Germany's Largest Landlord Hires RWE Veteran to Restart Construction as Shares Hit Fresh Low

Vonovia appoints RWE's Katja Wünschel to revive building pipeline, but shares plunge to fresh lows as financing costs weigh and ECB rate decision looms.

Vonovia has turned to the renewables sector for its next development chief, a move that hints at a revival of its building pipeline even as the stock plunges to a new 52-week trough. Katja Wünschel took over the development division on June 1 after being unanimously appointed by the supervisory board, replacing Daniel Riedl, who left by mutual agreement following a two-month handover. Wünschel joins from RWE Renewables Europe & Australia, where she served as CEO overseeing onshore wind and solar parks. Her expertise in project planning and execution is expected to accelerate Vonovia's shift toward serial construction.

The strategic hire comes after Vonovia almost completely halted new development in 2023 and 2024, and explicitly signals a more active project pipeline in 2026 and 2027. The company has set a target of reaching €3.2 billion to €3.5 billion in adjusted EBITDA by 2028, well above its 2024 level.

Yet the market remains unimpressed. Shares fell to €19.67 on Monday — a fresh year low — and were trading 0.41% above the 52-week nadir. The stock has lost roughly 35% from its June high and sits about 20% below its 200-day moving average. The relative strength index has dropped to around 29, signaling oversold conditions.

The disconnect between Vonovia's operating performance and its share price is stark. First-quarter adjusted group EBITDA rose 1.4% to €711.6 million, powered by a 6.3% gain in the rental segment to €629.7 million. Average monthly rent climbed 3.8% to €8.46 per square meter, with organic rent growth of 4.0%. Occupancy remains high at 97.7%, and the payment rate is 99.6%. The value-add segment surged more than 30% to €50.1 million.

But the financing burden is eating up those gains. For the first quarter, the adjusted net profit attributable to shareholders fell 7.2% to €365.6 million, and operating free cash flow collapsed 42.6% to €363.9 million. The loan-to-value ratio stands at 45.1%, and management aims to reduce it to 40% by 2028. Net debt to EBITDA is 13.7 times.

All eyes are now on the European Central Bank's decision on Thursday. Markets have priced in a 99% probability of a 25-basis-point rate increase to 2.25%, which would be the first move since June 2025. Eurozone inflation hit 3.0% in April, well above the 2% target, and German data for May showed consumer prices rising 2.6% year-on-year with core inflation at 2.5%. A hike would directly pressure Vonovia's portfolio valuations, which the company itself has tied to rising bond yields — the stock lost 12.1% in the first quarter for that reason.

Wider economic headwinds are also building. The eurozone economy contracted 0.2% in the first quarter of 2026 versus the previous quarter. The German property association GdW expects fewer than 200,000 new homes to be built this year — a historic low — blaming high construction costs, inflation, elevated interest rates and red tape. Locally, a dispute over Frankfurt's new rent index, rejected by the Chamber of Industry and Commerce and the Haus & Grund landlords' association on June 3, could add to regulatory uncertainty.

Despite the sell-off, most analysts remain constructive. Goldman Sachs' Jonathan Kownator lifted his price target from €31.80 to €34.30 and retains a buy rating. J.P. Morgan reiterated its buy call in May. Barclays' Paul May is the outlier, rating the stock a sell with a €23 target — the lowest among analysts tracked.

Vonovia's net asset value per share edged up to €46.57, and its property portfolio grew 0.3% to €84.8 billion. The next portfolio valuation is due June 30, and the company expects the positive trend of the last 18 months to continue. More detailed financials will arrive in August with the second-quarter report.

For now, the stock's technical support is being tested, and Thursday's ECB press conference will determine whether the oversold bounce has any legs or if further downside lies ahead.