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MIMCO AM launches "MIMCO Grand-Ducal" dedicated to real estate development in Luxembourg

This product presents a risk of capital loss. Investors should seek professional advice.

MIMCO Asset Management introduces a new alternative investment fund focused on real estate development in Luxembourg: "MIMCO Grand-Ducal".

Luxembourg, a fast-growing property market

Real estate in the Grand Duchy is known for its strong growth, providing new investment opportunities on a regular basis. Due to the country's high standard of living, which attracts wealthy investors and non-residents, high-end real estate is the fastest growing market. 

Accordingly in 2020, and despite the economic consequences of the Covid-19 health crisis, office property in Luxembourg had a record year with take-up of just over 350,000 sq m compared with 267,000 sq m for 20191. Moreover, the house price index for the whole country increased by more than 10% compared to last year, a remarkable trend and far above the European average of approximately 5%.2

The Luxembourg property market continues to grow and remains one of the most dynamic in Europe

Spurred on for years by strong economic and demographic growth and a very attractive tax framework, the Luxembourg property market continues to experience unprecedented development. "The statistics continue to speak for themselves. In 2020, Luxembourg was awarded a triple A rating by the main financial rating agencies DBRS, Fitch and Standard & Poor's3 and, according to the CSSF, it ranks 2nd globally in investment fund management with more than 5,200 billion euros4. It also had the highest GDP per capita in the world in 2020 according to the IMF.5 These figures testify to the continued healthy balance and dynamics that are attracting more and more new businesses and residents wishing to settle in this exceptional small state.” comments Christophe Nadal, co-founder and CEO of MIMCO AM.

The resilience of the Grand Duchy property market

This ability to constantly adapt and quickly overcome economic shocks and disruptions made Luxembourg the 3rd most resilient economy in the world in 2021.6

With an average annual growth rate of 2.2%, the World Bank believes that the increase in the resident population in Luxembourg is leading to an ever-greater demand for real estate. This inevitably translates into real estate pressure on prices and a continuing shortage of housing, with an estimated 3,000 additional dwellings delivered each year by STATEC, while demand is more than double.7

Rigorous selection of investment projects

MIMCO AM chose to set up "MIMCO Grand-Ducal" in the form of a Joint-Stock Company (Société en Commandite par Actions) under French law, in the category of other Alternative Investment Funds (other AIF). It will offer its partners and professional investors exposure to qualitative and diversified real estate transactions in the Grand Duchy of Luxembourg. "MIMCO Grand-Ducal focuses its investment policy primarily on the development of residential projects and the refurbishing of obsolete office buildings in Luxembourg", says Ara Adjennian, Managing Director of MIMCO Asset Management. “To achieve its investment objective, MIMCO Grand-Ducal will use all its know-how and experience to anticipate multiple real estate opportunities in this booming market, in which our teams benefit from exclusive high-quality sourcing."

Investing in value-added transactions with value creation potential

"We ensure that we invest in real estate transactions or assets that have the potential to create value", explains Bernd von Manteuffel, co-founder and CEO of MIMCO Capital. "For example, by selecting and then transforming obsolete buildings, repositioning them into functional assets that meet the most current standards to resell them while meeting the needs of the market, we give our investors the benefit of privileged sourcing due to our group's recognised skills in this field. The reputation earned by the group allows MIMCO AM to take advantage of opportunities due to its strong presence on the ground."

Providing full control of the property value chain

At MIMCO AM, through our structured management process and our in-depth knowledge of the Luxembourg real estate market acquired through the experience of our founders and teams, we develop and regenerate urban projects whilst ensuring their potential and intervening in the entire real estate value chain: sourcing, legal and financial structuring, asset management and property management. 

It is this strength and uniqueness that sets our group apart today. In our opinion, very few players master the entire real estate chain in several countries with expert teams based locally. This combination of skills also enables MIMCO AM to master all the stages of the regeneration of a real estate asset, a process that requires a constant presence.

Committed to a healthy world

MIMCO AM is aware that considering environmental, social and governance criteria leads to a better assessment of investments in terms of usefulness and sustainability. MIMCO AM therefore strives to integrate investments that consider sustainability criteria that meet the new challenges of the real estate sector.

View MIMCO AM's ESG policy here.

“The desire to identify the best real estate opportunities with a long-term vision, as well as creating and promoting functional living and working spaces with a unique identity and high added value whilst respecting the environment, is part of our DNA.” emphasises Christophe Nadal.

Investing in real estate in Luxembourg

The MIMCO Grand-Ducal AIF is an equity investment vehicle and, depending on the strategy, the recommended investment period is 6 years. The target commitment amount for the AIF is limited to 20 million euros. This product presents a risk of capital loss. Investors should be aware of this risk and seek advice from authorised professionals.

“We decided to control our annual acquisition rate with the strong desire to be more efficient and demanding in the selection of investments”, continues Ara Adjennian. “This type of fund is suitable for investors seeking an optimal return on very high value-added transactions, representing an annual distribution target of between 7 and 8% and a share of excess returns.”

A real estate solution adapted to the reinvestment of capital gains on sales

The SCA MIMCO Grand-Ducal, which is eligible for the reinvestment of capital gains within the framework of article 150 O B Ter of the General Tax Code, may be invested in directly via a securities account, or within French and Luxembourg life insurance policies.

This fund is intended exclusively for professional and professional-like investors in France who meet the conditions of article 423-27-1 of the AMF's General Regulations (family offices, asset managers, real estate asset management advisors and private banks).  MIMCO Grand-Ducal is a Fund with the status of "Other FIA" within the meaning of article 214-24-III of the French Monetary and Financial Code, notified and authorized for marketing in France by the Autorité des Marchés Financiers (AMF) but not accredited, and whose operating rules are set out in the Articles of Association and the Information Document.

The MIMCO AM team is available to answer your questions and provide you with further information.

 

References:
1. Paperjam, « Le marché de bureau en progression grâce au secteur public », 29th January 2021
2. Luxemburger Wort, « Les prix de l'immobilier poursuivent leur envolée », 15th January 2021
3. Le Gouvernement du Grand-Duché de Luxembourg, « Triple A: Le Luxembourg résiste à la crise », 28th September 2020

4. CSSF, « Les gestionnaires de fonds d’investissement – Situation au 31 décembre 2020 », 4th May 2021
5.
IMF via KNOEMA, “IMF: World Economic Outlook (WEO) Database”, April 2021
6.
FM Global, “2021 FM Global Resilience Index”, 2021

7. Portail d’informations pour l’installation et l’intégration au Luxembourg, « Pourquoi devenir propriétaire au Luxembourg », 2020

Luxembourg
MIMCO Capital S.à r.l. headquarters
Address: 25C Boulevard Royal
L-2449 Luxembourg
Tel: +352 661 988 977
Email: office@mimcocapital.com
Germany
MIMCO Asset Management GmbH subsidiary
Address: Grolmanstrasse 36,
10623 Berlin
Tel: +49 30 810 5661-0
Email: office@mimcocapital.com
France
MIMCO Asset Management S.A.S. subsidiary
Address: 87 Boulevard Haussmann
75008 Paris
Tel: +33 1 44 70 04 36
Email: office@mimco-am.com
Access to MIMCO Asset Management website