Economic Context
Luxembourg’s economy closed 2025 with GDP growth of 0.57%, reflecting modest expansion amid weaker investment and softer exports. Inflation (HICP) moderated to 3.3% in December 2025, above the eurozone average, while the unemployment rate rose to 5.97%. Economic forecasts indicate strengthening growth and easing inflation in 2026, supported by stabilized interest rates and improving domestic demand.
Demand Overview
Leasing activity improved in Q4 2025, with 49,068 sq m transacted across 48 deals, marking the most active quarter of the year. Annual take-up reached 179,000 sq m over 189 transactions, an increase from 2024 but still 23% below the ten-year average. Demand remained focused on high-quality, grade A space, accounting for 65% of total take-up. Key submarkets included Cloche d’Or and Kirchberg, with notable transactions such as the commercialisation of Skypark Business Center (nearly 20,000 sq m across seven deals) and a significant pre-letting by Lombard Odier at The Terraces. The preference for modern, energy-efficient buildings in established districts persisted.
Vacancy Trends
Vacancy rates remained broadly stable in Q4 2025. The central districts posted a vacancy rate of 3.43%, while the overall Luxembourg market stood at 5.20%. Vacancy was lowest in Centre (2.42%) and Kirchberg (2.47%), and highest in the Periphery (10.79%) and Decentralised areas (9.39%). Limited new supply and sustained demand for prime space contributed to contained vacancy in core locations.
Rent Trends
Prime office rents held steady across key submarkets in Q4 2025. The CBD maintained the highest prime rent at €54/sq m/month, followed by Kirchberg at €42/sq m/month and Cloche d’Or at €40/sq m/month. Stability in headline rents was underpinned by robust demand for grade A assets, with secondary stock facing greater competitive pressure. No significant changes in landlord concessions were reported.
Construction & Supply Pipeline
New supply remained limited, with approximately 22,900 sq m delivered in Q4 2025, including The Waves and AXS – The Shift. The total pipeline under construction reached 447,671 sq m, with significant activity concentrated in the CBD (377,187 sq m) and Kirchberg (240,143 sq m). The market continues to see a focus on modern, energy-efficient developments, particularly in established office districts.
The Luxembourg office market in Q4 2025 demonstrated stable fundamentals, with improved take-up, steady prime rents, and contained vacancy in core locations. Market activity remains focused on high-quality, energy-efficient assets amid a limited supply pipeline.
