Deutsche Bank Turns Bullish on Vonovia as Political Fire and Portfolio Revaluation Converge
28.06.2026 - 19:54:38 | boerse-global.de
Vonovia finds itself caught in a perfect storm of political backlash and market catalysts this week. The German housing giant’s decision to raise rents in Berlin by an average of 4.8% has drawn sharp criticism from local politicians, while investors brace for the mid-year revaluation of its property portfolio on Tuesday. Adding fuel to the fire, Deutsche Bank has just upgraded the stock, arguing that the worst of the interest rate headwinds is already priced in.
The rent increase, which pushes the average Berlin asking price to €8.23 per square meter, stays below the city’s new rent index median of €7.71, but that has done little to calm the political reaction. Raed Saleh, leader of the SPD faction in Berlin’s parliament, publicly called on Vonovia to scrap the plan. Meanwhile, the Left party has launched a nationwide campaign urging tenants to report excessive bills anonymously. Chief executive Luka Mucic pushed back, defending the company’s pricing as fair and pointing to its leading role in new housing construction.
Against that tense backdrop, Deutsche Bank analyst Thomas Rothäusler lifted Vonovia from "Hold" to "Buy" and raised the price target to €26 from €25. He also added the stock to the bank’s list of top picks. Rothäusler’s core thesis: European property equities have underperformed badly in the first half, and both sentiment and valuations are at rock-bottom levels. Higher interest rate expectations, in his view, are now largely discounted, leaving the balance of risk tilted to the upside. The upgrade puts Deutsche Bank in the middle of the pack — Goldman Sachs sees a target of €34.20, Berenberg €34.50, while Bernstein holds at "Market Perform" with a €26.50 target, close to the new Deutsche Bank price.
Should investors sell immediately? Or is it worth buying Vonovia?
Operationally, Vonovia continues to deliver solid numbers. Organic rent growth in the first quarter stood at 4.0%, with the rental segment reporting an occupancy rate of 97.7%. The overall portfolio vacancy rate was a mere 0.8%, underscoring the strength of the letting market. Adjusted EBITDA from the rental business climbed 6.3%. Yet higher borrowing costs ate into bottom-line profits — adjusted earnings attributable to shareholders slid 7.2% to €365.6 million. The company has around €1.6 billion in refinancing falling due this year, making each ECB rate hike directly felt.
That brings the focus to Tuesday’s portfolio revaluation, the single most important catalyst for the stock in the near term. At the end of March, Vonovia’s portfolio stood at €84.7 billion, with EPRA net tangible assets per share of €46.57. The current share price of €21.52 represents a discount of more than 50% to that net asset value. Higher bond yields are pushing up discount rates, which could weigh on the valuation. If the mid-year adjustment is sharply negative, the loan-to-value ratio — currently 45.1% — would rise, putting additional strain on the balance sheet. Conversely, a modest write-down that confirms the operational picture could help narrow that gap.
The interest rate environment remains a headwind. The ECB delivered a 25-basis-point hike in June, raising the deposit facility rate to 2.25%. Landesbank Baden-WĂĽrttemberg forecasts two more increases by the end of 2026, taking the rate to 2.75%. For Vonovia, that spells a double hit: higher discount rates erode asset values, while refinancing costs rise in lockstep.
The stock has recovered some ground in recent days, posting a weekly gain of 4.21% to close at €21.52. Still, it is down roughly 11% year-to-date and sits nearly 29% below its 52-week high of €30.13. Management has guided for full-year adjusted EBITDA between €2.95 billion and €3.05 billion. Whether that remains achievable given the shifting interest rate backdrop will become clearer when half-year results are published in August. For now, all eyes are on Tuesday’s revaluation — and the political noise around Berlin’s rent increases shows no sign of fading.
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