Property giant Vonovia 'concerned' over Berlin left's housing plans

Europe's leading corporate landlord Vonovia said Wednesday it was "concerned" at plans by Berlin's possible incoming far-left led city administration to expropriate apartments to tackle the city's housing crisis.

The Die Linke (The Left) party won an election in the city-state in September and is now in talks with two other parties about forming a state government.

One of Die Linke's flagship promises in the campaign was to expropriate some 240,000 apartments held by large corporate landlords.

"Of course, we are concerned about plans to nationalise housing owned by private companies," Vonovia CEO Luka Mucic told reporters Wednesday during a conference call on the company's third-quarter results.

He said such a move in Berlin would be the "wrong path" and "highly legally questionable", arguing that only an increase in construction could supply the 1.4 million homes needed to plug Germany's housing gap.

In their negotiations with the Greens and the centre-left Social Democrats, Die Linke has agreed to reduce the target of expropriations to 160,000 homes belonging to groups that own more than 10,000 properties.

Landlords would compensated to the tune of 16 billion euros ($18bn), averaging 100,000 euros per apartment, well below market prices.

Vonovia itself would stand to receive an estimated 12bn euros.

The group says its holdings in Berlin are worth around 20bn euros, meaning Die Linke's plans would represent a significant loss.

Vonovia's chief financial officer, Philip Grosse, said that the discussion around expropriation was "very theoretical" given the signals from the federal government under conservative Chancellor Friedrich Merz that it will seek to block the project.

At the end of October, Interior Minister Alexander Dobrindt presented a draft law which would require compensation at market value in the event of the nationalisation of housing.

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