Vonovia Courts the Bundeswehr as Berlin's Expropriation Arithmetic Divides Economists
Published on 09/26/2026 at 19:21 | Editorial boerse-global.de
Vonovia has opened a second front in its effort to steady a business under political siege, offering to build and operate housing for Germany's armed forces just as Berlin's expropriation debate resurfaces with fresh force.
Chief executive Luka Mucic confirmed on Thursday that preliminary contacts with the military had already taken place. The plan would put Vonovia's construction capacity to work for a state client, delivering accommodation for service members and managing the properties over the long term — a rare chance to deploy new-build capability outside the troubled rental market.
A Portfolio in the Crosshairs
That rental business is precisely where the pressure is concentrated. Together with its subsidiary Deutsche Wohnen, Vonovia holds roughly 138,000 apartments in Berlin and its surrounding region — a stock that sits at the center of a debate over whether large residential holdings should be transferred into public ownership.
The idea traces back to a 2021 Berlin referendum, which voters approved but which politicians left on the shelf. The Left party's victory in the capital has pushed the question back onto the agenda, and the revived talk of expropriation promptly unsettled the markets.
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Estimates That Refuse to Agree
How much such a transfer would cost is a matter of fierce dispute. A study by the Hans-Böckler Foundation puts compensation for just over 200,000 Berlin apartments at EUR 13.5 billion, or roughly EUR 64,000 to EUR 72,000 per unit.
DIW economist Konstantin Kholodilin arrives at a far larger figure of about EUR 50 billion, while other calculations span from a few billion up to EUR 42 billion. The Left party, for its part, pencils in EUR 10 billion to EUR 17 billion for some 240,000 apartments, to be financed through decades of loans repaid from ongoing rental income.
The yawning gap between the models comes down to divergent legal assumptions about the value to be applied. Some concepts envision steep discounts to book values; market experts counter by pointing to the constitutional protection of property and to valuations at prevailing market rates.
Mucic Reaches Out to the Capital
Mucic has sought to keep channels open with Berlin's state politicians. According to Reuters, he stressed that Vonovia stands ready as a constructive partner for a future government, casting the company — through new construction and affordable rents — as part of the solution to the housing shortage rather than part of the problem.
Federal policymakers are adding their own layer of regulation. A government draft would require that index-linked rents in tight housing markets be passed on to tenants at only half the rate once inflation exceeds 3.0 percent. The same proposal caps the furnishing surcharge and raises the threshold for modernization costs from EUR 10,000 to EUR 20,000.
Tenant Complaints Add to the Noise
Alongside the political controversies, the group has faced allegations from its own tenants. A Frankfurter Rundschau report dated September 17 described households complaining about structural defects and questionable practices in their tenancy arrangements.
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Those factors fed selling pressure in the market. According to dpa, the stock at one point on Tuesday fell to its lowest level since the summer of 2023 amid the expropriation discussion.
A Modest Bounce to End the Week
The slide paused as the trading week closed. Vonovia finished yesterday at EUR 17.34, a modest gain of 0.7 percent, leaving the shares 1.7 percent above their 52-week low. Since the start of the year, the DAX-listed group has shed 29 percent.
For market watchers, the question is whether the company can rebuild investor confidence. Additional business lines beyond the classic rental market could help shift attention back to its operating prospects.
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