In the maelstrom of the Signa bankruptcy, the Elbtower is now also insolvent. Hamburg, Elbtower Immobilien GmbH & Co. KG, as the company in question is correctly called, has announced that it has filed for bankruptcy, the city of Hamburg said. “This means that the city of Hamburg can now assert its right of repurchase secured by the purchase agreement as well as the assumption of all planning and construction contracts,” Karen Pein, the Senator for Urban Development and Building, is quoted as saying in the statement.
But that in no way means that progress will soon be made again on the currently around 100-meter-high shell near the Elbe bridges. Rather, the senator points out that the Elbtower is a “private sector project”. As part of the insolvency proceedings, it is expected that a private sector solution will be found and that further construction can begin promptly. The purchase agreement ensures that significant changes can only be made in agreement with the city of Hamburg.
However, it is still unclear whether the expectation will become reality. Logistics billionaire Klaus-Michael Kühne, who comes from Hamburg and is, among other things, a major shareholder in the shipping company Hapag-Lloyd, has often been discussed as an investor in the past. However, in an interview with the FAZ, he had signaled early on that such rumors had pushed him into an investment that he viewed with skepticism.
Sustainability has been questioned for a long time
In fact, there are many doubts as to whether the Elbtower ever had a viable business model. Apart from the fact that the anchor tenants were found in triangular deals with Signa companies, the planned rental income is also considered unrealistically high. An indication of an unsustainable business model could also be the fact that Signa was unable to obtain bank loans to finance the high-rise and instead had to start the project largely with equity capital.
If no investors are found in the insolvency proceedings, the city could first have to fight for its right to repurchase, warns Heike Sudmann, who has dealt intensively with the legal details surrounding the Elbtower for the left-wing faction in the citizenry. Accordingly, the contract provides for a right of repurchase if there is insolvency after completion. But the Elbtower is still a long way from completion, notes Sudmann. She repeated her demand that the city should not spend any money on the high-rise project: “The Senate’s promise not to use a cent of taxpayer money must not now be allowed to falter like the Elbtower.”
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City Development Senator Pein announced that the city would immediately contact the insolvency administrator. After the application was filed in Berlin, Torsten Martini from the Görg law firm was appointed as provisional insolvency administrator. He has already worked for several Signa companies, including Signa Real Estate Management Germany, which was the first company to lead the wave of insolvencies in René Benko’s real estate empire at the end of November.