The take-up of office space in Luxembourg has slumped to its lowest level since the middle of the eurozone crisis in 2011, commercial real estate firm JLL said on Tuesday, nevertheless predicting rents will “increase significantly” this year and next.

Although the vacancy rate for Luxembourg’s offices remained largely unchanged at just under 4.2% in 2024, overall take-up fell to just over 133,000 square metres, a drop of almost 25% from 2023.

JLL said the decline as measured by office space was “the lowest level since 2011 i.e in the midst of the eurozone crisis”.

In another sign of a slowing economy, the number of office transactions rose slightly – by 2% to 174 – but remains well below the five year average of 215.

“It’s another year without significant take-up,” Emna Rekik, country lead at JLL Luxembourg, said in a press release.

“Occupiers have maintained a cautious attitude towards their real estate decisions. The lack of visibility on growth prospects and ESG issues have held back occupiers in their decision-making. Paradoxically, rents continue to grow, which is to the advantage of existing owners,” added Rekik.

Luxembourg’s vacancy rate remains well below that of the European average of 8.5%, according to JLL’s report.

In terms of rental costs, there was virtually no change in prices across Luxembourg.

Rent is most expensive in the main financial centre, around Boulevard Royal in the capital, with costs of around €56 per square meter per month, followed by the Kirchberg area, at €42.

In the district around the capital’s main train station, new properties rent for €40 per square meter per month, falling to €38 in the Cloche d’Or and €32 in the area around the airport at Findel. On the outskirts of Luxembourg City and in Esch/Belval, rent remained unchanged at €24 per square meter per month.

However, a major rise in rental prices is expected soon, the report noted.

“For 2025 and 2026, JLL expects a significant increase in most districts due to limited availability and construction costs that remain well above historical averages,” JLL said.