Luxembourg office market: a strong recovery in H1 2025

 

The Luxembourg office market has demonstrated a robust recovery in the first half of 2025, making it an attractive destination for businesses looking to expand or relocate.

 

Total office take-up reached an impressive 102,970 square metres, with the second quarter alone contributing 63,785 square metres.

 

This represents a significant 63% increase from the previous quarter and an extraordinary 148% rise year-on-year, signaling strong market confidence.

 

Private sector fuels growth

 

This remarkable rebound is predominantly driven by the private sector, showcasing Luxembourg's appeal to leading global enterprises. Major firms such as JP Morgan, PwC, and Baker McKenzie have signed substantial leases, primarily in new, high-quality developments. This trend highlights the demand for modern, well-located office spaces that meet the strategic needs of prominent businesses.

 

New developments and stable vacancy

 

Despite the influx of new completions, the office vacancy rate has remained steady at a healthy 4.2%. This indicates a balanced market where new supply is being absorbed efficiently. Furthermore, over 515,000 square metres are currently under construction, with a promising 72% already pre-let. This high pre-let rate points to an optimistic outlook for future occupancy and underscores the ongoing demand for premium office facilities.

 

Prime rents and investment outlook

 

The stability of prime rents in key areas like Boulevard Royal, holding firm at €54 per square metre per month, reflects the market's resilience. Additionally, the Gare district experienced a 7.5% increase, showcasing its growing appeal and value. The investment market has also shown strong signs of recovery, with total office investment reaching €274 million in H1 2025, indicating renewed investor confidence in Luxembourg's commercial real estate.

 

Secure your spot in Luxembourg's thriving office market

 

With its vibrant private sector activity, stable vacancy rates, and significant ongoing developments, Luxembourg's office market offers compelling prospects for businesses. Now is an opportune time to explore the diverse range of high-quality office spaces available to secure your company's strategic position in this dynamic European hub.

 

Source: luxtimes.lu