3 minute read
INTERVIEW – GOVERNANCE: R. BUCH, VONOVIA
HOW IS VONOVIA REACTING TO THE CURRENT SITUATION, MR. BUCH?
Rolf Buch is CEO of housing company Vonovia. Vonovia SE is Europe’s leading private housing company which owns more than 550,000 apartments in all attractive cities and regions of Germany, Sweden and Austria. In addition, the company manages around 72,500 apartments. When he became CEO, Rolf Buch listed Vonovia on the stock market. In 2015, Vonovia SE was included in Germany’s lead index DAX 30 (now DAX 40) and, in September 2020, in the EURO STOXX 50. The company is also listed in other national and international indices such as the DAX 50 ESG. Vonovia employs 15,900 people.
THE WAR IN UKRAINE HAS CHANGED A GREAT DEAL. WHAT IMPACT HAS THIS HAD ON VONOVIA SE?
February 24 changed Europe. The war has brought unimaginable suffering to the people of Ukraine. Many women and children have sought refuge in Germany. They are vulnerable and urgently need their own apartment as a safe haven. It is our task to provide them with this safe haven. To date, we have rented more than 420 apartments to Ukrainian citizens. However, the war is also having a macroeconomic effect. Prices are rising rapidly, inflation is at its highest level since the 1970s, and interest rates are increasing. The war and the economic sanctions on Russia have made materials more expensive and supply chains longer. All of this results in delays. The shortage of qualified labor is also contributing to making projects slower than planned.
THE GERMAN GOVERNMENT HAS TIGHTENED ENERGY EFFICIENCY REQUIREMENTS FOR BUILDINGS. CAN THE REAL ESTATE SECTOR COMPLY WITH THESE REQUIREMENTS?
The main priority is to switch to sustainable forms of energy, both to protect the climate and to become more independent of the international energy markets. This is the only way to ensure the continued affordability of heating, hot water and electricity. We have committed to a climate path which we are now accelerating to make our portfolio of apartments virtually climate-neutral by 2045. We want to achieve this by modernizing the energy systems and using electricity from renewable sources. We have taken a great stride in this direction by installing photovoltaic modules on 30,000 roofs, thus also increasing our offering of green electricity for our tenants. By contrast, political demands are becoming increasingly divorced from reality. There is a lack of materials, labor and binding regulatory requirements. In addition, increasing interest rates are dampening the investment environment. The government needs to act.
IS DIGITALIZATION ALSO AFFECTING DEVELOPMENT ON THE HOUSING MARKET?
Definitely. At least a year ago, Vonovia developed a software solution to measure the impact of its own portfolio on the climate and its own ESG tool. This software is now in use and subject to ongoing optimization. In the end, it will be more than just a planning and analytical tool. As soon as possible, it will include modules for implementing and monitoring measures, feedback management and the generation of various reports. We are also working with a number of start-ups on other projects such as the digitalization of building applications. For example, we are currently cooperating with the City of Bochum and start-up VSK Software to develop a model-based digital solution for checking building applications in light of the applicable local building regulations. The solution will make work easier for the applicant and the responsible building authority, making the approval process more efficient while ensuring the high quality of the checks.
ARE INTEREST RATE HIKES, THE SHORTAGE OF QUALIFIED LABOR AND THE ENERGY TRANSITION JEOPARDIZING THE FUTURE DEVELOPMENT OF THE MARKET AND YOUR COMPANY?
2021 was the most successful year in our company’s history. Since our IPO, the high demand for real estate, the shortage of supply, and the low interest rates have given us a strong tailwind. The impact of the COVID crisis on our business was also limited. Our business model and digital management platform give us the strength to face the current macroeconomic challenges.
