Following the slowing in new store openings in 2023, last year bucked the trend with a 12% increase in new store openings globally. In 2024, China remained the powerhouse, accounting for 40% of all new openings globally – with a 10% YoY increase, although this is down from a 41% global share in 2023.

The biggest growth region in store count terms was the wider Asia Pacific region, excluding China. The region accounted for 24% of all new openings worldwide, accelerating past North America and Europe. Excluding China, Japan remained the biggest market for new openings in the region, with Savills research pointing to the strength of domestic and visitor spend, particularly that coming from China.

As forecasted in 2024, the return in international travel meant global alpha cities and smaller gateway/destination cities have moved back up the agenda. The refocus of global alpha cities is also underpinned by the larger concentration of high net worth individuals (HNWI) in these markets. Their spend has proved to be more resilient to the current slowdown, as reflected in the strong performance seen across a number of ultra-luxury brands such as Chanel and Hermès.

Global alpha cities in the Asia Pacific – Shanghai, Beijing and Tokyo – took the top three spots when it came to new store openings in 2024. All three reported YoY increases in new openings compared to 2023, as did two other global alpha cities in the region, Hong Kong (9^th) and Singapore (5^th).

Hong Kong’s Tsim Sha Tsui retained its top position as a core luxury destination. Despite downward pressure on prime headline rents, luxury retail rents were €17,132 per sqm per annum in 2024.

New York’s Madison Avenue and London’s Bond Street moved up the rankings to come in second and third, having ranked fifth and fourth respectively last year. As a result, London’s Bond Street now has the highest indicative prime rent in Europe at €15,333 per sqm, overtaking Milan’s Via Monte Napoleone (€15,000 per sqm), which held the top spot in 2023.

Tokyo is in fifth place, with prime rents in Ginza at €13,406 per sqm. Singapore came in 19^th spot, with prime rents at €1,725 per sqm.

Sulian Tan-Wijaya, Executive Director, Retail & Lifestyle, Savills Singapore says, “Whilst Singapore ranked 5th in the 2024 list of Global Alpha Cities, the available real estate for luxury brands remains limited, which could somewhat limit the growth and expansion of luxury brands in the city in the near future, unless new supply comes onstream in the form of new retail developments targeting high-end retailers.”

Anthony Selwyn, Co-Head, Global Retail, Savills, comments: “Luxury brands are clearly taking a longer-term strategic view of the market and are recalibrating portfolios to get closer to their consumers. 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, albeit growth will slow, with availability of space becoming more constrained.”

Marie Hickey, Director, Commercial Research, Savills, adds, “The stabilisation in the luxury market’s performance that started to materialise at the end of 2024 will become more entrenched as this year progresses. Weakened consumer sentiment in the US and China, however, will weigh on growth, and will shape real estate investment, with the focus over the short term to remain on the best opportunities.”