Sven Rein, elected chairman of LuxReal last June, presents the objectives he has set out for his mandate and the impact of Covid-19 has had on the real estate market in Luxembourg. Interview.
Could you describe LuxReal in a few words?
LuxReal is a non-profit interdisciplinary real estate industry representative association for Luxembourg. It was founded in 2009 with the goal of providing a platform for real estate professionals from all branches of the industry – including the development, transaction, architecture, engineering and investment fund business – to connect and exchange information, knowledge and experience. Furthermore, LuxReal represents the common interests of its members at a corporate and political level and seeks to continually build relationships with peer associations, regulatory boards and other industry or governmental bodies through partnerships that will help drive Luxembourg’s real estate industry forward. The association’s professional network positions it as a think tank where industry professionals can discuss real estate trends in Luxembourg and abroad. LuxReal now has close to 100 supporting members and 140 personal members.
In residential real estate, we’re hoping that the residential value increase, currently at 5-6%, will stabilise at 2-3% in the next five years.
What are your objectives as President of LuxReal?
In its over 10 years of activity, LuxReal has achieved its primary goal and is recognised as the interdisciplinary real estate industry representative association for Luxembourg. This role is an asset but also a liability. In that light, my goal is to further contribute to the industry by representing its interests. To note a few initiatives, LuxReal now participates as a member of the European Real Estate Forum (EREF) in Brussels, where lobbying efforts towards EU policymakers takes place. We have joined forces with local and international associations to drive our common interests; in Luxembourg, with ALFI, OAI, LPEA, LuxFlag, CNCD, among others; internationally, with RICS, GRESB and INREV. Another recent objective for the association is to improve the real estate educational offering in Luxembourg. Real estate remains an important sustainable asset class with many different sectors that are growing and need a well-educated workforce.
How do you see the Luxembourg real-estate market evolving in the next five years?
In residential real estate, we’re hoping that the residential value increase, currently at 5-6%, will stabilise at 2-3% in the next five years. As for office space, our local market is a pioneer in innovative design and technology compared to other European countries; we are currently working in a circular economy. Future business real estate developments will decentralise due to a lack of common transport solutions and motorway infrastructures. The business park of tomorrow will be alongside the flow of the country’s future workforce. In retail, the global shift towards e-commerce will impact small and medium retail classes except for luxury brands. Also, our local market will move towards an international brands market. However, this will create a new opportunity for high-quality service orientated business models. The population will be a mix between the e-commerce and the sensitive “money for value” consumer. Finally, regarding Covid-19, homeworking might have a short-term impact, with employees most likely returning to their desks within the next three months. It may change the way we live and work in the future, but our need for human interaction, both on a personal and professional level, will help mitigate any adverse effects on Luxembourg’s Real Estate market.