But it was not the highest value investment reported in this period. According to Cushman & Wakefield the top price tag was for the Vertigo building in Cloche d’Or by Allianz from Rynda for a mere €178m. Other purchases include the Da Vinci building at the airport by M&G Real Estate from Union Investment (€71m), Impulse at the station by Swiss Life from Besix (€70m) and Centre Descartes in Merl/Belair, purchased by Blue Colibri from AG Real Estate (€39m).
During the third quarter, more than €500m was invested in commercial real estate in Luxembourg, mostly in the office sector (€478m). The report found that occupation activity was down compared to the start of the year (32,000 m2 compared to 12,000), however, the report author expected total take-up for 2017 to exceed 2016’s levels.
The 4% overall vacancy rate, meanwhile, was among the lowest in Europe and the report author said they expected to “witness no changes in the coming months as the speculative pipeline is limited.”
The report further said: “This growing competition results in a new increase in the prime rental levels to reach €50/m2/month in the CBD (centre), its highest level ever and further slight uptick are still expected for 2019.”
The high rental rates in the centre were driven by a low vacancy rate, which fell to 1% in that area.
Prime rents were considerably lower in the station district (€36/m2/month) where the vacancy rate was 4.3%, and Kirchberg (€35/m2/month) where the rate was 1.8%.
The report forecast activity in the investment market to remain intense with significant transactions in the pipeline.