Another blow for Germany. The German branch of the giant Signa real estate, owner among other things of the Chrysler skyscraper in New York and the Selfridges department store in London, who have been at loggerheads for some time, had to present official bankruptcy petitiono.
Founded in Austria in 2000 by bench, the group has become the largest owner of shopping centers in Central Europe (in Austria, Germany, Switzerland, Northern Italy and Great Britain) with over 46.000 employees, equity investments for 27 billion and projects under development for 25 billion. But the impetuous growth of the real estate giant was done in debt, supported by some of the main Austrian and German credit institutions. In this situation came the rise in rates which caused the cost of debt to rise and the price of properties to fall.
The long line of banks involved. Among these also Unicredit
The largest portion of debts is thus owed to banks. Among these Julius Baer is in the forefront and then rumors are circulating, according to Bloomberg, of Raiffeisen, NordLB, BayernLB Munich, Hessen-Thüringen (Helaba), LBBW Stuttgart, Dz Bank (the central institution of the German cooperative credit banks) and also the Italian Unicredit, present in Germany with HVB and in Austria with Bank Austria.
According to Reuters at sun Unicredit (via Bank Austria) e Raiffeisen Bank International debts of almost 1,5 billion could be attributable, while the overall exposure towards Austrian banks it would stand at 2,2 billion. The Swiss private banking and asset management player Julius Baer is exposed for 606 million Swiss francs, news that yesterday caused it to fall by 2,29% the stock on the Zurich stock exchange and today by another 3,49%. Some market sources say that other subsidiaries of the empire founded by tycoon René Benko could also do the same in the coming days.
Benko's desperate search for liquidity. His superyacht “Roma” was also sacrificed
In recent weeks Benko, desperate for new liquidity, has started selling his most precious things, starting from his rich art collection, up to his superyacht "Roma".
As reported by the Austrian press, the 62 meter long yacht was put up for sale on the Alpha Yachting portal with a price of 39,9 million euros. A real bargain, given that for yachts of this level you have to calculate a million euros per metre. “Roma”, which – according to Vesselfinder – is currently located in Mallorca, offers space for 12 guests and 12 crew members, has a cinema, a gym, an indoor swimming pool and a water slide from the flybridge. And then Benko also resigned from the position of president, passing the baton to restructuring expert Arndt Geiwitz.
The ECB's warning
In its latest report dedicated to the sector, the ECB had warned the banks and the market about the contraction of European real estate. A particularly serious problem in Germany and Austria, two countries where in recent months the price drop it was consistent. Several of Signa's projects, including a skyscraper in Germany, have stalled, making investors increasingly nervous.
In October in Germany, 22,2% of construction companies reported canceled projects and orders, a worsening from the September figure of 21,4%. A figure that follows a well-defined trend: in August the percentage was 20,7%, in July it was 18,9%.
There are two fronts open for the ECB: on one side the residential and on the other the commercial. Residential real estate loans represent the main category of exposures in the European banking sector, with an amount exceeding 4.000 billion euros and an incidence equal to 200% of the institutions' CET1 on average. Similar investigations are underway on commercial real estate credits.
The final bill, however, could be significantly higher, also because several are still circulating on the market bonds issued by Signa in recent years. The new president Geiwitz attempted a restructuring of the overall asset portfolio and launched market surveys to obtain further financing of up to approximately two billion. Among the interlocutors contacted was the Elliott fund with which, however, no agreements were reached.
