Overview

The Frankfurter Allgemeine Zeitung, cited by Reuters, reported that the governing coalition in Berlin—comprising the Greens, Social Democrats and the Left—has advanced an exploratory paper outlining plans to expropriate large residential landlords. Following the report, Vonovia shares fell 2.6%.

Expropriation Proposal Details

The coalition’s paper proposes raising the expropriation threshold from the earlier 3,000‑apartment limit to 10,000 apartments. Compensation for expropriated properties would be capped at €16 billion, subject to fiscal sustainability considerations. Apartments constructed after 1 January 2021, as well as cooperatives and non‑profit housing companies, would be exempt from the socialisation measures. The coalition aims to present legislation transferring residential properties into public ownership by mid‑2028.

Impact on Vonovia and Peer Companies

Vonovia would be the most affected entity, with an estimated portfolio of nearly 140,000 apartments in Berlin at the end of 2025. Three other private real‑estate firms also exceed the 10,000‑apartment threshold: Heimstaden Germany holds roughly 20,000 apartments, Adler Group just over 17,000, and Covivio’s German subsidiary possesses a comparable number of units. The higher threshold reduces the total housing stock eligible for socialisation to about 150,000 apartments, down from the 240,000 apartments calculated by research institute Empirica under the original 3,000‑apartment threshold.

Fiscal Implications for Berlin

Berlin’s current debt stands at almost €70 billion. The Berlin State Audit Office estimated in 2024 that compensation based on market values could reach up to €40 billion, far exceeding the €16 billion cap set in the coalition’s proposal.

Legal Considerations

An expert commission appointed by the Berlin Senate concluded in 2023 that socialisation is permissible under Article 15 of the German Basic Law. Nonetheless, legal uncertainties persist regarding whether the measure would be proportionate to its objectives and how property‑rights challenges might be resolved.