Germany's largest residential property group Vonovia has returned to profit in the first quarter after a multi-billion-euro loss in the previous year.
Net income for the three months to the end of March totalled €335.5 million ($360 million), the DAX-listed company announced on Tuesday.
In the same period of the previous year, Vonovia had suffered a loss of just under €2.1 billion due to a devaluation of its property portfolio.
At just under €83.7 billion at the end of March, the value of the property portfolio remained almost stable compared to the end of 2023.
The bottom of the value trend is practically within reach, the company said. A return to growth is in sight, it added. From 2025 at the latest, the group intends to switch gears and focus on increasing its earnings again.
From then on, the Bochum-based company expects organic value growth of around €3 billion per year - influenced primarily by the housing shortage and high demand for residential space in major cities. Vonovia is not taking valuation effects into account here.
Operationally, things did not go so smoothly for the company in the first quarter of 2024. Adjusted earnings before interest, taxes, depreciation and amortisation fell by 3.3% year-on-year to €607 million.
Letting performed better due to the continued high demand for affordable living space in metropolitan areas. Rents rose to an average of €7.78 per square metre at the end of March - 3.2% more than a year earlier.
In Germany, Vonovia's average monthly rent was €7.67 per square metre at the end of March.
The company now expects rents to grow by 3.8% to 4.1% in the current year. Previously, the company had assumed growth of 3.4% to 3.6%.
In the long term, Vonovia expects annual rental growth of 4%. The company confirmed its annual targets.