The number of investments carried out in 2014 has exceeded a billion euros. This is the highest level since 2007. It marks a progression of 40% compared to 2013 and confirms the strength of the corporate property market of the Grand-Duchy.
2014 has confirmed and magnifed a shift from 2013 by Luxembourg’s corporate property market. Between 2008 and 2012, the total amount of annual investments had stubbornly remained beneath the 500 million euro barrier and the crisis had incited investors to act with prudence.
In 2013, the first signs of a solid shift could be seen by a very significant progression in the volume of investments (+53% compared with 2012).
This result was seen as even more encouraging as it was the fruit of international investors, notably Belgians, French and Germans.
In 2014, the recovery was felt in a beautiful way and the volume of investments reached 1,08 billion euros, displaying an increase of more than 40% compared with 2013. INOWAI took an active part in this result, remaining the number one in the market with more than 30% market share.
Several operations were carried out last year, such as the sale of the Kons gallery at AXA Belgium. Situated opposite Luxembourg station, this 150 million euro project covers 20 500 m², of which 14 600 m² are offices, 2 400 m² is commercial space and 3 500 m² is housing. ING will move to this location, its Luxembourg headquarters, at the end of construction in 2016. The AXA buyer was attracted to the project’s unique location and its technical characteristics which will enable him to obtain a « very good » BREEAM certification level.
The renovation project and the extension of the old ING headquarters is equally exemplary for more than one reason. The operation includes an investment of more than 70 million euros. Situated on Route d’Esch, in the heart of the Cloche d’Or district, it has attracted the long term interest of investors and is zoned for full development. To purchase this property, Ethias has associated with two other insurers, the Luxembourg « Foyer » and the Belgian « L’intégrale ». This association was initiated by INOWAI, which played a complete consulting role in management and patrimony.
After renovation, the property will offer more than 10 000 m² of office space, providing the latest technological advances and an environmental certification. It will be rented out to the BDO auditing firm for a period of 12 years.
The investment operations concluded in 2014 showed the interest of investors for the Grand-Duchy. As proof, the projects for all the big auditing firms have been carried out or are in the process of completion. In a global economic context which remains uncertain and risky, Luxembourg is a sound investment.
Investors which offer arbitration in their real estate portfolios quickly find buyers for their released products. The fluidity of the market is a sign of maturity and good health.
At the same time, the flux of new projects bears witness to continuing growth which attracts new arrivals, such as the American firm, Blackstone, REAL IS or CNP Assurances. This movement is encouraging as it reflects the economic dynamism of the Grand-Duché.
Apart from international Belgian, German, French and American institutional investors, Luxembourg also attracts private investors, notably through the Family Office, which represents 16% of investments carried out.
In 2015, the Grand-Duchy corporate property market will remain dynamic because of mandates entrusted to operators, new projects and the interest of new arrivals. Holiday tax, being historically low, particularly in the cloche d’Or region, which was the most researched region during the second semester of 2014, continue to be pushed higher.
Trust and belief in Luxembourg, which translates in growth estimated at 3% for this year, constitute a powerful force for the corporate property market over the last decade.