Global Luxury Retail Report 2025: More openings, rents rise again

Retail

Chanel boutique Credits: Pixabay

The latest Savills Global Luxury Retail 2025 Report shows that global luxury retail continued to withstand economic challenges, with core markets experiencing strong rental growth in 2024. Prime rents increased or remained stable in over 75 percent of the 21 regions surveyed.

After the number of new openings slowed in 2023, this trend reversed last year. There was a 12 percent increase in new stores opening worldwide. China remained the driving force in 2024, accounting for 40 percent of all new openings globally, although this was down from 41 percent in 2023.

Asian region grows the most

The largest growth region in terms of store numbers was the Asia-Pacific region, excluding China. The region accounted for 24 percent of all new openings worldwide, overtaking North America and Europe. Without China, Japan remained the largest market for new openings in the region.

As predicted for 2024, the return of international travel meant that global Alpha cities and smaller destinations regained importance. The refocus on global Alpha cities is also supported by the greater concentration of wealthy individuals in these markets. Their spending has proven more resilient to the current downturn, which is reflected in the strong performance of a number of ultra-luxury brands, such as Chanel and Hermès.

Co-head of global retail at Savills, Anthony Selwyn, commented: “Luxury brands are clearly taking a longer-term strategic market view and are adapting their portfolios to move closer to their customers. Immediately after the pandemic, when international travel declined, we saw brands increasingly focus on large, affluent and relatively underserved domestic markets. While this trend will continue, we will also see increasing competition in our core luxury markets, where the quality of buildings and location will be paramount. As a result, upward pressure on prime rents in these markets will persist, albeit with slower growth momentum and increasingly limited space availability.”

The global Alpha cities in the Asia-Pacific region – Shanghai, Beijing and Tokyo – took the top three spots for new store openings in 2024. All three saw an increase in new openings compared to 2023, as did two other global Alpha cities in the region, Hong Kong (9th place) and Singapore (5th place).

London has highest shop rents in Europe

Hong Kong’s Tsim Sha Tsui district retained its top position as a key luxury destination. Despite downward pressure on prime rents, rents for luxury properties in 2024 were 17,132 euros per square metre per year. New York’s Madison Avenue and London’s Bond Street rose in the rankings to second and third place, respectively, having been in fifth and fourth place the previous year. London’s Bond Street now has the highest indicative prime rent in Europe at 15,333 euros per square metre, overtaking Milan’s Via Monte Napoleone (15,000 euros per square metre), which held first place in 2023.

Tokyo is in fifth place with prime rents in Ginza of 13,406 euros per square metre. Singapore was in 19th place with prime rents of 1,725 euros per square metre.

Director of commercial research at Savills, Marie Hickey, added: “The stabilisation of the luxury market’s development, which began to emerge at the end of 2024, will continue to solidify over the course of this year. However, weak consumer sentiment in the US and China will weigh on growth and shape property investment, with the focus remaining on the best opportunities in the short term.”

This article was translated to English using an AI tool.

Luxury

Savills