On September 23rd, residents of the Gare district protested against the escalating levels of insecurity in their neighbourhood. While residents bear the brunt, asset managers, their clients, and employees are also affected by the increasing anti-social behaviour in the area.
The Gare district has never been inviting; growing up, it was a place to avoid. However, I don't recall seeing as many drug addicts, dealers, alcoholics, and homeless individuals as I do today. Moreover, there are significantly more closed stores and buildings undergoing renovation than ever before.
This is regrettable because the Gare district, Avenue de la Liberté, and their surroundings are among the most beautiful areas of Luxembourg City. There is untapped potential that remains unrealized, and many asset managers would love to establish a presence there.
Tourists and investors arriving in Luxembourg by train should be impressed, given Luxembourg's status as a wealthy country and financial hub. However, stepping outside the Gare building is extremely disappointing.
So, what went wrong?
The tram
The construction of the tram was the first nail in the coffin for the Gare district; nothing has been the same since the first tracks were laid. Unless you take the train, it has become significantly harder to access the district for work or shopping.
While the tram aimed to improve transportation around the city, it's unclear how the Gare district has benefited. To accommodate the tram, car access was greatly reduced, despite the fact that many still rely on cars.
Covid
Lockdowns due to Covid-19 coincided with the finalisation of tram construction. Shops closed, people started working from home, and the district, heavily dependent on commuters, became deserted.
Anti-social behaviour
The final blow is the presence of drug addicts, dealers, alcoholics, and homeless individuals in the district. Although I never considered the area dangerous, I understand why people might feel uncomfortable eating, shopping, working, or living there.
Stories abound of employees and clients facing drug addicts at their office entrances and restaurants having to chase addicts away. This creates an unfriendly business environment.
Impact
Tangible evidence of a downturn includes numerous store closures and the departure of major fashion retailers from the district. As more shops close, fewer people visit, perpetuating a downward spiral.
Though challenging to quantify, there is undoubtedly an impact on Luxembourg's reputation with tourists and investors visiting the area. No business, especially an asset manager, wants to be located in an area with such a poor reputation.
Overall, the Gare district struggles to recover from tram construction, the impact of Covid-19, and the persistent issue of growing anti-social behaviour. However, it is hoped that one day its potential will be fully realised, and the district will become a hub for business once again.
Gregory Kennedy is a columnist for Investment Officer Luxembourg. His columns appear every other week. He also works as a business development manager at Finsoft Luxembourg.
