Planning to invest in the Great Duchy, or looking for ways to strengthen your asset portfolio? You can’t make the right move without the right data: that’s where our Snapshot comes in.
Find out how the last quarter of 2019 has been treating the Luxembourg office and retail real estate market. Get the insights that make the difference, with an analysis of the key parameters of the local market and an outlook on everything to come – all the essentials for your business strategy.
Two things: there’s been a high increase in GDP growth – up to 3.2%! Unemployment rates remain low at 5.3%, cross-border workers are on the rise and the country’s blessed with a solid economic foundation.
Strong population growth is expected in the coming years. Private consumption should continue to drive growth and inflation is set to remain contained due to lower energy prices and transport becoming free in March 2020.
We’ve seen strong take-up in the last quarter, which has given the total activity for 2019 quite a boost. Several significant transactions were carried out, including the largest one of the years so far. Vacancy rate remains at a historically low 2.97%. Prime rents saw an increase in the CBD and in the periphery.
On the investment front, the total office investment volume for the year reached record levels with only 18 transactions recorded.
Letting activity is expected to keep up the momentum with some large transactions still expected. Then Luxembourg has been considered as a “Brexit Winner” and should continue to attract UK-based companies looking to relocate.
Thanks to significant transactions on the retail market, over 122,000 square meters have been recorded this year, making 2019 the best year on record. The global picture is to be read carefully as the growing disparity between stronger areas and mid-tier centers without a clear consumer value proposition. Prime rent has stabilized and will most likely increase slightly in the coming months in some areas.
On the investment side, it was radio silence: no transactions were recorded. Opportunities on the market are scarce, which limits investment activity.
The retail industry will continue to benefit from the country’s strong economic foundation, but there’ll be a growing need to adapt to the increasing competition from online retail and evolving consumer habits. Worth mentioning as well the positive dynamics of sectors such as jewellery, optic and supermarket chains.
Contact our team for more info about : Snapshot Q4/2019 – Key analytics on Luxembourg real estate market