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ECONOMY

Plan to build 30,000 new homes in five years

30,000 new apartments could be constructed in Austria over the next five years at a cost of €6.5 billion ($8 billion), the heads of the construction association, construction unions, non-profit developers and building societies told media on Wednesday.

Published: 18 December 2014 11:50 CET
Plan to build 30,000 new homes in five years
The Gasometer complex in Vienna - hailed as attractive and affordable housing. Photo: APA

About €1.3 billion will be made available each year for the construction of 5,000 apartments, of which a third will come from the European Investment Bank (EIB).

The new apartments are planned for urban centres such as Vienna, Graz and Linz – where demand for affordable housing is high. The population of Vienna is predicted to grow by 10 percent in the next ten years.

The project aims to provide homes for about 68,000 people in total and will bring a boost to the domestic economy of 0.4 percent GDP growth and contribute to a reduction in public debt of 1.5 percent.

Additionally it is expected to create 30,000 jobs – of which between 15,000 and 20,000 will be permanent.

Josef Muchitsch from the Wood Construction Union said the "innovative" project came about because Austria doesn’t have enough affordable housing and needs to create new employment opportunities.

It will use available capital at historically low interest rates, he said.

Muchitsch said he assumes the government will now review the model for the project, with Minister for Social Affairs Rudolf Hundstorfer having already announced his support, given that the project would not put pressure on the national budget.

He added that it was a “Christmas gift that the government just needed to unwrap”.

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ECONOMY

Key divisions of Austria’s property giant Signa file for insolvency

The two most important property divisions of real estate giant Signa -- whose vast portfolio includes New York's iconic Chrysler building -- are filing for insolvency, the company announced Thursday.

Published: 28 December 2023 14:23 CET
Key divisions of Austria's property giant Signa file for insolvency

The filings mark the latest troubling developments at Signa, exacerbating the spectacular downfall of self-made Austrian tycoon Rene Benko.

Benko — one of Austria’s richest men — founded Signa in 2000 and grew it into a property and retail conglomerate. But as the sector is hit by higher borrowing costs and rising building material prices, a growing number of developers are filing for bankruptcy.

The Signa Prime Selection division — which includes properties such as the Berlin shopping gallery KaDeWe — on Thursday initiated self-administrated insolvency proceedings at Vienna’s commercial court, the company said.

A second subsidiary, Signa Development Selection, will also file Friday to restructure under self-administration, it said.

BACKGROUND: Austria property giant Signa to file for insolvency

Credit rating agency Fitch had already downgraded the Signa Development unit earlier this year.

“It is well known that external factors have had a negative impact on business development in the real estate sector in recent months,” the statement said. “Despite considerable efforts in recent weeks, the necessary liquidity for an out-of-court restructuring could not be secured to a sufficient extent, so that SIGNA Prime Selection AG has applied for restructuring proceedings with self-administration,” it added.

At the end of November, Signa’s holding company filed for insolvency after Benko announced he was handing over the chairmanship of the company’s advisory board to a German restructuring expert.

According to the company’s website, the assets of Signa Prime Selection are valued at €20.4 billion. Prime Development owns assets worth €4.6 billion, the website states.

Several Signa projects, including the construction of a landmark high-rise in the German city of Hamburg, have ground to a halt. Recently, Signa has been looking at selling its partial ownership of the
Chrysler building.

READ ALSO: Can foreigners buy property in Austria?

The leading German department store chain Galeria Karstadt Kaufhof, which Signa purchased in 2019, filed for bankruptcy in 2020 amid the coronavirus pandemic, and the chain decided to close 52 stores at the start of the year.

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