German property giant Vonovia rejects Berlin housing takeover plans

Germany's largest residential property company, Vonovia, has criticized plans by a potential left-wing government in Berlin to bring thousands of privately owned flats into public ownership, arguing the move would do nothing to ease the city's housing shortage.

"A public takeover would not create a single additional flat," chief executive Luka Mucic said on Wednesday while presenting the company's quarterly results.

He warned that even discussing such plans "undermines confidence in property rights, investment, and Germany as a business location as a whole."

The Left party, which is in talks to lead a coalition with the Social Democrats and Greens following Berlin's September election, has agreed with its prospective partners to pursue the public takeover of around 160,000 apartments owned by five major property companies in a bid to curb excessive rents.

Vonovia, which owns more than 130,000 flats in Berlin together with subsidiary Deutsche Wohnen, values its holdings in the capital at more than €20 billion ($22.5 billion).

Mucic argued that Germany, which faces a shortage of around 1.4 million homes, instead needed more construction and private investment.

Vonovia reported a 3.3% rise in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to nearly €2.2 billion in the first nine months of the year.

Higher rental income and stronger demand for additional services supported earnings, while higher financing costs weighed on property sales and new construction.