How a Luxembourg property developer overcomes repeated crises

Between the swimming pool, the ring road and the Dernier Sol tram stop, a whole block of land that began undergoing a major facelift in 2023 will continue its transformation this year in the capital.

It is part of the transformation of this part of the Bonnevoie district, the broad outlines of which were approved by the local authority in the dedicated PAP in 2019. In the first two residences of the Brooklyn development, workers are busy completing the 44 flats of the first residential lot, due for delivery in October.

Developer Eaglestone is overseeing operations and providing site visits.

“Around 70% of the properties in phase I have found takers,” said Gisèle Lippolis, head of residential sales for the Luxembourg company. Brooklyn, built on a former industrial wasteland, claims to be rooted in the concept of the proximity city, where all daily activities are at a 15-minute distance from home.

Between now and 2028-2029, a whole neighbourhood within the district is due to emerge. The project consists of 15,000 square meters above ground developed by Eaglestone (out of a total of 30,000 square meters developed here): four residences, two mixed-use buildings and the country’s first carbon-neutral building, The Bridge, which will be occupied and acquired by a public authority.

Risk and success

For Eaglestone, Brooklyn is symbolic.

“We launched this ambitious, high-risk project in a residential market that was in turmoil,” said Nicolas Orts, co-CEO of the Eaglestone group.

The company was set up in 2010, is based in Luxembourg and has operations in Belgium, France and the Grand Duchy. It has its sights set on Spain.

The international context hurt the group’s 2023 results, as multiple crises have weighed on the property sector since the Covid-19 pandemic. At the end of 2024, the group with 230 employees said it will have generated sales of €368.5 million (EBITDA at €27 million) and returned a net profit of €6.7 million (compared with a loss of €8.9 million in 2023).

“Above all, it’s a liquidity crisis for developers, whose projects may be blocked for longer than had been estimated,” Orts explained.

“In practical terms, our job is to get projects up and running. If we’re stuck for another four years on an ambitious project like Brooklyn, it can be to the detriment of other projects. That’s why cash-flow management can be a problem. In our case, we believe that this liquidity crisis was managed with the support of shareholders and banks, which is a guarantee of solidity and professionalism that not everyone benefits from.”

Brooklyn has also benefited from support offered by the government in its marketing phase.

“Part of our success on this project is linked to the accompanying measures,” the director acknowledged.

Government help a great help

The government wants to extend the measures in the tax package designed to stimulate the housing market, starting with the Bëllegen Akt, by six months to 30 June. For Eaglestone, these measures have been beneficial.

“If the aid had been suspended, Luxembourg would have remained mired in an extremely serious housing crisis,” Orts said, adding that “these measures must therefore be extended. We would even be inclined to ask for new or additional measures because people in Belgium, Luxembourg and France feel that the authorities are not taking sufficient account of the housing issue.

Julien Thevenon, Eaglestone’s head of business development, suggested a paradigm shift: “Current subsidies lighten the bill for buyers. But as developers, we’re waiting for real progress on the planning, design and implementation phases of projects.”

In other words: “administrative simplification and, above all, much greater fluidity”.

Orts said that this slowness in the process is a blight on society, and not just on the property sector: “We realise that by breaking down the fluidity of the market, it is the local authorities that are impoverished, because they no longer naturally collect various fees on all property transactions. We’re also convinced that this creates a social problem: people can’t find housing even though it’s a primary need; it creates discontent and tension; and it generates indirect costs, particularly in terms of mobility.”

Putting an end to the crisis

Fortunately for Eaglestone and many other players affected by the property crisis, it seems to be coming to an end. Never before has the Luxembourg-based group, which was founded in Belgium, experienced such a shake-up.

“In a very short space of time, the fundamental parameters on which we base our business have completely changed,” Orts said.

Soaring interest rates, reluctant banks, flagging business confidence and soaring construction costs have shaken a sector that has lost its feathers, with numerous bankruptcies, particularly in Luxembourg.

“Before, the time taken to sell a flat in Luxembourg was counted in a few weeks, as soon as the permit was issued,” Orts said. “Now, there are entire programmes that can’t find takers, because the price is too high, or because we’re waiting for new support measures.”

Turning the page appears to be a “necessity” because, in the CEO’s view, “this crisis has been far too long and far too brutal”, leaving the property sector in the doldrums on the eve of a “decisive” 2025.

Also read:More than 3,300 jobs lost as result of bankruptcies in 2024

“Real estate attracted a lot of people. And today, a distinction is being made between professionals who have sufficient acreage to get through the crisis, and a whole series of operators who are in a fragile state and can’t deliver. And I also believe that this property crisis is accompanied by a crisis of confidence, and that it is up to us, by launching risky programmes and reassuring counterparties, to demonstrate our ability to deliver over the long term.”

As a result, if interest rates continue to fall, there may be an “inflection point” at which “the curve can be inverted and market fluidity restored, but perhaps at the right price”, Orts said.

The image problem

If the building and property sector manages to emerge from the crisis, it will also have to deal with a reputation tarnished by several cases that have now gone to court. Orts acknowledged that “the sector needs to work on its image”.

The CEO said he intends to highlight the contribution of an entire profession and its countless trades to the reshaping of our environment.

“Where in the past we were seen as ‘concreters’ and speculators who made a lot of money on the backs of the community, today the focus is on developing neighbourhoods and towns in close collaboration with the public sector as part of public-private partnerships, creating buildings for the public sector and building facilities. Within the group, in France, for example, we are building sports halls, community libraries, hospitals and accessible housing, all with very close attention paid to all environmental aspects,” he said.

In the Grand Duchy, in a very favourable market for office space – with a vacancy rate of only 3 to 4% according to Eaglestone – 53% of the real estate group’s business is in projects for professional use. Within its Brooklyn project, Eagelstone is planning the construction of a timber-framed office building of over 10,000 square meters – called the Nest – in the Cloche d’Or district.

This is a sign that, despite the vicissitudes of a sector that has been in turmoil since 2020, resilience and ambition are still on the menu.

Eaglestone in Luxembourg

Eaglestone Group is developing 69 projects in over 35 cities, a portfolio with an estimated sales value of €2.2 billion, according to a press release issued by the group on 5 March. In Luxembourg, it is developing seven projects, including Brooklyn and The Bridge. Here are the others in brief:

Prism, a 4,780 m² office building in the Cloche d’Or district, delivered and occupied by CBRE since 2024.

The Arc, an office building, flats and retail units for rent near the central station (next to the soon-to-be-completed Hotel Alfa) in Luxembourg City.

Prince, a 3,200-square-meter building on the Boulevard du Prince-Henri in Ville-Haute, with offices and flats, built on behalf of Monceau.

Upperside, a residence of eight luxury flats, to be completed by the end of 2026 in the Neudorf/Weimershof district, south of Kirchberg.

The Nest, a 10,324-square-meter office building built to the latest environmental standards, planned for 2026 at the earliest, in the Cloche d’Or, with a wooden structure and a strong green feel.

The Nest at the Cloche d’Or, the Eaglestone group’s new flagship project. © Photo credit: Eaglestone Luxembourg

Asked about future ambitions, Nicolas Orts said that the group “has acquired and taken positions in some very ambitious projects in recent months”. In Luxembourg, “a number of projects are being studied, and by mid-2025, we will have taken up new positions”.

(This article was first published on Virgule. Translation and editing by Tracy Heindrichs.)