Cushman & Wakefield MarketBeat reports analyse quarterly Luxembourg commercial property activity across office and retail real estate sectors including supply, demand and pricing trends at the market and submarket levels.
After solid economic growth in 2019, when GDP grew 2.3%, Luxembourg’s economy will contract this year due to the impact of the coronavirus pandemic and the containment measures. The combined supply, demand and financial shock of the crisis has led to a revised economic growth forecast of -6.2% for 2020.
The health crisis has had limited effect on the on letting activity. The second quarter of the year recorded 72,000 sq m of take-up and 40 letting transactions (including pre-lettings).
The second quarter of the year recorded approximately 262 MEUR (five transactions).
Some notable letting transactions are still expected this year. On the other hand, the health crisis could lead to some deals being postponed. Furthermore, the low level of availability in the market could also hinder further activity.
Luxembourg’s economy will contract this year due to the impact of the coronavirus pandemic and the containment measures. The combined supply, demand and financial shock of the crisis has led to a revised economic growth forecast of -6.2% for 2020.
The COVID-19 crisis accelerates the reshaping previously observed in the retail sector. The growing shift towards the online retail and the lockdown observed during most of the second quarter led to a strong decrease of the activity (both in number of deals and surfaces)
No investment transaction has been recorded in Q2.
This unprecedented situation will have a long-term impact on the whole retail market in Europe and will contribute to a strong reshaping of the sector in the coming years.
Nevertheless, Luxembourg seems to recover slightly better than expected, supported by its strong economy and highlighting once again its historical resilience.