My Biggest International Investment: Roundtable Discussion With Vonovia (Strong Buy Reaffirmed)

Before going into this update, we recommend that you start by first reading our full investment thesis by clicking here. In short, Vonovia (VNA) is the biggest apartment landlord in Germany, it enjoys steady growth, has a great track record, and yet, it has persistently traded at a large discount relative to its net asset value in recent years. 

It is today our biggest foreign real estate investment. We invested in it a bit early into this bear market, but we then bought a lot more of it when it dipped into the €15-25 range and it eventually became our largest holding, now representing 15% of our International Portfolio.  

Since then, it has nicely recovered and now trades at €32, resulting in a large unrealized gain on our big position. 

Is now time to sell some of it or does it still offer further upside potential?

To answer this question, I attended the EPRA ReThink conference, which I knew would also be attended by Vonovia. 

I finally had the chance to meet their CFO in person and also participated in a property tour to visit some of their biggest assets in Berlin, Germany. 

Philip Grosse, Vonovia's CFO:

And my latest findings were very positive. 

There were five main takeaways for me: 

Takeaway #1: Cap Rates Have Stabilized in Germany