The latest German developer to file for insolvency is the Wiesbaden-headquartered integrated residential property company D.i.i. Deutsche Invest Immobilien AG, which ran out of financial road just before Easter.
The fund manager sets up and manages residential property portfolios for private, semi-professional and professional investors as well as for its own portfolio. It has enjoyed a high profile in German financial circles, with several prominent celebrities and high-profile managers investing in its funds.
Formed in 2006, the company specialises in buying residential real estate with high capital appreciation potential in Class B cities and in selected micro-environments of Germany’s metropolises. It currently manages about €4.0 billion of assets across its funds, in more than 50 German locations with a staff of 280 in Wiesbaden and several other German cities.
In a press statement, CEO Frank Wojtalewicz commented: "The combination of a sharp rise in construction costs, political planning uncertainties regarding subsidies, a persistently high interest rate environment and a collapsed transaction market have led to a sharp rise in costs and increased planning expenses on the one hand, and to a postponement of required sales and income on the other. Talks with our shareholders and financing partners to bridge the liquidity bottlenecks and with various investors had been very promising in recent weeks and months, but the current financing talks between the shareholders have not been successfully concluded in recent weeks."
He added: "D.i.i.'s business model, focussing on energy-efficient refurbishment and the creation of living space through new construction and corresponding residential property services, is still absolutely viable for the future. Unfortunately, we have run out of staying power to overcome the current reluctance on the part of investors and buyers. We will of course support the standard insolvency proceedings in the best possible way in order to utilise all opportunities for repositioning the D.i.i. Group."
CEO Wojtalewicz owns a third of the shares in the holding company, along with prominent Munich-based management consultants Stephan Goetz and Stefan Sanktjohanser. Both are currently 'helping police with their enquiries' on a matter unrelated to D.i.i. Group, but rather in relation to fraud charges at the textile company Sympatex, which they own.
D.i.i. has itself been in the headlines recently in fending off accusations of breaching compliance in a case of suspected bogus invoices, and has had to deal with unwelcome visits by BaFin, auditors KPMG, and the public prosecutors' office in Wiesbaden, according to a report in business daily Handelsblatt. The 'unpleasantries' have led to a delay in the publication of the 2022 annual financial accounts, which have still yet to appear.
