Real-Estate Stocks Trade Higher After Court Scraps Berlin Rent Cap
By Kim Richters
Shares of real-estate companies in Germany rose on Thursday,
after a court decided the law capping rents in the country's
capital was unconstitutional.
The law introduced in Berlin last year for many residential
premises included freezing rents for some years, capping rents for
new leases and cutting them for tenants whose rent exceeded the
The German Federal Constitutional Court said Thursday that the
act was void because federal legislation was already in place to
Analysts had expected the law to be overturned, but nevertheless
saw the decision as a positive trigger for companies with
significant exposure to the Berlin market, such as Deutsche Wohnen
SE or Adler Group SA.
Analysts at Jefferies, who had viewed the rent cap as rather
extreme, said the ruling would revert trading conditions in Berlin
to the favorable situation prior to the rent freeze.
"We expect the narrative to move towards a free-market but
resident-protective solution," Citi analysts said.
At 0931 GMT, DAX member Deutsche Wohnen traded 3.4% higher and
Luxembourg-based Adler Group, which is listed in Germany, traded up
Germany's Vonovia SE rose slightly, too, trading 0.3% higher at
the same time. The company said that it won't collect foregone
rents from its tenants, even though it would now be entitled to do
However, renewed calls to restrict rents in Germany are
expected. "Claims for a federal rent freeze will persist,"
Jefferies analysts said.
Write to Kim Richters at email@example.com
(END) Dow Jones Newswires
April 15, 2021 05:53 ET (09:53 GMT)
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