Industries across the globe are adapting to the ever-changing coworking scene and Luxembourg is no exception to the trend. Yet, beneath the surface of this flourishing industry lies a nuanced landscape. Key industry players reveal the prevailing trends, apprehensions, future endeavours and obstacles shaping the trajectory of coworking in the Grand Duchy.
As one delves into the ever-evolving world of coworking trends in 2024, it becomes clear that these flexible spaces transcend traditional work environments or traditional business centres.
As the Luxembourg Workspace Association points out, the worldwide failure of the renowned WeWork platform had no direct influence on coworking spaces in Luxembourg, except in terms of overall reputation. Coworking spaces continue to serve as dynamic communities that pulsate with innovation, sustainability and a futuristic essence, giving rise to the concept of the “office of the future” – a customizable workspace poised for significant growth.
Since 2020, it seems that the Gare district has emerged as the primary coworking hub in the capital. This trend position marks the expanding sector in the city, driven by influential players such as Gingko Solutions Facilities, Regus or Silversquare.
Although the Luxembourg Workspace Association cannot yet confirm statistics on the sector, preliminary research carried out for this article, suggests an estimated count of 56 coworking spaces spread across the country (see the Coworking Directory here). Predominantly concentrated in the capital, shared workspaces also dot the landscape in the Mosel region and southern Luxembourg.
But the key question is: How are entrepreneurs and managers adapting their real estate strategies to meet this new hybrid standard and what are their main concerns? Diving into the coworking sphere, one discovers a diverse landscape where the future unfolds in harmony with the communities it nurtures.
Conservative concerns
In Luxembourg, coworking spaces play a pivotal role in driving the economy, offering vital support to freelancers, startups, and established companies alike. However, industry insiders lament a lack of vibrancy and support within the sector, suggesting the Grand Duchy falls short in comparison to more trendy destinations like Australia, Germany, or neighbouring countries.
“The shortage of coworking spaces in Luxembourg, compared to other neighbouring and worldwide countries, is the result of multiple factors. The small size of the country’s market, exacerbated by a conservative approach to the real estate sector, as well as the huge bureaucracy to install a business, are three of the main reasons.”
Gosia Kramer, CEO of The Office.
Despite its reputation primarily as a financial hub, Luxembourg boasts strategic advantages that could elevate its appeal on the global stage. Its central European location, unrivalled access to diverse markets, a high number of expats, financial safety, and a rich cultural tapestry underscored by multilingualism and a balanced lifestyle, present compelling advantages.
According to industry leaders, quoted in this article, streamlining bureaucratic processes is crucial for fostering rapid economic growth. If more entrepreneurs entered the country, the coworking industry would also benefit from this dynamic, it’s a win-win cycle.
Regulatory constraints prevail
As Gosia Kramer, CEO of The Office, points out, coworking spaces are one of Luxembourg’s most important economic drivers, but the government doesn’t seem willing to cooperate with the sector. “We can’t increase our desks because of regulatory rules and I would like to have more people here, you know, because not everyone comes every day, that’s the beauty of freedom”.
In her opinion, the government should support coworking centres in a more proactive and stronger way, because these entities serve as critical launchpads for aspiring entrepreneurs, yet current support measures remain insufficient. Entrepreneurs are calling for a shift towards more inclusive support initiatives, stressing the need to extend aid beyond a few selected companies, such as those enrolled in financial programmes like Fit4Start. Rather, a broader approach aimed at empowering hundreds, or even thousands, of entrepreneurs is urgently needed to breathe new life into this crucial sector.
“Traditional business centres favour long-term commitments, contrasting with the fast-paced nature of business. Despite the significant presence of expatriates, strict regulations often limit entrepreneurs to expensive private spaces. Long office rental contracts are a disincentive, especially for early-stage companies, which are reluctant to commit to an uncertain future”, enhances Gosia.
That’s why coworking spaces are so popular. In fact, they offer a flexible solution, allowing companies to adapt to changing conditions. “In an uncertain environment, the attraction of coworking lies in its ability to provide a safety net, allowing agreements to be terminated quickly if necessary,” Gosia explains.
“The bureaucratic burden is increased by the fact that entrepreneurs must have an establishment authorisation and prove they are Luxembourg residents in order to have a business address. The difficulty of opening a bank account is another obstacle. They’re not really welcome. There are many barriers to foreign companies setting up here, and we need more entrepreneurial mass, companies stimulate the economy.”
Gosia Kramer, CEO of The Office.
Also, according to Claudine Bettendroffer, Country’s Silversquare Leader, “Luxembourg is still a conservative country on this matter, so under the recent legislation of last November, in order to lease shared workspaces or offices with auxiliary services, the manager must have an establishment licence”.
At Silver Square, 65% of businesses occupy private offices and 35% are in open spaces, the latter split between “desk flix” and “desk flex”, with the particularity that in Luxembourg companies can only register their headquarters using a “desk flix”. Instead, in other countries, such as Belgium, Germany or France, it can also be registered on a “desk flex”.
Toward a new norm
Regardless of how the market evolves, one of the trends the industry is witnessing is that large companies in various countries are choosing and nurturing the coworking space sector instead of opting for classic business centres. They are relocating their offices to shared workspaces in order to benefit from the creativity, vitality and networking spirit that these ones provide for their teams.
“At The Office, the request for private spaces has increased. Now we have much more demands for private offices than before Covid, when the open spaces were more requested, so the business model is changing”, states Gosia Kramer.
For example, in France, as in Luxembourg, the business model is no longer based on renting nomadic workplaces daily, either self-service or in open spaces.
Is the traditional office obsolete?
While coworking spaces have challenged traditional office models, it’s premature to deem offices as obsolete. They remain a viable option for companies with specific needs (industries, medical practices, etc.), while coworking offers flexibility and cost-effectiveness for others. Offices and coworking spaces coexist as complementary options in today’s workspace landscape.
“I’m obviously convinced that flexible spaces are the only effective solution to this fluctuation in footfall… That’s the gamble Befimmo has taken by investing in Silver Square, and together we’re able to offer the best of both worlds: leasing and flexibility!”, states Alex Kuborn, Cofounder of the Silver Square, in a statement on LinkedIn.
To support the industry in Luxembourg, Claudine Bettendroffer, The Office Country’s Leader, co-created the Luxembourg Workspace Association in 2021, which brings together incubators, coworking spaces and business centres.
“Our goal is to be a voice for the sector, setting the standards that define our industry, ensuring a level of quality and ethics among our members and also providing a platform for finding the right place to build one’s business.”
Claudine Bettendroffer, country leader at The Office.
To reinforce her point, Claudine adds: “We want to give life to the whole sector, that’s why we want to enlarge the Association, the more members we have, the stronger we will be, that’s why we hope that all workplaces will join us.”
The Association has legal (lobbying and exchange with authorities, representation internationally), promotion (workspace map, statistics and exchange with international workspace associations) and animation (onboarding new members, training and networking activities) working groups. In 2023 the Association became an official member Federation of the Luxembourg Confederation.
Based on insights from the Association, the market penetration of coworking in Luxembourg ranges from 2% to 3%.
Innovative services for improved quality of Life
“It’s the extra services that give the coworking centres their strength for the future. We need to innovate and offer services that stand out from the crowd. There are several Paladium projects in the pipeline.”
Emilie Marasse, communication and marketing director at Paladium.
Exciting developments are underway as Paladium gears up to unveil its newest venture by the end of March: apart from the two well-known spaces, Paladium Gare Centrale, Le Jardin Secret in Bertrange and the newest storage warehouse Le Stockage Hamm, the company is preparing to open another warehouse, Le Hangar Celtes in Merl, on the 1st of April, specifically designed for craftworkers.
Set to revolutionise the local artisan community, this innovative hub will provide a dynamic workspace coupled with secure storage facilities for materials, catering to the diverse needs of its members and also non-members. It will offer convenient storage solutions for various purposes, from temporary furniture storage during relocation to safekeeping important documents or gardening equipment.
In addition, a “Guingette” venue (a kind of tavern) will be launched in the middle of nature, available for events organised by communication agencies and private individuals. The expansion of Paladium’s network in Metz is also on the horizon, marking steady growth and innovation for the Paladium brand in the world of coworking and the Greater Region.
At Gingko Solutions Facilities, the main focus is on combining personal well-being with work productivity, offering a wide range of services so that customers can relax before or after a meeting.
“Our services are geared towards well-being and comfort: fitness rooms, yoga classes, but also comfortable relaxation areas, table football, a well-stocked library, user-friendly catering areas featuring local products, etc,” elucidates Barbara Brecko, Gingko’s Founder & Managing Director.
In general, coworking spaces aim to merge a business environment with a chilled-out and relaxed atmosphere, through cafés, restaurants, fitness classes, conference rooms, etc., offering entrepreneurs a harmonious balance between work and leisure.
Cross-border coworking
Strategically located in the Mosel region, Concilium and S-Hub coworking spaces are some of the examples that serve not only local entrepreneurs but also, and above all, cross-border commuters, reflecting a growing trend in the workspaces sector.
Therefore, the S-Hub in Yutz (Thionville) constitutes a practical solution for French border workers and Concilium in Stadtbredimus (near Remich) for German, French and Luxembourgish frontier labourers.
“For years, the absence of substantial government support has been a glaring issue for us, who have been providing a stimulating environment for artisans and burgeoning businesses, being a fundamental support for the frontier workers. Throughout my three-decade journey as an entrepreneur, governmental aid has remained noticeably scarce. It’s disheartening”, admits Jorge Simões, founder of Retrouvailles Concept and the Concilium coworking space.
Since 2008, the entrepreneur continues its mission to bolster independent workers and start-ups, many of whom struggle with entry fees and rents while navigating the arduous authorization process, often lasting three months or more.
One of the solutions Concilium proposes is lowering rents in the first few months, before entrepreneurs get their establishment licence. “In times of recession, our action becomes even more crucial and I predict a significant crisis this year. Without the right support, many companies, especially new ones, can face insurmountable challenges”, emphasises the Concilium CEO.
Overall, the future of coworking spaces in Luxembourg seems promising, driven by factors such as economic growth, changes in coworking regulations, reducing bureaucracy, policies to attract new talent, services innovation and cutting-edge technological innovation. The exact trajectory will therefore depend on various internal and external factors that shape the country’s entrepreneurial landscape.
Editor’s note: This article first appeared in Forbes Luxembourg here.
