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‘Restoring confidence in real estate assets’

For Arnaud Regout, Managing Director of BPI Real Estate Luxembourg and winner of the LuxReal Awards in the "Promoters & Developers" category, the year 2025 will be synonymous with opportunities. 

The market recovery, driven by opportunities in real estate investment, is expected to foster a new dynamic.

Arnaud Regout
Managing Director of BPI Real Estate Luxembourg

"We must approach 2025 with optimism. Over the past twelve months, with the establishment of a new government team, significant efforts have been made to reinvigorate the residential real estate market, enhance the country's attractiveness, and give momentum to the national economy.

If we look at the real estate sector, 2024 is likely to have been the last challenging year in a cycle that spanned three years. In the residential sector, we should see a gradual market recovery due to declining interest rates, stabilized selling prices, rising rents, and the continuation of state measures to support housing over the next six months.

Providing strong guarantees

The main challenge for all industry players, particularly for us as developer-promoters, will be to restore confidence in real estate assets, especially among banks, buyers, and investors. This is essential if we are to achieve a dynamic market that meets the challenges of housing and national attractiveness.

For developers, this means providing solid guarantees regarding our ability to complete projects successfully and ensuring greater transparency regarding completion and repayment guarantees, as well as delivery schedules. This is precisely the aim of the "Developers' Quality Charter." In this context, it is also crucial that banks commit to facilitating access to financing. The issue of affordable housing, which continues to be discussed between developers and state representatives, also remains critical.

The right time to invest

The fundamentals of the market remain strong, with a significant housing shortage across the territory. In 2023, Luxembourg had 10,376 more residents than in 2022. Population growth creates significant housing needs. This means that in a market normalizing after a price decline, opportunities abound, making this the right time to invest. Sustainability requirements for new buildings, whether residential or office, provide solid guarantees for asset value retention, unlike older buildings that will eventually require investments to improve energy performance.

The sustainability challenge

Sustainability is also a major issue in the office sector, with companies required to provide environmentally friendly spaces where employees feel comfortable. The future of remote work, balanced between major players wanting employees back in the office and expanded remote work options for cross-border workers, will also be a significant challenge. Companies are already actively considering ways to offer attractive environments, sparking a new market dynamic. As developers, it is our responsibility to anticipate their expectations by delivering top-quality products.

Progressive but solid recovery

2025 will be a year of recovery—gradual but robust nonetheless. Restoring confidence among buyers and investors is a key challenge. Initiating a new dynamic should enable developers to generate liquidity to complete ongoing projects and consider new ones."