Berlin (dpa) - Deutsche Wohnen has to cut thousands of rents in the capital in November because of the Berlin rent cap. According to the law, existing rents are then to be reduced, which are more than 20 percent above the permissible upper limit.
"This affects approximately 30 percent of our Berlin leases," said board member Lars Urbansky at the Annual General Meeting on Friday.
The livestream shareholder meeting was marked by the rise of Vonovia's competitor in the German share index (Dax). The previous evening, Deutsche Börse in Frankfurt decided to include Berlin's largest landlord in the leading index - instead of Lufthansa, which had gotten into a crisis. The capital will get a Dax group again 14 years after Bayer took over Schering.
116,000 of the 160,000 homes in Germany are located in Berlin. A rental cover came into effect there in February. The group had to take back rent increases from mid-June 2019 and maintain upper limits for new rentals. However, the reduction in excess rents is not planned until November 23.
The company is anticipating nine million euros in lost rent this year, 30 million euros next year. For comparison: nationwide, the group had rental income of 862 million euros last year.
The company was confident that the rental cover would not last. Union and FDP in Berlin have filed a lawsuit review complaint with the Federal Constitutional Court.
The contracts of new tenants therefore include a so-called shadow rent: the rent that can be achieved according to the Civil Code has been agreed, but only the amount that the rent cover allows is required, as Urbansky explained. That means: If Karlsruhe lifts the rental cover, tenants have to pay extra.
CEO Michael Zahn emphasized the company's social responsibility - but was also aimed at shareholders who approved a dividend of 90 cents per share, three cents more than in the previous year. Instead of increasing the shareholder participation by five percent, an aid fund for tenants in the Corona crisis was set up in the amount of 30 million euros, the group emphasized.
"We take responsibility for employees, tenants and of course our shareholders," said Zahn. The inclusion in the Dax confirms the growth strategy. They want to continue investing in the booming metropolitan regions.
In view of rising rents, Deutsche Wohnen is particularly criticized in Berlin. Tenant representatives fear that the promotion to the first stock exchange league will increase the pressure on tenants. Criticism came especially from the Left Party on Friday. "No one needs this company," party leader Bernd Riexinger wrote on Twitter. The largest single shareholder is Blackrock, the largest asset manager in the world. He is involved in all DAX companies.
Shareholder representative Michael Kunert from the protection community of investors reminded that Deutsche Wohnen holds tens of thousands of apartments that the state of Berlin sold in 2004. Not much changes now in the return expectations of investors. The DAX rise is a win for the state of Berlin.
Deutsche Wohnen does not plan to move away from its most important market. "We will continue to have a strong foothold here in the future," said Zahn. When it comes to new construction projects, however, southern German cities such as Munich and Stuttgart are also in view.
The tenants' association's fears are unfounded, said Zahn. His company wanted to be a firm anchor in difficult times. According to Urbansky's information, around 1200 tenants and around 300 commercial tenants with payment difficulties have registered. There are currently no evictions of apartments.
Press releases from Deutsche Wohnen
Annual report 2019 (pdf)
Key points rental cover