ᐅ Only one-third of the new apartments sold 1.5 years after the launch
Created on: 7 Jan 2024 11:27
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TorstenKandt
Hello everyone,
I am considering buying a condominium in Düsseldorf Benrath. The developer Bonava is building two apartment buildings with a total of about 90 units. Sales started in summer 2022. Currently, 1.5 years after the sales launch, the shell construction is completed, and the move-in date is scheduled for autumn 2024 (according to the developer, construction is fully on schedule). What puzzles me is that of the 90 units, only about half are currently “officially” on the market or have been listed on the website, and of those, only about half have been sold so far. So overall, only about one-quarter to one-third of all units have been sold, 1.5 years after the sales started and three-quarters of a year before completion. Bonava is also advertising extensively through Google Ads and has numerous listings on property portals like Immoscout.
Does anyone know if this is normal (in today’s market), and whether there could be any risk for me as a buyer if the developer does not sell all the units? As mentioned, the shell is finished, but windows, electrical work, and other installations are still missing.
Best regards
Torsten
I am considering buying a condominium in Düsseldorf Benrath. The developer Bonava is building two apartment buildings with a total of about 90 units. Sales started in summer 2022. Currently, 1.5 years after the sales launch, the shell construction is completed, and the move-in date is scheduled for autumn 2024 (according to the developer, construction is fully on schedule). What puzzles me is that of the 90 units, only about half are currently “officially” on the market or have been listed on the website, and of those, only about half have been sold so far. So overall, only about one-quarter to one-third of all units have been sold, 1.5 years after the sales started and three-quarters of a year before completion. Bonava is also advertising extensively through Google Ads and has numerous listings on property portals like Immoscout.
Does anyone know if this is normal (in today’s market), and whether there could be any risk for me as a buyer if the developer does not sell all the units? As mentioned, the shell is finished, but windows, electrical work, and other installations are still missing.
Best regards
Torsten
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tochris0612 Mar 2024 11:04I basically agree with you. However, the financial situation at Bonava doesn’t look too critical right now. But of course, if it crashes, it crashes. In such a case, Bonava could probably sell many properties at lower prices. The margin would still be sufficient. But if that fails, the real estate sector would be in serious trouble initially.
In my case, it’s a semi-detached house. Since payment is made according to construction progress and the manufacturing contract can be canceled, the land itself already secures the initial payments.
In my case, it’s a semi-detached house. Since payment is made according to construction progress and the manufacturing contract can be canceled, the land itself already secures the initial payments.
tochris06 schrieb:
I basically agree with you. However, the financial situation at Bonava doesn’t look that bad right now. Of course, if things go south, they really do. But in a worst-case scenario, Bonava could sell many properties at lower prices. The margin would still be sufficient. But if that fails, the real estate industry would be in serious trouble. Pretty well-known companies have ended up discarded on the stock market’s sidelines before. A publicly traded company is inherently exposed to risk, especially when it typically has zero percent non-public equity.
tochris06 schrieb:
And in my case, it’s a semi-detached house. Since payments are made according to construction progress and the manufacturing obligation can be canceled, the land itself already secures the initial payments. You have a low risk there. My previous post mainly referred to condominiums. The risk increases with the size of the homeowners’ association. That doesn’t apply even remotely comparably to the overall size of a semi-detached house development. At least once the site development is completed, you can be relaxed.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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nordanney12 Mar 2024 11:50tochris06 schrieb:
I just bought from Bonava. I can't imagine that insolvency is imminent there. The restructuring mainly affects their in-house craftsmen. Outsourcing is now more cost-effective for them.tochris06 schrieb:
I basically agree with you. However, the finances of Bonava do not look that dramatic at the moment.2023: Net annual loss quadrupled... (Bonava AB)And how do you know the exact figures for Bonava Germany?
Oh, and Interboden also claimed as late as last autumn, "Interboden has 'prepared extensively and drawn conclusions' regarding the crisis situation of the entire market," a company spokesperson said at the time. "Insolvency was ruled out."
And today?
I don't want to scare you, but without explicit insight into the financial statements, you really can't make any judgment today. Even though Bonava is one of the major players. But Interboden, Signa, Gerch, Euroboden, Project Immobilien, and others were worth billions.
Oh yes, Swedish real estate companies are currently struggling especially hard, with many more insolvencies than here. Just saying.
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TorstenKandt12 Mar 2024 12:33There are already quite a few issues at Bonava. For example, the CEO recently fired the CFO, Bonava Germany is laying off 30% of its workforce, and the company had to quickly raise new capital because otherwise, they would not have been able to service their loans. To do this, they issued new shares at a time when the stock price is very low (currently €0.69; that’s a 50% drop over the last 6 months; the peak was once €14).
However, the situation is probably not much better at most other companies. The difference is that, as a publicly traded company, Bonava has to disclose such news, while a family-owned business in the local village tends to loudly claim that everything is fine, only to file for bankruptcy “unexpectedly” the next day.
However, the situation is probably not much better at most other companies. The difference is that, as a publicly traded company, Bonava has to disclose such news, while a family-owned business in the local village tends to loudly claim that everything is fine, only to file for bankruptcy “unexpectedly” the next day.
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nordanney12 Mar 2024 12:36TorstenKandt schrieb:
There are already significant issues at Bonava. For example, the CEO recently fired the CFO, and Bonava had to quickly raise new capital because otherwise they couldn’t service their loans. To do this, they issued new shares at a time when the stock price is at a low point (currently €0.69; that’s a 50% drop over the last 6 months; the peak was once 14 euros).
However, the situation at most other companies is probably not much better. The difference is that, as a publicly traded company, Bonava has to publish such news, whereas the sole proprietor from the local village always loudly claims that everything is fine and then ‘surprisingly’ announces insolvency the next day. That’s true. But the sole proprietor loses their own hard-earned money (for example, Interboden). Usually, they operate much more cautiously than corporations, which sometimes just hand us, as the bank, the keys to a project and say, "Oops, things went wrong and unfortunately we are insolvent." And three weeks later, the people involved show up in the market again with other companies. Really frustrating...
TorstenKandt schrieb:
There are already several issues at Bonava. For example, the CEO recently fired the CFO, When a CEO makes such a key personnel decision alone, especially regarding the CFO, I cannot disagree with the conclusion that there are serious problems. Unfortunately, the fall of Rome is still often taken as a blueprint (just as the "Peter Principle" applies on a smaller scale).
TorstenKandt schrieb:
Bonava Germany is laying off 30% of its staff, ... and the naive assumption is that 70% remain afterward. In reality, by that point, the best employees have usually already left. And the generous severance packages for a few terminated contracts deal the final blow to the company.
nordanney schrieb:
But sole proprietors lose their own hard-earned money (example Interboden). They typically act much more cautiously than corporations, which sometimes just hand the bank the keys to a project and say, "Oops, this went wrong and unfortunately we are insolvent." Then, three weeks later, the people involved reappear on the market with other companies. Very frustrating... Well, that is a fundamental difference between a small family business and a publicly traded company.
TorstenKandt schrieb:
and Bonava had to raise new capital at short notice because otherwise, they wouldn’t have been able to service their loans. To do this, they issued new shares. This type of allowed delay of insolvency is the real scandal.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/