BOCHUM (dpa-AFX) - Germany's largest real estate group Vonovia benefited last year primarily from the acquisition of Deutsche Wohnen and higher rental income. Sales and operating earnings increased significantly. The Group remains cautious about the current year.

Demand for apartments will continue to rise in 2023, but the market environment remains challenging, said company CEO Rolf Buch on Thursday after the close of the stock market. In the current year, segment revenues are expected to rise to 6.40 to 7.20 billion euros. For earnings before interest, taxes, depreciation and amortization (Ebitda), management is targeting 2.60 to 2.85 billion euros and for operating profit (FFO) 1.75 to 1.95 billion euros.

2022 operating profit (FFO) increased by a fifth year-on-year to 2.04 billion euros, mainly thanks to the acquisition of Deutsche Wohnen. Rents rose to an average of 7.49 euros per square meter at the end of December - 2.2 percent more than a year earlier. Modernized apartments were the main contributors to the increase. Landlords can pass on some of the costs of energy-related renovations, such as thermal insulation and the replacement of old heating systems and windows, to the rent.

Last year, sales climbed by almost a fifth to 6.26 billion euros. Below the line, Vonovia reported a loss of 669 million euros, compared with a profit of a good 2.4 billion euros a year earlier. Buch attributed the loss to write-downs on the real estate portfolio, the development business and the care subsidiary totaling just under 1.3 billion euros./mne/jha/