LONDON – Fifth Avenue in New York is the costliest retail location worldwide, in line with new analysis from Savills, which has analyzed rental costs in 21 worldwide luxurious purchasing locations.
Annual rents on Fifth Avenue reached 26,000 euros per sq. meter [10.8 square feet], within the fourth quarter of 2024. The second most costly location was Hong Kong’s Tsim Sha Tsui, with rents of 17,132 euros regardless of downward stress on prime headline rents within the space, Savills stated.
Bond Avenue in London has the best indicative prime lease in Europe at 15,333 euros, barely increased than Milan’s By way of Montenapoleone, the place the annual lease per sq. meter is 15,000 euros.
Youngsters play below the “Horse and Rider” sculpture on Bond Avenue, London.
In Footage through Getty Photos
The report stated that 75 p.c of markets surveyed reported annual will increase, or a maintain, in prime headline rents year-on-year, whereas New York and London reported their strongest progress because the onset of the pandemic.
Rents throughout New York’s Madison Avenue and Fifth Avenue surged 24 p.c, though Fifth Avenue has but to get well absolutely to 2019 ranges. In 2024, London’s Bond Avenue reported a 20 p.c uplift in prime headline rents.
China was the key driver of progress in 2024, with the area accounting for 40 p.c of all new openings globally, down from a 41 p.c international share in 2023.
Past China, the largest progress area, by way of retailer depend, was Asia-Pacific, which accounted for twenty-four p.c of all new openings.
Japan remained the largest marketplace for new openings within the area, as a result of power of home and customer spend, notably that coming from China.
Anthony Selwyn of Savills.
Anthony Selwyn, co-head of worldwide retail at Savills, stated luxurious manufacturers “are clearly taking a longer-term strategic view of the market and are recalibrating portfolios to get nearer to their customers.”
He added that within the instant aftermath of the pandemic, with lowered worldwide journey, “we noticed manufacturers more and more give attention to massive, prosperous, comparatively underserved home markets. And whereas this pattern will proceed, we’ll see our core luxurious markets grow to be more and more extra aggressive, with constructing high quality and pitch being of the upmost significance. As a consequence, upward stress on prime rents in these markets will proceed and progress will gradual, with availability of area turning into extra constrained.”
The present yr shall be a slower one by way of retailer openings, due mainly to tepid demand in China, particularly from aspirational luxurious customers.
Marie Hickey, director in business analysis at Savills, stated the stabilization within the luxurious market’s efficiency that began to materialize on the finish of 2024 “will grow to be extra entrenched as this yr progresses. Weakened client sentiment within the U.S. and China will weigh on progress, and can form real-estate funding, with the main target over the brief time period to stay on the perfect alternatives.”
