POLITICS & INSTITUTIONS - ECONOMY

Troc struggles to find second life as shop rents spiral



83 rue de Hollerich, in the Hollerich district of Luxembourg City, pictured, will be razed to make way for a housing project JB

83 rue de Hollerich, in the Hollerich district of Luxembourg City, pictured, will be razed to make way for a housing project JB

Second-hand furniture store Troc has closed its Luxembourg shop after being pushed out to make way for a residential development.

The 1,500m2 shop has been housed in a small but bustling arcade of shops and eateries at 83 rue de Hollerich since 1998. It closed at the end of December after the landlords gave notice.

“We had a year’s warning,” Laurent Vergeynst, whose father managed the store, told Delano at the end of December, adding: “We looked at a handful of shops but they weren’t appropriate because they were too big or small or the price was too high.”

Vergeynst said he has real estate agents looking for a new site in the capital. In the meantime, he removed the remaining stock to the Esch-sur-Alzette shop, which his family owns.

Daniela Trofin, who owns Romanian store La Bacanie in the same arcade as Troc, said the high cost of leasing was also a barrier for finding new premises in the capital. When she first took out a lease on the 100m2 shop in 2012, she said the rent was not so different to elsewhere in the capital. “Now I can’t find anything even for twice the rent I pay here,” she said at the end of December, adding: “To pay a higher rent, I’d have to ask my customers to pay more.” The entrepreneur said she had until March to find a new site, after extending her contract three months.

End of an era. The Luxembourg City Troc store closed in December 2020. Photo: JB

15% rent rise

The situation reflects the impact of spiralling rents on innovation and commerce. According to JLL, a real estate group, average street shop rents rose 15% from €130 per square metre in 2018 to €150 in 2020. Retail warehouse park and shopping centre rents remained stable at €20 and €110, respectively.

Assistant director of the CLC, Luxembourg’s retail confederation, Claude Bizjak, credits real estate projects for asking “questionable figures” on retail leases, which drive up rent averages. He says the pandemic has not changed that.

“We don’t have the impression that prices will go down. In this situation, retailers and other merchants have very limited revenues. I think that the landlords need to think more long-term,” he told Delano.

The CLC is working to develop a retail map, involving data on the retail mix which, if made public, could make retailers better informed about which locations would benefit them. Bizjak would also like to see more sustainable rent models rolled out, in which part of the rent is fixed and the remainder proportionate to revenues. “This has the advantage that landlords are more involved and it’s in their best interest to make it work,” Bizjak said.