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We are seeing huge challenges in the housing sector: urbanisation, climate change and demographic change. All of these affect companies and society in equal measure. However, investments in holdings and new construction made as a result of these challenges should not be at the expense of tenants and must be socially responsible. This is why we will focus on the capabilities of each individual in future and thus relieve our tenants of any anxiety that they might lose their home due to renovation measures or future increases in rent.

You can find more questions and answers on our tenant promise here.

For potential rent increases following refurbishment, we are not taking advantage of the permitted eight per cent charge. Instead, we will cap gross warm rents at the point they would exceed 30 per cent of the household’s net income. In many cases, this means that we are waiving the entire charge and bearing the full costs ourselves. For rent rises in line with the rent index, our tenants can declare financial hardship if the net cold rent exceeds 30 per cent of the net household income – even if the rent index would permit further rises. From 1 July 2019, we will also allocate 25 per cent of our residential units to people who are entitled to a certificate of eligibility to live in public housing or to groups with specific requirements.

You can find more questions and answers on our tenant promise here.

In Berlin, the average rent according to the 2019 Berlin rent index was 6.72 Euro per m², whereas the average in-place rent in Berlin at Deutsche Wohnen in 2018 was just 6.70 Euro per m².

Germany-wide, tenants paid an average rent of 6.92 Euro per m² in 2018. By comparison, Deutsche Wohnen’s tenants throughout Germany paid an average rent of 6.64 Euro per m² in 2018.

If we look at new lettings, the average rent at Deutsche Wohnen in Berlin was 9.00 Euro per m² in 2018. This is significantly lower than the average new-letting rent of 10.34 Euro per m² which is quoted in the housing market report of the property experts CBRE Berlin.

In principle, Deutsche Wohnen considers the rent index to be a suitable tool for establishing the local comparable rent. However, a qualified rent index must be compiled in accordance with scientific rules and be statistically sound. In our view, the Berlin rent index does not meet these requirements.

Irrespective of this, we use the Berlin rent index.

Let us clarify one or two things in advance. The Berlin rent index is a complex tool. It consists of a so-called qualified section – the rental value table – and a non-qualified section, which provides guidance on features that increase or diminish the quality of housing. First of all, a flat is classified within the rental value table on the basis of certain criteria like, for example, its location and its year of construction. The guidance section is then used to determine the precise rental value between an upper and lower value as stated in the relevant part of the rental value table. Our particular criticism of the rental value table is that, up to now, the compilation and processing of the relevant data has been unsatisfactory and both scientifically and statistically unsound. This criticism has been confirmed by several independent expert reports on these statistics as obtained by courts of law.

Our criticism of the guidance section concerns the way it is compiled and its imbalanced design. For example, a bathroom with high-quality installations or a barrier-free flat design – where the costs may run to several thousand euros – are valued as being equivalent to a corner valve for connecting a dishwasher or a low-cost kitchen sink.

Overall, our rents rose by 3.4 per cent in 2018, whereby 1.9 percentage points were due to new lettings. If new lettings are removed from this calculation, one can see that our in-place rents rose by 1.4 per cent on average. And this includes refurbishment work. Germany-wide, the local comparable rent rose by 2.2 per cent last year.

This shows that Deutsche Wohnen increased its rents much less than the average in Germany. Our flats are and remain affordable. The average warm rent for a flat of approximately 60 m2 is 580 Euro.

Deutsche Wohnen’s profit is made up of earnings from residential property management, but also of earnings from other business segments as well. The revaluation of our holdings has a particularly significant influence on the company’s operating result. The value of our properties is rising because the economy is very buoyant and because large numbers of people are moving into Germany’s metropolitan regions. This has an impact on the operating result and makes up a large part of our earnings.

 

Our business model can only work if it is sustainable and long-term oriented. The current dividend yield per share is around 2 per cent. The yield is the dividend payment calculated as a percentage of the value of the share. With a 2 per cent dividend yield, Deutsche Wohnen is at the lower end of the scale of the companies listed in its segment of the stock market – the MDAX.

 

No, it isn’t true. In 2017, Deutsche Wohnen invested EUR 332 million in its holdings. Of this sum, only EUR 97 million was regarded by us as modernisation costs which could be apportioned to the rent. Indeed, over the past years, the proportion of modernisation costs that was apportioned to the rent has been significantly below the statutorily permissible figure of 11%. So, these figures show that in 2017 Deutsche Wohnen invested much more money in maintenance and repairs than in apportionable modernisation work.

 

Deutsche Wohnen does not speculate with flats. Rather, we are interested in managing our holdings over the long term. This is why we adopt refurbishment measures to keep our properties up to a contemporary standard both in terms of their technical installations and their energy efficiency. In addition, we equip our properties to ensure that they are intergenerational and meet the standards typical of today’s market. Finally, we adapt them to meet what are new challenges and opportunities in the area of digitisation.

 

It is true that, with approximately 111,500 rental flats in Berlin, Deutsche Wohnen is the largest private residential property company in the city. However, given the fact that there are more than 1.9 million flats in Berlin, this represents a market share of merely 6%. By comparison, public housing corporations – taken together – hold more than 320,000 flats in the city. This represents a market share of approximately 17%.

 

When it comes to modernisation work, our tenants can, of course, make an application to be considered as a financial hardship case if the apportionable costs are going to be too much for them. When we first write to tenants to announce any planned modernisation work, we specifically draw their attention to the fact that this entitlement exists. Then we confirm to tenants who make this application that we have taken note of their situation and that we will approach them – unprompted – at the time when we have calculated the apportionable costs. Deutsche Wohnen uses the benchmark of rent including operating costs and heating to decide hardship cases. This enables us to ensure that, following the apportionment of modernisation costs, our tenants do not have to pay more than 30% of their net household income for rent. The requirement for this is that tenants inform us of their hardship by the stated deadline and that, when the apportionable modernisation costs have been calculated, they produce proof of their income situation (e.g. salary statement, pension statement or notification of approval for the payment of benefits). If the documents submitted by the tenant confirm that this is a hardship case, the apportionable modernisation costs will be reduced accordingly – down, in some cases, to zero.

In 2017, Deutsche Wohnen invested a total of 332 million Euro in maintenance, repair and modernisation work on its holdings. A major part of this investment sum cannot be apportioned to the rent. We bear these costs ourselves. For example, in the railway workers’ estate in Gallwitzallee (Berlin-Lankwitz), approximately 70% of the total investment sum is being used for repair work and so these costs are borne entirely by Deutsche Wohnen. The remaining 30% is the basis for statutorily permissible apportionment – with due consideration given, of course, to individual financial hardship cases.

In 2018 alone, Deutsche Wohnen paid property transfer tax in the amount of just under 100 million Euro.

 

Yes, it does. In 2018, Deutsche Wohnen made just under 5% of all new lettings available to people in socially difficult circumstances. For example, for several years now Deutsche Wohnen has worked together with the charitable association hestia e.V. and makes housing available for women who have been victims of domestic violence and who desperately need a place to live. In 2018 alone, Deutsche Wohnen made 20 flats available to such women.