Vonovia Targets Debt Reduction Amid Rising Interest Rates, CEO Confirms
Vonovia's Debt Strategy and Financial Outlook
DUESSELDORF, June 17 (Reuters) - Vonovia, Germany's largest real estate group, which is burdened by billions in debt, is on track to reduce its liabilities despite rising interest rates, its new CEO, Luka Mucic, told journalists on Tuesday evening.
Interest Rate Impact on Debt Reduction Plans
"We have factored that into our planning," said Mucic in reference to the European Central Bank's latest interest rate decision, adding that Vonovia can achieve its target of a 40% loan-to-value (LTV) ratio by the end of 2028.
The LTV ratio most recently stood at 45.4%.
CEO Luka Mucic’s Priorities
Mucic has made reducing Vonovia's debt one of his priorities since taking over in January, and he has also identified parts of the real estate portfolio that could potentially be sold.
Expansion History and Current Debt Load
Following its rapid expansion in the past, which included the acquisition of competitor Deutsche Wohnen, Vonovia is carrying debt totalling around €40 billion ($46.42 billion).
Approach to Asset Sales Amid Rate Changes
However, Mucic emphasised that there will not be any fire sales in light of the recent interest rate rise.
($1 = 0.8616 euros)
(Reporting by Matthias Inverardi, Writing by Miranda Murray, Editing by Linda Pasquini)
