Real Estate Investment In Luxembourg (Video)

Luxembourg's real estate market is evolving, shaped by increased investment, regulatory change and the influence of key industry players. At Arendt, we're here to guide you through this complex maze with clarity and confidence.

Our Real Estate team provides integrated legal, tax, regulatory and business advisory expertise, along with investor services tailored to your needs. Whether you're structuring a fund, defining your investment strategy, financing real estate, refinancing or restructuring existing real estate investments, acquiring or selling real estate, ensuring compliance, resolving disputes or managing operations, we deliver practical, end-to-end support to help you overcome challenges and seize opportunities at every stage of the value chain.

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Luxembourg remains a key hub for real estate investment

Luxembourg remains a key hub for real estate investment, attracting institutional investors, private equity firms and real estate funds. The market is shaped by increasing regulatory requirements, the rise of fintech, evolving AML and ESG standards and the need for efficient investment structures.
Key challenges for asset managers, developers, investors and real estate investment funds:

• Regulatory compliance adapting to Luxembourg regulations for funds and asset managers with regard to operations, distribution/marketing, rules of business conduct, data and ICT/cybersecurity and more.
• Compliance complying with distribution and pre-marketing notification and marketing communication requirements.
• ESG meeting EU Taxonomy and sustainability requirements.
• Fund structuring, fundraising & investor negotiations setting up investment vehicles while negotiating contractual arrangements.
• Financing & tax considerations raising capital from third-party lenders (i.e. first-ranking mortgage loans, mezzanine loans, bridge loans, crowdfunding), handling difficult negotiations of terms and conditions of new financing arrangements including interest rates, loan terms, financial covenants, scope of security package, extension options, annual cash flow targets and asset diversification, assessing risk and tax implications and ensuring efficient deal structuring.

• Increased refinancing/restructuring needs fulfilling a refinancing or restructuring need caused by, inter alia, valuation decreases, difficulties in implementing an exit due to tense market situation and banks acting more cautiously when granting loans or extending existing loans.
• Portfolio diversification investing across office, retail, residential, logistics, hospitality, healthcare and niche sectors like vineyards and manufacturing facilities.
• Operational & legal risks managing real estate transactions, rental income, third-party occupants, disputes, asset management and property maintenance, and compliance matters including ESG, loan-to-value ratios and occupancy levels.
• AML/KYC satisfying investor and asset side AML/KYC requirements.
• Luxembourg is ranked among the highest purchasing powers in Europe and is a highly attractive real estate market for investors, developers and tenants. The Grand Duchy's resident population and the number of cross-border workers are both continuously increasing. This demographic growth drives demand for office space, commercial properties and housing, positioning Luxembourg as a prime market for real estate investment.

Our expertise and tailored solutions

At Arendt, we provide specialised legal, regulatory, tax , and business advisory services covering the entire real estate investment lifecycle.

Comprehensive real estate services:

• Fund structuring & investment vehicles our team can handle end-to-end projects across the fund life cycle, from fund structuring, fund formation, distribution and investor negotiations to closings.
• Transaction support assisting with acquisitions, disposals, sale and leasebacks, bilateral and syndicated credit facilities, refinancings, senior and mezzanine financings, third-party contracts, including lease agreements, and due diligence.
• Financing & tax advice working with clients to find creative financing methods to mitigate costs and enhance returns, drafting, reviewing and negotiating financing documents, advising on corporate matters, advising on tax implications and providing tax solutions.
• Refinancing/restructuring advising clients on the refinancing or restructuring (in court and out of court) of existing real estate investments and the negotiation and execution of the relevant refinancing agreements or restructuring agreements with the stakeholders concerned.
• Regulatory & compliance ensuring alignment with EU and Luxembourg regulations, including IFM organisational and procedural matters, regarding real estate investments and beyond (data security, cybersecurity, DORA, rules of business conduct, etc.).
• Cross-border fund service and advice we can take care of notification services to EU regulators and others, including for pre-marketing activity.
• Marketing communication regulatory requirements and scrutiny around marketing communication has increased. We can help navigate the complexity of European and national rules.

• AML/CFT we advise on designing AML/KYC frameworks, including risk assessments, and help clients in the performance of their duties, including investor and asset-specific KYC.
• ESGwe assist with preparing SFDR and EU Taxonomy disclosures for pre-contractual, website and periodic reporting at both the financial product and market participant levels. Our services also include ESG due diligence, regulatory health checks, risk process reviews, strategy development and the selection of key ESG performance and risk indicators.
• Investor Services offering fund support, external valuation and corporate administration
• Luxembourg real estate Our team also advises developers, lenders, operators, regulators and both national and international investors on complex development projects. These include urban regeneration schemes, mixed-use developments, commercial office spaces, leisure and retail facilities, residential housing, home care centres, logistics hubs, shopping centres, industrial plants, greenfield constructions and brownfield redevelopments.
  
  We provide comprehensive legal support throughout the entire project life cycle, from design and feasibility through to structuring (asset deal, share seal, forward funding and forward sale), including insurance matters and dispute resolution.
  
  Our expertise spans all phases of real estate construction and development. We assist with property acquisition, deal structuring, surface rights agreements and the preparation of documentation and permit applications that comply with local land use, public law and environmental regulations.
  
  In addition, we advise landlords and tenants on all aspects of office, retail, private and commercial leasing, from lease negotiations and agreement drafting to building management and operational issues.

Arendt is the leading legal advisor for real estate in Luxembourg

With extensive experience in real estate funds, private equity, pension funds and multinational investors, we deliver:

• In-depth industry expertise across all major real estate asset classes.
• Strategic guidance on fund structuring, financing and tax efficiency.
• Integrated legal, regulatory and operational support tailored to our clients' needs. Our multidisciplinary approach also encompasses general consultancy, business advisory services and automation, reporting, forensic, distribution/marketing, data protection and cybersecurity services.