Image: (APA/AFP/AXEL HEIMKEN)
The city development authority announced on Friday that the city could now assert its right to repurchase and take over all planning and construction contracts. The Elbtower construction site has been at a standstill since the end of October.
Signa restructuring board member Erhard Grossnigg has been intensively looking for money in recent weeks to finance the real estate group’s numerous project companies. By Monday, Grossnigg had demanded around 350 million euros from existing investors in Signa Prime and Development, and by Tuesday, according to media reports, only 150 million euros. There was no interest in subordinated Signa profit participation certificates. There is now a mass loan for Signa Prime and Development to finance the project companies. A bankruptcy loan has priority over the claims that were taken out before the bankruptcy was declared.
According to the urban development authority, Elbtower Immobilien GmbH & Co. KG was obliged to notify the city of the insolvency application. When the application was submitted, a case of “economic deterioration” occurred according to paragraph 10.7 of the property purchase agreement.
“This means that the city of Hamburg can now assert its right of repurchase, which is secured by the purchase agreement, as well as the assumption of all planning and construction contracts,” said city development senator Karen Pein (SPD). The city will also secure its rights in the insolvency proceedings and will contact the provisional insolvency administrator immediately after the appointment.
Signa subsidiary
Elbtower Immobilien GmbH & Co. KG is an indirect subsidiary of the already insolvent Signa Prime Selection AG of the Tyrolean real estate investor René Benko. During the low interest rate period, he took out cheap loans, gained financially strong investors and thus significantly expanded his Signa Group. But the recent rise in interest rates, construction costs and energy prices have put his complex network of companies in trouble.
- Also read: René Benko: The deep fall of the Tyrolean real estate tycoon
According to its own information, the urban development authority assumes that a private sector solution will be found as part of the insolvency proceedings for the prompt resumption of construction work, which has been dormant since October. However, significant changes to the overall project could only be made with the consent of the city.
The city’s right of repurchase allows the city to take control of the project if a viable solution is not found, the city said. Mayor Peter Tschentscher (SPD) said last. “If we buy it back, we would refund the original purchase price of 122 million euros without interest and less five million euros and in return we would get the property back.”
Work stopped
The Elbtower is intended to be the crowning glory of Hamburg’s Hafencity. It is to be built in the far east near the Elbe Bridges, as a kind of counterpart to the Elbphilharmonie in the far west: “64 floors, 245 meters above sea level. A new view of the city,” it says on the Elbtower’s homepage. Planned completion and total costs so far: 2025 for around 950 million euros. At a height of 100 meters, the contracted construction company stopped work because bills were not paid. The third tallest building in Germany, designed by London star architect David Chipperfield, will one day house, among other things, offices, shops, galleries, restaurants and a viewing platform on the 55th floor.
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