Immobel Luxembourg block sale of 124 apartments

Yesterday Immobel announced the block sale of 124 apartments in Luxembourg to Fonds Kirchberg. The apartments will be sold (leasehold) further to individuals in a later stage. The apartments are part of the Kiem 2050 project, a JV between Immobel (70%) and Prefalux Home (30%). The project is a public-private partnership to create affordable homes in Luxembourg. The residential part of the project is now sold and construction can start. As construction starts now and cash instalments are phased over the project, we think the working capital drain will be minimal. There is no sales price given for the projects but we assume a GDV of EUR 107m. In the past off-plan apartments in Luxembourg were sold at EUR 12-14k/sqm with development margins of EUR 2k-4k/sqm. The price per sqm is likely lower here as it is a private-public partnership and a block sale. With the rise of interest rates, the Luxembourg RESI market, once the Walhalla for property developers, came to a complete standstill. In 1H24 only 154 off-plan apartments were sold in Luxembourg (country). Therefore this deal actively contributes to the de-risking of Immobel.