Deutsche Annington

From Low to High Rent

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A Deutsche Annington building in the west-German city of Bochum.
  • Why it matters

    Why it matters

    Deutsche Annington will need to prove it is ready for big-time scrutiny from investors if it becomes the first real estate firm among the top 30 German companies in the blue-chip DAX index.

  • Facts


    • Deutsche Annington, founded in 2001, is Germany’s largest publicly traded property manager and the second largest real estate firm in Europe.
    • Deutsche Börse decides once a year whether to add or drop companies from its top 30 DAX blue-chip index, basing the decision on market capitalization and trading volume.
    • Tenants in the 370,000 residential units owned by Deutsche Annington have a host of complaints about the condition of their apartments, and critics say the firm overcharges tenants for maintenance work.
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Rolf Buch has tried his best to play down the importance of his company climbing into the premier league of German firms.

The chief executive of Deutsche Annington, Germany’s largest publicly-traded property manager, pretends that everything will run as normal if his firm is chosen next week to become a member of Germany’s blue-chip DAX index of the largest 30 firms in Europe’s largest economy.

“The company will not change as a result of membership in the DAX,” Mr. Buch said in an exclusive interview with Handelsblatt. “We are already big enough that politicians, associations and capital markets already take note of us.”

That might be true for his core business, which involves renting out and managing some 370,000 residential units acquired across the country over the last decade – a meteoric rise up the ranks for the Bochum-based company that was founded only in 2001.

But his investor relations department will almost certainly need an overhaul. Becoming a DAX-listed firm will mean answering calls from new, bigger investors in Germany and across the globe, particularly from funds that only invest their money in blue-chip firms.

With new interest will also come much tougher scrutiny of the company, its business model and the way it treats its tenants: The world’s biggest investors will want to know that they’re placing their money in a firm that is built to last.

Whether Annington, potentially the first real estate company to be listed on the DAX, is even large enough to qualify will be decided next week. But the company’s image in recent years – of run-down apartments and angry tenants – doesn’t quite coincide with that of Germany’s top companies.

Interviews with tenants, lawyers, consumer advocates and experts across Germany reveal that, while there have been some improvements and investments over the past two years, there remain a host of ongoing complaints about the conditions at Deutsche Annington’s apartments.

Critics also say the firm overcharges for maintenance work by classifying about half the work it does as “modernization,” which allows it to raise the rent on its tenants by as much as 30 percent.

Deutsche Annington is the largest publicly traded property management company in Germany and the second largest real estate company in Europe. About a million people live in its apartments, and they are expected to pay €1.4 billion ($1.6 billion) in rent this year.

Mr. Buch, who left the Bertelsmann Group in 2013 to assume the top spot at Annington, is well aware of this reputation. He has made it his mission to turn around the company and help it shed its grungy image to become a flagship German corporation.

“We will not be able to pay any reliable dividends in the long term if our customers are dissatisfied. That’s my fundamental belief,” Mr. Buch said.

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