Benko's Signa has halted work on six German projects, data shows

By Tom Sims and Matthias Inverardi

FRANKFURT, Nov 10 (Reuters) – Construction has halted at six sites under development in Germany by Rene Benko’s property company Signa, data compiled for Reuters show, underscoring the depths of troubles at the firm and the broader real-estate industry.

The data, by the analytics firm Bulwiengesa, record building stoppages at three Signa locations in the capital Berlin and three in the northern city of Hamburg, encompassing plans for nearly 200,000 square meters in space.

Signa, owner of New York’s Chrysler Building and Britain’s Selfridges store, did not respond to multiple requests for comment.

Germany, Europe’s largest economy, is in the middle of a property crisis after a sharp rise in interest rates and building costs forced some developers into insolvency and put deals and construction on hold.

On Wednesday, Signa said that Benko would relinquish chairmanship of the company he founded and that it had brought in a restructuring expert to review its asset portfolio.

In recent weeks, Signa’s sports retailer filed for insolvency and credit rating agency Fitch downgraded one Signa division to junk.

Regulators, concerned about risks of real-estate related debt, have been keeping tabs on banks’ ties to Signa.

Benko, who remains Signa’s largest shareholder, said on Wednesday he was certain it had “a very bright future”.

Signa is based in Austria but Germany is one of its most important markets.

A halt in the construction on a Hamburg skyscraper, one of the six projects cited in the Bulwiengesa data, has been widely reported after the building’s construction company said that Signa was behind in its payments.

According to the data, other halted projects include the Femina Palast in Berlin. Signa is turning the 1920s building that was most recently a hotel into shops and offices.

Another is the nearby No. 1 Passauer project, a high-rise for offices, roof gardens and shops.

(Reporting by Tom Sims and Matthias Inverardi; Editing by Toby Chopra)

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