Vonovia's Nine-Month Cash Flow Drops 34% as JPMorgan Builds Just Over 5% Stake

JPMorgan Chase & Co. has nudged its aggregate holding in Vonovia above the 5% reporting threshold, lifting its combined position in voting rights and financial instruments to 5.08% from 4.88%, according to a mandatory disclosure filed on Friday. The relevant threshold was crossed back on 30 October.

The stake-building comes as the German landlord works through a tougher operating backdrop. Operating free cash flow for the first nine months of 2026 came in at EUR 932.5 million, down 34.1% year on year. Management pinned the decline on higher financing costs and weaker sales-oriented segments.

Rental arm holds up while pre-tax profit slips

The core lettings business proved resilient. Adjusted EBITDA from rentals advanced 3.5% to EUR 1.91 billion, and organic rent growth reached 3.8%. Vonovia described the operating performance as robust given the difficult macroeconomic climate.

Group-level adjusted EBITDA rose 3.3% to EUR 2.19 billion. Adjusted earnings before taxes, however, moved the other way, falling 3.5% to EUR 1.41 billion.

For the full year, the company expects adjusted EBITDA in the lower half of its EUR 2.95 billion to EUR 3.05 billion range. When it refined its annual guidance roughly two weeks ago, Vonovia trimmed its organic rent growth forecast to around 3.8% from about 4%. Operating free cash flow is projected to land moderately below the prior-year level, with higher financing costs and a softer transaction market cited as the drivers.

Disposals and deleveraging stay front and centre

Vonovia sold properties worth roughly EUR 900 million over the nine-month period. dpa-AFX noted that rising interest rates have made buyers more hesitant and stretched out sale processes. Reuters attributed the persistent pressure on the shares partly to higher rates and the harder path to debt reduction, alongside a weaker property market with delayed apartment sales and Berlin's expropriation debate.

The group cautioned that its target of a loan-to-value ratio of around 40% by the end of 2028 could prove harder to reach. Disposals and debt reduction remain the priority, according to the company.

On 28 October, Vonovia announced a strategic review of its development business. It also flagged lower development-to-hold investment and a pause on new manage-to-green spending.

CFO to leave, Berlin criticism sharpens

Finance chief Philip Grosse said he will not extend his contract, which runs out at the end of 2027. A successor is to be named shortly, the company said.

In Berlin, CEO Luka Mucic on Wednesday criticised the Left party's nationalisation plans, warning of the consequences for confidence in property ownership, investment and the city's standing as a business location. Vonovia and its subsidiary Deutsche Wohnen hold around 138,000 apartments in Berlin and the surrounding area, according to Reuters.

Vonovia has confirmed it will take part in the Kepler Pan-European Real Estate Conference in London on 12 November 2026. It plans to publish its 2026 annual report on 5 March 2027, with the 2027 half-year report scheduled for 30 July 2027.