Financial expert warns: Signa insolvency and Benko quake threaten the German economy and real estate market.

Financial expert warns: Signa insolvency and Benko quake threaten the German economy and real estate market.

According to a report by www.merkur.de, the Signa empire of Austrian billionaire René Benko is in a serious crisis.

The insolvency applications of three German subsidiaries of the ailing Signa Group, Signa Financial Services GmbH, Signa REM Germany Rent GmbH and SCAx GmbH, represent a further setback for the company. The insolvency administrator Christof Stapf has already taken measures such as the closure of non-essential parts of the business, which is leading to a significant number of employees being laid off. In addition, former business partners of René Benko are considering filing a criminal complaint, while the German Association of Cities and Municipalities is warning against the closure of Galeria branches and is calling for financial help for the realignment of the city centers.

These developments have serious implications for the real estate market and the retail industry. Since the Signa Group plays a significant role in the retail sector, the bankruptcies could lead to a further aggravation of the situation in the affected city centers. The closure of Galeria locations could lead to increased vacancies and impair the attractiveness of city centers. This, in turn, could also impact property prices in these areas as unprofitable locations may be more difficult to market.

In order to mitigate the impact on the market and maintain the attractiveness of city centers, close cooperation between cities, property owners and government authorities is required. Attractive reuse concepts must be developed, and financial aid from the federal and state governments may be necessary to support the realignment of inner cities. The real estate industry will therefore have to closely monitor developments at Signa and prepare for possible changes in the market.