Real estate company d.i.i. reports new bankruptcies

Real estate company d.i.i. reports new bankruptcies

Deutsche Invest Immobilien (d.i.i.), a major German real estate company, recently filed for bankruptcy and has now announced additional bankruptcies within the company. The company plans to act for 14. GmbH & Co. Closed Investment KG and d.i.i. 14. Neubau E GmbH to file for insolvency. Another four companies will also file for insolvency in the near future. The company is primarily active in the management of residential construction projects and has a portfolio of properties worth four billion euros in 50 different locations with 280 employees, mainly at the headquarters in Wiesbaden.

The difficult market conditions of the last few years have had a severe impact on the new building fund 14 and in particular the “Viktoria Quarter” project in Wiesbaden. The price increases for building materials due to material shortages and delivery difficulties as well as the shortage of craftsmen led to significant problems during the construction phase. In addition, demand for condominiums fell due to high interest rates, which exacerbated the situation. The insolvency of Deutsche Invest Immobilien is part of a series of bankruptcies in the construction and real estate industry, which has slipped into a deep crisis in the last two years.

The provisional insolvency administrator, Romy Metzger, expects positive developments without bankruptcies for most funds. Despite some liquidity-related problems in some funds, the company is in intensive discussions with investors and banks to stabilize the funds in the long term. The construction industry has a direct impact on the entire economy, as 14 percent of the working population in Germany works in this sector. The increasing number of bankruptcies and staff cuts have led to a decline in tax revenues and a general slowdown in growth in Germany.

The federal government is working on measures to stimulate the construction industry, with the introduction of building class E playing an important role. This class is intended to make building easier and cheaper. A change in the Civil Code could advance this process and thus support the construction industry. However, the government's measures are still being voted on, although it is unclear when exactly these changes will take effect.