FRANKFURT (dpa-AFX) - Concerns about the new dividend policy have significantly accelerated the recent slide in Vonovia 's share price. The shares of Germany's largest residential real estate group fell by more than eight percent on Friday morning to their lowest level since November last year.

At midday, Vonovia's shares were still down six percent at 25.21 euros, putting it at the bottom of the Dax. The leading German index rose slightly at a record high level.

At Vonovia, the dividend proposal for the 2024 financial year will no longer be based on Group FFO (after minority interests), but on adjusted earnings before taxes (EBT) plus excess liquidity from operating free cash flow.

According to the press release, the Executive Board is convinced that the new dividend policy will lead to an appropriate shareholder participation in the core business and at the same time enable stable internal financing of the investment program. Analysts, on the other hand, were rather skeptical.

"The surprisingly changed key figures are relatively complex," said expert Kai Klose from the private bank Berenberg. In general, the expert assumes that the capital markets prefer continuity in a company's key earnings figures.

Analyst Paul May from the British investment bank Barclays added that the real estate group's accounting was already complex. The changes now presented are therefore not welcome.

Analyst Charles Boissier from the major Swiss bank UBS wrote that, in his opinion, distributions would now generally be set at a lower level. According to observers, this would be bad news for investors who value the traditionally high dividends of real estate companies as an attractive alternative to interest rate products.

Vonovia's business figures presented the previous evening, however, were more or less in line with expectations and thus faded into the background in view of the new dividend policy. Vonovia had slipped significantly deeper into the red last year.

The high loss was mainly the result of significant devaluations of the real estate portfolio, wrote capital market strategist Jürgen Molnar from trading house Robomarkets. This shows "how inflated real estate prices were and perhaps still are as a result of the low-interest phase."

Nevertheless, the dividend is to be increased slightly to 90 cents per share, Molnar continued. "The move is intended to keep disappointed shareholders in line." Economically, however, stabilizing the balance sheet by reducing debt would certainly be the better option.

Other sector stocks also came under pressure in Vonovia's wake. Aroundtown shares, for example, brought up the rear in the MDax mid-cap index, losing five percent. LEG shares fell by three percent.

"The German housing market is still a long way from a positive turning point," said Molnar, pointing to a dilemma: although significantly more apartments need to be built, the rise in prices due to the coronavirus pandemic and inflation and higher financing costs due to higher interest rates make building unattractive.

Many experts expect the major central banks to lower key interest rates this year because inflation has already fallen significantly. This would also ease the situation on the real estate market somewhat. However, economic data pointing to a return to rising prices in the USA and a continued robust US labor market have recently dampened hopes of a rapid easing of monetary policy in the United States.

The President of the European Central Bank (ECB), Christine Lagarde, has recently recognized overall progress in the fight against inflation. However, the ECB Council is not yet confident enough to react with monetary policy. In Japan, the prospects of a stricter monetary policy from the central bank have even increased recently after the country's largest trade union federation pushed through significant wage increases./la/mne/stk