Shopping Centers Today International

MAR 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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M a r c h 2 0 1 6 / S C T 51 O N T H E G R O U N D : L U x E m b O U R G banking on retail in one of Europe's smallest markets New shopping space in the Grand Duchy of Luxembourg is set to make the duchy a bit grander in two years' time through the opening of the 75,000-square-meter (about 807,000 square feet) house of Brands — the retail component of the vast cloche d'Or mixed-use project under development to the south of Luxembourg city. currently, most of Luxembourg city's retail is distributed among three malls, two of them privately owned by Luxembourg families, and the third operated by French retail group auchan. Between those and three additional malls in the less populated north of this tiny country, Luxembourg's gross leasable area for shopping center retail is about 323,000 square meters — 254,000 square meters, excluding hypermarket space, according to cushman & Wakefield. This might seem to be sufficient for the 550,000 people who live in Luxembourg, but there is room for yet one more, argues Virginie chambon, head of Luxembourg retail at cushman & Wakefield, which makes referrals for LcO1, house of Brands' developer. "Once this one is delivered and opened, the limit will be reached." LcO1, a joint venture of Immochan (the real estate investment arm of Groupe auchan) and Promobe (an investment vehicle of local entrepreneur Flavio Becca), asserts that the project will be drawing business away from no one. "The ambition of our project is not to compete with the existing commercial offering, but rather to strengthen it and to differentiate ourselves by increasing the com- mercial attractiveness of the Grand Duchy of Luxembourg by means of an innovative and high-end offering," said Philippe Provost, gen- eral manager of LcO1, in a prepared statement. Besides the 120-store mall, the 80-hectare cloche d'Or (French for "golden bell") district will contain 495,000 meters of offices and apartments. Up to 3,000 people will live in the district when the project is completed, including 500 in two residential tow- ers over the mall, and an additional 20,000 will work in the district, according to publicists. Several factors make Luxembourg an attractive market. First, Luxembourgers are relatively rich. Luxembourg is a banking center, and it is also home to several European Union ministries. average disposable household income is $38,951 per year, ac- cording to the Organisation for Economic co-operation and Devel- opment, considerably higher than the OEcD average of $25,908 and the averages in neighboring Germany ($31,252), France ($28,799) and Belgium ($28,307). Foreign bargain hunters will help boost sales, because Luxem- bourg malls offer two unique selling propositions to cross-border buyers: First, the malls are allowed to operate on Sundays, unlike shopping centers in Belgium, France or Germany; and second, they offer some tax advantages — Luxembourg's 17 percent VaT might not sound like any shopping paradise, but it does beat Germany's 19 percent, France's 20 percent and Belgium's 21 percent. Lux- embourg also offers lower taxes in particular categories; French and Belgian shoppers visit to stock up on cheaper alcohol, tobacco, per- fume and gas, according to chambon. From the more rural north, Germans make the trip to buy coffee and water. "That's strange," chambon said, "but that's really the way it is." — Bennett Voyles H O U S E O F B R A N D S w i l l O p E N i N 2 0 1 8

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