rent growth above the inflation rate.

Inflation also reflects wage developments.

It would not be sustainable to calculate with rents that have nothing to do with income development.


How are tenants getting through the crisis? Have you recorded a lot of rent defaults?


At the first lockdown, one percent of the tenants reported because of possible payment difficulties.

We have found a solution for everyone.

At the moment the effects seem less serious, we have practically no inquiries.



: Are you changing your corporate strategy because of the pandemic?

Are new buildings or further acquisitions in question?


: Not at all.

It would also be irrational to question long-planned projects.

I also have great confidence in the government's crisis management.

It is impressive to see what is possible when things get serious.

Incidentally, that should be a wake-up call for the real estate industry: If one day climate change is also perceived as a serious crisis, it could also be that tough requirements for more energy efficiency will come.

The weighing of legal interests between the common good and property rights can suddenly turn out to be completely different - as you can see today.

That is why we have committed ourselves out of conviction to contribute to reducing CO2.


: The Berlin Senate also took action and introduced a rent cap.

Do you think that the law will fail in Karlsruhe?


: I'm an engineer and manager, not a lawyer.

And even among lawyers there are different answers to the question of whether the rent cap is constitutional.

Basically, a rent freeze, i.e. the temporary freezing of rents, seems to me to be similar to the rent brake, which is already in place and which is constitutional.


: The rent brake applies to new contracts.

In the case of the Berliner Lid, rents in current contracts will be reduced from Monday.


: That encroaches on existing contractual relationships and is therefore very questionable.

It is also still unclear whether Berlin has any legislative competence at all.

But regardless of all these questions: Even if the constitutional court were to overturn the rent cap completely, I would not expect us to return to the old normal.

A city where expropriation from housing corporations is an issue and the Senate is about to vote will respond to this ruling.

People are dissatisfied, rents have risen sharply.

I can only repeat: rents cannot rise faster than inflation over a long period of time.


: That sounds like you understand the stricter rent regulation.



: I have a high understanding of the fact that politics tries to absorb moods and to regulate developments that are perceived as not being constructive.

That's what politics is for.

It is also clear to me that the housing market has to be regulated in some way.

In the long run, stricter rent regulation only alleviates symptoms.

Of course, new buildings have to be built in growing cities, new districts have to emerge.


: How high is the loss of rent in Vonovia apartments in Berlin after the second rent cap level?


: A third of all Vonovia apartments in Berlin have to be lowered.

In total, that's ten million euros over the year.


: The company and the shareholders don't seem to mind.


: Yes, that's right.


: And are you now stopping to invest in maintenance, as many landlords in Berlin are announcing?


: Of course not, we are a long-term company.

It would be crazy to let our buildings rot now.

Then we would have to invest a lot more later.

My predecessors at Deutsche Annington have already discovered that if you save on maintenance, it will be all the more expensive later.

However, we are now modernizing less energetically, and we are building less age-appropriate, because the modernization levy has also been cut further to one euro per square meter.


: But you just said that rents shouldn't rise faster than inflation.

Modernizations often lead to faster climbs.



: This means market-related rental growth, which for us is less than one percent.

But we are also moderate when it comes to modernization: our average surcharge after modernization is 1.36 euros per square meter.

And then tenants still have savings because the heating costs are reduced.

We have to take climate protection seriously.

Vonovia was the first housing company to set a clear climate roadmap: we renovate three percent of the buildings every year.

Our goal is a climate-neutral inventory by 2050.


: How should that work?

How do we get CO2-neutral buildings in Germany?


: In any case, not alone with the renovation of the building envelope, with more insulation, new windows and roofs.

We can no longer convert our existing apartment buildings into low-energy houses.

We don't get underfloor heating with a low-temperature system installed in older apartments, which should then also remain affordable.

Heating systems with climate-neutral energy are therefore in demand.


: The Federal Ministry of Economics favors heat from electricity, for example from heat pumps.

And electricity from photovoltaics.


: Heat pumps with electricity from solar energy initially sounds like a simple solution.

But if I did that, Bochum's municipal utilities would probably not agree and would say: Dear Vonovia, unfortunately you cannot use our power grid as storage.

Feeding in photovoltaic electricity in summer and pulling it out again for the heat pumps in winter is not technically possible.



: So how should it go?


: We test different systems.

It is always crucial to have a form of energy that can be stored.

In our innovation quarter in Bochum-Weitmar we combine an electrolyser for the production of hydrogen from electricity and fuel cells or heat pumps, with which we supply 81 apartments with CO2-free heat.

The electrolyser generates a lot of waste heat, which is also dissipated so that we can achieve an efficiency of up to 80 percent.

It’s just like that on paper, but we’re starting testing now.

Intelligent control should also be part of it.


: How much space do you need for such a complex system?

Does it even fit in a residential area?


: This prototype is as big as a container - but it is scalable.

We want to develop a modular system.

But all of this only works if I also install photovoltaics on every available roof.

We need larger amounts of electricity.


: All of this should devour billions in subsidies.


: If you count that with today's standards, then yes.

But electrolysers will become cheaper with technological developments, as will fuel cells and hydrogen storage systems.

The big advantage is that we then come into a world in which we have calculable investments and calculable energy costs.

Tenants will be able to count on safe heating and electricity costs for years.

And the housing companies are becoming heat suppliers.


: At the moment, not even a simple photovoltaic system on the roof is worthwhile for landlords and tenants.

The EEG surcharge and trade tax are due for the electricity that the tenants use from it.


: That is totally absurd and makes the whole energy transition in the building sector uneconomical from the start.

We urgently need a sensible model for tenant electricity.

But at the moment the legislator seems to be mainly interested in someone paying the EEG surcharge.


: Homeowners with photovoltaics on the roof do not pay the EEG surcharge.


: A Social Injustice.

In principle, tenants bear a double burden: They pay homeowners the electricity they feed in through the levy and cannot benefit from the advantages of in-house production themselves.


: In January, the CO2 tax comes on the consumption of fossil fuels.

Among other things, the SPD is now proposing that this tax should be divided between the landlord and tenant.

Reason: Tenants cannot influence the energetic quality of a building.


: And the landlord cannot influence the tenants' consumption behavior.

But we won't get any further this way.

After all, tenants benefit from a reduction in the EEG surcharge for electricity and the electricity tax.


: Nevertheless, there is no incentive for landlords to renovate energetically.


: That is why you could definitely split the CO2 tax, but depending on the energy class of a building.

If a landlord rents out an H-Class, they should pay a higher share of the fee.

In an efficient A-Class, on the other hand, tenants can pay the full fee - which would then be lower overall.

In a top refurbished building, only the tenant can actually influence the heat consumption.

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