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HOUSING

German property giants Vonovia and Deutsche Wohnen merge to ‘tackle housing shortage’

Germany's top property group Vonovia has announced plans for a €19 billion merger with rival Deutsche Wohnen to form a giant in the sector.

German property giants Vonovia and Deutsche Wohnen merge to 'tackle housing shortage'
A protest march in Berlin after the Mietendeckel failed. The sign says: 'We only want affordable housing'. Photo: picture alliance/dpa | Christoph Soeder

“In order to tackle both the housing shortage and climate change more robustly and efficiently, Vonovia and Deutsche Wohnen are joining forces,” said a statement from the company released late on Monday night.

The proposed deal comes after two previous attempts failed to come off, the last having been rejected by Deutsche Wohnen in 2016.

But this latest offer prices Deutsche Wohnen shares at well above their current market value, which stood at €44.99 on close of trade Friday on the Frankfurt exchange.

The markets in Germany are closed for a public holiday Monday.

Deutsche Wohnen shareholders will be offered €53.03 per share: 52 in cash and the rest as the company’s dividend for the 2020 financial year, said the statement.

The previous purchase offer in 2016 saw Deutsche Wohnen oppose the merger, saying the proposed price was too low.

Around half the population in Germany rents. The merger will give birth to a giant of more than 500,000 homes in total. 

The two promised to work closely with political decision makers on the sensitive issue of housing supply and prices.

They pledged to limit rent increases until 2026 and to build new apartments in the capital Berlin, which has been hit for years by runaway rent and a lack of affordable housing.

READ ALSO: These are the reasons why so many Germans rent rather than buy

Private housing firms in spotlight over Berlin’s rent cap fail

In Berlin, where around 85 percent of residents are renters, Deutsche Wohnen and Vonovia play a premier role in the housing sector.

They have about 150,000 apartments in total in the greater Berlin area.

Recently both housing companies hit the headlines when Berlin’s Mietendeckel – rent cap – was ruled unlawful by the constitutional court in April after around a year of reduced housing costs.

After the decision, thousands of tenants in Berlin were hit with rent increases and back payments amounting to hundreds or thousands of euros in some cases.

Vonovia, which owns around 42,000 properties in the capital, opted to wipe the back payments for its residents, acknowledging the stress that the Mietendeckel debacle had put on tenants in Berlin. 

“The well-being of the people who live in our properties is our first priority,” said CEO Rolf Buch at the time.

“They should not have to suffer any financial disadvantages as a result of political decisions.” 

READ ALSO: Stressed and depressed: How Berlin’s Mietendeckel fiasco has affected foreign residents

But Deutsche Wohnen, which owns around 111,000 flats in Berlin and is the largest private housing provider in the city, said it intended to make tenants pay back the difference in rent.

“We are fully aware of the strained situation of the housing market in Berlin,” a spokesperson for the company told The Local in April.

“To completely forego the settlement of outstanding debts, however, would not meet our obligations to the company, its employees and owners.” 

READ ALSO: ‘Extraordinary situation’: What can you do if your Berlin landlord demands rent arrears?

The Mietendeckel fallout is likely to have boosted support for a campaign calling for a referendum on expropriating large property developers in a bid to deal with the housing crisis in Berlin.

The “Expropriate Deutsche Wohnen & Co.” initiative targets companies with more than 3,000 apartments in their portfolios.

READ MORE: How Berliner’s are plotting a radical ‘expropriation referendum’ to fight housing crisis

The aim is to bring these companies into public ownership in order to ensure enough affordable housing for people in the city.

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LIVING IN GERMANY

REVEALED: The most commonly asked questions about Germans and Germany

Ever wondered what the world is asking about Germany and the Germans? We looked at Google’s most searched results to find out – and help clear some of these queries up.

Oktoberfest
Hasan Salihamidzic, the sports director of FC Bayern, arrives with his wife at Oktoberfest in full traditional dress. Photo: picture alliance/dpa |

According to popular searches, Germany is the go-to place for good coffee and bread (although only if you like the hard kind) and the place to avoid if what you’re looking for is good food, good internet connection and low taxes. Of course, this is subjective; some people will travel long stretches to get a fresh, hot pretzel or a juicy Bratwurst, while others will take a hard pass.

When it comes to the question on the bad Internet – there is some truth to this. German is known for being behind other rich nations when it comes to connectivity. And from personal experience, the internet connection can seem a little medieval. The incoming German coalition government has, however, vowed to improve internet connectivity as part of their plans to modernise the country.

There are also frequent questions on learning the German language, and people pointing out that it is hard and complicated. This is probably due to the long compound words and its extensive grammar rules, however, as both English and German are Germanic languages with similar words in common, it’s not impossible to learn as an English-speaker.

Here’s a look at some of those questions…

Why is German called Deutsch? Whereas ‘German’ comes from the Latin, ‘Deutsch’ instead derives itself from the Indo-European root “þeudō”, meaning “people”. This slowly became “Deutsch” as we know it today. It can be a bit confusing to English-speakers, who are right to think it sounds a little more like “Dutch”, however the two languages do have the same roots which may explain it.

And why is Germany so boring? Again, probably a generalisation, especially given that Germany has a landmass of over 350,000 km² with areas ranging from high rise, industrial cities to traditional old town villages and even mountain ranges, so you’re sure to find a place that doesn’t bore you to tears.

Perhaps it is a question that comes from the stereotype that Germans are obsessed with strict about rules, organised and analytical. Or that they have no sense of humour – all of these things being not the most exciting traits. 

Either way, from my experience I can confirm that, even though there is truth to German society enjoying order and rules, the vast majority of people are not boring, and I’m sure if you come to Germany you’ll meet many interesting, funny and exciting people. 

READ ALSO: 12 mistakes foreigners make when moving to Germany

When it comes to the German weather, most people assume a cold and cloudy climate, however this isn’t entirely true. While the autumn and winter, especially in the north, comes with grey skies and sub-zero temperatures, Germany can have some beautiful summers, with temperatures frequently rising above 30C in some places.

Unsurprisingly, the power and wealth of the German nation is mentioned – Germany is the largest economy in Europe after all, with a GDP of 3.8 trillion dollars. This could be due to strong industry sectors in the country, including vehicle constructions (I was a little surprised to find no questions posed on German cars), chemical and electrical industry and engineering. There are also many strong economic cities in Germany, most notably Munich, Frankfurt am Main and Hamburg.

READ ALSO: Eight unique words and phrases that tell us something about Germany

Smart and tall?

Why are Germans so tall? They are indeed taller than many other nations, with the average German measuring a good 172.87cm (or 5 feet 8.06 inches), however this may be a question better posed to the Dutch, who make up the tallest people in the world.

Why are Germans so smart? While this is again a generalisation – as individuals have different levels of intelligence in all countries – this question may stem from Germany’s free higher education system or their seemingly efficient work ethic. Plus there does seem to be some scientific research behind this question, with a study done in 2006 finding that Germans had the highest IQ in Europe.

So, while many of the questions posed about Germany and Germans on Google stem from stereotypes, we can confirm that some aren’t entirely made up. If you’re looking to debunk some frequently asked questions about France and the French, check out this article by our sister site HERE.

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