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Investor Guide to Europe 2014
In terms of stock, Luxembourg is relatively small,
and this is reflected in the level of activity, with
volumes averaging less than EuR1bn per annum
over the last ten years. Its location in the heart of
Europe and its core sectors of activity does attract
investors from across Europe, mainly from Belgium,
france and Germany. as a result the country has
benefitted from above average levels of liquidity.
Private investors, unlisted funds, notably German funds, and
institutions are the most active players in the luxembourg
market. very little is traded or owned by listed companies.
Furthermore, investors from the Middle-East and Asia are
increasingly visible. Four of the most important Chinese banks
have now established operations in luxembourg.
offices represent the most sought-after asset class,
accounting for more than 79% of the total investment
volume in 2013, in line with the long run average. Benefiting
from dynamic letting activity and with important projects
in the pipeline, this asset class should continue to attract
investments, both in small and large volumes. Some mixed-
use projects are currently under development and could offer
alternative investment strategies as the competition for core
office assets is increasing. Retail and industrial/ logistics space
does trade, though volumes are typically lower.
Debt is readily available from traditional banks and German
Pfandbriefe banks. We do not see any real institutional activity
at present.
Market sizing
luxembourg
Europe
Invested stock*
(Total stock)
EUR 12bn
(EUR 25bn)
EUR 3,380bn
(EUR 8,150bn)
liquidity ratio*
(10y average)
3.5%
(7.0%)
4.0%
(4.5%)
2013 volumes
(10y average)
EUR 0.3bn
(EUR 0.9bn)
EUR 139bn
(EUR 135bn)
Investment activity by asset type, 2013
Source : DTZ Research
Investment activity by source of capital, 2013
Source : DTZ Research
Market pricing – luxembourg (Q4 2013)
office
Retail
Industrial
Current Yield
5.75% 5.25% 8.50%
Min/Max
(10y)
5.20-6.80% 5.25-6.00% 7.50-9.50%
Yield
definition
net initial yield
Source : DTZ Research
LuXEMBouRG
* 2012 figures
