Vonovia Selling Cable TV to Its Tenants to Generate More Revenue

Vonovia SE, Germany’s biggest residential landlord, is trying to generate more money from its tenants by offering add-on services, including cable TV and nurse visits, to help compensate for a slowing pace of acquisitions.

Add-ons have become so significant to Vonovia’s business that the company will list them separately for the first time when it reports full-year earnings on March 3, Chief Executive Officer Rolf Buch told reporters at a dinner in Frankfurt on Tuesday. He also confirmed the company’s profit guidance for 2015 and 2016.

"What else can I sell my tenants other than housing?" Buch said, describing one of the company’s four main strategies. Vonovia’s business model resembles that of a subscriptions-based book club, with tenants paying rent each month instead of club dues, he explained. "If you’re already selling books, you might as well sell records too."

Vonovia has more than doubled its homes since Buch took over, thanks to an aggressive acquisition strategy facilitated by cheap interest rates and rising property stocks. Vonovia failed in its latest bid to acquire Deutsche Wohnen AG for about 8 billion euros ($8.8 billion), following a four-month hostile takeover battle.

Vonovia won’t bid for any publicly traded companies in the foreseeable future, although it will continue to accumulate apartment portfolios, Buch said.

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