Former Landesbankers involved in bankruptcy of Leipzig real estate company

Ulrich Wolf

Leipzig. A real estate company of the former Landesbank Sachsen subsidiary Publity AG is insolvent. The administrator appointed by Leipzig Local Court for Preos Global Office Real Estate & Technology AG, Rainer M. Bähr, announced Saxon.com The company announced on request that insolvency proceedings for the company's assets would be opened at the beginning of next month.

The Preos management board itself had filed the application, said commercial lawyer Bähr. The reason for the insolvency was the fall in prices on the office real estate market and rising interest rates. Regarding the future of the Leipzig-based real estate investor Preos, he said: "There is no positive forecast for the continuation of the company." The company's website has already been shut down. There is "no more money and no more need for it", said Bähr. There are no more Preos real estate projects.

The insolvency was preceded by a months-long dispute over a corporate bond worth around 250 million euros with an interest rate of seven percent. Investors should have received the interest on the bond this year. According to estimates by the Schutzgemeinschaft für Kapitalanleger, the amount due is five million euros - but the money was apparently already lacking. An interest deferral hoped for by Preos and a longer term for the bond had previously been rejected by the Higher Regional Court in Frankfurt am Main.

The Leipzig investment firm's flagship project for a while was the Centurion Tower in Frankfurt am Main. The office tower was to become a green showpiece. But by 2023, Preos' balance sheet was already showing losses due to the loss in value of its real estate investments. The financial supervisory authority also discovered indications thatthat Preos was misleadingly advertising its securities.

Publity AG was founded in 1999 as the first Internet underwriting house. Until the end of 2003, the company belonged to the Saxon state bank (Sachsen-LB), which was then itself sold to Landesbank Baden-Württemberg during the financial crisis in 2007/08. Former Sachsen-LB board member Hans-Jürgen Klumpp served as a member of Publity's supervisory board from 2017 to 2022, and even as chairman of the board from 2019. Thomas Olek, a former advisor to Sachsen-LB, has been Chairman of the Supervisory Board since 2023.

At his best Publity managed real estate assets of 4.6 billion euros. But then they began to sell: in 2019, for example, the ex-Landesbankers parted with an office building in Essen, which housed the headquarters of Galeria-Kaufhof and the police headquarters; it went to the Austrian Signa Group, which is now also insolvent. The Preos portfolio also included an office property in Eschborn, where tenants included Cisco Systems and Continental-Teves, and the wholesale market in Leipzig's freight village.

Publity AG, which is legally based in Frankfurt but which, according to its own information, operates from Leipzig, shows a deficit of around 237 million euros for 2023. The company describes itself as the asset manager of Preos. According to the parent company Publity, the original plan was to expand the assets under management in real estate "in top locations in major cities such as Frankfurt, London and Paris to eight billion euros" by the end of this year.

Real estate companies and projects cause a stir with major bankruptcies

Leipzig is currently causing a stir with a number of bankruptcies in the real estate sector. For example, the Austrian Imfarr-Beteiligungs-GmbH, which was 600 million euros in debt and wanted to implement a major project with 2,400 apartments at the former Eutritzscher Freiladebahnhof, has run out of steam. The city of Leipzig recently emphasized that it had not suffered any "financial losses" as a result of this insolvency. This would only be the case if the responsible project company, which was provided with capital by Imfarr, was no longer able to meet its contractual obligations. At its most recent meeting in November, the city council rejected a debt waiver in any form.

The building contractor Christoph Gröner, who is well-known beyond Leipzig's borders, is also in trouble. Gröner Group GmbH and several project subsidiaries are at least provisionally insolvent. In mid-November, the Group announced that a total of eleven proceedings were imminent. Gröner's group is also active in Dresden. It renovated the former post office building on Postplatz, added new buildings and thus created the Residence at Postplatz. Gröner was an investor in the Quartier Hoym near the Frauenkirche, the Carré Löbtau, the Royal courts at Palaisplatz and sponsor of the festival Dresden Palais Summer.