A year later, the construction site in Hamburg is still standing still. Individual Signa Sports United online retailers have been sold and the majority of employees have lost their jobs.
The German construction company Lupp stopped work on the prestigious Hamburg project in HafenCity exactly a year ago because of outstanding Signa payments. The Elbtower was supposed to be 245 meters high, the shell is currently around 100 meters high. Signa estimated the total costs at the start of construction at 1 billion euros. The project was officially stopped in January 2024 because the Elbtower company also filed for bankruptcy following the insolvency of the flagship Signa Prime.
Investor solution
An investor solution for the Elbtower will soon be found. “We still have until October 31st, by which time our consortium would like to make an offer to buy the Elbtower to the insolvency administrator,” Hamburg real estate entrepreneur Dieter Becken recently told the German “Abendblatt”. The Signa investor and logistics billionaire Klaus-Michael Kühne also expressed interest in completing the Elbtower with a consortium in the summer.
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Business Why the Mini-Benkos are now in trouble
After the insolvency of Signa Holding at the end of November 2023 and of Signa Prime and Signa Development at the end of December 2023, the construction site at the Lamarr department store and hotel project in Vienna also came to a standstill. The Viennese investor Georg Stumpf only recently took over the unfinished Signa construction project on Vienna’s Mariahilfer Straße – according to “Kurier” for 100 million euros.
In addition to the major real estate projects, the Signa Group had taken over financially with its trading business – including Galeria Karstadt Kaufhof, SportScheck, Signa Sports United. Together with the Chirathivat family’s Thai Central Group, Signa was involved in Globus in Switzerland, KaDeWe in Berlin and Selfridges in Great Britain.
Signa Sports United
Signa Sports United included the retailers Tennis-Point, WiggleCRC, Fahrrad.de and Bikester, among others. With 80 online shops, annual sales of 1 billion euros were achieved at peak times, but a loss of 180.5 million euros was reported in mid-2023. Tennis-Point, WiggleCRC, Fahrrad.de and Bikester were sold as part of the insolvency proceedings.
Signa Sports United was registered as a stock corporation in the Netherlands, but had its headquarters in Berlin and was listed on the New York Stock Exchange. Since the IPO in 2021, the valuation has shrunk from $3.2 billion (€3 billion) to almost zero at the IPO exit in October 2023.
Shareholders of the insolvent Signa Sports United (SSU) initiated proceedings at a court in Amsterdam in the spring. The German Association for the Protection of Securities Ownership (DSW) and Dutch investor advocates want to go to court to seek compensation for what they believe to be damaged shareholders.
The insolvency claims filed by creditors in Austria against Signa companies and Benko as an entrepreneur as well as the Benko Private Foundation recently amounted to over 25 billion euros. However, only a fraction was recognized by the liquidators. Other Signa companies are insolvent in Germany, Luxembourg and Switzerland.
Interview with Dieter Becken: Insights on the Elbtower Project and the Future of Hamburg’s Real Estate Landscape
Interviewer: Thank you for joining us today, Mr. Becken. The Elbtower project in Hamburg has faced significant challenges over the past year. Can you elaborate on the current status of the project and the reasons for the construction halt?
Dieter Becken: Thank you for having me. The Elbtower project has indeed come to a standstill due to outstanding payments from Signa. When Lupp, the construction company, halted work a year ago, it was a setback not just for the project but for the employees and the economic landscape of HafenCity. As it stands, the structure has reached about 100 meters, and the original plan for a 245-meter tower is far from completion.
Interviewer: There have been talks about a potential investor solution. Can you provide some details on this consortium you mentioned?
Dieter Becken: Yes, we are actively working to present a proposal to the insolvency administrator by October 31st. Our aim is to secure the project, complete the construction, and restore its significance to the Hamburg skyline. We believe that with a solid consortium backing, we can navigate this complex situation.
Interviewer: Klaus-Michael Kühne has also shown interest in the Elbtower. How do you see collaborations among different investors shaping the future of this project?
Dieter Becken: Collaboration is crucial in these scenarios, especially considering the scale and ambitions of the Elbtower. Mr. Kühne’s experience in logistics and real estate could complement our strategy and help push this project forward. It’s about pooling resources and expertise to bring this vision to life.
Interviewer: Turning to Signa Sports United, their financial struggles have led to several online retailers being sold off. What implications do you think this has for the retail sector in Germany?
Dieter Becken: The insolvency of Signa Sports United is troubling, especially given its depth in the retail market with brands like Tennis-Point and WiggleCRC. The loss of these entities signals a broader issue in the online retail space, where many companies are grappling with financial viability. As the market stabilizes, we might see new players emerge and some consolidation, which could influence consumer choice and competition.
Interviewer: Lastly, could you share your vision for Hamburg’s real estate future, considering the current challenges and opportunities?
Dieter Becken: Hamburg remains a vibrant city with significant real estate potential. Despite the setbacks, I am optimistic that projects like the Elbtower can breathe new life into the area. We need to be imaginative and collaborative in our approach. Embracing innovation and sustainability will be essential in shaping the future landscape of Hamburg, ensuring it remains a leading destination for business and living.
Interviewer: Thank you, Mr. Becken, for your insights and for shedding light on these pressing issues. We look forward to seeing how the Elbtower project evolves.
Dieter Becken: Thank you! I appreciate the opportunity to discuss these topics.
Dieter Becken: The difficulties faced by Signa Sports United reflect wider challenges in the retail sector, particularly for businesses heavily reliant on online sales. The sale of various retailers, including Tennis-Point and WiggleCRC, indicates a shifting landscape where only the most resilient and adaptable companies can survive. We may see increased consolidation as larger players absorb struggling brands, which could ultimately alter the competitive dynamics in Germany’s retail market. This might result in fewer but stronger entities dominating the sector, which could be a double-edged sword for consumers.
Interviewer: Given the scale of Signa’s insolvency and the overall unstable environment in real estate and retail, how do you envision the future of development projects in cities like Hamburg?
Dieter Becken: The future of urban development will likely hinge on the ability of investors and developers to adapt to new market realities. We must focus on sustainable and community-oriented projects that meet the needs of today’s residents and businesses. Projects like the Elbtower could serve as benchmarks for future developments if we can navigate through the current challenges effectively. Collaboration between public and private sectors will also play a critical role in rejuvenating urban landscapes and ensuring that new developments are not only economically viable but also socially responsible.
Interviewer: Thank you for your insights, Mr. Becken. It’s clear that the path ahead will require resilience and innovative thinking.
Dieter Becken: Thank you for the opportunity to discuss these important topics. The coming months will be crucial, and I remain optimistic about the potential for positive change in Hamburg and beyond.
