In 2024, the biggest growth region in count terms was the wider Asia Pacific region (excluding China). Accounting for 24% of all new openings, accelerating past North America and Europe, with a 52% increase. Japan remained the biggest market, no doubt reflecting the strength of domestic and visitor spend in 2022 and 2023, particularly that coming from China. Thailand, or rather Bangkok, was also key to growth coming second to Japan.

Dior and Louis Vuitton have invested significantly into Bangkok with the opening of Dior Gold House and LV The Place Bangkok. As a result it has been gaining attention from a wider variety of luxury brands, attracted by its relatively under served domestic population and growing international visitor appeal; for example, according to Euromonitor, Bangkok had the largest number of overnight international arrivals in 2024. We talk to Sunny Gill from Gill Capital Partners on the appeal of Bangkok and the wider Southeast Asian region and how partnerships can help brands navigate and capitalise on opportunities in the region.

Large, affluent, domestic-focused markets still hold plenty of appeal to expansive brands, but 2024 did see a shift back to global and key destination cities.

2024 marked the start of a recalibration of real estate strategies. In the immediate aftermath of the pandemic, with reduced international travel, brands focused attentions on large, affluent, relatively under-served domestic markets – particularly in China. These markets still hold appeal as brands look to get closer to their customers, with 33% of 2024 new openings in domestic-focused cities.

As we forecast last year, the return in international travel meant global alpha cities and smaller gateway/destination cities moved back up the agenda (see figure 01). 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 ultraluxury 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 year-on-year increases in new openings compared to 2023, as did two other global alpha cities in the region, Hong Kong and Singapore. Again, a reflection of sentiment in 2022 and 2023 , rather than that in 2024.

While Hong Kong saw improved levels of activity, they were still below pre-pandemic activity. A recalibration in its luxury market is currently underway. Following several years of store contraction, upsizing in key locations is slowly starting to gather pace – Tom Waterhouse in our Hong Kong team adds “the city’s high concentration of HNWI is starting to garner renewed interest, albeit current market conditions are weighing on decision making”. The rebase in prime rents, which are 34% lower than 2019 levels, is also helping to facilitate this new activity. For example, press reports suggest that Louis Vuitton are considering a new 4,000 sqm store in the city that would include a museum, café and VIP lounge. However, appetite remains extremely focused.

Availability challenges continue to limit new activity in Europe and North America’s key markets

Global alpha cities in Europe and North America saw fewer new openings in 2024 compared to the prior year, reflecting availability challenges rather than lack of appetite. For example, vacancy on London’s Bond Street, Avenue Montaigne, Paris and New York’s Madison Avenue is back at, or below, pre-pandemic levels. These availability pressures are being compounded by a greater scrutiny on ‘pitch’ and building quality by brands. As a result, competition for the ‘best’ opportunities have been significantly acute. In some instances, this has seen the return of ‘key money’ – a regular feature of the market almost ten years ago.

The increased scrutiny on opportunities reflects the more considered and longer-term real estate strategies luxury brands are adopting, preferring to wait for the right opportunities. This has translated into real estate acquisitions in the more availability constrained markets such as Paris, London and New York by a number of the larger groups and brands. A trend we picked up in last year’s report that continued into 2024.

Global (Alpha) Cities 2024 rankings

Bangkok became the top‑ranking destination city in 2024

Looking beyond the global alpha cities to smaller destination cities globally, those in Asia Pacific dominated the ranking – supported by improving international arrivals, particularly from Chinese nationals. Bangkok was a stand-out performer, followed by Seoul. Vietnam’s Ho Chi Minh City continued to see good levels of activity, despite being slightly down on the activity seen in 2023. Matthew Powell, from Savills Vietnam adds “a growing affluent domestic population and increasing tourist arrivals, means we’ve seen improving appetite from luxury occupiers.”

They may not have made the top five, but several smaller European destination cities also saw new store activity in 2024. A number of these are defying the global slowdown and reporting improving luxury spend. Norway’s Oslo is a prime example. We talk to Justin Johnston-Taki, Senior Vice President at MARK Capital Investments alongside Annette Lund, CEO of Promenaden Management and David Wilkinson, Executive Director of Steen & Strøm to explore why Oslo has been bucking the trend and what the future holds.

Destination/ Gateway Cities 2024 rankings