Vonovia said late on Monday it agreed to take over its closest German rival Deutsche Wohnen for about 18 billion euros ($22 billion) to better shoulder future investments in heat insulation.

The two companies said they wanted to offer the senate the option to buy "a significant number of flats" from their portfolios to help address the "strained rental situation" in the capital.

Of the 150,000 apartments owned by Deutsche Wohnen, 113,000 are located in Berlin, while Vonovia owns around 43,000 apartments in the German capital.

Vonovia and Deutsche Wohnen could not immediately be reached for comment.

(Reporting by Alexander Huebner and Matthias Inverardi; Writing by Caroline Copley; Editing by Christoph Steitz)