Luxembourg office market: a strong recovery underway
The Grand Duchy of Luxembourg's office market is experiencing a significant turnaround, emerging from nearly two years of slowdown with clear signs of robust recovery.
Data from JLL, a global leader in corporate real estate consulting, highlights this resurgence, primarily driven by the private sector's increasing demand for premium office spaces.
Key indicators of growth
The second quarter of 2025 saw impressive activity, with a take-up of 63,785 m². This represents a remarkable 63% increase from Q1 2025 and a massive 148% surge year-on-year. This accelerated demand underscores a healthy and dynamic market.
High demand for grade a spaces
A significant trend in the current market is the strong preference for high-quality, modern office spaces. New 'Grade A' buildings, defined as those under five years old or currently under construction, accounted for a substantial 71% of the total transactional volume. This indicates that businesses are prioritizing state-of-the-art facilities that offer contemporary amenities and sustainable features.
Healthy investment and low vacancy
Total office investment in the first half of 2025 reached an impressive 274 million euros, further solidifying confidence in the market. Despite the high transactional volume, the vacancy rate remains remarkably low and contained at just 4.2%.
Furthermore, of the 515,514 m² currently under construction, approximately 72% are already pre-leased, signaling continued strong demand and limited immediate availability for new projects.
Prime locations and rental trends
Several key areas in Luxembourg are at the forefront of this market resurgence:
Notable transactions highlighting demand
PwC secured 9,500m² in the 'Eosys' project located in the rapidly developing Cloche d'Or district.
JP Morgan leased a substantial 13,975m² in 'The Waves' at Kirchberg, a major financial hub.
Baker McKenzie took 2,640m² in 'Ekxo', also situated in Cloche d'Or.
These significant transactions by major corporate entities underscore the appeal and strategic importance of these locations.
Rental stability and increases
While the average city rent stands at 32.90€/m² per month, specific prime areas show variations:
Rents in the prestigious Boulevard Royal area remain stable at 54€/m².
The Gare district has seen a notable 7.5% increase, largely due to the impact of the 'Unicity' project.
Expected rental increases are also projected for the highly sought-after Kirchberg and Cloche d'Or districts, reflecting their growing popularity and limited supply of new prime spaces.
Outlook: a promising future for Luxembourg office space
The clear recovery and strong indicators across all segments of the Luxembourg office market suggest a promising outlook for businesses looking to establish or expand their presence.
With robust demand, significant investment, and a preference for high-quality spaces, Luxembourg continues to solidify its position as a prime European business hub.
Source: virgule.lu
