August 26, 2019 / 6:03 AM / 3 months ago

Vonovia warns of lower rental income due to Berlin rent cap plans

BERLIN, Aug 26 (Reuters) - German property company Vonovia said rental income for its Berlin portfolio may take a 20 million euros to 25 million euros ($22-28 million) hit in 2020 due to plans by the Berlin city government for introducing a limit on rental income.

This represents about 10% of its rental income in the German capital and 1% of its total rental income, the DAX-listed company added.

“The 2019 guidance remains unchanged as the current financial year is expected to not be impacted by the planned Berlin-specific legislation,” Vonovia said on Monday.

Berlin daily Tagesspiegel had reported the government of the city state planned to cap rents at 7.97 euros per square metre per month as part of a rent freeze agreed earlier this year.

Vonovia also cited press reports from this weekend.

Its shares were indicated to open 1.5% lower at Lang & Schwarz premarket trade while peer Deutsche Wohnen — Berlin’s biggest private landlord — lost 3.8%.

Berlin’s government decided in June to freeze rents for five years, heeding complaints from residents that their once famously affordable city was hiking prices.

Analysts have said the rent freeze advocated by the centre-left Social Democrats (SPD), who govern Berlin with the Greens and hard-left Die Linke, could worsen Germany’s housing crisis as it would scare off real estate investors eager to build in urban centres.

($1 = 0.8973 euros)

Reporting by Thomas Seythal Editing by Edward Taylor

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below