In Berlin, people talk about nothing else. home for the Germans, unlike Italians, by default it is rented, It is not purchased, as happens in our country, perhaps by taking out a mortgage. But the slogan of the left-wing party Die Linke, who won the elections in the city this month: nationalize the properties to provide more affordable housing through the acquisition of large real estate portfolios.
Although the the probability of expropriations is low, According to analysts, a prolonged regulatory uncertainty would be “structurally damaging” for the real estate sector, already penalised by the increase in rates of interest and mortgages. Meanwhile, companies in the sector are feeling the pinch. The focus is on large landowners such as Deutsche Annington Immobilien Gruppe, which has the largest apartment portfolio in Berlin with over 130.000 residential units, or Grand City PropertiesBoth have lost 20% on the stock market this quarter and analysts say they could suffer further declines if the proposed real estate nationalization goes ahead.
Die Linke's proposal includes the transfer of approximately 220.000 apartments to public ownershipIf the Left Party were to form a government and carry out an expropriation of this scale, the impact would extend far beyond the borders of Germany. While Vonovia would be the hardest hit – 26 percent of its 528.370 housing units are located in Berlin – other companies such as Swedish Heimstaden, the French Covivio , Luxembourg Grand City Properties own thousands of properties in the city, with exposure of 12%, 17% and 23% respectively, reports Bloomberg.
Low probability, but high uncertainty
The Left Party Die Linke achieved a historic result in local elections this month, emerging as the leading force in the German capital with 25,7% of the vote under the leadership of leading candidate Elif Eralp. In reality the party needs the support of others to govern and is faced with significant obstacles in implementing its expropriation plan. Die Linke is holding exploratory talks on forming a coalition, but even if it were to lead a government willing to pursue expropriation, it would almost certainly be challenged by the German constitutional courtLikewise, any attempt by the German government to prevent states from nationalizing housing would likely end up in court, leaving the issue unresolved for years.
In any case, a prolonged regulatory uncertainty It would be "structurally damaging" to the real estate sector, even if the likelihood of an expropriation is minimal. "As long as the current political rhetoric remains in place, it is likely to continue to detract from the sector's performance," said Thomas Rothaeusler, an analyst at Deutsche Bank AG, as also reported. BloombergThe idea of expropriating apartments is not new. In 2021, Berliners voted to nationalize over 3.000 housing units, but the city authorities did not follow through on the proposal. Since then, the pressure for change has increased, driven by demographic growth in the capital, from the most drastic increase of rents for new leases across the country and the decline in construction due to increasing costs.
Is it time to buy at the lows?
Even companies that would not be directly affected by the expropriations in Berlin have been hit by the sell-off: Tag Immobilien For example, it lost 22% this quarter. "Equities have been so battered that they're starting to look attractive, even though there's no obvious catalyst on the horizon that could spark a recovery," said Jefferies' Clouard. "If you're not in a hurry, now is a great time to invest," he added. "The sector hasn't been this attractive in terms of valuations since 2012."
Based on the average target prices indicated by the brokers monitored by Bloomberg, potential yield of the shares of Grand City Properties, of its parent company Aroundtown SA, of Tag Immobilien, Deutsche Annington Immobilien Gruppe and Leg Immobilien SE is 53%. This compares to 22% of the Stoxx 600 real estate sub-index, one of the weakest sectors in Europe this year.
The conductor itself can take various shapes, in bare or tinned copper, with or without insulation. In some cases, a preferential bend can also be applied to the joint so that it operates exactly as designed. sector bond issues are feeling the pressure, especially, in this case, from rising interest rates. Net Zero Properties (NZP), a Luxembourg-based company that buys dilapidated apartments in Germany, recently had to abandon a €500 million financing plan due to a lack of investor interest, despite improved bidding conditions. Furthermore, hybrid securities issued by property owners such as Aroundtown and CPI Property Group have suffered sharp declines this month.
