In Germany, the fall of Austrian real estate magnate René Benko

The group’s bankruptcy jeopardizes a large number of projects in several of Germany’s main cities.

René Benko left school at 17 to go into business. They will quickly become flourishing. His recipe is simple: he buys real estate at low prices and resells them, after work, with a considerable capital gain. To seduce investors, the businessman promises them to make their fortune without effort.

In 20 years, Benko built one of the most prestigious empires in Europe, with luxury properties, department stores… He invited politicians to his yacht on the French Riviera, to his hunting estate or his chalet at the mountain. According to the magazine Forbes, René Benko’s fortune amounts to 5.6 billion euros. The slogan of his group, in the 2000s, sums up his state of mind: “It has never been so boring to get rich.”

But to finance his projects, René Benko needs money. And with the real estate crisis, the war in Ukraine, interest rates are soaring and the costs of construction materials are soaring. The projects stop, the billionaire’s strategy no longer works.

Customers are also deserting the department stores that Benko had brought into its fold: Galeria Karstadt Kaufhof is collapsing, the same goes for the furniture flagship Kika-Leiner which is going bankrupt… This week, René Benko also had to get rid of the historic British brand Selfridges, which he sold to a Thai group. No official figures have been released on the group’s financial collapse, but the debt amounts to at least ten billion euros, according to the magazine. Der Spiegel.

Faced with his difficulties, the businessman has just given way to an expert in restructuring operations.

Several emblematic real estate projects are threatened

In Hamburg, for example, on the Elbtower construction site, the huge red cranes are at a standstill. At 245 meters high and 64 floors, the building was expected to become the third tallest in Germany by 2025. The city has threatened to demolish what has already been built if the work is not completed on time.

Another project whose future is on hold: the renovation of the Alte Akademie in Munich, the former Jesuit college which was to be transformed into offices and housing. The list of suspended construction sites is still long: in Berlin, Frankfurt, Düsseldorf and Stuttgart. The mayors who placed their trust in René Benko regret it today.