Berlin’s largest residential landlord, Vonovia, faces potential losses exceeding €8 billion under proposed plans by Berlin’s prospective ruling coalition to nationalize a significant portion of the city’s housing stock. The coalition talks between the left-wing Die Linke party, the Social Democrats, and the Greens focus on transferring more than 140,000 apartments into public ownership as part of efforts to alleviate the city’s chronic housing shortage and reduce rents.
The plan, which targets properties owned by companies holding more than 10,000 apartments in Berlin, would require these landlords to hand over units beyond that threshold to the city. Current estimates indicate that over 144,000 flats would be affected. The Berlin Senate estimates the city has a deficit of approximately 100,000 apartments for its population of around 4 million people.
The proposed legislation, relying on a little-used clause in the German constitution, would set compensation at levels below the market value recorded on company balance sheets. The coalition envisions paying no more than €16 billion in total, translating to roughly €100,000 per apartment. This figure is approximately 40% lower than the average book value landlords currently assign to their properties. The legislation is expected to be introduced by 2028.
Vonovia, which owns about 130,000 flats in Berlin and holds the city’s largest residential portfolio, would be most affected. Based on company disclosures, the average market value of its apartments in Berlin is about €170,000 each. With roughly 120,000 units subject to nationalization, their combined market value stands near €20.4 billion. The planned compensation of €12 billion would therefore yield an estimated loss of €8.4 billion for Vonovia, representing approximately 60% of its current market capitalization. Following the announcement, Vonovia’s shares dropped to their lowest level since 2023.
Vonovia’s CEO Luka Mucic criticized the plans as “unconstitutional” and indicated the company intends to challenge the measures legally. A similar attitude was expressed by Heimstaden, another affected landlord, which faces potential losses of €1.5 billion on a portfolio valued at €2.5 billion for around 10,000 apartments. Heimstaden co-CEO Christian Fladeland expressed skepticism about the likelihood of the plans being implemented.
Other major property owners expected to be impacted include Adler and Covivio, with the combined nationalization potentially devaluing their holdings by billions. The proposed nationalization reflects Berlin’s broader efforts to address housing affordability amid rising rents and a constrained rental market, though its implementation and legal viability remain uncertain.