LEG boss Lars von Lackum warns of expropriation debate in Berlin

The Düsseldorf residential real estate group LEG does not own a single apartment in Berlin, but is looking at the expropriation debate in the federal capital with great concern. “My view is that property guarantees individual freedom,” said company boss Lars von Lackum in an interview with the financial news agency dpa-AFX and the German press agency dpa.

Questioning ownership also leads to questioning individual freedoms, von Lackum continued. Socializing home ownership would create a completely different social system. The state would then be the sole owner of apartments and responsible for the distribution of the still scarce living space.

The federal government has made it clear that it wants to prevent such associations in federal states by law, von Lackum continued. “I trust in the federal government’s ability to act and assume that it will then implement this law.”

The LEG real estate group is Germany's second largest private landlord with around 171,000 apartments, of which 136,000 are in North Rhine-Westphalia. The company is listed in the MDax stock market segment.

According to von Lackum, international investors are also concerned about Germany as a location. "When I'm with investors in Melbourne or Hong Kong or New York, one of the questions I'm asked frequently in the first ten minutes of the conversation is: Is Germany now on the path to socialism?" said the manager. This is something that is of great concern to investors internationally and to which they expect a clear answer.

However, the LEG boss does not expect that the expropriation debate will spread to western German states in which the group has real estate holdings. In Berlin, the home ownership rate is only around 18 percent, explained the company manager. In the western German states where LEG is active, however, the ownership rate is between 46 and 54 percent. “That is why we do not assume that there are so-called spillover effects in the federal states in which we are active,” he added.

The federal government wants to pass a law to prevent federal states from transferring rental property portfolios of corporations into public ownership. For the Left, which became the strongest force in the House of Representatives elections in Berlin, the implementation of its goal of socialization is a central concern. The project, from which the party hopes to achieve low rents, is therefore likely to play an important role in the coalition negotiations it is aiming for with the Greens and the SPD. Whether the federal government can make socialization impossible by law is controversial.