German residential specialist Vonovia has raised its forecast for 2015, with vacancy in its portfolio falling and rental income improving.
Chief executive Rolf Buch said the third quarter of this year was “highly positive” and that the sale of around 20,000 units would improve its portfolio’s quality.
Vacancy in Vonovia’s portfolio is expected to fall to around 3%, with rental growth predicted to be between 2.8% and 2.9%.
Rental income is expected to increase to €1.4bn-1.42bn, compared with €789m in 2014.
Operating profit more than doubled during the nine-month period, which the company, known as Deutsche Annington until September this year, said was due to its increased portfolio volume.
The company’s takeover of Gagfah late last year created a €21bn portfolio of around 350,000 residential units.
The integration of Gagfah has “significantly improved” operating performance.
“We are ahead of schedule in our integration,” Buch said. “We will have completed the incorporation of this company within our corporate group by the end of this year.
“This will enable us to exploit synergies more rapidly than expected.”
The company is expected to make an offer for LEG Immobilien, which owns 110,000 rented residential assets and was last month expected to have been sold to Deutsche Wohnen.
The deal, which collapsed, would have created a €17bn real estate portfolio.