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Luxembourg is as small as many have a problem locating it on a map. Thus, the growing interest of financial companies in London to open a new headquarters in Luxembourg after the law on brexite raises the question: is there enough office space?
"We have just raised the question of how Luxembourg can respond to the demand, following the Brexite vote (in June 2016)," said Julien Pillot, real estate broker at Inowai. He admitted that the answer was not satisfactory.
The good news is that companies looking for spaces up to 500 square meters will not be in trouble. On the contrary, the maladministration is "the apparent absence of more important office space in the center of the capital and its surroundings".
This means that businesses that need more space need to occupy new buildings in the suburbs or satellite neighborhoods around the capital, where there are often only a few restaurants, a petrol station and a supermarket.
Z ruchu do pokoja
The new offices are mostly occupied before the completion of the building. About four kilometers south of the center, in the town of Cloche d'Or in Luxembourg, a new neighborhood is being built for some 30,000 people. There will be offices, apartments, shops, a large shopping center, schools and a new train station.
The problem is that the project is expected to be completed in 2025, six years after Britain's departure from the EU. The decision of the UK to leave the EU has already convinced more than 30 financial companies, especially in the field of insurance and asset management, to seek a new head office in Luxembourg .
According to the local statistics office, Brexit has so far brought 250 new jobs. The Bureau estimates that, in the end, it could add up to three thousand new posts in Luxembourg.
London staff, accustomed to a wide range of pubs, bars and restaurants, can take a bus from a busy city to the limit of a smaller and more peaceful Luxembourg. Most cafes, bars and restaurants are located in the city center and new office buildings are on the edge.
In order to solve the problem of food, there should be new canteen and restaurant buildings on the ground floor. Some companies even offer electric bikes for hungry employees who are ready to go to lunch at the center.
The city is also building a new tramway line, a small part of which was commissioned in December. The extension of public transport is welcome because Luxembourg is struggling with road congestion.
The Brexit did not have a major impact on rent, but the fight for prime locations in the city's central business district has already resulted in a rise in their prices. And the cost of purchase has again drawn attention to larger areas outside the center. But the people of London who are used to renting astronomy in the UK metropolis have no price in Luxembourg.
"When we talk about customers in London, we are also talking about the market where rental rates are usually much higher than in Luxembourg," said Gilles Bindels, managing director of Luxembourg Capital Capital. "I think we will be more shocked if Londoners are willing to pay more."
The Grand Duchy of Luxembourg is the world leader in financial funds, after the United States. And it is also becoming a magnet for financial companies and insurance companies in London who want to continue to provide their services across the EU, even after the British blockade of March 2019.
The US giants of insurance, Global FM, RSA Insurance, Lloyd's of London, Hiscox, as well as Blackstone private equity firm and asset managers such as M & G Investments announce the relocation of their European headquarters to Luxembourg.
The real estate market is trying to adapt and new projects under construction "have a very high level," said G. Bindels.
The greatest rivals of the Grand Duchy are Frankfurt, Germany, Paris and Dublin, but its Luxembourg metropolis has its charm, and those who are interested in it should now take the necessary measures, concluded G. Bindels
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