And again. The rumours about the Galeria Kaufhof and Karstadt stores have barely died down before they start boiling again. This time even more so than last time.

The reason? The crisis at Signa is coming to a head. "The real estate giant is stopping all construction projects in Berlin. (…) The Karstadt stores on Hermannplatz and in Wedding are also affected by the planning and construction freeze," wrote Berlin's TAGESSPIEGEL last week.

What does this mean for Galeria Kaufhof and Karstadt?

While Signa was planning to extensively renovate and expand the Karstadt store on Müllerstrasse in Wedding, there were also extensive plans for the redevelopment of the heritage-protected Karstadt complex at Hermannplatz. An ensemble of two skyscrapers was also to be built on the Karstadt site in Charlottenburg, for which Signa presented architectural designs in the spring of 2023 and has probably already invested €900 million.

Investors are now needed to take over René Benko's potentially disintegrating property portfolio. German insurance companies that invest directly in real estate are being considered, as are foreign investors or sovereign wealth funds. This has already worked for the exposed "Galeria Weltstadthaus" on Berlin's Alexanderplatz, which Commerz Real is taking over in full from Signa and completing with the construction company Züblin.

However, it is not so easy to find investors, especially for other large project developments that Signa wanted to drive forward not only in Berlin, but also throughout Germany, especially in relation to the other Galeria & Co. properties. This is because the project developments only generate income after years of completion, which currently makes them unattractive in view of rising construction and energy costs. A possible solution, though, could be to sell high-priced and risky project developments in packages with attractive existing properties.