M A R K E T B E AT
Luxembourg Retail Market Retail Q2 2021
YoY Chg
12-Mo. Forecast
18,000
Take-Up YTD (sq m)
Economic Overview After a limited decline in 2020, the real GDP growth is expected to bounce back to 6% on an annual basis in 2021, before moderating to 3.3% in 2022. Luxembourg’s economy performed relatively well in 2020, thanks to information and communication exports and the financial services sector. In recent weeks, the accelerating pace of the vaccination campaign and the improvement in the health situation have prompted a gradual relaxation of restrictions affecting contact-intensive services. This trend is assumed to continue in the coming months, along with a broader reopening of the economy and a likely positive effect on the retail sales.
40
Deals YTD
135 EUR/sq m/m. Prime Yield (3/6/9 Lease)
Sentiment indicators also suggest a positive outlook for Luxembourg’s economy. Business sentiment has improved, also outside the financial services sector. Consumer sentiment, meanwhile, showed a strong recovery in spring, after the dramatic fall recorded between March and the end 2020, particularly concerning expectations about consumers’ future financial situation. This is in line with an observed increase in employment, which should also support the rebound in consumption. Despite a slight increase in the unemployment rate forecasted to 7.4% this year, unemployment rate should decrease as from 2022.
ECONOMIC INDICATORS Q2 2021
Inflation is projected to rise to 2.5% in 2021 due to oil price increases, the introduction of a carbon tax, the rebound in consumption, and base effects linked to the introduction of free public transportation in 2020. However, this pressure on prices is expected to be temporary and to ease in 2022. Consequently, inflation is expected to decline to 1.7% in 2022.
Prime rent High Street
3.75%
7.4%
YoY Chg
12-Mo. Forecast
Unemployment Rate 2021
-15 -20 -25
Unemployment r at e
-30 09 -2 03 01 -2 2 09 01 -2 3 03 01 -2 3 09 01 -2 4 03 01 -2 4 09 01 - 5 03 201 -2 5 09 01 -2 6 03 01 -2 6 09 01 - 7 03 201 -2 7 09 01 -2 8 03 01 -2 8 09 01 - 9 03 20 -2 19 09 02 -2 0 03 02 -2 0 02 1
GDP Growt h
20 21 20 22 20 23 20 24 20 25
Please note the economic data can vary significantly from one source to the other. Therefore, the figures provided should merely be used as an indication or trend.
-10
20 19 20 20
Source: Statec.lu, Eurostat
-5
20 18
Inflation for 2021
0
20 17
2.2%
Consumers’ confidence index 5
8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% 20 16
GDP Growth for 2021
GDP Growth (LHS) and Unemployment rate (RHS)
20 15
6%