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Why Luxembourg Can Be An Acquired Taste For Bankers Fleeing Brexit

Why Luxembourg Can Be An Acquired Taste For Bankers Fleeing Brexit
From JPMorgan Chase & Co. to insurance giant American International Group Inc., little Luxembourg is luring firms on the lookout for a post-Brexit foothold in the European Union.
Following the U.K.’s vote to leave the European Union, AIG in March said it will open an operation in Luxembourg. Luxembourg as their new EU hub was also chosen by U.S. insurer FM Global and Lloyd’s of London insurer Hiscox Plc., as well as private equity firm Blackstone. Plans to move hundreds of London-based bankers to expanded offices in Luxembourg, Dublin and Frankfurt was announced by JPMorgan this month.
Luxembourg has been trying to adapt to a likely influx of financiers from the U.K. capital and adapt to the growing demands of its wealthy population, culturally and socially. unlike in bigger cities, it’s still easy to snap up a ticket for shows and celebrity artists now regularly pay a visit.
According to the country’s statistical office Statec, compared to the previous year, Luxembourg’s house-price index in the second quarter of last year grew by 5.6 percent. the average price for existing was 594,379 euros for a one-family house and 4,613 euros ($5,165) per square meter for apartments, in 2016.
Since priced at or above a million euros are high-quality family homes with two or more bedrooms close to Luxembourg city,, the data don’t show the full picture.
“We are only a few hundred meters from the border, but the price is 10 times cheaper,” said Benoit Wtterwulghe, the chief executive officer of ABLV Bank Luxembourg SA. “It’s quite tough with all the traffic jams. Sometimes I leave very early, but you need to cross the border before 6:30 a.m. Or, I start to work from home and get in a bit later.”
Brexit could create some 1,000 local jobs, estimates Luxembourg for Finance, the agency for the development of the financial center even though no one knows exactly how many people will head to the nation. Due to current demand exceeding supply, prices are already under pressure, according to realtors.
“Finding good accommodation here is becoming the real issue,” said Wtterwulghe. “It’s not just the price, you also need to grab a place during your first visit, or it’s gone.”
Forgoing big yards and losing out on few square meters could be the result for those staying closer to the center. But just with a matter of minutes, the ability to get to and from Luxembourg’s beautiful heart, part of which is a UNESCO World Heritage site, is the payoff.
Nicolas Mackel, chief executive officer of Luxembourg for Finance said that another big plus for parents wanting multilingual kids are Luxembourg’s internationally oriented schools, many of them free.
Apart from the local language of Luxembourgish, having their kids schooled in German, French and English is “a unique opportunity” for anyone looking to move over with their families. “You can’t find that anywhere else,” Mackel said.
Luxembourg “has the capacity to further adapt, should there be an increase in demand,” said Myriam Bamberg, a spokeswoman for the education ministry. Saying that families coming to Luxembourg get priority over those who apply locally, and monitoring the Brexit situation is the International School of Luxembourg, one of several private schools.

Christopher J. Mitchell

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