Luxembourg Property market - Market Overview 2018
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Luxembourg
Property market
Research Report
Market Overview 2018
© Le Dôme
Axa
Developer : Vinci
Edito
The property markets in Luxembourg
have reiterated an excellent
annual performance in 2018.
Dear reader,
Amidst major ongoing infrastructure works, pressure. Future development will include
national elections and uncertainties on an increased density of construction and the
the geopolitical level, the property markets creation of new housing districts, particularly
in Luxembourg have again outperformed in locations where new public transport
in 2018. The take-up level achieved in the facilities will become available.
office market 2018 was driven by corporate The investment market is soaring with a
activity. The take-up volume is the second transactional volume close to €1.9 billion in
highest since the start of our data recordings 2018 all asset classes combined, including
in 1994, the vacancy rate is at its lowest level the iconic building The Dôme, a transaction
since the financial crisis of 2008 and prime realised by JLL, and the new HQ of Deloitte
rents are at their highest level ever. The stock at Ban de Gasperich. The outlook is bright
recently passed the 4 million sq.m. mark and as investors’ appetite remains strong,
speculative development underpins the particularly for locations outside the CBD
market. Future growth areas include the Ban where rental growth is anticipated.
de Gasperich, Belval and the Station district. Given the solid fundamentals of the
The retail market performed below its 2017 national economy, demand for residential
volume, which was an exceptional year, and and professional accommodation is
the number of transactions decreased. Large expected to remain high and property
transactions were registered in shopping markets in Luxembourg are set to grow
centres and in the main streets of the city further.
centre. In the next year, the completion of In 2019 JLL celebrates 30 years of presence
large development projects such as Royal- in Luxembourg. We are proud to have worked
Hamilius and the shopping centre at Ban de alongside you to realise the growth of the
Gasperich will boost market activity. property markets and we look forward to
The pace of development in the residential working with you in the future. Let’s achieve
market is solid but insufficient to meet our ambitions together.
demand and prices are under upward
ROMA IN MULLER
M A NAGING DIR E CTO R JLL LUX E MB O U R G
Contents
5
27
ECONOMIC
BACKGROUND
The economy of the Grand Duchy is in
good health and its growth remains
ahead of that of the Eurozone.
INVESTMENT
MARKETS
The return of mega deals
15
RETAIL
MARKET
The take-up volume in 2018 amounted
to 37.650 sq.m., above the annual
average for the 5-year period 2013-2017.
7
OFFICE
MARKET 30
The take-up volume 2018 was the
second highest ever since the start of SUMMARY
our data recordings in 1994. Key Performance Indicators
19
RESIDENTIAL
MARKET
The growth of the population, from
435,000 inhabitants in 2000 to 602,000 as
at 1st January 2018 represents a growth
of 38% over the period.
www.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Hogan Lovells, cabinet d’avocats,
a fait confiance à Tétris pour deux
projets consécutifs d’aménagement
en «build» seul, puis en «design & build».
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 4
Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
Economic
background
The economic situation of the Grand
Duchy is sound and its growth remains
ahead of that of the Eurozone.
Last year was a real Sturm und Drang Domestic demand remains high, with the rest of Eurozone. The national
situation for the global economy. We reaching 2017 level at 2.1%. The total consumer price index published by
saw high and low for 12 months long population in the Grand Duchy as Statec stays at 104.66 in November
and uncertainty about Brexit and at 1st December 2018 amounted to 2018, a 2.2% increase in comparison
China/US trade war promise more 602,005 inhabitants and daily 193,142 with November 2017. The volume of
turbulence in 2019. Despite all of this commuters top up the potential retail sales turnover (excluding sale by
we found a beacon of green light: consumer base and reinforce the mail order) increased by 5.5% on an
Luxembourg’s economy, where almost economy. The public debt remains annual basis as at October 2018.
all indicators stay strong, well ahead of low at 23% of the GDP in combination
the rest of the Eurozone. The increase with long-term sovereign credit ratings Statec published a strong
of minimum wage is testimony to how granted with the highest AAA-rating unemployment rate for November
Luxembourg’s government stays one (stable). at 5.2%, down from 5.8% during the
jump ahead of the social discontent same period last year and confirming
facing neighboring countries. Public and private consumption a persistent downward trend since
re m a i n s o l i d a n d t h e m o n t h l y mid-2014. It represents a seasonally
The expected annual GDP growth consumer confidence index remains adjusted number of unemployed
rate for 2018 hit 3.0% (according by largely positive, confirming the of 14,576 persons on an active
Statec) and 3.9% (according to by country’s sustained growth. The population of 280,315. Looking
The Economist). This should continue consumer confidence indicator forward, the unemployment rate is
between 3.0% and 3.3% during 2019. remains at record highs in comparison expected to continue to fall in 2019.
Consumer Confidence
Consumer Indicator
Confidence Indicator
30,0
20,0
1 0,0
0,0 EU-28
Index
Belgium
Germany
-1 0,0
France
Luxembourg
-20,0
-30,0
-40,0
5 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved
www.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Office
market
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 6
Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
TAKE-UP: 2018 IS AN EXCELLENT YEAR
AND THE OUTLOOK IS BRIGHT
The take-up volume in 2018 amounted
to more than 245,000 sq.m., the
second highest annual volume ever.
From 2015 to 2017, take-up in volume amounted to 85,100 sq.m., a 10 dependent on recruiting and retaining
Luxembourg has been rather stable. year record. Behind this boost we saw talent so getting a modern place to
2018 marks a transition and shows new transactions from Deloitte in D Square work is essential for the sustainability of
potential in offices take-up. This year (31,000 sq.m.) and Alter Domus in Melius their operations. Noteworthy also is the
the market reached pre-subprime crisis (10,600 sq.m.). These two operations presence of the retail sector, particularly
levels again with a take-up volume of in Q4 made the difference, driving the companies active in e-commerce.
245,000 sq.m., representing an 18% volumes to a record high. To illustrate The remaining transactions were
increase vs. 2017. Two major reasons this, the number of deals registered (278 spread over diverse activities.
are behind this evolution. The first is transactions) was below last year’s total
the good (and stable) economic health of 293, proof that the average deal was
In terms of geographical spread, Ban
of Luxembourg, which attracts more higher at 885 sq.m. (vs 729 sq.m. in 2017).
de Gasperich confirms its attractivity by
and more corporate companies. This
hosting 27% of the transactional volume
is an oasis compared to the economic
Mid-size categor y transactions in 2018, almost tripling 2017 numbers.
turbulence experience in neighboring
between 5,000 and 10,000 sq.m. are As mentioned earlier, locations outside
countries (Brexit, gilets jaunes, etc.). The
way up withan increase of +246% of Luxembourg city are more and more
second is the willingness of corporates
versus 2017 and +147% vs.the 5-year appreciated. Transactions in the City
to provide modern high-quality
average numbers. This is made up of Belt confirm this trend. Strassen is
workplaces which give their workforce
partly Local Administration and partly particularly appreciated, with Serenity,
more room for creativity and interaction.
financial and service sector corporates. Edison 7, «Le 5» and Kiem buildings
Talent acquisition and retention is
This should be confirmed during 2019 accounting for 75% of the transactions
at the centre of their strategy, hence
whenn more buildings of this size will in the district. Leudelange, Airport,
new buildings are particularly in
become available. Hamm and Bertrange are also in the
demand even if they are not exactly
spotlight as they more than double their
located in the centre of Luxembourg Looking into details of occupant
take-up transactions in comparison with
where accessibility suffers from a lack types, corporates account for 84% of
2017. The Periphery and Esch/Belval
of infrastructure. Trendy business the take-up volume whilst local and EU
also grow in take-up volume, from
locations such as Esch/Belval or the City administrations represent together 16%
22,000 sq.m in 2017 to 32,400 sq.m in
Belt are more and more sought after. . Take-up transactions in the corporate
2018.
sector are mainly attributed to business
services (37%), banking and finance
More concretely, 2018 is 17% above
(17%) and computer and IT services
the 5-year average and the Q4 take-up
(8%). These three sectors are particularly
7 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved
www.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Vacancy declined in the last quarter
of 2018 to reach 3.4% representing
139,439 sq.m. This represents a
decline for the fourth consecutive
quarter and marks a long-time record
low.
2018 was a record year for office more specifically in the CBD, where
stock in Luxembourg the symbolic the current vacancy rate drops
level of 4 million sq.m for the whole from 2.7% in Q3 to 1.6% in Q4. We
country was reached for the first expect that speculative movement
time. Vacancy nevertheless declined will continue contracting this ratio
in the last quarter of 2018 to reach further. The lowest vacancy rate in the
3.4% representing 139,439 sq.m. centre is recorded in the Kirchberg
district where vacancy eventually
This is the fourth consecutive increases from 0.6% to 0.8% due to
quarter where vacancy has declined an additional stock delivery. In the
and marks a long-time record low. City Belt, the vacancy rate shrinks
If we compare the 2018 Q4 vacancy from 6.4% to 5.8% under pressure
rate to the same period last year, the from the Airport district where the
decrease amounts to 140 bps. With a vacancy rate decreased. In Esch/
speculative pipeline of 45,000 sq.m. Belval and the Periphery (Windhof,
due for delivery in 2019, the vacancy Contern, Capellen, Munsbach and
rate is expected to decrease further, Potaschberg), average vacancy rates
particularly in the first half of 2019. remained stable between 6.7% and
8.8%. The outlook for 2019 is bright Copyright : Royal-Hamilius
Architects : Foster + Partners & Tetra Kayser
Looking at district level, a decrease as demand is sustained.
Developer : Codic Group
was noted in the central districts and
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 8
Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
Top 5 transactions 2018
District Building Age Class Area (sq.m.) Operation Occupier
Ban de
D Square New 31,000 Pre-letting Deloitte
Gasperich
Ban de
Melius New 10,600 Pre-letting Alter Domus
Gasperich
The Square-
Kirchberg Modern 10,073 Pre-letting E-commerce sector
Geos
Bertrange Beaubourg New 9,000 Pre-letting Telindus
Le Foyer Owner Le Foyer &
Leudelange New 7,898
Extension occupier subsidiaries
Other
Retail
7%
5%
Insurance & Pension
Funds
4% Business Services
37%
Real Estate Activities
6%
IT
8%
Administration
16% Banking and
Finance
17%
9 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved
www.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Take-Up (Sq.m.)
Take-Up (sq.m.)
90.000
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
-
2014 2015 2016 2017 2018
Q1 Q2 Q3 Q4
Vacancy Rate By District
Vacancy rate by district
0% 2% 4% 6% 8% 10% 12%
CBD
Kirchberg
Station
Ban de Gasperich
City Belt
Periphery
Esch/Belval
Luxembourg total
Q4 16 Q4 17 Q4 18
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 10Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
SPECULATIVE PIPELINE DRIVEN BY CITY BELT,
KIRCHBERG AND CLOCHE D’OR / BAN DE GASPERICH
In 2018, we saw 102,000 sq.m. of new
office space built in Luxembourg.
Ban de Gasperich and City
Belt accounted for 87%
of the total amount.
For City Belt, the extension of “Le sq.m. and NAOS with 17,338 sq.m co- finance sector.
Foyer” and the new construction developed by Arhs Developments
“Beaubourg” freshly occupied by and Atenor and sold to the Belgian In Esch/Belval projects currently
Telindus were the biggest completions. institutional insurer Ethias and Le under construction with completion
For Cloche d’Or, the project “D-Square” Foyer from Luxemburg. The third scheduled in 2019 account for 41,000
(31,000 sq.m.) built-to-suit for Deloitte largest completions expected is the sq.m additional office space. In
HQ was the main factor of this increase. office component of ROYAL-HAMILIUS Kirchberg, three different projects
(from Codic Group) at 10,150 sq.m. totalising 14,000 sq.m. are under
Looking forward, more than 262,800 and already fully prelet. The fourth development: INFINITY, SERRA and
sq.m. are currently under construction is the ZENIT in CBD (10,000 sq.m), STACCATO. Finally, in Ban de Gasperich
with completions expected in the next owned by Everop and already pre- other deliveries , the buildings Bijou,
two years. In this amount, speculative let at 55% by Bank of China. All four Darwin and Kockelscheuer are planned
space accounts for 91,800 sq.m (around should be finished and delivered in before the end of 2019.
35% of the total). This number may of 2019. In Leudelange, the ALTITUDE
course change as pre-lettings occur. LA PAZ building (7,200 sq.m.) is under
construction and 90% of the building
The largest completions scheduled has recently been pre-let by JLL to a
for 2019 are CASA FERRERO with 29,000 company active in the banking and
11 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
For 2020, the biggest project to date is the Court of Justice OFFICE CENTER I & II will boost the stock by respectively
in Kirchberg. The building will offer an extra 39,750 sq.m to 16,000 sq.m. and 30,000 sq.m., both projects being scheduled
the European Court of Justice and could be delivered in Q4 for completion towards the end of 2020.
of that year. Still in Kirchberg, a French developer is launching
the OBH building (10,000 sq.m.). Next to Bertrange/Strassen, ARCELOR MITTAL (55,000 sq.m.) in Kirchberg and POST LUX
but still in the commune of Luxembourg City, CREOS project (27,700 sq.m.) in the Station district are under construction
is expected with 19,400 sq.m. of office space. In Leudelange, and expected to be completed in 2021-2022. In Belval,
8 two projects are planned for 2019: the W4 where 3,587 sq.m. BesixRed is developing its ICONIC building (18,000 sq.m.) New Map
is pre-let and few remains available ant the ALTITUDE LA PAZ designed by the famous architect Foster & Partners. JLL is
where also the major part is pre-let. BUZZCITY and AM BANN co-agent in the letting of the property.
Analysis Save Share Print Directions Measure Bookmarks Fin
Luxembourg Pipeline 48,420
290,356
17,196
47,729
45,177
29,364
9,676
46,566
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 12Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
UPWARD PRESSURE ON RENTS
IN CENTRAL LOCATIONS
Prime rents rise to €50 per sq.m.
per month in CBD and to €36 per
sq.m. per month in Kirchberg,
with upward pressure.
The most impressive increase came from If we compare December 2018 to the
the CBD where €50/sq.m./month (+VAT) same period one year ago, we see a 6%
is the prime rent applicable at the end increase in prime rents for CBD and 5% for
of this year. We estimate that this trend Cloche d’Or/Ban de Gasperich (30€/sq.m).
will continue through 2019, with upward Munsbach is also growing at 5% yoy and
potential to €52/sq.m./month. A number has reached €22.50/sq.m. Leudelange
of transactions were realised above €50/ and Hamm/Neudorf see their prime rents
sq.m. per month (+VAT) in the CBD and increase both by 4% yoy with a rent at €24/
asking prices for top buildings are rising. sq.m./month.
The situation in Kirchberg is similar, albeit
at a lower level: prime rents went from €35/ The global rental analysis (prime and
sq.m. to €36/sq.m. this year. second-hand included) for the last four
quarters shows another trend. Top quartile
All other districts show broad stability rents in Q4 decrease by 1.5% in comparison
from Q3 to Q4 in prime rents: Station district with the previous quarter, to €39.50 per
stands at €35 per sq.m. per month, Cloche sq.m. per month. Weighted average rents
d’Or/Ban de Gasperich at €30 per sq.m. per have increased by 1.1% to €27.9 per sq.m.
month and Howald at €25 per sq.m. per per month (+VAT).
month. In the City Belt, prime rents range
from €23.5 to €28.5 per sq.m. per month. All rents quoted are exclusive of VAT.
In Belval, €24 per sq.m. per month is the
standard rent for new projects.
13 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Retail
market
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 14Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
TAKE-UP
The take-up volume 2018 reached
37,650 sq.m., above the annual average
for the 5-year period 2013-2017.
The average size per transaction this in the past five years. The transacted by a large transaction in the city centre
year was 509 sq.m. overall, varying per volume in the sectors Health & Beauty to a fashion retailer whose name is
market segment from 383 sq.m. in high and Telecom was stable in terms of the confidential. In 2018, retailers active in
streets to 1,392 sq.m. per transaction in proportion of the total market. All other high streets were mainly fashion brands
retail warehousing. categories decreased in comparison and food & beverages. The Grand-Rue
with their respective 5-year averages. and its adjoining streets accounted for
The annual volume is, however,
more than half of the take-up volume in
22% below that of 2017, which was an The shopping centre segment took
the country, thus confirming their prime
exceptional year with two transactions first place in 2018 with over 15,400 sq.m.
status.
above 5,000 sq.m. in retail warehousing in 37 transactions, 147% above the
parks. Transactions were spread 5-year average. The volume recorded In the retail warehousing segment, a
unevenly over the different quarters in in shopping centres was underpinned total volume of just around 11.100 sq.m.
2018: 77% of the volume representing on the one hand by a high number was registered in 2018. The volume was
close to 29,000 sq.m. was recorded in of transactions in City Concorde and 70% lower than that of 2017, which
the first half year. The second half of Belval Plaza, and on the other hand was an exceptional year with two large
the year represented 23% of the annual by large size transactions in La Belle transactions totalling 23,000 sq.m.
volume with a total take-up of 8,500 Etoile (2,055 sq.m. let by Maisons du When excluding these, the decrease
sq.m. Monde, a transaction realised by JLL) year-over-year is limited to 13%. The
and Knauf Schmiede (1,045 sq.m. let by number of transactions in the segment
Fashion remains the largest category
Sportsdirect). was relatively low in 2018, 53% below
in 2018 representing close to one fifth
the 5-year annual average of 17
of the transacted volume, vs. a 5-year An annual volume of 10,400 sq.m.
transactions, due to a lack of available
average of 12%. Growth vs. 2017 was was recorded in the high street segment
units. The average size of transaction
also recorded in the categories Leisure in 2018, 23% above its 5-year annual
in 2018, however, reached 1,392 sq.m.,
& Sport which represented 9% of the average, in spite of being hampered
well above the 5-year average of 807
volume in 2018 vs. a 5-year average of by infrastructure works in Luxembourg
sq.m.
3%, and in the Services sector with 9% city centre and the rise of online retail.
of the volume against 1% on average The transaction volume was boosted
50
Thousands sq.m.
45 8
40
4
35
29 11
30
25
20 10 6
36 15
15 12 4 10
3
10 3
3 14
5 13 11
7 8
0
2013 2014 2015 2016 2017 2018
Retail warehousing Shopping centres High street 5-y annual average
15 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
PRIME RENTS
Prime rents remained stable in the average rents reach €90 per sq.m. per
fourth quarter. Prime rents for shopping month + VAT. Prime rents up to €20 per
centres remain at €110 per sq.m. per sq.m. apply to the retail warehousing
month (+ VAT) and apply to the best parks in the periphery of Luxembourg
shopping centres around the City of City. The outlook for rents applicable to
Luxembourg. In the high street segment, prime locations remains stable, whilst
on the prime high street locations in the rents for secondary locations are under
city an average rent of €150 per sq.m. downward pressure.
per month applies. In the station area
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 16Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
SUPPLY
As at the end of 2018, the total stock retail warehousing in Luxembourg’s looks very promising with an extra
for retail in Luxembourg amounted to periphery by Leasinvest offering 113,109 sqm. under construction
1.2 million sq.m. Beating 2017 was not 22,700 sq.m. of retail area, where as at today. Large completions are
an easy task if we see the extra 50,000 a second development phase is scheduled in 2019, amongst which
sq.m. that were completed during planned for completion by 2020, and the shopping centre Cloche d’Or in
that year. In 2018 the completed the extension of shopping centre Gasperich with its pharaonic 75,000
volume was lower, at 27,500 sq.m., City Concorde offering 4,800 sq.m. of sq.m., the Royal-Hamilius in the
but remains nevertheless the second- additional retail area and 250 parking hyper-centre of Luxembourg offering
best annual completion volume of spaces. 17,000 sq.m. of shopping area and
the past 10 years. Infinity Retail on avenue J.F. Kennedy
Projects in the pipeline with
in Kirchberg with a retail space of
The two largest completions in completion foreseen in the next two
6,500 sq.m.
2018 were the redevelopment of a years amount to 145,000 sq.m. 2019
Projects
Knauf Schmiede, Ulflingen Royal-Hamilius, Luxembourg
© Leasinvest © Codic Group – Royal-Hamilius Retail
Auchan, Cloche d’Or
© Auchan / Promobe
17 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Residential
Market
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 18Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
FACTORS IMPACTING DEMAND:
FROM DEMOGRAPHIC GROWTH
TO LOW INTEREST RATES
The growth of the population, from
435,000 inhabitants in 2000 to 602,000
as at 1st January 2018 represents
a growth of 38% over the period.
Mainly driven by expats, units per year. In the period between major part is contracted in variable
Luxembourg is experiencing a 2000 and 2014 an annual average rate (75.8% of loans) this could raise
tremendous population growth of 2,600 units was completed in the threat of defaults should there be
of 20% in 18 years, from 502,100 Luxembourg, rising to 4,000 in 2016, a major increase in interest rates. This
inhabitants to 602,005 inhabitants. still below the calculated demand. medium-term vulnerability should be
The proportion of foreigners reached This imbalance results in increasing taken in context however as financial
33% during the same period. This pressure on prices. assets-to-debt ratio per households is
results in growing demand in the one step higher at 251%.
The low level of interest rates gives
residential sector. Looking at canton
access to cheaper mortgage loans The combination of sustained
level, the highest growth in the
and further fuels demand. Rates on demographic growth, persistent
period 2000-2018 was recorded in
variable interest rate mortgage loans demand in excess of supply and
the cantons Luxembourg (+ 53,786
granted to households decreased to sustained low interest rates results in
inhabitants), in Esch (+ 46.011 inh.)
1.47% during October 2018, a 13 basis increasing upward pressure on prices.
and in Capellen (+ 11,500 inh.).
points’ decrease on a yearly basis.
In percentages, the demographic
The volume of newly granted loans
growth ranged from 29% (Diekrich) to
reached €248 million, stable monthly.
49% (Clervaux) during the 2000-2018
The fixed interest rate on mortgage
period. The canton of Luxembourg
l oa n s g ra n t e d t o h o u s e h o l d s
currently has the highest number of
remained at 1.91% during October
inhabitants in the country, 182,607,
2018.
closely followed by Esch with 176,820
inhabitants. This global upward trend According to the “Revue de Stabilité
should continue during the following Financière 2018” from the BCL, the
years to 760,000 residents by end last household debt-to-disposable-
2030 or even 1 million by 2060. income ratio calculated is the
third in Europe at 176% (Q3 2017)
On the demand side, STATEC has
mainly due to the sharp increase in
estimated the required number of
property prices. As 90% of this debt is
new dwellings at approx. 6,000-6,500
concentrated in only 5 banks and the
19 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
SALES PRICES AND RENTS FOR RESIDENTIAL
PROPERTY IN LUXEMBOURG RISE STEADILY
Sales prices
Luxembourg City
Reference prices for residential more than doubled bringing the price to € 8,856 €/sqm, well above the
accommodation in Luxembourg City average for the city to €7,063 per sq.m. national average of €5,590 per sq.m.
rose steadily over the past ten years. when the national average sits around (CAGR of 4.4%). During one year,
Compounded average growth rate € 4,419 per sq.m. Weimerskirch and “Ville Haute” had seen tremendous
for sqm sales prices for housing rose Kirchberg complete the podium with growth of 13.5% compared to July
to 3.4% for houses and to 4.4% for 6.7% and 6.3% of CAGR during the 2017. Limpertsberg and Gasperich
apartments between 2009 and June last ten years. dominate the ranking with
2018 included. respectively 8.6% and 7.7% of CAGR
For apartment sales, prices in
during the last ten years, followed by
For house sales, prices per sq.m. Luxembourg City trend upwards with
Kirchberg at 6.3%.
for “Ville-Haute” of Luxembourg City a CAGR of 6.4% bringing the average
Prix moyen
Average priceannoncé auper
announced m²sq.m
en €incourant
current €
9.000 €
8.000 €
7.000 €
6.000 €
5.000 €
4.000 €
3.000 €
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Country Sale Apartments Country Sale House
Lux City Sale Apartments Lux City Sale House
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 20Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
50 99
49
32
67
25 Kirchberg
428
Limperts-
berg
322
31
98
Belair Ville 27
244 Haute
174
179
80
Gare
119 275
Bonnevoie
284
Cessange
289
Gasperich
1,022
Average prices (based on offers):
< € 7.000/sq.m.
€ 7.000/sq.m. - € 7.999/sq.m.
> € 8.000/sq.m.
Number of offers:
from 10 to 49
from 50 to 149
from 150 to 299
more than 300
Rest of Luxembourg
The countrywide CAGR prices increased We can see a big difference in price
about 4.4% for apartments and 3.4% for between Luxembourg City and the
houses over the last 10 years. The national Periphery which means that residents
average price for existing apartments behaviour changes when the question of
increased from € 3,877 per sq.m. in 2009 to moving pops up. Indeed, there is a trend
€5,976 per sq.m in Q2 2018. Prices are also pushing Luxembourgers to relocate outside
rising by between 3% and 4% for Strassen, the city to benefit from lower prices whilst
Mamer and Steinsel in the Luxembourg city keeping the same perspective of value
periphery. growth.
21 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Période du 1er octobre 2016 au 30 septembre 2017
Troisvierges
Prix de vente moyen des appartements existants
Weiswampach (issus des actes notariés)
nombre de ventes insuffisant
Clervaux moins de 4 000 €/m²
Wincrange
de 4 000 à 4 499 €/m²
de 4 500 à 4 999 €/m²
Parc Hosingen de 5 000 à 5 999 €/m²
Wiltz
Kiischpelt 6 000 €/m² ou plus
Winseler
Putscheid 5 002 €/m² : moyenne du pays
Vianden
Goesdorf
Lac de la Haute-Sûre
Bourscheid Tandel
Boulaide
Esch-sur-Sûre
Erpeldange-sur-Sûre
Diekirch
Feulen Bettendorf Reisdorf
Grosbous Ettelbruck
Rambrouch Wahl Mertzig Beaufort
Schieren Vallée de l'Ernz
Berdorf
Colmar-Berg
Préizerdaul Vichten Nommern Echternach
Bissen Waldbillig
Redange Rosport
Useldange Larochette Consdorf
Ell Heffingen
Boevange-sur-Attert
Mompach
Mersch Fischbach Bech
Beckerich Saeul
Lintgen Manternach
Tuntange Mertert
Junglinster Biwer
Septfontaines Lorentzweiler
Hobscheid
Betzdorf
Kehlen Steinsel Grevenmacher
Koerich Kopstal
Walferdange Niederanven Flaxweiler
Steinfort
Mamer Strassen Schuttrange
Garnich Sandweiler Wormeldange
Luxembourg-Ville Lenningen
Bertrange
Dippach Contern
Hesperange Stadtbredimus
Kaerjeng
Leudelange Waldbredimus
Reckange-sur-Mess Bous
Pétange Weiler-la-Tour
Remich
Mondercange Roeser Dalheim
Differdange Sanem Bettembourg Frisange Mondorf-les-Bains
Schifflange
Schengen
Esch-sur-Alzette
Kayl Dudelange
Rumelange
0 5 10 km
Auteur : B. Darud, LISER, Janvier 2018
Fonds de carte : ACT, LISER, 2015
Données statistiques : Publicité Foncière, calculs STATEC-Observatoire de l’Habitat
Note : Un minimum de 5 ventes d’appartements après sélection, rejet des extrêmes et traitements est requis pour afficher le prix moyen communal.
Luxembourg and EU Housing Prices Evolution (Index 100 = 2008)
140
If we compare Luxembourg house
130
price evolution to the rest of the
Eurozone, we see that Luxembourg
beats the Euro zone area average 120
with a gap of 290 bps. Luxembourg
Prices Index
is followed by Germany and UK with 110
CAGR of 2.7% and 2.2% respectively.
This trend is expected to continue
100
in taking into consideration Statec
Q2 2018 data and pessimistic
expectations regarding Brexit. 90
80
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Years
Euro area Belgium Germany France Luxembourg United Kingdom
2018, https://ec.europa.eu/eurostat/web/housing-price-statistics/data/database
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 22Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
Rents
Luxembourg City
Apartment rental prices for Luxembourg in Dommeldange and Cessange rose by
City are growing rapidly. CAGR for rents 27.9% and 23.5% respectively. In June
in the capital city stood at 4.5% over the 2018, the average rent for an apartment
last ten years versus 4.1% for the country in Luxembourg City (excluding charges)
average. This bring the average rent to 27.1€ amounted to €28 per sq.m. per month.
per sq.m. The pace of rises is accelerating
with a city average of 9.7% growth from
2017 to Q2 2018. In only six months, rents
Rest of Luxembourg
For the rest of the countr y, rents years. The average rent for an apartment
increased at a slightly slower pace than ranged between €16 and €18 per sq.m.
sales prices, at a global growth rate of 3% per month in Esch-sur-Alzette and 20€ and
per year. Luxembourg City aside, urban 22€ per sq.m. per month for Bertrange and
areas in the country grew between 2.5% Strassen.
and 3.8% per year during the past ten
Average asking rent for apartments per municipality
National Average: 22,58 €/M²
23 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
RESIDENTIAL PROPERTY PIPELINE
Large residential developments
are in the pipeline
throughout the territory.
The success of a project is directly housing and especially in the Station big projects. Differdange sees the
linked to the effort you are ready area, Cessange and Kirchberg where development of 2 big residential
to put into it. This said, the budget we see a rise in medium range complexes: Opkorn and Porte de
of Luxembourg city for 2019 is at a residential buildings (30-50 units) l’Europe and in Diekirch Matexi and
record high: €930 million or in other coupled with a fast growth in the Thomas & Piron is building a huge
term a 13.9% increase versus last price/sq.m. In the Station area as residential project hosting between
year. Of this budget almost 39% will well as the Polvermillen (210 units) 500 and 700 units.
be dedicated to their investment in the projects Shades and Dernier
This huge need in residential
infrastructure (housing, childcare, Sol will offer respectively 40 and
infrastructure requires land. A good
mobility, etc.) to tackle the city’s 30 residential units. In Cessange,
solution to answer the inevitable
biggest challenge: the steady increase “Domaine du Parc de Cessange”
land constraint is to build vertically.
of the population. To solve the linked obtained a permit for the construction
Luxembourg’s government has
housing issue, the city of Luxembourg of 40 apartments and 70 houses.
understood this and has become
is willing to push the development AtHome.lu estimates that around
more flexible for this kind of project.
of affordable housing. In this sense, 1.000 extra units could be completerd
In this sense we see residential towers
several projects are popping up such in the next 10-15 years in Cessange.
projects appearing in locations where
as the transformation in “rue Adolphe Finally, according to the Ministry of
demand is high. Infinity, BPI & Opkorn
Fischer”, the refurbishment project in Housing, Kirchberg represents a huge
are all good examples of maximising
“rue Haute” and new constructions in potential where several projects are
unit numbers in narrower space.
“Rue de Mühlenbach” where 33 new planned, to answer the sharp increase
apartments are planned. of population (from 3,600 to 22,500 Finally, following the booming
inhabitants in the next 20-30 years). co-working trend, the new trend “co-
The cost of housing will be a
living” is rising, especially appreciated
serious issue for the government in Outside Luxembourg city,
by millenials. A good illustration of
the next few years. Indeed, the price residential development growing
this is the renovation of the Cents
per sq.m. increased twice as much in Belval, with three projects in the
neighbourhood. In this project, we
as the average disposable income pipeline for the end of the decade,
will see 111 new housing units split
over the last ten years. To tackle this allocated to respectively Tralux,
into 7 unifamilial houses and 104
problem, the government is seriously Ate n o r a n d S o l u d e c /A s a rs . I n
co-living spaces. At least 10% of the
thinking to expand the “emphyteotic Walferdange, BesixRed is developing
total surface will be dedicated to
right” to more low/middle income a residential project comparable
affordable housing. This is a good
households. In this sense, “Fond to the famous Soho in Hollerich. In
testimony to the dynamism of the
du Kirchberg” developed a new Bertrange, new projects are coming
residential market.
project “habiter au Kirchberg” where up with the old KBC site where we will
Luxembourgers can apply to access see the development of respectively
emphyteotic rents chosen by a lottery 250 and 160 units. Differdange and
system. Diekirch are also nurturing their
residential infrastructure needs
In the capital city, we see a lot of
by hosting the development of
movement also concerning standard
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 24Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
Large residential projects in Luxembourg City
KRECH
DI
K
EC
Ï
DRA
TROISVIERGES
+/-220 units / 25 000 sq.m
120 units / 12.000 sq.m WEISWAMPACH
Matexi 35 units
developped by PAP Grossfeld
M
WINCRANGE CLERVAUX
IU
GE
LG
RM
PARC
HOSINGEN
BE
9 3
WILTZ
AN
LOT
KIISCHPELT
WINSELER
PUTSCHEID
Y
VIANDEN
GOESDORF
LAC DE LA HAUTE-SÛRE
BOURSCHEID TANDEL
BOULAIDE
ESCH-SUR-SÛRE
DIEKIRCH
ERPELDANGE BETTENDORF
104 units
REISDORF
28 units GROSBOUS
FEULEN
ETTELBRUCK Tralux
under construction RAMBROUCH WAHL MERTZIG
BEAUFORT
VALLÉE DE L’ERNZ
SCHIEREN
BERDORF
COLMAR
VICHTEN -BERG ECHTERNACH
PRÉIZERDAUL NOMMERN
LUXEMBOU
BISSEN WALDBILLIG
ROSPORT
DU R LAROCHETTE CONSDORF
REDANGE
USELDANGE
ELL HEFFINGEN
G
46
BOEVANGE
N
MOMPACH
-SUR- MERSCH FISCHBACH BECH
DI
ATTERT
LOT
JAR
BECKERICH SAEUL
LINTGEN MANTERNACH
JUNGLINSTER MERTERT
SEPT TUNTANGE BIWER
FONTAINES LORENTZWEILER
HOBSCHEID
BETZDORF
KEHLEN STEINSEL
GREVENMACHER
KOERICH KOPSTAL
WALERDANGE NIEDERANVEN FLAXWEILER
STEINFORT
MAMER
100 unités
14 300 sq.m
SCHUTTRANGE
650 units GARNICH
STRASSEN
LUXEMBOURG SAND
WORMELDANGE
par Capelli
Atenor
WEILER
Thomas & Piron BERTRANGE
CONTERN
LENNINGEN
KAERJENG DIPPACH STADTBREDIMUS
HESPERANGE
LEUDELANGE
WALDBREDIMUS
RECKANGE
PETANGE -SUR- WEILER BOUS
I MESS -LA- REMICH
BP MONDERCANGE
ROESER
TOUR
DALHEIM
T DIFFERDANGE
SANEM
BETTEMBOURG
C
FRISANGE MONDORF
47
JE
-LES-
SCHIFFLANGE BAINS SCHENGEN
P O
ESCH
LOT
-SUR- KAYL DUDELANGE
ALZETTE
RUMELANGE
10 000 sq.m
100 units / 10.000 sq.m 80 units / 25 000 sq.m
BPI
FRANCE Soludec / Asars
BPI
© BPI - Photo non contractuelle
25 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Investment
Market
« Luxembourg is on the
“shop list” of all institutional
investors. Due to the healthy
fundamentals of the market,
i.e. low vacancy rate, strong
demand and rental growth,
central and non-central
locations are sought after. »
VINCENT VAN BRÉE,
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 26 Head of Capital Markets LuxembourgResearch Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
SECOND-BEST YEAR EVER CONFIRMED
2018 started strongly and Q4 to Belgian insurers Integrale and transaction was the acquisition of
confirmed the trend: 2018 is the Ethias. The second is the purchase Rosenstiel in the CBD by GLL (5.000
second-best year ever in terms of by AXA Investment Management Real sq.m. of retail space).
investment. The full investment Assets of the “Le Dome” building from
We obser ved a change in the
volume for Luxembourg reached Blackstone. The last but not the least
breakdown of investment types
almost €1.9 Billion. If we compare is the acquisition by Immochan of the
over the course of the year. Value
this with 2017, the numbers talk JBBK building in Kirchberg previously
Added was the rule in Q3 and Core
for themselves: a 53% year on year owned by the German Commerzbank
transactions took over in Q4 with 58%
increase which is a great leap we Real. Other obviously played a big
of the total volume. This was followed
consider that the CAGR was 13% role into this impressive year such as
by Value Added (20%), Core+ (13%)
from 2013 to 2017. The good health of the sale of the KUBIC building BVW
and finally Opportunistic (9%). Core
Luxembourg’s economy and the rising Kirchberg SA in Kirchberg. Offices are
dominates the market largely due to
level of rents attract investors and clearly the asset class enjoying the
the acquisition of “Le Dome” in the
explain a major part of this growth. most liquidity.
station area and “Melius” in Ban de
Offices are still the main driver of Retail is the next biggest asset class Gasperich, which represent 34% of
growth for investment in Luxembourg with €103 million invested this year, the total volume. The size of Value
and represent 56% of the total a slight decrease on 2017 of 3.6%. Added category is mainly due to the
investment (or €1.9 billion). If we Most investors in retail are private redevelopment of 37,600 sq.m. of the
dive into the numbers for Offices we individuals and families having a JBBK building in Kirchberg.
see three standout transactions . patrimonial view, which implies that
The first and largest is the sale of their strategy is of buy and hold, hence
the new Deloitte HQ (31.000sq.m.) opportunities are scarce. The biggest
27 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
As previously mentioned the We saw two very interesting trends investment. The other nationalities
structurally low level of vacancy in in terms of buyer nationality. The first active in the market are UK and Israel,
the office market and the shortage is the boom in investment coming with one transaction each.
of quality housing fuel developers from Belgium and France which
interest for redevelopment generate the biggest drivers of the
t ra n s a c t i o n s . T h i s s u m m e r, global investment growth. Investment
E a g l e s t o n e a cq u i r e d t h e A l fa from French companies grew by 127%
Arcades, (the former headquarters yoy (to reach €448 million) and from
of the Banque de Luxembourg in the French firms by 54% (to reach €561
Station district) After redevelopment million). The second point is the
the property will comprise 2,000 sq.m. arrival of US investors, which invested
of offices, 1,200 sq.m. of retail and 800 €340 million in 2018 fuelled almost
sq.m. of residential. Price: €45 Mln. entirely by Fidelity acquisitions
a cco u n t i n g fo r 8 7 % o f a l l US
Building Price Yield Seller Buyer
HQ Deloitte Extensa /
€225 Mln (est.) 4.5% (est.) Integrale/Ethias
(Cloche d’Or) Grossfeld
Le Dôme (Station) < €200 Mln Conf. Blackstone AXA IM Real Assets
JBBK (Kirchberg) €170 Mln Conf. Commerz Real Private
Aerogolf Center
€100 Mln Atoz Fidelity
(Airport)
Extensa /
Melius €85 Mln Hannover Leasing
Promobe
Portfolio Intesa
€85 Mln Intesa San Paolo Triuva
San Paolo (CBD)
KUBIC €75 Mln Aberdeen Private
LOW YIELDS
The general good economic previously. Yields are also under lack of reference transactions on the
situation of Luxembourg and the high pressure in Periphery as well as in market. High street shops and retail
proportion of Core type of investment the City Belt. warehousing yields are flat as well at
set the tone for for the low level of respectively 3.25% and 5.25%. With
Logistics yields are unchanged
Yields. Office yields are accordingly regard to shopping centers, should a
at 5.75%, this level reflects our
under pressure, new prime office prime opportunity arise we estimate
sentiment and comparison with
buildings with strong creditworthy the yield would be around 4%, down
neighbouring countries rather than
tenants now trade at 4%, vs. 4.5% from 4.5% previously.
real transactions because of the
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 28Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
Summary
MARKET INDICATORS
29 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Offices 2016 2017 2018
Take-up
218,400 208,600 245,000
(total sq.m.)
Take-up (#
233 287 278
transactions)
Stock (sq.m.) 3,900,000 3,950,000 4,089,000
Completions
121,400 52,000 102,000
(sq.m.)
Vacancy (sq.m.) 209,700 188,400 139,400
Vacancy rate (%) 5.3 4.8 3.4
Prime rent (€/
46 47 50
sq.m./month +vat)
Retail 2016 2017 2018
Take-up (total sq.m.) 20,700 48,200 37,650
Take-up (# transactions) 69 70 74
Completions (sq.m.) 14,500 50,100 27,500
Prime rent (€/sq.m./month+vat)
High streets 130 130 150
Shopping Centres 110 110 110
Retail warehousing 20 20 20
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 30Research Report • Luxembourg Property Markets • Overview 2018 www.jll.lu
Residential 2016 2017 Q2 2018
(cumulative)
Sale of apartments :
Country
• Average price per sq.m. €5,590 €5,783 €5,976
Luxembourg City
• Average price per sq.m. €7,731 €8,237 €8,856
Sale of houses :
Country
• Average price per sq.m. €6,051 €6,316 €4,419
Luxembourg City
• Average price per sq.m. €7,587 €7,895 €7,064
Capital Markets 2016 2017 2018
Investment volume (million €) 1,042 1,260 1,929
Of which offices, 80% 82% 90%
Prime Yield – offices (%) 4.50 4.50 4.00
Prime Yield – logistics (%) 6.50 5.75 5.75
Prime Yield –
4.00 3.25 3.25
retail high streets (%)
Prime Yield –
4.75 4.50 4.00
retail shopping centres (%)
Prime Yield –
5.50 5.25 5.25
retail warehousing
Sources : JLL Research, LISER-Observatoire de l’Habitat
31 COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reservedwww.jll.lu Research Report • Luxembourg Property Markets • Overview 2018
Offices Luxembourg
Atrium Business Park
41 Rue du Puits Romain
L-8070 Bertrange - Luxembourg
T: + 352 - 46 45 40
www.jll.lu
Contacts
Romain Muller Angélique Sabron
MANAGING DIRECTOR HEAD OF MARKETS
LUXEMBOURG LUXEMBOURG
+352 46 45 40 22 +352 46 45 40 72
Romain.Muller@eu. jll.com Angelique.Sabron@eu. jll.com
Vincent Van Brée Ann Vanderwegen
HEAD OF CAPITAL MARKETS RESEARCH DIRECTOR
LUXEMBOURG BELUX
+ 352 46 45 40 35 +352 46 45 40
Vincent .VanBree@eu. jll.com ann.vander wegen@eu. jll.com
© BPI - Photo non contractuelle
www.jll.lu / Jones Lang LaSalle
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of evaluating this proposal.
All such documentation and information remains the property of Jones Lang LaSalle and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary
for its evaluation. It is not to be shown to any third party without the prior written authorization of Jones Lang LaSalle. All information contained herein is from sources deemed reliable; however,
COPYRIGHT © JONES LANG LASALLE IP, INC. 2019. All Rights Reserved 32
no representation or warranty is made as to the accuracy thereof.
© pictures : Foster+Partners/Tétra kayserYou can also read
