Austrian property tycoon’s troubles rattle investors


VIENNA – The Austrian property group that co-owns New York’s iconic Chrysler building has warned of an imminent “restructuring” that has cast a spotlight on several precarious projects — and the wealthy tycoon behind the company.

Rene Benko, one of Austria’s richest people, with a net worth of US$6 billion (S$8 billion) according to Forbes, has grown Signa Holding into a real estate giant since founding it in 2000.

But as the sector is hit by higher borrowing costs and surging material prices, a growing number of developers are filing for bankruptcy.

Several Signa projects, including the construction of a landmark high-rise in Germany, have ground to a halt, making investors jittery about their money.

Confirming its troubles, Signa announced last week that Benko was stepping down from its advisory board as the group prepares a “plan for essential restructuring steps” by the end of November.

“Signa symbolises the real estate boom of recent years, in which cheap money was readily distributed for every project, no matter how daring,” the Austrian daily Die Presse wrote in an editorial this month.

“A perfect environment for Mr Benko, who took out dizzying amounts of loans without shame. Sustainability didn’t play a role,” it said.

‘Never so boring to get rich’

Born in 1977 to a middle-class family in Innsbruck, Mr Benko worked with a friend restoring attics as a teenager before dropping out of school and founding Signa.

Among its first purchases was a department store in Innsbruck, which Mr Benko transformed into a modern shopping centre.

Since then, Mr Benko has added the Chrysler building and the Berlin shopping gallery KaDeWe to the company’s portfolio, while branching out into media and other sectors.

At one point, the company reportedly tried to attract investors with slogans like “It was never so boring to get rich”.

With offices in Austria, Germany, Italy, Luxembourg and Switzerland, Signa has holdings worth 27 billion euros (S$39.5 billion) and projects worth 25 billion euros in development, according to its website.

But Signa looks to be in trouble.

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