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Investment | Opinion

Man of the Year: René Benko. The Real Estate Tycoon

A self-made man who set out to form a European format omnichannel provider.

René Benko was chosen by the editorial team of ACROSS and its Advisory Board as the most outstanding person of the industry in the past year.

2018 was, undoubtedly, René Benko’s year. What the industrious Austrian investor had unsuccessfully attempted to do several times in the past seemed to finally become a reality in the summer of last year: the merger of Karstadt and Kaufhof to create Deutsche Warenhaus AG. A framework agreement was signed with Kaufhof owner Hudson Bay Company (HBC), and, at the beginning of November, the German competition authority in Cologne approved the merger. Once again, René Benko accomplished a goal he had set himself. Nothing less than the creation of a European-style commercial giant, embedded in the privately managed industrial holding of the Signa Group.

The media-shy investor laid the foundation stone for his retail empire as early as 2014, when he took over the struggling German retail chain Karstadt. That was not a risk-free undertaking, as department stores were regarded as dinosaurs of retail formats within the industry, whose future prospects were not necessarily rosy. Benko and Stephan Fanderl, the Karstadt manager appointed by him, saw things differently. Within two years, the duo managed to bring about a turnaround by means of a rigorous restructuring concept. Karstadt has been earning money at the sales counter since 2016. The fact that Benko, a seasoned real estate expert, also knows how to exploit inner-city real estate naturally made things easier.

 

Who is René Benko?

René Benko, a self-made man, demonstrated a flair for real estate at an early age. While his classmates attended school, the native Tyrolean organized the renovation of attics in the best inner-city location for a friend, an Innsbruck-based master builder. While this generated a considerable income for the son of a municipal employee and a kindergarten teacher, it prevented him from graduating from school.

René Benko, now 41, founded the Signa Group in 1999. Considered an outstanding networker, Benko was immediately successful. With the purchase and subsequent resale of celebrity hotel Lanserhof, near Innsbruck, he was able to close one of his first major deals and, simultaneously, attract financially sound investors to his Signa Group. As a result, he established medical practices for doctors in Vienna. The group expanded. His devotion to retail real estate developed at an early stage as well.

In 2004, today’s self-made billionaire purchased Innsbrucker Kaufhaus Tyrol and rebuilt it. From that point forward, growth of the Signa Group has accelerated both rapidly and beyond the borders of Austria. Benko and his group have expanded into Italy and Germany. He made a name for himself in the Austrian capital of Vienna with his Golden Quarter, luxury shops, and penthouses, all situated in prime inner-city locations. In the meantime, the early bird has become one of the largest private property owners in Vienna. His assets are estimated at 3.7 billion euros.

 

The Ascent

René Benko’s rapid ascent did not go unnoticed by financially powerful investors. The family man no longer has to worry about finding fresh capital for the expansion of his Signa Holding. One of Signa’s most well-known investors is former Formula 1 world champion and subsequent airline founder Niki Lauda, who holds a full 10 percent of Benko’s retail division, Signa Retail.

However, René Benko occasionally reaches into his private coffers as well. Due to the fact that the takeover of furniture stores Kika and Leiner from the battered Steinhoff Group was too slow for him in mid-2018, he is alleged to have quickly closed the deal using his private assets. According to reports, Kika/Leiner will ultimately be integrated into Signa Retail. Industry insiders estimate that the Kika/Leiner venture will cost Signa roughly 600 million euros. This remarkable deal, which took place in the summer, involved the operational business of Kika/Leiner, 46 properties in Austria and 22 in Eastern Europe.

René Benko has recently told the Austrian business magazine “Trend” that his visions were anything but modest: “Signa is supposed to be a family-owned European industrial and investment holding company, similar to the family holdings of Agnelli, Oetker, or Reimann.” The first steps have been taken. Signa’s retail division will presumably serve as an essential cornerstone of this new empire.

 

A New Retail Giant

Image: Galeria Kaufhof

The merger of Galeria Kaufhof and Karstadt has created a leading European omnichannel provider that comprises 243 city center locations and a strong e-commerce platform.

The new joint venture includes Galeria Kaufhof GmbH, Karstadt Warenhaus GmbH, other retail stores that belong to HBC Europe (Saks OFF 5TH, Galeria Inno in Belgium, Hudson’s Bay in the Netherlands), Karstadt Sports, and the entire food and gastronomy operations of both companies (Dinea, Galeria Gourmet, Karstadt Feinkost, Le Buffet). The company operates 243 established city center locations in Europe, generating sales of approximately five billion euros, and employs around 32,000 people.

The new joint venture is 49.99 percent owned by HBC and 50.01 percent owned by Signa. Signa also holds 50 percent of the German real estate assets acquired by HBC and its partners. In addition, Signa is set to take over 50 percent of 18 additional properties owned by Galeria Kaufhof as well as 100 percent of Kaufhof flagship store Hohe Strasse in Cologne and the Carsch-Haus in Düsseldorf at the beginning of 2019, in accordance with standard transaction terms.

Incidentally: Since 2018, René Benko’s Signa Holding has been flirting with the media industry. The media-shy investor acquired a financial interest in the highest-circulation Austrian daily newspapers “Krone” and “Kurier” via a 49% stake in WAZ Ausland Holding GmbH. 2018 proved to be the year of René Benko.

 


About René Benko

René Benko (* May 20, 1977 in Innsbruck, Tyrol) is an Austrian entrepreneur in the real estate, media, and retail sectors. Signa Holding, which he founded, is Austria’s largest private real estate company and is also active, on a large scale, in Germany. With estimated assets of 3.7 billion euros, Benko is currently one of the 10 richest Austrians. René Benko has been married twice and has four children.

 

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