Frankfurt skyscraper owner files for insolvency as property crisis grips
2024.06.25 10:06
By Tom Sims and Matthias Inverardi
FRANKFURT (Reuters) -The owner of a prominent skyscraper in Germany’s banking capital of Frankfurt has filed for insolvency, as the country reels from its biggest property crisis in a generation.
The tower, described on its website as an “essential part of the Frankfurt skyline”, is home to part of Germany’s central bank and to Deka, one of its biggest asset managers.
Geschaeftshaus am Gendarmenmarkt, which owns the 186-metre, 45-floor Trianon building, filed for insolvency in a Frankfurt court on Monday and an insolvency manager has been appointed, a filing published on Tuesday showed.
For years, low interest rates, cheap energy and a strong economy sustained a boom across the German property sector, which broadly contributes 730 billion euro ($782 billion) a year to the nation’s economy, or roughly a fifth of Germany’s output.
That boom ended when rampant inflation forced the European Central Bank to swiftly raise borrowing costs. Real-estate financing dried up, deals fizzled, projects stalled, major developers went bust, and some banks teetered. The industry has called on Berlin to intervene.
The court-appointed manager, law firm PLUTA, said that the reason for the insolvency was “liquidity difficulties” and that it was already in talks with banks.
Like the United States and other countries, offices in Germany and its financial capital of Frankfurt are suffering from lower occupancy rates, in part due to working from home.
“Office space available from summer 2024,” the Trianon’s website says.
The Bundesbank has been a tenant since 2015 with room for 1,000 employees. Deka, a tenant for decades, will be vacating the building for new headquarters in August.
Both said they would not be impacted by the insolvency.
Reuters was unable to contact Geschaeftshaus. The building manager did not immediately respond to a request for comment.
($1 = 0.9336 euros)
