Vonovia issues green bonds and for the first time social bonds worth €2.5 billion
- First social bonds for rent-controlled and low-barrier housing with terms of around 4 and 6 years
- First green bond issued by a property company under new EU taxonomy with a term of 10 years
- Philip Grosse: “This demonstrates our social responsibility and our strategy of sustainability. Rising energy prices show how important it is to reduce the cost of heating for tenants.”
Bochum, 22 March 2022 – On 21 March, Vonovia SE (“Vonovia”) has issued its first two social bonds with terms of 3.85 and 6.25 years as well as its first 10-year green bond under the new EU taxonomy. This is a premiere in the property industry. The bonds worth €2.5 billion have a coupon of 1.875% and were oversubscribed by a multiple of 4.7.
“The bonds demonstrate our social responsibility and our strategy of sustainability. This is precisely what investors expect from companies today,” says Philip Grosse, CFO of Vonovia. “In turn, we as a company benefit from social bonds and green bonds as an opportunity to expand our investor base.” Just recently, in February 2022, Vonovia adjusted its sustainable financing to the new EU standards (EU taxonomy) and added social components.
The two social bonds will be used for the financing of social projects. This includes housing set aside for holders of state subsidy entitlements and thus low-income households. But it also includes privately financed flats in Berlin as a way of providing access to affordable housing, with rental fees that are at least 15% below the officially determined average local reference rent. Furthermore, the funds from social bonds will be used for low-barrier housing and for modernization that will cater more effectively for the needs of an ageing society.
Vonovia’s sustainability strategy is based on the three ESG fields of action: the environment, social responsibility and governance. For example, the company has committed itself to a binding climate roadmap and a nearly climate-neutral building portfolio by 2045. It has also introduced a Sustainability Performance Index which transparently shows its annual progress.
The 10-year green bond provides Vonovia with additional cash, which the company also wants to use for refinancing sustainable projects in Germany, Austria and Sweden. This includes investments in new builds and upgrading existing buildings to an energy efficiency class of at least B (in Austria: at least A). Above all, Vonovia is promoting renewable energies, such as the installation of solar panels.
“We still have buildings that go back to the 1950s and 60s and which have not been modernized. This is why we’ve been working steadily since 2015 on a reduction of the carbon footprint of our buildings through energy upgrades. Today’s rising energy prices show how important it is to reduce the cost of heating for tenants,” says Philip Grosse. “We also ensure high standards in energy efficiency in new builds, and so we often give preference to wood as a building material.”
The Sustainable Finance Framework is available on Vonovia’s website:
2022 Financial Calendar:
29 April 2022: Annual General Meeting – online
5 May 2022: Interim Statement for the First Three Months of 2022
3 August 2022: Interim Statement for the First Half of 2022
4 November 2022: Interim Statement for the First Nine Months of 2022