NewScarcity of affordable housing drives German deal frenzy
Affordable housing stock in Germany has been in short supply since a rash of privatisations in the early 2000s
Frantic deal-making in the German property market has spotlighted the scarcity of housing in the country and thrown into sharp relief the influx of up to one million refugees fleeing war and poverty.
Property consolidation reached new heights last week when the country's largest listed residential property owner forced its closest rival to drop a takeover plan in favour of its own, ¤14 billion (HK$119 billion) hostile bid.
Vonovia, formerly known as Deutsche Annington, has already swallowed smaller rivals Gagfah and Suedewo and now has its sights set on Deutsche Wohnen, a peer with most of its properties in sought-after Berlin.
“If you've got a million people coming to your country of 80 million, that's got to be positive for the owners of affordable housing,” said Credit Suisse analyst Ben Richford.
Affordable housing stock in Germany has been in short supply since a rash of privatisations in the early 2000s and Chancellor Angela Merkel and the government are under pressure to increase funding in order to help the federal states cope with the growing need.
Secretary of housing Barbara Hendricks estimates the need at 350,000 apartments per year while only 245,000 were built last year. Tenants' association DMB said Germany, which has roughly 40 million homes, currently lacks 800,000 flats.