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Office Market Report 2016
Luxembourg
Letting Market Overview YTD 2016
 Take-up Q4:
 Take-up 2016:
 Transaction Q4:
 Transaction YTD:
 Average size :
 Vacancy rate YTD:
 Total stock YTD :
 m² offices delivered 2016:
48.485 m²
216.060 m²
54
233
927 m²
5,39%
3.851.845 m²
113.049 m²
(- 36,9 % Year Over Year)
(- 30 % YOY)
(- 30,8 % YOY)
(- 11,4 % YOY)
(+ 6,7 % YOY)
(+ 4,36 % YOY)
2
Office Market Districts
City (Core)
City (others)
City - Periphery
Periphery
3
Luxembourg Stock Distribution
2%
1%
5%
2%
27%
2%
2%
1%
2%
22%
2%
1%
10%
1%
11%
2%
City (Core)
2%
City (others)
City - Periphery
Periphery
5%
Source: INOWAI Research
4
Deal Distribution & Outlook
Deal Distribution
19 % of deals below 100 m²

41 % of deals below 200 m²

72 % of deals below 500 m²

83 % of deals below the average transaction size of 927 m²

15 % of deals over 1.000 m²

Median size : 286 m²
+5%
Average 927 m²
60
51
50

44
+ 80 %
40
30
27
21
25
20
13
7
10
10
14
10
4
3
4
0
OFFICE MARKET OUTLOOK

Take-up is expected to reach around 180.000m².

New deliveries 2017 : 61.000 m² of new offices should be delivered this year, 28% of these new surfaces are however already pre-let.

Vacancy rate is expected to remain stable around 5%.

Rental levels are expected to remain stable. Prime rent reached 50 € in the CBD in 2016.
Source: INOWAI Research
5
Office Market
Stock & Vacancy rate
Office Market 2016
District
CITY
Stock sqm
Kirchberg
CBD
Cloche d'Or
Station
Belair / Merl
Limpertsberg
Hamm
Kalchesbrück
Total:
CITY - PERIPHERY
Airport
Strassen
Bertrange/Bourmicht
Leudelange
Howald
Total:
PERIPHERY
Belval
Capellen
Munsbach
Windhof
Esch-sur-Alzette
Contern
Total:
Total
Stock %
1.063.500
831.514
408.600
387.600
91.500
86.500
49.000
33.000
2.951.214
171.355
86.650
82.000
73.556
62.600
476.161
188.245
75.035
60.100
40.600
32.600
27.890
424.470
27,61%
21,59%
10,61%
10,06%
2,38%
2,25%
1,27%
0,86%
76,62%
4,45%
2,25%
2,13%
1,91%
1,63%
12,36%
4,89%
1,95%
1,56%
1,05%
0,85%
0,72%
11,02%
3.851.845
+ Sub-letting :
Source: INOWAI Research
Vacancy sqm
Vacancy rate %
24.828
26.663
21.343
24.318
11.643
2.626
2.104
2.943
116.468
6.280
15.218
8.813
4.355
19.690
54.356
7.475
11.069
11.380
282
2.753
3.666
36.625
2,33%
3,21%
5,22%
6,27%
12,72%
3,04%
4,29%
8,92%
3,95%
3,66%
17,56%
10,75%
5,92%
31,45%
11,42%
3,97%
14,75%
18,94%
0,69%
8,44%
13,14%
8,63%
207.449
14.644
5,39%
0,38%
6
Office Market
Take-up & Vacancy rate
Take Up
Vacancy rate
%
‘000 m²
9,0
300
7,5
250
-30%
6,0
200
4,5
150
100
3,0
50
1,5
0
0,0
2006
Source: INOWAI Research
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
7
Take-up 2016
Main Transactions (> 1000 m²) 1/2
District
Tenant
m²
Kirchberg
Kirchberg
Kirchberg
Cloche d'Or
Airport
CBD
Kirchberg
Kirchberg
BGL BNP Paribas*
RTL*
Commission Européenne*
BDO*
DekaBank Girozentrale Luxembourg
SGBT
Vistra Luxembourg
Amazon
Commerzbank International SA/Julius Baer
BGL - Service IT*
EFG Bank Luxembourg
Banque J. SAFRA Sarrazin*
PWC
KPMG
Eri Bancaire
Globality Health
Enovos
Kleyr Grasso*
28.000
22.000
Kirchberg
Other Periphery
CBD
CBD
Howald
Kirchberg
Cloche d'Or
Munsbach
Strassen
Strassen
15.000
10.600
8.924
5.608
4.475
4.374
4.190
4.185
4.134
3.476
3.200
3.060
2.731
2.627
2.620
2.562
*Built to suit owner/occupier
Source: INOWAI Research
8
Take-up 2016
Main Transactions (> 1000 m²) 2/2
District
Tenant
m²
Hamm
Ministère de la Santé
2.452
Station
VILLE DE Luxembourg*
2.400
Cloche d'Or
SwissLife
CBD
Munsbach
China Everbright Bank
2.180
1.906
Immobilière Vauban
1.643
Belair/Merl
CSSF
Belair/Merl
Kirchberg
Hogan Lovells (Luxembourg) LLP
1.557
1.533
DLA PIPER
1.500
Esch-Belval
Banque Pictet
1.461
Belair/Merl
Station
Vitis Life
1.434
Banque Carnegie Luxembourg
1.375
Station
GazpromBank
1.290
Capellen
Electrolux Luxembourg
Leudelange
BIONEXT SA
1.256
1.139
Kirchberg
GSK Stockmann + Kollegen
1.112
Bertrange/Helfent
My Stock
1.100
Other Periphery
PolyOne SA
1.089
*Built to suit owner/occupier
Source: INOWAI Research
9
Take-up 2016
Activity & Districts
Split by District/m²
Split by activity/m²
Kirchberg
40%
Others
5%
Esch-Belval
1%
Capellen
1%
Leudelange
1%
Hamm
2%
Howald
2%
Munsbach
2%
Banking & Finance
48%
Others
1%
[POURCENTAGE]
CBD
15%
Belair/Merl
3%
Strassen
3% Other Periphery
4%
Source: INOWAI Research
Airport
5%
Station
7%
Cloche d'Or
9%
Industry
2%
Fiduciary &
accounting
3%
Admin. & Pub.
Serv.
3%
IT & Telecom
16%
N.S.
Insurance Law Firm
4%
4%
5%
Serv. for comp.
7%
EU
7%
10
Rental Bands New Buildings
€/ m²/ month (excl. VAT )
CBD
Kirchberg
Station
Limpertsberg
Merl
Belair
Cloche d'Or
Strassen
Airport
Leudel.
Howald
Bourmicht
Capellen
Bertrange
Kalchesbr.
Hamm
Belval
Munsbach
Windhof
Contern
16 €
18 €
20 €
Source: INOWAI Research
22 €
24 €
26 €
28 €
30 €
32 €
34 €
36 €
38 €
40 €
42 €
44 €
46 €
48 €
50 €
11
Rent Time Series
€/ m²/ month excl. VAT
43 €
CBD
40 €
37 €
34 €
Station
31 €
Kirchberg
28 €
Cloche d’or
25 €
City Periphery
22 €
Periphery
19 €
16 €
2001
2002
Source: INOWAI Research
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
12
Total Stock Evolution
Stock
3.800
3.500
3.200
2.900
2.600
2.300
2.000
1.700
‘000 m²
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
13
Capital Market
Overview 2016

Investment transactions YTD 2016: ± 1.352,4 €m
 Standing investments: 1.062,4 €m
 Development: 203,5 €m
 Occupier / Owner: 86,5 €m

Number of transactions YTD 2016: 42

Standing investments : 23

Occupier / Owner : 16

Development : 3
Split by district/volume
CBD
24%
Hamm
1%
Other
Periphery
1%
Leudelange
1%
Limpertsberg
3%
Station
19%
Belair / Merl
3%
Howald
5%
Capellen /
Windhof
5%
Bertrange /
Bourmicht
18%
Strassen
7%
Kirchberg
14%
Split by # of deals
CBD
33%

Station
14%
Prime Yields :
 City : 4,35% (2015 : 4,35%)
 Periphery : 7,00% (2015 : 7%)
Strassen
10%
Hamm
2%
Leudelange
2%
Howald
2%
Bertrange /
Bourmicht
2%
Esch
5%
Kirchberg
7%
Other Periphery Limpertsberg
5%
5%
Capellen /
Windhof
5%
Belair / Merl
7%
14
Capital Market
Deal distribution
5%
14%
3%
7%
24%
18%
3%
1%
29%
5%
City (Core)
City (others)
City - Periphery
1%
Periphery
Volume
>98%
15
Capital Market
Investment Volume Evolution 2016
M€
3.000
2.500
2.000
1.500
1.000
500
0
2004
Source: INOWAI Research
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
16
Capital Market
Prime Yield Evolution
Prime Yield City
%
Prime Yield Periphery
7,50
7,25
7,00
6,75
6,75
6,75
6,85
5,25
5,25
7
7
7
4,35
4,35
2015
2016
6,5
6,50
6,25
6,75
6,85
6,5
6,00
6,25
6
6,08
5,75
5,50
6,13
5,75
5,63
6
5,757
5,5
5,25
5,00
5
4,75
4,50
4,25
4,00
3,75
3,50
2005
Source: INOWAI Research
2006
2007
2008
2009
2010
2011
2012
2013
2014
17
NOTES
Capital Market
Investors in Luxembourg

GERMANY:
AIK, Allianz, Commerz Real, DEGI, Deka Immobilien, Hannover Leasing, HansaInvest, HSBC Trinkhaus, Triuva
Immobilien, KanAm, Pramerica REI, Real IS, SEB Immobilien, UBS RE, Union Investment

BELGIUM:
AG Real Estate, Befimmo, Fidentia, KBC RE, Leasinvest, Retail Estates, Groupe Quares, Ethias, Ogeo

UK:
Aerium, Aviva Investors, Rockspring

HOLLAND:
Breevast

FRANCE:
AXA REIM, CNP, Monceau Assurances, Amundi

AUSTRIA:
Eco-Business Immobilien AG, Signa


US:
Blackstone, Morgan Stanley, Starwood, ARC
ABU DHABI
ADIA Investment Authority
19
Developments
Main Market Players

LUXEMBOURG
ALAG, Avensis, CM Participation, CDC, Everop, Felix Giorgetti, Ikogest, Immobilière Konrath, Royal
Properties, T-Comalux, Tracol, Valeres, The Wagner Group, Schuler, Solum Real Estate

BELGIUM
Allfin, Atenor Group, Banimmo, BesixRED, CLE/CFE, CIP, CODIC, Gilbo Construct, Immobel, Matexi, Pylos,
Thomas & Piron

GERMANY
Baumeister Haus, Somaco

HOLLAND
Breevast

FRANCE
Vinci Immobilier

SWEDEN
Dawimo
20
Master Plan 2016-2030
Luxembourg-City and Esch/Belval
 CBD, PLACE DE L’ETOILE, 2019-2025:
10 000 m² office, 18 000 sqm retail, 17 000m² residential
 CBD, ROYAL-HAMILIUS, 2017-2019:
10 000 m² office, 12 000 m² retail, 16 000m² residential
 KIRCHBERG, INFINITY, 2017-2019:
6 800m² office, 6 500 m² retail, 20 000m² residential
 CLOCHE D’OR, BAN DE GASPERICH, 2016-2030:
490 000 m² office, 80 000 m² retail, 120 000 m² retail
 STATION, LUXEMBOURG-CENTRAL, 2025:
113 000-199 000 m² office, 6 000 – 73 000 m² retail
 STATION, ACIÉRIE-INDUSTRIE (PAUL WURTH), 2025: 215 000 m² office, 47 000 m² retail
 STATION, PORTE DE HOLLERICH, 2030:
500 000 m² office, 150 000 m² retail
 AIRPORT, FINDEL, 2025-2030:
50 000 m² office, hotel, 4 100 parking spaces
 ESCH, BELVAL, 2015-2030:
253 000 m² office, 35 000 m² retail
21
Macro economic zoom
 Total Population (Jan 2016):
 Luxembourg-City:
≈ 576 249
≈ 110 500
 Esch-sur-Alzette:
≈ 33 940
 Wage-earners (Nov 2016):
≈ 397 321
 Cross-border commuters(Sept 2016 ) ≈179 016
50% F, 25% D, 25% B
 Unemployment rate (Nov 2016):

 Inflation rate (Nov 2016):
≈ 6,2%
 Growth rate 2015:
 Growth rate forecast 2016:
 Growth rate forecast 2017:
≈ 3,5%
≈ 3,7%
≈ 4,2%
GDP Growth
8%
6%
4%
2%
≈ 0,5%
 GDP per capita (€) Lux (2016):
 GDP per capita (€) Euro Zone-19 (2016):
 GDP per capita (PPS) Lux (2016):
 GDP per capita (PPS) Euro Zone-19 (2016 ):
0%
-2%
≈ 80 800
≈ 29 200
≈ 264
≈ 106
-4%
Luxembourg
EU-18
Source Statec
Luxembourg Rankings
Luxembourg :
• Only 0,0017% of the Earth’s surface
• Only 0,0073% of the World’s population
The Grand Duchy is one of only nine countries worldwide to hold a AAA rating by all three major credit rating agencies
Ranking
TOP 100 of the world best development perspectives (contor / manager
magazin)
Labor productivity per hour
(the conference board)
European micro cities with economic potential
(fdi magazine)
Global Innovation Index (INSEAD)
Ranked
Out of
Year
1
100
2010
1
43
2013
1
253
2012
9
141
2015
Ranking
Ranked
Out of
19
186
2016
European Smart Cities (TUWIEN)
1
77
2014
Fundamental Health Indicator (The Lisbon Council)
3
21
2015
14
86
2016
Global Talent Competitiveness (INSEAD)
3
93
2015
Open Market Index (ICC)
3
75
2015
16
154
2014
67
2015
Index of Economic Freedom (Heritage Foundation)
Global Financial Centers (ZYEN)
Best Countries for Business (Bloomberg)
Year
Gross domestic product (GDP) based on purchasing-power-parity (PPP)
per capita- (Global Finance)
2
185
2015
ICT Development Index (ITU)
6
Quality of life study (ECA)
3
254
2012
Index of Globalization (ETH)
18
187
2016
Sustainable Governance Indicators (Bertelsmann)
8
40
2014
Global ICT Index (world economic forum)
9
143
2015
International Property Rights Index (PRA)
Logistics Performance Index (World bank)
4
8
129
160
2015
2014
11
138
2014
6
61
2015
20
144
2015
Global trade enabling index (world economic forum)
Global competitiveness rankings
(institute for management development)
Growth competitiveness index (world economic forum)
23
The Financial center
More than 60,000 employees
 Banks: (Dec 2016)
 Number of banks: 141
Banks: Evolution of balance sheet vs. n°of employees*
€ bn
'000
1,1
28
1
27,5
 Employees: 26 132
0,9
27
 Countries of origin: 28
0,8
26,5
0,7
26
0,6
25,5
0,5
25
 Investment funds : (Nov 2016)
 Number of UCIs: 3 891
 Net assets: 3 626 bn€
 PSF: (September 2016)
Balance
€ bn
Investment funds: evolution of net assets vs. N°of funds*
 Number of PSF: 309
4.500
 Employees: 15 079
4.000
 Insurance & Re-insurance: (July 2016)
 Number of insurances: 91
 Number of re-insurances: 216
Employees
4.000
3.500
3.500
3.000
3.000
2.500
2.500
2.000
2.000
1.500
1.500
2006
2007
2008
2009
2010
N° of Funds
2011
2012
2013
2014
2015
2016
Net assets
24
Major companies – January 2016
Company
Groupe Entreprises des P&T
Groupe ArcelorMittal
Groupe Cactus
Groupe CFL
BGL BNP Paribas
Groupe Dussmann Luxembourg
Goodyear Dunlop Tires Operations
Luxair SA
Groupe PWC
Fondation Hôpitaux Robert Schuman
Centre Hospitalier de Luxembourg
Fondation Stëftung Hëllef Doheem
Groupe BIL
Centre Hospitalier Emile Mayrisch
Sodexo Luxembourg
Servior
Banque et Caisse d'Epargne de l'Etat
Elisabeth
Groupe Deloitte à Luxembourg
Compass Group Luxembourg
Nettoservice
Government
City of Luxembourg
Line of business
Post & Telecommunications
Steel industry
Supermarkets
Railway
Bank
Cleaning
Tyres
Airlines
Tax & Advisory
Hospital
Hospital
Help and services for seniors
Bank
Hospital
Catering & Facilities Management
Housing & services for seniors & disabled
Bank
Social Services
Tax & Advisory
Catering & Restaurant
Cleaning
Employees
4 320
4 180
4 060
4 040
3 830
3 450
3 290
2 470
2 570
2 240
2 140
1 900
1 940
1 930
1 820
1 810
1 780
1 680
1 740
1 600
1 280
26 919
3 949
25
Headquarter of European Institutions
 Court of Justice of the European Communities
 European Court of Auditors
 European Commission
 Eurostat (part of European Commission)
 General Secretary of the European Parliament
 European Investment Bank
 European Investment Fund
 Office for Official Publications of the European Communities
 Translation Center for the Bodies of the European Union
 European Stability Mechanism (ex EFSF)
… over 700 000 m² office, 190 000 m² of extensions in construction
over 120 000 m² in project
26
Julien Pillot
INOWAI S.A.
Head of Office Agency
T. + 352 26 43 07 07 48
[email protected]
Marc Baertz - MRICS
INOWAI S.A.
Partner & Head of Valuation
T. + 352 26 43 07 07 36
[email protected]