Skip to content
ABBL Logo
Switch to consumers
Corporate & Institutional Banking

Concrete results and extended action: Prolog Luxembourg continues its mission

Published on 29 June 2025

In light of the still hesitant recovery of the housing market and the renewed interest in Prolog Luxembourg S.A., the shareholder banks have decided to extend the initiative until 31 December 2025.

Summary

    An innovative response to market demand

    Launched during the Logement’s Dëch event on 22 February 2024, Prolog Luxembourg S.A. was created in consultation with all sector stakeholders. The initiative is supported by its founding shareholders: Spuerkeess, Banque Internationale à Luxembourg (BIL), Banque Raiffeisen, Banque de Luxembourg, and the Société Nationale de Crédit et d’Investissement (SNCI).

    Since becoming operational in July 2024, Prolog Luxembourg has aimed to support real estate development projects that are commercially ready but unable to launch construction due to a lack of sufficient pre-sales.

    In December 2024, in response to market expectations, two major adjustments were made to the scheme:

    • The minimum pre-sale threshold was lowered from 50% to 30%.
    • Application fees were revised to avoid penalising smaller projects.

    These adjustments rekindled the interest of certain developers, encouraging them to re-engage with the banks’ initiative. In parallel, banks reached out proactively to clients who had previously shown interest but refrained from applying due to the initial pre-sale threshold.

    Four applications accepted since April 2025

    As of June 2025, Prolog Luxembourg S.A. has made four formal offers to developers, involving purchase options for apartments with a total sale price of nearly EUR 16.5 million (incl. VAT). These relate to real estate projects with a combined value of EUR 43 million (incl. VAT). A fifth application is currently being finalised.

    To put these figures in context, the total value of all off-plan sales (VEFA) in Luxembourg in 2024 amounted to EUR 579.6 million, with 54.5% of these purchases made by the State and the City of Luxembourg.

    A fragile recovery

    However, the situation is far from stabilised, even as the European Central Bank announced the end of its key interest rate cuts and state aid for investors in Luxembourg was discontinued.

    At the end of April 2025, professionals in the sector reported an increase in notarised deeds for off-plan apartment sales. However, volumes remained more than 50% lower than those recorded during the pre-crisis years 2020 to 2022. (Source: RTL, Interview with the Chamber of Notaries, April 2025).

    A mechanism that remains relevant

    In view of the current market difficulties and the gradual return of interest in this unique instrument, the shareholder banks have agreed to extend the Prolog Luxembourg S.A. mechanism until 31 December 2025. No new put options will be issued beyond that date.

    The banks remain convinced that this tool responds to a real market need. It is also more beneficial to developers than maintaining commercialisable but inactive projects on their balance sheets. Importantly, it remains the only mechanism on the market that combines:

    • the possibility to launch construction once 30% of pre-sales have been secured, while ensuring project completion for both buyer and developer;
    • and, where approved by the bank involved, access to completion guarantees and the construction loan liquidity necessary to complete the development.