Economic Context
Luxembourg’s economy closed 2025 with modest GDP growth of 0.57%, reflecting subdued investment and softer exports, while private consumption was supported by wage indexation and improved household confidence. Inflation (HICP) moderated to 3.3% in December 2025, above the eurozone average, with expectations for further easing in 2026. The unemployment rate rose to 5.97% but is projected to decline as economic growth strengthens, underpinned by the resilience of the financial and public sectors.
Demand Overview
Retail take-up in H2 2025 totaled 5,455 sq m across 22 transactions, with notable activity in the home & deco segment and the commercialisation of the GRIDX multi-experience complex. Key transactions included Roche Bobois (680 sq m) at Royal Hamilius and Plum’Art’s expansion in Bettembourg and Pommerloch. For the full year, take-up reached 24,360 sq m across 57 deals, an improvement over 2024 but still below the ten-year average. Demand was concentrated in destination retail formats and new shopping centre concepts that integrate retail with leisure and experiential elements.
Vacancy Trends
The report does not provide explicit vacancy rates; however, market activity indicates selective take-up, with demand focused on well-located and specialised retail schemes. The absence of significant new supply and the concentration of leasing in specific segments suggest stable overall availability, with no indication of material increases in vacancy or sublease space impacting the market.
Rent Trends
Prime retail rents remained stable throughout 2025 across all submarkets, with prime high street rents at €145/sq m/month, prime shopping centres at €90/sq m/month, and prime out-of-town units at €25/sq m/month. The market showed limited transactional evidence and no new benchmark-setting deals, resulting in unchanged headline rents and a cautious approach from landlords.
Construction & Supply Pipeline
There is no significant new construction reported for H2 2025. Market activity was driven by the further commercialisation of existing assets, notably the GRIDX complex, which contributed substantially to take-up. The supply pipeline remains limited, with no major project starts or completions highlighted during the period.
Luxembourg’s retail market in H2 2025 demonstrated stable rents and selective demand, with activity focused on specialised segments and established retail destinations. Economic indicators point to gradual improvement, while investment and development remain measured.