The facts. Luxembourg's office market has experienced a significant recovery following the pandemic-induced slowdown. In 2025, office take-up increased by 36% year-on-year, reaching 181,160 square metres. This growth was primarily driven by the financial and professional services sectors, with major leases including JP Morgan's 14,000 square metre space in Kirchberg and PwC's 9,970 square metre pre-let in Cloche d'Or. Despite the delivery of nearly 108,000 square metres of new office space, the vacancy rate declined to 3.9%, indicating strong absorption of new developments. Rents have risen across most central districts, with prime areas like Boulevard Royal maintaining stable rates at €54 per square metre per month. Investment activity also rebounded, with total real estate investment reaching €839 million, a 38% increase year-on-year.
Why it matters for international business. The resurgence of Luxembourg's office market underscores the country's resilience and attractiveness as a financial hub. For international businesses, family offices, and fund managers, the low vacancy rates and rising rents signal a competitive market, necessitating strategic planning for office space acquisition. The strong demand from the financial sector highlights Luxembourg's continued appeal for banking and professional services, potentially influencing investment decisions and operational strategies for entities considering a presence in the region. Additionally, the significant investment activity reflects confidence in the market's stability and growth prospects, which is pertinent for high-net-worth individuals evaluating real estate opportunities.
Last updated: 2026-07-29
Frequently asked questions
What factors contributed to the rebound of Luxembourg's office market?
The rebound was driven by increased demand from the financial and professional services sectors, major leases by firms like JP Morgan and PwC, and a significant rise in real estate investment activity.
How have vacancy rates changed in Luxembourg's office market?
Despite the addition of nearly 108,000 square metres of new office space, the vacancy rate declined to 3.9%, indicating strong absorption of new developments.
What impact does the office market recovery have on international businesses?
The recovery signifies a competitive market with low vacancy rates and rising rents, necessitating strategic planning for office space acquisition by international businesses.
How have rental rates changed in Luxembourg's prime office areas?
Rents have risen across most central districts, with prime areas like Boulevard Royal maintaining stable rates at €54 per square metre per month.
What does the increase in real estate investment indicate about Luxembourg's market?
The 38% year-on-year increase in real estate investment to €839 million reflects confidence in the market's stability and growth prospects.
Glossary
Office take-up
The total amount of office space leased or sold to tenants within a specific period.
Vacancy rate
The percentage of all available office space that is unoccupied at a given time.
Prime office area
A location within a city that is considered highly desirable for office space due to factors like accessibility, amenities, and prestige.
