Insolvencies in Vienna: Alarming increase threatens business location!

Insolvencies in Vienna: Alarming increase threatens business location!

Vienna will be struggling with a drastic increase in corporate bankruptcies in 2024, which will put the city under financial pressure. According to the Credit Protection Association of 1870 (KSV1870), an average of seven companies are affected by insolvency every day. With a total of 2,467 bankruptcies in the federal capital, Vienna accounts for 38 percent of the 6,550 bankruptcies throughout Austria. The increase in bankruptcies is an alarming 27.6 percent compared to the previous year. Jürgen Gebauer, Head of Corporate Insolvency Vienna/Lower Austria/Bgld at KSV1870, explains that the real estate industry is primarily responsible for these figures, as many real estate companies are based in Vienna meinkreis.at reported.

Worrying trends and high debt

Over 39 percent of the insolvent companies, around 969, were unable to even initiate orderly insolvency proceedings due to a lack of assets. This represents a drastic increase of almost 30 percent compared to the previous year and significantly worsens the situation for creditors. The estimated liabilities of these companies amount to around 4.8 billion euros, which represents a decrease compared to previous years, not least due to the major insolvencies of the SIGNA Group in 2023, which also recorded significant insolvencies in 2024. The largest bankruptcies include SIGNA Prime Beteiligungs GmbH with liabilities of 830 million euros, followed by IMFARR Beteiligungs GmbH (600 million euros) and SIGNA Prime Holding GmbH (500 million euros), reports kosmo.at.

The real estate sector has been severely affected, with 322 bankruptcies in the construction industry, followed by other affected sectors such as retail and catering. Gebauer explains that high energy and raw material prices as well as persistently high inflation are further increasing the pressure on companies. Geopolitical developments further contribute to economic uncertainty. The situation is unlikely to improve by 2025, putting investors and the entire business community on alert.