The Berlin state government is the owner of Karstadt, Kaufhof and KaDeWe on the glue. He buys scrap real estate in prime locations, lets third parties pay significantly for the renovation, in order to then sell the houses at a multiple of the purchase price: René Benko’s strategy is neither new nor illegal. And yet local politicians in his hometown Innsbruck, in Vienna and now also in Berlin fall into a state of shock. As if Benko can do something that no one else can.
What is impressive is the size of the numbers with which this 43-year-old self-made billionaire and his Signa-Holding are juggling: more than 172 German department stores bought, 50 of them closed almost silently, more than 40,000 people given work, many taken, 460 million euros in Corona state aid received.
Now he wants to build a 134 meter high house on Alexanderplatz. And more. Benko thinks in dimensions that are atypical for Europeans. Like Tesla and Space X founder Elon Musk or the CPC. If you like, you can admire him for it. But what Benko does is nothing more than financial acrobatics, it is anti-social in the best sense of the word.
He’s broken up his corporate empire into so many subsidiaries that anyone who wants to draw an organizational chart becomes desperate. It is also believed to be used for obfuscation and tax optimization.
So it deprives the cities and the meanwhile 20 states in which it has settled important income. And he takes advantage of politicians’ concerns about mass layoffs when – as in the late summer of last year – he only gives job guarantees if he is given the prospect of building permits for high-rise buildings in the middle of Berlin.
Financial experts express doubts about Signa’s business model
It was shortsighted by the Berlin Senate to go along with it. The pact should be terminated. And the Senate should not have granted a loan guarantee to the KaDeWe Group, in which Benkos Signa owns half of the shares and the entire property in Tauentzien.
Financial experts are increasingly expressing doubts about Signa’s business model. Apparently it only works well as long as all business partners accept the increases in value of the refined properties that he claims. Much more yield growth can hardly be expected here. At the same time, inflation in the euro area is rising again for the first time, in March it was already 1.3 percent.
As soon as the corona crisis subsides, central banks around the world are likely to initiate their interest rate reversals. Then money flows back into more stable forms of investment. Then at the latest it comes to the oath: In the face of a sustained online trade boom, which blinded person by Benko is still willing to pay higher prices for department store properties than a few years ago?
René Benko’s Signa is only good where it is under public scrutiny, which it is so afraid of: for example at Karstadt on Hermannplatz. The plans for the building, an important social center for Kreuzberg and Neukölln for decades, have worked out well under pressure from civil society. Doctors, daycare centers, and shelter for small, independent retailers should be available: Here Singa apparently wants to prove that the group can create value not only on paper. In this specific case, the state of Berlin and the Friedrichshain-Kreuzberg district should perhaps let Signa block the millions – before it’s too late.
I am a technology author with 8 years of experience in journalism. My writing covers the latest technology advancements and trends, drawing on my expertise in news journalism and social media platforms. I have contributed to major media outlets such as The New York Times, The Wall Street Journal, and Reuters.
