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TEG - TAG Immobilien AG News Story

€25.04 0.2  1.0%

Last Trade - 21/02/20

Sector
Financials
Size
Large Cap
Market Cap £3.06bn
Enterprise Value £5.06bn
Revenue £344.2m
Position in Universe 224th / 1050

UPDATE 1-Berlin rent freeze prompts Deutsche Wohnen share slide

Mon 21st October, 2019 8:41am
(Adds details)
    BERLIN, Oct 21 (Reuters) - Deutsche Wohnen  DWNG.DE  and
other German property companies' shares were hit on Monday by
Berlin city government's approval of a plan to freeze rents in
the German capital for five years.
    Shares in Deutsche Wohnen, the largest private landlord in
Berlin, fell by as much as 4.5% in reaction to the blueprint
approved on Friday by the Berlin Senate, which also includes
capping subletting contracts.
    The plan will be sent to parliament this month, where it is
expected to be approved and will go into effect in January 2020.
    Deutsche Wohnnen shares were trading 3.6% lower at 0714 GMT,
while shares in Vonovia  VNAn.DE , Grand City Properties
 GYC.DE , TAG Immobilien  TEGG.DE  and LEG Immobilien  LEGn.DE 
were also down.
    Under the plan, initially drafted in June, rents will be
frozen for five years from June 18, 2019, with the possibility
of an inflation-related increase of about 1.3% only allowed from
2022 and very limited hikes allowed to pay for modernisations.
    Jefferies analyst Thomas Rothaeusler said the agreement
reached by Berlin's governing parties was slightly watered down
from a previous draft and he expected listed companies in the
sector would have to provide guidance on its impact.
    Rents in Berlin, for long far cheaper than in other major
European cities, have more than doubled since 2008 as around
40,000 people a year have moved to the German capital, where
some 85% of residents rent rather than own homes.
    Opponents of the rent freeze say the policy could worsen
Germany’s housing crisis as it would scare off real estate
investors eager to build in urban centres.
    But the Social Democrats, which form Berlin's government
together with the Greens and far-left Die Linke, and are
Chancellor Angela Merkel's junior coalition partners on the
federal level, have raised the idea of a national rent freeze. 
    This resonated in the most populous European Union country,
where most people rent and only 46% are homeowners.

 (Reporting by Joseph Nasr and Emma Thomasson
Editing by Tassilo Hummel and Alexander Smith)
 ((Joseph.Nasr@thomsonreuters.com; +49 172 678 5836; Reuters
Messaging: joseph.nasr.thomsonreuters.com@reuters.net))
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