Luxury calls for luxury Business in Luxembourg Ville-Haute
B Y G É R A R D K A R A S
There are few cities as well-endowed with luxury boutiques as Luxembourg Ville-Haute, and particularly Grand Rue and rue Philippe II. Everything leads one to think that the future for luxury brands in Luxembourg is a bright one!
Luxembourg is a European capital. It is therefore necessary, indispensible even, for international luxury brands to show themselves and to present their collections to the public, even though there may not always be the immediate prospect of profitability.
The location and visibility offered by a presence in a strategic place are some of the main reasons for the interest shown in given premises by an international brand.
Other considerations, particularly fiscal, and the obligation to have a physical presence to justify the presence of a holding, also play a part in the decision to locate within the Grand Duchy.
“Demand for opening a boutique in Luxembourg from a large number of desirable brands remains strong and is tending to stabilise in relation to the existing availability”, notes Fabrice Kreutz, a specialist in Luxembourg commercial property.
It may be noted that trading locations do not remain empty for long, such as the Krau-Hartmann shop, which recently closed its doors after over a century of trading.
In this respect, the closure of this historic shop in the city marks the ineluctable decline in the presence of independent traders in the heart of the city. One must remember that Jacques Krau, formerly the owner of the shop, was, in 1928, in collaboration with the Burgomaster Gaston Diderich, in the initiative for the creation of the Luxembourg discount centre. The Krau-Hartmann shop will be replaced by a Gérard Darel franchise, which will leave room, in avenue de la Porte Neuve, for a Pablo boutique.
“Other movements concerning boutiques, with approximately five departures and as many arrivals, may be expected in the coming months”, announces Fabrice Kreutz, without, however, giving the names; “the leases have not yet been signed”, he explains. The level of rents, which has increased by 12.5% in the last 5 years, is tending to stabilise around 215 euros per square metre per month, which may change, depending on location, while the average shopping centre lease is within the range of 120 and 150 euros per square metre per month. The theory is that the rental should not exceed 10% of turnover.
The Royal Hamilius will be a game changer
With the arrival of the tram in the city centre, the imminent establishment of the Royal-Hamilius centre will be a landmark development for the city of Luxembourg in the years to come. With its 10,000 m² of offices, its 73 apartments, its 15 business units, and 630 parking spaces, it is indisputable that the availability of commercial premises will be transformed.
Regarding commercial store traffic, the electronic goods/HiFi telecommunications company FNAC, a Delhaize supermarket and Inno Department Store have already been announced.
Opening is scheduled for 2019.
The commercialisation of business units will begin at the end of this year, while the sale of apartments is planned for spring. “Parking spaces will be distributed as follows: approximately 130 spaces allocated to offices and residential use. The rest, or 500 spaces, will be for the general public, and will be managed by the German contractor APCOA”, says the assistant managing director of Codic Luxembourg, Raphaël Van Der Vleugel, the project’s developer.
Some very dynamic current trends
Major international groups are always looking for prime locations. Even access difficulties, such as the current lack of parking, are compensated for by the emotional aspect of the purchase.
The act of purchasing in a luxury boutique is often linked to an exceptional event or occasion, which compensates for possible inconveniences due to access that is more difficult than supermarkets or even more so than e-commerce on the Internet. Customers are mainly a resident international clientele, tourists and a business clientele. What is true for trade, is just as valid for the restaurant, dining and catering sector, attracted by a level of presence on the Place d’Armes or in the immediate vicinity, especially for lunches. The restaurant sector suffers from a lack of a local population for dining at lunchtimes. The development of top of the range residences in the city centre and the actual presence of new residents will be an additional bonus for commerce in general and for the restaurants at the heart of the city in particular. These residences are the Cloître St François in rue Siegfroi, résidence Cécile in boulevard de la Pétrusse, and Fensterschlass in rue des Bains. The sale price of apartments in these luxury residences will be in the region of 15,000 euros per m². Added to the apartments in the Centre Royal Hamilius, the number of residents in the city centre will be increasing, so long as these apartments are actually occupied and not used solely as addresses for tax purposes.
Efforts that have been made, for example, in the adaptation of opening hours to the needs of the clientele, or the improvement of the attractiveness of the city with facilities such as Golf in the city, the discount centre, or the Stroossemaart, may have a positive influence on the business market. It seems however, that in the medium term, when the tram service is running, and the Royal Hamilius has opened its doors and the surfacing of the pedestrian zone has been completely harmonised, the attractiveness of the Ville-Haute will be even greater than it is now, inevitably enticing the major brands to establishment themselves here. There is a bright future around the corner for luxury in Luxembourg!
Source : Luxemburger Wort