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Next real estate insolvency: Construction crisis is dragging more and more companies into the abyss

2024-02-22T04:16:01.980Z

Highlights: Next real estate insolvency: Construction crisis is dragging more and more companies into the abyss. There were a total of 1,164 bankruptcies in the industry in 2023, which corresponds to an increase of 30 percent compared to the previous year. It is feared that the crisis will lead to even more bankruptcies this year if construction orders do not increase again in a timely manner. Otherwise, companies would no longer be able to retain staff, resulting in a wave of layoffs. A real estate developer from Frankfurt is now bankrupt. 90 employees now have to worry.



As of: February 22, 2024, 5:03 a.m

By: Amy Walker

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The construction crisis is spreading more and more in Germany.

A real estate developer from Frankfurt is now bankrupt.

90 employees now have to worry.

Frankfurt – The next bankruptcy is hitting the real estate and construction industry: The project developer Schoofs Immobilien GmbH Frankfurt, based in Neu-Isenburg (Hesse), has filed for self-administration bankruptcy.

Several media outlets report this unanimously.

This makes Schoofs Immobilien GmbH Frankfurt the latest in a series of bankruptcies in the real estate industry; the most prominent case so far was the Signa bankruptcy in Austria, which resulted in numerous other bankruptcies.

Prominent projects such as the Elbtower in Hamburg have faltered as a result.

High costs and interest rates as well as reduced demand led the company to bankruptcy

“In view of the exorbitant price increases for over 10 years and a new interest rate environment, a phase of price correction is certainly appropriate and, even on the current scale, is not worrisome for the overall economy,” summarizes the IfW.

© Monika Skolimowska/Deutsche Presse-Agentur GmbH/dpa

The reason for the latest bankruptcy is the extremely difficult situation on the real estate market due to increased interest rates and high construction costs, which is particularly causing problems for small and medium-sized companies.

“The necessary renovation is the result of the critical market development with increased construction and financing costs, the reluctance to grant loans and the simultaneous decrease in demand and valuation of properties among potential buyers,” says Mohamed Younis, Managing Director of Schoofs Immobilien GmbH Frankfurt, to the

immobilienmanager portal

.de

according to.

According to the portal, around 90 employees are now receiving insolvency money.

Discussions with a potential investor are already advanced, meaning a rescue is likely.

The number of bankruptcies in the real estate industry reached a new high in 2023.

As

WirtschaftsWoche

reports, there were a total of 1,164 bankruptcies in the industry in 2023, which corresponds to an increase of 30 percent compared to the previous year.

It is feared that the crisis will lead to even more bankruptcies this year if construction orders do not increase again in a timely manner.

Otherwise, companies would no longer be able to retain staff, resulting in a wave of layoffs.

Source: merkur

All news articles on 2024-02-22

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