The project developer had filed for bankruptcy under self-administration last week. How can it go on now?
The insolvent real estate developer Gerch hopes to be able to save its billion-dollar project pipeline in the course of the insolvency proceedings under self-administration. “We are convinced that with a bit of prudence on the part of everyone involved in the project, the majority of the projects – maybe all of them – can be brought to a successful conclusion,” said CEO Mathias Düsterdick on Wednesday in Düsseldorf.
The project developer, which specializes in office real estate and district development, filed for insolvency under self-administration last week. According to Gerch, he has nine projects with a total volume of around four billion euros in his portfolio. This includes large-scale district developments such as the INquartier in Ingolstadt, but also inner-city properties such as the Laurenz Carré on Cologne Cathedral Square and the Praesidium high-rise project in Frankfurt.
So far, the insolvency has not affected the project companies, but only the four umbrella companies of the group. According to Düsterdick, construction work on the Laurenz-Carrè in Cologne has now been stopped. On other projects, such as the conversion of the former Quelle headquarters The Q in Nuremberg, work continued, it said.
The situation is different with the large district developments in Ingolstadt and Augsburg, said Düsterdick. Here one is still in the process of creating building rights, and there are still no construction measures. However, there are also challenges with these projects. “Here, too, we definitely have to talk to those involved in the project and the financiers to see how we can ensure liquidity for the coming months and years?”
The trigger for the crisis at Gerch was the upheaval on the real estate market triggered by high inflation and rising interest rates, said Düsterdick. “Nobody wanted to buy it anymore. The investment market is practically dead.” When the expected payment of more than 100 million euros from an investor failed to materialize, this triggered a domino effect that ultimately led to the filing for insolvency.