The investment firm of U.S. businessman Richard Baker (NRDC) is among the two remaining bidders for Germany's most prominent department store chain Galeria Karstadt Kaufhof, business outlet WirtschaftsWoche reported on Friday, according to Reuters. Galeria, which recently filed for insolvency, is seeking a new owner after the collapse of its parent Signa, the Austrian-based property empire that has become the biggest casualty so far in Europe's real estate crisis.
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German banks saw a jump in customers struggling to pay back commercial property loans in the fourth quarter, as the sector faces higher interest rates and shifts in consumer behavior exacerbated by the pandemic, Bloomberg News reported. Banks in the country saw their non-performing commercial real estate loans swell to €13.6 billion ($14.8 billion) at the end of December from €9.7 billion three months earlier, according to the European Banking Authority.
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German inflation eased for a third month in March, supporting expectations that the European Central Bank will start lowering interest rates in June, Bloomberg News reported. Consumer prices rose an annual 2.3% last month, according to the statistics office — down from 2.7% in February and less than the 2.4% median estimate in a Bloomberg poll of economists. Food costs were a key driver of the slowdown. The data come after France also reported a slowdown on Friday.
German retail sales were significantly weaker than forecast, symbolizing the woes in the sector as consumer confidence remains sluggish, the Wall Street Journal reported. Sales were down 1.9% on month in February, adjusted for seasonal and calendar effects, a fourth month of declining sales, data from German statistics agency Destatis showed Thursday. Economists had, instead, expected sales to rise 0.5%, according to a poll by the Wall Street Journal. Sales were 2.7% below the same level of last year.
A Signa Prime Selection AG creditor committee has rejected plans to sell a portfolio of Austrian property to the Schoeller Group, Bloomberg News reported. The initial decision casts doubt on a deal that insolvent Signa Prime had hoped would help address a bottleneck in its restructuring efforts. Negotiations between the firm and its lenders are ongoing. The luxury unit in the property and retail empire founded by Rene Benko was looking to sell several Austrian assets, including the Park Hyatt hotel and the Golden Quarter luxury shopping area.
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German electric vehicle (EV) manufacturer Next.e.Go Mobile, which planned to build a factory in Bulgaria, has filed for insolvency amid industry challenges and capital market volatility, SeeNews.com reported. It is expected that other subsidiaries, including New York-listed Next.e.GO N.V., will initiate corresponding insolvency proceedings, German business news magazine Wirtschaftswoche reported last week. Next.e.Go Mobile intended to build three new micro-factories across Europe and the U.S., aiming to expand production of its small EVs for urban settings.
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Deutsche Bank's chief executive officer said on Tuesday that he expects the current crisis in commercial real estate to continue in 2024 and that provisions for loan losses will be at the upper end of its projected range, Reuters reported. There won't be "overall big relief" to the challenges facing commercial real estate in 2024, CEO Christian Sewing said. Deutsche Bank is Germany's largest lender and also has the most in outstanding loans to the commercial real-state sector among its domestic competitors, data show.
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A €200 million ($218 million) loan to Signa’s flagship property unit has become a roadblock in attempts to sell off its assets and fund a restructuring, according to insolvency administrators, Bloomberg News reported. The loan from the Schoeller Group, controlled by one of Germany’s industrialist families, is one of the last cash injections Signa Prime Selection managed to secure in July 2023, before its insolvency in December.
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Rene Benko’s ailing property group Signa is close to selling a building in downtown Munich to German construction tycoon Alfons Doblinger, in what would be the first major asset sale since its main units filed for insolvency in December, Bloomberg News reported. Signa Prime and its insolvency administrator are in direct talks with the 80 year-old entrepreneur over the sale of Rosenstrasse 8 in Munich’s main shopping area. The building has been marketed for about €100 million ($109 million).
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The European gravure printing market has been dealt a further blow after Germany’s Tiefdruck Schwann-Bagel (TSB) filed for insolvency just five months after being acquired by another continental group, Print Week reported. France headquartered Riccobono Group became Europe’s biggest gravure printer when it took over TSB last autumn. The deal involved reducing the number of gravure presses from six to four and a restructure that cut 78 jobs. Despite the downsizing, TSB filed an application to open insolvency proceedings with the district court in Mönchengladbach last week.
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