The Luxembourg office market is experiencing a remarkable resurgence in 2025, with an impressive over 100,000 m² leased in the first half of the year. This represents a staggering 148% increase year-on-year, signaling a robust recovery.
This significant growth is primarily fueled by the strong presence and activity of major corporations, which in turn intensifies competition for all businesses actively seeking office space in the Grand Duchy.
High demand for "Grade A" office space
The current market is highly selective, with demand heavily concentrated on modern, sustainable, and strategically well-located "Grade A" buildings. These premium spaces now account for over 70% of all transactions.
In stark contrast, older or less ideally located office spaces are struggling significantly to attract tenants, highlighting a clear bifurcation in market preferences. Businesses must prioritize quality and location to remain competitive.
Understanding rental costs and low vacancy rates
Prime rents in Luxembourg's city center have remained stable, hovering around €54-55 per square meter per month. However, certain areas, such as the dynamic Gare district, have witnessed a notable increase, with rents climbing by over 7% in the past year.
Compounding the challenge for tenants is the persistently low vacancy rate, currently sitting at approximately 4%. This low availability underscores the scarcity of quality office spaces and the urgency required for securing them.
Your strategic approach to securing office space in Luxembourg
In this fast-moving and competitive landscape, adopting a proactive and strategic real estate approach is not just beneficial, but crucial for companies. This strategy should encompass several key considerations:
Location, sizing and competitive financial conditions
Careful consideration of location remains paramount, but it's equally important to accurately size your space to accommodate evolving work models, particularly hybrid work. Furthermore, negotiating competitive financial conditions is vital.
Simply put, understanding your needs and the market's nuances will determine your success in securing the right property.
Why tenant representation is crucial in a competitive market
Navigating Luxembourg's highly competitive office market demands expert guidance. This is where Tenant Representation services, such as those offered by firms like 10-7 B2B, become invaluable.
These specialized services exclusively defend the interests of tenant companies, working diligently to secure the best possible opportunities and most favorable lease conditions.
Engaging a tenant representative ensures your business is well-positioned to act swiftly and make the right decisions ("agir vite, agir juste") in this challenging market.
Source: paperjam.lu
