How RTL makes millions with real estate

From a small building, RTL has evolved to a large real estate business on Kirchberg.

Be careful, if you also want to learn this magic trick:

You can transform an old building in a small plot of land in the city park into an entire district full of real estate and even high-rise buildings on Kirchberg. Without losing a franc, because in this trick the state pays. So the taxpayers, of course. Normally, you are not allowed to reveal magic tricks, but we are making an exception here.

There was once a small private broadcaster

This story begins a long, long time ago - in 1937. Of course, RTL Luxembourg did not exist at that time, but its predecessor Compagnie Luxembourgeoise de Radiodiffusion (CLR), also known as „Radio Luxembourg“, already existed. But don’t let that irritate you now - different name, same shit - and above all: same mindset. In fact, the CLR was already a private company with profit interests in 1937, which grabbed all the public money they could get their hands on. In 1937, the CLT bought the Villa Louvigny in the city for a whopping 3.2 million LUF (about €23,000). Of course, Luxembourg was still a small, worthless hole at the time, without EU institutions and banks, and such prices were still half-normal there.

But if you wait long enough, you can cheat the state with real estate speculation. In 1997, the CLR, which is now called CLT-UFA, sells the Villa Louvigny, where they had their offices and, in some cases, studios until then. And if the state opens its purse strings, you can go up the price considerably, even above the market price. CLT-UFA sells Villa Louvigny for 951 million LUF, i.e. 300 times the price, to the Banque Centrale du Luxembourg, a state institution. The overpriced deal already drew criticism at the time.

But ultimately, the state support for CLT-UFA is for the state’s sake - even though it has since become a profitable media empire. Even if someone in the Luxembourg state had come up with the idea at that time that it was actually not so smart to lease public buildings to companies - it was already too late for the next mistake.

Large plot of land…

In 1973, the Luxembourg state sold a plot of land of 5 hectares to what was then called CLT - still the parent company behind RTL Luxembourg. 5 hectares, or seven football fields, of land on Kirchberg, which was still vacant at the time, for 50 million LUF (equivalent to approximately 1.2 million euros). In 1973, Luxembourg was still a small hole, but the state had already begun its plans for the urbanization of Kirchberg. Since the 1950s, buildings had been built on Kirchberg for the institutions of the European Community.

At the time of the 5-hectare deal with RTL, the EIB, the European Court of Auditors and the European Court of Justice had already been granted permission. It was therefore clear that Kirchberg would gain in value; 15 years later, the state had already sold plots of land on Kirchberg for five times that amount. And compared to 2020 prices in the area, the original price paid by CLT has increased by 180 times.

… with a top location

To prevent CLT from speculating again with this bargain, the huge plot of land was sold under one condition: The land is a „zone réservé à destination particuliére de CLT.“ This means that CLT, the parent company behind RTL, can only use this land to work there itself. No building real estate, no speculation, no profit.

CLT’s original plans were to build a huge production center in Luxembourg for all of its European programming. But this project has since been shelved. Although the programs from, for example, the Netherlands or Belgium still had their mailbox in Luxembourg, they were produced in the respective countries.

And now we come to the big magic tricks. How exactly this worked, you can also read in this exceptional research by the Land from 2017, which speaks of a „hidden state aid“. But that is more complicated written in French and they don’t even have accident photos on their site, so you’d better read on here.

The Fata Morgana of large-scale production

5 hectares, that’s about 7 football fields. Let’s put it this way: Even if you cram a big building into it, you still have a huge… erm… garden. And since that big project was shelved, basically all that was needed was an office building.

In 1988, the main building „KB1“ was built, by none other than star architect Georges Reuter. This headquarters of RTL (aka CLT-UFA) was made entirely of glass. There was plenty of money for the construction, 1987 was a „record year“ for CLT, with a profit of over a billion LUF. At the end of the day, CLT didn’t have to spend any of its own hard-earned money on its main building. 900 million LUF were earmarked for the large construction on Kirchberg (see Land 05.1988) and a few years later the CLT received 951 million LUF from the state when the Villa Louvigny was sold. That worked out well.

In 1991 KB1 was finished and RTL moved in. Since the gigantic garden was somehow too big, a parking lot was simply built on the 4.8 hectares of green space that remained. Wonderful. In 1995, another building was added with KB2, with TV and radio studios, and architect Georges Reuter was again called in. Here, in a significantly smaller space than planned in the 70s, real TV formats were finally to be produced, sitcoms for the European market. Gaston Thorn, director of the CLT, therefore wanted extra tax breaks from the government - and he got them (see Land 05.1988).

Oh no, we’re losing our media location

The CLT continued to grow in those years. However, not, as some might have romanticized, as a production site for series and TV formats.

They grew as a hard-working profit machine, which has now merged with Bertelsmann and had a single goal: profit. And where was the chance for profit in Luxembourg? That’s right, in real estate. In the 90s and the 00s, it also became clear to everyone that Kirchberg is full of European institutions - now it even has an Auchan - and a piece of land was now a financial investment with potential profit to be made. MONEY! Could you do something smart with the 5 hectares that the state had so generously sold to someone? But damn it, unfortunately RTL had signed at the time: „Zone réservé à destination particulière de la CLT.“

There’s only one thing that helps: Jéimeren. Shortly after the completion of the second Georges Reuter Prestige building, the managers of CLT-UFA started to tingle their fingers to immediately tear down the whole store again - and use the 5 hectares a little differently.

However, a change in the contract was missing. And if Jéimeren doesn’t bring anything, then threats will help: Bertelsmann, which now owns CLT-UFA and therefore RTL, has made it clear that RTL could go elsewhere. Luxembourg could therefore lose its media location if it doesn’t declare itself ready to show CLT-UFA a little more love.

Politics, your savior and friend

« In order to consolidate and perpetuate RTL’s presence in Luxembourg », the Luxembourg government in 2009 ultimately gave CLT-UFA exactly what it wanted. The government, before and after the 2009 elections, was the CSV and the LSAP. Before the elections, the Minister of Communications responsible for CLT-UFA was [Jean-Louis Schiltz](/people/staatsraison/2024/01/15/schiltzohr/. After the formation of the new government, he joined the board of directors of CLT-UFA. The 2009 coalition agreement states – surprise: « [the government] encourages RTL Group to implement a new real estate project on the Plateau de Kirchberg ».

The day after the coalition agreement was signed and the government was sworn in, the new contract for the CLT-UFA site was also signed. A full 3.2 hectares of the huge RTL parking lot will be converted into a „mixed urban area“. So practically nothing. The fact that the brand new KB1 and KB2 were still standing right in the middle was not really a problem. The star architect’s servants had been built with, among other things, state money from the sale of the Villa Louvigny - so off with it.

There had long been no talk of actual „media activities“, i.e. large-scale media production at the Luxembourg site. The new RTL City was conceived as an office tower. The RTL headquarters was rebuilt on a significantly smaller area at the very edge of the site. And with the rest, RTL alias CLT-UFA alias Bertelsmann was finally able to make a bold move in their new „mixed urban zone“.

440 residential units, 21,000 square meters of office space and another 4,400 square meters of commercial space. All this on a plot of land in the most expensive area of Luxembourg - what a business.