Office Market Report Q2 2016 Luxembourg
Macro economic zoom Total Population (Jan 2016):
≈ 576 249
Luxembourg-City:
≈ 115 200
Esch-sur-Alzette:
≈ 33 900
GDP Growth 8%
6%
Wage-earners (May 2016): Cross-border commuters(May 2016) 50% F, 25% D, 25% B
≈ 390 393 ≈176 375
Unemployment rate (May 2016): Inflation rate (June 2016):
≈ 6,5% ≈ 0,02%
Growth rate 2015: Growth rate forecast 2016:
≈ 4,8% ≈ 3,4%
GDP per capita (€) Lux (2015): ≈80 500 GDP per capita (€) Euro Zone-18 (2015): ≈29 200 GDP per capita (PPS) Lux (2015): ≈ 271 GDP per capita (PPS) Euro Zone-18 (2015):≈ 107
4%
2%
0%
-2%
-4%
Luxembourg
EU-18
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)
3
The Financial center More than 60,000 employees Banks: (June 2016)
Banks: Evolution of balance sheet vs. n°of employees*
€ bn
'000
Number of banks: 143
1,1
Employees: 26 136
0,9
27
0,8
26,5
0,7
26
0,6
25,5
0,5
25
28
1
Countries of origin: 28 Investment funds : (May 2016)
27,5
Number of UCIs: 3 882 Net assets: 3 487 bn€ PSF: (March 2016) Number of PSF: 309 Employees: 15 079
Balance
Employees Source: ABBL, CSSF, LFF
€ bn
Investment funds: evolution of net assets vs. N°of funds* 4.500
4.000
4.000
3.500
3.500
Insurance & Re-insurance: (June 2015) Number of insurances: 98 Number of re-insurances: 226
3.000
3.000 2.500
2.500
2.000
2.000
1.500
1.500 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Série4
YTD 2016
Série3
* September 2011: The increase in the bank sector results from the takeover of the specialised PFS FASTNET by Caceis: This change triggered a fall in the staff of 551 persons.
4
Major companies 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 aged Bank Hospital Catering & Facilities Management Housing & services for aged & 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 5
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 and over 120 000 m² in project
6
Office Market Districts
City (Core) City (others) City - Periphery Periphery
7
Luxembourg stock distribution 2% 1%
2%
5% 27%
2% 2%
1% 22% 2%
2%
1% 10%
11% 2%
2%
5%
1%
Letting Market Overview YTD 2016 Take-up Q2: Take-up YTD: Transaction Q2: Transaction YTD: Average size : Vacancy rate YTD: Total stock YTD : m² offices delivered YTD:
50 067 m² (-0,91 % Year Over Year) 121 408 m² (+ 44 % YOY) 58 (+13,7 % YOY) 131 (+ 7,4% YOY) 927 m² 5,59% (+ 29,1 % YOY) 3 796 870 m² (+ 4,66 % YOY) 21 071m²
9
Deal Distribution & Outlook
17 % of deals below 100 m²
40 % of deals below 200 m²
69 % of deals below 500 m²
81 % of deals below the average transaction size of 927 m²
16 % of deals over 1000 m²
Median size : 300 m²
+5%
+ 80 %
Office Market Outlook
Take-up is expected to reach around 200.000m².
New deliveries 2016 : 134,800 m² of new offices should be delivered this year, 65% of these new surfaces are however already pre-let, Vacancy rate is expected to be stable beginning of 2016, with a possible increase throughout the year to end close to 5,5% for the last quarter
Rental levels are expected to remain stable, with probably a price pressure in CBD, Kirchberg and Station districts. Prime rent reached 45 € in the CBD in 2015. 10
Office Market Q2 2016 Stock & Vacancy rate District
CITY
Stock sqm
Kirchberg CBD Station Cloche d'Or Limpertsberg Belair / Merl Hamm Kalchesbrück
Total: CITY - PERIPHERY
Airport Bertrange/Bourmicht Strassen Howald
Total:
PERIPHERY
Belval Capellen Leudelange Munsbach Windhof Esch-sur-Alzette Contern
Total: Total
Stock %
Vacancy sqm
Vacancy rate %
1 026 500 829 939 383 500 408 600 85 000 91 500 49 000 33 000
27,04% 21,86% 10,10% 10,76% 2,24% 2,41% 1,29% 0,87%
26 311 22 326 23 375 21 351 1 873 10 901 1 251 2 943
2,56% 2,69% 6,10% 5,23% 2,20% 11,91% 2,55% 8,92%
2 907 039
76,56%
110 331
3,80%
171 355 82 000 81 050 62 600
4,51% 2,16% 2,13% 1,65%
14 139 9 359 17 387 19 777
8,25% 11,41% 21,45% 31,59%
397 005
10,46%
60 662
15,28%
183 045 75 035 73 556 60 100 40 600 32 600 27 890
4,82% 1,98% 1,94% 1,58% 1,07% 0,86% 0,73%
6 670 9 838 7 210 11 857 40 2 153 3 422
3,64% 13,11% 9,80% 19,73% 0,10% 6,60% 12,27%
492 826
12,98%
41 190
8,36%
212 183 13 857
5,59% 0,36%
3 796 870 + Sub-letting :
11
Office Market Take-up & Vacancy rate Take Up
‘000 m²
Vacancy rate
% 9,0
300 7,5 250 6,0
200
4,5
150
3,0
100
1,5
50
0,0
0 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
YTD 2016
12
Take-up YTD 2016 main transactions (> 1200 m²) District
Tenant
m²
Kirchberg
BGL BNP Paribas*
28,300
Cloche d’Or
BDO
10,600
CBD
Société Générale Bank & Trust
5,608
Kirchberg
Vistra Luxembourg
4,475
Kirchberg
Amazon
4,374
CBD
EFG Bank Luxembourg
4,134
CBD
Banque Safra*
3,476
Howald
PWC
3,200
Cloche d’or
ERI Bancaire
2,731
Munsbach
Globality Health
2,627
Strassen
Enovos
2,620
Hamm
Ministère de la Santé
2,452
Station
Ville de Luxembourg*
2,400
Munsbach
Immobilière Vauban
1,643
Esch-Belval
Banque Pictet
1,461
Station
Banque Carnégie Luxembourg
1,375
Station
GazpromBank
1,290
Capellen
Electrolux
1,256 13
Take-up YTD 2016 activity & districts Split by activity/m²
Split by District/m² Kirchberg 33%
Banking & Finance 61%
Others 4% Limpertsberg 1% Esch-Belval 1%
CBD 20%
Capellen 2% Howald 3% Hamm 3%
Others 2% Industry 2%
Other Periphery 3% Strassen 4%
Munsbach 4%
Station 7%
Cloche d'Or 14%
Insurance 3% Law Firm N.S. 4% 4%
IT & Telecom 7% Fiduciary & accounting 5%
Admin. & Pub. Serv. 5%
Serv. for comp. 7%
14
Rental Bands New Buildings €/ m²/ month (excl. VAT ) Rental Bands CBD Station Kirchberg Limpertsberg Merl Belair Cloche d'Or Strassen Airport Howald Bourmicht Leudelange Capellen Kalchesbruck Bertrange Hamm Munsbach Windhof Belval Contern
16 €
18 €
20 €
22 €
24 €
26 €
28 €
30 €
32 €
34 €
36 €
38 €
40 €
42 €
44 €
46 € 15
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
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016 16
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 17
Capital Market Overview S1 2016
Investment transactions S1 2016: ± 530,1 €m
Split by district / volume
Standing investments: 317,5 €m
Development: 143,5 €m
Occupier / Owner: 69,1 €m
CBD 39%
Number of transactions S1 2016: 18
Standing investments : 9
Occupier / Owner : 7
Development : 2
Kirchberg 1%
Strassen 15%
Hamm 2% Other Periphery 2% Leudelange 3% Capellen / Windhof 6%
Limpertsberg 7%
Split by # of deals CBD 33%
Prime Yields :
Station 13% Howald 12%
Station 17%
City : 4,35% (2015 : 4,35%) Periphery : 7,00% (2015 : 7%) Other Periphery 11%
Strassen 6% Leudelange 6%
Howald 6%
Hamm 6%
Limpertsberg 5% Capellen / Kirchberg Windhof 5% 5%
18
Capital Market Deal distribution
6% 1% 7%
15%
39%
2%
17%
12%
3%
Volume >97%
19
Capital Market Investment Volume Evolution Q1 2016 M€ 3.000
2.500
2.000
1.500
1.000
500
0 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016 YTD 20
Capital Market Prime Yield Evolution %
Prime Yield City
Prime Yield Periphery
7,50 7,25 7,00 6,75 6,50 6,25 6,00 5,75 5,50 5,25 5,00 4,75 4,50 4,25 4,00 3,75 3,50
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016 21
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
22
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
23
Master Plan 2016-2030 Luxembourg-city and Esch/Belval CBD, Place de l’Etoile, 2019-2025:
17 000 m² office, 18 000 sqm retail, 10 000m² residential
CBD, Royal-Hamilius, 2017-2019:
10 000 m² office, 16 000 m² retail, 7 500m² residential
Kirchberg, Infinity, 2017-2019:
6 800m² office, 6 500 m² retail, 20 000m² residential
Cloche d’Or, Ban de Gasperich, 2016-2030:
413 000 m² office, 105 000 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
24
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]