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

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

In recent months there has been considerable turbulence in the Viennese construction industry, particularly due to the payment problems of the prominent real estate investor Klemens Hallmann. How crown reports that Hallmann, who is ranked 39th on the Forbes list of the richest Austrians with a personal fortune of 1.08 billion euros, is having massive difficulties with a private construction project in Vienna-Hernals. Tradesmen from various trades, including electricians, builders and gardeners, have stopped work because they have been waiting for their payments for some time.

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 und Projekterehrungs GmbH filed for bankruptcy, which further aggravated the situation. There are 14 employees in bankruptcy. The causes of insolvency are diverse: high interest rates, inflation and rising construction costs have led to enormous burdens in recent years. Despite all efforts, no bridge financing could be secured to advance a restructuring concept courier reported.

The financial situation of SÜBA AG

SÜBA AG offers services in the planning and construction of residential and commercial properties and has recently also been active in Germany and Hungary. Sales of 67.1 million euros were achieved for the 2023 financial year, but the company struggled with a net loss of almost 10 million euros and negative equity of 6.45 million euros.

Klemens Hallmann himself was very reserved about the ongoing problems and reiterated that services provided correctly had always been paid for. At the same time, Hallmann is planning to sell the villa in Vienna's 17th district, which he acquired in 2016 for 6 million euros, in order to escape the financial misery. The villa, which has almost 5,000 square meters of floor space and around 1,000 square meters of living space, is valued at around 20 million euros at Oberbank and the sale should be completed by February 2026 at the latest.

The challenges of the construction industry

SÜBA AG's difficulties are not isolated, but rather represent a symptom of the general crisis in the construction industry. According to the Austrian Chamber of Commerce WKO The industry has been in recession since 2021, which worsened further in 2023. High construction and financing costs are putting a strain on construction projects and are leading to a significant decline in demand for housing loans, which fell by 55% in 2023 compared to the previous year.

This situation is also reflected in the forecasts for housing completions, which are expected to decline by 25% by 2026 compared to 2022. The number of apartments approved for construction has also fallen dramatically, while unemployment in the construction industry has risen by 5.7%. It becomes clear here that not only large companies like 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 appropriate interventions, the trend towards falling construction investment and rising unemployment could continue to intensify.