Vonovia CEO calls Berlin's expropriation financing plan "unrealistic"

Vonovia is pushing back against plans by the Left party, the winner of Berlin's state election, to transfer the housing stock of profit-oriented landlords into public ownership. Chief executive Luka Mucic took particular aim at the proposed financing through a 100-year bond at 3.5 percent interest: "That is unrealistic, but it is being claimed because otherwise the state of Berlin cannot afford it." Vonovia, which owns about 130,000 apartments in the city, would be hit hardest.

About 1,000 apartments are currently under construction in Berlin, according to the company. It cites investment of about 539 million euros in its Berlin portfolio this year, an average rent of 8.26 euros per square meter for existing tenants and 10.80 euros for new leases. He said about 20,000 apartments could be built on Vonovia's own land, but building rules and capital costs stand in the way.

Left party federal leader Luigi Pantisano had called Mucic the "head of the rental mafia." Mucic replied that "in the end, everyone is responsible for their own choice of words." The Left called off a meeting between the two planned for Tuesday at short notice, saying Vonovia had refused the agreed participation of a journalist. Vonovia denies agreeing to that. Both sides say they remain open to talks.