Page 1

Luxembourg – Winter 2012/13

Professional Real estate

brought to you by

AV Q AIL 1 A 20 B 14 L E

Summary City Link at a glance p.1 Editorial

p.2

Our current offers

p.3-10

Key figures

p.11-13

Our special feature: Focus on City Link building

p.14-15

Glossary

p.16-17

Contact Us

City Link building developed by

REALCORP Luxembourg 22, Avenue Monterey, L-2163 Luxembourg Tel: +352 26 27 29 www.realcorp.lu

Ce r t i fi e d by

p.1


Luxembourg – Winter 2012/13

Editorial Here we are again—entering a New Year full of expectation and resolution, buoyed by last year’s successes, and positively wiser by our failures, hoping for a smoother ride in the market, but ready for anything! WHAT’S IN THIS NEWSLETTER We’re excited to start 2013 with a great selection of buildings To Let and For Sale in Current Offers (pp. 3-10),which are highlights from our extensive collection at realcorp.lu/property. In particular, we look forward to introducing you to the new City Link building developed by Pylos Benelux SA, which is designed to provide light and space on the corner of Rue de la Chapelle and Boulevard de la Foire in the CBD (see Feature pp. 12-13). Their well-designed, environmentally-friendly projects and their flexible approach have made this developer a pleasure to work with in the past, so contact us without delay if you want new office space from an experienced provider who can listen and adapt to your needs. At the beginning of the New Year, it’s useful to reflect not only on the last Quarter’s performance, but also on trends over the whole of the last year. 2012 produced a mixture of good and bad indicators for the whole Eurozone and a similarly mixed view for Luxembourg, with a decline in industrial production and investment, but some positive movement in construction, increased inflation and a continuing squeeze on jobs, but some good results in finance and retail. See the overview and analyses in our Key Figures (pp. 11). SUPPORTING PEOPLE TO NEW HORIZONS In the last few months we have said goodbye to two people whose expertise and support have been highly valued at RealCorp and by our clients: Greg Sheppard and Kathy Liebl. RealCorp has grown stronger as a result of their contribution and we support them both in following their hearts to pursue the different goals that are important to them. We look forward to catching up with their news at industry events or over a coffee and a cupcake at Kathy’s Cupcakery!

NEW FACES, NEW SKILLS, NEW STRENGTHS We are delighted to welcome Charlotte Liégeois to our team. As Office Manager, she oversees fund and board documentation, office administration and accounting. Originally from Belgium, she obtained her degree in Marketing—International Trade in Luxembourg. An experienced Communications Officer, she speaks French, English, Spanish and German. She previously worked in Luxembourg for the European Investment Bank Monitoring Division for loans outside Europe, and as Latin America Division Monitoring Officer. She also served in Brussels as the European Commission’s Front Office Manager for Field offices and relations with Representations in Member States. We also welcome Aline Verdin as an Administrative Assistant to our Agency Team. Another strong communicator, she originally qualified as a teacher of French. In 2010 she achieved a Master’s in Information and Communication, with a specialisation in Public Relations. She also studied English in Cambridge, UK, and speaks Spanish as well. After interning at Le Soir (Belgium), she worked as a journalist at Talk2u (Luxembourg), a Marketing Assistant at Van In Editions (Belgium) and a Communications Officer at Haute Ecole Robert Schuman (Belgium), before joining RealCorp in 2012. Aline helps the Agency Team with marketing, office and business administration, and client support. To see the experience and qualifications of REALCORP staff, as well as individual contact details, visit our site’s Management Team page at: realcorp.lu/about/management-team. We all look forward to doing business with you in 2013! Michael Chidiac Managing Director

Non- contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.2


Luxembourg – Winter 2012 /13

Current Offers To Let

Offices 2116 sqm Not divisible Availability: contact us

Central Business District

280749

Offices 3125 sqm Divisible from 81 sqm Available now

Offices 1070 sqm Not divisible Available Q2 2013 296117

200981

N

EW

Offices 843 sqm Divisible from 396 sqm Available now 218996

Offices 5428 sqm Divisible from 978 sqm Available Q4 2014

Offices 552 sqm Not divisible Available now

290115

301402

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.3


Luxembourg – Winter 2012/13

Current Offers To Let

Offices 313 sqm Divisible from 200 sqm (or 113 sqm) Available now

Airport / Kirchberg

281967

Offices 2967 sqm Divisible from 707 sqm Available now

Offices 2256 sqm Divisible from 100 sqm Available now 222275

206239

Offices 1986 sqm Divisible from 480 sqm Available Q1 2013 294681

Offices 916 sqm Not divisible Available now

Offices 7780 sqm Divisible from 220 sqm Available now 279979

207442 / 207435

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.5


Luxembourg – Winter 2012/13

Current Offers To Let N

N

EW

EW

Offices 165 sqm Divisible from 15 sqm Available now

Bourbon / Gare / Hollerich

341165

Offices 2537 sqm Divisible from 284 sqm Available Q2 2013

Offices 3675 sqm Divisible from 291 sqm Availability : contact us 304810

295855

N

EW

Offices 200 sqm Divisible from 97 sqm Available now

222621

Offices 450 sqm Divisible from 80 sqm Available now

Offices 1158 sqm Divisible from 259 sqm Available now

295372

207633

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.6


Luxembourg – Winter 2012/13

Current Offers To Let N

EW

Offices 1258 sqm Divisible from 629 sqm Available now

Gasperich / Leudelange

ref.: 275211

Offices 2472 sqm Divisible from 834 sqm Available now

Offices 1855 sqm Divisible from 233 sqm Available now 299705

205166

N

EW

Offices 17331sqm Divisible from 700 sqm Available now 282812 / 207202

Offices 5285 sqm Divisible from 423 sqm Available now

Offices 4471sqm Divisible from 556 sqm Available now

207463

306409

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.7


Luxembourg – Winter 2012 /13

Current Offers

Strassen / Bertrange /Capellen

To Let

Offices 5448 sqm Divisible from 261 sqm Available now 207027

Offices 380 sqm Not divisible Available now

Offices 898 sqm Divisible from 207 sqm Available now 310334

220008

Offices 2637 sqm Divisible from 400 sqm Available now 204944

Offices 330 sqm Not divisible Available now

Offices & Retail 2386 sqm Divisible from 580 sqm Available now 279629

278229

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.8


Luxembourg – Winter 2012/13

Current Offers

HAMM

To Let

ESCH

Offices 245 sqm Not divisible Available now

CONTERN

205218

Offices 750 sqm Divisible from 375 sqm Available now

Offices 740 sqm Not divisible Available now

Offices 5840 sqm Divisible from 376 sqm Available now

CONTERN

221644

Offices 140 sqm Divisible from 65 sqm Available now

208778

204087

LIVANGE

HAMM

339284

Offices 876 sqm Divisible from 292 sqm Available now

221809

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.9


Luxembourg – Winter 2012/13

Current Offers

STATION

BETTEMBOURG

For Sale

Contact us now to discuss Office and Retail properties for sale in the Station (Gare) area. +352 26 27 29

Offices 152 sqm Not divisible Availability: Contact us

CBD

ASPELT

338358

Offices 130 sqm Not divisible Available now

Offices 300 sqm Not divisible Available now 309777

306647

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.realcorp. lu p.10


Luxembourg – Winter 2012/13

Key Figures Economic Context European stock indices ended the year 2012 on a rather positive trend. The overall GDP growth registered in the last two months of the year helps to encourage optimism in the euro zone. However, household consumption remains limp, mainly because the labour market is still struggling to recover. In Luxembourg, the decline in industrial production continued over Q3 and Q4. As a result, we expect a sharp drop in investment in industry in Luxembourg for 2013. One reassuring and promising element is the improved indicators of confidence in construction in Luxembourg for 2013. The financial and retail sectors did show a modest upward trend, but there is some concern for banks and financial sector jobs. Also, the Luxembourg reforms that came into effect in late 2012, such as new pricing for crèches and service employment cheques, have strongly impacted inflation (+0.2 points) and we expect this to rise to continue with more reforms in 2013. It is therefore appropriate, for this New Year 2013, to watch this weak recovery with care. It will depend mainly on consumer confidence which currently is not certain. We thus await the indicators of the next two quarters with some apprehension. Summarised from source: STATEC December 2012

Demand

Take-up: Office

This last quarter comprised 42638m ² of offices in 69 transactions. This total is very similar to that of the same quarter in 2011 (42901m² in 70 transactions). The major difference this year is in the Q3 total of 27585m², a 50% drop in take-up compared to 55415m² in Q3 2011. This Q3 slowdown affected the 2012 annual result of 145939m ², which is about 30000m ² less than the 172762m ² transacted in 2011. The most significant transactions from Q4 are: o o o o o

Espace Strassen—8134m ² at 2, rue des Primeurs, Strassen European Investment Bank—4814m ² in the BHK building, Kirchberg Duo Decad ITS—1223m ² in the Axento building, Kirchberg BRE Europe—2059m ² in the Vertigo building, in the Cloche d’Or The Luxembourg Stock Exchange—4635m ² in the Aurora building, CBD

The most dynamic sectors in Q4 were CBD, Strassen, Kirchberg, Capellen, Gasperich and Station. This tendency was evident throughout 2012, especially for the CBD, Kirchberg and the Station area, e.g. AXA (CBD) the EIB site (Kirchberg), and Société Générale (Station).

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu

p.11


Luxembourg – Winter 2012/13

Key Figures SUPPLY Vacancy

14% 12% 10% 8% 6%

Evolution of Luxembourg vacancy rate

4% 2%

2

2

Q4 /1

1

Q2 /1

1

Q4 /1

Q2 /1

0 Q4 /1

9

0 Q2 /1

Q4 /0

Q2 /0

9

0%

The vacancy rate has declined to 6.68% (versus 7.33% in Q3), but is almost similar to that recorded in Q4 2011 (6.63%). The declining rate is mainly due to the lack of new supply in Q4. 2013 could turn out to be a year of decline (or, at worst, stagnation) in the vacancy rate because many buildings scheduled to be delivered this year are already entirely (or almost entirely) rented (e.g. Kremer Clifford Chance in the Charlotte building and The Luxembourg Stock Exchange in the Aurora building, both in the CBD).

Rents

PE RT CH B ER G IR K

C

BD

LI M

PO R

T

H A

ER O

IC

SP ER

CH A

G A

NS B

U

G

A R E

Rent range per sector

M

C

O N ETR N H O W A LD B ER TR A N G E H MA LE M U D EL A NG ST E R A SS EN C AP EL LE N

€44.00 €40.00 €36.00 €32.00 €28.00 €24.00 €20.00 €16.00 €12.00

Rents did not undergo any major changes in the last quarter of 2012. The trend is towards stagnation in prices, with owners open to the possibility of negotiation regarding freebies and facilities. Only the CBD recorded a transaction of more than 40 €/m² in one of the main arteries of the city: HMS rented 617m ² in the Brasseur Centre building in Grand Rue.

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu

p.12


Luxembourg – Winter 2012/13

Key Figures Most Dynamic Sectors In 2012, sectors such as Capellen and the Airport were much more dynamic in terms of take-up compared to the year 2011. This can be explained by the arrival on the market of new projects (such as Solarwind) which drew a greater proportionate share of demand. The incentives granted by the owners certainly increased the desirability of areas that previously attracted fewer customers.

2012

GASPERICH BERTRANGE

AIRPORT

CBD

STRASSEN

Most dynamic sectors in 2012

CAPELLEN KIRCHBERG STATION

2011

CONTERN

AEROPORT BERTRANGE HOWALD GASPERICH

CBD STRASSEN KIRCHBERG

Most dynamic sectors in 2011

LEUDELANGE

ESCH STATION

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu

p.13


Luxembourg – Winter 2012/13

Feature AV Q AIL 1 A 20 B 14 L E

City Link

building developed by

RealCorp is pleased to present another innovative project by Pylos Benelux SA. This conveniently-located CBD building designed by Jaspers-Eyers Architects will brighten the corner of Rue de la Chapelle and Boulevard de la Foire in Luxembourg. With wide, tall windows and internal glass panes, it maximises the sense of space for thinking and working. Demolition and construction works began in November 2012 to welcome tenants from January 2014. City Link has been graded Energy Performance Class A and also has a BREEAM “Very Good” green and sustainability certificate. This leading environmental assessment method sets the standard for best practice in sustainable design and has become the de facto measure of a building’s environmental performance. Find out about BREEAM advantages at realcorp.lu/property/innovative-projects. Please see the Technical Specifications on the next page for an idea of the very high standard already planned. The developer is always committed to achieving at least BREEAM “Very Good” for each building, but aims to receive the coveted “Excellent” score and is open to discussion with prospective tenants about changes or additional elements. Floor

Type

Sqm

5

Offices

272

4

Offices

675

3

Offices

762

2

Offices

772

1

Offices

728

Ground

Offices

553

Lower Ground

Offices

73

TOTAL

Offices

3835

-1

Archives

256

-2

Parking

31 bays

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

Non-contractual document

www.rea lcorp .lu p.14


Luxembourg – Winter 2012/13

Feature Technical Specifications This luxury office building’s energy-saving techniques and materials include: Raised floors finished with quality carpet tiles Ideal modulation of 1,35m Two elevators Entrance hall of double height in natural stone Ground floor ceiling height min 2,70m Upper-floor office ceiling height 2,60m Metallic perforated ceiling Cooled ceilings for the offices Office lighting intensity 500 lux Luminous offices due to large vertical windows High performance triple-glass panes Walls U-value: maximum 0,2 Roof U-value: maximum 0.25 Automatic external sunscreens on south side Toilets and parking for disabled people Iced water from combination heat pump

CITY LINK

and scroll machine Exterior stores

Kirchberg

Capellem

The Location

BELGIUM

Access to motorways about 3km Findel Airport about 16km

GERMANY

Limpertsberg Strassen

Airport

Route d’Arlon Bertrange

Sandweiler Bonnevole

Several bus lines (Reuter station)

Gasperich

Glacis car park Luxembourg Station about 2km

Leudelange

FRANCE

Have a project, need advice or simply wish to visit ? Contact us

p.13

Tehdi-Edouard Babigeon

Jennifer Venne

Aurélie Vanaudenhoven

Head of letting & sales

Agency & research

Account manager

tebabigeon@realcorp.lu tel: +352 26 27 29 22 (Direct)

jvenne@realcorp.lu Tel: +352 26 27 29 34 (Direct)

avanaudenhoven@realcorp.lu Tel: +352 26 27 29 24 (Direct)

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.15


Luxembourg – Winter 2012/13

Glossary

1st Demand Bank Guarantee

Commitment issued by a third party to a financial institution on payment of a certain sum at first request of the creditor, beneficiary of the guarantee, subject to certain agreed conditions (for rental, usually 3 to 6 months’ rent).

Indexation

Binding contractual clause re sequential performance changes in value of the parties’ respective benefits against those of an agreed benchmark, e.g., in Luxembourg, an index based on NCPI C2 cost of living defined by STATEC.

Institutional investors

Public or private establishments, organizations, financial and mutual institutions which, due to their function and the guarantees they are legally obliged to provide to the public, invest some of the funds they hold in real estate.

Rent

A tenant’s regular payment to a landlord for the use of property or land. Economic rent

Rent calculated after deduction of all incentives.

Headline rent

Rent recorded in the lease contract.

Incentives

Inducements to future tenants, such as a contribution to fitout works, a rent-free period, progressive rent, early access to the rented premises, or any combination of these. Incentives may increase depending on lease contract duration and total rented space.

Presentation rent

Landlord’s requested rent which is marketed to the Lessee.

Prime rent

Highest value rent recorded of a high quality office unit in the best location during a specified period.

Registration

Legal obligation of a tenant to register its lease contract with the competent authority within the three months following the signing of the lease.

Service charges

Cost of routine maintenance and minor repairs to services that facilitate use of the building in which a premises is situated, e.g. elevator and common area (but not private charges related to local use, e.g. electricity, water, gas).

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.16


Luxembourg – Winter 2012/13

Glossary

Speculative building

Building planned to be constructed before the developer has found purchasers or investors, or for which the investors have not yet found business tenants.

Sub-letting

Letting of all or part of a building or space by a tenant to a third party.

Sustainable architecture

Environmentally conscious architectural design techniques that seek to minimize the negative environmental impact of buildings by enhancing efficiency and moderation in use of materials, energy, and space.

Efficient building

Office building offering productivity gains due to its equipment, networks, communication techniques and material resources.

Green certification

Certification of the environmental value of renewable energy generated in and by a building. Certifications known in Luxembourg include HQE (France), BREEAM (Great Britain), LEEDS (USA), and DGNB (Germany). See realcorp.lu/property/innovative-projects for more info.

Total stock

Sum of existing space (office, retail and warehouse), both occupied and free.

Availability

Total area available on the rental or sales market.

New delivery

New buildings expected to be delivered within the next quarter, whether already occupied or not.

Pipeline

Total of ongoing projects expected to be delivered in the future (in more than 3 months’ time).

Take-up

Total stock (office, retail, and warehouse) known to have been let, pre-let, sold or pre-sold during a defined period.

Vacancy rate

Proportion of vacant premises available for rent or for sale in the total existing stock.

Non-contractual document

22, Avenue Monterey, L-2163 Luxembourg, Tel: +352 26 27 29

www.rea lcorp .lu p.17

RealNews Winter 2012  

RealCorp's review of Luxembourg Commercial Real Estate in Q4 2012, with a wide selection of current offers for sale or to rent.

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