Office market – 2015 already better than 2014


2015 will be an excellent year for the office space real estate of Luxembourg. Results for the first three quarters are better than those for the whole year 2014 both in terms of investments and rentals.




The rental market developed dramatically with 139,112 sqm rented during the third quarter. Indeed, a total of 223,502 sqm were rented during the first 9 months of this financial year, exceeding the 205,941 sqm rented during the whole year 2014. However, such a result should be put into perspective, since it is especially related to the inauguration of the University at Esch-Belval. The House of Humanities and Social Sciences, the House of Knowledge, the House of Numbers and the House of Innovation occupy surfaces of 26,500 sqm, 20,000 sqm, 19,400 sqm, and 13,700 sqm respectively. Therefore, by excluding these 79,600 sqm, the quarterly take-up would amount to 59,512 sqm for a total of 143,902 sqm since the beginning of the year.

Apart from the transactions related to the University, several other major operations were recorded during the last three months. The Arendt and Medernach law firm recently moved into its new offices (16,700 sqm) and the European investment bank (EIB) continues to grow as it took possession of 10,768 additional square metres in Kirchberg.

Arendt House, 17,700 m² (1,000 m² of retail included) in kircherg, Headquarter of Arendt & Medernacht

During the third quarter, 63 transactions were completed, a little less than for the same period of the previous year. Since the beginning of the year, 186 take-ups have been registered. Given the major operations recorded, the average area has risen dramatically and largely crossed the 1,000 sqm threshold to reach 1,162 sqm. On the other hand, the median area is 250 sqm.

The inauguration of the University at Esch-Belval is the reason why this region totals more than a third of the take-ups (36%) registered this year, in front of the Kirchberg (20%), the Cloche d’Or (12%) and the city centre (8%). The analysis by activity shows that the education and social sector (36%) gets ahead of the European institutions (18%), the financial and banking sector (15%) and law firms (10%).

In this context, the vacancy rate remains very low (4.3%), the lowest level since 2009. This average rate conceals disparities since it falls to 1.58% in Kirchberg and 3.28% in the city centre, the average throughout the city of Luxembourg being 3.14%.

Once again, investments surpassed 1 billion euros

Driven by a favourable economic environment, the investment market is also very dynamic. In 2014, it surpassed once again the 1 billion euro threshold for the first time since the 2008 crisis. This year, this symbolic threshold was exceeded in only 9 months. Indeed, the amount of transactions completed is 1.2 billion euros for 23 operations.

The city centre of Luxembourg totals 45% of investment volume. It gets ahead of the Cloche d’Or district with 13% of transactions, the airport district (12%) and the Kirchberg (6%). Such a result confirms the predominance of the crescent connecting the airport to the Cloche d’Or through the Kirchberg, the city centre and the railway station.

These good results were obtained in a promising climate. According to the National Institute for Statistic and Economic Studies (Statec), the Luxembourgish economy is expected to grow between 3.5% and 4% this year. Moreover, the Institute reckons on an increase in GDP of over 3% for 2016.