2023-11-19 09:47:19
From luxury properties to department stores, Austrian billionaire René Benko has built in two decades one of the most prestigious real estate empires in Europe, including Selfridges and the Chrysler Building in his hunting list. Until the recent rout.
Faced with the financial difficulties of his holding company Signa, founded in 2000, the charismatic 46-year-old businessman stepped aside last week, leaving the reins to an expert in restructuring operations.
A roadmap must be presented to shareholders by the end of November. Already, several emblematic projects have been suspended, particularly in Germany where the group is very present.
In Hamburg, the Elbtower construction site has been at a standstill since the end of October: around the unfinished framework, stationary red cranes stand.
Another project with an uncertain future was the renovation of the Alte Akademie in Munich, a former listed Jesuit college that Signa wanted to transform into an office and residential complex.
So easy to “get rich”
Through spectacular expansion, the opaquely operating holding company has accumulated real estate assets worth 27 billion euros, while diversifying into commerce and media.
“Signa symbolizes the real estate boom of recent years, marked by the era of flowing money,” comments the Austrian daily The press. “The ideal environment for Benko, who shamelessly took out loans of dizzying amounts without worrying regarding the sustainability of his investments. »
A state of mind summed up by a slogan from the 2000s: “It has never been so boring to become rich,” the company wrote on its website, promising investors a fortune amassed without effort.
But in the meantime, the situation has changed: interest rates have increased sharply and successive crises (pandemic, war in Ukraine) have caused the costs of construction materials to soar.
If the amount of the group’s debts is not known, worrying signals are multiplying.
The subsidiary Signa Development, specializing in large urban programs, risks bankruptcy, warned the Fitch rating agency.
Also in troubled waters, Signa Sports United: this leader in online commerce, which sells bicycles and tennis rackets, has reported insolvency proceedings for several of its entities and will leave the New York Stock Exchange.
Legal disputes
Same gloomy picture for the department stores acquired by the holding company, victims of the economic context and customer disaffection.
Galeria Karstadt Kaufhof, the leading chain in Germany, filed for bankruptcy in 2020, before the flagship Austrian furniture company Kika/Leiner, sold last June.
Also read: Is the golden age of residential in the Grand Duchy of Luxembourg over?
Signa also withdrew this week from the historic British brand Selfridges, which came under the control of the Thai Central Group.
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