Brexit bankers risk life on the edge

As Luxembourg fills up, firms may need to look toward the outskirts of the city or smaller commuter towns

Luxembourg is so tiny that mapmakers have been known to give up and pretend it’s not there.

So as the minuscule financial hub continues to draw London firms opening up a post-Brexit presence in the European Union, there’s a nagging question: is there enough office space? “We asked ourselves in the beginning, right after Brexit, if Luxembourg will have the capacity to respond to the demand,” said Julien Pillot, a real estate broker at Inowai SA. “It was a worry.”

The good news, according to Pillot is that “if you’re looking for 500 square metres, you’ll find it easily.” The bad news, Pillot said, is “there’s clearly a lack of larger office spaces in and around the centre” of Luxembourg City, even if smaller sites are still readily available.

That means firms looking for a bigger footprint may need to look toward the outskirts of the city as well as smaller commuter towns, which often have little more than a petrol station, restaurant or supermarket to offer.

New developments are mostly already reserved before they are finished. A whole new area is being developed to accommodate 30,000 people just four kilometres south from the centre, in the Luxembourg City district of Cloche d’Or. It will combine office spaces, residential flats, shops, a large shopping mall, schools and a new train station.

The problem is, that project is only slated to be finished in 2025, six years beyond UK Prime Minister Theresa May’s target for completing the Brexit process.

The UK’s decision to quit the EU has already convinced more than 30 financial companies — mainly in insurance and asset management — to seek a foothold in Luxembourg.