Moody's affirmed Deutsche Wohnen SE's A3 senior unsecured and issuer ratings, P-2 short-term issuer and P-2 commercial paper ratings.
The outlook on the German residential real estate company was changed to negative from stable, reflecting political headwinds in Berlin, where Deutsche Wohnen generates roughly 75% of its income. Politicians in the German capital are advancing various proposals to cap and "substantially freeze" rents in residential properties, Moody's noted.
Despite these challenges, Moody's expects Deutsche Wohnen's occupancy ratios to remain strong, with its key credit ratios to be broadly stable, as it sees Berlin's residential market to remain under-supplied for years.
The affirmation of the A3 rating reflects Deutsche Wohnen's stable cash flow generation, good quality portfolio, moderate debt-to-asset ratio and conservative financial policies, among other factors.
