Luxembourg experienced its strongest second quarter for office take-up in a decade, largely driven by public sector activity.
According to the CBRE Marketview Luxembourg office report, 64,000 sqm of office space was filled in the second quarter. The largest deal landed came from the Luxembourg finance ministry, which took up three floors (7,758 sqm) in Yris in Gasperich for additional offices for the Administration des Contributions Directes.
Another public sector operator, Sigi, which supports Luxembourg communes in their activities, took up 3,224 sqm at the IEE building in Contern. Just over a third of volume was taken up by banking, finance and insurance sector actors, the biggest deals from which include MM Warburg at the Enop 1 (5,330 sqm) in Munschbach, while Oksigen welcomed new tenants VP Bank (3,850 sqm) and Avega (2,665 sqm) in Kirchberg.
Vacancy rates fell to 4% overall, with the rate dropping to 2% in the central business district and Kirchberg and 3% at the airport.
There was still some space for new tenants in Esch-Belval and Gasperich which, which counted vacancy rates from 8-9% despite some sizeable transactions. The Terres Rouges buildings in Esch-Belval welcomed Pictet Technologies (1,400 sqm) as well as Deloitte, which took up 3,968 sqm there. They recorded vacancy of 18,800 sqm. The new Dyapsason building in Gasperich, meanwhile, counted 10,200 sqm available.
Luxembourg recorded one of its largest office asset deals in over ten years in the second quarter with the acquisition of the new Deloitte headquarters in Gasperich by Integrale/Ethias for €220m. The building is expected to reach completion in the second half of 2018. Fidelity International, meanwhile, acquired the Aerogolf Center next to the airport for €100m, a building which is currently occupied by Deloitte, Ferrero and Luther Avocats.
Work on some 40,100 sqm of office space was underway in the first half of 2018, of which 24,600 sqm was available. By the end of the year, some 110,000 sqm will have been completed. Green Square, in Luxembourg-Hamm (14,740 sqm), rue de Turi in Livange (8,000 sqm) and Impuls, Luxembourg-Gare (6,000 sqm) are among the biggest projects.