Luxembourg Property Market Shows Signs of Recovery with Private Equity Investors Leading the Way

Explore investment opportunities in risky properties for higher returns. Gain insights at the upcoming property trade show.

The commercial property market is showing signs of a slow but steady recovery, with private equity and value-added investors leading the way. The upcoming major property trade show presents an opportunity to gain insights into international market trends. In the current commercial property market, there are investment opportunities to be found, particularly in properties that are considered more risky due to factors such as tenant turnover, vacancies, poor environmental performance, and limited financing options from banks. These properties offer the potential for higher returns on short-term investments, attracting investors who believe in the market's future growth within the next two to four years.

However, core investors like insurance companies and core-plus investors have yet to fully re-enter the market, as government and corporate bonds continue to offer more appealing yields compared to the properties they are interested in. These investors are shifting their focus towards diversifying their portfolios by exploring opportunities in logistics, hotels, retail, and residential properties. On the other hand, private individuals and family offices are becoming more active in the market, feeling less pressure from institutional investors and more comfortable participating in bidding processes. This shift is driving the European market, with notable transactions taking place in Luxembourg, such as the acquisitions of the Allianz Life headquarters and Corec SA, owner of Royal Park.

Overall, the current trend in the commercial property market is towards smaller investment amounts compared to three years ago, with a preference for diversifying across different asset classes. Private equity and value-added investors are leading the way in seizing opportunities in the market, while core investors are cautiously observing the landscape for potential future investments.

The professional property market is slowly regaining momentum, with different categories of investors navigating the landscape in search of profitable opportunities. As the market continues to evolve, it will be interesting to see how these trends shape the future of the industry.