The global slowdown is having little impact on the largest and most mature luxury markets beyond China.

Globally, core luxury markets continued to see rental growth in 2024. Across the 21 core luxury destinations we track, over 75% reported annual increases or a hold in indicative headline rents. As a result, just over half of locations have rents back at, or above, 2019 levels. However, we did see an increasing number of markets reporting year-on-year declines in response to weakened occupier sentiment.

Unsurprisingly, Shanghai and Hong Kong saw rental contraction – with prime headline rents down 5% and 8% respectively, year-on-year, as of Q4 2024. Toronto’s Bloor Street also reported a 6% softening on the back of strong 2023 growth, attributed to increased supply in Canada following the Yorkdale extension and the upcoming opening of Oakridge Park Vancouver in late 2025. Jordan Karp, Head of Canadian retail services, adds “once these schemes are complete and fully let availability will tighten, there are positive signs [on Bloor Street] for 2025.”

New York and London bucked the wider trend to report their strongest growth since the onset of the pandemic. In 2024, London’s Bond Street reported a 20% uplift in prime headline rents – with growth across New York’s Madison Avenue and Fifth Avenue averaging 24%, though rents on Fifth Avenue are still to fully recover to 2019 levels. The scale, affluence and visitor reach of these markets has intensified demand, with availability now at record lows, facilitating significant upward pressure on rents. Looking forwards, considering current market conditions, we expect demand will remain focused on best in class opportunities over 2025. As a result prime headline rents will remain relatively stable through to 2026. Any growth that does materialise, however, will be much slower than that seen over 2024.

New York and London moved back up the rental rankings in 2024. Last year, demand and supply dynamics in New York and London moved both these markets up the rankings. New York’s hybrid, luxury-mass market, Fifth Avenue, strengthened its position to become the most ‘expensive’ retail destination in the world – with prime headline rents of €26,000 per sqm, per annum as of Q4 2024. Focusing solely on dedicated luxury retail destinations, those where occupiers are predominately luxury brands. Hong Kong’s Tsim Sha Tsui retained its top position, despite downward pressure on prime headline rents. But there were changes beyond Hong Kong.

As expected, 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, overtaking Milan’s Via Monte Napoleone which held the top spot in 2023, although there is little between them. It is also important to note that there is always potential for deals to be done at much higher levels than the average tone for the street, the level of which will be determined by rarity with Milan’s Via Monte Napoleone most likely to fall into this category.

Dublin, Amsterdam and Madrid also moved up the rankings, all driven by rental growth.

As already alluded to, there is likely to be little change to these rankings over the course of 2025. Uncertainty in the US in response to a potential ‘trade war’ and stock market volatility, both of which are weakening US consumer confidence, is likely to temper occupational demand and, in turn, rental growth in New York, and other major markets.