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Luxembourg Office MarketView Q1 2026
Prime office rents rise in Station amidst broader market softness in Q1
May 6, 2026 7 Minute Read
Summary
Office letting activity in Q1 was limited, with the scarcity of large available spaces playing a notable factor. Luxembourg City and its immediate periphery accounted for the majority of transactions, with significant deals in Station and Kirchberg.
The overall office vacancy rate in Luxembourg remains under pressure, now squeezed below 4.0%. Specific areas like Leudelange and Lux West saw reduced vacancy, while the recent increase in Station's available space from new deliveries is being absorbed.
No new office deliveries occurred in Q1, but significant projects are anticipated for completion later in the year. The available pipeline for tenants seeking new space remains very limited for both 2026 and 2027, suggesting continued supply constraints.
Prime office rents were well-supported, driven by demand for ESG-compliant spaces and construction inflation, with a notable double-digit year-over-year increase in the Station market. The overall prime rent in the CBD remained stable, and the long-term trend for increasing rents persists.
Commercial real estate investment in Q1 was subdued, with only one notable transaction involving the state's acquisition of Edison 2. However, several significant deals are in progress for Q2, indicating a potential return to increased market activity and clearer pricing.
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Kim Verdonck
Executive Director - Research, Marketing & IT
