RUHR DISTRICT, GERMANY. Today the large German housing company Viterra AG (150.000 former social and company flats) was sold to the British based Annington company, which is the housing branch of the private equity fund Terra Firma (Japanese Nomura Bank) . With 7 billion Euro the prize is significantly higher than expected. Annington some years ago already bought 66.000 company flats from the public rail ways. Through strict contracts they had been forced to limit single owner ship privatisation and provide extra protection for affected tenants. The sale of Viterra does not include comparable securities. However, Annington agreed to continue commitments of Viterra regarding some social limitations of quittings.
Since years Viterra AG is privatising huge parts of their original social housing stock. Tenants react with fear or resistance. Earlier this year tenants alliances called for strict protection through sale contract. HIC with a letter to the share holders and the regional government supported these demands. But the former share holder – energy trust E.on – denied any possibility to do so.
Some days ago the regional tenants alliances together with trade unions organized a conference in Dortmund focussing on the overall trend of economical globalisation of the housing business in Germany. The Viterra sale is only one step in this process. Tenants, Trade Unions, Social Landlords and Researchers called for a stop of sales through public entities like local authorities, better legal protection of the tenants and even international regulation on the growing transnational speculation with renatal housing. One issue is the planned introduction of Real Estate Investment Trusts (REITs) in Germany and Britain. REITs are tax free housing companies which are traded at stock exchange. The introduction of REITs, which is very much supported by financial lobbies, already lead to new speculation bubbles in the housing markets of Eastern Asia and France.
At the moment it is too early to know about the concrete consequences of the Viterra sale for the tenants. So far Annington seemed to behave less brutal than other privatisators. But the high prize and the missing obligations may even be understood as bad signals.
The old share holder E.on no wants to use the extra cash flow to buy energy companies in Italy or France. Deregulation is expected in these branches.
Globalisation creates new types of economical actors. With Aninngton 250.000 tenants household in Germany have a transnational fund as landlord now. This in Germany, where housing was regulated nationally so far and investments focused on long term security, is a new situation.