Vincent Bechet (LuxReal): Grand Duchy, XXL real estate
LuxReal, the association representing the leading players in the Luxembourg real estate market, states that Luxembourg is attracting more and more major investors in the sector. And the future outlook continues to be optimistic, according to Vincent Bechet, President of LuxReal.
Can you tell us about LuxReal in a few words?
LuxReal, otherwise known as the Real Estate Association, with a Board of Directors of 14 members, brings together since 2009 a number of members representing key players in the Luxembourg real estate ecosystem. These include investment funds, specialist law firms, international and Luxembourg brokers, experts from the “Big 4” audit firms, architects, developers, and senior banking executives. Over the year, the association organises a series of specialist forums and networking events. The events are generally open to non-members, encouraging a constant mix between different professional backgrounds. Nevertheless, LuxReal members benefits from some exclusive networking events for members only. So far, LuxReal organised around 50 forums, attracting a large number of high-level international and national players, each time hosted in exclusive locations. These meetings are designed to cover the diversity of the real estate sector and meet a range of needs. LuxReal is keen to welcome all professionals in the sector.
“Continual economic growth and low interest rates are perfect for encouraging investors to continue choosing Luxembourg...”
What are the specific features of the Luxembourg real estate market?
Primarily, the Grand Duchy of Luxembourg holds two assets: firstly, a very buoyant economy, considered to be one of the best in the eurozone, and secondly, the highest demographic growth in the EU. These two factors combined mean that there has been continual growth in the real estate market in general, led by the explosion of fund management volumes from private equity (or capital investment), but also from Family Office (or wealth management), insurance, fintech, etc. It should also be noted that residential real estate which, structurally, lags behind demographic growth, has seen continual price rises for several years.
What are the prospects for the real estate sector in the next five years?
The capital of the Grand Duchy, although the size of a small provincial town, developed a tertiary real estate market - primarily offices - comparable to that of Dublin. As a result, Luxembourg is now on the map for major investment funds and the big international insurance companies.
Generally, businesses and analysts have a lot of confidence in the Luxembourg business model. The model demonstrates Luxembourg’s capacity to adapt to a world in which transparency is now a key value, meaning that the coming years can be viewed with confidence. Firstly, the robust health of the real estate sector is a result of economic growth, and secondly, no analysts are predicting a sudden rise in interest rates, so there should be a significant flow of capital seeking returns in this sector.