Vonovia Rejects Berlin Expropriation Drive, Pitches Military Housing as Stock Sits Near Yearly Floor

Vonovia rejects Die Linke's Berlin expropriation call as CEO Mucic offers to build housing for soldiers and warns of billions in compensation costs.

Vonovia finds itself squeezed between two very different conversations about German housing. On one side, Berlin's political left wants to take the company's local portfolio into public hands. On the other, the defense ministry needs somewhere to put soldiers and their families. The real estate giant is answering the second call while fighting the first.

A fresh expropriation push from the Left

Ines Schwerdtner, federal co-leader of Die Linke, used Friday's housing policy debate to call for the expropriation of major landlords in the capital, according to media reports. Her proposal is a party-political demand, not a legally binding measure aimed at Vonovia.

The idea is not new. Berlin's Left faction had already announced on Thursday that it wanted to socialize Vonovia's Berlin holdings. The initiative targets landlords owning more than 3,000 units in the city — a threshold that would sweep in over 200,000 apartments.

Mucic: no new flats, just new owners

CEO Luka Mucic pushed back hard. Expropriation, he argued, would not create a single additional home; it would merely reshuffle who holds the deeds. What the market needs instead, he said, is more construction, faster permitting and a friendlier climate for investment.

He pointed to Vonovia's own pipeline as evidence of good faith: the group is currently building 1,000 new apartments.

The numbers behind any compensation remain fiercely disputed. Berlin's audit office put the bill for a conventional expropriation at more than EUR 42 billion. A 2021 senate estimate, covering 243,000 units, landed between EUR 28.8 billion and EUR 36 billion. Die Linke's own concept comes in at roughly EUR 25 billion, to be financed through loans and ongoing rental income.

Warning on public finances and investor trust

Beyond the housing-supply argument, Mucic cautioned that compensation payments in the billions would overwhelm Berlin's budget. He also flagged the risk of a serious loss of confidence among private capital providers — the very investors needed to fund residential construction.

An olive branch to the Bundeswehr

On Thursday, Mucic told dpa that Vonovia stands ready to build and operate housing for soldiers and their families as Germany expands its armed forces. The company has already held initial talks with military leadership, he said, citing existing accommodation needs and naming Berlin among the possible locations.

That offer followed comments Mucic made roughly a week earlier, after the Left's election victory in Berlin. Speaking to Reuters, he said Vonovia would be available as a partner to any future state government, framing new construction and affordable rents as the company's contribution to easing the housing market — and repeating that socialization creates no new homes.

Where the shares stand

Vonovia closed Friday at EUR 17.34, up 0.7% from the prior session. Year to date, the stock is down 29%. The close leaves it just 1.7% above its 52-week low of EUR 17.05.

For investors, the renewed flare-up of the expropriation debate adds another layer of uncertainty on top of a rate environment that is already weighing on the sector. The leadership's blunt response shows how seriously the company now treats political risk in its Berlin home market.