German construction firm Project goes bankrupt

So far, three of the group's four companies have filed for insolvency, the law firm Schultze & Braun announced on Saturday.

The holding company Project Real Estate AG will follow shortly, they said.

The lawyers want to continue business operations by potentially restructuring the firm and continuing the planned projects.

According to the company's website, 120 projects with an investment value of €3.2 billion ($3.5 billion) were under way or in planning across Germany at the end of June.

The group is managing around 60 projects across Germany, according to the insolvency administrators.

"A major reason for the insolvency is the enormous increase in construction costs as a result of the Ukraine war. It was not possible to pass on these cost increases to customers," Friday's statement said.

The Project Group mainly operates in Berlin, Munich, Hamburg, the Rhine-Main region, the Rhineland and Nuremberg.

The construction company is not the only one struggling in Germany. A rapid rise in real estate interest rates alongside higher construction prices has led to a series of insolvencies across the industry in recent months.

Throughout Germany, reports are increasing that developers are unable to sell finished condominiums and houses, or can only do so after months, because buyers are unwilling or unable to pay up.

If real estate developers run into financial difficulties, the consequential damage affects not only investors and buyers. Often, the construction companies commissioned by the developers are left sitting on unpaid invoices.