Effects of the Signa Holding insolvency for real estate in Munich. What the earthquake means in René Benko's empire.

Effects of the Signa Holding insolvency for real estate in Munich. What the earthquake means in René Benko's empire.

According to a report from www.tz.de,

The insolvency of Signa Holding and its subsidiaries, including Signa Prime and Signa Development, has a massive impact on the real estate market in Munich. This particularly affects top properties in the city center that are part of Benko's crumbling empire. The parent company and its subsidiaries, which represent important real estate divisions, are insolvent. This affects assets of 20.4 billion euros at Signa Prime alone.

The insolvency leads to vacancies, standstills and deserted construction sites in downtown Munich. This affects important buildings such as the Karstadt-Betonklotz, the Kaut-Bullinger-Haus and the Alte Akademie. Ruins in the pedestrian zone characterize the cityscape. The insolvency of Signa Prime Selection AG also has an impact on the leasehold agreement of the Alte Akademie, which is concluded with a project company.

Further bankruptcies are expected, and Signa Holding has launched a liquidation plan that provides for the accelerated sale of investments and assets. This affects important properties such as the Chrysler Building in New York and the Munich luxury department store Oberpollinger. The forecasts for Galeria Karstadt Kaufhof (GKK) with its 92 branches are also bleak.

The bankruptcy of Signa Holding and its subsidiaries is part of a larger trend in the real estate industry characterized by higher construction costs, energy prices, interest rates and pressure on brick-and-mortar retail. The network of companies created by Benko over 30 years and the entire real estate industry are struggling with these challenges, and the situation at Signa has deteriorated dramatically in recent years.

The bankruptcy also has an impact on partners and employees, including the 13,800 employees of Galeria Karstadt Kaufhof. While the bankruptcy has an impact on many people, Benko personally appears to be largely unaffected and continues his life of luxury. The development will continue to be monitored closely as the impact on the property market and industry continues to become apparent.