Hallmann's construction empire wobbles: bankruptcy and high debts in Vienna!

Hallmann's construction empire wobbles: bankruptcy and high debts in Vienna!

In the past few months, there have been considerable turbulence in Viennese construction, in particular due to the payment problems of the prominent real estate investor Klemens Hallmann. As reports Krone , Hallmann, who is number 39 on the Forbes list of the richest Austrians with a private assets of 1.08 billion, has massive difficulties in a private construction project in Vienna Hernals. Craftsmen from various trades, including electricians, builders and gardeners, have hired their work because they have been waiting for their payments for some time.

The Süba AG, which belongs to the Hallmann Group and is responsible for the construction project, now has debts of 226 million euros. Meanwhile, the subsidiary Süba Bau and Projektnerstellungs GmbH reported bankruptcy, which further exacerbates the situation. There are 14 employees in bankruptcy. The causes of insolvency are diverse: high interest rates, inflation and increasing construction costs have led to an enormous burden in recent years. Despite all the efforts, no bridging financing could be secured to advance a restructuring concept, as Kurier reported.

The financial situation of Süba AG

Süba AG offers services in the planning and construction of residential and commercial properties and has recently been active in Germany and Hungary. A turnover of 67.1 million euros was achieved for the 2023 financial year, but the company fought with a loss of balance sheet of almost 10 million euros and a negative equity of 6.45 million euros.

Klemens Hallmann himself was very cautious about the persistent problems and confirmed that correct services had always been paid. At the same time, Hallmann plans to sell his villa acquired for 6 million euros in 2016 in the 17th district of Vienna to escape the financial misery. The villa, which includes almost 5000 square meters of floor space and around 1000 square meters of living space, is loaded with around 20 million euros at the upper bank and the sale should be completed by February 2026 at the latest.

The challenges of the construction industry

The difficulties of Süba AG are not isolated, but are a symptom for the general crisis in the construction industry. According to the Austria Chamber of Commerce WKO , the industry has been in a recession since 2021. High construction and financing costs burden the construction projects and lead to a significant decline in the demand for residential building loans, which in 2023 decreased by 55% compared to the previous year.

This situation is also reflected in the forecasts for the housing marketing, which should decrease by 25% by 2026 compared to 2022. The number of building -approved apartments has also dropped drastically, while unemployment in the construction industry has increased by 5.7%. Here it becomes clear that not only large companies such as Süba AG are affected, but the entire industry is under pressure.

The current situation urgently requires targeted measures to minimize the negative effects on the construction industry and the associated industries. Without suitable interventions, the trend could continue to increase building investments and increasing unemployment.