RealCorp Luxembourg’s Winter Newsletter 2011/12 contains so much good news that we decided to celebrate by introducing a new format to make reading easier and more enjoyable.

Please comment below this post, either on the new format or on any of the items covered. These include:

• Key figures (Take-Up and Vacancy) that show a healthier-than-expected commercial real estate market in Luxembourg in 2011.
• Introduction to new appointments at RealCorp (yes, we are expanding!):
  • Alain Dehem, who is Head of our new Project Management Services division.
  • Aurélie Vanuaudenhoven, who has joined our Agency team as an Account Manager.
• A choice of luxurious, environmentally friendly and exceptionally well-located office buildings with immediate availability in the Current Offers section, including some new to the market since our last newsletter.
• A special feature on the European Bank and Business Centre (EBBC). This collection of highly desirable buildings is proving very popular with international companies because of its location near the Airport and easy access for all forms of transport.

You can also browse through previous newsletters, and register to receive future newsletters by email, on our Newsletter page.

Read and comment on this post on RealCorp's blog: Good News in our Winter Newsletter 2011/12

As we move into 2012, it’s important to be aware not only of the major economic pressures that are having an enormous impact on the way we do business, such as the current squeeze on bank finance and the uncertain future of the Euro (indeed, who could fail to be aware of these?), but also to note the underlying trends that accompany them.

Several of our posts in 2011 addressed environmental protection and energy efficiency, which have become much more important in recent years. RealCorp proactively called attention to this (indeed, our first post on this blog a year ago was on this very theme: Go green profitably in Luxembourg).

A year later, we can see that this trend is definitely not a fad, and not restricted to the Luxembourg market, as Tehdi Babigeon reported after his recent trip to SIMI in Paris.

Occupants, like owners, now look for quality labels. There are different degrees and different labels, which have different requirements (four of the major ones are discussed in the post Luxembourg commercial real estate initiatives 2011), but, in general, people seek verifiable evidence of sustainable building. This is due not only to environmental concern, but also to an interest in improving financial reporting.

RealCorp’s MD, Michael Chidiac, explains it thus:

Buildings that are more responsible, more energy-efficient, reduce operating expenses.

Of course, it costs extra time and energy to build environmentally friendly buildings. It also costs more money. However, these costs must be viewed in light of green buildings’ other purpose: the maintenance of their intrinsic value. In the life cycle of a property, sustainability is an important criterion. It’s no longer just a question of the sale price, but of how the property will succeed in maintaining its value through time.

In other words, savings in operating costs are only one aspect of sustainability. A good building, which costs little to maintain and occupy, will also reduce the turnover of tenants. Staying longer, they stabilize the readability of your investment.

There is a domino effect in this system: investors, seeing the good results of the first “responsible” buildings, begin to look for similar projects. This becomes a means of differentiation vis-à-vis the competition, and provides more value to the investment. Whereas, previously, ecological buildings were “nice-to-have”, the evolution and maturation of the market is transforming them into necessary assets, as evidenced by direct demand from clients.

If you are looking to own or occupy cutting-edge office space that makes financial sense in Luxembourg in 2012, we urge you to consider some of the green buildings we represent on this site’s Innovative Projects page.

Read and comment on this post on RealCorp's blog: “Sustainability” moving centre-stage in commercial real estate

At the beginning of December, Tehdi-Edouard Babigeon, our Head of Letting and Sales, represented RealCorp at the SIMI (Salon de l’immobilier d’entreprise) at the Palais des Congrès de Paris Porte Maillot, France.

Marketed simply as “le rendez-vous de l’immobilier d’entreprise” or, in English, “The Real Estate Event”, it attracted around 20 000 visitors this year, proving that markets are very interested in Commercial Real Estate. Most sectors are suffering from the recession, but Tehdi observed that Commercial Real Estate seems to be in better health than Residential Real Estate. He returned with this report:

“In participating in SIMI this year on behalf of our clients (landlords and end users), our objectives were to identify business opportunities by meeting international funds based in Paris, and also to gain a better overview of our French neighbours’ real estate sector.

What did we learn?

2011 has been a year of “trompe l’oeil” for the real estate market in France:

• Companies are moving but not always where they had planned to go
• Generally, Supply and Demand are having trouble in meeting; as a result, transactions take 6-9 months as opposed to 3-6months earlier in the year
• The investment market seems to be back, but with a foggy horizon for the future

There is a new conception of the city, of buildings and of office spaces:

• Office buildings with showy architecture are no longer appropriate to the market. Users and developers are looking for green buildings with energy and cost savings.
• Traditional ways of working in companies are changing dramatically, as demonstrated by the rise in businesses that incorporate some form of “coworking”, “a style of work which involves a shared working environment, sometimes an office, yet independent activity”.

Although the Luxembourg market does not work on exactly the same model, we do share some similar effects with our French neigbours.”

Despite the general anxiety in the financial markets, RealCorp remains optimistic for 2012, precisely because we have experience in meeting the kinds of needs that Tehdi describes above. We have a good track record in matching buildings with client requirements, and in finding alternatives when circumstances change. We are aware of the need for careful analysis of potential investments and have the expertise and the patience to support clients in that process. We also have several energy-efficient “green” buildings in our portfolio, including many that are excellently designed for various forms of “co-working” and which are well-located (with easy access to the airport and other transport systems) for commuting managers and cross-border teams.

Read and comment on this post on RealCorp's blog: Commercial real estate active at SIMI 2011

RealCorp’s Autumn newsletter was initially slightly delayed while, like everyone, we waited for the promised announcement of the Euro rescue package that we expected from the G20 summit in Cannes. When it didn’t come, we decided, as the editorial, says, to get on with business anyway!

We had several good leads to work on after a successful visit to ExpoReal and, despite the market uncertainty, we were happy to send our newsletter out in November because we had several pieces of good news to offer:

• RealCorp facilitated the acquisition of the STARGATE project in October by AXA LUXEMBOURG/ AXA BELGIUM from developers PYLOS BENELUX/ DEXIA BANK BELGIUM and continues to coordinate the letting of the remaining 2200m2. The newsletter gives details of the accommodation available.
• The Key Figures review demonstrates that take-up in Q3 continued to improve, with a particularly strong showing from the financial sector, and that vacancy rates are still quite low, although there are obviously variations between CBD and outlying areas. It explains that rents are broadly stable and offers reasons for variations. For more detail, including figures and graphs, please see the newsletter.
• Amongst the wide-ranging selection of Current Offers are some interesting New Offers of properties To Let, some with very attractive rents.

If you haven’t read it yet, we hope you enjoy the Autumn Newsletter and look forward to receiving your feedback!

You can browse through previous newsletters, and register to receive future newsletters by email, on our Newsletter page.

Read and comment on this post on RealCorp's blog: Autumn Newsletter: AXA buys StarGate; Q3 figures good

INDUSTRY INTERVIEW: This October, RealCorp’s Head of Investment & Advisory Services, Greg Sheppard, and M.D., Michael Chidiac, attended ExpoReal 2011 in Munich, and returned full of energy for new and ongoing projects. I asked them why they find this event so particularly useful and what specific insights they gained this year (in general, they echoed or expanded on each other’s conclusions, so I have conflated their answers here).

1. What is the purpose of ExpoReal?
   It’s an opportunity for companies, regions and countries to display their latest real estate projects, and a networking forum for property professionals. All the people one might need to see, from different countries or from different sectors of the commercial real estate business, are together under one roof. So it is ideal for meetings with clients or complementary service providers.
2. What is your purpose in going to ExpoReal?
   We attend Expo to make new connections, introduce our clients to each other, and deepen existing relationships. Expo is a great forum for gaining a broad insight into the state of the market by exchanging ideas with peers and taking the pulse of the industry in general.
3. Did ExpoReal 2011 differ from last year’s Expo in any way?
   The ExpoReal closing report outlines that Belux is a growing platform at Expo. This year there were twice the number of visitors from the Netherlands. The report also specifically mentions Luxembourg real estate, underscoring our country’s growing popularity as a Real Estate investment and development location. In the words of Jeannot Krecke, Minister of the Economy and Foreign Trade of Luxembourg, “It would be a mistake not to be here”.
4. How does it compare with MIPIM and the GRI Summit?
   Well, Expo is really such a significant size that it’s difficult to compare it with anything but MIPIM. ExpoReal hosted 37,000 people this year, and although MIPIM 2011 had only about 18,000 visitors, it has had up to 30,000 in other years. In contrast, only 300 or so attend the GRI. Both MIPIM and Expo are trade shows with a much more overt promotional ethos, whereas at the GRI the focus is on facilitated discussion by industry leaders. However, this does not mean that the senior decision-makers are not at ExpoReal, just that they are usually in business meetings, such as those that we arrange.
5. The report says that “The mood in the halls was very good” and that “71 per cent of the visitors were of the opinion that the current economic situation in the sector was positive. As regards developments going forward, 47 per cent expect no change, 28 per cent think there will be an improvement and 25 per cent see a worsening of the situation.” Did your own conversations bear out these statistics?
   Our sense was that the “mood” was mixed. Interest in trading was definitely tempered by deep concerns over the Euro sovereign debt crisis and the increasing scarcity of finance. People we spoke to were busy with deals and ongoing projects, but many of these were proceeding slowly. Both developers and investors mentioned issues with debt financing, and the uncertainty over how the Euro will emerge from the sovereign debt crisis naturally makes banks reluctant to commit funds to anything other than core property deals.
6. Were your own expectations or hopes of this year’s show fulfilled?
   All of our meetings were very positive and we came back with new avenues of business, and new relationships to explore. The positive impact of ‘meeting shops’ like Expo is to galvanise opinion, ideas and relationships into plans of action … and we’re never short of a good idea or two!
7. Why do you think that you had these positive responses, given the current economic climate?
   Firstly, we are experts in the local Luxembourg market, which is still trading comparatively strongly, so we had some good opportunities to offer clients. Secondly, we can think imaginatively about how to structure deals, despite banks’ reluctance to finance. Thirdly, we have specific experience in identifying and delivering real estate value through local market knowledge and active asset management. Despite financial turmoil, real estate still needs to be managed and clients are always keen to speak to people who can find and deliver solutions for their real estate needs. As one contact said at Expo, “People forget that Real Estate is real—it’s not a financial instrument or bond”. Despite difficulties of financing, people need to do business, and it must be a shared hope that the Euro countries will sort out their debt issues before the markets do it for them.

Read and comment on this post on RealCorp's blog: Report on ExpoReal 2011: Experts can still find value

INDUSTRY INTERVIEW: Hans Stuckart, Director and Deputy Fund Manager, CORPUS SIREO Investment Management S.à.r.l., Luxembourg, has experience in real estate fund investment and management. Like Keith Burman, whose thoughts we posted last week, Hans attended the recent Global Real Estate Institute Europe Summit 2011 (GRI) in Paris.

The GRI describes itself as “a global club of senior real estate investors, developers and lenders… at GRI meetings there are no speakers or panellists, just informal discussions in small groups, where everyone participates equally.” Tia Azulay, RealCorp’s Head of Communications, asked Hans Stuckart for his opinion of the summit from a real estate funds perspective.

1. Which discussions at the GRI Summit 2011 were most useful for you?
   Definitely, discussions relating to the sovereign crisis and its impact on real estate. The unanswered questions remain where to invest money and how to evaluate alternative options given investor expectations. On the valuations side, for example, some surveyors use government bonds as an element of their discount rate. When interest rates increase suddenly (e.g. for Italy), yields for real estate artificially decompress without any evidence from the market. This brings up difficulties between fund managers, investors and surveyors, because even though good properties retain good covenant tenants and positive cash inflows, properties lose value, with a negative impact on the Net Asset Value as a result of sovereign negative rating. The quick-fix then may be to change the surveyor or the surveying method.
2. Did you draw any general conclusions from the conference?
   The general market uncertainty means that investors are very cautious. Even though they are sitting on enormous amounts of equity right now, they don’t know where to invest it. They are only slowly getting used to lower returns and adjusting their expectations.
3. In light of this uncertainty, how are you finding the capital-raising market?
   It is difficult to raise funds at present, even from the usual reliable players: insurance companies, family offices and pension funds. They are making some investments, but very cautiously and slowly. It takes an enormous amount of time and effort to convince investors to release money. On top of that, when they do invest, some investors prefer using their own money, rather than financing, even if this means a reduced return rather than benefitting from leverage. This raises the question of what this means for the banks which are now side-lined from these core property deals.
4. Have any recent developments in the global or European markets altered those conclusions?
   No, my perceptions are still the same—uncertainty prevails and people are seeking investments that they see as less volatile. For example, there is huge interest in retail property in Germany, especially from foreign investors, probably because, in 2008-2011, retail properties had relatively few problems with valuation and rental income compared to other asset classes. Therefore this intense interest in a single sector leads to compressed yields. While good for vendors in the short term, it may not be healthy in the long term. There is no macro-economic reason to focus on retail; it is just an idea of stability. So this raises the question of whether it is just the flavour of the month, or a sustainable trend, as German consumption behaviour has not changed and, according to a GMA/Sonae survey, 38% of German shopping centres do not perform.
5. Is Luxembourg still an appropriate strategic base for you?
   German legislation has adjusted the Investment act a lot recently, so that Luxembourg is not quite as attractive as it was to German investors in the past; however, it still has some advantages and it remains very important from an international perspective. Luxembourg is the second-largest fund market in the world, after the USA. It is highly regulated and extraordinarily professional. The tax treaties between foreign countries and Luxembourg make it rather simple to bring diverse international investors together in the same vehicle. So we have no doubt that it is good to be here.

Hans Werner Stuckart joined CORPUS SIREO Investment Management S.à.r.l. in Luxembourg in March 2011 as a Director and fund manager of Sireo Immobilienfonds No. 4 SICAV-FIS. He was previously Head of Asset Management and of German operations for UK private equity property investment company Catalyst Capital GmbH in Frankfurt (Jan2008-Feb2011), where he was responsible for realizing implemented business plans, new acquisitions, due diligence, financial reporting and modeling and asset management for opportunistic retail and office properties, and for work-out, refinancing and repositioning of the German portfolio. As senior portfolio manager for Commerz Real (Jun2004-Jan2008), he was responsible for a shopping centre portfolio in Canada for the open-ended global property fund, and a member of shareholder and advisory committees. From 2007 he managed two open-ended institutional property funds, invested in shopping centres, office buildings and warehousing. From Jul 2000-Jun 2004 he was senior financial services auditor for KPMG Frankfurt, responsible for valuations and for audits of property loans and of private equity vehicles. He has degrees in Business Administration and in Real Estate Portfolio Management (EBS).

Read and comment on this post on RealCorp's blog: Luxembourg still good for real estate investors

INDUSTRY INTERVIEW: Keith Burman, Senior Vice President, Global Alternatives Product Manager, Brown Brothers Harriman, Luxembourg, is one of the senior figures I like to consult on real estate matters.

Keith attended the recent Global Real Estate Institute Europe Summit 2011 (GRI) in Paris. He kindly agreed to an interview on Sept 13th by RealCorp’s Head of Communications, Tia Azulay, to share his impressions.

1. You’ve just attended the Paris GRI Summit. Do you go every year?
   Yes, I’ve been attending since 2009. I find it a very interesting format for a conference because it is all set up as discussion groups rather than as panels or lectures, apart from a few keynote speeches. In advance of the conference, someone thinks of a topic, and then gets five or six people to commit to being there to initiate and moderate discussion on that topic. Anyone can sign up to attend, but because so many people have been personally invited, the quality of input is high, with many senior people participating. Several of my clients and prospects also attend, and the conference provides plenty of networking time, which is very useful.
2. What did you do at the conference this year?
   For the past few years I’ve been part of a group facilitating discussion on the impact of European regulation initiatives, with a focus on AIFMD (Alternative Investment Fund Managers Directive) of which I have personal knowledge having been involved in its development, along with Mike Hornsby of Ernst & Young (Luxembourg) and Jeremy Soutter of Aviva Investors. This year, we were joined by Catherine Martougin, partner of the Luxembourg law firm Arendt & Medernach, and Peter Cosmetatos of the British Property Federation, so we were five co-chairs. Group sizes can vary. This year there were about 20 participants in our group, which was 10% of the total conference attendence of around 200 people. It was not as large a turnout as we had had in previous years, but, on the other hand, the smaller group size enabled some really fruitful discussion.
3. What were your expectations of the conference before you got there?
   I anticipated that it would be good to see various clients and prospects, but I also wanted to know what people were thinking generally about the prospects for the market and how the industry is doing. Naturally, I hoped to see signs of optimism and to find out whether people are finding deals and managing to raise capital.
4. Were these expectations fulfilled?
   Yes, although there was a mixture of impressions. There was a general feeling that we are not out of the woods yet. Activity had definitely picked up in the first half of 2011, with people doing more than in 2010 despite the continuing lack of finance, but there was stasis over the summer due to all the bad news, particularly the downgrade of the US credit rating and the obvious problems with Greece, Italy, Portugal and Spain creating the threat to the Euro. Nevertheless, there is clearly still demand for prime property.
5. Did you learn anything of particular note?
   Yes, there were a few important insights. It is perhaps not surprising that people have been putting money into core investments that are low-risk, stable and well-let, even though these offer relatively low returns, but what was unexpected is that the flow of money into this kind of property in London led to that market actually becoming overpriced by 2011, with the result that investment focus moved to Paris, and then, when that heated up similarly, to the major investment centres of Germany (Hamburg, Berlin, Frankfurt, Munich, Stuttgart, etc.). Another puzzling trend observed by an agent involved in investment transactions across Europe was that Spanish prime property appears to have no risk premium over London and Paris, i.e. it was selling at similar rates, despite people talking of increased sovereign risks. So for Spanish prime property, it seems that some people are ignoring macro indicators. However, it might be just Spanish buyers doing this in Spain — we did not have info on the buyer profiles.
6. What about responses to your particular discussion theme?
   Well, interestingly, the co-chairs discussed afterwards that perhaps our session should have been differently titled. We called it “Regulated Funds”. Of course, many people still have unregulated funds, so may have thought that it didn’t apply to them. But if so, they’re in for a shock. From 2013, almost all funds will be regulated — they will be affected by Solvency II (Insurance Investors), AIFMD (Alternative Fund Managers) and EMIR (central clearing of derivatives). This will inevitably change the way that a lot of people do business and has implications for manager substance¹, fund design, capital raising, delegation, valuation, property ownership and the sourcing and timing of financing. Time is short, as the implementation deadline is July 2013, and the necessary changes will take considerable effort to understand and accommodate. It’s not all bad news, as the AIFMD will provide a clear and hopefully efficient legal framework to distribute funds to professional investors in 27 European Union Member States, which should give managers access to a wider pool of capital, and reduce the current risks of non-compliance with individual countries’ private placement² rules. And, over time, if AIFMD can emulate the success of the UCITS framework, this may lead to easier selling into non-European markets, for example, in Latin America and Asia.
7. Did you learn of any other impacts on business from the regulatory moves?
   Well, another group I joined engaged in a discussion on cross-border valuation. There is general agreement that more must be done to improve standards and consistency, and regulation definitely will both push and enable this to happen. AIFMD has a lot of focus on valuation and is tending to require standards and information that are useful for both lenders and investors. For instance, we consider it important that a valuer knows the use to which a valuation will be put. Although the opinion of valuation should of course be the same, no matter the client, lenders and investors need different emphases in the commentary that accompanies the valuation. The lender typically needs a three-to-five year overview of likely trends in value, which valuers have understandably been hesitant to give, but they will have to develop this skill in future. A related issue is the availability and cost of Professional Indemnity Insurance (PII) in all the countries affected. Everyone noted that the environment in the UK has become increasingly litigious, which is making business more difficult. There is an estimate that 25% of gross valuation income is paid out on PII premiums. The focus on more regulation could lead to these costs rising, to more insurers withdrawing from the valuation PII market, and to fewer profesisonal firms being willing to do regulated valuations. In some European countries, PII is not readily available at all, so this is really problematic if the new regulations demand it. On the other hand, harmonisation of standards could allow some useful consolidation and centralising of resources, although firms will still need access to local market information to produce accurate valuations.
8. Did you draw any general conclusions from the conference?
   Although it was easy to see why some people remain very pessimistic, saying that the lack of finance, imminent sovereign collapse, the end of easy money for banks and the increasing inflation rate add up to a new ‘perfect storm’ of which 2008 was just the precursor, on the other hand, there is still demand for income-producing investments, and no sign of the big banks needing to unload their portfolios in the short term, because interest rates have remained low. Despite inflation, the current cost of finance benefits the banks, so I believe that they will continue to reduce their loan portfolios slowly and carefully and core investments will continue to find backing.

Notes:
¹Manager substance = Fund managers’ capacity and resources to satisfy their fiduciary, tax and regulatory obligations
²Private placement = Selling one-to-one to “professional investors”, normally institutions, outside the rules for “public placement” i.e. selling to the general public, which is highly regulated and restricted

Keith Burman
Keith is Brown Brothers Harriman’s Global Alternatives Product Manager, responsible for strategic business development, including new clients, services and domiciles. Keith joined BBH Luxembourg in 2004, after nine years with JLL/LIM. Keith is a member of RICS, IPF and IOD, chairs the Association of the Luxembourg Fund Industry (ALFI) AIFMD Committee and REIF Sub-Committee, and sits on INREV’s Public Affairs Committee and RICS Belux Board. BBH’s Investor Services provides cross-border institutional services as depositary, fund administrator and transfer agent for many leading asset managers and financial institutions in 100 markets with €2 trillion of assets in custody.

Read and comment on this post on RealCorp's blog: Core investments will continue to find backing

Our Summer Newsletter reflects the season with a sunnier outlook for Office Market Take-Up based on figures from Q2. There has been a significant increase in take-up volume, and also of space in excess of 1.000sqm.

Correspondingly, and despite the completion of BHK in Kirchberg and the Marivaux at the Station, there has also been a steady decrease in overall office vacancy.

Prime and base rents have been rising in Kirchberg and the CBD, although some peripheral sub-markets have seen a drop.

For more detail, including figures and graphs, please see the newsletter.

As usual, the newsletter also offers an overview of several of our Current Offers, with a wide selection of different types and locations of buildings to let, for you to browse through at your convenience.

The Feature section includes a focus on two innovative new buildings: One on One at No. 1 Route d’Esch and The SolarWind Project in the Windhof Ecopark. Both of these are BREEAM-certified “green” buildings and contain smart technologies for energy production and rationalisation. One on One is visually very attractive due to stunning design and SolarWind offers access to the numerous eco-friendly facilities that are required in an Agenda 21 sustainable development.

We hope you enjoy the Summer Newsletter and, as always, welcome your feedback!

Read and comment on this post on RealCorp's blog: Summer Newsletter: Focus on Growth and Innovation

We are excited about this latest issue of our newsletter, not only because it is the first one we have produced in English, and because we currently have some very interesting and valuable properties to highlight for readers’ attention, as well as some useful observations about the state of the market over the last several months, but also because of our special feature on Wellness at Work.

This theme increasingly has an impact on the choice and management of real estate because it is becoming more and more important for companies for several reasons. Competitive companies wish to:

• Attract and retain the best talent in the market
• Comply with various regulations or best practice guidelines regarding employees’ wellbeing
• Benefit from their investment in their employees by freeing them to be as productive as possible

Of course, “Wellness at Work” encompasses various factors such as health and safety provision, working conditions and personnel support systems, as well as the physical working environment (addressed in my earlier post on green buildings and our winter newsletter Hiver 2010-11 (in French—please see my post Luxembourg commercial real estate initiatives 2011 for an English summary), but leading edge companies are taking it even further as they respond to the needs and expectations of an increasingly sophisticated workforce. In the process, these enlightened firms are also discovering that reducing employees’ stress in appropriate ways ultimately benefits the bottom line.

Acting on behalf of some of our clients, our Research Assistant, Jennifer Venne, was able to interview representatives of two companies who specialise in providing on-site concierge services to employees of progressive companies. They offered examples of the types of services often requested, and described the benefits these offer to both employers and employees. The interviews took place in French, but are reported in our newsletter in English for the benefit of a wider readership.

As always, we would love to hear what you think, and especially if you have any personal experience of this new trend. In your opinion, are these manifestations of the “Wellness at Work” philosophy genuinely beneficial and do they make sense financially, and have you seen, or do you foresee, any direct or indirect impact on real estate as a result?

Read and comment on this post on RealCorp's blog: RealCorp’s Spring 2011 Newsletter is here

On Friday, Greg Sheppard and I returned to Luxembourg from this year’s MIPIM conference in Cannes. Naturally, we’ve been bombarded with questions from everyone we meet or speak to this week. Each person has their own way of asking, but the queries always boil down to two:

1. (Asked with hopeful expectation of a positive response) “How was it for you?” and
2. (Asked with varying degrees of anxiety or desperation) “What did you learn that’s useful to me?” or, in other words, “What did you learn about about where the property market is headed in 2011?”

I’ve been glad to give a positive response on both counts. The Riviera Review might moan about the low attendance rate and the cold weather, and from a tourism perspective that’s possibly understandable, but as a property professional, remembering MIPIM’s 2009 and 2010 “doom and gloom” mood, I actually felt quite hopeful by the end of the week.

It’s in my nature to be optimistic, but in my training to be cautious, so I listened hard for clues that would justify my impression that things may be looking up this year. In general, the people we met were serious about doing business. Cautious, still, yes, but willing to explore possibilities. We had some good conversations with people looking to complete what they’ve started, and we emerged with some active leads.

We found funds looking to domicile in Luxembourg, equity available for investing in Luxembourg, and even some banks now willing to look at files that last year wouldn’t have interested them. They seemed committed to lending for prime assets, with secondary still a little neglected, but even there I sensed a will from some to consider financing some well-chosen projects. A few even indicated that they are looking again at some speculative developments.

I even received a few personal approaches from new funds seeking information and help on setting up in Luxembourg. I have several years’ experience as an Independent Director for Real Estate Regulated Investment Funds and for unregulated investment structures, so I was happy to have some initial conversations with them about obtaining legal advice, finding premises, appointing Custodians, sourcing staff, etc. RealCorp specialises in providing solutions to funds, so we are actively pursuing these leads.

A note on Japan: While we are grateful to be very busy with our normal business and with our post-MIPIM follow-up, it is impossible not to be aware, when thinking about buildings, of the incredible destruction that Japan so suddenly suffered on Friday March 11th. I have not yet heard details of direct repercussions for Luxembourg funds invested in Japan, but I know that the tragedy touches many people in Luxembourg on a personal, if not as well a professional, level. As the situation clarifies over the next few days and weeks, if I learn anything of relevance, I’ll post about it here.

Read and comment on this post on RealCorp's blog: Post-MIPIM musings