By Matthias Inverardi and Tom Sims
DUESSELDORF (Reuters) - Germany's largest real estate group Vonovia slipped to a 2 billion euro ($2.19 billion) second quarter loss and wrote down the value of its properties by 3 billion euros on Thursday in the latest sign of stress in the country's property sector.
After a decade-long property boom, Germany is undergoing a sharp reversal of fortune after an era of cheap money ended.
Vonovia's quarterly loss compared to a profit of 1.8 billion euros a year earlier, and Germany's biggest landlord confirmed its forecast for a 2023 drop in a key profit measure.
Germany's real estate sector is mired in its worst crisis in decades, marked by insolvencies, fizzling transactions, falling prices and a stagnation in construction jobs.
Vonovia, which went public in 2013 at the start of the property boom and took over its biggest rival in 2021, serves as a bellwether for Germany's property sector.
The company said that the value of its assets fell to 88.2 billion euros in the quarter from the end of March, marking a further writedown of 3.3%.
Germany's property industry will ask the government for multi-billion euro support at a meeting with Chancellor Olaf Scholz in September.
"It's a major achievement that we performed so well in this challenging market environment," said Chief Executive Rolf Buch.
Vonovia's shares are down almost 7% this year, compared to a 14% climb in Germany's blue-chip DAX index.
Analysts at Stifel recently downgraded Vonovia and other property companies to "sell" from "hold", noting they would be subject to "a protracted hangover" after "a seemingly endless party of growth fuelled by ever cheaper finance".
Vonovia affirmed full-year guidance for its key profit metric - so-called funds from operation - of 1.75 billion euros to 1.95 billion euros, down from 2.04 billion in 2022.
($1 = 0.9132 euros)