Renewed sense of optimism at Capital Markets
JLL Capital Markets positively observes the global market recovery as well as investment demand growth towards the real estate sector. H1 2021 direct investment volumes in the EMEA region grew 14% YoY to €119bn: when compared with the historical 5-year average, H1 volumes in 2021 are flat (+0%).
Investors have a renewed sense of optimism for the future of the office sector and lockdowns rules vanish. The demand for higher quality, amenity rich, and more sustainable buildings is being accelerated which is causing rental growth and yield compression on prime assets. Luxembourg office prime yield at 3,50% could compress further. German, followed by UK groups, were the most active European cross-border buyers in H1 2021. JLL is proud to have successfully managed the disposal of two assets in Luxembourg city during summer 2021 on behalf of its clients: “Elementae SA” sold by AM Alpha to Kanam and “Faïence SA” sold by Fidentia to a Family Office. Those two transactions echoe European investors’ demand for risk-off strategies primarily targeting core assets in established office
Luxembourg with its strong fundamentals being perceived as a growing European office market despite new way of working trends.
Overall investment outlook is positive with pent up demand for real estate, led by $85bn in dry powder in EMEA.
Several investment opportunities should be brought to the market by JLL Capital Markets BeLux before year end.