Luxembourg property professionals had already understood, a long time ago, the value of taking part in the MIPIM, at the Palais des festivals in Cannes, which took place in March. The 28th edition covered very wide-ranging themes, with an imposing British delegation in attendance.
This was unprecedented in 27 previous editions of the MIPIM. Never had there been such a presence from a national delegation. This year the British had their own pavilion within the Palais des festivals from which to launch a large scale communications campaign: London, and the cities of ‘Perfidious Albion’ want to show that they are still attractive for investors and building projects. In reality, the British professionals in this sector have no choice: Brexit has had a catastrophic impact on investments, down 42% in 2016 compared to 2015, according to the Cushman and Wakefield special report published in February. Transactions that used to take three months to complete now take twice that, and a quarter of transactions are on hold.
With a vacancy rate that is still very low as the politicians begin the discussions, likely to last some time, businesses, mainly London-based, are seriously raising their game, to shift at least some of their activity over to the Old Continent, particularly financial services, in order to be able to continue to benefit from the European passport that enables them to work in all of the Member States.
This is a key question for the Luxembourg financial market. The latest announcements show that Luxembourg could be a location of choice, which neither the Prime Minister or the Minister of Finances seem to question any more. Simply in order to welcome these companies, the politicians and the property professionals will need to play it safe: the new arrivals have scarcely contributed to providing a shot in the arm for vacancy rates in office property, which were at 4.2% in 2015, and 5.3% last year in Luxembourg.
According to the Jon Lang Lassalle annual report, even though the vacancy rate has doubled in Kirchberg, it is still very low (at 1.9%). The additional availability is perceptible in the station district (4.4 %) and in the outlying areas (8%, as against 5.9% a year ago).
23,000 visitors and 400 lectures…
This MIPIM with the title “Nouvelle donne pour l'immobilier” / “New Deal for Real Estate” was a focus of attention for other reasons. It combined three issues that are starting to gently impinge on our minds: there will soon be 8.3 thousand million people living on this earth, two thirds of whom will be living in an urban environment; the demand for energy will increase by 40% and half the world population could be short of water; finally, the digital revolution should translate into thousands of millions of connected objects which will have an impact on our day to day lives in all kinds of ways.
Luxembourg is active in all of these issues. Faced with an interrupted price rise in the context of a difficult property market, it should advance more into the field of eco-construction and digitalisation, whose main issues were extensively covered in the Rifkin report.
Over four hundred lecturers addressed these subjects for the 23,000 visitors attending the trade far this year, including a thousand politicians, including five hundred mayors or burgomasters. Two Luxembourg ministers took part: the minister of the Economy, Etienne Schneider, and the minister for Sustainable Development, François Bausch.
For the first time, organisers will have created an innovation forum in the 1,500 m2 space, bringing together sixty companies, with a start-up competition for the entire planet.
source: Thierry Labro / Luxemburger Wort
photo: CJ9, the third tower of the European Union Court of Justice - one of the four Luxembourg projects presented at Cannes, source: MIPIM