Céline Coubray: Why go to Expo Real in Munich if you come from Luxembourg?

Cédric Kaison: Expo Real is a European trade fair for professional real estate. It’s a major annual event in the same way as Mipim in Cannes. These are fairs dedicated to professionals with an international character. For a consultancy like BNP Paribas Real Estate, it’s important to be present, because the Luxembourg market is exposed to foreign capital. I refer in particular to the activity of German, French or Anglo-Saxon investment funds that buy in Luxembourg, mainly office buildings, those that are currently invested or have disinvested and would like to come back, or the ‘newcomers’ who haven’t yet found the right building. Financing players are also present at the fair. Expo Real is therefore an opportunity for us to meet them in person, as they are not present on a daily basis in Luxembourg.

What is the difference between Expo Real and Mipim? The two fairs are very similar in that they are both aimed at property professionals. Expo Real is more European in character, whereas Mipim is more international, with investors from the Middle East and Asia. These two fairs are held about six months apart, so we can take the pulse of the market on a regular basis. It’s an opportunity for us to share statistics on the Luxembourg market and the latest trends and dynamics. Our contacts tell us about the capital they have managed to raise, their new challenges and their investment criteria. The setting, however, is different. Mipim takes place in Cannes, by the sea and with mild temperatures, whereas Expo Real is held in a trade fair hall at the beginning of October.

How do you work during the show?

Well in advance, we organise meetings with people who are all very different from one another: it could be a private equity firm, a pension fund or a family office... The meetings follow on from one another, so you have to be prepared. The aim is to summarise the situation in Luxembourg and get the important messages across quickly and efficiently, because if we have a meeting every half hour, so do our contacts. The work continues after the show, of course, with a more relaxed discussion of specific issues, either during a face-to-face or remote meeting.

What is your conversion rate between making contact on the stand and the business deals you subsequently conclude?

The number of appointments doesn’t reflect the number of deals we’ll make over 12 months. To fully understand the world of international real estate in which we operate, we need to talk to our contacts. By taking the pulse of the capital, we can better identify the property profile that might attract interest. The fair is a sort of speed dating, with a wealth of information that you need to take advantage of when marketing properties in Luxembourg. As a result, if we don’t go to the fair, we’re not as well equipped to work on our files afterwards.

Do you take the time beforehand to find out what properties are available on the Luxembourg market?

That was true when everything was going well. For this edition of Expo Real, we can imagine that the climate will not be very festive because of the context of high interest rates and the lack of appetite for property. Rather than trying to sell a building, we’re going to try to understand the state of mind of the investors, those who have the capital, what the investor profile is, and the type of building that might be suitable. It would be counterproductive to go straight in with files. On the other hand, if we see that an investor is a perfect match for a building, we can obviously submit it to him and enter into a more concrete discussion.

What is the current state of the professional investment market in Luxembourg?

The current volume of professional transactions is low. We’re wondering when investors will return. That’s why it’s important to talk to them to understand their priorities for the next few quarters. So far, 2024 has been a quiet year, with a volume of investment of €205m recorded in Luxembourg over the first six months of the year. Last year, over 12 months, the market recorded transactions worth €500m. So it’s fair to say that we’re slightly behind schedule, but I think we’ll be close to last year’s figure of €500m by the end of the year. This has to be seen in the context of a more or less normal year, with around €1.2bn worth of transactions. We are therefore at half the volume of transactions for a reference year.

Is this specific to Luxembourg?

No. This decline can be seen across the whole of Europe, with investment volumes between 40% and 60% lower than in a ‘normal’ year, depending on the country. We can also see that transaction sizes have fallen throughout Europe. Today, an investment volume of more than €100m is an illiquid property. There is much more activity in the €25m bracket. More than 50% of transactions in Europe are in this segment. Because capital is smaller, investors prefer to do several small deals rather than one large one. The profile of investors active on the market in Europe and Luxembourg has also changed: the absence of institutional investors, such as investment funds, has been partly filled by family offices and private investors. We saw this happen, for example, with the and the sale of o.

Do you expect to find these private investors at Expo Real?

Not really. Expo Real is mainly dedicated to institutional investors. A few international family offices will be present at the show, but that's a small proportion of the participants.

 will take place from 7 to 9 October in Munich, Germany.

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