Vincent Bechet, Marc Baertz, Jean-Nicolas Montrieux (Inowai):
Property and mobility
Vincent Bechet, Partner and Managing Director, Marc Baertz, Partner and Head of Valuation and Jean-Nicolas Montrieux, Partner and COO of INOWAI assess the property market in Luxembourg. A sector which benefits from the dynamism of the economy.
How do you see the development of the Luxembourg property market?
Vincent Bechet (VB): Luxembourg is one of the best countries within the euro zone. Regular growth for many years combined with political stability generates confidence, the main factor sought by investors. The property sector benefits directly.
Marc Baertz (MB): The strength of the financial market, plans for new launches within the insurance sector, industrial investments and, in infrastructure, the Family Offices which create real substance in Luxembourg, contribute to an excellent office occupancy rate. A trend has emerged since 2008: an increase in the market share of residential property. Low rates reassure investors, who represent more than 50% of buyers. Consequently, the sector is seeing the emergence of specialised investment funds.
« Developers are looking to be close to the tram line, which will significantly improve mobility »
What initiatives are there in Luxembourg to support competitiveness?
VB: Two key words are constantly mentioned by foreign investors: legal certainty and stability. The sector is adapting to the market by investing in the energy performance of buildings, for example. The tram is also becoming a driving force. Developers are looking to be close to the tram line, which will significantly improve mobility: being able to get off a plane in Findel and trvel to La Cloche d'Or by tram is a real plus.
What opportunities do you see for Luxembourg and, more specifically, for INOWAI?
Jean-Nicolas Montrieux (JN): Despite a number of significant projects, there is a persistent imbalance between supply and demand for purely demographic reasons. It’s estimated that about 6,000 homes per year would be needed to achieve a balance. Current rates of development of about 4,000 units per year is leading to a steady increase in prices. This increase was between 5 and 10% last year, depending on the sector and the location.
VB: We don’t anticipate a decline in demand in the residential or office sectors in the coming years. In terms of the impact of Brexit, we’ve felt the shockwaves and the market is now calmly preparing for an influx of requests. We can easily absorb the announced figure of 3,000 new jobs over 3 years, mainly by increasing the size of existing structures.
MB: At INOWAI, we’re calm about the future. We want to maintain continuous but controlled growth: from 3 people in 2002 to 52 today. By providing a full range of property services and professions, we offer our customers stability and security. For example, our expertise in property valuation is an important growth factor. INOWAI’s organic growth has followed the country’s growth. Being patient will help us to benefit from the effects of current investments.