General volatility weighed on occupier demand in Luxembourg

Luxembourg, 16 July 2026 – JLL reviews the first six months of 2026, marked by volatility, uncertainty and concerns about the economy and financing conditions.

General volatility and multiple geopolitical and economic uncertainties weighed on business confidence.

The impact on occupier demand for offices is visible in Luxembourg as evidenced by take-up declining 50% to 51,789 sqm and average transaction size dropping from 1,035 sqm over the 2021-2025 period to 602 sqm in H1 2026. Financial institutions dominate at 31% of the total, although the year's largest transaction is Hôpitaux Robert Schuman's acquisition of nearly 7,000 sqm in The Rock office project at Cloche d'Or.

"The first semester confirms a demand slowdown in an uncertain economic and geopolitical context. Several sizable transactions are under discussion for the second semester, particularly with financial institutions and business services companies, but caution should remain the watchword," explains Jonathan Morand, Head of Office Agency at JLL Luxembourg.

In the absence of new speculative deliveries, vacancy in Luxembourg remains well below the European average of around 9.5%. Our estimate at end-June 2026 is 3.6% versus 3.9% at end-2025, and we anticipate a slight increase by year-end due notably to large deliveries particularly in Hamm.

As a consequence of this very low availability, rents are rising again. "The relatively constrained supply in new office projects is putting upward pressure on rents, but that's not the only explanation," analyzes Pierre-Paul Verelst, Head of Research BeLux at JLL.

Although no official statistics exist on tertiary real estate construction costs, the trend in residential real estate construction cost indices provides an indication. According to the latest Statec survey published early this year, construction costs climbed 39% between 2020 and 2025. Energy efficiency requirements carry a cost that is gradually passed on to tenants through rent increases.

In this context, prime rents reached a new record in the CBD at €55/sqm/month (+1.8%) achieved in The Henri building on Boulevard du Prince Henri. The notable development this year is confirmation of prime rent convergence at Cloche d'Or, the Station and Kirchberg. In these three districts, tenants must pay €43 per sqm per month (excluding VAT). This level has now also been reached at Cloche d'Or, representing a 4.9% year-on-year increase, with other districts unchanged.

Over the first six months we recorded an investment volume of €292 million, down 49%. Approximately 41% represents the sale of The Rock building for €120 million. A notable transaction was the sale of B&B Hotel Cloche d'Or to British institutional investor Aberdeen, where JLL acted for the buyer.