Berlin housing expropriation plan alarms Vonovia

Vonovia said Wednesday it was concerned by plans from Berlin's possible incoming Die Linke-led city administration to expropriate apartments from large corporate landlords.

Chief executive Luka Mucic told reporters during a call on Vonovia's third-quarter results that nationalising private company housing would be the "wrong path" and "highly legally questionable". He argued that Germany needed more construction to close a housing gap of 1.4 million homes.

Die Linke won Berlin's city-state election in September and is negotiating with the Greens and the Social Democrats to form a state government. During the campaign, it promised to expropriate about 240,000 apartments from large corporate landlords.

In coalition talks, Die Linke has agreed to reduce the target to 160,000 homes owned by groups with more than 10,000 properties. Landlords would receive 16 billion euros in compensation, averaging 100,000 euros per apartment.

Vonovia would receive an estimated 12 billion euros under the plan. The company says its Berlin holdings are worth about 20 billion euros.

Vonovia chief financial officer Philip Grosse said the debate remained "very theoretical", citing signals from Chancellor Friedrich Merz's federal government that it would seek to block the project. Interior Minister Alexander Dobrindt presented a draft law at the end of October that would require market-value compensation if housing is nationalised.