Thierry Labro: Why does the Mipim conference in Cannes remain so important for Luxembourg year after year?
: Mipim is still very important because it’s the world’s leading real estate event, and in Luxembourg it brings together a whole range of players. There are, of course, the developers, but also bankers, lawyers, architects, engineers and many other professionals. All these professions and sectors reflect the diversity of the economy. Luxembourgers are traditionally well represented at Mipim, which also testifies to the dynamism of our marketplace. However, the 2024 edition was marked by the accumulation of geopolitical crises and their impact on the real estate sector. The 2025 edition is still taking place in a difficult environment, marked by uncertainty and weak growth in Europe. At the same time, however, the economic outlook is improving, with some signs of recovery and a downward trend in interest rates. In the United States, the fall in interest rates has paused somewhat, and if the Trump administration’s announcements of new tariffs materialise, an inflationary wave could result in the US and similarly slow down the economic recovery in Europe.
Real estate is a sector that anticipates new trends
Real estate is a sector that anticipates new trends, such as sustainable development. Developments in this area are medium-to long-term. The challenge is to look to the future in a context of profound change and lack of predictability. In this respect, Luxembourg, with its stable and reliable environment, offers major advantages that are recognised and appreciated by many of the investors and players present at Mipim.
But don’t we have enough opportunities to meet up in Luxembourg?
That’s true, but firstly, the players have the opportunity to meet international clients. Secondly, they can discover for themselves the new trends in the sector. It’s important to draw inspiration from what’s going on abroad, to get a broader view of developments beyond the Luxembourg microcosm. Last but not least, the three-day event offers an ideal opportunity to meet prospective Luxembourg business partners.
What is your analysis of the property market situation in Luxembourg? For example, the promoters of the special purpose vehicle Prolog recently said that this sort of bank guarantee to help finance projects had only been used once.
This tool attempts to provide an answer to a problem that is difficult to solve, i.e., restoring confidence, and therefore acting in the realm of human psychology. In addition, it aims to ensure the continuation of ongoing projects that have already reached a pre-sales level of at least 50%. This ceiling was too high and has been lowered to 30%. It remains to be seen whether this adjustment boosts this measure, whether buyer confidence returns and whether developers can use it to help finance their projects…
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It should be remembered that the government has done everything in its power to ensure its success, with extensions until 30 June 2025. The fall in property prices has been greater for existing properties than for sale of property under construction (Vefa). So there are some great opportunities on the market right now. I don’t think that the government will be proposing any additional measures. I hope that the current tentative improvement will strengthen over the coming months.
From that point of view, Donald Trump and his very aggressive comments are probably not helping much. On the one hand, we have the impression that everything has been done to restore confidence and, on the other, we are starting to read and hear everywhere that we don’t know how it will all end.
We are living in a time of great uncertainty. Donald Trump often reacts ‘on the spot’ with ‘shock’ announcements. It’s a new way of doing politics, but we need to keep a cool head and not overreact to every announcement, which will not necessarily materialise. Europe needs to realise the role it has to play. We need to remain united and, between the European Commission’s competitiveness programme and the omnibus on administrative simplification to be presented at the end of February, we have some positive elements. We need to have a common position to maintain a negotiating margin with the US. All this has a profound impact on the real estate sector, where people need predictability. They look at rates and are interested in major trends. Many thought that 2025 would be the year of recovery, both in the economy in general and in real estate in particular, after a sharp slowdown over the last two years.
How long can Luxembourg maintain its favourable microclimate when there are storms all around? Remember that the country exports 65% of everything it produces to its neighbours and 85% to Europe. So we need to remain cautious, bold and agile all at the same time. In view of the package of measures in favour of the housing sector, we can look to the future with a degree of optimism. The government has understood that a competitive economy is the prerequisite for a generous social model. We need to create wealth before we can redistribute it. There has also been progress on personal taxation, which is very important for attracting talent, but also for business taxation. And the issue of startups should be looked at in greater depth in the near future. I also hope that measures will be taken with regard to the pension insurance system. It’s not enough to discuss its sustainability, we need to act quickly.
These are positive signals for foreign investors, especially those who are looking at Luxembourg, because they are aware that there is greater stability than in many other European countries.
Are messages about Luxembourg something you’ll be delivering at Mipim?
Highlighting Luxembourg’s stability at Mipim is nothing new. But it’s even more important today when you look at the situation around us. As far as investment funds are concerned, we need to remain cautious. The Irish are catching up and will overtake us in some areas. But in other sectors, the financial centre is doing well despite all the regulatory challenges. Investment in technology and data security remains high. In any case, this is a positive message that we want to get across. I think that, until now, Luxembourg has never been particularly aggressive in promoting itself as a location. We are relatively discreet. Our competitive advantages could be better exploited through a proactive approach to promoting Luxembourg’s expertise and the Luxembourg investment location. We have a good infrastructure compared with other countries, thanks to public investment in many areas. And that’s a message that we carry. Visitors who make an appointment at our stand are informed. They don’t come by chance. Generally speaking, however, during our missions abroad, we find that the grand duchy is not sufficiently well known by many potential investors and partners.
What really happens at Mipim?
We visit other countries’ pavilions. Visitors to our pavilion can make appointments with exhibitors and meet in a small, discreet, specially equipped lounge. For Mipim to be a success, we have to hope that the geopolitical context becomes more predictable and stable, that Europeans get their act together and that interest rates continue to fall. The European Central Bank’s key interest rates could fall back to 2% by the end of the year. Some experts believe that this slowdown could be even more marked, reaching 1.5% by the end of the year. If there is too great a divergence against the US dollar, it could trigger a flight to that currency. In fact, the US economy is doing well, and inflation has remained relatively high, which is why they are not cutting their key rates as quickly.
The other aspect of geopolitical tensions is the absence of certain nations, such as Russia, isn’t it?
Generally speaking, there are fewer nations represented and fewer participants than before covid, but the quality is there, which is the most important thing. Change and movement are now an integral part of any business. Once again, we have one of the largest pavilions, with no fewer than thirteen exhibitors. This year, several key players in the marketplace have launched a new event, the Luxembourg Evening, to mark the occasion and bring together Luxembourg participants and their many national and international partners on the evening of Wednesday 12 [March].
They will be at Cannes…
The following companies or organisations are part of a Luxembourg delegation to the Mipim real estate event, taking place in Cannes from 11 to 14 March 2025: Agora, Banque de Luxembourg, Banque Internationale à Luxembourg, Dagli Atelier d’architecture, Drees & Sommer, DSM Avocats à la Cour, Fonds d’urbanisation et d’aménagement du plateau de Kirchberg, ICN, ING, Necron Capital, Sedlo Law Firm, Ordre des architectes et des ingénieurs-conseils (OAI) and Ville de Luxembourg.
This article was written for the magazine, published on 26 February. The content of the magazine is produced exclusively for the magazine. It is published on the website as a contribution to the complete Paperjam archive. .
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