What trends are shaking up the Luxembourg professional property market today?
Clémence Lett: The market today is much better than it was this time last year. The start of the year was driven by the active search by large corporates for rapidly available opportunities that better meet their needs. On the other hand, vacancies remain relatively low and few new projects are coming on stream. In recent years, the reluctance of banks has increasingly prevented developers from starting construction before they have identified an occupier for 50, sometimes 60 or even 75% of the project. In the next few years, we could therefore fear a shortage of property that meets corporate requirements, particularly in terms of ESG.
Dylan Feber: Absolutely, we can see that this ESG dimension is now fully integrated. It's no longer an option, but an imperative for occupiers, particularly large groups. Developers have understood this and are responding quite well. I would add to what Clémence says, the desire for flexibility, particularly on the part of occupiers. This is due to the uncertainty that can weigh on the market. Companies want to remain flexible and responsive in the face of these movements, which can slow their growth.
What do you think are the origins of these trends?
Clémence Lett: There's no doubt that the health crisis and then the conflicts around the world in recent years have been a turning point for the professional property market. Today, the economic environment is regaining a degree of stability, but the way work is organised has changed, with teleworking taking hold and remaining the norm for a large number of corporates. Some companies have also opted to set up satellite offices across borders, offering their staff greater flexibility and comfort. Added to this is the fact that these companies remain very cautious in their decision-making and are much more attentive to costs. Companies assess risk in different ways, and this is driving the market accordingly.
Dylan Feber: The market is still finding its feet, with some occupiers yet to find 'the right solution' between teleworking, hybrid systems with the importance of collaborative spaces or more traditional methods. Depending on the activity, depending on the needs, the right answer is not the same.
It's important to understand that real estate is not just an expense item, it's also and above all a strategic opportunity, a visibility and an image that enable you to achieve your growth objectives. It is a vehicle for attracting and retaining not only potential customers, but also potential employees, at a time when there is a shortage of talent. Companies that adapt to these expectations will stand out from the competition. We are the first to be affected, and our move to our new offices at the Cloche d'Or is a fine example of this and a great showcase for our clients who are owners, developers or tenants.
How is your approach a different and relevant response?
Clémence Lett: Our strength comes from the collaboration and complementary expertise of the Investor Leasing department, which I represent, and the Occupier/Tenant Representation department represented by Dylan. His teams know the needs of the clients they represent inside out, and have a very clear view of the requirements and type of property these occupiers are looking for. For my part, my team has an in-depth knowledge of the market, in terms of immediate and future availability, off-market opportunities and owners' expectations. This synergy means that the occupiers represented by Dylan are offered solutions that are ideally suited to their needs, and they are assured of making an informed decision that can be justified to their management. On the owners' side, it is the guarantee of access to a pool of major client accounts, notably via the CBRE international network.
Real estate is not just a cost, it is also and above all a strategic opportunity that enables growth objectives to be achieved.
Concretely, what are you putting in place?
Dylan Feber: We always start with an in-depth 'Stay vs Go' analysis: should we stay in the current premises or move? If the decision is to stay, we work with the occupier to renegotiate their lease. If the decision is to move, we carry out a detailed analysis of current and future requirements in conjunction with our Advisory Project Management department, which specialises in fit-outs, before issuing a formal market research request to Clémence's teams. We then carry out an analysis of comparables to determine the best opportunities, as well as a detailed financial analysis.
A crucial point in our support is the analysis of travel times for employees, which we call "Commute Analysis". This tool enables us to assess the impact of a move on employees' quality of life.
Recently, we have also integrated environmental issues and forthcoming legal obligations in order to provide additional support for occupants, particularly in terms of carbon neutrality. Luxembourg is committed to carbon neutrality by 2050 and CBRE by 2040.
Can you remind us who CBRE is and what sets it apart from its competitors?
Clémence Lett: CBRE is today the world leader in commercial and investment property services. The company has more than 140,000 employees worldwide and offers a wide range of real estate services such as property management, leasing, sales and real estate investment advice. In Luxembourg, we currently have around thirty people working in the various departments that make up our structure.
Dylan Feber: The close collaboration between our three departments, Investor Leasing, Occupier/Tenant Representation and Advisory Project Management is a considerable asset in the market. Our ambition is to support companies in their real estate transformation to turn this expense item into a genuine lever for value creation. Our local expertise, coupled with our international network, enables us to offer tailor-made support, adapted to the specific features of the Luxembourg market while keeping pace with global trends in the sector.