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The turmoil experienced by Austrian entrepreneur René Benko (46) and his billion-dollar company Signa is the final proof of the joke “Not everything that glitters is gold”. Because Benkos Signa Prime’s real estate portfolio has a brilliant value of over 20 billion Euros. But apparently a third of their property is said to be ruined. At least that’s how an insider describes it to the “SonntagsZeitung”.
However, the houses are not structurally dilapidated, with moldy walls and rotten stairs. But it’s financially strapped: This means the rental income brings in less than the interest payments on the cost of the property. This, the newspaper continues, should also apply to Benko’s properties, where, among other things, the Galeria and Kaufhof stores are located.
The department store chain Galeria Karstadt Kaufhof, which is part of the Benko empire, has long been in deep crisis: At the beginning of the year, the group was forced to announce the opening of 52 of the remaining 129 department stores in Germany. to be closed. More than 4,000 jobs will be lost as a result.
Benko dominates in commercial real estate
Apparently, 30 percent of dilapidated properties are going under the hammer for the first time to renovate Signa, an insider told “SonntagsZeitung”.
If properties are sold below value during emergency sales, this could cause the entire commercial real estate sector in Germany to slide. After all, Signa Group is one of the largest players in the commercial real estate market. The portfolio includes the struggling Galeria and Kaufhof department stores, as well as the prestigious KaDeWe buildings in Berlin and the luxury Oberpollinger department store in Munich.
Globus department stores in Switzerland are also part of the luxury department stores in Benko’s real estate portfolio. Half of Globus is owned by Benko’s Signa Group and the other half is owned by Thai Central Group. This also provides security for Globus amid the current Benko storm: Thai investors have announced that they will take over Globus entirely in the event of an emergency.
At the large Globus construction site in Basel, there is no danger of construction being halted, at least so far, as is the case with the multi-billion-euro Elbtower project in Hamburg’s Hafen-City.
Swiss chocolate maker fears investment
The reason why Benko’s Signa Group is in such trouble has to do with rising interest rates: Loans on billion-dollar properties have become more expensive due to the turn in interest rates. With the structural change in retail business that caused Benko’s department stores to stumble, Signa could not compensate for rising interest rates with high rents.
Benko’s billion-dollar empire now includes well-known names fearful of their investments: Lindt & Sprüngli boss Ernst Tanner (77), Switzerland-based logistics entrepreneur Klaus-Michael Kühne (86) and Fressnapf founder Torsten Toeller (57). .
It’s unclear whether they’ll ever see their money again and how much. They now have to endure criticism that they are in love with the busybody Benko, the alleged golden boy. Not everything that glitters is gold. (page)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
