The 10,000 m2 Dyapason building in rue Robert Stümper, Cloche d'Or, is owned by Foyer Group
Edmond de Rothschild Group will be the next firm to quit the central business district when it moves staff to new offices in the Cloche d’Or in October.
The firm will consolidate its 550-strong team, currently working over seven different sites, at the 10,000 m2 Dyapason building in rue Robert Stümper in phases, from October 2020 to January 2021.
In an interview with Paperjam in January 2020, CEO Pierre Voos said the move aimed to improve communication and collaboration between the different teams located in Luxembourg. Voos said it has yet to decide what to do with the properties it owns.
It is one of a number of corporates to quit the CBD (including Kirchberg and gare districts) following a trend that is expected to continue from now until 2025, JLL’s Emna Rekik explained at the real estate group’s annual report press conference in January.
Responding to Delano in February, Rekik said that the trend was in part being driven by a limited availability of large volume buildings in the city centre faced with headcount progression, and a tendency by corporates to optimise costs.
According to real estate experts CBRE in their Q4 2019 office market report, “the only major vacancy is the Ikaros in Hamm (15,000 m2). Every other facility remains below 6,000 m2 of available space.”
Rents increased, reaching a high of €51 per square metre in the CBD in 2019, compared to €36 in Kirchberg, and €30 in Cloche d’Or.
Rekik said that corporate profit margins were under pressure, “especially for banking and insurance sector”, and therefore they were looking to achieve rental savings.
“All sectors are being impacted, except the European institutions, which in the short term, will be exclusively concentrated in Kirchberg,” Rekik wrote.
Firms that have already exited the CBD include Deka Bank, from Kirchberg to the airport; Amazon, which moved from several sites in the Grund and Clausen to Kirchberg; and Intesa Sao Paolo, to move to an 11-storey tower in the Ban de Gasperich.
The public sector is also following the trend. According to Rekik, the ministry of education and youth is moving to Clausen, one administration is in Hamm and certain departments are now located in Belval, in the south. The phenomenon does not appear to have impacted office vacancy rates, which reached a critical low in 2019 at 3.2% on average and 0.6% in Cloche d’Or, 0.9% in Kirchberg and 1.6% in the CBD, according to JLL.
The new office pipeline for 2020 is estimated at 328,000 m2, of which a quarter is available. The 2021 pipeline is forecast for 188,000 m2, of which a half remains, according to CBR.