Vonovia Courts the Bundeswehr While Berlin's Expropriation Math Darkens the Mood

Vonovia CEO Mucic pitches Bundeswehr housing and Berlin dialogue as a EUR 13.5 billion expropriation study and an Exane target cut weigh on the stock.

Luka Mucic has spent the week doing two things at once: pitching his company as a partner to the German state and absorbing the market's verdict on what Berlin might do to it. On Thursday, the Vonovia chief executive told dpa that the Bochum-based landlord is willing to build and operate housing for Bundeswehr personnel, with early talks at the military level already underway. The final call rests with the armed forces and the defence ministry.

The offer leans on serial construction in designated residential zones, a method Vonovia has been pushing as a way to deliver standardized units at scale while Germany's new-build pipeline stays frozen. It also opens a revenue channel well outside the group's traditional rental business.

A 13.5 Billion Euro Question in Berlin

That pivot has not shielded the shares from politics. A study from the Hans-Böckler-Stiftung, reported in the media, put the compensation bill for expropriating roughly 210,000 Berlin apartments at about EUR 13.5 billion — a figure that would land partly on Vonovia and its subsidiary Deutsche Wohnen. Between them, the two hold around 138,000 units in and around the capital. Scope Ratings flagged on Tuesday that such plans could weigh on the credit standing of the companies involved.

Mucic has responded by keeping the door open to policymakers, offering dialogue to Berlin's state government on both Monday and Tuesday and casting Vonovia as part of the solution to the city's strained housing market. His recipe: new construction, affordable rents and dependable legal ground rules.

Exane Trims Its Target

Analysts are not waiting for the politics to resolve. On Tuesday, Exane BNP Paribas lowered its price target on Vonovia to EUR 16, citing the interest-rate environment alongside the Berlin situation, according to dpa-AFX.

The stock closed Friday at EUR 17.34, a gain of 0.7% on the day, but the broader picture is grim: a decline of 29% since the start of the year, following a fresh 52-week low of EUR 17.05 hit on Tuesday.

Concrete Work in Rastatt

While the headlines swirl, the company is pressing ahead with bricks and mortar. Work began Wednesday on the modernization of four apartment blocks at the Rheinauer Ring in Rastatt, covering 73 units with an investment of more than EUR 4.7 million. Roofing accounts for roughly EUR 900,000 of that sum, and Vonovia says maintenance measures will not be passed on to tenants. The job is expected to run about a year.

Alongside the construction, Vonovia struck a cooperation agreement Tuesday with MietMachen München gGmbH, a Munich housing agency, to place tenants from disadvantaged groups. In mid-September it also joined the Essen Charter against loneliness.

Legal friction persists as well: a good week ago, Deutsche Umwelthilfe filed suit over the conditions Vonovia imposes on tenants who install balcony solar panels.

Investors get their next hard data point on 4 November 2026, when the company publishes its interim report for the third quarter.