LONDON – Fifth Avenue in New York is the most expensive retail location worldwide, according to new research from Savills, which has analyzed rental prices in 21 international luxury shopping destinations.
Annual rents on Fifth Avenue reached 26,000 euros per square meter [10.8 square feet], in the fourth quarter of 2024. The second most expensive location was Hong Kong’s Tsim Sha Tsui, with rents of 17,132 euros despite downward pressure on prime headline rents in the area, Savills said.
Bond Street in London has the highest indicative prime rent in Europe at 15,333 euros, slightly higher than Milan’s Via Montenapoleone, where the annual rent per square meter is 15,000 euros.
Children play under the “Horse and Rider” sculpture on Bond Street, London.
In Pictures via Getty Images
The report said that 75 percent of markets surveyed reported annual increases, or a hold, in prime headline rents year-on-year, while New York and London reported their strongest growth since the onset of the pandemic.
Rents across New York’s Madison Avenue and Fifth Avenue surged 24 percent, although Fifth Avenue has yet to recover fully to 2019 levels. In 2024, London’s Bond Street reported a 20 percent uplift in prime headline rents.
China was the major driver of growth in 2024, with the region accounting for 40 percent of all new openings globally, down from a 41 percent global share in 2023.
Beyond China, the biggest growth region, in terms of store count, was Asia-Pacific, which accounted for 24 percent of all new openings.
Japan remained the biggest market for new openings in the region, due to the strength of domestic and visitor spend, particularly that coming from China.
Anthony Selwyn of Savills.
Anthony Selwyn, co-head of global retail at Savills, said luxury brands “are clearly taking a longer-term strategic view of the market and are recalibrating portfolios to get closer to their consumers.”
He added that in the immediate aftermath of the pandemic, with reduced international travel, “we saw brands increasingly focus on large, affluent, relatively underserved domestic markets. And while this trend will continue, we will see our core luxury markets become increasingly more competitive, with building quality and pitch being of the upmost importance. As a consequence, upward pressure on prime rents in these markets will continue and growth will slow, with availability of space becoming more constrained.”
The current year will be a slower one in terms of store openings, due chiefly to tepid demand in China, especially from aspirational luxury consumers.
Marie Hickey, director in commercial research at Savills, said the stabilization in the luxury market’s performance that started to materialize at the end of 2024 “will become more entrenched as this year progresses. Weakened consumer sentiment in the U.S. and China will weigh on growth, and will shape real-estate investment, with the focus over the short term to remain on the best opportunities.”
