The majority of Berliners voted for expropriation on Sunday from large real estate groups. But Vonovia shares hardly care – on the contrary. Why?
Vonovia shares has on Monday at the Dax – Peak increased by 4.1 percent. The titles of the real estate companies LEG and Aroundtown rose in the MDax by up to 2.9 percent. The two indices were most recently 0.7 percent plus.
Vonovia shares did not react negatively to a referendum in Berlin voted for an expropriation of housing companies like Deutsche Wohnen. According to the text of the resolution, the Senate is now called upon to “initiate all measures” that are necessary for the transfer of real estate into common ownership and to draft a law for this purpose.
However, the vote is not legally binding for politicians. But why are the courses not responding to the vote – on the contrary, why is the Vonovia rate rising so significantly?
Red-red-green alliance as “worst case” for real estate companies
Analysts explain this mainly with the result of the general election. “The danger of a red-red-green federal government is over and so many market participants are now counting on a more moderate further approach to the issue of high rents,” said market observer Andreas Lipkow from Comdirect.
Karsten Oblinger, an analyst at DZ Bank, also sees it as reassuring that a red-green-red alliance is not possible at the federal level. From the point of view of the residential real estate companies and their shareholders, that would have been the “worst case”, he wrote in a study available on Monday.
On the other hand, the experts see the vote in favor of expropriating the real estate companies as secondary, especially since in Berlin, despite the positive referendum, there is no “automatic expropriation”, according to Oblinger. Even though politicians cannot completely ignore the signal.
SPD as Berlin election winner against expropriations
Analyst Julian Livingston-Booth of the Canadian bank RBC made a similar statement. He still sees the sector in a phase of uncertainty. But there are good arguments why it is unlikely that the new Berlin government will actually pass the law.
“In addition, there are likely to be legal challenges, especially if the expropriation price is well below the current book value,” said the expert. What the book value is exactly read here.
The expert also stated that the SPD, as the Berlin election winner, was not exactly open to expropriation and that it had been given other options in the course of the parliamentary elections: “The SPD has an alternative to the coalition with the Greens and the Left,” emphasized the expert. Especially with the latter party, but also with the Greens, he sees the main camp of supporters for expropriations in Berlin.
Is Deutsche Wohnen expropriation even possible?
SPD top candidate Franziska Giffey announced on Monday that she would respect the will of the population. “It must now also be the drafting of such a bill,” she said on Monday in the RBB Inforadio. “But this draft must then also be examined under constitutional law.” Giffey had always spoken out against expropriation during the election campaign.
The Green top candidate Bettina Jarasch also called on Monday to take the result seriously. “That belongs in coalition negotiations,” Jarasch told the German press agency on Monday.
But she also limited: Politicians must check whether an implementation of the citizens’ vote for expropriations is feasible. “There are still many legal and practical questions to be clarified for such a law.”
Vonovia secures majority in Deutsche Wohnen
Vonovia’s takeover target of Deutsche Wohnen, for example, would be severely affected by expropriation, but here the shares would remain controlled by the planned merger. The price came close to Vonovia’s offer of 53 euros, practically on the spot. Progress was recently reported on the takeover.
Market watcher Lipkow found this helpful for the Vonovia course. Vonovia had secured 50.49 percent by late Friday.