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The ever-increasing demand for green bonds from investors, meanwhile, is supporting their expected performance. Given the overall appetite for green and the relatively defensive nature of the Vonovia credit, CreditSights analysts wrote that they would buy the bond down to 57bp, while seeing fair value around 62bp.

Green bond issuance from the real estate sector is expected to continue to grow given the expanding demand for sustainable buildings. Around 40% of the energy consumption in the EU is accounted for by the building sector and 35% of the CO2 emissions, according to CreditSights.