Berlin's election winner, Die Linke, is negotiating with the Greens and the Social Democrats to expropriate 160,000 apartments from landlords owning over 10,000 units. The proposal offers an aggregate 16 billion euros in compensation, paying roughly 100,000 euros per home. Corporate landlords such as Vonovia face substantial financial hits, as the projected payouts remain far beneath current portfolio valuations. Federal leaders, led by Chancellor Friedrich Merz, have vowed to intervene and safeguard market-rate protections.
Key points
Real estate executives argue that constructing new homes is the only viable path to resol…: Real estate executives argue that constructing new homes is the only viable path to resolve Germany's ongoing housing crisis.
The expropriation scheme faces severe national opposition that could render the local adm…: The expropriation scheme faces severe national opposition that could render the local administration's plans legally unenforceable.
Institutional landlords face billions of euros in potential balance-sheet losses if munic…: Institutional landlords face billions of euros in potential balance-sheet losses if municipal below-market acquisition plans succeed.
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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.
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